VATWatch - August 2024
VAT on Private School Fees
- The VAT exemption will be removed from 1 January 2025, making private school fees subject to VAT at 20%.
- The same will apply to board and lodging deemed to be closely related to the supply of education by a private school, even if provided by an alternative body.
- Further guidance will be published for impacted schools in due course.
- Anti-forestalling provisions mean that pre-payments for private school fees and boarding services made after 29th July 2024 will be treated as taking place on the later of 1st January 2025, or the first day of the term the pre-payment relates to.
- Private schools are defined in the legislation
HMRC launches the VAT Registration Estimator
HMRC have just launched a digital tool to help businesses estimate what being VAT registered may mean for them.
A business must register for VAT if:
- their total VAT taxable turnover for the previous 12 months is more than £90,000 -known as the ‘VAT threshold’ – until 31 March 2024 this was £85,000.
- they expect their turnover to go over the £90,000 VAT threshold in the next 30 days.
- they are an overseas business not based in the UK and supply goods or services to the UK (or expect to in the next 30 days) – regardless of VAT taxable turnover.
A VAT-registered business must charge VAT on eligible sales and can usually reclaim it on eligible purchases and there are around 300,000 new VAT registrations each year.
HMRC Director General for Customer Strategy and Tax Design, said:
“We know that the majority of our customers want to get their tax right. We have listened to what businesses have said and the new tool is designed to help them understand VAT registration, including when they might be required to register.”
Before you start you will need information to hand about your business income and costs, and the VAT rates that apply to them. You can read more about what the tool is and what it does by going to Check what registering for VAT may mean for your business – GOV.UK (www.gov.uk)
It is important to note that The VAT Registration Estimator is a guidance tool designed to help you decide if VAT registration is right for your business and allows you to experiment with different inputs and outputs. It cannot provide bespoke business advice.
You can read the HMRC press release here HMRC launches VAT Registration Estimator – GOV.UK (www.gov.uk)
HMRC have issued an update to the method of ‘Changing Your VAT Registration Details’
HMRC have given notification that from the 5th of August any request to change your VAT registration details should be made using your online VAT account and no longer the VAT484 form, or any other postal or electronic methods.
For those who are unable to access and use HMRC’s digital services, perhaps because they are digitally excluded or may need assistance with digital services, HMRC have confirmed they will always provide a service to meet such needs. They will continue to offer support through non-digital channels such as the phone which includes their ‘needs extra support’ service.
HMRC have acknowledged that some customers will still need to apply for a change to their details via post on a VAT484 if they are digitally excluded, for example, or when notifying them of the taking over of someone else’s VAT responsibilities. In such circumstances HMRC should be contacted to request the form.
If you need to get in touch with HMRC, find their contact details below
To view the update guidance or change your details, use the link below
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