June 2022 VATwatch

Holidays

Please note that the office will be closed on the following dates:

·       Week commencing 4^th July

·       Week commencing 5^th September

Tolley’s Finalist

Thank you to everyone who has congratulated me for being a finalist in the Tolley’s Taxation Awards. I didn’t win on the night, but I had a wonderful time at the awards dinner in London and met lots of lovely people who I am already starting to work with.  

VAT Penalties

HMRC has published new guidance in relation to the VAT penalties and interest charges which will apply for periods beginning on or after 1 January 2023. These are the rules which were deferred from earlier this year.

Late submissions will no longer be subject to the default surcharge and instead, penalties will work on a points based system.

This is a key change as it means that NIL OR REPAYMENT VAT RETURNS WILL ALSO BE SUBJECT TO LATE SUBMISSION POINTS AND POTENTIAL FINANCIAL PENALTIES.

Late-submission penalties will work on a points-based system. Each VAT return submitted late will receive one late-submission penalty point. Once a penalty threshold is reached, businesses will receive a £200 penalty and a further £200 penalty for each subsequent late submission. The late-submission penalty points threshold will vary according to submission frequency.

Postponed Import VAT Accounting – issues with statements

On 3 May 2022, HMRC updated its guidance on accounting for import VAT on a VAT return as the issue that resulted in some statements not being displayed for some users had been resolved.

The guidance confirms that there have been issues with March 2022 statements not being accessible, and with April 2022 statements being incorrect.

They suggest that if you downloaded the April statement before 16 May 2022, you should download a fresh one as the original was probably wrong.

I am also aware that some March statements did not appear within the government gateway until mid-May. As this was after VAT Returns to 31/03/2022 had to be submitted, it may be that figures need to be included on later returns.

DIY Housebuilders Claims

HMRC policy is that only a single claim can be made in relation to DIY Housebuilders. 

The case of Andrew Ellis and Jane Bromley challenged this as they made a second claim after further required works were done. 

HMRC has clarified their position, stating that a subsequent claim will be allowed where the first claim was paid in error. In certain circumstances they will also accept supplementary claims for invoices left out or received late.

Reverse Charge Reporting for Mobile Phones and Computer Chips

With effect from 1 July 2022, the requirement to submit a Reverse Charge Sales List to HMRC in respect of mobile phones and computer chips will be removed.

Thank you for taking the time to read this VATwatch round-up.