September 2022 VATwatch

Holidays

Please note that the office will be closed for holidays the week commencing 5^th September.

New Online VAT Registration Procedure

There has been a new online VAT registration system in place from 1 August and, as with any new system, there have been some teething issues.

Ruth Corkin, technical chair of the VAT Practitioners’ Group said:

There has been a veritable flurry of emails between the various professional bodies and HMRC on the subject of the new online registration process. In my view it should be suspended until it has been properly tested by people who have to use it, but I doubt HMRC will do that. Anyway, below is a distillation of the issues thus far, including a couple that may be ultra vires and I thought members might want to know.

·       Agents must use their Agent Services Account credentials to apply for registration on behalf of a client. If they don’t and use the old style agent account, they will be deemed to not be identified and have to provide a raft of personal details. The link to register is https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-registration-applications-exceptions-and-changes .) (I did a Google search on register for VAT and managed to get into the new system using our ASA details without going through that link. Interestingly you can choose your own submission reference. I bet they will get some interesting ones!)

·       If you are registering an intending trader, HMRC appears to be limiting it to persons who will commence trading in the following 3 months (ultra vires)

·       General Partnership registration requires the name of the lead partner and their company registration number, missing the fact that not all lead partners will be corporate bodies!

·       Saving facility is only valid for 7 days (Previously 30 days). I know it can take more than 7 days to get information out of the client or their approval, so this is a worrying change.

·       Last and by no means least – it seems that HMRC is insisting on the agent being a VAT representative (with joint and several liability) where the taxpayer is overseas. It is a blanket requirement and when I looked at S49 and S98 VATA1994, appears to be ultra vires.

·       The last point I have raised with HMRC following a query from a friend at a large compliance firm, whose staff were told it had been introduced to combat fraud by overseas sellers!

New Advisory Fuel Rates

The latest advisory fuel rated have been released.

Old VAT Portal Will Close

As all VAT returns now must be submitted using MTD, the old VAT portal will be closed with effect from 1 November 2022. That means any taxpayer not using MTD will be unable to file their return unless they have an exemption agreed with HMRC.

If you (or your clients) are not yet signed up for MTD and using MTD compliant software, this really must be dealt with as soon as possible.

Import VAT & Duty on Gifts

On 1 August 2022, HMRC published guidance on import VAT and duty on gifts. The guidance sets out:

·       when VAT and duty will be charged;

·       the volume or quantity of gifts of alcohol and tobacco products that will be permitted without duty or VAT being charged;

·       the volume of gifts of perfumes and toilet waters that will be allowed without payment of duty or VAT;

·       how the allowances are applied for multi-gift packages

·       how to query charges.

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