August 2022 VATwatch

What is Partial Exemption



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



More issues with Postponed Import VAT Statements


I feel like I am writing this in every bulletin at the moment, but there have been more issues with HMRC’s PVA system.


Initially, taxpayers were advised that they should not rely on June statements which were published between 4th and 8th July. This was subsequently updated to say any statement for June which was downloaded before 13th July could not be relied upon.




Update to VAT Registration Service


With effect from 1 August 2022, a new VAT registration service will be in operation. We are told this will speed up the process and improve security.


The main difference is that businesses will be signed up for Making Tax Digital (MTD) automatically during the registration process.


Any unsubmitted applications which were partially completed at the end of 31 July 2022 will be lost and will need to be started again.




Input VAT on Cars


The recent case of Firth (t/a Church Farm) is a useful reminder that VAT is not usually recoverable on motor cars. 


VAT is only recoverable in very limited circumstances – the key point being that the vehicle must not be available for private use. It is not enough for it just not to be used privately.


The case found that the vehicles in question were not stored in such a way to prevent private motoring and they were insured for private motoring. This meant that the partners did have the option to use the vehicles privately and so the VAT was not recoverable.






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



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