Processing of Option To Tax Forms Changes from 1st February
Following a short consultation, HMRC has decided to change the way they process Option to Tax (OTT) Forms with effect from 1 February 2023.
A letter confirming receipt of OTT forms will no longer be issued. Instead, when a Notification of Option to Tax is submitted to firstname.lastname@example.org, an automated email response will be sent. This should kept for your records. The date on the automated response will confirm the date that HMRC was notified. An OTT form sent by any other method will not receive confirmation of receipt, but HMRC will make contact if further information is required.
HMRC Change Policy for Scaffolding on Zero Rated New Build Housing
For scaffolding supplied for zero-rated construction of dwellings the services of erecting and dismantling scaffolding can be zero-rated. Charges for the hire of scaffolding are not covered by the zero rate and are liable to VAT.
The VAT liability of any supply of scaffolding will depend on what is being supplied under the contract in each case.
The hire of goods on its own is not a service that is covered by the reverse charge. Any VAT due on the hire of scaffolding for new build housing work should be accounted for under normal VAT rules.
A contract for the hire, erection and dismantling of scaffolding is within the scope of the Construction Industry Scheme. If the scaffold supplier’s invoice shows separate charges for the hire of scaffold and the cost of the labour to erect and dismantle it, the labour element will be VAT zero-rated as a service carried out in connection with the construction of new build housing.
The reverse charge does not apply if the scaffolding is supplied for a zero-rated construction project.
This is a change to the previous policy. For a transitional period up to 1 February 2023, businesses can use either reverse charge accounting or normal VAT rules.