October 2023 VATWatch

Welcome to my October newsletter. As I mentioned last month, please be aware that the office will be closed for holidays the week commencing 2nd October.

Changes to assessment process for late VAT returns

I’ve recently written an article for AccountingWeb, covering the changes HMRC has made to the Central Assessment system.

Please do read the article, which fully explains the process and the impact on the taxpayer.

Read the full article

Digital Publications and VAT – Supreme Court Decision in News Corp and Ireland Ltd Case

Printed newspapers have been zero-rated since VAT was introduced in the UK in 1973. However, digital publications had been subject to standard-rated VAT until a change in legislation on 1 May 2020 made certain e-publications, including digital newspapers zero-rated.

News Corp and Ireland Ltd had submitted a claim, stating that they had been overpaying VAT on income it received for granting access to digital versions of several of its publications. It claimed that these digital versions were zero-rated since they fell within the ordinary meaning of newspapers and that to treat them differently would breach the principle of fiscal neutrality. This is the principle which requires that supplies of similar goods and services be treated consistently for VAT purposes.

HMRC rejected the organisation’s claim, as at that time all digital publications were standard-rated, meaning that VAT had been paid correctly.

The Supreme Court decided that the defining characteristics of newspapers to which zero rates applied prior to May 2020, were news communicated through the medium of print in a physical format. Therefore the principle of fiscal neutrality did not apply, so Newscorp and Ireland Ltd’s case was dismissed.

HMRC is now contacting other organisations that have submitted claims on the same basis, to establish whether they wish to continue to pursue those claims.

Read more here 

HMRC Updates List of VAT Appeals

HMRC has updated the published list of  VAT appeals that HMRC has lost, or partly lost, that could have implications for other businesses.

The list includes cases where HMRC has:

·       lost at the First-tier Tribunal that could have a wider impact

·       lost in the Upper Tribunal or higher courts

·       decided whether to appeal

It also includes cases where HMRC has partly lost where they meet these criteria.

The list includes details of cases where a decision has been handed down since 1 January 2010. It’s updated regularly and shows details of finalised cases for 6 months.

Read HMRC’s guidance

CIOT Survey Results Published

The results from the CIOT survey into HMRC service levels have been published.

Unsurprisingly, the results are not good. Hopefully this means the government will take notice and allocate more funds to improve the situation, but perhaps that is wishful thinking!

Find out more here

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



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