July Newsletter 2021

Further Education Institutions

HMRC has released a brief about the VAT treatment of public funds received by further education institutions. The brief follows the Upper Tier Tribunal case of the Colchester Institute Corporation which found certain grant funded supplies of education to be exempt from VAT.

HMRC are “taking steps to test the primary decision” so this is perhaps not the final answer here but it may be worth submitting an error correction form to protect the position in circumstances where this may apply.

Revenue & Customs Brief 8 (2021)

Daycare Services

HMRC has released a brief regarding the VAT liability of daycare services provided to vulnerable adults.

The brief confirms that providers must be charities, public bodies or regulated by the relevant authority in the country concerned, in order to be able to exempt their supply of services.

Revenue & Customs Brief 9 (2021)

Temporary Reduced Rate Update

VAT Notice 701/14 has now been partially updated to reflect the extension of the temporary reduced rate of VAT for food and non-alcoholic drinks sold for consumption on the premises and for hot takeaway food.

The beginning of the notice includes a grey box confirming that:
–         The temporary reduced rate of 5% will apply until 30 September 2021.
–         The new rate of 12.5% will then apply from 1 October 2021 to 31 March 2022.

The rest of the notice, unfortunately has not been updated and still repeatedly, incorrectly, refers to the reduced rate ending on 31 March 2021. Do please be careful if you are searching for information online!

VAT Notice 701/14

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