VAT on home care
Commercially provided home care services will be within the scope of the VAT exemption for welfare services, which means that providers subject to national care standards will no longer charge VAT on the care that they provide.
A Customs Business Brief article explains the change and also provides details of an extra-statutory concession that will allow exemption for welfare services effective from 31 January 2003.
VAT on home care
Commercially provided home care services will be within the scope of the VAT exemption for welfare services, which means that providers subject to national care standards will no longer charge VAT on the care that they provide.
A Customs Business Brief article explains the change and also provides details of an extra-statutory concession that will allow exemption for welfare services effective from 31 January 2003.
The concession enables a consistent VAT treatment for welfare services across the United Kingdom during the phased introduction of the registration and regulatory régimes to which the exemption is linked. It states that any welfare provider which is not a state-regulated private welfare agency but will become one once the regulatory register opens, or any business that is in the process of registering with the appropriate regulatory body, may treat the welfare services it provides as exempt from VAT.
The concession will be available only where a business can demonstrate a reasonable expectation that it will be required to register at the appropriate time, and will cease to apply when the business registers with the regulatory body or if its application for registration with that body is refused.
Use of the concession is voluntary, and until they register with the appropriate regulatory body, commercial providers of welfare services may choose to continue taxing their supplies. However, once a business registers with the regulatory body, and thereby becomes a state-regulated private welfare agency, all of the welfare services it provides will be exempt.
(Source: HM Customs news release 107/02 dated 30 December 2002 and Business Brief 01/03 dated 20 January 2003.)
VAT on road tolls
On 1 February 2003, as a result of a European Court of Justice ruling, tolls payable to private sector operators for use of roads, road bridges or road tunnels will become subject to VAT. While statutory toll charges levied by public bodies can remain free from VAT, other toll charges must be taxed.
From 1 February 2003, VAT-registered businesses will be entitled to recover the VAT charged on tolls, provided they have made the journeys in question in connection with their taxable activities and they hold the necessary evidence.
From 1 February 2003, tolls payable to use the following bridges and tunnels will include VAT, unless the toll operator is a small business with a turnover beneath the VAT registration threshold: Aldwark Bridge, Clifton Suspension Bridge, Dunham Bridge, Rixton and Warburton Bridge, Severn River Crossing, Skye Bridge, Swinford Bridge, Shrewsbury (Kingsland) Bridge, Whitchurch Bridge, Whitney on Wye Bridge.
Customs plans to issue formal guidance. The change will also affect tolls paid to use wholly private roads and bridges. There is, however, no formal record of these undertakings.
(Source: HM Customs news release 108/02 dated 30 December 2002.)
Aggregates levy
The Aggregates Levy (Registration and Miscellaneous Provisions) Regulations are to be amended, subject to Parliamentary approval, so that any person who exploits solely exempt aggregate will not have to register for the levy nor carry out certain obligations such as submitting nil returns.
The changes are set out below and will take effect from 1 April 2003:
Full exemption from registration and all obligations
Full exemption will apply to any person who commercially exploits only:
* soil, vegetable matter or other organic matter;
* spoil, waste or other by-products of any industrial combustion process, or the smelting or refining of metal;
* drill-cuttings from licensed oil exploration; or
* arisings from roads when utilities work is carried out.
Exemption from registration and consequent obligations but required to notify Customs of activities
Any person who exploits only:
* coal, lignite, slate or shale;
* spoil, waste or other by-products resulting from the separation of coal, lignite, slate or shale after extraction;
* spoil, waste or other by-products resulting from the separation of specified minerals after extraction; or
* china clay and ball clay and spoil or waste resulting from its extraction; or
* any other clay;
shall be exempt from registration and consequent obligations such as submitting returns but will be required to notify Customs of site details, activities undertaken and responsible persons. Notifications should be sent to: HM Customs and Excise, Aggregates Levy Team, Dobson House, Regent Centre, Gosforth, Newcastle Upon Tyne NE3 3PF.
(Source: Customs Business Brief 34/2002 dated 24 December 2002.)
