VAT

RICHARD CURTIS has to visit the pub to research a VAT problem.

Three-year cap

HMRC have recently published a Business Brief relating to the three-year cap in the light of two recent Court of Appeal decisions, Michael Fleming (trading as Bodycraft) v CRC [2006] 864 and Condé Nast Publications Ltd v CRC [2006] SWTI 1881.

VAT: theatres

HMRC have decided to appeal the High Court decision in Mayflower Theatre Trust Ltd v CRC; see Update, Taxation, 27 April 2006, page 92. In the meantime, HMRC have provided guidance for theatres affected by the High Court decision.

Unrecorded shooting income

If the landowner is a member of a syndicate, HMRC will expect the landowner to account for VAT on the open market value of the rights granted to the syndicate and also on the supply of any goods and services, such as those of the gamekeeper or others working on the shoot. This VAT will be payable even if no money changes hands.

Liquidated

S Ltd imported goods from suppliers in the EU and sold them on to different UK purchasers. S Ltd's sole director, the first defendant, instructed the company to divert most of the moneys due from the English companies to overseas companies. In respect of two transactions, S Ltd told purchasers to pay a Spanish company, with which S Ltd had never dealt and which was not a supplier of goods to S Ltd. This instruction rendered S Ltd insolvent and unable to pay its VAT. It was subsequently wound up.

Tuition fees and VAT

Reverse charge

Missing trader intra-community fraud is estimated to have cost between £1.12 billion and £1.9 billion in 2004-05. As announced on 26 January 2006, the Government has submitted an application to the European Commission for a derogation from the Sixth Directive to change the normal VAT accounting rules for supplies of certain specified goods, i.e. the reverse charge.

Beneficial ownership