VAT

Record filings

A record 10.74m tax returns were filed for 2012/13 by 31 January, the highest proportion (93.4%) of on-time submissions recorded. Around 8.48m were filed online, passing last year's figure by 0.55m. The busiest day for online returns was 31 January, when HMRC received 569,847. The busiest hour occurred between 4pm and 5pm on the same day: 45,706 returns were received at more than 12 a second, while 21,027 taxpayers filed their return between 11pm and midnight on deadline day.

HMRC have published Revenue & Customs Brief 3/14 to clarify the definition of the term “student” in connection with the VAT liability of construction works to buildings that are “used for a relevant residential purpose”.

Previous definitions have been misinterpreted in some cases. The revised guidance in HMRC’s VAT Construction Manual at VCONST15360 attempts to set out the Revenue’s policy more clearly, stating:

AV Concepts Ltd (TC3030)

Air conditioning was installed in a restaurant more than six months before it opened. A claim to input VAT incurred by the business was denied on the basis that this comprised a supply of services and the decision was upheld on review. Was the decision correct, and what are the chances of a successful appeal?

Input tax on management fees for an endowment fund and the University of Cambridge case

The taxman’s powers to withhold repayments

Fonecomp Ltd v CRC, Upper Tribunal (Tax and Chancery Chamber)

HMRC plan to recover the amounts paid out in VAT claims made under the terms of Revenue and Customs Brief 11/10, following the Court of Appeal decison in favour of the taxman in CRC v The Rank Group plc in relation to gaming machines including multiplayer terminals.

Erect Architecture Ltd (TC3076)

A builder uses the labour-only rate in the flat rate scheme. In October 2013, he invoiced a client £10,000 for zero-rated work on new houses and was paid in November 2013

Recent VAT cases’ potential impact on monthly returns and payments

Finance and Business Training Ltd v CRC, Upper Tribunal (Tax and Chancery Chamber)