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HMRC Amends VAT Treatments

5 Sep 2012

HM Revenue & Customs has issued guidance on several changes to current VAT treatments which take effect from 1 October 2012. These changes are outlined in the 2012 Budget, with one exception regarding hot take away food. Taxand UK highlights the changes and provides a summary of what you need to know.

Multinationals with subsidiaries in the UK that supply or receive any of the following goods or services should be aware of the below changes:

  • Approved alterations to listed buildings will now be standard-VAT rated instead of zero-VAT rated in line with the existing treatment of repair and maintenance. Zero-rating for the first grant of a major interest in a protected building will also be restricted to buildings substantially reconstructed from a shell.
  • Catering and takeaway food - New tests have been added to determine if takeaway food is to be standard-VAT rated. Clarification on what constitutes premises is needed to determine if food is taken-away.
  • Drinks marketed and advertised as sports nutritional drinks will be standard-VAT rated.
  • Clarification that renting-out a hairdressers' chair is standard-VAT rated and not an exempt supply of land.
  • Self-storage will be compulsorily standard-VAT rated.
  • Anti-forestalling rules apply to supplies of self-storage, approved alterations, and first grants of a major interest in protected buildings.

Discover more: Access guidance from the UK HMRC Brief 27/12

Taxand's Take

Multinationals in these sectors will need to take heed of these recent VAT changes as it may have an impact on how they wish to price their goods or services in the UK.

Your Taxand contacts for further queries are:
Richard Baxter
T. +44 20 7663 0750

Iman Ben Abbes
T. +44 20 7072 3250

Taxand's Take Author