Welcome to the November 2021 edition of RPC's [email protected], an update which provides analysis and news from the VAT world relevant to your business.
- HMRC has published an impact assessment entitled Overseas UK VAT registered traders – non-established taxpayers. Overseas VAT traders, known as non-established taxpayers (NETPs), are registered for UK VAT but do not have a business address in the UK. If they are due a repayment, HMRC's VAT systems automatically issue a payable order. HMRC has received notification and complaints from taxpayers advising that they can no longer cash their payable orders in their country or their bank. With the impact of EU Exit and COVID-19, HMRC has seen an increase in banks/countries no longer accepting payable orders which means they cannot be cashed.
To address this issue HMRC is creating a Gform that will enable NETPs to send HMRC their bank account information so that it can prevent the issue of a payable order and send an electronic Clearing House Automated Payment System repayment instead. The assessment discusses the impact of HMRC's plan to create a Gform.
- HMRC has published a policy paper entitled Implementation of VAT rules in free zones. The paper discusses the measure, introduced in Finance Bill 2021-22, to enable the operation of free zones in Great Britain by introducing to the VAT free zone model a VAT exit charge for goods that have benefited from a zero-rated supply and where, after the goods leave the free zone procedure, there is no onward taxable supply of the goods within a specified time limit. The measure will affect VAT registered businesses authorised to operate in the customs site (free zone) of a Freeport.
- HMRC has published a policy paper relating to two statutory instruments:
The statutory instruments address issues identified in legislation introduced in the Finance Act 2021 to implement the One Stop Shop and the Import One Stop Shop simplified VAT accounting schemes. The measures will come into effect on 1 December 2021..
Additionally, the statutory instruments make a number of minor amendments identified in a review of EU Exit VAT legislation. The changes make sure the UK VAT system operates as required and intended. Together, these statutory instruments make a number of consequential and otherwise necessary amendments to ensure that VAT changes already made as part of the e-commerce package and in relation to EU Exit, work as originally intended.
- HMRC has published a policy paper on the VAT exemption for dental prostheses imports. The measure introduces a VAT exemption for the importation into the UK of dental prostheses to ensure supplies of dental prostheses by registered dentists and other dental care professionals continue to be exempt between Great Britain and Northern Ireland. The changes will apply retrospectively from 1 January 2021 (the end of the Brexit transition period).