Business Travel – VAT refund opportunity?

Some businesses may be able to secure refunds of VAT charged to them by their business travel agents following the announcement of a new policy by HMRC. Business travel agents can now apportion their charges and charge VAT only on that part of their fee which relates to the underlying travel costs that were themselves subject to VAT. Any affected organisation that is not able to recover all of the VAT charged to it should see a saving.

Education sector – educational trips subject to VAT?

Some providers of educational trips may be facing extra complexity and, perhaps, additional VAT costs following the ECJ decision in ISt Internationale Sprach und Studienreisen GmbH. In this case, the ECJ decided that the company, which arranged educational trips lasting up to 10 months, was acting as a tour operator and should therefore apply special VAT rules.

Charities – survey of VAT concerns

The Deloitte Charity VAT survey is being carried out by Deloitte in association with the Charity Finance Directors' Group and the Charities' Tax Reform Group. This online VAT survey will seek to measure the cost of both irrecoverable VAT and VAT compliance, as well as assessing HMRC’s role in respect of charities. The findings of the survey will be published on our website and discussed at a seminar to be held in London on 23 November 2005.

Retrospective VAT claims?

The Court of Appeal will decide soon whether the UK is still in breach of EU law because it has not provided proper transitional provisions dealing with the introduction of its "3 year cap" on claims for historically unclaimed VAT on purchases and for VAT overpaid on sales in VAT accounting periods when a repayment of VAT was due. Businesses that have underclaimed or overpaid VAT in these circumstances may still be able to make claims even though the underclaim or overpayment was over three years ago.

Retailers – low value consignments

Retailers who have set up operations outside the UK (e.g. in the Channel Islands) to take advantage of the fact that low value consignments of goods sent to UK customers are not subject to VAT may be facing a challenge. It is reported that the Forum of Private Businesses is lobbying the UK Government to try to prevent businesses taking advantage of this relief as it believes that the smaller businesses that it represents are at a commercial disadvantage if larger businesses set up internet supply operations offshore. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.