VAT
Thresholds
The VAT registration limits increase with effect from
1 April 2008 as follows:
- the threshold for compulsory registration is
£67,000
- the threshold for voluntary deregistration is
£65,000.
Car fuel scale charges
Where an employee is provided with free fuel along
with a company car, an income tax benefit in kind arises based on the CO2
emissions of the car. In addition the employer has to pay a VAT car fuel scale
charge. Revised tables have been issued for use from the start of the next VAT
accounting period beginning on or after on 1 May 2008.
Reduced rate for smoking cessation products
A reduced 5% VAT rate for ‘over the
counter’ sales of smoking cessation products was introduced from 1 July
2007 for a period of one year. The government has announced that the 5% reduced
rate will continue to apply.
Smoking cessation products dispensed on
prescription continue to be zero rated.
Option to tax land and buildings
The government will simplify the rules relating to the
option to tax land and buildings. It will also make changes to enable taxpayers
to revoke an option to tax after 20 years. The earliest date an option to tax
will be revocable will be 1 August 2009.
The government also proposes
to make changes to improve the practical administration of the option to
tax.
Claims
The government will introduce rules to enable eligible
businesses to make claims for over declared output VAT or under declared input
VAT which accrued before the introduction in 1996 and 1997 of the three year
time limit for claims. Claims will need to be made by 31 March 2009.
Errors
The error correction regulations for VAT permit the
inclusion of errors below £2,000 on the next return submitted. Errors
exceeding £2,000 have to be separately notified to HMRC. The de minimis
limit will be increased to the greater of £10,000 or 1% of turnover,
subject to an upper limit of £50,000. This measure will take effect for
accounting periods commencing on or after 1 July 2008. The change also applies
to other indirect taxes. |
