EDUCATION UPDATE
17.03.2020
HMRC Changes
Ann Wilson Clark will be leaving HMRC’s HE/FE Team on 20 March to move into a different part of HMRC, and David Cannon will be taking over as the HE/FE Sector Lead. David was previously a CCM in the sector, and then moved to be Sector Lead for Police, Fire & Rescue, and Housing Associations.
BUDGET UPDATE- VAT
VAT to be removed from e-publications
VAT on a range of e-publications will be removed from 1 December 2020. Specifically mentioned as qualifying for the new zero-rating are ‘e-books, e-newspapers, e-magazines and academic e-journals’ so hugely useful to the education sector.
It is not clear what this means for current retrospective claims that many HE’s and Fe’s are currently compiling and submitting to suppliers and HMRC. It is uncertain whether HMRC will still proceed with their appeal against the Upper Tribunal News Corp decision, or whether they will now agree to pay these claims or refuse them based on this future change. We will keep you updated as soon as we hear anything further.
Partial exemption and Capital Goods Scheme
No specific response was announced in the Budget on the recent call for evidence in respect of simplification of partial exemption and the Capital Goods Scheme. The government stated that it will ‘continue to engage with stakeholders in relation to their responses and will publish a response in due course’.
Domestic reverse charge on construction services
The Budget confirmed that the domestic reverse charge for building and construction services will come into force on 1 October 2020. It is unlikely that this will be directly relevant to universities and FE Colleges, however, it would be prudent to review contracts with suppliers to make sure they are aware that they are dealing with an ‘end user’ and that the reverse charge doesn’t apply. If an HEI or FE College is providing or passing on building or construction services to another entity, we would recommend that the DRC position is reviewed.
Imports from outside the UK - Postponed Accounting
From 1 January 2021 registered businesses will account for VAT on goods they import from all countries, including the EU, on their VAT return. It is not clear whether ‘registered’ means VAT registered, or registered for postponed accounting. We will keep you updated.
Goods from overseas/low value imports
There will be a formal consultation to explore options for the VAT treatment of goods from overseas sellers, including looking at low value imports.
Removal of the ‘Tampon Tax’
From 1 January 2021 a zero-rate will be introduced for women’s sanitary products.
Should you have any questions then do get in touch with your Centurion VAT Specialist. We are here for when VAT gets complicated!
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