A recent issue of concern from our professional accountancy partners has revolved around client questions relating to Customs Duty issues. Duty is in itself a complex area and we are happy to signpost any concerned parties to specialist Duty advisers should a Duty concern arise.
An area where VAT and Duty do cross over and cause concerns is in the compliance of the VAT & Duty Relief scheme of Inward Processing Relief (IPR) where, if clients operate the scheme, it is vital to ensure that they retain the correct evidence to show that the goods concerned have been re exported from the UK. A recent case has shown that a Bill of Discharge is a key requirement as evidence for those using IPR.
For real technical buffs there is a Duty issue impacting on the imposition of import duties by the EU on certain IT products which is in violation of the World Trade Organisations Information Technology Agreement!
We are noticing an increasing range of VAT issues arising within our own client base from activities between the UK and the rest of the world and the following case illustrates one aspect well:
Update on VAT incurred from EU based suppliers
A recent First Tier Tribunal (FTT) case, J.B. Davison, highlighted the problems that can arise in trying to recover non UK VAT that should not have been charged by the supplier under VAT place of supply rules. Our own experience, particularly in relation to Germany, is that where non UK VAT has been charged on services which should have been zero rated in the relevant EU state and subject to a VAT reverse charge in the UK, the EU VAT authorities will not refund the VAT incurred.
We recommend that clients should review any EU VAT that they incur and where it is found that the place of supply is the UK and not the supplier’s EU state, they should request a VAT credit note and refund from the supplier rather than seek to reclaim the VAT using the HMRC EU VAT reclaim procedure. Contact firstname.lastname@example.org if this issue touches a nerve.
Housing Associations: Supporting an internal VAT Network
The VAT training session we are running for Development Teams in the Housing Association sector is reaping real benefits for our association clients who have run the course in house with their development team managers and finance managers. Apart from the increased VAT awareness on complex property developments across the board, the teams are finding out about the complexities that partial exemption methods can create and the restrictions on VAT recovery on project costs. It’s proving a great way to demonstrate why it’s vital that project plans are shared as early as possible with the finance team.
If running this course in house with your team appeals do get in touch. If there are 10 or more staff to attend it could also prove a more cost effective option then sending teams out to our site for the next open course to be run on 12th June 2012.