30 November - Tax Administration and Maintenance Day


Yesterday was Tax Administration and Maintenance Day – and in a continuing trend of engagement with businesses and advisers on VAT and Tax issues in general, HMRC published yesterday an update on the range of active tax consultations - Tax policy consultations - GOV.UK (www.gov.uk)

From the VAT perspective you could briefly respond that the news is “there is no news” in terms of any changes planned that would have an immediate impact. One of the more significant consultations had been into “Simplifying the VAT Land Exemption” where feedback from the original consultation and the Office of Tax Simplification review had covered ideas from widening the Exemption to broadening the Taxable treatment across Land transactions.

Whilst there is no immediate agreement on changes to VAT treatments in this area, a positive to come out of the process is that the need for improved guidance in the area is recognised. We’ve been waiting on an updated Public Notice 742 on Land and Property for some years now and with the added areas of complexities recently around issues such as dilapidations, overages, call options and rights of light it would be useful for businesses and their VAT advisers to get detailed commentary on HMRC ‘s position. There will be a working group with the Land and Property Liaison Group which hopefully will drive this need for clarity and updated guidance relating to dilapidation payments is due to be published early next year.

The consultation commentary goes on to state:

“On overages, the joint working group is already working to produce updated guidance for officers and businesses to follow. There is already some guidance available on call options, which has not changed. However, HMRC’s position in some specific cases, including those in litigation, has created uncertainty and doubt. HMRC is currently considering this and will provide clarification in the new year. Work on providing guidance on rights of light has not started yet. HMRC intends to engage with the working group on this issue once sufficient progress has been made on the other areas mentioned above.”

All positive comments. There is talk of developing a central database to store the VAT treatment on land which would be a useful tool to many organisations when tracking down their position on “opted” land which is currently proving a challenge and it is clear from the commentary that more engagement on areas that create VAT concerns is being planned for 2022. Certainly, one of the more complex areas of VAT management is regarding land and property transactions so whilst there’s nothing of significance to report from yesterday’s Tax Administration and Maintenance Day it does remind us of the need to be alert to managing VAT in this area currently and to keep abreast of developments in the VAT treatment going forward.

Centurion – here for when VAT and Environmental Tax gets complicated.


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