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HMRC released their consultation document on 21 March on VAT: Addressing borderline anomalies. This followed on from the budget announcement. I have practiced in VAT, on both sides of the fence, for twenty one years and in that time have been constantly amazed at the anomalies there are both in the application of and interpretation of VAT. VAT and anomalies go together like cheese and cucumber in a sandwich, we expect them, we, at times, relish the opportunity they can provide and we are often driven to moments of frustration at the results they can produce.
A number of changes were announced together with a reaffirmation of other proposed changes already in process that will be introduced later in the year.
In VAT the following changes were announced:
VAT anomalies and loopholes: Legislation will be introduced to address long-standing VAT anomalies and loopholes, with effect from 1 October 2012. The purpose here is to eradicate where possible the anomalies in VAT where similar supplies have different VAT rates.
A number of changes were announced together with a reaffirmation of other proposed changes already in process that will be introduced later in the year. In VAT the following changes were announced: VAT anomalies and loopholes: Legislation will be introduced to address long-standing VAT anomalies and loopholes, with effect from 1 October 2012. The purpose [...]
Construction services involving connected parties: This is an extension of the current rules applied for construction services provided by sub-contractors to principal contractors. From 1 May 2012 the reverse charge accounting facility can be applied to construction services between connected parties without the requirement for a principal/sub-contractor relationship to exist.