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Simplifications will be made to the procedures for opting to tax land and buildings, in respect of which the tax payer has made previous exempt supplies. The simplification will be made by the replacement of an automatic permission condition (APC) for tax payers who would otherwise have to seek permission from HMRC before opting to tax.
The new APC will have effect from 1 May 2009. Two related extra statutory concessions will also be withdrawn but not until 30 April 2010.
Comment
HMRC expect that the new APC will result in more taxpayers being able to opt to tax land and buildings without having to contact them.
A package of measures is being introduced to simplify and modernise the VAT system for cross-border trading and to counter fraud with effect from 1 January 2010 across the EU. The measures include:
- changes to the basic place of supply of services rules
- changes to the time of supply rules
- European Sales List (ESL) reporting for supplies of cross-border services
- a new electronic refund procedure for VAT incurred in other EU Member States.
Changes will be made to the complex rules on the place of supply of services rules which determine the country where a supply of services is made and where any VAT due is payable. The rules also determine whether, if VAT is due on a supply, it should be accounted for by the supplier or their business customer.
The proposal is that, as far as possible for business to business supplies, VAT is due in the country where the service is consumed. This will have the effect of reversing the present general rule.
The basic rule for supplies to non-business customers will remain unchanged in that it will be where the supplier is established.
Comment
Businesses will be liable to account for UK VAT on most services provided by their overseas suppliers under the reverse charge procedures.
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