Penalties

HMRC have published a leaflet on new VAT penalties. The leaflet provides information about the financial penalties that may apply to overseas traders failing to take reasonable care in making repayment applications. This applies from 1 July 2008.

The new penalties apply to VAT claims made under the EC 13th Directive (86/560/EEC) by businesses based outside the European Union, for years commencing on or after 1 July 2008. The new penalties also apply to VAT claims made under the EC 8th Directive by businesses based in other European Union Member States, for years commencing on or after 1 January 2009.

Online Registration Upgrade July 2008

Changes have been made to the VAT Online registration form, which will have effect from 24 July 2008. HMRC believe that these changes will reduce the number of errors made when completing the form. In addition, processing times for VAT registration applications will be reduced.

Every screen now has a sub-heading advising that certain questions must be answered. Each question that must be answered is now marked with an asterisk.

The content of help pages and error messages have been reviewed and improvements to content made.

VAT (Finance) Order 2008

SI 1892 redefines the categories of special investment fund whose management is exempt under that Group 5 of Schedule 9 (VAT exemption for certain financial supplies) to the Value Added Tax Act 1994.

The management of authorised unit trust schemes and open-ended investment companies remains exempt. Trust-based schemes have been removed from the exemption. The management of funds recognised pursuant to sections 264, 270, 272 or 409 of the Financial Services and Markets Act 20001 (“the FSMA”) has been included in the exemption.

The management of closed-ended collective investment undertakings which fulfil certain criteria relating to their investment object, UK Listing status and trading of their shares on a regulated market has also been included in the exemption.

Exemption for Fund Management Services

Budget 2008 announced that the VAT exemption for fund management services would be amended with effect from 1 October 2008. HMRC Brief 35/08 provides details of the amendment and information for businesses wishing to submit claims for overpaid VAT in the light of these changes.

VAT Notes No 2 2008

This information leaflet contains details of new information on issues including the rewrite of Schedule 10 (Land and buildings) to the VAT Act 1994, the withdrawal of staff hire concession from 1 April 2009 for VAT purpose, new VAT regulations for Intrastat.