The latest changes to VAT in both the UK and further afield in the EU.
EU VAT
The French government has gone ahead with its 0.4% increase to the standard rate of VAT (called TVA in France) to 20%, effective from 1 January 2014. This increase is a small change when compared with the recent hikes in VAT rates across Europe. It also brings an end the unusual French VAT rate of 19.6% with the French government hoping to increase revenue.
The Cypriot VAT rate has increased from 1 January 2014, an increase of 1% to bring the VAT rate to 19%. As with France this now brings Cyprus in line with the recent VAT increases across Europe though a more conservative increase.
For further details on EU VAT rates along with other useful information ACCA produces a helpful analysis of the 28 EU countries that includes details on:
- what VAT is called in each member state
- the EU country code
- the standard rate of VAT
- the form and type of the VAT registration number used in each member state
- the common VAT filing period
- details on government website details in order to access further information
- non-resident VAT threshold.
The last bullet point is a recent addition and highlights the need for businesses operating in other EU member states to be careful. As you will note the threshold to register in all but two member states now stands at zero including the UK since December 2012.
The EU VAT analysis will be available on ACCA’s Technical Advisory webpages.
Other EU news
Effective from 1 January 2014 amendments to legislation will add new Regulation 137(b), effectively:
- adding Mayotte and Saint-Martin; and
- removing St Pierre and Miquelon
from those treated as excluded from the territory of member states and the European Union for the purposes of the VAT Act 1994. The territories in question are overseas department, regions or a collective of France.
VAT Notices Update
VAT Notice 725 – The Single Market
Notice 725; The Single Market has been updated. The notice provides guidance on when VAT is charged and accounted for on movements of goods within the EC Single Market and also on how businesses should account for VAT on goods they buy from other EC member states. The updates were to paragraph 16.19 regarding VAT registration numbers for member states, the inclusion of Croatia and changes to references for Ireland.
VAT Notice 707 – Personal Export Scheme
The VAT Notice has been updated to combine the previous VAT Notice 705 and VAT Notice 705A to reduce duplication and to make it easier for buyers and sellers to find the appropriate information.
VAT Notice 701/20 – Caravans and Houseboats
The VAT Notice has been updated to reflect the Budget 2012 changes details of which are contained within paragraph 2.2 of the Notice. The main changes were around the definition of a caravan in terms of size and the British Standard (BS) referencing effective from 1 April 2013.
Withdrawn notices
Notice 915 – Assessments and time limits: Statement of Practice has been withdrawn as it is no longer up to date and it has been superseded by more detailed and contemporary guidance, effective 22 November 2013. Notice 208 – Excise Assessments has been removed for the same reasons with the same effective date.
For the most up to date information on VAT Notices the ACCA has produced a summary of VAT Notices, categorised into groups to demonstrate the additional notices available that you may not be aware of.
Article contributed by ACCA