1.18 VAT rules concerning call-off stock arrangements
As announced on 31 December 2019, the government will introduce legislation required by Council Directive 2018/1910 relating to the VAT treatment of supplies of call-off stock across EU borders. This change will introduce simplified rules for the VAT treatment of movements of call-off stock between the UK and EU Member States, allowing businesses to delay accounting for VAT until the goods are called-off. The legislation will have a retrospective element, applying to goods which are removed from a Member State or the UK on or after 1 January 2020.
2.21 VAT: applying a zero rate to e-publications
As announced at Budget 2020, the government will legislate to apply a zero rate of VAT to e-publications, to make it clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts. This change will take effect from 1 December 2020. The government will be consulting on the details of the legislation ahead of its implementation
2.22 VAT: amendment to the Agricultural Flat Rate Scheme (AFRS)
As announced at Budget 2020, we will introduce new entry and exit rules for the VAT AFRS. The government engaged with businesses and their representatives in 2019. The following changes will be implemented from 1 January 2021:
• businesses can join the AFRS when their annual turnover for farming related activities is below £150,000
• businesses must notify HMRC once their annual turnover for farming related activities exceeds £230,000, to be deregistered from the scheme and register for VAT instead
• businesses with turnover that exceeds £85,000 for non-farming related activities will still be required to register for VAT and will be ineligible for the scheme
2.23 Introduction of a zero rate of VAT for women’s sanitary products
As announced at Budget 2020, and following enabling legislation in Finance Bill 2016, the government will introduce a zero rate of VAT for women’s sanitary products on 1 January 2021.
2.24 S4C Section 33 VAT Act review
The government will legislate later in the year to add S4C to the special VAT refund scheme for public bodies, which will allow S4C to receive a refund of VAT incurred on its public service activities. HM Treasury and the Department for Digital, Culture, Media & Sport will conduct an internal review in spring 2020 to establish whether other broadcasters should be given similar VAT treatment.
2.25 Partial Exemption and the Capital Goods Scheme
Following the recent call for evidence on the simplification of the VAT rules on partial exemption and the capital goods scheme, the government will continue to engage with stakeholders in relation to their responses and will publish a response in due course.
2.26 VAT financial services: industry working group
As announced at Budget 2020, the government will create an industry working group to examine VAT on financial services.
2.27 The Value Added Tax (Finance Order) 2020
As announced by the government in July 2019, the government is legislating to provide a wider VAT exemption for the management of Special Investment Funds
2.28 VAT treatment of goods from overseas sellers
As announced at Budget 2020, the government will informally consult with stakeholders to explore options on the VAT treatment of goods from overseas sellers. This will include consideration of low value imports and goods located in the UK when sold to UK customers
2.29 Postponed VAT accounting
As announced at Budget 2020, from 1 January 2021 registered businesses will be able to account for VAT on goods they import from all countries, including the EU, on their periodic VAT return.
2.30 EU Exit: long term passengers policy consultation
As announced at Budget 2020, the government is publishing a consultation on the approach to the VAT and excise treatment of goods carried across borders by passengers for their personal use. The consultation will be published on 11 March and run for 10 weeks. It will consider inbound allowances for excise and non-excise goods, outbound duty-free and tax-free sales, and the VAT Retail Export Scheme.