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VAT update December 2014

In the run up to year end a number of VAT items are time-sensitive, whilst others are general interest.  A VAT calendar summarising some of the more interesting changes in 2015 is appended.

HMRC Business Brief 49/14 has been issued today 22 December 2014, reminding businesses of the 1 April 2015 changes to the Prompt Payment Discount Rules.  Current rules permit suppliers to only account for VAT on the discounted amount on their charges, even where the customer pays late and thus pays the full price (and not qualifying for the discount).  This rather generous rules is being removed from 1 April 2015, (although it has already been rescinded from 1 May 2014 for broadcasting and telecoms services where there was no obligation to provide a VAT invoice).

Under the new rules the supplier must account for VAT on the sums actually received, and the customer may recover the VAT paid.  The brief has some useful practical guidance on various points relating to various options, invoicing, adjustments, credit notes etc.

HMRC Business Brief 47/14 explains the increase in the Intrastat threshold limit for Arrivals of goods into the UK from £1.2 million to £1.5 million.  The threshold for reporting Dispatches of goods to other EU countries remains at £250,000.

HMRC Business Brief 46/14 helpfully sets out guidance on the changes from 1 January 2015 for those selling BTE services (Broadcasting, Telecoms and E-services/digital services) and what will and won’t be caught.  This is a useful and timely summary of the rule changes and confirms a facilitation for smaller business to register for MOSS without having the inconvenience of having to charge UK VAT to UK customers, if sales are below the normal VAT threshold of £81,000.  VAT recovery on costs relating to EU sales is also available to the smaller businesses in this case.

HMRC Business Brief 42/14 updates insolvency practitioners on changes to how HMRC deal with insolvent taxpayers tax affairs.

VAT Notice 723A: updates the guidance on VAT refund claims made by EU and non-EU businesses.  This is a lengthy, but welcome update to the guidance.

CJEU - Case

In the Schoenimport ‘Italmoda’ Mariano Previti vof, case, the court held that national tax authorities & courts have the right to deny VAT deductions, refunds or zero-rating in cases of VAT evasion.  No national laws are required and the location of the evasion within the EU does not affect this ability.

Budget to be on 18 March 2015
The Chancellor has announced that the Budget will be on 18 March 2015.   VAT has been a contentious topic for Mr Osborne so he may well steer clear of it pre-election.

VAT Calendar

A few VAT dates for 2015:

1 January 2015:

  • Changes to Place of Supply rules for BTE sales to EU non-VAT registered customers.MOSS registration available.
  • Changes to SIVA requirements will ease applications and remove the need for a 3-year VAT registration history.
  • Coming into force of SI 2014/3185 - The Value Added Tax (Sport) Order 2014:  removing the requirement for the individual receiving the supply to be a member where the body making the qualifying supply operates a membership scheme.

18 March 2015:

  • Final budget before the May Elections.

1 April 2015:

  • Changes to, the Prompt Payment Discount rules for remaining businesses.
  • Withdrawal of various concessions relating to student accommodation and impacting zero-rating.

May 2015:

  • Elections to be followed by a possible new budget/ policies on VAT and tax.

30 Sept 2015:

  • The end of the transitional period extending zero-rating for works on qualifying protected buildings benefitting from the time extension.

Merry Christmas & a Happy (& interesting) New Year



Date: 23rd December, 2014
Author: Richard Collier


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