Updates

A range of VAT measures featured from VAT relief to energy saving materials, to the treatment of private hire vehicles.  Reforms to Energy-Saving Materials   Following a call for evidence, the Government intends to expand the VAT relief available on the installation of energy-saving materials by extending the relief to additional technologies, such as water-source heat pumps, and bringing buildings used solely for a relevant charitable purpose within scope.   As a result of the Windsor Framework, these reforms will be implemented UK-wide in February 2024. Full details on these reforms will be published shortly.  Private hire vehicles   The Government will consult in early 2024 on the impacts of the July 2023 High Court ruling in Uber Britannia Ltd v Sefton MBC.   This case considered the regulation of Uber's business model outside of London, and specifically whether the private hire vehicle operator is acting as a principal when entering into a contractual obligation with the passenger to provide the journey. This potentially has VAT consequences in terms of whether the private hire vehicle operator is acting as a principal or an agent for the purposes of charging VAT.  VAT retail export scheme   The Government continues to review the rules of this scheme and thanks industry for submissions on the scheme and the associated airside scheme (tax-free shopping). The Government will continue to accept representations and will consider any new information carefully alongside broader data.   Sanitary products   The scope of the current VAT zero rate relief on women’s sanitary products is being extended to include reusable sanitary underwear from 1 January 2024. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service and Cabinet Office Borders bulletins are also available. HMRC has also issued an email about the first phase of its Border Targeted Operating Model which takes effect in just under ten weeks, and will impact on movements of goods from Ireland to Great Britain. The email contains important details of actions which need to be taken and how to prepare for these changes. Miscellaneous guidance, publications etc.   The following updated guidance, and publications relevant to EU exit are available:-  Customs, VAT and excise UK transition legislation from 1 January 2021;  Reference documents for The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020;  Reference Document for The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2020;  Reference document for authorised use: eligible goods and authorised uses;  Trade Specialised Committee on Goods;  Joint statement from the Specialised Committee on Financial Provisions, 26 October 2023; and  EM on Windsor Framework customs arrangements. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available. The Secretary of State for Northern Ireland recently gave evidence on the Windsor Framework to the House of Lords Sub-Committee and the House of Commons Northern Ireland Affairs Committee. Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Appendix 2 C21e: Data Element 1/11: Additional Procedure Codes;  Notices made under the Customs (Northern Ireland) (EU Exit) Regulations 2020;  List of customs training providers;  Reference document for authorised use: eligible goods and authorised uses;  Reference Documents for The Customs (Tariff Quotas) (EU Exit) Regulations 2020;  Reference Documents for The Customs Tariff (Preferential Trade Arrangements) (EU Exit) Regulations 2020;  Reference Document for The Customs Tariff (Establishment) (EU Exit) Regulations 2020; and  Reference Documents for The Customs Tariff (Suspension of Import Duty Rates) (EU Exit) Regulations 2020. 

Last week the Institute was represented at meetings in London of the UK Domestic Advisory Group (“DAG”), and at the annual joint UK and EU DAG meeting. After the joint meeting with the EU, a statement was issued by the UK and EU DAG’s setting out the matters discussed in more detail. On day two, representatives from both DAGs and from civil society were present at the annual Civil Society forum which provided an opportunity to feedback to representatives of the UK Government and the European Commission on key issues and concerns in implementing the Trade and Co-operation agreement.  The UK DAG is conducting its work via the following sub-groups each of which aims to publish on GOV.UK an update on key issues being discussed in the near future:-  Business and Labour Mobility;  Trade and Customs;  Regulatory Cooperation and Level Playing Field;  Energy and Climate Change; and  Nations and Regions.  Chartered Accountants Ireland participates in the Nations and Regions sub-group and was in attendance at the most recent meeting of this sub-group which took place in Edinburgh on Friday 10 November. During this meeting, attendees heard from Dimitris Dimitriadis, President of the European Economic and Social Committee’s External Relations Section as well as Irene Oldfather Vice-Chair of the UK DAG and Chair of the Sottish Advisory Forum on Europe. Broadly, concerns about youth mobility, environmental targets and the need for clearer guidance on business and economic issues were heard.    During the UK DAG meeting, attendees heard from Professor Anand Menon (UK in a Changing Europe) about the 2026 TCA review process and what that might look like given the potential for a change in UK Government after the next election. Sir Oliver Heald, Leader of the Delegation and Co-Chair of the UK-EU Parliamentary Partnership Assembly, was also in attendance and listened to various concerns from the UK DAG’s sub-groups.  Last week’s meetings in London took place in the grand surroundings of Lancaster House (see photo) which has been used in previous series of Netflix’s The Crown and which also features in the final series starting later this week. The UK Government’s wine cellars are also located at Lancaster House. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available in addition to the most recent Cabinet Office Borders bulletin which recently returned from a break. The Minister of State has written to the Chair of the House of Lords Protocol Sub-Committee providing an update the on the implementation of the Windsor Framework (“WF”) and this Committee has recently launched a new inquiry into regulatory divergence and the WF. Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Check if a business holds Authorised Economic Operator status;  Apply to use Simplified Import VAT Accounting;  CDS Declaration Completion Instructions for Exports;  Split consignments: Tariff classification and import procedures;  Known error workarounds for the Customs Declaration Service (CDS);  Apply for an Advance Tariff Ruling;  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS);  Additional Information (AI) Statement Codes for Data Element 2/2 of the Customs Declaration Service (CDS);  Customs Declaration Completion Requirements for The Northern Ireland Protocol;  Customs Declaration Service (CDS) waiver codes for imports replacing 999L;  Authorisation type codes for Data Element 3/39 of the Customs Declaration Service; and Split consignments: Tariff classification and import procedures.

Readers will be aware that the Institute has been lobbying HMRC from the beginning of September in relation to the 31 October 2023 deadline for selling second-hand motor vehicles under the VAT margin scheme, where these were bought in GB and transferred into Northern Ireland prior to 1 May 2023. HMRC’s VAT policy team has confirmed to us in a meeting that dealers can continue to use the VAT margin scheme for such vehicles that were in stock on 1 May 2023 as long as these are sold by 30 April 2024. Hence the previous deadline has now been extended by six months. According to HMRC, there will be no further extensions to this deadline thereafter. The Institute is pleased to see HMRC have taken the decision to extend this deadline which clearly recognises the difficulties being experienced by dealers in selling these vehicles in the current economic climate. The guidance on GOV.UK has now been updated to confirm this. Once again, the Institute thanks those members and businesses who provided supporting information to assist us in achieving this result. HMRC’s email message confirming the extension says the following:- “We have listened to feedback from businesses about the 31 October deadline, and have now extended the period that you can use the VAT margin scheme for vehicles you had in stock on 1 May 2023 and have not yet sold. You can now use the VAT margin scheme for eligible motor vehicles that you purchased in Great Britain and moved to Northern Ireland before 1 May 2023 and still have in stock,  if you resell them by 30 April 2024. If you sell them after 30 April 2024, you will have to account for VAT on the full selling price. Find out more information about motor vehicles you had in stock on 1 May 2023.”  HMRC has also asked to us to issue a reminder that the new VAT related payment scheme should be used, where the relevant conditions are met, in relation to second hand vehicles bought in GB and transferred to Northern Ireland from 1 May 2023. The relevant guidance for such vehicles is available here. Should you have any queries in relation to the extension to the VAT margin scheme deadline or the new VAT related payment scheme, please get in touch.

Our most recent update on this issue set out the discussions which took place with HMRC on 3 October. Since then, discussions have continued and the Institute is now pressing HMRC to remedy the situation given the continued and ongoing economic difficulties being experienced by second-hand car dealers in Northern Ireland in trying to sell these vehicles by the deadline of Tuesday 31 October 2023, in order to avail of the VAT margin scheme. Any further updates on the issue will be reported in the news section of our website. The Institute extends its thanks to those members and businesses who have provided supporting information to facilitate the dialogue with HMRC. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. We also update you on recent developments in relation to the Windsor Framework and the latest Trader Support Service bulletin is also available. The Institute will also be attending the next UK Domestic Advisory Group meeting on 6 November and would welcome your feedback by Friday 3 November on specific areas of concern which arise in relation to the Trade and Co-operation Agreement. Update on the Windsor Framework   Meetings of the Joint Committee and the Specialised Committee on the Windsor Framework took place recently, where the EU and UK reviewed progress and finalised certain arrangements for the Framework’s implementation. According to the joint statement released  after the Withdrawal Agreement Joint Committee meeting “The Joint Committee took stock of discussions under the Withdrawal Agreement framework since the last meeting on 3 July 2023. The alternate co-chairs welcomed the progress made and reiterated their mutual commitment to continued work to ensure the full implementation of all the elements of the Windsor Framework in a faithful way.”  Parliament also returned from conference recess last week, with debates taking place on the Retained EU Law Bill, and the Windsor Framework regulations. Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:- HMRC Brexit communications resources;  Report payments and view your allowance for non-customs state aid and Customs Duty waiver claims;  Report and manage your allowance for Customs Duty waiver claims: service availability and issues;  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS);  Check if a business holds Authorised Economic Operator status;  List of customs training providers;  Making an entry summary declaration;  Apply for a voluntary clearance amendment (underpayment) (C2001);  Claim repayment or remission of charges on rejected imports; and  Moving goods between the UK and the UK Continental Shelf. 

Last week the Institute met with HMRC’s VAT policy team to discuss in detail feedback received from our members and their clients that the 31 October 2023 deadline for selling second-hand cars bought from Great Britain and moved to Northern Ireland before 1 May 2023 should be extended. Under the current rules, such vehicles will not be able to use the VAT margin scheme if these vehicles are sold after 31 October 2023 meaning VAT must be charged on the full selling price. HMRC’s current view is that 31 October 2023 is still the deadline and dealers should make all attempts to sell these vehicles before that date. The Institute pressed HMRC to consider an extension and also said that if an extension is granted, this decision should be made and announced as soon as possible.  If your car dealer client has not yet sent in supporting evidence to demonstrate the ongoing difficulties being experienced in selling these vehicles, HMRC is still willing to accept such evidence which can be emailed to the Institute. We would recommend that this is done as soon as possible. By way of reminder, the information requested by HMRC is details or estimates in respect of the following:- The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain;  How many of these remain unsold at present, and their estimated value;   How many are likely to be unsold on 31 October 2023, and their estimated value; and   If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used.   The Institute wishes to thank those members and their clients who have already provided information to support the need for an extension.   

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available, and the Institute has developed a new graphic setting out the key milestones in the Windsor Framework (“WF”). Windsor Framework infographic  In the wake of the WF agreement, traders, and businesses across the island of Ireland need to be mindful of the various changes taking effect over the coming months and years as the provisions of the WF are gradually phased in.   To help navigate this landscape of new regulations, the Institute has prepared a high-level infographic which summarises the key dates and changes that traders need to be aware of in the short to medium term. As further developments arise, members will be kept up to date and informed in Chartered Accountants Tax News. As these changes bed down, contact us to share your feedback and any problem areas which arise which we can then share with UK Government officials.  Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Known error workarounds for the Customs Declaration Service (CDS);  Customs declaration completion requirements for Great Britain;  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  List of customs training providers;  Search the register of customs agents and fast parcel operators;  Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service;  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service;  4-digit to 3-digit procedure to additional procedure code correlation matrix for imports;  Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS);  Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS);  Attending an inland border facility; and  How to subscribe to the New Computerised Transit System. 

In the wake of the Windsor Framework agreement, traders and businesses across the island of Ireland need to be mindful of the various changes due to take effect over the coming months and years as the provisions of the new framework are gradually phased in. To help navigate this landscape of new regulations, the Institute’s public policy team have prepared a high-level infographic which summarises all of the key dates and changes that traders need to be aware of in the short to medium term. As further developments with respect to the Windsor Framework arise, the policy team will ensure that our members are kept up to date and informed. 

Last week we notified readers that the Institute is meeting with HMRC tomorrow to discuss the 31 October 2023 deadline for using the VAT margin scheme for second hand vehicles purchased from Great Britain and moved to Northern Ireland before 1 May 2023. Sales of such vehicles after the end of the VAT margin scheme on 31 October 2023 will mean that VAT must be charged on the full selling price. These vehicles do not qualify for the VAT related payment scheme which commenced on 1 May 2023. Today is the deadline for providing us with supporting evidence that many of these vehicles are currently unsold and are expected to remain unsold on 31 October 2023. A reminder of the evidence that HMRC is seeking is set out below.  HMRC has requested details or estimates in respect of the following:- The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain;  How many of these remain unsold at present, and their estimated value;  How many are likely to be unsold on 31 October 2023, and their estimated value; and  If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used.  We recognise that many dealers may not be able to provide all of the detail requested in such a short period of time, especially the category of vehicle, but any information or evidence to support the difficulties being experienced in selling these vehicles would be appreciated.  The meeting will also be an opportunity to discuss the new second-hand motor vehicle VAT related payment scheme. Feedback on the end of the VAT margin scheme and the new VAT related payment scheme should be emailed to the Institute by the end of today Monday 2 October 2023.