2010 No. 2940

Value Added Tax

The Value Added Tax (Amendment) (No. 3) Regulations 2010

Made

Laid before the House of Commons

Coming into force

The Commissioners for Her Majesty’s Revenue and Customs1 make the following Regulations in exercise of the powers conferred by sections 26B2, 39(1) and (3)3 of, and paragraph 2A4 of Schedule 11 to, the Value Added Tax Act 19945.

Citation, commencement and effect1

These Regulations may be cited as the Value Added Tax (Amendment) (No. 3) Regulations 2010 and come into force on 4th January 2011.

Amendment of the Value Added Tax Regulations 19952

The Value Added Tax Regulations 19956 are amended as follows.

Change of rate, supplementary charge invoices3

In regulation 15A (change of rate, supplementary charge invoices), after “Schedule 3 to the Finance Act 2009” insert “or Schedule 2 to the Finance (No. 2) Act 20107”.

Flat-rate scheme for small businesses

4

For the Table in regulation 55K (flat rate scheme for small businesses, category of business), substitute—

Category of business

Appropriate percentage

Accountancy or book-keeping

14.5

Advertising

11

Agricultural services

11

Any other activity not listed elsewhere

12

Architect, civil and structural engineer or surveyor

14.5

Boarding or care of animals

12

Business services that are not listed elsewhere

12

Catering services including restaurants and takeaways

12.5

Computer and IT consultancy or data processing

14.5

Computer repair services

10.5

Dealing in waste or scrap

10.5

Entertainment or journalism

12.5

Estate agency or property management services

12

Farming or agriculture that is not listed elsewhere

6.5

Film, radio, television or video production

13

Financial services

13.5

Forestry or fishing

10.5

General building or construction services*

9.5

Hairdressing or other beauty treatment services

13

Hiring or renting goods

9.5

Hotel or accommodation

10.5

Investigation or security

12

Labour-only building or construction services*

14.5

Laundry or dry-cleaning services

12

Lawyer or legal services

14.5

Library, archive, museum or other cultural activity

9.5

Management consultancy

14

Manufacturing fabricated metal products

10.5

Manufacturing food

9

Manufacturing that is not listed elsewhere

9.5

Manufacturing yarn, textiles or clothing

9

Membership organisation

8

Mining or quarrying

10

Packaging

9

Photography

11

Post offices

5

Printing

8.5

Publishing

11

Pubs

6.5

Real estate activity not listed elsewhere

14

Repairing personal or household goods

10

Repairing vehicles

8.5

Retailing food, confectionary, tobacco, newspapers or children’s clothing

4

Retailing pharmaceuticals, medical goods, cosmetics or toiletries

8

Retailing that is not listed elsewhere

7.5

Retailing vehicles or fuel

6.5

Secretarial services

13

Social work

11

Sport or recreation

8.5

Transport or storage, including couriers, freight, removals and taxis

10

Travel agency

10.5

Veterinary medicine

11

Wholesaling agricultural products

8

Wholesaling food

7.5

Wholesaling that is not listed elsewhere

8.5

*

“Labour-only building or construction services” means building or construction services where the value of materials supplied is less than 10 per cent of relevant turnover from such services; any other building or construction services are “general building or construction services”.

5

In regulation 55M (withdrawal from the scheme)—

a

in paragraph (1)(a), for “£225,000” substitute “£230,000”,

b

in paragraph (1)(b), for “£225,000 substitute “£230,000”, and

c

in paragraph (2), for “£187,500” substitute “£191,500”.

Repayments to Community traders6

In regulation 173P (the day by which a claim under this Part must be made)—

a

at the beginning of paragraph (1) insert “Subject to paragraph (1A),”; and

b

after paragraph (1) insert—

1A

A repayment application in respect of a repayment period falling within the repayment year commencing on 1st January 2009 must be submitted in accordance with regulation 173I(c) before 1st April 2011.

Dave HartnettSteve LameyTwo of the Commissioners for Her Majesty’s Revenue and Customs
EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations come into force on 4th January 2011 and amend Parts 3 (VAT invoices and other invoicing requirements), 7A (flat-rate scheme for small businesses) and 20 (repayments to Community traders) of the Value Added Tax Regulations 1995 (S.I. 1995/2518).

Regulation 3 amends regulation 15A (change of rate, supplementary charge invoices) to include a reference to a supplementary charge due under Schedule 2 to the Finance (No. 2) Act 2010 as a consequence of the increase in the standard rate of VAT from 17.5% to 20% on 4th January 2011.

Regulation 4 amends regulation 55K (flat rate scheme for small businesses, category of business) to substitute a new table with revised percentages to reflect the increase in the VAT rate.

Regulation 5 amends regulation 55M (withdrawal from the flat rate scheme) to provide for revised figures relating to exit thresholds to reflect the increase in the VAT rate.

Regulation 6 amends regulation 173P (day by which a claim under this Part must be made) to implement an amendment made by Council Directive 2010/66/EU (OJ No L 275, 20.10.2010, p 1) to Council Directive 2008/9/EC (OJ No L 44, 20.02.2008, p 23) which lays down the rules for the refund of VAT incurred by a taxable person in a Member State other than the Member State in which that person is established. Its effect is that claims for repayment of VAT incurred in the year commencing on 1st January 2009 may be submitted to Her Majesty’s Revenue and Customs until 31st March 2011.

A full Impact Assessment has not been produced in relation to this instrument as it has no impact on business, charities or voluntary bodies.

A full Impact Assessment of the effect that the increase in the VAT rate will have on the costs of business and the voluntary sector is available at http://www.hmrc.gov.uk/better-regulation/ia.htm.