Reverse charge VAT Order laid
Our regular update of tax and customs-related developments in secondary legislation.
SIs laid in the past week
Value Added Tax (Finance) (EU Exit) (Revocation) Order 2019
Procedure: Made negative. Made date: 12 June 2019. Laid date: 13 June 2019. Objection period ends: 22 July 2019. Coming into force date: 8 July 2019. Laying body: HM Treasury. Applicability: UK-wide.
Purpose of the instrument: This instrument revokes the Value Added Tax (Finance) (EU Exit) Order 2019 (the Finance Order). The Finance Order would have extended the scope of the UK’s VAT exemption for the management of special investment funds to fully reflect the scope of the exemption under EU law with effect from the UK’s exit from the EU (EU Exit Day). Whilst this would have ensured that UK taxpayers could continue to exempt their supplies under UK law once they were no longer able to rely on the direct effect of EU law, a smaller group of taxpayers would have had to exempt their supplies for the first time. The Finance Order is being revoked so that new legislation can be laid at a later date that will make the changes that the Finance Order would have made, but with effect from 1 April 2020 rather than EU Exit Day. (More in the Explanatory Memorandum.)
Value Added Tax (Section 55A) (Specified Services) Order 2019
Procedure: Made negative. Made date: 12 June 2019. Laid date: 13 June 2019. Coming into force date: 14 June 2019. Objection period ends: 22 July 2019. Laying body: HM Treasury
Purpose of the instrument: The Value Added Tax Act 1994 (“the Act”), as a general rule, requires a supplier of goods and services to account for VAT on those supplies. Section 55A of the Act (“section 55A”) requires VAT to be paid by the recipient of supplies (“a reverse charge”) if the supplies are of a type specified for that purpose in a Treasury order. A reverse charge prevents supplies of goods and services from being exploited by those engaged in missing trader intra-community (MTIC) fraud. This instrument imposes a reverse charge, with effect from 14 June 2019, on supplies of gas and electricity certificates (also known as “renewable energy certificates”). (More in the Explanatory Memorandum.)
Income Tax (Accommodation Allowances of Armed Forces) Regulations 2019
Procedure: Made negative. Made date: 10 June 2019. Laid date: 11 June 2019. Coming into force date: 2 July 2019. Objection period ends: 20 July 2019. Laying body: HM Treasury.
Purpose of the instrument: The new armed forces accommodation allowance is exempted from income tax. These Regulations set out the detailed conditions that will have to be met for the exemption to apply. (More in the Explanatory Memorandum.)
Social Security (Contributions) (Amendment No. 2) Regulations 2019
Procedure: Made negative. Made date: 10 June 2019. Laid date: 11 June 2019. Coming into force date: 2 July 2019. Objection period ends: 20 July 2019. Laying body: HM Treasury.
Purpose of the instrument: These regulations provide for a Class 1 National Insurance contributions (NICs) disregard for payments made as part of the new armed forces accommodation allowance in the United Kingdom. (More in the Explanatory Memorandum.)
Select committee scrutiny
At its meeting on 12 June 2019 (report here) the Joint Committee on Statutory Instruments considered the following relevant instruments and did not require them to be reported to both Houses:
Instrument subject to annulment
Procedure: Made negative. Made date: 9 May 2019. Laid date: 10 May 2019. Coming into force date: 1 June 2019. Objection period ends: 29 June 2019. Laying body: HM Treasury.
Purpose of the instrument: The instrument commences sections 101 and 102 of the Finance Act 2009, so that interest is charged by HMRC on late payment of certain penalties, or paid by that department for late refunds of such charges. The penalties are those for failing to comply with certain obligations under the Disclosure of Tax Avoidance Schemes (DOTAS) regime. (More in the Explanatory Memorandum.)
Instruments not subject to Parliamentary proceedings not laid before Parliament
S.I. 2019/921 Finance Act 2009, Sections 101 and 102 (Avoidance: Penalties) (Appointed Day) Order 2019
By George Crozier