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Budget 2015 - VAT

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18 March 2015

Rates of VAT

The standard and reduced rates of VAT remain unchanged at 20% and 5% respectively.

Registration / Deregistration

The registration and deregistration thresholds are increased by £1,000 to £82,000 and £80,000 respectively with effect from 1 April 2015.

Deductions Relating to Foreign Branches

With effect from the first day of its next partial exemption year beginning on or after 1 August 2015, supplies made by foreign branches can no longer be taken into account by a partly exempt UK business when calculating how much VAT incurred on overhead costs used to support those branches can be deducted.

VAT Refunds for Search and Rescue, Palliative Care and Medical Courier Charities

As previously announced in the Autumn Statement, measures effective from 1 April 2015 will refund to search and rescue and palliative care charities the VAT incurred on the purchase of goods and services, and the acquisition and importation of goods from outside the UK, used for their non-business activities.

These measures are now extended to cover medical courier (e.g. blood bikes) charities.

Severn River Crossing Toll

Once the Severn River Crossings are in public ownership post-2018, VAT on the tolls will be abolished.

Non-Departmental and Similar Public Bodies Engaged in Shared Services Arrangements

From Royal Assent, measures will be introduced to refund to named non-departmental public bodies, and similar public bodies, the VAT incurred as a part of shared services arrangements which is used to support their non-business activities.

Transport Agency

As previously announced in the Autumn Statement, The Finance Bill 2015 will legislate to ensure that the organisation to replace the Highways Agency will be eligible for VAT refunds from 1 April 2015.