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8 July 2015

Rates of VAT

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

The government will include “tax lock” legislation in the Finance Bill to set a ceiling for the standard and reduced rates of VAT and to prevent the relevant statutory provisions being used to remove any items from the zero rate of VAT and reduced rate of VAT for the duration of this Parliament.

Registration / Deregistration

The registration and deregistration thresholds remain unchanged at £82,000 and £80,000 respectively.

Fuel Scale Charge The figures for the amount of output VAT to account for in respect of fuel provided for private motoring are shown on our Tax Facts card and on the HMRC website, click here. The figures are based on carbon dioxide (CO2) emissions, and apply from the first VAT return period beginning on or after 1 May 2015.

VAT on services used and enjoyed in the UK

The government will apply VAT “use and enjoyment” provisions which override the general “place of supply” rules in certain situations, such that from April 2016, it will be clear that all UK repairs made under UK insurance contracts will be subject to VAT in the UK. This is designed to prevent UK insurance companies creating establishments outside the EU in order to receive repair services free of VAT.

In addition, the government will consider a wider review of offshore-based avoidance in VAT exempt sectors, with a view to introducing additional “use and enjoyment” measures for services such as advertising in the following year.

VAT refunds for shared services

The government will legislate in the Finance Bill 2016 to refund to eligible public bodies the VAT incurred on specified shared services.


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