V@ update - October 2020

Welcome to the October 2020 edition of RPC's V@, an update on developments in the VAT world that may impact your business.

News

• HMRC has published Revenue and Customs Brief 14 (2020): changes to the methods used by opticians and sellers of hearing aids to account for VAT on their supplies. The brief explains simplifications to the processes used by opticians and dispensers of hearing aids to account for VAT on their supplies, which took effect from 1 October 2020
  
  
• HMRC has published the VAT reverse charge technical guide, which provides technical information about the VAT reverse charge for those who buy or sell services in the Construction Industry Scheme. HMRC has also published practical guidance for suppliers and customers.
  
  
• HMRC has published guidance on the deferral of VAT payments due to coronavirus (COVID-19). This follows the announcement of the Chancellor on 24 September 2020, that businesses which deferred VAT due from 20 March to 30 June 2020, will now have the option to pay in smaller payments over a longer period.
  
  
• HMRC has updated its policy paper Changes to VAT treatment of overseas goods sold to customers from 1 January 2021. The paper has been updated to include information about transactions before 1 January 2021, who should register for UK VAT and the requirements for online marketplaces.
  
  
• The Official Journal of the European Union has published Commission Implementing Regulation (EU) 2020/1318, which extends the application dates of Implementing Regulations (EU) 2020/21 and (EU) No 2020/194 by six months to 1 July 2021, in response to the COVID‐19 pandemic. Regulation (EU) 2020/1318 entered into force on 13 October 2020.
  
  
• HMRC has published updates to guidance in its VAT Taxable Person Manual in relation to employment bureaux, in particular to reflect the decisions in Adecco UK Ltd and others v HMRC [2017] UKUT 113 (TCC) and Adecco UK Ltd and others v HMRC [2018] EWCA Civ 1794.
  
   

Case reports

United Biscuits – CJEU confirms that pension fund management services are not exempt from VAT

In United Biscuits (Pension Trustees) Limited v HMRC (Case C-235/19), the CJEU held that investment fund management services supplied for an occupational pension scheme, which did not provide any indemnity from risk (the pension fund management services), could not be classified as 'insurance transactions' within the meaning of Article 135(1)(a) of Council Directive 2006/112/EC (the VAT Directive), and therefore did not fall within the VAT exemption provided in that provision in favour of such transactions (the insurance exemption). Read more

DCM – Court of Session decides that HMRC may amend input tax repayment claims

In DCM (Optical Holdings) Ltd v HMRC [2020] CSIH 60, the Court of Session upheld in part a decision of the Upper Tribunal (UT) in respect of an appeal by DCM (Optical Holdings) Ltd (DCM), whose business consisted mainly of the sale of spectacles. Read more

Concept Multi-Car  – FTT finds that taxpayer had no reasonable excuse for late payment of VAT

In Concept Multi-Car Ltd v HMRC [2020] UKFTT 344 (TC), the FTT dismissed the appeal of Concept Multi-Car Ltd (CMC) and upheld CMC's VAT default surcharge, confirming that CMC did not have a reasonable excuse for late payment of VAT. Read more