Reduced VAT for e-pubications

EU citizens could pay less for e-books after plans to allow member states to reduce VAT on e-publications were backed in committee on 3 May.

An EU Commission proposal to enable member states to charge a reduced rate of VAT on e-books, which would bring them into line with VAT levied on printed matter, was backed by the 48 votes to 1 with 2 abstentions by the Economic and Monetary Affairs Committee. The proposal will now be voted by Parliament as a whole on May 31st.


VAT: new rules for zero- rate relief on adapted motor vehicles for disabled wheelchair users

New rules for VAT relief on substantially and permanently adapted motor vehicles for disabled wheelchair users, which are intended to end the abuse of the current scheme, come into force on 1 April 2017.

The rules will specify a limit on the number of vehicles within a specified period of time that an individual can purchase, and require an electronic or written submission of the eligibility declaration form published on Motor dealers selling adapted motor vehicles under this relief will also be required to provide sales information to HMRC within a specified time frame. Individuals who are in breach of these requirements may be denied zero rate relief or may be subject to a section 62 Value Added Tax Act (VATA) 1994 penalty if the declaration they make is incorrect.

The new rules include provisions allowing exceptions to the limit on the number of cars purchased, for example in cases where the medical needs of the wheelchair user change.

Further information can be found on here.


Office of Tax Simplification: terms of reference for its review of VAT

The OTS has published the terms of reference for its review of VAT announced in Autumn Statement 2016, setting out areas which will fall within its scope.

Areas suggested for  the simplification review include:

  • VAT registration thresholds;
  • complexities created by the definitions of types of supply  currently exempted, reduced rated or zero-rated, and whether they need to be modernised;
  • whether there is demand for having a more widely available formal rulings system, e.g. in relation to TOGCs;
  • the potential for simplifying partial exemption methods, the option to tax and the Capital Goods Scheme;
  • Special Accounting Schemes;
  • general administration including the penalty regime and the appeals process; and
  • opportunities to align VAT with other taxes (or vice versa) as part of Making Tax Digital.

The review will not be concerned with VAT rates or issues arising from Brexit, including the treatment of financial services, statistical reporting and EU cross-border VAT rules such as the MOSS. But the review will consider Brexit in looking at opportunities to simplify VAT
for the future.

The terms of refernce are on the website.