5. VAT Communications

Question 1

VAT law principles originate from a number of sources

Answer 1

1. VAT Directives of the European Economic Community.
   Directive 2006/112/EC amended in 2010 is most imp’t of these.
2. The Value Added Tax Act 1994.
   Passed by uk parliament; amended from time-to-time in the various.
   Finance Acts which turn Budget measures into legal requirements.
3. UK statutory instruments - these are detailed rules and regs which
   have the authority of Acts of Parliament but don’t have to go through
   the lengthy process required to pass an Act of Parliament.
4. Certain VAT notices published by HMRC and available on www.gov.uk

Question 2

Some changes

Answer 2

Rate change

Changes to types of goods and services that are chargeable. Eg extension to reduced rate for child car seats and domestic fuel.

Intro of new VAT special schemes and modification of the upper turnover limit on existing schemes.

Question 3

A letter can be used when…

Answer 3

Business can’t find satisfactory answer on HMRC website.

Business is in real doubt about how VAT affects a particular transaction and getting a decision is financially important for the business and its customer.

Telephone line has asked biz to write letter.

Question 4

When writing need to provide

Answer 4

Vat reg number
Full postal address and phone number.
Explain prob and why biz can’t make decision.
Full details of the situation or transaction.

Following should also be provided
Is biz the supplier or customer.
Is the customer registered for vat.
Relates to goods or services.
Any other countries involved and will goods be supplied to them.
If services are involved, what sort are they.