Value Added Tax

Turnover Limits for Registration/De-Registration

Taxable turnover thresholds from 1st April 2005:-

The existing conditions for determining liability to registration or entitlement to de-registration remain unchanged. The registration and de-registration limits for acquisitions from other European Union Member States will also be increased from £58,000 to £60,000.

Fuel Scale Charges

From the first accounting period beginning on or after 1st May 2005, the quarterly scales for charging VAT on fuel used for private motoring are:-

Optional Flat Rate Scheme for Small Businesses

The Flat Rate Scheme allows businesses with a net annual turnover of less than £150,000 to account for VAT based on a percentage of gross turnover rather than the difference between output VAT charged and input VAT incurred. This simplified method of accounting for VAT is also financially beneficial for many businesses. H.M. Customs and Excise are keen to promote the scheme for the many eligible businesses that have yet to join.

Partial Exemption

A number of measures have been introduced to police the use of special methods of partial exemption calculation. Customs now have increased powers to override unfair or unauthorised methods.

Overseas Suppliers of Gas and Electricity

As a result of changes to the place of supply rules introduced in January 2005 some UK customers who are registered for VAT are now required to account for VA T on supplies they receive from suppliers who are established abroad.

Reduced VAT Rate for Energy Saving Materials

Currently a 5% reduced rate of VAT applies to the installation of specific energy saving materials. From 7th April 2005 further goods will be added to the qualifying list.