HMRC has issued guidance on various changes to the existing construction industry scheme (CIS) rules.

The zero rate of VAT has been extended to include the installation of additional energy-saving materials (ESMs) from 1 February 2024.

The hospitality and tourism sector has been enjoying a reduced rate of VAT (5%) since 15 July 2020. This rate applies to most supplies made by hotels, tourist attractions, members' clubs and most events venues. It also applies to the food and drink served in those premises and hot takeaway food and non-alcoholic drinks.

HMRC will block recovery of VAT on invoices that do not clearly state what goods or services were supplied. We have heard that HMRC officers are using this power to query the validity of invoices, particularly in the construction sector and from employment agencies.

As the UK is no longer a member of the EU, import VAT applies to all goods imported from the rest of the world into Great Britain (different rules apply for Northern Ireland) which do not qualify as small parcels (worth under £135).

Most VAT registered businesses were required to comply with the making tax digital (MTD) regulations for VAT periods beginning on or after 1 April 2019

Life outside of the EU is considerably more complicated for businesses in Great Britain who import goods, as import VAT applies to the value of most goods that come in. There are different rules for businesses in Northern Ireland.

A year ago, at the start of the Covid-19 pandemic, the Government automatically deferred all VAT due to be paid to HMRC between 20 March to 30 June 2020. The direct debit to collect that VAT was not activated by HMRC and no interest or late payment surcharges have been charged on that debt until now.

A fundamental change to VAT charged within the construction industry came into effect on 1 March 2021.

B20 Wessex, Spring Budget 2021 Tax Briefing

The rate of VAT on services supplied to non-business customers in other EU countries normally depends on where the supplier is located or, for services related to land, where the land is located.

There will be several VAT changes for businesses that import or export goods from 1 January 2021 as the rules that permit free movement of goods and people between the UK and the EU cease to apply from 11pm on 31 December 2020.

Management accounting can help develop a clear picture of your monthly performance, financial year to date, performance against budget and previous years.

Unless you use the VAT cash accounting scheme you have to account to HMRC for the VAT you charge on sales even if the customer does not pay you.

There are three rates of VAT applicable to sales in the UK: standard 20%, reduced 5% and zero 0%.