Commentary

RCB/24/08 VAT—land and buildings—new Schedule 10 of VATA 1994 including changes to the option to tax

Part V16 Forms and other HMRC material

RCB/24/08 VAT—land and buildings—new Schedule 10 of VATA 1994 including changes to the option to tax

RCB/24/08 VAT—land and buildings—new Schedule 10 of VATA 1994 including changes to the option to tax

Revenue & Customs Brief, Issue 24. 22 April 2008

This Brief announces the introduction of a new Schedule 10 to VATA 1994 that becomes effective from the 1 June 2008 following the announcement in Budget Note 79 at Budget 2008 (BN/79/08, Division V16.3).

Background

Schedule 10 to VATA 1994 deals primarily with the option to tax supplies of land and buildings and was introduced following the European Court's ruling that the UK had to tax the construction of non-domestic buildings. Following a series of amendments needed to block various avoidance schemes; this legislation has become increasingly more complex to follow. The new Schedule 10 has been rewritten in the Tax Law rewrite style, which greatly improves the layout of the legislation as well as simplifying the language.

In addition, in 1995 changes were made to Schedule 10 that allowed revocation of an option to tax 20 years after it had been made. This means the first options eligible for revocation will take place in 2009. This new legislation therefore also includes the rules for revocation and also some changes necessary for its smooth operation. Finally, in line with suggestions received from business, the new legislation includes several changes designed to facilitate business.

During its development, this new legislation has been subject to two public consultations in 2004 and 2005 and legislation was introduced in the Finance Act 2006

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