RCB/53/10 VAT—changes to Lennartz Accounting, the Capital Goods Scheme and legislation for an Extra Statutory Concession which is to be withdrawn
Revenue & Customs Brief, Issue 53. 31 December 2010
Changes to the VAT recovery rules in respect of land, property, boats (and other vessels) and aircraft were announced in 2010 (see Budget Note 42 (BN2/42/10, Division V16.3)), along with amendments to the Capital Goods Scheme (CGS) rules to allow for an adjustment mechanism. These implement the EU VAT Technical Directive (Council Directive 2009/162/EU). The changes are made partly by primary law (Finance (No 3) Act 2010 s 19 and Sch 8) and partly by secondary law (The VAT (Amendment) (No 4) Regulations 2010), taking effect from 1 January 2011.
HM Revenue & Customs (HMRC) also announced that alongside these amendments it would simplify or update the current rules for the CGS and that it would regularise an existing Extra Statutory Concession linked to the option to tax and reaffirm an area of policy that has been the subject of litigation (see Revenue & Customs Brief 47/10 (RCB/47/10, Division V16.3)). Legislation relating to recovery of VAT on directors' accommodation is also removed.
Draft secondary legislation was published for comment in November and amended in light of responses. The new law takes effect from 1 January 2011.
Who needs to read this?
Taxpayers buying land, property, boats (as well