Commentary

V16.947 VAT—opting to tax supplies of land and buildings – new automatic permission rules and changes to concessionary VAT recovery

Part V16 Forms and other HMRC material

V16.947 VAT—opting to tax supplies of land and buildings – new automatic permission rules and changes to concessionary VAT recovery

V16.947 VAT—opting to tax supplies of land and buildings – new automatic permission rules and changes to concessionary VAT recovery

Information Sheet 6/09, April 2009

Introduction

With effect from 1 May 2009, a new automatic permission condition (“APC”) will replace one of the existing APCs (see Notice 742A “Opting to tax land and buildings” – para 5.2 and Box D) (Part V8). In addition to this new APC, there will be changes to the concessionary recovery of VAT that will take effect from 1 May 2010.

Background

Taxpayers who wish to opt to tax land and buildings, but have made previous exempt supplies of them, are required to seek the prior permission of HMRC unless they meet the terms of any one of the four APCs published in notice 742A “Opting to tax land and buildings” (Part V8). If a taxpayer meets the terms of any one of the four conditions, that taxpayer is able to opt to tax simply by notifying that option to HMRC, without the need to formally apply for permission.

With effect from 1 May 2009, the new APC (at Annex A) replaces the previous condition 3 and has force of law. The other APCs (1, 2 & 4) remain unchanged.

New automatic permission condition (“APC”)

It is hoped that many more taxpayers will now be able to use the APCs than in the past and that the number of formal requests for permission will, as a result, be reduced. However, it has been necessary to write the new APC in a legally

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