Budget 2013 – Changes affecting VAT

We present a summary of the main changes to VAT arising from the 2013 Budget.

Registration /deregistration thresholds

From 1 April 2013:

  • VAT registration threshold: £79,000
  • VAT deregistration threshold: £77,000

Withdrawal of exemption for supplies of research between eligible bodies

Subject to the outcome of the consultation, the plan is to withdraw this exemption from 1/08/13.  Transitional reliefs may be introduced.

Place of supply rules: B2C: Telecoms, broadcasting and e-services

From 1/01/15, intra-EU B2C supplies of such services will be taxed in the Member State where the customer is located.

To save multiple VAT registrations across the EU, it will be possible to account for VAT due in other Member States via a ‘Mini One Stop Shop’, using a single return.

Included within these provisions are the supplies of mobile phone services, access to the internet, video and music downloads, gaming, e-books, anti-virus software and on-line auctions.

Environmental taxes

Landfill tax

Standard rate:

  • £72 /tonne from 1 April 2013
  • £80 /tonne from 1 April 2014

Reduced rate:

  • £2.50 / tonne from 1 April 2013
  • £2.50 / tonne from 1 April 2014

Climate change levy

  • Increases in line with inflation.

Aggregates levy

  • £2.10 / tonne from 1 April 2013

New consultations announced

Retail Export Scheme

With a view to redesigning the scheme to make it easier to use and more efficient.

Zero-rating of certain exports

With a view to enabling zero-rating of exports to businesses that are VAT-registered in the UK but have no business establishment here, where they arrange for export to a non-EU destination.

Extension of exempt education to profit-making providers of Higher Education

This consultation has identified significant issues and the proposal will not proceed as planned. The Government will look for alternative proposals for further consultation.

 

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