Weekly VAT News

GfC8: Help with VAT compliance controls
HMRC have published Help with VAT compliance controls – Guidelines for Compliance GfC8. The guidelines set out HMRC’s recommended approach to VAT compliance, and their expectations for businesses planning, carrying out, and reviewing their VAT accounting and compliance processes. There are 10 parts to the guidelines, which commence with HMRC noting that businesses will approach VAT compliance matters differently depending on the complexity and scale of their business, and that the guidelines should be used to aid taxpayers in developing their individual compliance strategy and approach to tax risk and governance matters. The guidelines proceed to cover a series of best practice points, including risk management, process documentation, and use of master data, as well as addressing compliance controls relating to employee expenses, outsourcing, the making of manual adjustments, and error corrections. The collection of guidelines issued to date is available at Guidelines for compliance (Contact: Andrew Dalah)

TalkTalk Telecom Ltd: VAT and prompt payment discounts – UT

Between 1 January and 30 April 2014, TalkTalk Telecom Ltd offered its retail customers a 15% Speedy Payment Discount (SPD) if their monthly bills were paid within 24 hours of receiving them. TalkTalk considered that under the VAT legislation for prompt payment discounts in place at the time, it should account for VAT on the basis that the consideration was reduced by the amount of the SPD, irrespective of whether it was taken up. The First-tier Tribunal disagreed with TalkTalk’s interpretation, and the Upper Tribunal has now upheld the FTT’s decision. The provisions of the VATA at the relevant time provided that where the terms of a supply allowed a discount for prompt payment, the consideration for the supply was reduced by the amount of the discount, whether or not payment was made on those terms. The UT found that there was no change to the terms and conditions of TalkTalk’s services (both those billed in advance and those billed in arrears); “they remained the same unless and until the SPD offer was accepted by the customer making the payment in accordance with the offer. For those customers who did not accept the offer of the SPD, the Ts&Cs did not change.” This meant that the supplies of services to customers that did not take up the SPD (the majority) were not supplied on terms allowing a discount for prompt payment. TalkTalk was therefore required to account for VAT on the full amount received from customers who did not accept the SPD offer. (Contact: Nicole Brook)

Update on implementation of the Windsor Framework

The Trader Support Service (TSS) supports businesses moving goods between Great Britain and Northern Ireland under the Windsor Framework. HMRC have confirmed that a competitive procurement exercise for the next phase of the TSS will begin by early 2025, to support traders from 2026. HMRC also confirmed that the current TSS has been extended to the end of 2025. HMRC have also advised that the new arrangements under the Windsor Framework for parcels and freight movements that were to come into effect from 30 September 2024 will now not take effect on that date. HMRC have not provided further information on the proposed timeframe for the new arrangements, but state that businesses should be prepared for them by 31 March 2025. (Contact: Donna Hemphill)

Dbriefs webcast

On 26 September at 12.00, there will be a Dbriefs webcast in the UK tax controversy series: HMRC special edition: Interview with Nicole Newbury, Director of Large Business, HM Revenue & Customs. The webcast will discuss HMRC’s strategy for working with large businesses, Business Risk Review+ and co-operative compliance, approach to audits, and channels for resolving long running disputes.