The European Union is proposing a directive to harmonise VAT treatment for electronically delivered services. This includes Internet services and pay-per-view television. The main elements of the proposal are: such services delivered within the EU will be subject to VAT. Services delivered outside the EU will not be; the application of VAT will depend on...Read More

Inland Revenue has published details of its proposed new power to obtain information from third parties when investigating serious tax fraud. The proposals relate to procedures rather than to policy. This new power is to end the anomaly whereby Inland Revenue cannot always require a third party to produce documents but can raid the premises...Read More

There have been two cases which hold that the power of the Board of Inland Revenue to require documents may be exercised by an officer of the Board to whom such power has been delegated, and such authorisation may be given orally. R v IRC, ex parte Davis Frankel & Mead. QBD [2000] R v...Read More

A VAT fraud perpetrated by employees or other workers of a business was treated as a fraud perpetrated by the business. It was not necessary for Customs to show that they directed the fraud or even knew of its existence. It was only necessary to show that there had been fraud as a result of...Read More

The right to deduct input tax depends on a direct and immediate link between a particular input transaction and a particular output transaction, the European Court of Justice has ruled in a VAT case. The court went on to say that the right to deduct could exist in the absence of such a link, provided...Read More

Inland Revenue has issued a Revenue Interpretation on what constitutes a licence to occupy land for the purposes of determining the right to claim a capital allowance for plant and machinery installed on the land. Normally only the owner of an asset may claim a capital allowance for it. An exception is made for tenants...Read More

Yet further tinkering with employer’s national insurance has been announced in a consultation document. The document has been called a simplification for employers. Issues raised include: harmonising Inland Revenue’s powers to inspect records; a simpler system for calculating national insurance on employees seconded abroad; a common basis of pay for income tax and national insurance,...Read More

From 30 June 2000 the scope of VAT zero-rating for motor cycle helmets is changed. From this date, the helmet no longer need comply with the relevant British Standard. Instead it must meet the requirements imposed under traffic law. This allows helmets which comply with standards of other EU countries. Value Added Tax (Protective Helmets)...Read More

The VAT tribunal has held that a business growing and selling flowers did not carry on a separate business by selling cut flowers acquired from other growers. The business acquired a certificate allowing it to use the VAT flat rate scheme for farmers. Growing flowers is regarded as a farming activity for VAT purposes. The...Read More

Interest methods of calculating depreciation should only be used in closely defined circumstances, according to a draft published by the Accounting Standards Board. The straight-line method of depreciation is preferred, though other methods are still permitted. The straight-line method depreciates the asset in equal annual amounts over its estimated useful life. Interest rate methods can...Read More