VAT U-Turns

Following intense lobbying by interested parties the Government has withdrawn or altered a number of changes to VAT that it had intended to introduce in the Budget 2012. The two items that received the most publicity are:

VAT on hot food

One of the most contentious and unpopular issues announced as part of the Budget related to the definition of hot takeaway food. The Government had intended to change the definition of hot food which would have meant that the sale of all hot takeaway food, with the exception of freshly baked bread, would be subject to VAT at the standard rate, currently 20%.

A consultation about the changes ended on 18 May 2012 and the Treasury has now announced new proposals which would mean that items which are hot as a result of just being cooked but are left to cool naturally will not be subject to VAT. This applies to food which is taken away in the same way as for cold takeaway food. This change will remove the requirement for shops to test the ambient temperature of foods. So shops which supply pasties hot out of the oven, but left to cool will not attract VAT. However, pasties, sausage rolls, rotisserie chickens and other food which are cooked hot to order or kept warm in cabinets, hot-plates etc. will be subject to VAT when taken away.

Caravans

Plans to introduce VAT on the sale of static holiday caravans are to be changed. Static caravans are currently zero-rated. The planned VAT rise to 20% has been replaced by a new measure which will see the sale of static caravans being subject to VAT at the reduced 5% rate. The implementation date of this measure is expected to be delayed from October 2012 until April 2013.

Disclaimer – Please note: The ideas shared with you in this article are intended to inform rather than advise. Taxpayers’ circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

 

If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletter

Subscribe

Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

CALL 0808 144 5575

or

Contact Us

All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.

Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW