Highlights from the broader tax news week ending 19 May, which includes further clarity on VAT registration for overseas suppliers that only sell zero-rated goods and on drinks as food replacements for VAT purposes. HMRC confirms that 550,000 people have claimed WFH tax relief for 2021/22 and that its VAT records move may result in erroneous MTD message.
HMRC publishes TRS Manual
To coincide with the changes made to the Trust Register, HMRC has published its Trust Registration Service Manual and is inviting non-taxable trusts to volunteer to test the system (email: service_team17.digital_ddcn@digital.hmrc.gov.uk). The manual will continue to be developed, but the initial version focuses on the types of trusts required to register, and the information required at the point of registration.
VAT records move may result in erroneous MTD message
HMRC’s transfer of VAT records for non-MTD traders to a new database has resulted in some agents seeing an erroneous message stating their client has signed up to MTD. The incorrect message appears in the VAT client list in the agent online services portal and HMRC is currently working on a solution. HMRC has confirmed that for these clients agents can still file VAT returns using the online VAT return through their agent services account. Find out more about the system change.
VAT registration for overseas suppliers that only sell zero-rated goods
HMRC has updated its guidance on overseas suppliers of zero-rated goods to UK customers. In updates to its guidance for selling directly, HMRC confirms that overseas sellers supplying only zero-rated goods can apply for exemption from VAT registration.
Drinks as food replacements for VAT purposes
Following an Upper Tribunal (UT) decision, HMRC has published a new brief (No 6 of 2021) reaffirming its approach to assessing whether drinks are food replacements or beverages for VAT purposes. The UT upheld the decision that juice drinks produced by The Core Ltd for a cleansing programme did constitute meal replacements and were therefore zero-rated for VAT. However, the UT also confirmed that a number of factors needed to be assessed in each case when deciding whether a drink is a beverage, and therefore subject to standard rate VAT. In Brief 6, HMRC says that this approach is consistent with its own and outlines the factors which it will consider in future such cases, which includes how the drink is marketed. Read Brief 6 in full.
More than half a million claim WFH tax relief for 2021/22
On 13 May HMRC confirmed that more than 550,000 people have already claimed the working from home tax relief for 2021/22 on top of the three million claims received for 2020/21. HMRC has published an eligibility checker to help employees understand whether they are able to claim the relief. HMRC also confirmed that employees required to work from home last year and did not claim for the relief are still able to do so. Backdated claims can be made for up to four years.
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