Compound interest on VAT claims?
Some businesses claiming retrospective VAT refunds might be able to claim compound interest on the sums repaid, following the Court of Appeal’s decision in the direct tax Sempra Metals case. It might be possible to argue that previously settled claims should be revisited but this is unlikely to be cost effective as it will be highly contentious and, therefore, time consuming and expensive.
Insurance and outsourcing – extended period of uncertainty?
Insurers and businesses providing "outsourced" services to them may be facing an extended period of uncertainty about the VAT treatment as the publication of Customs’ views on the UK implications of the ECJ decision in the Arthur Andersen & Co case (now Accenture) has been delayed by the election. Despite their delay, businesses involved with this kind of work need to consider their position as early as possible so that they are in a position to move quickly when there is any clarification.
Employment bureaux and businesses using them – Customs inspections?
We hear that Customs intend to review the VAT affairs of employment bureaux and businesses which use VAT efficient arrangements for the supply of staff. Customs seem to believe that many of these businesses are systematically under-declaring VAT, particularly in respect of areas such as holiday pay and pension contributions.
HM Revenue and Customs trawling for information
We are seeing more instances of Customs seeking information from businesses by the use of questionnaires. Recent examples have included requests for data about "labour only" type supplies and "business entertaining" and some hotels have been asked for information in connection with overseas businesses using their facilities. In some cases, the information sought could have wide implications (for PAYE, National Insurance, etc as well as VAT) and businesses responding to such questionnaires should consider this. It is not clear whether this is a deliberate example of the kind of "joined up thinking" that David Varney, the chairman of HMRC has referred to in relation to the merging of Customs & Excise with the Inland Revenue.
New Head Office address for HM Revenue and Customs
The address of the London Headquarters of HM Revenue & Customs previously assigned by Westminster City Council was '1 Parliament Street, London, SW1A 2BQ’. This was incorrect and the address will now be ‘100 Parliament Street, SW1A 2BQ’. This change will affect disclosure of avoidance schemes amongst other things.
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