The Budget 2010 Introduction »

VAT

VAT thresholds

The VAT registration limits increase with effect from 1 April 2010 as follows:

Fuel scale charges

Businesses which recover input tax on fuel used for private motoring have to use VAT fuel scale charges to tax the private use of road fuel.

New scale charges have been published which reflect changes in fuel prices and maintain alignment with the CO2 bands that are used for income tax purposes. The new scale charges must be used for VAT periods starting on or after 1 May 2010.

VAT recovery on mixed use assets

Under existing arrangements VAT on immovable property, boats and aircraft is recoverable upfront and in full on both the business and private use of the asset (subject to any partial exemption restriction).

VAT is then payable over subsequent years in respect of the private use of the asset. This is known as ‘Lennartz’ accounting.

Changes will apply from 1 January 2011 in line with EC VAT law so that:

Other changes announced

Amendments to the place of supply rules for gas, heat and cooling.

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