Energy-saving materials installations
The scope of the VAT relief on energy-saving materials (ESMs) in residential accommodation was extended on 1 February 2024. It now includes installations in buildings used solely for relevant charitable purposes, such as village halls or similar recreational facilities for a local community.
The list of (ESMs) was extended on the same date to include water-source heat pumps, electrical battery storage and smart diverters.
Qualifying installations of ESMs benefit from the zero VAT rate until 31 March 2027, after which they revert to the reduced rate of VAT at 5%. Contractors or subcontractors installing energy-saving materials and grant-funded heating equipment can find out more about how to account for VAT at the gov.uk website.
Cosmetic surgery
A VAT tribunal has found that a private medical clinic offering cosmetic treatments was not providing medical care, so its supplies were not exempt from VAT.
Treatments provided by Aesthetic-doctor.com Ltd (ADCL) included Botox, facial volumising fillers, dermal fillers, and laser treatments primarily used to repair sun or sunbed damage. The tribunal decided these treatments were not carried out to diagnose, treat, or cure diseases or health disorders.
It also rejected the argument that ADCL’s services were comparable to the services provided by doctors in general practice and that the principle of fiscal neutrality was, therefore, not applicable.
3 important reminders
1. DIY Housebuilders Scheme
Following the digitisation of the DIY Housebuilders Scheme, HMRC is requesting further evidential documentation in relation to DIY housebuilders’ VAT claims. Find out more in our Spring VAT Update.
2. Import One Stop Shop Scheme (IOSS)
The VAT Import One Stop Shop Scheme (IOSS) is designed for businesses that supply low-value consignments of goods (£135 or less) from the UK to individuals in the EU or Northern Ireland. It enables these businesses to streamline VAT processes for these transactions.
The Scheme is optional, and VAT-registered businesses have been able to choose to register online since 1 March 2024. To help businesses register and use the IOSS Scheme to report and pay VAT on imports of low-value goods, HMRC has released a helpful guidance document. We have also published a summary of how the IOSS works.
3. New VAT registration and deregistration thresholds
On 1 April 2024, the VAT registration and deregistration thresholds increased by £5,000. This means the current VAT registration threshold is £90,000 and the deregistration threshold is £88,000.
CAN WE HELP?
If you have any questions or need assistance with any topics covered in this update, please get in touch with our team of specialists.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.
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