VAT prompt payment discounts
Currently, if a supplier offers a prompt payment discount then they account for VAT on the discounted price even when that discount is not taken up. From 1 April 2015 VAT will be accounted for on the full amount paid for goods and services where prompt payment discounts are offered.
VAT reverse charge for gas and electricity
A reverse charge for wholesale supplies of gas and electricity will be introduced which means customers will be liable to account for VAT rather than the supplier. The measure does not apply to domestic supplies or to businesses not registered, or liable to be registered for VAT. The timing of this amendment is subject to consultation.
Requirement for users of failed avoidance schemes
It is proposed to give HMRC the power to give notice to taxpayers who have used avoidance schemes, which are defeated in another party’s litigation, that taxpayers should amend their returns or settle their disputes with HMRC accordingly. Taxpayers who decide not to settle their case will risk a penalty. This change will take effect from Royal Assent.
Accelerated payments in tax avoidance cases
From Royal Assent, accelerated payment of tax will be extended to users of schemes disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) rules, and to taxpayers involved in schemes subject to counteraction under the General Anti-Abuse Rule (GAAR), so that the amount in dispute is held by HMRC whilst the dispute is resolved.