One of the biggest risks and challenges to foreign investment is political risk. There are the obvious risks of nationalization and discriminatory treatment and more oblique risks such as unfair and arbitrary treatment and a lack of due process. There are the risks that a new government could tear up your deal with the previous government, or that different parts of the government or regulatory bodies may adopt different stances as to whether your investment is welcome. There are risks that you may be able to foresee and risks that could completely blindside you. In short, there are the known known risks, the known unknown risks and the unknown unknown risks.
What has VAT, the building of new homes, and possible independence of Scotland have to do with each other? This eclectic selection has more unity than you might first think.
Let’s start off with new homes. It is well known that, in the UK, the supply of new homes, and construction services to create new homes, are zero rated for VAT purposes, which is to say that they are subject to a 0% rate of VAT, but allow the developer or the contractor to reclaim VAT that he incurs on his expenditure, thus producing the best possible taxation outcome.
Every year the Charity Tax Group (CTG) has its annual meeting. I thought that it was about time that an example of this annual event was celebrated in a blog. As this is a blog, and not a ‘review’ or an ‘article’, I am going to be selective in what caught my notice. Continue reading
It is a truth universally acknowledged that the passenger of a hot air balloon which is rapidly losing altitude is best advised to throw out as much luggage as possible if only to soften his crash landing. This appears to have been the thought of HMRC in the litigation against Skyview Ballooning Limited (PC03173), though it would have been more dignified for them to have stopped after the first piece of luggage and endure the crash landing with dignified fortitude. Continue reading
HMRC find themselves stuck in a bunker. There are two ways in which this might be true. They could be holed up in an underground shelter awaiting the same fate as befell Hitler (and at risk of sliding into similar insanity) or their little round ball could be in a sand pit, defying each attempt to be clubbed onto the green. In HMRC’s case, both of these are true.
I often think that VAT is interesting mostly for what I learn, in passing, from clients and from case reports about goings on in the world. By means of reading cases I have learnt interesting commercial facts about part exchange of cars, about car lease business models, about the financial position of local authority parking, and about park and ride. And these are only examples relating to cars. There is much else besides. Continue reading
We have become increasingly familiar with the call upon taxpayers to pay an amount of tax which fulfils their moral obligations in addition to an arguably different legal obligation, and thus to ensure that the overall amount of tax payable is commensurate with what is assumed, by somebody or other, to be the financial scale of the business operation. This concept is clearly not aimed at evasion, since evasion is not merely immoral but also plainly illegal. It is aimed at avoidance which could be legal but may arguably not be moral, or merely the adopting of certain legal interpretations, which increasingly has been suggested as somehow potentially immoral if it leads to ‘too little tax’ being paid through a given scale of business operation.
Last year the Chancellor got his fingers burned by trying to handle hot pasties, not to mention the ‘caravan tax’. He had to pay a sweetener to the church lobby to fend off disaster for his misguided listed building alteration ‘reform’. VAT nearly destroyed his reputation in 2012. Was he going to risk bad luck on VAT in a year with a 13 in it? No. Continue reading
It was only a few days ago, at a Withers reception, that I was talking to what one might describe as a ‘small taxpayer’, who had been embroiled in an appeal to the Tribunal over a trifling sum of £40,000 of VAT. As it turned out, she won her appeal, without the assistance of a professional advocate, because HMRC had misinterpreted the VAT legislation. The professional fee insurers were not prepared to back her, so she could not afford representation. Continue reading
For readers who thought from the title they would find enlightenment on pasties, Subway toasties, rotisserie chickens, or even Jaffa Cakes, this is not about food aspect but the ‘free’ aspect of the title. But it is nonetheless fascinating, so please stick with it.
The question is, can you ever get something for nothing in VAT terms?