HM Revenue and Customs Brief 21/13
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Issued 30 July 2013
VAT: withdrawal of the VAT exemption for supplies of research
between eligible bodies - announcement on transitional arrangements
Purpose of this Brief
The purpose of this Brief is to announce the transitional
arrangements that will be implemented following the withdrawal on 1
August 2013 of the VAT exemption for research services between eligible
Who should read this brief
Eligible bodies who supply business research services and
those that commission research from eligible bodies.
The UK received notification from the European Commission
that its exemption for business supplies of research between eligible
bodies does not comply with European legislation. The UK has accepted
that this is the case and will withdraw the exemption with effect from
1 August 2013.
HM Revenue & Customs published a consultation
December 2012 to gather information to allow them to assess more
accurately the impact that the withdrawal of the exemption would have
and to establish whether there were any possible options to mitigate
The withdrawal will apply from 1 August 2013 to all written
contracts that are entered into on or after that date.
The Government wants to mitigate the impact of the withdrawal
of the exemption on supplies under existing contracts entered into
before 1 August 2013.
For supplies of business research where the written contract
was entered into before 1 August 2013, whether or not work has already
commenced, the exemption will continue to apply to services within the
scope of the contract.
The Government believes that these transitional arrangements
will reduce the administrative burden on those bodies affected by the
VAT Information Sheet 11/13 is intended to assist those
affected in distinguishing when a contract may be outside the scope of
VAT or exempt from VAT. It will also explain in more detail how the
transitional arrangements are intended to work and the restrictions on
the scope of the arrangements.
The consultation responses document will also be published
shortly on the GOV.UK website.
About the Author
© Crown Copyright 2013.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
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Article Published/Sorted/Amended on Scopulus 2013-08-08 09:05:12 in Tax Articles