HM Revenue and Customs Brief 28/08
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Issued 30 May 2008
VAT: Land & buildings – announcing a new revised Notice 742A - Opting to tax
land and buildings and associated forms and certificates
This brief announces a new revised Notice 742A - Opting to tax land and
buildings and the publication of a number of new forms and certificates.
- Following consultation, a new Schedule 10 to the VAT Act 1994 (which deals
with the option to tax of land and buildings), comes into effect on 1 June
2008. In addition to being re-written in a more simplified style to improve
the understanding of the legislation, the new Schedule 10 also introduces the
right for businesses to revoke an option to tax. This includes necessary
changes to facilitate revocation and a few minor additional changes requested
What is being published?
- On 1 June 2008, we are publishing on our website a new revised Notice
742A. This revised notice replaces the March 2002 version and its three
updates and also consolidates Information Sheet 03/08 which detailed the
changes following the introduction of the new Schedule 10. Information Sheet
03/08 is withdrawn from 31 May 2008.
- In addition, we are publishing a series of new and updated forms and
certificates dealing with the option to tax (again available on our website).
These forms and certificates, like the clearly marked boxed text in notice
742A, are tertiary legislation and have force of law. The use of these forms
and certificates is therefore compulsory although HMRC will, until further
notice, continue to accept notification of an option to tax (form 1614A) in a
different format (subject to all of the same required
information being provided).
- We are grateful for the comments received from business on Information
Sheet 03/08 and the new legislation. We have taken the opportunity in the
revised Notice 742A to make some minor changes to clarify the guidance and
tertiary legislation. The changes we have made to what was shown in
Information Sheet 03/08 are as follows:
- the identifying letter for each piece of tertiary legislation (boxed text)
has been changed to fit within the structure of the new notice
- in Box E - the valuation condition – we have made the time when the 10
year period ends clearer
- in Box G - all conditions – we have made it clearer that consideration
must be given not only to the opter but also to any relevant associate of the
opter and includes two additional explanatory notes to explain what
'connected' and 'relevant associate' means
- in Box G – the 20 year condition – we have removed the confusion
surrounding the words 'had effect'
- in Box K – we have made it clear that the time of notification is the time
the Real Estate Election is made
- in paragraph 8.1.4 of the revised Notice 742A, we have made it clearer
that permission for revocation within the six month cooling-off period can
only be considered if the taxpayer has met conditions a) to e) in paragraph
8.1.2 but fails to meet the condition in Box F
- Further information can be obtained on the HMRC website or through the
National Advice Service (NAS) on Tel 0845 010 9000.
About the Author
© Crown Copyright 2008.
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Article Published/Sorted/Amended on Scopulus 2008-06-03 23:22:12 in Tax Articles
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