Font Size

VAT Notes No 4 2010


HM Revenue and Customs -Tax Authorities

Tax Articles
Submit Articles   Back to Articles

Issued December 2010

Please make sure everyone responsible for VAT in your business reads this newsletter.

1. Imports, Exports and Transit: the VAT rate increase may affect guarantees, waivers and deferment limits

In the February 2010 edition of the Community/Common Transit and TIR Newsletter

HM Revenue & Customs (HMRC) explained that some guarantees, guarantee waivers, and deferment limits may need to be increased to take account of the VAT standard-rate increase from 17.5 per cent to 20 per cent on 4 January 2011.

If you expect to use the Community and Common Transit (CT) procedure on or after 4 January 2011 you will need to ensure that your guarantee reference amounts are set at a sufficient level to cover the increased VAT rate. Limits are not automatically increased, so please check now to avoid your goods being stopped.

To amend your guarantee or to obtain new certificates please contact the Central Community Transit Office (CCTO) at HMRC National Simplifications Team, Central Community Transit Office, Custom House, Main Road, Harwich CO12 3PG.

For further information go to and search for 'TIR newsletter'.

2. Reverse charge accounting for businesses selling or purchasing emissions allowances in the UK

On 1 November 2010, the temporary zero-rate for emissions allowances was replaced by the reverse charge accounting mechanism at the standard-rate. It operates in a similar way as the reverse charge accounting mechanism for mobile phones and computer chips (except for the threshold).

For more information about this, please refer to the  Revenue & Customs Brief 35/10.

You may also find  Notice 735 VAT reverse charge for mobile phones and computer  chips helpful.

3. Beat the rush and make the switch to filing your VAT Return online

Every day more businesses are switching to HMRC’s VAT Online to file returns and pay their VAT.

If you’re not already filing VAT Returns online, why not give it a try? If you switch to the online service now you will save time and, in some cases, you'll get more time to pay the VAT too. Whether you are new to HMRC Online Services, or have used the service before, enrolling for the VAT Online service is easy. It will only take a few minutes. Go to and look at the Do it online menu. Select Register and follow the instructions.

The VAT online service offers lots of useful features:

  • The online form looks the same as the paper version 
    The method to calculate the VAT due or repayable is the same.
  • Improved accuracy as it helps avoid mistakes
    Enter amounts in boxes 1, 2 and 4 and HMRC calculate boxes 3 and 5 for you.
  • You can review the return before you submit it 
    Please check that the figures calculated on-screen and displayed in boxes 3 and 5 are the same as the figures you have calculated for yourself.
  • You can file your return at any time of day or night 
    There is no need to worry about your return being lost or delayed in the post.
  • An on-screen message will let you know HMRC have received it safely
    You should receive the message soon after you submit the return but, at busy times, there may be a short delay. To avoid this, HMRC recommend that you file your return a few days before the due date. However, if there is a delay, please do not re-submit the return.
  • You can look up a copy of the VAT Returns you file online
     Returns that are filed online after 22 November 2009 are retained for 15 months. If you want to keep a copy for your records, you can either print your return or store it electronically.
  • You can sign up to get an email to remind you when your return is due
     HMRC will send you an email about six weeks before the return is due. This will be the only prompt to tell you that it’s due. Set up your email address on the ‘At a glance’ page – follow the links for

‘Maintain email address’ and ‘VAT messages’.

4.   New – VAT Input Tax toolkit

HMRC has developed a series of toolkits to highlight common errors made, how to avoid them and what you need to do to get things right. The new toolkit for VAT Input Tax will help you complete your VAT Return accurately.

The VAT Input Tax toolkit is in PDF format and is available from the website. Go to

 Toolkits to help reduce errors-

HMRC have designed it to be easy to use and would welcome your feedback on it. It includes a checklist, explanatory notes and links to further guidance available on the website. HMRC intend to publish two more VAT toolkits this year for VAT Partial Exemption and VAT Output Tax.

If you would like to read some background information about the toolkits go to  Background to toolkits to help reduce errors -

5. Update to VAT Notes 3 and factsheet VAT FS1

Correction to VAT Notes 3 of 2010

In an article 'If you file online, do we have your email address?' HMRC stated that they will email you a reminder two weeks before the due date of your return. This was incorrect. HMRC should have said that they will email you a reminder six weeks before the due date of your return. HMRC apologise for any confusion caused.

Reclaiming VAT – what you can and cannot claim: paid VAT before you registered?

HMRC issues a factsheet, VAT FS1 What you need to know about VAT to all newly VAT registered businesses. The factsheet states that ‘In some cases, you can reclaim VAT you paid on goods you bought up to three years before you registered’.

From 1 April 2009, the time limit was increased to four years. The factsheet will be updated as soon as possible. HMRC apologise for any confusion caused.

6. New and revised Notices

Please check this list to decide if you need any of these publications.

New and revised notices





Fuel and power

August 2010


Customs Freight Simplified Procedures (CFSP)

August 2010


Zero-rating of books etc.

October 2010


Place of supply of services (before 1 January 2010)

October 2010

Getting further advice about VAT

You can find further information on the HMRC  website

You can contact HMRC by phoning 0845 010 9000 Monday to Friday 8.00 am to 8.00 pm. If English is not your first language, please say so when you call.

Os hoffech siarad â rhywun yn Gymraeg, ffoniwch 0845 010 0300, dydd Llun i ddydd Gwener 8.00 am i 6.00 pm.

If you have a Textphone (for deaf, hearing impaired or speech impaired customers) 0845 000 0200.

HMRC have a range of services for people with disabilities, including guidance in

Braille, audio and large print. Most HMRC forms are also available in large print. Please contact us by phone if you need these services.

Your rights and obligations

Your Charter explains what you can expect from HMRC and what HMRC expect from you. For more information go to  Your Charter.

Putting things right

If you are unhappy with the way HMRC have handled your affairs (because of delays or mistakes, for example) please tell the person or office you have been dealing with.

If they are unable to sort things out, ask for your case to be referred to the complaints team. For more information about complaints procedures, go to and under‘quick links’ select ‘Complaints & Appeals’.

These notes are for guidance only and reflect the position at the time of writing. They do not affect any right of appeal

About the Author

© Crown Copyright 2010.

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.

Follow us @Scopulus_News

Article Published/Sorted/Amended on Scopulus 2011-01-13 17:48:53 in Tax Articles

All Articles

Copyright © 2004-2021 Scopulus Limited. All rights reserved.