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Talking Points 37/20 and 38/20: KPMG’s weekly indirect tax news update

Talking Points 37/20 and 38/20: KPMG’s weekly indirect

Read Talking Points to keep up to date on recent Indirect Tax developments.

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Talking Points is a weekly newsletter covering recent developments in Indirect Tax.  We will highlight the most significant items in Tax Matters Digest so readers are aware of issues that may be relevant and can read on for more details where applicable. Issue 37/20 included: a First-tier Tribunal (FTT) decision concerning sales of hot food and coffee; the Commission’s consultation on review of VAT rules for financial and insurance services; HMRC’s latest guidance on accounting for VAT on goods moving between Great Britain and Northern Ireland; extension of import VAT and duty relief on COVID-19 medical supplies and equipment; the Commission’s taxation and customs measures to support access to more affordable COVID-19 vaccines and testing kits; and a Revenue and Customs Brief on the VAT liability of private sonography services. Issue 38/20 included: HMRC’s consultation on Insurance Premium Tax; a FTT decision on manual roller blinds; a HMRC update on domestic supplies of PPE; the response to the consultation on retained EU case law after transition; the VAT Committee Guidelines on Quick Fixes and ‘combined lifestyle intervention’ supplies; and date of our Italian VAT Receivable learning session.

3 November 2020 | Issue 37/20
This week’s edition begins with the University of Southampton Students’ Union FTT in which the taxpayer is arguing (unsuccessfully), that its sales of hot food and coffee are exempt supplies, closely related to principal exempt supplies of education. The European Commission has published a public consultation as part of its review of the VAT rules for financial and insurance services, for which the feedback period ends on 19 November 2020. In terms of end of transition updates, HMRC have published guidance on Accounting for VAT on goods moving between Great Britain and Northern Ireland from 1 January 2021. For COVID-19 related updates, the exemption for import duty and VAT on medical supplies, equipment and protective garments (COVID-19) has been extended again until 31 December 2020. At EU level, the Commission has also proposed a further relief for COVID-19 vaccines and test kits supplied to hospitals and medical practitioners. Finally, we report on Revenue and Customs Brief 17 (2020) in which HMRC have accepted the FTT’s decision in Window to the Womb (Franchise) Ltd and others and confirmed that other ultrasound scanning service providers can similarly exempt their supplies where the facts demonstrate that the two following conditions are met. The services must be provided by an appropriately qualified health professional and must be medical care which means that they must meet the primary purpose test.

11 November 2020 | Issue 38/20
This week’s edition begins with HMRC’s consultation on IPT, which focuses on unregistered insurers, avoidance structures and the administration of IPT. The consultation closes on 5 February 2021. Next in Wickford Development Co Ltd, the FTT has found that roller blinds are building materials so zero rated for VAT purposes when supplied with zero rated services and not covered by the input tax blocking order where VAT is charged. In a round-up of other news, HMRC have updated VAT Notice 701/57 to confirm that domestic supplies of PPE are now standard rated from 1 November 2020. This unexpected move reintroduces different VAT treatment on the import and domestic supply of PPE, as import VAT relief for PPE has been extended to 31 December 2020. In terms of end of transition updates, the Government, after reviewing responses to the consultation on retained EU case law, concluded that it is appropriate to extend the power to depart from EU case law to UK courts at CoA level and published draft legislation following the consultation. Finally, the VAT Committee has published Guidelines on Quick Fixes and ‘combined lifestyle intervention’ supplies. Details of a new date for our Italian VAT Receivable Lunch & Learn session on Thursday 19 November 2020 have also been shared in this edition.

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