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Indirect Taxes including VAT

The main announcements for all indirect taxes including duty rates and VAT, are shown below. More details can be found in the Overview of Tax Legislation and Rates (OOTLAR) (PDF 1.3MB) document.

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Main Announcements

1. Indirect Taxes and Duties

Fuel duty

The fuel duty increase that was due to take effect on 1 September 2013 will be cancelled. Legislation will be introduced in Finance Bill 2013 to reflect the cancellation of the 1 January 2013 fuel duty increases and to amend fuel duty rates to reflect the current effective rates of duty.

Fuel duty rates (PDF 40K)

Tobacco duty

The duty rates for all tobacco products will be increased  by two per cent above the rate of inflation (based on RPI) from 6pm on 20 March 2013.

Alcohol duty

The duty rates for spirits, wine and made-wine, cider and perry will increase by two per cent above the rate of inflation (based on RPI) with effect from 25 March 2013. This will add 2 pence to the price of a litre of cider, 10 pence to the price of a bottle of wine and 38 pence to the price of a bottle of spirits.

The duty rates on beer will decrease by 6 per cent for low strength beer (less than 2.8 per cent abv), 2 per cent for the standard rate of beer duty (between 2.8 per cent and 7.5 per cent abv) with effect from 25 March 2013. This will reduce the price of an average strength pint of beer by 1 penny.

Beer duty rates (PDF 47K)

All other duties

Full details of duty rates, including those announced at Autumn Statement on 5 December 2012 can be found in OOTLAR.

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2. VAT: revalorisation of fuel scale charges

A statutory instrument laid on 20 March 2013 will revalorise fuel scale charges with effect from 1 May 2013. The fuel scale charges are published in OOTLAR.

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3. VAT: revalorisation of registration and deregistration thresholds

The VAT registration and deregistration thresholds will be increased in line with inflation so that with effect from 1 April 2013:

  • the taxable turnover threshold which determines whether a person must be registered for VAT, will be increase from £77,000 to £79,000;
  • the taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £75,000 to £77,000; and
  • the registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased from £77,000 to £79,000.

The simplified reporting requirement (three line accounts) for the income assessment return will continue to be aligned with the VAT registration threshold. For the 2013-14 tax year and onwards, small businesses will be able to use the new simpler income tax cash basis intended to simplify the way in which small businesses can calculate their trade profits. The eligibility conditions for the cash basis will be linked to the VAT registration threshold in place at the end of the tax year.

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4. VAT: changes to the place of supply rules

Legislation will be introduced in Finance Bill 2014 to tax intra-EU business to consumer supplies of telecommunications, broadcasting and e-services in the Member State in which the consumer is located. These services are currently taxed in the Member State in which the business is established. The changes will take effect from 1 January 2015 and implement already agreed EU legislation into UK legislation, ensuring that these services are taxed fairly in the Member State of consumption.

To save the need for businesses affected by these changes to register for VAT in other Member States, a Mini One Stop Shop will also be introduced from 1 January 2015. This is an IT system that will give businesses the option of registering in just the UK and accounting for VAT due in other Member States using a single return.

The Question and Answer brief published on Budget Day 20 March 2013 has been replaced with this version on 12 July 2013.

Changes to the VAT place of supply rules and the introduction of the Mini One Stop Shop (MOSS) - QA Guidance (PDF 46K)

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