Again the Chancellor has largely left VAT alone in this Budget.  The debate continues on whether simplification of the VAT regime means significantly raising the VAT registration threshold or significantly lowering it. So it will remain at £85,000 for another two years after 1 April 2020, until 1 April 2022.  The deregistration threshold will remain at £83,000 for the same period.

Previously announced changes are confirmed, these concern:

  • the treatment of “face-value” vouchers for vouchers issued on or after 1 January 2019
  • changes to certain intermediary services in the financial services and insurance sectors supplied to businesses that are based outside the EU from 1 March 2019
  • introduction of a domestic reverse charge scheme for contractors in the construction industry on 1 October 2019
  • amending VAT grouping regulations to allow non-corporate entities to join a VAT group.  In-house services provided by overseas branches of the same VAT entity will be subject to VAT from 1 April 2019.

Other measures include:

  • Changes from 1 March 2019 to ensure that VAT is declared on all advance payments for goods and services – if customer does not actually collect the goods or use the services the VAT must still be accounted for unless a credit note is issued to the customer
  • Tightening up of rules regarding adjusting VAT on a change of price – credit notes must be issued if applicable
  • Further discussions on VAT collection at source for certain sales made via the internet by overseas suppliers