VAT and tax: Export zero rate goes
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Export house provisions With effect from 1 April 1999, supplies to UK export houses will no longer qualify for zero-rating under the conditions set out in Notice 703 VAT: Exports and removals of goods from the United Kingdom.
Instead, such supplies should be treated in exactly the same way as any other supplies delivered to UK customers, and VAT must be charged at the appropriate rate.
Supplies of goods to customers outside the UK will still be eligible for zero-rating, either as exports or intra-EC supplies, provided that the appropriate conditions in Notice 703 are met.
For further information contact your local VAT business advice centre.
Exports review Customs & Excise is inviting views on a review of the current export policy and framework. The review will look at developing a modern system compatible with Government policies and commercial and international freight trends.
For a copy of the consultation paper, contact Valerie Lucking or Robin Impey, TPG (Export Review), 2nd Floor North, C E Health House, 61 Victoria Avenue, Southend, Essex SS26EY, phone 01702 361934/1955.
Registration threshold Customs and Excise is consulting on whether the VAT registration threshold should be changed. The aim of the current high threshold is to keep administrative costs down for smaller businesses; the counter-argument suggests that a high threshold distorts competition, particularly for those companies trading close to the level at which registration is required.
Consultation documents on the VAT Registration Threshold are available free from local VAT advice centres, or from Philip Buckels, HM Customs & Excise, VAT Policy Directorate, Collection Division, Registration Branch, 4th Floor SW, Queens Dock, Liverpool, Merseyside L74 4AA, or on the Internet at: httP://toundoPen,goauk/custorns/c&ehome.htm Comments should be received by 12 October 1998.
Interest rate alignment As of 6 July 1998, the Customs default interest rate has been brought into line with the rate charged by the Inland Revenue for unpaid tax. Default interest charged on underdeclared VAT, Air Passenger Duty, Insurance Premium Tax and Landfill Tax, as well as statutory interest paid in cases of official error, will be set using formulae linked to a reference rate. The reference rate will be based on an average of the base rates of six main banks to the nearest whole number.
For default interest the formula used will be the reference rate plus 2.5% (making 9.5%). For statutory interest, the formula used will be the reference rate minus 1%.
Customs charter Customs & Excise has joined the growing list of organisations in the Citizen's Charter scheme by publishing a Traveller's Charter. The leaflet explains the role of Customs staff and sets a number of standards which will be followed by Customs officers when dealing with the public.
For example, the Charter promises to "settle straightforward claims within 10 working days and all other claims within one month" and to "try to cause you as little trouble and delay as possible when we are doing our job".
If Customs officers decide to search you they must give a reason and guarantee that before being searched you can appeal to a senior Customs officer and a JP Complaints may also be sent to the independent Customs Adjudicator, Haymarket House, London SW1Y 4SP; phone, 0171 930 2292; fax, 0171 9302298.