The CIOT does not favour of a major overhaul of the VAT rules
for land and property ‘at this time’ as, for the majority of land and property
transactions, the VAT position is clear and administratively straightforward. Any
major change would create additional complexity for taxpayers. The CIOT would
also like to see any changes considered from a wider social policy and green
taxation policy perspective.
Although the Law Society agrees that simplification should be
considered to address particular issues with the scope and application of the
rules, and to ensure that taxpayers can comply with their tax obligations, it
recommends that any changes should focus on specific areas of concern before
considering whether wider changes are needed.
The Society opposes some of the more ‘potentially disruptive’
proposals such as making all land transactions exempt or, conversely, making
all land supplies taxable, instead preferring consideration of:
making supplies
of commercial property taxable but with an option to exempt; and
making all
residential property transactions zero-rated.
The CIOT identifies a number of areas of complexity which would
benefit from further attention, including:
legislative
definitions: particularly those used in VATA 1994 Sch 9 (which sets out the
VAT exemption groups) and also terminology around rights over land and the
letting of immovable property; and
the option to tax: the CIOT would support simplification of the administration and operation of
the system.
The law Society would like to see a focus on:
clear
identification of the boundary between land and non-land supplies;
the VAT treatment
of payments connected with land;
complexities and
potential pitfalls associated with the zero-rating of residential property; and
the VAT treatment
of bundled services that include the occupation of land.
The Law Society also recommends the creation of a publicly
available and searchable register of options to tax which could be accompanied
by a searchable register of entities that are VAT registered, going beyond the
functionality of the current VAT number check facility.
The CIOT does not favour of a major overhaul of the VAT rules
for land and property ‘at this time’ as, for the majority of land and property
transactions, the VAT position is clear and administratively straightforward. Any
major change would create additional complexity for taxpayers. The CIOT would
also like to see any changes considered from a wider social policy and green
taxation policy perspective.
Although the Law Society agrees that simplification should be
considered to address particular issues with the scope and application of the
rules, and to ensure that taxpayers can comply with their tax obligations, it
recommends that any changes should focus on specific areas of concern before
considering whether wider changes are needed.
The Society opposes some of the more ‘potentially disruptive’
proposals such as making all land transactions exempt or, conversely, making
all land supplies taxable, instead preferring consideration of:
making supplies
of commercial property taxable but with an option to exempt; and
making all
residential property transactions zero-rated.
The CIOT identifies a number of areas of complexity which would
benefit from further attention, including:
legislative
definitions: particularly those used in VATA 1994 Sch 9 (which sets out the
VAT exemption groups) and also terminology around rights over land and the
letting of immovable property; and
the option to tax: the CIOT would support simplification of the administration and operation of
the system.
The law Society would like to see a focus on:
clear
identification of the boundary between land and non-land supplies;
the VAT treatment
of payments connected with land;
complexities and
potential pitfalls associated with the zero-rating of residential property; and
the VAT treatment
of bundled services that include the occupation of land.
The Law Society also recommends the creation of a publicly
available and searchable register of options to tax which could be accompanied
by a searchable register of entities that are VAT registered, going beyond the
functionality of the current VAT number check facility.
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