Following a short consultation from 20 July 2021, the government has confirmed that it will proceed to make The Value Added Tax (Treatment of Transactions) (Revocation) Order 2021 with no changes. The Order will revoke the VAT (Treatment of Transactions) Order, SI 1992/630, with effect from 21 October 2021. The measure follows the decision in Northumbria Healthcare NHS Foundation Trust [2020] EWCA Civ 874, which concluded that any government department or NHS body that operates a salary sacrifice scheme for cars, and which had recovered 50% of the VAT incurred, would be entitled to make a claim for the remaining 50%. The Order will remove what the government describes as this ‘unwelcome interaction’ with VATA 1994 s 41 (refunds to government departments, etc).
Following a short consultation from 20 July 2021, the government has confirmed that it will proceed to make The Value Added Tax (Treatment of Transactions) (Revocation) Order 2021 with no changes. The Order will revoke the VAT (Treatment of Transactions) Order, SI 1992/630, with effect from 21 October 2021. The measure follows the decision in Northumbria Healthcare NHS Foundation Trust [2020] EWCA Civ 874, which concluded that any government department or NHS body that operates a salary sacrifice scheme for cars, and which had recovered 50% of the VAT incurred, would be entitled to make a claim for the remaining 50%. The Order will remove what the government describes as this ‘unwelcome interaction’ with VATA 1994 s 41 (refunds to government departments, etc).
