For the second year in a row the Budget has been a quiet one for VAT. Apart from the normal increases in the registration and de-registration thresholds in line with inflation, there have only been minor amendments to quite narrow areas of VAT.
One interesting change will be to prompt payment discounts; at present VAT is only accounted for on the discounted amount even if the discount is not taken by the customer, this will change to VAT being accounted for on the price paid.
The on-going issues with Intra Community VAT fraud have resulted in the reverse charge applying to supplies of fuel and power. It is likely that the reverse charge will apply to a greater range of goods and services in the future.
There will be a consultation on reform of the zero rate applied to vehicles adapted for wheelchair users. This is in a bid to cut fraud but also to target and widen the relief, particularly in respect of users of lower limb prosthetics.
Finally, HMRC has used the budget to remind taxpayers of the change in the place of supply rules for telecommunication, broadcasting and e-services which will take effect on 1 January 2015. In order to facilitate this measure, and in line with other EC countries, there will be the introduction of a Mini One Stop Shop (MOSS) which is designed to allow UK businesses to account for VAT in other EC countries on a single return.