VAT Notes March 2012

Holiday Caravans

The intention is that with effect from 1 October 2012 new rules will come into effect to ensure VAT is charged on the sale of caravans that fall outside of the defnition of those designed and constructed for continuous year round occupation.

Approved Alterations to Grade II Listed Buildings

A fundamental change with a measure to take effect from 1 October 2012 that will remove the zero rate for alterations to protected buildings, mostly listed residential dwellings, but also listed buildings used for charitable and other residential purposes.

Also this measure will substantially restrict the ability to treat the first major grant of a substantially reconstructed Grade II listed dwelling as a zero-rated supply with effect from 1 October 2012.

For any person carrying out approved alterations or substantially reconstructing a Grade II dwelling, or expecting to carry out these works should seek advice as soon as possible. There will be transitional arrangements for any on-going projects that are commenced before 1 October 2012 but will not be completed until after this date.

Hot food take away

This important measure to take effect from 1 October 2012 will confirm the sale of all hot food taken away from premises (with the exception of bread, and separately, pies, pastries, sandwiches etc that will be sold at or below ambient air temperature), will be subject to VAT at the standard rate at the point of sale to a customer.

Any parties still considering submitting claims for the recovery of VAT accounted for on certain types of hot food that are generally eaten by the customer at temperatures much lower than the temperature at which they are sold should seek advice now to consider whether these claims can still be submitted.

Also, all food taken away from premises but eaten within areas adjacent to the premises, or within a shared retailer area, will become subject to VAT at the standard rate.


The intention is that with effect from 1 October 2012 all supplies to end users of self-storage space will become subject to VAT at the standard rate.

Sports Nutrition Drinks

This measure to take effect from 1 October 2012 will add VAT at the standard rate to the sales of sports nutrition drinks marketed as drinks enhancing performance, or recovery from exercise or for building bulk.

Hairdressers' chair rental

This measure will make clear all chair rentals by hairdressers are taxable at the standard rate unless there is a clearly defined area without any additional services provided, such as booking services, and the salon operator has not opt to tax.

For all or some of the main points noted above there will be anti-forestalling legislation introduced and transitional arrangements put in place.

VAT registration

The taxable turnover threshold that determines when VAT registration becomes compulsory will be increased to £77,000 with effect from 1 April 2012.

The taxable turnover that determines whether a person can apply for deregistration from VAT will be increased to £75,000.

There are additional measures for which the detail will be published shortly by HMRC, including the legislation for the much anticipated VAT cost sharing exemption.