|
|
|
|
|
Postal services exemption See VM ¶474 From 31 January 2011 the exemption for postal services will be restricted to supplies of public postal services (and incidental goods) by the universal service provider (currently Royal Mail). Postal services supplied on terms which are individually negotiated, and services not made under a licence duty, will become standard-rated from that date. Zero-rating of aircraft See VM ¶1298 For zero-rating purposes, a qualifying aircraft will no longer be determined by its weight or commercial design. From 1 January 2011 zero-rating will depend on the recipient of the supply being an airline operating for reward chiefly on international routes. When previously announced the implementation date was 1 September 2010. Lennartz mechanism See VM ¶1525, ¶1841 The Lennartz mechanism is to be made unavailable in respect of purchases of land, property, boats and aircraft. The Lennartz mechanism applies where an asset is purchased for both business and private purposes. Under this mechanism full input tax recovery is permitted on purchase and output tax is accounted for in respect of private use over the asset’s economic life. From 1 January 2011 full input tax recovery will not be available on purchase; instead input tax will be restricted to the business use proportion. The Capital Goods Scheme will be amended to take account of this change. HMRC has also recently announced an amended policy under which Lennartz is not available unless non-business use is private use (as opposed to, for example, use by a charity for non-commercial purposes). Legislation will be introduced to ensure that those affected by this change of policy do not gain an advantage by, for example, ceasing to account for output tax on non-business use. |
|
185 PARK STREET BANKSIDE LONDON SE1 9DY (T) 020 7803 4666 (F) 020 7803 4699 |
|
AS PREVIOUSLY ANNOUNCED |