VAT

VAT chargeable on all non-refundable deposits

HMRC has confirmed a new policy that VAT will remain due on a deposit, even if the customer does not use the goods or services for which it was paid – this comes into effect from March 1 2019. This change will affect the hospitality industry significantly (but it will also apply to other businesses), which will soon be unable to recover VAT charged on cancelations or ‘no show’ charges.

VAT blow for cultural charities and public bodies

The European Court of Justice (ECJ) has finally crushed hopes that more public bodies and charities engaged in cultural activities could claim VAT exemption on their admission charges. Its recent judgment in the VAT case of the British Film Institute (BFI), released in February, draws a line under an argument that has been running for the last four years.