Citation, commencement and effect

1.  These Regulations may be cited as the Value Added Tax (Amendment) (No. 3) Regulations 2010 and come into force on 4th January 2011.

Amendment of the Value Added Tax Regulations 1995

2.  The Value Added Tax Regulations 1995(6) are amended as follows.

Change of rate, supplementary charge invoices

3.  In regulation 15A (change of rate, supplementary charge invoices), after “Schedule 3 to the Finance Act 2009” insert “or Schedule 2 to the Finance (No. 2) Act 2010(7)”.

Flat-rate scheme for small businesses

4.  For the Table in regulation 55K (flat rate scheme for small businesses, category of business), substitute—

5.  In regulation 55M (withdrawal from the scheme)—

(a)in paragraph (1)(a), for “£225,000” substitute “£230,000”,

(b)in paragraph (1)(b), for “£225,000 substitute “£230,000”, and

(c)in paragraph (2), for “£187,500” substitute “£191,500”.

Repayments to Community traders

6.  In regulation 173P (the day by which a claim under this Part must be made)—

(a)at the beginning of paragraph (1) insert “Subject to paragraph (1A),”; and

(b)after paragraph (1) insert—

“(1A) A repayment application in respect of a repayment period falling within the repayment year commencing on 1st January 2009 must be submitted in accordance with regulation 173I(c) before 1st April 2011.”.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations come into force on 4th January 2011 and amend Parts 3 (VAT invoices and other invoicing requirements), 7A (flat-rate scheme for small businesses) and 20 (repayments to Community traders) of the Value Added Tax Regulations 1995 (S.I. 1995/2518).

Regulation 3 amends regulation 15A (change of rate, supplementary charge invoices) to include a reference to a supplementary charge due under Schedule 2 to the Finance (No. 2) Act 2010 as a consequence of the increase in the standard rate of VAT from 17.5% to 20% on 4th January 2011.

Regulation 4 amends regulation 55K (flat rate scheme for small businesses, category of business) to substitute a new table with revised percentages to reflect the increase in the VAT rate.

Regulation 5 amends regulation 55M (withdrawal from the flat rate scheme) to provide for revised figures relating to exit thresholds to reflect the increase in the VAT rate.

Regulation 6 amends regulation 173P (day by which a claim under this Part must be made) to implement an amendment made by Council Directive 2010/66/EU (OJ No L 275, 20.10.2010, p 1) to Council Directive 2008/9/EC (OJ No L 44, 20.02.2008, p 23) which lays down the rules for the refund of VAT incurred by a taxable person in a Member State other than the Member State in which that person is established. Its effect is that claims for repayment of VAT incurred in the year commencing on 1st January 2009 may be submitted to Her Majesty’s Revenue and Customs until 31st March 2011.

A full Impact Assessment has not been produced in relation to this instrument as it has no impact on business, charities or voluntary bodies.

A full Impact Assessment of the effect that the increase in the VAT rate will have on the costs of business and the voluntary sector is available at http://www.hmrc.gov.uk/better-regulation/ia.htm.