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Autumn Statement 2023: VAT and Customs Duty

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Budgets and Autumn Statements rarely contain any significant VAT changes, and this year was no exception. The only changes were minor ones to the scope of zero rating for energy saving materials and sanitary products. HMRC will consult in early 2024 on the consequences of a recent court case involving Uber and the VAT treatment of private hire vehicles, which has received a lot of press coverage. HMRC also said they would continue to receive representations on the Retail Export Scheme which was withdrawn on 1 January 2021.

If you require further information or supportget in touch or speak to your usual Crowe contact.

Andy Spencer identifies the key tax changes and outline practical support for you and your business.

Relief for energy saving materials extended

Author: Andy Spencer, Director, VAT and Customs Duty Services

There was little mention of VAT with minor extensions to the scope of zero rating. HMRC are expanding the scope for energy saving materials to include additional technologies such as water-source heat pumps. It also brings buildings used solely for a relevant charitable purpose within scope of the relief. This relief will apply from 1 February 2024, but is due to increase to the reduced rate of 5% from 1 April 2027, so is relatively short-lived.

From 1 January 2024, the zero rate on women’s sanitary products will extend to reusable period underwear.

The extension for energy saving materials will impact charities and homeowners installing these additional technologies. Extending relief for energy saving materials was one of the measures that Crowe had called for in its submission to HM Treasury prior to the Autumn Statement, and it is good to see that this has been implemented.

However, it is disappointing that some of the other requests made in Crowe’s submission to HM Treasury have not been met. The VAT registration threshold remains the same, maintaining the cliff edge, preventing some small businesses from expanding. The hospitality and leisure sector received support in a number of areas but still have to account for VAT at 20% on sales – many countries have a reduced VAT rate for this sector, this was applied in the UK during COVID to support the sector.

Talk to us

If you have any questions regarding how the Autumn Statement impacts you or your organisation, or would like to discuss the possible opportunities, please get in touch.
Robert Marchant
Robert Marchant
Partner, National Head of Tax