Constable VAT Budget Focus March 2023

Spring Budget 2023

The Chancellor has delivered the Spring Budget, which included the following VAT related items:

Services supervised by pharmacists 

The VAT exemption on healthcare will be extended to include medical services carried out by staff directly supervised by registered pharmacists. This change will take effect from 1 May 2023.

Treatment of Patient Group Directions

The zero-rate applicable to prescriptions will be extended to medicines supplied through Patient Group Directions.

Fund management reform

Following the recently closed consultation on the proposed reform of the VAT rules on fund management, the government is considering the responses and continuing to discuss the proposals with interested stakeholders. The government will publish its response to the consultation in the coming months.

Review of the VAT treatment of financial services

Building on the recommendations of the Industry Working Group established to consider the future of VAT and financial services, the government will continue working with industry stakeholders to consider possible reforms to simplify the VAT treatment of financial services, with the aim of reducing inconsistencies and providing businesses with greater clarity and certainty.

VAT relief for energy saving materials

The government has published a call for evidence on options to reform the VAT relief for the installation of energy saving materials in the UK. The call for evidence will consider the inclusion of additional technologies and the possible extension of the relief to include buildings used solely for a relevant charitable purpose.

VAT and Deposit Return Schemes

The government will legislate to simplify the VAT treatment of deposits charged under a deposit return scheme for drinks containers. The rules for accounting for this VAT will be set out in the subsequent secondary legislation and a VAT Notice.

DIY Housebuilders Scheme Digitisation Project

The government will legislate to digitise the DIY housebuilders’ scheme and will also extend the time limit for making claims from 3 to 6 months. These measures should improve the overall customer experience and reduce the administrative burden for claimants and HMRC.

Minor Technical changes to late payment interest and penalty rules

Minor technical changes have been made to the new harmonised interest rules and late payment penalties that apply to  VAT, which took effect from 1 January 2023.  These can be viewed using the link above.

Please note that this blog is intended to provide a general overview of the subject. No liability is accepted for the opinions it contains or for any errors or omissions. Constable VAT cannot accept responsibility for loss incurred by any person, company or entity as a result of acting, or failing to act, on any material in this blog post. Specialist VAT advice should always be sought in relation to your particular circumstance.