Autumn Budget 2021
With much having been announced or shared in advance of the Chancellor rising to his feet, there were few elements left to surprise in what Rishi Sunak has labelled a Budget delivering a ‘Stronger Economy for the British People’.
VAT updates - Autumn budget 2021
The government has taken steps to equalise VAT treatment within free zones to ensure that businesses cannot gain an unintended tax advantage by locating in a free zone.
The government consultation on free zones took place during 2020, with a boost to UK trade marked as a potential benefit of UK exit from the EU. Eight new sites were announced at the April 2021 budget statement.
Free zones give various benefits to authorised businesses operating within them which includes relief from VAT (VAT at 0%) and customs duties for goods and related services whilst located in the free zone.
A VAT exit charge will be introduced for goods that have benefitted from a VAT relief in the free zone and where there is no onward taxable supply of the goods within three months after the goods have left the free zone. The measure will take effect from 3 November 2021.
The purpose of this measure is to maintain a level playing field by ensuring goods that benefit from the VAT relief in a free zone are subject to VAT if they are not sold on to a customer outside the free zone within the time limit, or if the rules relating to the free zone procedure are breached.
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To find out how you or your organisation might be affected by the 2021 Autumn Budget please contact us.
VAT & indirect tax
Indirect taxes need careful planning as they make up an ever-larger part of the tax take