Eight ESCs to be withdrawn from 1 January 2012
As our readers will be aware, HMRC have been reviewing all Extra Statutory Concessions (ESCs) and that many are being replaced by legislation to preserve their effect. However, as part of the review HMRC have now identified eight ESCs which they intend to simply withdraw.
HMRC accept that taxpayers affected by the withdrawal of the ESCs will need to make adjustments and will, where possible, provide sufficient notice before the concessionary treatment is withdrawn. HMRC have also confirmed that no ESC will be withdrawn retrospectively.
The list of eight ESC’s which are to be withdrawn from 1 January 2012 is as follows:
- Misunderstanding by a VAT trader – VAT 3.4 & IPT
- Connection to the gas or electricity mains supply – VAT 3.16
- Sail away boats – VAT 8.1
- Recharge of non-domestic (business) rates at caravan sites – VAT
- Recharge of water and sewerage rates at caravan sites – VAT
- Zero-rating of motor vehicles adapted after initial supply – VAT
- Zero-rating of parts and accessories for boats supplied for disabled people – VAT
- Cemeteries, lump sums for grave maintenance, etc. – Corporation tax (This ESC is to be withdrawn for accounting periods commencing on or after 1 January 2012)
The ESCs will continue to operate in their present form until they are withdrawn.