Accordance » Manufacturing Industry VAT

Ford delays VAT impact on car prices

admin — Fri, 15 Jan 2010 10:20:36 +0000

Car manufacturer Ford has announced that it will offset the difference in the VAT rate increase from 15 per cent to 17.5 per cent.

The offer means customers buying new models will not be affected by the VAT hike until the end of February when the government’s scrappage scheme ends.

Nigel Sharp, managing director of Ford Britain, said delaying the VAT impact on new car prices until March is aimed at offering customers “some relief from the cold start to 2010″.

“Combined with the scrappage deals still available for customers with older cars, [the scheme] presents plenty of reasons to visit a Ford dealer this winter,” he said.

The scrappage scheme allows car dealers to offer customers up to £2,000 towards the cost of a new vehicle in exchange for their old models.

The standard rate of VAT increased from 15 per cent to 17.5 per cent on January 1st 2010, while Ford raised its new car prices by an average of 2.7 per cent on December 1st.

VAT hike led to increase in car production

admin — Tue, 12 Jan 2010 10:37:58 +0000

The rush to purchase cars before the 17.5 per cent VAT rate was implemented led to a rise in car production, new figures show.

According to Auto Trader, the number of cars built in the UK increased by 15.7 per cent in November – the first rise since September 2008.

Around 112,948 vehicles were built in November, as more consumers also took advantage of the government’s scrappage scheme to exchange old motors and get a discount towards the cost of a brand new car.

The figures suggest a higher level of confidence in the car market, as growing numbers of consumers are returning to dealerships and driving up demand.

Matt Thompson, marketing director at Auto Trader said the figures spell good news for Britain’s car industry.

“We’ve seen a clear increase in buying activity as people take advantage of the scrappage scheme extension and make purchases before the January VAT rise,” he said.

In December, the Automotive Parts and Components Manufacturers Association in Turkey called for lower levels of VAT to help revitalise the country’s motor industry and help it cope with the economic downturn.

Rok calls for lower VAT for repairs

admin — Tue, 01 Dec 2009 10:24:19 +0000

UK building firm Rok has called on the government to reduce VAT on property repairs.

Garvis Snook, chief executive of the company, wrote to chancellor Alistair Darling asking him to cut VAT on property repairs to five per cent in order to protect contractor jobs.

As part of its Repairing Britain Campaign, Rok commissioned Teesside University Business School to study the effects a tax cut would have on the economy, reports H & V News.

The report calls for tax cuts on repair work in line with the VAT exemption on building new properties and concludes that the reduction would save tens of thousands of jobs.

According to the report, VAT tax cuts on repairs would cost the Treasury £2.6 billion in lost tax revenue but would increase demand for property repair services by ten per cent.

"The Teesside University report supports the campaign’s assertion that a VAT cut on repairs would bring down unemployment, protect skills and apprentice programmes and improve the quality and efficiency of UK housing stock," Mr Snook said.

The Scottish Building Federation also recently called for the government to reduce VAT for the industry to help stimulate business.

‘Lower VAT on property repairs could save jobs’

admin — Thu, 19 Nov 2009 10:21:50 +0000

A VAT cut on property repairs could save thousands of jobs, a new report suggests.

According to a study conducted by Teesside University Business School on behalf of the Repairing Britain Campaign, reducing VAT on repairs to five per cent will minimise the black economy and allow a better use of existing building stock.

The report found that the cost to the government of reducing VAT on repairs would total £2.6 billion but demand for these services would go up by ten per cent.

If unemployment continues in the construction industry, there could be a skills shortage in the future and resultant inflationary wage rises as the recovery arrives, the study said.

Garvis Snook, chief executive of Rok plc and spokesperson for the Repairing Britain Campaign said: "We welcome the findings of this report which give validity to our arguments that a change in tax on property repairs could be cash neutral."

The Scottish Building Federation recently called on the government to reduce VAT for the industry to help stimulate business during the recession.

Pakistan exporters concerned about VAT proposals

admin — Thu, 19 Nov 2009 10:19:00 +0000

Manufacturers in Pakistan have hit out against plans to implement VAT on a wide range of export-orientated sectors in the country.

The Pakistan Tanners Association (PTA) expressed concern about the Federal Board of Revenue’s (FBR) proposal to implement VAT on textiles, surgical equipment, carpets, leather and leather-based goods.

The association said these sectors are currently exempt from VAT in order to promote businesses and any changes to the current setup could have a detrimental impact on industrial sectors.

Gulzar Firoz, chairman of the PTA, told The News International: "The move to impose VAT and withdraw sales tax exemption was intended to be initiated at the behest of the World Bank."

He added that if VAT is implemented on these sectors, exports could decline – particularly on the leather industry, which has already seen exports go down by 29 per cent.

Earlier this year, the FBR met to discuss the implementation of VAT on the retail sector during the next fiscal year.

Construction industry calls for lower VAT

admin — Mon, 02 Nov 2009 10:19:01 +0000

The Scottish construction industry has called on the government to reduce VAT for the sector.

Industry body the Scottish Building Federation said the government should implement a five per cent VAT cut to help stimulate business amid the recession.

The organisation said the VAT reduction would help encourage more spending on homes and would help drive cash-in-hand builders out of the industry for good.

Michael Levack, head of the Scottish Building Federation, told STV: "Encouraging homeowners to spend more money on building works to improve their homes would make a huge contribution towards sustaining the jobs of thousands of apprentices and tens of thousands of other construction workers in Scotland."

He alleged that the UK government has treated the construction industry like the "poor cousin" of other industries which have been given more attention and financial backing.

Mr Levack’s comments come after a recent survey found that half of all Scottish homeowners said they would spend more on building work if they could pay a five per cent VAT rate instead of the current 15 per cent.

Expert calls for less VAT on carbon-friendly wood

admin — Wed, 30 Sep 2009 11:38:27 +0000

The president of the European Panel Federation has called on the EU to reduce VAT for wood-based products.

Ladislaus Dory said items made of wood should benefit from lower VAT because they store carbon and are thus environmentally-friendly, reports the Timber Trades Journal.

He stressed that European authorities should encourage more consumers to purchase "Kyoto-friendly" products such as timber by rewarding them for replacing old kitchens.

Speaking at the International Conference on Carbon Storage in Wood Products in Brussels, Mikael Eliasson, chairman of the European Confederation of Woodworking Industries, echoed Mr Dory’s comments and urged Europe to encourage more wood consumption.

He pointed out that increasing the proportion of wood purchased in Europe by four per cent every year, could equate to saving around 150 million tonnes of carbon dioxide from being emitted annually.

The International Conference on Carbon Storage in Wood Products took place earlier this month (September 1st) and attracted a number of leading scientists on climate change and wood products. A range of wood industry and forestry representatives were also in attendance.

EU carbon market ’still open to VAT fraud’

admin — Thu, 03 Sep 2009 11:06:11 +0000

The EU carbon credits market is still susceptible to VAT fraud, experts have warned.

Despite calls to tighten up the carbon market across Europe, a new investigation by Reuters reveals that there are still a number of tax loopholes and regulatory flaws open to exploitation by unscrupulous businesses.

The report found that although a few EU member states have taken action to curb tax fraud on carbon permits, scammers are simply moving into other countries which do not have similar stringent policies in place.

James Emanuel, a director at broker CantorCO2e, told Reuters: "Carbon permits are a tax on emissions and applying VAT to them is effectively putting a tax on a tax, which is kind of ludicrous."

David Bates, of emissions broker CarbonDesk, added that the fraud schemes put innocent intermediaries who are unknowingly complicit in the scams "in a very awkward position of responsibility and liability".

Last month, the UK’s tax authority HM Revenue & Customs made its first arrests in the country for VAT carbon credit fraud totalling some £38 million.

Ugandan mobile operators call for no VAT

admin — Mon, 27 Jul 2009 09:59:49 +0000

Mobile phone and telecommunications manufacturers in Uganda have called on the government to scrap VAT for their goods.

Industry figures said the abolishment of the 18 per cent VAT rate on mobile phones plus the 0.3 per cent clearance fee could help to increase mobile phone penetration in the country and enable consumers to benefit from improved technologies, reports New Vision.

It is also thought that the reduction in VAT could provide a boost to the economy by encouraging more people to spend on mobile phone goods and develop the domestic market.

Dorothy Ooko, Nokia communications manager for East Africa, said: "We believe that if Uganda does not remove VAT on its mobile phones then the Ugandan market will end up increasing parallel importation from Dubai and Kenya."

Neighbouring country Kenya recently announced in its national budget last month that it plans to scrap VAT on all mobile phones, cellular networks and telephones.

Dutch ministry changes CO2 VAT rules

admin — Wed, 15 Jul 2009 11:40:19 +0000

The ministry of finance in the Netherlands has launched new VAT legislation for the CO2 industry in order to combat fraud.

It claims there is currently "clear indications" of fraud in the carbon emissions market in the Netherlands, prompting it to announce changed VAT rules, reports Reuters.

Under the new scheme, the carbon permit buyer will pay VAT as of today (Wednesday July 15th), instead of the current system where the seller pays the tax.

The ministry claims carousel fraud, where criminals import VAT-free goods from other countries and then sell them domestically and charging VAT, is one area of concern to be addressed with the new rules.

Jan Kees de Jager, deputy finance minister, said in a statement: "In order to do away with uncertainty for buyers, I have decided that entrepreneurs who sell emissions rights will simply mark the bill with ‘turnover tax transferred’. The buyer will then insert the tax into his or her tax return."

The European Commission recently outlined its position on VAT grouping schemes, stating that companies are only able to join a group which has been introduced by the member state it is present in.