Country-specific updates: UK

Repeal of VAT (Treatment of Transactions) Order 1992

On 14 September 2021, HMRC issued a policy paper confirming the revocation of the VAT (Treatment of Transactions) Order 1992 (SI 1992/630) (“the 1992 Order”) with effect from 21 October 2021.

The revocation will align the VAT recovery position of public bodies (within section 41 of VATA 1994) with other employers in respect of cars supplied to employees under salary sacrifice arrangements.

Section 41 public body employers became able to obtain full input tax recovery on cars leased to employees (without having to charge VAT on the supply to employees) when the Court of Appeal, in Northumbria Healthcare NHS Foundation Trust [2020] EWCA Civ 874, held that the effect of the interaction of the 1992 Order and section 41 of VATA 1994 meant that the supply of a car under salary sacrifice was a non-business activity allowing full input tax recovery (rather than partial recovery available under the Value Added Tax (Cars) Order 1992 (SI 1992/3122)).

For section 41 employers that have obtained full input tax recovery, the transitional provisions allow the supply to employees to continue VAT free after 21 October 2021 provided the contract was entered into before 21 October 2021, is for less than three years duration and the benefit of the employer's input tax recovery is fully passed on to the employee.

Revised timetable for border controls for imports from EU

The Minister of State in the Cabinet Office made a written statement to the House of Lords (the same statement was also made to the House of Commons) announcing revisions to the timetable for the phased introduction of border controls on imports from the EU into Great Britain. The timetable was previously revised in March 2021.

Under the revised timetable:

• Import safety and security declarations will be required from 1 July 2022 (previously 1 January 2022). However, as planned, from 1 January 2022, import declarations may no longer be deferred.
• Pre-notification of agri-food imports will be introduced from 1 January 2022 (previously 1 October 2021). This means advance notice of imports of consignments of products of animal origin (POAO), certain animal by-products (ABP) and high-risk food not of animal origin (HRFNAO) must be given to relevant regulatory bodies. Pre-notification requirements for low-risk plants and plant products were already scheduled to start from 1 January 2022.
• Export health certificates (official document confirming that the product meets UK health requirements) for POAO and certain ABP will be required from 1 July 2022 (previously 1 October 2021). Physical sanitary and phytosanitary (SPS) checks (and certificates) for POAO, certain ABP and HRFNAO will be required from 1 July 2022 (previously 1 January 2022). From this date, physical SPS checks on these products and high-risk plants must take place at border control posts (BCPs) (designated and approved inspection sites) instead of the place of destination of the products.