Alcohol duty rates and bands – From 13 March 2017, the duty rates on beer, cider, wine and spirits will increase by RPI inflation, in line with previous forecasts…
1. Indirect taxes
Alcohol duty rates and bands – From 13 March 2017, the duty rates on beer, cider, wine and spirits will increase by RPI inflation, in line with previous forecasts. The government will also consult on:
- introducing a new duty band for still cider just below 7.5% abv to target white ciders
- the impacts of introducing a new duty band for still wine and made-wine between 5.5% and 8.5% abv
Tobacco duty rates – As announced at Budget 2014, duty rates on all tobacco products will increase by 2% above RPI inflation. This change will come into effect from 6pm on 8 March 2017.
Minimum Excise Tax – The government will introduce a Minimum Excise Tax for cigarettes. This will target the cheapest tobacco and promote fiscal sustainability. The rate will be set at £268.63 per 1,000 cigarettes. It will take effect from 20 May 2017.
2. Other indirect taxes
Value Added Tax (VAT) – Registration and deregistration thresholds – From 1 April 2017 the VAT registration threshold will increase from £83,000 to £85,000 and the deregistration threshold from £81,000 to £83,000.
Soft Drinks Industry Levy – The levy rate for added sugar drinks with a total sugar content of 5 grams or more per 100 millilitres will be set at 18 pence per litre, and those with 8 grams or more per 100 millilitres will be set at 24 pence per litre.
Insurance Premium Tax (IPT) – The government will legislate to introduce anti-forestalling provisions and increase the standard rate of IPT to 12% from 1 June 2017, as announced at Autumn Statement 2016.
3. Tax administration.
VAT Fraud – VAT Fraud in the provision of labour in the construction sector – The UK Government will consult on options to combat missing trader VAT fraud in the provision of labour in the construction sector, in particular, applying the reverse charge mechanism so the recipient accounts for VAT.
VAT: ‘Split Payment’ model – Some overseas traders avoid paying UK VAT, undercutting on-line and high street retailers and abusing the trust of UK consumers who purchase goods via on-line marketplaces. Building on the measures introduced in Budget 2016, the government will shortly publish a call for evidence on the case for a new VAT collection mechanism for on-line sales.
This would harness technology to allow VAT to be extracted directly by the Exchequer from on-line transactions at the point of purchase. This is often referred to as a ‘Split Payment’ model. This is the next step in tackling the non-payment of VAT by some overseas traders selling goods on-line to UK consumers.
Meridian International Vat Consulting Limited