VAT & Property Digital Event 2020
Last year our annual VAT & Property event was held online. It had been an unusual year but there’s been as much to talk about as ever, and we were delighted to welcome so many delegates to our event this year and sincerely hope to see everyone again in the future.
Originally run by Tolley®, and now in its seventh year with Orca Law, this conference has been the premier event in its field since 2002.
Why attend?
If you work in VAT, you probably can’t escape property and construction – it can affect any of your clients, it’s complicated, and it throws up new challenges all the time. You need to know what’s going on. And, sometimes, it’s reassuring to find that no-one else knows, either.
And if you work in property, or property tax, you’ll know that you can’t make assumptions about VAT. Even if the deal or project you’re working on looks the same as the last one, trivial differences, or a new interpretation from HMRC, can suddenly add 20% to the costs. Again, you need to know.
This year, a lot of the familiar problems are still out there, but the coronavirus has led to new legislation and new HMRC procedures. It’s triggered changes in the use of buildings, and changes to tenants’ obligations. To manage risk and spot opportunities – whether in your own organisation or for your clients – you need to know what’s going on, and to be sure that you’ve not missed an important new development. This event is your chance to hear a unique range of perspectives on current issues.
Speakers
Colin Smith - M&G plc
Colin works in-house at M&G Plc advising on VAT matters related to its property funds, having previously worked for a property regeneration company, Ernst & Young, PKF and Customs & Excise. He takes an active role in the industry, lobbying HMRC and HM Treasury for change, and is currently chair of the British Property Federation's VAT Committee.
Kirsten Prichard Jones - Macfarlanes
Kirsten advises primarily on the tax aspects of real estate transactions, including forward funding and developments, financing and restructuring transactions, corporate acquisitions, offshore holding structures and joint ventures. Particular areas of focus include residential developers and operators in the "build to rent", student accommodation and care home sectors. Her clients include large institutions, funds, developers and individuals.
David Millar - HMRC
David is the VAT Technical Lead for HMRC’s Business, Tax and Customs Directorate. He is responsible for advising all of the VAT operational teams nationally, including the Option to Tax and VAT Registration Units as well as the VAT Enquiries, Error Corrections and DIY Housebuilders teams.
Chris Nyland - Gowling WLG
Chris is a partner at Gowling WLG with a general real estate tax practice and a specific cross-sector VAT law focus. He works extensively with Gowling WLG's market-leading investment fund, property development and landlord-and-tenant practice groups, and has developed particular expertise in the interaction of taxes in these fields.
Martin Scammell
Martin Scammell is an independent VAT consultant, specialising in property and construction matters, and the author of the leading reference work VAT on Construction, Land and Property. Martin started out in VAT Policy in Customs & Excise, was a Partner at Ernst & Young, and then head of indirect tax at Eversheds. He is technical secretary to the BPF’s VAT Committee, and a member of the JVCC, of HMRC’s Land and Property Liaison Group, and of the CIOT’s indirect taxes and property taxes committees. In 2017 he served on the OTS’s consultative committee for their review of VAT.
Programme
Please note that this event will be spread across two days, broadcast between 10.30 and 14.30 on each. Each day's programme will contain entirely unique and distinct content, so be sure to attend both for the full experience.
Tuesday 3rd November - morning sessions
10.30 - 12.00 (estimated)
Colin Smith - Chair
Chris Nyland
Martin Scammell
The Landlinx case, and its implications
It has always been understood that a ‘call’ option to acquire property was basically exempt, with an option to tax. But, in Landlinx Estates Ltd, HMRC maintained that it is was necessarily standard-rated. The Tribunal disagreed, but this was no rogue ruling: HMRC’s policymakers had been heavily involved, and the case was a test for their new understanding of the exemption.
We explore:
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What was behind HMRC’s argument, and what else it might affect
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Why the Tribunal thought they’d got it wrong
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The treatment of call options, pre-emption rights, and land promotion agreements
Disapplication of the option to tax, following Moulsdale
The anti-avoidance rules for the option to tax apply in all sorts of circumstances, and can be triggered because of a buyer’s planned expenditure. The Upper Tribunal in David Moulsdale seems to have resolved the so-called ‘circularity’ mystery here, but we:
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Revisit the basics of the anti-avoidance rules, and look at what to consider,
and what to look out for -
Look at how the rules are relevant on a disposal, including in a TOGC
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Explore the implications for sale agreements – what can you warrant,
and what warranties do you want?
Compensation and termination payments — a landlord and tenant issue?
In Revenue & Customs Brief 12/20, HMRC announced policy changes, which taxpayers were expected to apply retrospectively. They seem to have been thinking about termination payments for phone contracts and the like, but clearly there were much broader implications. We consider:
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How the new policy applies in a property context – what about tenants’ break rights, or dilapidations?
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What provisions need to go in leases, and what problems might there be with existing leases?
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How much should we worry about the last four years?
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More generally, what was behind the retrospection, and can we ever rely on HMRC’s
guidance again?
Tuesday 3rd November - afternoon sessions
12.45 - 14.30 (estimated)
Colin Smith - Chair
Kirsten Prichard Jones
Chris Nyland
Re-gearing leases
In the circumstances of the last few months, many tenants have renegotiated their rents, and landlords have often wanted something in return. So was this a barter transaction? Did the parties need to charge each other VAT? And did tenants need to opt to tax, to avoid partial exemption issues? HMRC issued a Revenue & Customs Brief at the end of July, but not everyone found it clear, and many deals had been treated differently in the meantime.
We look at:
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What sorts of deals have been done?
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Which ones do create a VAT issue?
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What were HMRC trying to say?
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What about unpicking past treatments, that they now say were wrong?
Property in a changing environment
2020 has posed immediate problems for property owners and developers, but the landscape will never be the same again. Most obviously, many businesses have realised that they don’t need to have large expensive offices, while owners have looked around for new uses, and new ways in which property can be exploited. VAT seems unlikely to be foremost in their minds.
We consider:
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Government initiatives, and changes to the planning regime
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The re-emergence of commonhold
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Conversions to new uses
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What it all means for VAT
Uncertain tax treatment — a new regime
HMRC have been consulting on a requirement, from next year, for larger businesses to notify them when they adopt a tax treatment ‘which HMRC may disagree with’. In VAT and property, it might be thought that HMRC are capable of disagreeing with just about anything.
In this session, we ask:
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What are HMRC trying to achieve?
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What might need to be disclosed?
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How might the regime work in other areas, and for other taxes?
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What happens if you disclose? And what happens if you don’t?
VAT groups
August 2020 saw a Treasury consultation on VAT groups. We look at what changes here might mean for landlords and developers, and at how compulsory VAT grouping would have unwelcome consequences.
Open forum, with Q&A on the day’s sessions (also with Martin Scammell)
Thursday 5th November - morning sessions
10.30 - 12.00 (estimated)
Colin Smith - Chair
David Millar
Chris Nyland
Martin Scammell
Coming soon? The domestic reverse charge
Following two postponements, the reverse charge for building work is now due to come in on 1 March. We’ve looked at it in detail at our last two conferences, but this time we consider:
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The new notification requirement for customers, and what it involves
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How customers can now get a cashflow benefit by opting in to the reverse charge
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What needs to go into construction contracts, and what shouldn’t
HMRC update and Q&A
2020 has also seen new challenges for HMRC, while they continue to work on operational improvements. We welcome back David Millar, to talk us through what they’re doing, and to hear our experiences and concerns. Topics include:
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HMRC’s response to Covid-19
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New procedures, including the use of electronic signatures
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The DIY scheme - some relevant updates
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Registration – making it easier for property businesses
Thursday 5th November - afternoon sessions
12.45 - 14.30 (estimated)
Colin Smith - Chair
Kirsten Prichard Jones
Martin Scammell
Stamp taxes — ever more the driver
It’s a long time now since stamp duty was 1%, and could be avoided entirely by popping over to the Channel Islands to sign the documents. With rates sometimes approaching the VAT rate, and with no equivalent to input tax recovery, more and more deals need to be structured around SDLT or, in Wales and Scotland, LTT or LBTT. VAT practitioners need to understand the drivers, and to know when a VAT solution might make for a stamp tax problem. In this session, we look at:
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The basics, and how they’re changing
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The regimes around the UK, and how we can’t assume they’re the same
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Issues with new design and construction techniques
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What ‘golden brick’ means now, and the subtly different stamp tax equivalents
Hotel and holiday accommodation
The temporary reduced-rating will be four months old by November, but we consider:
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Issues with next year's return to 20%
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How 2021’s holidays can be reduced-rated too
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Some oddities and anomalies – does the legislation actually fit with HMRC’s interpretation?
RRP and RCP buildings — new issues, old issues
In an update on buildings for a ‘relevant residential purpose’ or a ‘relevant charitable purpose’, we ask:
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A year after the hearing in Swanage Sea Rowing Club, what’s happening with
zero-rating for sports pavilions? -
Following Marlow Rowing Club and Westow Cricket Club, is there ever any
point in asking HMRC? -
Does helping with Covid-19 mean suffering a ‘change of use’ charge?
All the other case law
We look at some recent, current and pending cases, and their implications. Topics include ‘leasing or letting’, place of supply, the CGS and input tax adjustments, penalty income and, of course, dwellings.
Open forum, with Q&A on the day’s sessions (also with David Millar and Chris Nyland)
