15 March 2023 l BUDGET 13 Deposit return schemes Simplifications will be made to the VAT treatment of deposits charged under a drink container deposit return scheme. From 1 August 2023, in effect, businesses will not have to account for VAT on the value of the deposit on drink sales at each stage in the supply chain. Instead, the manufacturer or importer who first sells the product in the UK will have to account for VAT on the value of the deposit for containers that have not been returned in exchange for a deposit refund. If the container is not returned, HMRC will collect the VAT on the unredeemed deposit. Late payment interest and penalties, and repayment interest rules Technical changes are being made to ensure interest is charged on late payments of VAT and that penalties are applied as intended. In particular, businesses that use annual accounting will not be charged late payment interest or penalties on instalments that they pay late, but only on any balancing payment they fail to pay on time. DIY housebuilders’ scheme The VAT DIY housebuilders’ scheme will be digitised and the time limit for making claims will rise from three to six months. TAX ADMINISTRATION Charitable reliefs UK charity tax reliefs and exemptions will be restricted to UK charities and community amateur sports clubs (CASCs). The change is effective from 15 March 2023 and affects income tax, CGT, corporation tax, IHT, stamp duty, SDLT, SDRT, annual tax on enveloped dwellings (ATED) and diverted profits tax. Non-UK charities and CASCs that HMRC had accepted before 15 March 2023 as qualifying for charity tax reliefs have a transitional period until April 2024.
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