Deloitte Weekly VAT News - Week ended 20 May 2005

Business Brief 11/05 confirms that HMRC believe UK law will need to be changed as a result of the ECJ’s decision in the Accenture case and many outsourced services that are now VAT-free will become subject to VAT. There is to be a 12 week formal consultation period on the implementation of the changes, based on a consultation document to be published in July, following discussions with industry representatives. Businesses will be able to carry on as before until the UK law is changed, most probably early in 2006. However, some businesses may wish to rely on the terms of the ECJ’s judgment and change the treatment of their sales. There could be an opportunity for some to make retrospective claims.