Indirect Taxes, both VAT and Environmental, can affect the bottom line of any business or organisation both positively and negatively. Our Indirect Tax expert team brings decades of experience to ensure your organisation can plan proactively to maximize VAT recovery opportunities and Environmental Tax Reliefs and minimize your exposure to challenges from HMRC. We are here for you when Indirect Taxes get complicated and help ensure they don’t undermine your aspirations. Read more about why indirect tax support is essential for your business.
Indirect tax: VAT
VAT is known as an Indirect Tax as it adds tax not to earned income or profit but to the value of a supply made in the context of business activity. Businesses need to become familiar with new VAT regimes and processes post-Brexit. Importers and exporters have other VAT accounting changes to onboard into their systems as well.
VAT has evolved over the decades from a “simple tax” – a tax rate added to the price of goods and services paid by the customer to HMRC through a VAT Return, which allowed the VAT registered taxpayer to recover VAT costs they had incurred.
Many sectors are VAT sensitive in that they are VAT registered but unable to recover much of the Input Tax they incur – universities, colleges, charities, healthcare organisations, housing associations, finance, insurance, and property businesses are just a few examples.
Even in more “straightforward” sectors, methods to agree to VAT recovery processes are needed. VAT decisions over property developments, disputes with HMRC, compliance for making VAT digital, importing and exporting goods and services, and cashflow management all come into the everyday world of proactive VAT management.
There are many different environmental taxes to keep in mind for your business. Getting the right support with these indirect taxes is essential because it is easy to lose track of all the different taxes.
Plastic Packaging Tax (PPT)
On April 1st 2022, the PPT was introduced, which obligated manufacturers and importers of plastic packaging to consider whether they must register and account for PPT on products they make or import to the UK. Due diligence is required of any business that may be subject to the tax.
Climate Change Levy (CCL)
The CCL is most similar to a ‘carbon tax’ in the UK. Almost all energy supplies for businesses in the industrial and production sectors are subject to the levy.
Aggregates Levy (AGL)
AGL is a tax on the ‘commercial exploitation of any rock, sand or gravel’. ‘Commercial exploitation’ is defined very broadly and includes simply removing material from its originating site or mixing it with anything other than water. It also includes using aggregate material for construction purposes – even where the construction or civil engineering work takes place on the originating site.
Landfill Tax (LFT)
Introduced in 1996, LFT was the first of many behavior changing environmental taxes introduced in the UK. Like most environmental taxes, its aims were fairly straightforward: if you put waste into a landfill rather than reuse or recycle it, you will be taxed by the tonne. In addition, if that waste is anything other than inert, you will be taxed at a much greater rate.
Learn more about Indirect Tax
Xeinadin has the expertise and experience to help identify opportunities and risks arising from indirect taxes.
Our specialist team will guide you through the complex world of indirect taxes. Want to know more about how we achieve that? Request a call back from our Indirect Tax team by filling in this form. Our team gives you the right support for your business.