VAT AND ENVIRONMENTAL TAXES
Whether you’re a commercial operation or a not-for-profit, a local authority or a government department – VAT will affect the income you generate and the costs you pay.
It’s not just a question of “Do I charge VAT on this income?” or “Can I recover VAT on these costs?”. It’s about everything from – “Should I be VAT registered?” to “Do Tax Digital processes need to be built into my VAT accounting?”.
Our dedicated VAT experts have broad and deep experience on both sides – in the Revenue and Tax Industry and in advising on the client-side. They understand the nuances of the VAT regime, how to support clients with challenges from HMRC, what HMRC want to see and how to build VAT compliance. They’ll find opportunities in new regulations and develop sound tax strategies for your organisation.
Plastic Packaging Tax (PPT)
PPT was introduced on April 1st, 2022. It obliged manufacturers and importers of plastic packaging to consider whether they should register and account for PPT on products they make or import into the UK.
There are stiff penalties for poor compliance and the burden of due diligence is on you – even if you don’t believe the tax applies to you. So you need certainty – which Xeinadin will provide.
There are, of course, exemptions and some products are outside the scope of the tax, but to be absolutely sure, it’s wise to check with the experts before it’s too late.
Climate Change Levy (CCL)
CCL is currently the closest thing the UK has to a ‘carbon tax’. It applies to almost all types of energy that businesses consume for industrial or production purposes.
Its purpose is to encourage energy efficiency – and it does so by raising costs to a level that reflects the carbon impact of the energy source. Needless to say, it’s far from simple – in fact, CCL is recognised by the government’s own Office of Tax Simplification as a “complicated tax”.
As with most indirect taxes, you need to apply for tax relief on it before you can get a reduction – and while it’s technically possible to get retrospective relief, it’s a lot harder in practice.
This means most businesses affected by it will need expert help. And that, of course, is where Xeinadin comes in. If you need help identifying the risks and opportunities around CCL, give our specialist team a call.
Aggregates Levy (AGL)
AGL is a tax on the ‘commercial exploitation’ of rock, sand or gravel. ‘Commercial exploitation’ is defined very broadly – it includes operations as simple as removing material from its originating site or mixing it with anything other than water. It also includes using aggregate material for construction purposes – even if the construction or civil engineering work takes place on the originating site.
So, while the most likely people to need to register and account for AGL are quarry operators, such a broad definition means that any contractor or developer who comes across useable, virgin aggregate during normal commercial activities may also be required to register.
Given that the rate of AGL is currently £2 per tonne, this could put a serious dent in a project’s profitability. If you feel you may be liable – or if you’ve incurred AGL liabilities and you’d like to know whether you could save some money – call one of our experts for a chat about your options.
Landfill Tax (LFT)
Introduced in 1996, LFT was one of the first behaviour-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 reusing or recycling it), you’re taxed by the tonne. And if the waste isn’t inert, you’ll pay even more.
It’s largely achieved its purpose – and over the years, Landfill Tax rates have increased to raise the incentive to reduce, reuse, and recycle.
But as with any tax, businesses incurring a liability may find themselves in disagreement with HMRC or might feel they’re paying too much.
And this is where it’s useful to pick the brains of an expert. Our team have huge experience in dealing with HMRC in environmental taxes, and will be happy to advise you, support you and go in to bat with you if necessary.