Chartered Institute of Taxation (CIOT / CTA) VAT and Indirect Taxes Advisory Syllabus

Give three examples of services subject to special place-of-supply rules overriding the general rule.

Land-related services (where the land is located); admission to events/services physically performed (where performed); and electronically supplied/digital services to consumers (where the customer belongs/consumes).

State the basic place of supply of goods rule and the treatment when goods are transported.

If goods are not transported, place of supply is where they are located when supplied. If transported, place of supply is generally where transport begins (subject to special rules for installed goods — where installed — and cross-border movements).

What is the VAT 'reverse charge' and why does it exist?

The reverse charge shifts the obligation to account for VAT from the supplier to the customer. The customer charges itself output VAT and (if eligible) recovers it as input VAT. It applies to cross-border B2B services and certain domestic supplies (e.g. construction industry), preventing the need for overseas suppliers to register and combating fraud.

How are exports of goods from the UK to overseas (outside UK) treated for VAT?

Exports of goods are zero-rated, provided the supplier holds valid evidence of export (commercial and official documentation) within the required time limits (generally 3 months).

How is import VAT on goods entering the UK normally accounted for by a VAT-registered business?

Via Postponed VAT Accounting (PVA): the importer accounts for import VAT on the VAT return (output VAT in box 1) and simultaneously recovers it as input VAT (box 4) where eligible, avoiding cash flow cost. Otherwise import VAT is paid at the border and reclaimed with a C79 certificate.

What is the UK domestic reverse charge for construction services (CIS reverse charge)?

For specified construction services between VAT-registered businesses within the CIS, the customer (not the supplier) accounts for the VAT. It applies B2B up the supply chain but not to 'end users'; designed to combat missing-trader fraud.

What is the One Stop Shop (OSS) and what does it simplify?

The OSS is an EU VAT simplification letting a supplier of B2C services or intra-EU distance sales of goods register in one EU member state and account for VAT due across all member states on a single return, avoiding multiple registrations. (Union and Non-Union schemes exist.)

What is the Import One Stop Shop (IOSS) and the consignment value limit it covers?

IOSS lets sellers/marketplaces account for import VAT on B2C distance sales of imported goods in consignments not exceeding €$150$ via a single EU return, collecting VAT at the point of sale so goods clear customs without import VAT at the border.

For UK-to-EU B2C sales of low-value goods, summarise the post-Brexit VAT position for the supplier.

The UK is outside the EU/OSS for UK-established sellers. Goods exported from UK are UK zero-rated; import VAT arises in the EU. Sellers may use IOSS (consignments $\leq$ €$150$) to collect EU VAT at point of sale; otherwise import VAT/duty is collected on entry to the EU.

How are cross-border B2C digital (electronically supplied) services taxed for VAT?

They are taxed where the consumer belongs (place of consumption). The supplier must charge the customer's country VAT rate and can use a Mini-One-Stop-Shop/OSS-type return to remit it, rather than registering in every country.

What is a customs duty and on what value is it normally charged on imports?

Customs duty is a tax on goods imported across a customs frontier, charged as a percentage of the customs value (generally the transaction value — price paid plus freight and insurance to the EU/UK border, i.e. CIF) at the rate set by the commodity code in the tariff.

What are 'rules of origin' in customs and why do they matter?

Rules of origin determine the economic nationality of goods to decide whether preferential (e.g. zero/reduced) tariff rates under a free trade agreement apply. Goods must be 'wholly obtained' or 'sufficiently transformed' in a partner country to qualify for preference.

Distinguish 'preferential' and 'non-preferential' origin in customs.

Non-preferential origin establishes the country of origin for general purposes (trade statistics, anti-dumping, labelling). Preferential origin determines eligibility for reduced/zero duty under a specific trade agreement, requiring stricter origin criteria and proof of origin.

What is a customs special procedure such as customs warehousing or inward processing?

Special procedures suspend or relieve duty/import VAT: customs warehousing stores non-Union/non-UK goods with duty suspended until release; inward processing allows import of goods for processing/re-export with duty suspended; outward processing allows temporary export for processing with duty relief on re-import.

What is Stamp Duty Land Tax (SDLT) and what transactions does it apply to?

SDLT is a tax on the acquisition of a chargeable interest in land and buildings in England and Northern Ireland (Scotland uses LBTT, Wales uses LTT). It is charged on the chargeable consideration given for the land transaction, including VAT where applicable.

How is SDLT on residential property calculated (structure of the charge)?

SDLT is charged on a 'slice'/progressive basis: each band of the consideration is taxed at its own rate, e.g. (illustrative residential) $0\%$ up to the nil-rate band, then $5\%$, $10\%$, $12\%$ on successive slices. Total SDLT is the sum of the amounts in each band.

What is the SDLT higher-rate surcharge on additional residential dwellings?

An additional surcharge (a flat percentage uplift on each band) applies to purchases of additional residential dwellings (e.g. second homes, buy-to-let) by individuals, and to most purchases by companies, above a £$40{,}000$ consideration threshold.

How does SDLT linked transactions / non-residential rate structure differ from residential?

Non-residential and mixed-use property has its own lower band thresholds and rates (max $5\%$). Linked transactions (between same parties/connected) are aggregated so consideration is combined to determine the rate, preventing fragmentation to access lower bands.

What is the difference between Stamp Duty and Stamp Duty Reserve Tax (SDRT)?

Stamp Duty is charged on paper (stock transfer form) transfers of shares and is a transaction tax on the instrument; SDRT is charged on agreements to transfer chargeable securities electronically (e.g. CREST) where no stampable instrument exists. Both at $0.5\%$ generally.

State the rate of Stamp Duty / SDRT on transfers of UK shares and the main exemption.

$0.5\%$ of the consideration (Stamp Duty rounded up to nearest £$5$; SDRT to nearest penny). Exemptions include transfers of AIM-listed shares (exempt from SDRT) and transfers for no chargeable consideration (e.g. gifts).

What is the higher $1.5\%$ Stamp Duty / SDRT charge?

A $1.5\%$ charge historically applied on the issue/transfer of shares into a depositary receipt scheme or clearance service, levied because subsequent transfers within the system are outside the normal charge. (Note: EU case law/HMRC practice has removed the charge on issues.)

Name the main UK environmental taxes a CTA student should know.

Climate Change Levy (CCL) on business energy use; Aggregates Levy on sand/gravel/rock; Landfill Tax on waste disposal to landfill; and the Plastic Packaging Tax on plastic packaging with insufficient recycled content.

What is the Plastic Packaging Tax and its threshold?

A tax on plastic packaging components manufactured in or imported into the UK that contain less than $30\%$ recycled plastic, charged per tonne. Registration is required once a business manufactures/imports $\geq 10$ tonnes of plastic packaging in a 12-month period.

What is the Climate Change Levy (CCL) and who pays it?

CCL is an environmental tax on the supply of energy (electricity, gas, solid fuel, LPG) to business and public-sector consumers, charged per unit of energy by the energy supplier. Reduced rates apply under Climate Change Agreements; domestic and charity non-business use is exempt.

What are excise duties and on which main goods are they levied?

Excise duties are taxes on the production/importation/sale of specific goods: alcohol (beer, wine, spirits), tobacco products, and hydrocarbon oils/fuel. They are typically specific (per unit/volume) duties charged in addition to VAT, with VAT calculated on the duty-inclusive price.

How does VAT interact with excise duty on dutiable goods like fuel or alcohol?

VAT is charged on the price including the excise duty — i.e. duty is part of the value of the supply on which VAT is computed: $$\text{VAT} = 20\% \times (\text{net price} + \text{excise duty}).$$ This results in 'tax on tax'.

What is Insurance Premium Tax (IPT) and its two rates?

IPT is a tax on general insurance premiums (the insurer accounts for it). Standard rate is $12\%$; a higher rate of $20\%$ applies to travel insurance and insurance sold with certain goods/vehicles (e.g. mechanical breakdown). Life and long-term insurance is exempt.

Name the main UK gambling duties and what they tax.

General Betting Duty (bookmakers' profits/stakes), Pool Betting Duty, Remote Gaming Duty (on remote/online gaming providers' profits), Gaming Duty (casinos), Bingo Duty, Machine Games Duty, and Lottery Duty. They are charged on operators' gross gambling yield or stakes rather than on the player.

What is the VAT tax point (time of supply) basic and actual rules?

Basic tax point: for goods, when removed/made available; for services, when performed. Actual tax point overrides if (a) an invoice is issued or payment received before the basic tax point (earlier date applies), or (b) a VAT invoice is issued within 14 days after the basic tax point (invoice date applies).

Compare the VAT treatment of a B2B service received from overseas versus B2C, for a UK customer.

B2B: general rule places supply where the UK customer belongs, so the UK customer applies the reverse charge (self-accounts for output VAT, recovers as input VAT if eligible). B2C: general rule places supply where the overseas supplier belongs, so usually no UK VAT (subject to use-and-enjoyment and digital-services rules).