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For businesses, the Summer Budget 2015 was set out to back business and support productivity.

As with the Spring Budget 2015, there were very few announcements in relation to VAT. Where there were VAT references, we have summarised the implications of the Summer Budget 2015 as follows:

Tax lock

The Government is to introduce into legislation a "tax lock" to ensure the standard and reduced rates of VAT cannot rise above their current (2015-16) levels of 20% and 5% respectively. The tax lock will also prevent the relevant statutory provisions being used to remove any items from the current zero and reduced rates of VAT. These measures are to be in place for the duration of this Parliament.


From 1 November 2015, the standard rate of Insurance Premium Tax will be increased from 6% to 9.5%. Separately, the Government will also introduce VAT provisions to extend the "use and enjoyment" provisions so that from next year, it will be clear that all UK repairs made under UK insurance contracts will be subject to VAT in the UK.

Additionally, the Government is also considering a wider review of offshore-based avoidance within the VAT exempt sectors, with a view to introducing additional "use and enjoyment" measures for other services, in particular, advertising. These further measures are intended to be introduced sometime during 2017. These measures are aimed at levelling the playing field for insurers and to deter insurers from routing costs through offshore associates.

Other Budget announcements -
VAT refunds for shared services

The Government is to legislate, in the Finance Bill 2016, to refund VAT incurred on specified shared services to eligible public bodies. The measure is intended to promote outsourcing and remove obstacles for joint working between eligible organisations.

Large Business Tax Compliance

Finally, the Government is to invest in additional resources in large business compliance work to further extend its efforts to tackle tax evasion, avoidance and aggressive planning by large businesses and this will cover VAT as well as direct and other indirect taxes.

Contact us

Should you wish further information on the above, please do not hesitate to contact Gary using the details outlined below.


Gary Moore
Direct line 0141 636 9353
Mobile 07812 061 582
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