25 October 2016 
Andrea Marshall, Tax Specialist
BUFDG and KMPG met with HMRC Policy last week to discuss the differences of opinion over how to interpret 'supply' for the purposes of applying the reduced rate of VAT to fuel and power (to over-simplify somewhat HMRC believe this should apply to a 'premises' which is determined in a subjective manner depending on the facts of each individual case, whereas we think it should apply to the supplier's fiscal meter). HMRC Policy will be considering the information we discussed, as well as taking legal advice about it. They are hopeful of concluding this by the end of November, or shortly thereafter (although with the Chancellor's Autumn Statement at the end of November, we don't know what effect this will have on HMRC resources).
In the meantime, however, we agreed with the Public Bodies compliance team, also present at the meeting, that no agreement over premises or meters in apportionment methods should be made while these discussions are ongoing, but information gathering exercises can continue. So if HMRC is requesting information from you about sources of data etc. you should respond, but if they are pressing for agreement on the basis of the method, this should be postponed until HMRC have concluded their review of their policy. HMRC will also be circulating information about which parts of this work can continue and which should be postponed to all the CRMs and Tax Specialists dealing with fuel and power apportionments with universities.
