The Single European Authorisation Project is a pilot project to trial the use of simplified procedures, with payment of customs duties in one Member State only, for all company imports within the EC.

Currently a large company may need to pay Customs duty in each Member State where it imports goods from non EC countries. Customs duties have the same rates and rules across all the Member States, most of the collected duty is used to help fund the EC.


At a seminar attended by the Commission in October 1997 it was decided that a ‘twin track’ approach to Single European Authorisation (SEA) would be pursued i.e. pilot projects could be set up and run by Member States before amending legislation while discussions on the theoretical and legal issues would be carried out by the relevant technical committees.

In order to examine the workings of such a system in practice, identify any problems and consider the form any EC legislation should take, Member States are conducting a trial with selected traders for a limited period.

The UK has received Ministerial agreement to run up to 12 pilot projects.

Under the SEA proposals all customs duty will be paid to the Member State where it is authorised. VAT, under the current regulations, will continue to be paid where the goods are ‘consumed’. Statistics will also need to be provided nationally.

Current Situation

The 12 pilot companies have been selected and are being progressed. UK Customs intends to enter into Joint Understandings on Co-operation (JUCs) with other Member States’ customs administrations. These are in effect Memoranda of Understanding. The first draft JUC between the UK and the Netherlands has received Parliamentary approval. The first UK triallist will commence operation on 1 March 2000.

There will be no difference in the total amount of the Member States’ payments of duty to the Community arising from the operation of the pilots. The companies involved are likely to be net gainers from savings in their operating costs due to the simplified payment arrangements in place during the period of the trials.

Customs are negotiating reciprocal arrangements with other Member States in respect of the 10% of duty which is retained by the Member States to cover their costs of collecting Community duties. It is envisaged that the arrangements will vary depending on the circumstances of each agreement.

The SEA arrangements represent a significant departure from usual practice for collecting and making available Community own resources which will help to streamline and modernise the collection of customs duty, and help trade by reducing traders’ compliance costs.

Contact: SEA Team, Trade Policy Group, 01702 36 1891/1791/1792


This Business Brief explains the VAT treatment of payments received by solicitors under revised procedures introduced by the Legal Aid Board.


On 1 January 2000 the Legal Aid Board introduced new payment arrangements for solicitors undertaking certain types of work for clients eligible for legal aid. This is mainly for the provision of initial legal advice and is governed by the contractual arrangements of the legal aid scheme. Any further legally aided work for the same client remains subject to existing Legal Aid Board billing and payment procedures.

Action for solicitors

Under the new arrangements, solicitors will receive regular monthly payments based on their anticipated level of legal aid work over the coming year. Customs anticipate that these payments will generally be received in advance of a supply being made to the client. On this basis, the date payment is received will be regarded as the tax point. VAT on the full amount received will therefore be due at that time, unless the solicitor can demonstrate that an element of the payment will not be subject to VAT, for example, because it includes non-taxable disbursements. Solicitors accounting for VAT on the full amount at the time of receipt who subsequently find that an element was not taxable, may adjust the amount of VAT previously accounted for accordingly.

For further advice and information, solicitors and their advisers should contact their local Business Advice Centre, listed under Customs & Excise in the telephone directory.


This Business Brief explains Customs’ position following the Tribunal decision in Rhonnda Cynon Taff County Borough Council.


Since the inception of VAT local authorities have been able to recover the tax incurred in making insignificant exempt supplies under what is now section 33 of the 1994 VAT Act. In this particular case the appellant argued that the provision and maintenance of cemeteries by local authorities, which Customs has always treated as exempt business activity, was non- business. As a result tax incurred by them in making such supplies did not count for partial exemption purposes and could be recovered as non-business under section 33. The Tribunal agreed and concluded that the provision and maintenance of cemeteries by a local authority was not a business activity for VAT purposes, as it had been carried out by them under a special legal regime applicable to public authorities. In reaching this decision the Tribunal considered the detailed legal structures which apply to local authorities who operate cemeteries. It also concluded that as there are so few privately owned cemeteries the non- business ruling would not distort competition.

New position

Customs has concluded that the decision only applies to the provision and maintenance of local authority operated cemeteries. This includes the grant of a right to an exclusive burial, the right to place and maintain a tombstone, the keeping and storage of the plans and records of burials, general maintenance, and any actions intended to remove dangerous obstructions, e.g. collapsed vaults or broken headstones.

Local authority cemeteries may also offer further services, such as the provision of books of remembrance and the erection of headstones for which a charge is made. As the provision of these services is not covered by the special legal regime applicable to cemeteries, they remain business activities of the local authority.


Some local authorities also provide crematoria. While crematoria are governed by special legal provisions, similar to those which apply to cemeteries, the higher incidence of privately owned crematoria means that a distortion of competition would result if local authorities were allowed to treat these activities as non-business. Where local authorities operate sites which contain both cemeteries and crematoria and they have exceeded the partial exemption de minimis limits, a business/non-business apportionment will have be made between the activities.

For further advice and information, please contact your local Business Advice Centre, listed under Customs & Excise in the telephone directory.


VAT Notices 701/21 and 701/21A

A revised edition of Notice 701/21 Gold and new Notice 701/21A Investment gold coins, both dated February 2000, have gone for printing. The revised edition of Notice 701/21 cancels and replaces the April 1993 version. The main changes in the revised edition relate to the exempt VAT regime for investment gold which came into force on 1 January 2000. It also makes clearer the scope of the Special Accounting Scheme in relation to goods sold for the value of the fine gold which they contain.

Notice 701/21A, which also takes effect from 1 January 2000, incorporates the list of gold coins published by the European Commission in the Official Journal of the European Commission (C342/13) on 30 November 1999.

Copies will be sent automatically to all VAT offices.

Interim changes to V1-7 (Liability) Chapter 10 have been made. New, more comprehensive guidance is currently being drafted.

Notice 930

New Notice 930 What if I don’t pay? dated December 1999 has been issued. It cancels and replaces VAT Notice 700/54 of the same title. It has been updated to reflect the move towards whole trader debt management.

This news release and other information about HM Customs & Excise can be found at our website:

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