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VAT changes – LSC Online users

• On Friday 28th November, we published our position on the changes to VAT. We are working through our processes and systems to make the VAT changes. We will produce explanatory notes in the next few days.
• There are immediate impacts for users of LSC Online who enter cases line by line, e.g. individually.

The advice below is only applicable to Providers who make their submissions to LSC Online, line-by-line and does not impact on Providers who:

• Make their submissions to LSC Online using the bulkload spreadsheet or via a case management system, or
• Are not yet using LSC Online and currently email submissions to ‘lsc submissions’ each month.

VAT announcement

• Cases concluding before 1st December will attract VAT at 17.5%.
• Cases concluding on or after 1st December will attract VAT at 15%.

Which submission?

• This announcement refers to your December submission, i.e. cases concluded on or after 1st December 2008 that are due to be submitted by 20th January 2009.

The issue

• If you enter cases that concluded on or after 1st December onto your December submission, those cases will be incorrectly credited with VAT at 17.5%. This is because we will be unable to make the necessary system changes to LSC Online before the end of December.

The solution

• Please do not begin typing cases into LSC Online that concluded on or after 1st December 2008 until January 2009.
• Your December submission should only include cases that concluded on or before 30th November 2008.
• Cases closed on or after 1st December 2008 should be reported on your January submission (to be submitted by 20th February 2009).
• You should continue to report your NMS as normal.

Impacts

• We have taken this course of action to minimise the risk of you being paid an incorrect amount of VAT and/or having to discuss and agree this issue with HMRC and/or having to re-price already reported cases.
• As the cases you close in December may not be included in your December submission, the value of your submission will be low, but that will be compensated by the inclusion of December claims in your January submission. This will not impact on reconciliation.

What if you do include December cases?

• If you enter a submission line into LSC Online before we have released the VAT changes, and those lines relate to a case with a concluded date of 1st December or later, it will be incorrectly credited with VAT at 17.5% and not 15%.
• In those circumstances you will have to pay the 17.5% VAT overpayment to HMRC. We have forwarded a copy of this advice note to HMRC.

Questions

•  If you have questions, please contact your Account Manager.