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Finance Act 1977

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This is the original version (as it was originally enacted).

14For Schedules 2 and 3 to the 1972 Act there shall be substituted the following Schedules— Section 6. SCHEDULE 2 Matters to be Treated as Supply of Goods or Services

1(1)Any transfer of the whole property in goods is a supply of goods ; but the transfer—

(a)of any undivided share of the property, or

(b)of the possession of goods,

is a supply of services, subject however to sub-paragraph (2) below.

(2)If the possession of goods is transferred—

(a)under an agreement for the sale of the goods, or

(b)under agreements which expressly contemplate that the property also will pass at some time in the future (determined by, or ascertainable from, the agreements but in any case not later than when the goods are fully paid for),

it is then in either case a supply of the goods.

2Where a person produces goods by applying to another person's goods a treatment or process, he is treated as supplying goods.

3The supply of any form of power, heat, refrigeration or ventilation is a supply of goods.

4The granting, assignment or surrender of a major interest in land is treated as a supply of goods.

5(1)The following applies to things done (whether or not for a consideration) by or under the directions of a person carrying on a business.

(2)If goods forming part of the assets of the business are transferred or disposed of so as no longer to form part of those assets, that is a supply by him of the goods ; but this does not apply to—

(a)a gift of goods made in the course or furtherance of the business (otherwise than as one forming part of a series or succession of gifts made to the same person from time to time) where the cost to the donor is not more than £10 ;

(b)the gift, to an actual or potential customer of the business, of an industrial sample in a form not ordinarily available for sale to the public.

(3)If goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, that is a supply of services.

(4)Anything which is a supply of goods or services by virtue of sub-paragraph (2) or (3) is to be treated as made in the course or furtherance of the business (if it would not otherwise be so treated); and in the case of a business carried on by an individual—

(a)sub-paragraph (2) applies to any transfer or disposition of goods in favour of himself personally ; and

(b)sub-paragraph (3) applies to goods used, or made available for use, by himself personally.

6Where in the case of a business carried on by a taxable person, goods forming part of the assets of the business are, under any power exercisable by another person, sold by the other in or towards satisfaction of a debt owed by the taxable person, they shall be deemed to be supplied by the taxable person in the course or furtherance of his business.

7Where a person ceases to be a taxable person, any goods then forming part of the assets of a business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—

(a)the business is transferred as a going concern to another taxable person ; or

(b)the business is carried on by another person who, under regulations made under section 23(3) of this Act, is treated as a taxable person; or

(c)the tax on the deemed supply would not be more than £50 ; or

(d)the taxable person can show, to the satisfaction of the Commissioners, that the goods were acquired for the business before 1st April 1973 and have not been the subject of relief under section 4 of the Finance Act 1973 (tax- or duty-paid stock held at commencement of VAT). Section 8B. SCHEDULE 2A Services Supplied Where Received

1Transfers and assignments of copyright, patents, licences, trademarks and similar rights.

2Advertising services.

3Services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services; data processing and provision of information (but excluding from this head any services relating to land).

4Acceptance of any obligation to refrain from pursuing or exercising, in whole or part, any business activity or any such rights as are referred to in paragraph 1 above.

5Banking, financial and insurance services (including re-insurance, but not including the provision of safe deposit facilities).

6The supply of staff.

7The services rendered by one person to another in procuring for the other any of the services mentioned in paragraphs 1 to 6 above. Sections 10(6) and 11(4). SCHEDULE 3 Valuation—Special Cases

1Where it appears to the Commissioners—

(a)that a taxable person has supplied goods or services for a consideration in money the amount of which has been determined with a view to securing a reduction of liability to tax; and

(b)that it is likely that goods or services will be similarly supplied by him ; and

(c)that it is necessary for the protection of the revenue to exercise their powers under this paragraph;

they may by notice in writing give directions to that person for securing that the value by reference to which tax is charged on any supply by him of goods or services after the giving of the notice or after such later date as may be specified therein is not less than the open market value of the supply.

2Where it appears to the Commissioners—

(a)that a person has been concerned with the importation of goods at a price in money the amount of which has been determined with a view to securing a reduction of liability to tax on importation; and

(b)that it is likely that there will be other importations with which he is or may be similarly concerned; and

(c)that it is necessary for the protection of the revenue to exercise their powers under this paragraph,

they may by notice in writing give directions to that person for securing that, in the case of goods imported by him after the date of the notice or such later date as may be specified in it, their value for purposes of tax on importation is to be the open market value as under section 11(3), instead of the price as under section 11(2) of this Act.

3Where it appears to the Commissioners—

(a)that the whole or part of a business carried on by a taxable person consists in supplying to a number of individuals goods to be sold, whether by them or others, by retail; and

(b)that those individuals are not taxable persons ; and

(c)that it is necessary for the protection of the revenue to exercise their powers under this paragraph,

they may by notice in writing give directions to the taxable person for securing that the value by reference to which tax is charged on any such supply by him after the giving of the notice or after such later date as may be specified therein shall be determined as if the consideration given by any such individual for the supply were equal to the price at which the goods are sold by retail.

4(1)Where goods or services are supplied for a consideration in money and on terms allowing a discount for prompt payment, the consideration shall be taken for the purposes of section 10 of this Act as reduced by the discount, whether or not payment is made in accordance with those terms.

(2)This paragraph does not apply where the terms include any provision for payment by instalments.

5(1)Where goods are imported at a price in money and on terms allowing a discount for prompt payment, the price shall be taken for the purposes of section 11(2) of this Act as reduced by the discount, whether or not payment is made in accordance with those terms.

(2)This paragraph does not apply where the terms include any provision for payment by instalments.

6Where a right to receive goods or services for an amount stated on any token, stamp or voucher is granted for a consideration, the consideration shall be disregarded for the purposes of this Part of this Act except to the extent (if any) that it exceeds that amount.

7Where there is a supply of goods by virtue—

(a)of a Treasury order under section 6(5); or

(b)of paragraph 5(2) of Schedule 2 (but otherwise than for a consideration); or

(c)of paragraph 7 of that Schedule,

the value of the supply shall be taken to be the cost of the goods to the person making the supply.

8Where there is a supply of services by virtue—

(a)of a Treasury order under section 6(4); or

(b)of paragraph 5(3) of Schedule 2 (but otherwise than for a consideration);

the value of the supply shall be taken to be the full cost to the taxable person of providing the services.

9Where a supply of services consists in the provision of accommodation in a hotel, inn, boarding house or similar establishment for a period exceeding four weeks—

(a)the value of so much of the supply as is in excess of four weeks shall be taken to be reduced to such part thereof as is attributable to facilities other than the right to occupy the accommodation ; and

(b)that part shall be taken to be not less than 20 per cent.

10(1)Where any sum relevant for determining value is expressed in a currency other than sterling, it is to be converted into sterling in accordance with Community rules applicable to valuation for customs purposes.

(2)In relation to a supply of goods or services, the material time for valuation, by reference to which the appropriate exchange rate is determined under the rules, is the time of supply.

11Regulations may require that in prescribed circumstances there is to be taken into account, as constituting part of the consideration for the purposes of section 10(2) (where it would not otherwise be so taken into account) money paid in respect of the supply by persons other than those to whom the supply is made.

12A direction under paragraph 1, 2 or 3 above may be varied or withdrawn by the Commissioners by a further direction given by notice in writing.

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