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U.K.

Value Added Tax Act 1994

1994 CHAPTER 23

An Act to consolidate the enactments relating to value added tax, including certain enactments relating to VAT tribunals.

[5th July 1994]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Modifications etc. (not altering text)

C1Act extended (27.7.1999) by 1999 c. 16, s. 13(6)

C2Act: Crown status for the purposes of the Act extended (6.5.1999) by S.I. 1999/677, art. 6

Part IU.K. The charge to tax

Imposition and rate of VATU.K.

1 Value added tax.U.K.

(1)Value added tax shall be charged, in accordance with the provisions of this Act—

(a)on the supply of goods or services in the United Kingdom (including anything treated as such a supply),

(b)on the acquisition in the United Kingdom from other member States of any goods, and

[F1(c)on the importation of goods from places outside the member States]

[F1(c)on the importation of goods into the United Kingdom,]

and references in this Act to VAT are references to value added tax.

(2)VAT on any supply of goods or services is a liability of the person making the supply and (subject to provisions about accounting and payment) becomes due at the time of supply.

(3)VAT on any acquisition of goods from another member State is a liability of the person who acquires the goods and (subject to provisions about accounting and payment) becomes due at the time of acquisition.

(4)VAT on the importation of goods from places outside the member States shall be charged and payable as if it were a duty of customs.

Textual Amendments

F1S. 1(1)(c) substituted (28.1.2019 for specified purposes) by Taxation (Cross-border Trade) Act 2018 (c. 22), ss. 41(2)(b), 57(3) (with transitional provisions etc. in S.I. 2019/105); S.I. 2019/104, reg. 2

2 Rate of VAT.U.K.

(1)Subject to the following provisions [F2and to the provisions of section 29A] of this section F3. . ., VAT shall be charged at the rate of [F420 per cent] and shall be charged—

(a)on the supply of goods or services, by reference to the value of the supply as determined under this Act; and

(b)on the acquisition of goods from another member State, by reference to the value of the acquisition as determined under this Act; and

(c)on the importation of goods from a place outside the member States, by reference to the value of the goods as determined under this Act.

F5(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F5(1B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(1C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)The Treasury may by order increase or decrease the rate of VAT for the time being in force [F7under this section] by such percentage thereof not exceeding 25 per cent. as may be specified in the order, but any such order [F8that has not previously expired or been revoked] shall cease to be in force at the expiration of a period of one year from the date on which it takes effect, unless continued in force by a further order under this subsection.

(3)In relation to an order made under subsection (2) above to continue, vary or replace a previous order, the reference in that subsection to the rate for the time being in force [F7under this section] is a reference to the rate which would be in force if no order under that subsection had been made.

Textual Amendments

F2Words in s. 2(1) inserted (11.5.2001 with effect as mentioned in s. 99(7)(a) of the amending Act) by 2001 c. 9, s. 99(2)

F3Words in s. 2(1) omitted (1.5.1995 with application as mentioned in s. 21(6) of the amending Act) by virtue of 1995 c. 4, s. 21(2)

F4Words in s. 2(1) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), s. 3(1)

F5S. 2(1A)(1B) repealed (11.5.2001 with effect as mentioned in s. 99(7) of the amending Act) by 2001 c. 9, ss. 99(3), 110, Sch. 33 Pt. 3(1) Note 2

F6S. 2(1C) repealed (1.11.2001) by 2001 c. 9, ss. 99(3), 110, Sch. 33 Pt. 3(1) Note 1

F7Words in s. 2(2)(3) inserted (11.5.2001 with effect as mentioned in s. 99(9)(a) of the amending Act) by 2001 c. 9, s. 99, Sch. 31 para. 2

F8Words in s. 2(2) inserted (with effect in accordance with Sch. 3 para. 11 of the amending Act) by Finance Act 2009 (c. 10), Sch. 3 para. 25(2)

Modifications etc. (not altering text)

3 Taxable persons and registration.U.K.

(1)A person is a taxable person for the purposes of this Act while he is, or is required to be, registered under this Act.

(2)[F9Schedules 1 to 3A] shall have effect with respect to registration.

(3)Persons registered under any of those Schedules shall be registered in a single register kept by the Commissioners for the purposes of this Act; and, accordingly, references in this Act to being registered under this Act are references to being registered under any of those Schedules.

(4)The Commissioners may by regulations make provision as to the inclusion and correction of information in that register with respect to the Schedule under which any person is registered.

Textual Amendments

F9Words in s. 3(2) substituted (28.7.2000 with effect as mentioned in s. 136(10) of the amending Act) by 2000 c. 17, s. 136(1)

[F103A[F11Supplies of electronic, telecommunication and broadcasting services: special accounting schemes]U.K.

(1)Schedule 3B (scheme enabling persons who supply electronically supplied services[F12, telecommunication services or broadcasting services] in any member State, but who are not established in a member State, to account for and pay VAT in the United Kingdom on those supplies) has effect.

[F13(1A)Schedule 3BA—

(a)establishes a special accounting scheme for use by persons established in the UK and supplying electronically supplied services, telecommunication services or broadcasting services in other member States, and

(b)makes provision about corresponding schemes in other member States.]

(2)The Treasury may by order amend Schedule 3B [F14or 3BA].

(3)The power of the Treasury by order to amend [F15Schedules 3B and 3BA] includes power to make such incidental, supplemental, consequential and transitional provision in connection with any amendment of that Schedule as they think fit.]

Textual Amendments

F10S. 3A inserted (with effect in accordance with s. 23(2) of the amending Act) by Finance Act 2003 (c. 14), Sch. 2 para. 2

F11S. 3A heading substituted (with effect in accordance with Sch. 22 para. 23 of the amending Act) by Finance Act 2014 (c. 26), Sch. 22 para. 12(4)

F12Words in s. 3A(1) inserted (with effect in accordance with Sch. 22 para. 23 of the amending Act) by Finance Act 2014 (c. 26), Sch. 22 para. 12(2)

F13S. 3A(1A) inserted (with effect in accordance with Sch. 22 para. 23 of the amending Act) by Finance Act 2014 (c. 26), Sch. 22 para. 12(3)

F14Words in s. 3A(2) inserted (with effect in accordance with Sch. 22 para. 23 of the amending Act) by Finance Act 2014 (c. 26), Sch. 22 para. 2(a)

F15Words in s. 3A(3) substituted (with effect in accordance with Sch. 22 para. 23 of the amending Act) by Finance Act 2014 (c. 26), Sch. 22 para. 2(b)

Supply of goods or services in the United KingdomU.K.

4 Scope of VAT on taxable supplies.U.K.

(1)VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.

(2)A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.

5 Meaning of supply: alteration by Treasury order.U.K.

(1)Schedule 4 shall apply for determining what is, or is to be treated as, a supply of goods or a supply of services.

(2)Subject to any provision made by that Schedule and to Treasury orders under subsections (3) to (6) below—

(a)“supply” in this Act includes all forms of supply, but not anything done otherwise than for a consideration;

(b)anything which is not a supply of goods but is done for a consideration (including, if so done, the granting, assignment or surrender of any right) is a supply of services.

(3)The Treasury may by order provide with respect to any description of transaction—

(a)that it is to be treated as a supply of goods and not as a supply of services; or

(b)that it is to be treated as a supply of services and not as a supply of goods; or

(c)that it is to be treated as neither a supply of goods nor a supply of services;

and without prejudice to the foregoing, such an order may provide that paragraph 5(4) of Schedule 4 is not to apply, in relation to goods of any prescribed description used or made available for use in prescribed circumstances, so as to make that a supply of services under that paragraph and may provide that paragraph 6 of that Schedule shall not apply, in such circumstances as may be described in the order, so as to make a removal of assets a supply of goods under that paragraph.

(4)Without prejudice to subsection (3) above, the Treasury may by order make provision for securing, with respect to services of any description specified in the order, that where—

(a)a person carrying on a business does anything which is not a supply of services but would, if done for a consideration, be a supply of services of a description specified in the order; and

(b)such other conditions as may be specified in the order are satisfied,

such services are treated for the purposes of this Act as being supplied by him in the course or furtherance of that business.

(5)The Treasury may by order make provision for securing, subject to any exceptions provided for by or under the order, that where in such circumstances as may be specified in the order goods of a description so specified are taken possession of or produced by a person in the course or furtherance of a business carried on by him and—

(a)are neither supplied to another person nor incorporated in other goods produced in the course or furtherance of that business; but

(b)are used by him for the purpose of a business carried on by him,

the goods are treated for the purposes of this Act as being both supplied to him for the purpose of that business and supplied by him in the course or furtherance of it.

(6)The Treasury may by order make provision for securing, with respect to services of any description specified in the order, that where—

(a)a person, in the course or furtherance of a business carried on by him, does anything for the purpose of that business which is not a supply of services but would, if done for a consideration, be a supply of services of a description specified in the order; and

(b)such other conditions as may be specified in the order are satisfied,

such services are treated for the purposes of this Act as being both supplied to him for the purpose of that business and supplied by him in the course or furtherance of it.

(7)For the purposes of this section, where goods are manufactured or produced from any other goods, those other goods shall be treated as incorporated in the first-mentioned goods.

(8)An order under subsection (4) or (6) above may provide for the method by which the value of any supply of services which is treated as taking place by virtue of the order is to be calculated.

Modifications etc. (not altering text)

C5S. 5 applied (with modifications) (1.4.2009) by Finance Act 2008 (c. 9), s. 113(2), Sch. 36 para. 34(4) (with Sch. 36 para. 38); S.I. 2009/404, art. 2

6 Time of supply.U.K.

(1)The provisions of this section shall apply, subject to [F16sections 18, 18B and 18C] for determining the time when a supply of goods or services is to be treated as taking place for the purposes of the charge to VAT.

(2)Subject to subsections (4) to (14) below, a supply of goods shall be treated as taking place—

(a)if the goods are to be removed, at the time of the removal;

(b)if the goods are not to be removed, at the time when they are made available to the person to whom they are supplied;

(c)if the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, at the time when it becomes certain that the supply has taken place or, if sooner, 12 months after the removal.

(3)Subject to subsections (4) to (14) below, a supply of services shall be treated as taking place at the time when the services are performed.

(4)If, before the time applicable under subsection (2) or (3) above, the person making the supply issues a VAT invoice in respect of it or if, before the time applicable under subsection (2)(a) or (b) or (3) above, he receives a payment in respect of it, the supply shall, to the extent covered by the invoice or payment, be treated as taking place at the time the invoice is issued or the payment is received.

(5)If, within 14 days after the time applicable under subsection (2) or (3) above, the person making the supply issues a VAT invoice in respect of it, then, unless he has notified the Commissioners in writing that he elects not to avail himself of this subsection, the supply shall (to the extent that it is not treated as taking place at the time mentioned in subsection (4) above) be treated as taking place at the time the invoice is issued.

(6)The Commissioners may, at the request of a taxable person, direct that subsection (5) above shall apply in relation to supplies made by him (or such supplies made by him as may be specified in the direction) as if for the period of 14 days there were substituted such longer period as may be specified in the direction.

(7)Where any supply of goods involves both—

(a)the removal of the goods from the United Kingdom; and

(b)their acquisition in another member State by a person who is liable for VAT on the acquisition in accordance with provisions of the law of that member State corresponding, in relation to that member State, to the provisions of section 10,

subsections (2), (4) to (6) and (10) to (12) of this section shall not apply and the supply shall be treated for the purposes of this Act as taking place on whichever is the earlier of the days specified in subsection (8) below.

(8)The days mentioned in subsection (7) above are—

(a)the 15th day of the month following that in which the removal in question takes place; and

(b)the day of the issue, in respect of the supply, of a VAT invoice or of an invoice of such other description as the Commissioners may by regulations prescribe.

F17(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)The Commissioners may, at the request of a taxable person, by direction alter the time at which supplies made by him (or such supplies made by him as may be specified in the direction) are to be treated as taking place, either—

(a)by directing those supplies to be treated as taking place—

(i)at times or on dates determined by or by reference to the occurrence of some event described in the direction; or

(ii)at times or on dates determined by or by reference to the time when some event so described would in the ordinary course of events occur,

the resulting times or dates being in every case earlier than would otherwise apply; or

(b)by directing that, notwithstanding subsections (5) and (6) above, those supplies shall (to the extent that they are not treated as taking place at the time mentioned in subsection (4) above) be treated as taking place—

(i)at the beginning of the relevant working period (as defined in his case in and for the purposes of the direction); or

(ii)at the end of the relevant working period (as so defined).

(11)Where goods are treated as supplied by an order under section 5(5), the supply is treated as taking place when they are appropriated to the use mentioned in that section.

(12)Where there is a supply of goods by virtue only of paragraph 5(1) of Schedule 4, the supply is treated as taking place when the goods are transferred or disposed of as mentioned in that paragraph.

(13)Where there is a supply of services by virtue only of paragraph 5(4) of Schedule 4, the supply is treated as taking place when the goods are appropriated to the use mentioned in that paragraph.

(14)The Commissioners may by regulations make provision with respect to the time at which (notwithstanding subsections (2) to (8) and (11) to (13) above or section 55(4)) a supply is to be treated as taking place in cases where—

(a)it is a supply of goods or services for a consideration the whole or part of which is determined or payable periodically, or from time to time, or at the end of any period, or

(b)it is a supply of goods for a consideration the whole or part of which is determined at the time when the goods are appropriated for any purpose, or

(c)there is a supply to which section 55 applies, or

(d)there is a supply of services by virtue of paragraph 5(4) of Schedule 4 or an order under section 5(4);

and for any such case as is mentioned in this subsection the regulations may provide for goods or services to be treated as separately and successively supplied at prescribed times or intervals.

[F18(14A)F19... this section and any regulations under this section or section 8(4) shall have effect subject to section 97A.]

(15)In this Act “VAT invoice” means such an invoice as is required under [F20paragraph 2A] of Schedule 11, or would be so required if the person to whom the supply is made were a person to whom such an invoice should be issued.

Textual Amendments

F16Words in s. 6(1) substituted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 1; S.I. 1996/1249, art. 2

F18S. 6(14A) inserted (retrospective to 17.3.1998) by 1998 c. 36, s. 22(2)(3)

F19Words in s. 6(14A) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 2 (with Sch. 36 para. 19)

F20Words in s. 6(15) substituted (1.12.2003) by Finance Act 2002 (c. 23), s. 24(4)(a)(5); S.I. 2003/3043, art. 2

7 Place of supply [F21of goods].U.K.

(1)This section shall apply (subject to [F22sections 14 , 18 and 18B]) for determining, for the purposes of this Act, whether goods F23... are supplied in the United Kingdom.

(2)Subject to the following provisions of this section, if the supply of any goods does not involve their removal from or to the United Kingdom they shall be treated as supplied in the United Kingdom if they are in the United Kingdom and otherwise shall be treated as supplied outside the United Kingdom.

(3)Goods shall be treated—

(a)as supplied in the United Kingdom where their supply involves their installation or assembly at a place in the United Kingdom to which they are removed; and

(b)as supplied outside the United Kingdom where their supply involves their installation or assembly at a place outside the United Kingdom to which they are removed.

(4)Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—

(a)the supply involves the removal of the goods to the United Kingdom by or under the directions of the person who supplies them;

(b)the supply is a transaction in pursuance of which the goods are acquired in the United Kingdom from another member State by a person who is not a taxable person;

(c)the supplier—

(i)is liable to be registered under Schedule 2; or

(ii)would be so liable if he were not already registered under this Act or liable to be registered under Schedule 1 [F24or 1A ]; and

(d)the supply is neither a supply of goods consisting in a new means of transport nor anything which is treated as a supply for the purposes of this Act by virtue only of paragraph 5(1) or 6 of Schedule 4.

(5)Goods whose place of supply is not determined under any of the preceding provisions of this section and which do not consist in a new means of transport shall be treated as supplied outside the United Kingdom where—

(a)the supply involves the removal of the goods, by or under the directions of the person who supplies them, to another member State;

(b)the person who makes the supply is taxable in another member State; and

(c)provisions of the law of that member State corresponding, in relation to that member State, to the provisions made by subsection (4) above make that person liable to VAT on the supply;

but this subsection shall not apply in relation to any supply in a case where the liability mentioned in paragraph (c) above depends on the exercise by any person of an option in the United Kingdom corresponding to such an option as is mentioned in paragraph 1(2) of Schedule 2 unless that person has given, and has not withdrawn, a notification to the Commissioners that he wishes his supplies to be treated as taking place outside the United Kingdom where they are supplies in relation to which the other requirements of this subsection are satisfied.

(6)Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—

(a)their supply involves their being imported from a place outside the member States; and

(b)the person who supplies them is the person by whom, or under whose directions, they are so imported.

(7)Goods whose place of supply is not determined under any of the preceding provisions of this section but whose supply involves their removal to or from the United Kingdom shall be treated—

(a)as supplied in the United Kingdom where their supply involves their removal from the United Kingdom without also involving their previous removal to the United Kingdom; and

(b)as supplied outside the United Kingdom in any other case.

(8)For the purposes of the preceding provisions of this section, where goods, in the course of their removal from a place in the United Kingdom to another place in the United Kingdom, leave and re-enter the United Kingdom the removal shall not be treated as a removal from or to the United Kingdom.

(9)The Commissioners may by regulations provide that a notification for the purposes of subsection (5) above is not to be given or withdrawn except in such circumstances, and in such form and manner, as may be prescribed.

F25(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)The Treasury may by order provide, in relation to goods F26... generally or to particular goods F26... specified in the order, for varying the rules for determining where a supply of goods F26... is made.

Textual Amendments

F21Words in s. 7 heading inserted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 3(5) (with Sch. 36 para. 19)

F22Words in s. 7(1) substituted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 2; S.I. 1996/1249, art. 2

F23Words in s. 7(1) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 3(2) (with Sch. 36 para. 19)

F24Words in s. 7(4)(c)(ii) inserted (with effect in accordance with Sch. 8 para. 19 of the amending Act) by Finance Act 2012 (c. 14), Sch. 28 para. 3

F25S. 7(10) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 3(3) (with Sch. 36 para. 19)

F26Words in s. 7(11) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 3(4) (with Sch. 36 para. 19)

[F277APlace of supply of servicesU.K.

(1)This section applies for determining, for the purposes of this Act, the country in which services are supplied.

(2)A supply of services is to be treated as made—

(a)in a case in which the person to whom the services are supplied is a relevant business person, in the country in which the recipient belongs, and

(b)otherwise, in the country in which the supplier belongs.

(3)The place of supply of a right to services is the same as that in which the supply of the services would be treated as made if made by the supplier of the right to the recipient of the right (whether or not the right is exercised); and for this purpose a right to services includes any right, option or priority with respect to the supply of services and an interest deriving from a right to services.

(4)For the purposes of this Act a person is a relevant business person in relation to a supply of services if the person—

(a)is a taxable person within the meaning of Article 9 of Council Directive 2006/112/EC,

(b)is registered under this Act,

(c)is identified for the purposes of VAT in accordance with the law of a member State other than the United Kingdom, or

(d)is registered under an Act of Tynwald for the purposes of any tax imposed by or under an Act of Tynwald which corresponds to value added tax,

and the services are received by the person otherwise than wholly for private purposes.

(5)Subsection (2) has effect subject to Schedule 4A.

(6)The Treasury may by order—

(a)amend subsection (4),

(b)amend Schedule 4A, or

(c)otherwise make provision for exceptions from either or both of the paragraphs of subsection (2).

(7)An order under subsection (6) may include incidental, supplemental, consequential and transitional provision.]

Textual Amendments

F27S. 7A inserted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 4 (with Sch. 36 paras. 14(1), 19)

8 Reverse charge on supplies received from abroad.U.K.

[F28(1)Where services are supplied by a person who belongs in a country other than the United Kingdom in circumstances in which this subsection applies, this Act has effect as if (instead of there being a supply of the services by that person)—

(a)there were a supply of the services by the recipient in the United Kingdom in the course or furtherance of a business carried on by the recipient, and

(b)that supply were a taxable supply.]

[F28(2)Subsection (1) above applies if—

(a)the recipient is a relevant business person who belongs in the United Kingdom, and

(b)the place of supply of the services is inside the United Kingdom,

and, where the supply of the services is one to which any paragraph of Part 1 or 2 of Schedule 4A applies, the recipient is registered under this Act.]

(3)Supplies which are treated as made by the recipient under subsection (1) above are not to be taken into account as supplies made by him when determining any allowance of input tax in his case under section 26(1).

(4)In applying subsection (1) above, the supply of services treated as made by the recipient shall be assumed to have been made at a time to be determined in accordance with regulations prescribing rules for attributing a time of supply in cases within that subsection.

[F29(4A)Subsection (1) does not apply to services of any of the descriptions specified in Schedule 9.]

(5)The Treasury may by order [F30amend subsection (4A) by altering the descriptions of services specified in that subsection].

F31(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F32(7)The power of the Treasury by order to [F33amend subsection (4A)] shall include power to make such incidental, supplemental, consequential and transitional provision in connection with any [F34amendment of that subsection] as they think fit.

(8)Without prejudice to the generality of subsection (7) above, the provision that may be made under that subsection includes—

(a)provision making such modifications of section 43(2A) to (2E) as the Treasury may think fit in connection with any [F35amendment of subsection (4A)]; and

(b)provision modifying the effect of any regulations under subsection (4) above in relation to any services added to [F36that subsection].]

Textual Amendments

F28S. 8(1)(2) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(2) (with Sch. 36 para. 19)

F29S. 8(4A) inserted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(3) (with Sch. 36 para. 19)

F30Words in s. 8(5) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(4) (with Sch. 36 para. 19)

F31S. 8(6) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 para. 5(5) (with Sch. 36 para. 19)

F32S. 8(7)(8) inserted (19.3.1997) by 1997 c. 16, s. 42

F33Words in s. 8(7) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(6)(a) (with Sch. 36 para. 19)

F34Words in s. 8(7) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(6)(b) (with Sch. 36 para. 19)

F35Words in s. 8(8) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(7)(a) (with Sch. 36 para. 19)

F36Words in s. 8(8) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 5(7)(b) (with Sch. 36 para. 19)

[F379Place where supplier or recipient of services belongs.U.K.

(1)This section has effect for determining for the purposes of section 7A (or Schedule 4A) or section 8, in relation to any supply of services, whether a person who is the supplier or recipient belongs in one country or another.

(2)A person who is a relevant business person is to be treated as belonging in the relevant country.

(3)In subsection (2) “the relevant country” means—

(a)if the person has a business establishment, or some other fixed establishment, in a country (and none in any other country), that country,

(b)if the person has a business establishment, or some other fixed establishment or establishments, in more than one country, the country in which the relevant establishment is, and

(c)otherwise, the country in which the person's usual place of residence [F38or permanent address] is.

(4)In subsection (3)(b) “relevant establishment” means whichever of the person's business establishment, or other fixed establishments, is most directly concerned with the supply.

(5)A person who is not a relevant business person is to be treated as [F39belonging—

(a)in the country in which the person's usual place of residence or permanent address is (except in the case of a body corporate or other legal person);

(b)in the case of a body corporate or other legal person, in the country in which the place where it is established is.]

[F40(6)The reference in subsection (5)(b) to the place where a body corporate or other legal person “is established” is to be read in accordance with Article 13a of Implementing Regulation (EU) No 282/2011 (which is inserted by Council Implementing Regulation (EU) No 1042/2013).]]

Textual Amendments

F37S. 9 substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 para. 6 (with Sch. 36 para. 19)

F38Words in s. 9(3)(c) inserted (with effect in accordance with s. 104(5) of the amending Act) by Finance Act 2014 (c. 26), s. 104(2)

F39Words in s. 9(5) substituted (with effect in accordance with s. 104(5) of the amending Act) by Finance Act 2014 (c. 26), s. 104(3)

F40S. 9(6) substituted (with effect in accordance with s. 104(5) of the amending Act) by Finance Act 2014 (c. 26), s. 104(4)

[F419AReverse charge on gas [F42, electricity, heat or cooling] supplied by persons outside the United KingdomU.K.

(1)This section applies if relevant goods are supplied—

(a)by a person who is outside the United Kingdom,

(b)to a person who is registered under this Act,

for the purposes of any business carried on by the recipient.

(2)The same consequences follow under this Act (and particularly so much as charges VAT on a supply and entitles a taxable person to credit for input tax) as if—

(a)the recipient had himself supplied the relevant goods in the course or furtherance of his business, and

(b)that supply were a taxable supply.

(3)But supplies which are treated as made by the recipient under subsection (2) are not to be taken into account as supplies made by him when determining any allowance of input tax in his case under section 26(1).

(4)In applying subsection (2) the supply of relevant goods treated as made by the recipient shall be assumed to have been made at a time to be determined in accordance with regulations prescribing rules for attributing a time of supply in cases to which this section applies.

[F43(5)Relevant goods” means—

(a)gas supplied through a natural gas system situated within the territory of a member State or any network connected to such a system,

(b)electricity, and

(c)heat or cooling supplied through a network.]

(6)Whether a person is outside the United Kingdom is to be determined in accordance with an order made by the Treasury.]

Textual Amendments

F41S. 9A inserted (22.7.2004 with effect in accordance with s. 21(2) of the amending Act) by Finance Act 2004 (c. 12), s. 21(1)

F42Words in s. 9A heading substituted (with effect in accordance with s. 20(3) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), s. 20(1)(b)

F43S. 9A(5) substituted (with effect in accordance with s. 20(3) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), s. 20(1)(a)

Acquisition of goods from member StatesU.K.

10 Scope of VAT on acquisitions from member States.U.K.

(1)VAT shall be charged on any acquisition from another member State of any goods where—

(a)the acquisition is a taxable acquisition and takes place in the United Kingdom;

(b)the acquisition is otherwise than in pursuance of a taxable supply; and

(c)the person who makes the acquisition is a taxable person or the goods are subject to a duty of excise or consist in a new means of transport.

(2)An acquisition of goods from another member State is a taxable acquisition if—

(a)it falls within subsection (3) below or the goods consist in a new means of transport; and

(b)it is not an exempt acquisition.

(3)An acquisition of goods from another member State falls within this subsection if—

(a)the goods are acquired in the course or furtherance of—

(i)any business carried on by any person; or

(ii)any activities carried on otherwise than by way of business by any body corporate or by any club, association, organisation or other unincorporated body;

(b)it is the person who carries on that business or, as the case may be, those activities who acquires the goods; and

(c)the supplier—

(i)is taxable in another member State at the time of the transaction in pursuance of which the goods are acquired; and

(ii)in participating in that transaction, acts in the course or furtherance of a business carried on by him.

11 Meaning of acquisition of goods from another member State.U.K.

(1)Subject to the following provisions of this section, references in this Act to the acquisition of goods from another member State shall be construed as references to any acquisition of goods in pursuance of a transaction in relation to which the following conditions are satisfied, that is to say—

(a)the transaction is a supply of goods (including anything treated for the purposes of this Act as a supply of goods); and

(b)the transaction involves the removal of the goods from another member State;

and references in this Act, in relation to such an acquisition, to the supplier shall be construed accordingly.

(2)It shall be immaterial for the purposes of subsection (1) above whether the removal of the goods from the other member State is by or under the directions of the supplier or by or under the directions of the person who acquires them or any other person.

(3)Where the person with the property in any goods does not change in consequence of anything which is treated for the purposes of this Act as a supply of goods, that supply shall be treated for the purposes of this Act as a transaction in pursuance of which there is an acquisition of goods by the person making it.

(4)The Treasury may by order provide with respect to any description of transaction that the acquisition of goods in pursuance of a transaction of that description is not to be treated for the purposes of this Act as the acquisition of goods from another member State.

Modifications etc. (not altering text)

C6S. 11 applied (with modifications) (1.4.2009) by Finance Act 2008 (c. 9), s. 113(2), Sch. 36 para. 34(4) (with Sch. 36 para. 38); S.I. 2009/404, art. 2

12 Time of acquisition.U.K.

(1)Subject to [F44sections 18 and 18B] and any regulations under subsection (3) below, where goods are acquired from another member State, the acquisition shall be treated for the purposes of this Act as taking place on whichever is the earlier of—

(a)the 15th day of the month following that in which the event occurs which, in relation to that acquisition, is the first relevant event for the purposes of taxing the acquisition; and

(b)the day of the issue, in respect of the transaction in pursuance of which the goods are acquired, of an invoice of such a description as the Commissioners may by regulations prescribe.

(2)For the purposes of this Act the event which, in relation to any acquisition of goods from another member State, is the first relevant event for the purposes of taxing the acquisition is the first removal of the goods which is involved in the transaction in pursuance of which they are acquired.

(3)The Commissioners may by regulations make provision with respect to the time at which an acquisition is to be treated as taking place in prescribed cases where the whole or part of any consideration comprised in the transaction in pursuance of which the goods are acquired is determined or payable periodically, or from time to time, or at the end of a period; and any such regulations may provide, in relation to any case to which they apply, for goods to be treated as separately and successively acquired at prescribed times or intervals.

Textual Amendments

F44Words in s. 12(1) substituted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 3; S.I. 1996/1249, art. 2

13 Place of acquisition.U.K.

(1)This section shall apply (subject to [F45sections 18 and 18B]) for determining for the purposes of this Act whether goods acquired from another member State are acquired in the United Kingdom.

(2)The goods shall be treated as acquired in the United Kingdom if they are acquired in pursuance of a transaction which involves their removal to the United Kingdom and does not involve their removal from the United Kingdom, and (subject to the following provisions of this section) shall otherwise be treated as acquired outside the United Kingdom.

(3)Subject to subsection (4) below, the goods shall be treated as acquired in the United Kingdom if they are acquired by a person who, for the purposes of their acquisition, makes use of a number assigned to him for the purposes of VAT in the United Kingdom.

(4)Subsection (3) above shall not require any goods to be treated as acquired in the United Kingdom where it is established, in accordance with regulations made by the Commissioners for the purposes of this section that VAT—

(a)has been paid in another member State on the acquisition of those goods; and

(b)fell to be paid by virtue of provisions of the law of that member State corresponding, in relation to that member State, to the provision made by subsection (2) above.

(5)The Commissioners may by regulations make provision for the purposes of this section—

(a)for the circumstances in which a person is to be treated as having been assigned a number for the purposes of VAT in the United Kingdom;

(b)for the circumstances in which a person is to be treated as having made use of such a number for the purposes of the acquisition of any goods; and

(c)for the refund, in prescribed circumstances, of VAT paid in the United Kingdom on acquisitions of goods in relation to which the conditions specified in subsection (4)(a) and (b) above are satisfied.

Textual Amendments

F45Words in s. 13(1) substituted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 4; S.I. 1996/1249, art. 2

14 Acquisitions from persons belonging in other member States.U.K.

(1)Subject to subsection (3) below, where—

(a)a person (“the original supplier”) makes a supply of goods to a person who belongs in another member State (“the intermediate supplier”);

(b)that supply involves the removal of the goods from another member State and their removal to the United Kingdom but does not involve the removal of the goods from the United Kingdom;

(c)both that supply and the removal of the goods to the United Kingdom are for the purposes of the making of a supply by the intermediate supplier to another person (“the customer”) who is registered under this Act;

(d)neither of those supplies involves the removal of the goods from a member State in which the intermediate supplier is taxable at the time of the removal without also involving the previous removal of the goods to that member State; and

(e)there would be a taxable acquisition by the customer if the supply to him involved the removal of goods from another member State to the United Kingdom,

the supply by the original supplier to the intermediate supplier shall be disregarded for the purposes of this Act and the supply by the intermediate supplier to the customer shall be treated for the purposes of this Act, other than Schedule 3, as if it did involve the removal of the goods from another member State to the United Kingdom.

(2)Subject to subsection (3) below, where—

(a)a person belonging in another member State makes such a supply of goods to a person who is registered under this Act as involves their installation or assembly at a place in the United Kingdom to which they are removed; and

(b)there would be a taxable acquisition by the registered person if that supply were treated as not being a taxable supply but as involving the removal of the goods from another member State to the United Kingdom,

that supply shall be so treated except for the purposes of Schedule 3.

(3)Neither subsection (1) nor subsection (2) above shall apply in relation to any supply unless the intermediate supplier or, as the case may be, the person making the supply complies with such requirements as to the furnishing (whether before or after the supply is made) of invoices and other documents, and of information, to—

(a)the Commissioners, and

(b)the person supplied,

as the Commissioners may by regulations prescribe; and regulations under this subsection may provide for the times at which, and the form and manner in which, any document or information is to be furnished and for the particulars which it is to contain.

(4)Where this section has the effect of treating a taxable acquisition as having been made, section 12(1) shall apply in relation to that acquisition with the omission of the words from “whichever” to “acquisition; and” at the end of paragraph (a).

(5)For the purposes of this section a person belongs in another member State if—

(a)he does not have any business establishment or other fixed establishment in the United Kingdom and does not have his usual place of residence in the United Kingdom;

(b)he is neither registered under this Act nor required to be so registered;

(c)he does not have a VAT representative and is not for the time being required to appoint one; and

(d)he is taxable in another member State;

but, in determining for the purposes of paragraph (b) above whether a person is required to be registered under this Act, there shall be disregarded any supplies which, if he did belong in another member State and complied with the requirements prescribed under subsection (3) above, would fall to be disregarded by virtue of this section.

(6)Without prejudice to section 13(4), where—

(a)any goods are acquired from another member State in a case which corresponds, in relation to another member State, to the case specified in relation to the United Kingdom in subsection (1) above; and

(b)the person who acquires the goods is registered under this Act and would be the intermediate supplier in relation to that corresponding case,

the supply to him of those goods and the supply by him of those goods to the person who would be the customer in that corresponding case shall both be disregarded for the purposes of this Act, other than the purposes of the information provisions referred to in section 92(7).

(7)References in this section to a person being taxable in another member State shall not include references to a person who is so taxable by virtue only of provisions of the law of another member State corresponding to the provisions of this Act by virtue of which a person who is not registered under this Act is a taxable person if he is required to be so registered.

(8)This section does not apply in relation to any supply of goods by an intermediate supplier to whom the goods were supplied before 1st August 1993.

Importation of goods from outside the member StatesU.K.

15 General provisions relating to imported goods.U.K.

(1)For the purposes of this Act goods are imported from a place outside the member States where—

(a)having been removed from a place outside the member States, they enter the territory of the [F46European Union] ;

(b)they enter that territory by being removed to the United Kingdom or are removed to the United Kingdom after entering that territory; and

(c)the circumstances are such that it is on their removal to the United Kingdom or subsequently while they are in the United Kingdom that any [F47EU] customs debt in respect of duty on their entry into the territory of the [F46European Union] would be incurred.

(2)Accordingly—

(a)goods shall not be treated for the purposes of this Act as imported at any time before a [F47EU] customs debt in respect of duty on their entry into the territory of the [F46European Union] would be incurred, and

(b)the person who is to be treated for the purposes of this Act as importing any goods from a place outside the member States is the person who would be liable to discharge any such [F47EU] customs debt.

(3)Subsections (1) and (2) above shall not apply, except in so far as the context otherwise requires or provision to the contrary is contained in regulations under section 16(1), for construing any references to importation or to an importer in any enactment or subordinate legislation applied for the purposes of this Act by section 16(1).

Textual Amendments

Modifications etc. (not altering text)

C7S. 15 applied (with modifications) (1.4.2009) by Finance Act 2008 (c. 9), s. 113(2), Sch. 36 para. 34(4) (with Sch. 36 para. 38); S.I. 2009/404, art. 2

16 Application of customs enactments.U.K.

(1)Subject to such exceptions and adaptations as the Commissioners may by regulations prescribe and except where the contrary intention appears—

(a)the provision made by or under the Customs and Excise Acts 1979 and the other enactments and subordinate legislation for the time being having effect generally in relation to duties of customs and excise charged on the importation of goods into the United Kingdom; and

(b)the [F47EU] legislation for the time being having effect in relation to [F47EU] customs duties charged on goods entering the territory of the [F46European Union],

shall apply (so far as relevant) in relation to any VAT chargeable on the importation of goods from places outside the member States as they apply in relation to any such duty of customs or excise or, as the case may be, [F47EU] customs duties.

(2)Regulations under [F48section 105 of the Postal Services Act 2000] (which provides for the application of customs enactments to postal packets) may make special provision in relation to VAT.

Textual Amendments

F48Words in s. 16(2) substituted (26.3.2001) by 2000 c. 26, s. 127(4), Sch. 8 para. 22(2); S.I. 2000/2957, art. 2(3), Sch. 3 (as amended by S.I. 2001/1148, arts. 2, 43(1)(2), Sch. (with art. 34))

[F4916APostal packetsU.K.

(1)The Commissioners may by regulations impose a liability to VAT on a person outside the United Kingdom in respect of the entry of goods into the United Kingdom if the person sent, or arranged for the sending of, the goods to their recipient in a postal packet (within the meaning of the Postal Services Act 2000).

(2)The regulations may—

(a)provide that a liability to VAT arises only in relation to goods of a value described in the regulations,

(b)provide that in cases specified in the regulations, other persons are jointly and severally liable for the VAT, and

(c)provide that the entry of the goods into the United Kingdom is not an importation for the purposes of this Act.

(3)Among other provision that may be made by the regulations, the regulations may make provision—

(a)requiring persons to register under the regulations for the purpose of accounting for VAT imposed under the regulations,

(b)modifying the application of this Act in relation to cases dealt with by the regulations, and

(c)requiring persons to provide information to the Commissioners about the goods or the person who sent, or arranged for the sending of, the goods.

(4)Regulations under this section may make different provision for different purposes.]

17 Free zone regulations.U.K.

(1)This section applies in relation to VAT chargeable on the importation of goods from places outside the member States; and in this section “free zone” has the meaning given by section 100A(2) of the Management Act.

(2)Subject to any contrary provision made by any directly applicable [F47EU] provision, goods which are chargeable with VAT may be moved into a free zone and may remain as free zone goods without payment of VAT.

(3)The Commissioners may by regulations (“free zone regulations”) make provision with respect to the movement of goods into, and the removal of goods from, any free zone and the keeping, securing and treatment of goods which are within a free zone, and subject to any provision of the regulations, “free zone goods” means goods which are within a free zone.

(4)Without prejudice to the generality of subsection (3), free zone regulations may make provision—

(a)for enabling the Commissioners to allow goods to be removed from a free zone without payment of VAT in such circumstances and subject to such conditions as they may determine;

(b)for determining where any VAT becomes payable in respect of goods which cease to be free zone goods—

(i)the rates of any VAT applicable; and

(ii)the time at which those goods cease to be free zone goods;

(c)for determining for the purpose of enabling VAT to be charged in respect of free zone goods in a case where a person wishes to pay that VAT notwithstanding that the goods will continue to be free zone goods, the rate of VAT to be applied; and

(d)permitting free zone goods to be destroyed without payment of VAT in such circumstances and subject to such conditions as the Commissioners may determine.

(5)The Commissioners, with respect to free zone goods or the movement of goods into any free zone, may by regulations make provision—

(a)for relief from the whole or part of any VAT chargeable on the importation of goods into the United Kingdom in such circumstances as they may determine;

(b)in place of, or in addition to, any provision made by section 6 or any other enactment, for determining the time when a supply of goods which are or have been free zone goods is to be treated as taking place for the purposes of the charge to VAT; and

(c)as to the treatment, for the purposes of VAT, of goods which are manufactured or produced within a free zone from other goods or which have other goods incorporated in them while they are free zone goods.

Textual Amendments

Goods subject to a warehousing regimeU.K.

18 Place and time of acquisition or supply.U.K.

(1)Where—

(a)any goods have been removed from a place outside the member States and have entered the territory of the [F46European Union];

(b)the material time for any acquisition of those goods from another member State or for any supply of those goods is while they are subject to a warehousing regime and before the duty point; and

(c)those goods are not mixed with any dutiable goods which were produced or manufactured in the United Kingdom or acquired from another member State,

then the acquisition or supply mentioned in paragraph (b) above shall be treated for the purposes of this Act as taking place outside the United Kingdom.

[F50(1A)The Commissioners may by regulations prescribe circumstances in which subsection (1) above shall not apply.]

(2)Subsection (3) below applies where—

(a)any dutiable goods are acquired from another member State; or

(b)any person makes a supply of—

(i)any dutiable goods which were produced or manufactured in the United Kingdom or acquired from another member State; or

(ii)any goods comprising a mixture of goods falling within sub-paragraph (i) above and other goods.

(3)Where this subsection applies and the material time for the acquisition or supply mentioned in subsection (2) above is while the goods in question are subject to a warehousing regime and before the duty point, that acquisition or supply shall be treated for the purposes of this Act as taking place outside the United Kingdom if the material time for any subsequent supply of those goods is also while the goods are subject to the warehousing regime and before the duty point.

(4)Where the material time for any acquisition or supply of any goods in relation to which subsection (3) above applies is while the goods are subject to a warehousing regime and before the duty point but the acquisition or supply nevertheless falls, for the purposes of this Act, to be treated as taking place in the United Kingdom—

(a)that acquisition or supply shall be treated for the purposes of this Act as taking place at the earlier of the following times, that is to say, the time when the goods are removed from the warehousing regime and the duty point; and

(b)in the case of a supply, any VAT payable on the supply shall be paid (subject to any regulations under subsection (5) below)—

(i)at the time when the supply is treated as taking place under paragraph (a) above; and

(ii)by the person by whom the goods are so removed or, as the case may be, together with the duty or agricultural levy, by the person who is required to pay the duty or levy.

[F51(5)The Commissioners may by regulations make provision for enabling a taxable person to pay the VAT he is required to pay by virtue of paragraph (b) of subsection (4) above at a time later than that provided for by that paragraph.

(5A)Regulations under subsection (5) above may in particular make provision for either or both of the following—

(a)for the taxable person to pay the VAT together with the VAT chargeable on other supplies by him of goods and services;

(b)for the taxable person to pay the VAT together with any duty of excise deferment of which has been granted to him under section 127A of the M1Customs and Excise Management Act 1979;

and they may make different provision for different descriptions of taxable person and for different descriptions of goods.]

(6)In this section—

(7)References in this section to goods being subject to a warehousing regime is a reference to goods being kept in a warehouse or being transported between warehouses (whether in the same or different member States) without the payment in a member State of any duty, levy or VAT; and references to the removal of goods from a warehousing regime shall be construed accordingly.

Textual Amendments

F50S. 18(1A) inserted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 1

F51S. 18(5)(5A) substituted (1.5.1995) for s. 18(5) by 1995 c. 4, s. 29

Marginal Citations

[F5218A Fiscal warehousing.U.K.

(1)The Commissioners may, if it appears to them proper, upon application approve any registered person as a fiscal warehousekeeper; and such approval shall be subject to such conditions as they shall impose.

(2)Subject to those conditions and to regulations made under section 18F such a person shall be entitled to keep a fiscal warehouse.

(3)Fiscal warehouse” means such place in the United Kingdom in the occupation or under the control of the fiscal warehousekeeper, not being retail premises, as he shall notify to the Commissioners in writing; and such a place shall become a fiscal warehouse on receipt by the Commissioners of that notification or on the date stated in it as the date from which it is to have effect, whichever is the later, and, subject to subsection (6) below, shall remain a fiscal warehouse so long as it is in the occupation or under the control of the fiscal warehousekeeper or until he shall notify the Commissioners in writing that it is to cease to be a fiscal warehouse.

(4)The Commissioners may in considering an application by a person to be a fiscal warehousekeeper take into account any matter which they consider relevant, and may without prejudice to the generality of that provision take into account all or any one or more of the following—

(a)his record of compliance and ability to comply with the requirements of this Act and regulations made hereunder;

(b)his record of compliance and ability to comply with the requirements of the customs and excise Acts (as defined in the Management Act) and regulations made thereunder;

(c)his record of compliance and ability to comply with [F47EU] customs provisions;

(d)his record of compliance and ability to comply with the requirements of other member States relating to VAT and duties equivalent to duties of excise;

(e)if the applicant is a company the records of compliance and ability to comply with the matters set out at (a) to (d) above of its directors, persons connected with its directors, its managing officers, any shadow directors or any of those persons, and, if it is a close company, the records of compliance and ability to comply with the matters set out at (a) to (d) above of the beneficial owners of the shares of the company or any of them; and

(f)if the applicant is an individual the records of compliance and ability to comply with the matters set out at (a) to (d) above of any company of which he is or has been a director, managing officer or shadow director or, in the case of a close company, a shareholder or the beneficial owner of shares,

and for the purposes of paragraphs (e) and (f) “connected” shall have the meaning given by section 24(7), “managing officer” the meaning given by section 61(6), “shadow director” the meaning given by [F53section 251 of the Companies Act 2006] and “close company” the meaning given by the Taxes Act.

(5)Subject to subsection (6) below, a person approved under subsection (1) shall remain a fiscal warehousekeeper until he ceases to be a registered person or until he shall notify the Commissioners in writing that he is to cease to be a fiscal warehousekeeper.

(6)The Commissioners may if they consider it appropriate from time to time—

(a)impose conditions on a fiscal warehousekeeper in addition to those conditions, if any, which they imposed under subsection (1), and vary or revoke any conditions previously imposed;

(b)withdraw approval of any person as a fiscal warehousekeeper, and

(c)withdraw fiscal warehouse status from any premises.

(7)Any application by or on behalf of a person to be a fiscal warehousekeeper shall be in writing in such form as the Commissioners may direct and shall be accompanied by such information as they shall require.

(8)Any approval by the Commissioners under subsection (1) above, and any withdrawal of approval or other act by them under subsection (6) above, shall be notified by them to the fiscal warehousekeeper in writing and shall take effect on such notification being made or on any later date specified for the purpose in the notification.

(9)Without prejudice to the provisions of section 43 concerning liability for VAT, in subsections (1) and (2) above “registered person” includes any body corporate which under that section is for the time being treated as a member of a group.]

Textual Amendments

F52S. 18A inserted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 5; S.I. 1996/1249, art. 2

[F5418B Fiscally warehoused goods: relief.U.K.

(1)Subsections (3) and (4) below apply where—

(a)there is an acquisition of goods from another member State;

(b)those goods are eligible goods;

(c)either—

(i)the acquisition takes place while the goods are subject to a fiscal warehousing regime; or

(ii)after the acquisition but before the supply, if any, of those goods which next occurs, the acquirer causes the goods to be placed in a fiscal warehousing regime; and

(d)the acquirer, not later than the time of the acquisition, prepares and keeps a certificate that the goods are subject to a fiscal warehousing regime, or (as the case may be) that he will cause paragraph (c)(ii) above to be satisfied; and the certificate shall F55... be kept for such period as the Commissioners may by regulations specify.

(2)Subsections (3) and (4) below also apply where—

(a)there is a supply of goods;

(b)those goods are eligible goods;

(c)either—

(i)that supply takes place while the goods are subject to a fiscal warehousing regime; or

(ii)after that supply but before the supply, if any, of those goods which next occurs, the person to whom the former supply is made causes the goods to be placed in a fiscal warehousing regime;

(d)in a case falling within paragraph (c)(ii) above, the person to whom the supply is made gives the supplier, not later than the time of the supply, a certificate F56... that he will cause paragraph (c)(ii) to be satisfied; and

(e)the supply is not a retail transaction.

[F57(2A)A certificate under subsection (1)(d) or (2)(d) must be in such form as may be specified by regulations or by the Commissioners in accordance with regulations.]

(3)The acquisition or supply in question shall be treated for the purposes of this Act as taking place outside the United Kingdom if any subsequent supply of those goods is while they are subject to the fiscal warehousing regime.

(4)Where subsection (3) does not apply and the acquisition or supply in question falls, for the purposes of this Act, to be treated as taking place in the United Kingdom, that acquisition or supply shall be treated for the purposes of this Act as taking place when the goods are removed from the fiscal warehousing regime.

(5)Where—

(a)subsection (4) above applies to an acquisition or a supply,

(b)the acquisition or supply is taxable and not zero-rated, and

(c)the acquirer or supplier is not a taxable person but would be were it not for paragraph 1(9) of Schedule 1, paragraph 1(7) of Schedule 2 and paragraph 1(6) of Schedule 3, or any of those provisions,

VAT shall be chargeable on that acquisition or supply notwithstanding that the acquirer or the supplier is not a taxable person.

(6)In this section “eligible goods” means goods—

(a)of a description falling within Schedule 5A;

(b)upon which any import duties, as defined in article 4(10) of the Community Customs Code of 12th October 1992 (Council Regulation (EEC) No.2913/92), either have been paid or have been deferred under article 224 of that Code or regulations made under section 45 of the Management Act;

(c)(in the case of goods imported from a place outside the member States) upon which any VAT chargeable under section 1(1)(c) has been either paid or deferred in accordance with [F47EU] customs provisions, and

(d)(in the case of goods subject to a duty of excise) upon which that duty has been either paid or deferred under section 127A of the Management Act.

(7)For the purposes of this section, apart from subsection (4), an acquisition or supply shall be treated as taking place at the material time for the acquisition or supply.

(8)The Treasury may by order vary Schedule 5A by adding to or deleting from it any goods or varying any description of any goods.]

Textual Amendments

F54S. 18B inserted (29.4.1996 for certain purposes and 1.6.1996 otherwise with application to any acquisition of goods from another member State and any supply taking place on or after 1.6.1996) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 5; S.I. 1996/1249, art. 2

F55Words in s. 18B(1)(d) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 29 para. 2(2)

F56Words in s. 18B(2)(d) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 29 para. 2(3)

F57S. 18B(2A) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 2(4)

[F5818C Warehouses and fiscal warehouses: services.U.K.

(1) Where—

(a)a taxable person makes a supply of specified services;

(b)those services are wholly performed on or in relation to goods while those goods are subject to a warehousing or fiscal warehousing regime;

(c)(except where the services are the supply by an occupier of a warehouse or a fiscal warehousekeeper of warehousing or fiscally warehousing the goods) the person to whom the supply is made gives the supplier a certificate F59... that the services are so performed;

(d)the supply of services would (apart from this section) be taxable and not zero-rated; and

(e)the supplier issues to the person to whom the supply is made an invoice of such a description as the Commissioners may by regulations prescribe,

his supply shall be zero-rated.

[F60(1A)A certificate under subsection (1)(c) must be in such form as may be specified by regulations or by the Commissioners in accordance with regulations.]

(2)If a supply of services is zero-rated under subsection (1) above (“the zero-rated supply of services”) then, unless there is a supply of the goods in question the material time for which is—

(a)while the goods are subject to a warehousing or fiscal warehousing regime, and

(b)after the material time for the zero-rated supply of services,

subsection (3) below shall apply.

(3)Where this subsection applies—

(a)a supply of services identical to the zero-rated supply of services shall be treated for the purposes of this Act as being, at the time the goods are removed from the warehousing or fiscal warehousing regime or (if earlier) at the duty point, both made (for the purposes of his business) to the person to whom the zero-rated supply of services was actually made and made by him in the course or furtherance of his business,

(b)that supply shall have the same value as the zero-rated supply of services,

(c)that supply shall be a taxable (and not a zero-rated) supply, and

(d)VAT shall be charged on that supply even if the person treated as making it is not a taxable person.

(4)In this section “specified services” means—

(a)services of an occupier of a warehouse or a fiscal warehousekeeper of keeping the goods in question in a warehousing or fiscal warehousing regime;

(b)in relation to goods subject to a warehousing regime, services of carrying out on the goods operations which are permitted to be carried out under [F47EU] customs provisions or warehousing regulations as the case may be; and

(c)in relation to goods subject to a fiscal warehousing regime, services of carrying out on the goods any physical operations (other than any prohibited by regulations made under section 18F), for example, and without prejudice to the generality of the foregoing words, preservation and repacking operations.]

Textual Amendments

F58S. 18C inserted (29.4.1996 for certain purposes and 1.6.1996 otherwise with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 5; S.I. 1996/1249, art. 2

F59Words in s. 18C(1)(c) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 29 para. 3(2)

F60S. 18C(1A) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 3(3)

[F6118D Removal from warehousing: accountability.U.K.

(1)This section applies to any supply to which section 18B(4) or section 18C(3) applies (supply treated as taking place on removal or duty point) and any acquisition to which section 18B(5) applies (acquisition treated as taking place on removal where acquirer not a taxable person).

(2)Any VAT payable on the supply or acquisition shall (subject to any regulations under subsection (3) below) be paid—

(a)at the time when the supply or acquisition is treated as taking place under the section in question; and

(b)by the person by whom the goods are removed or, as the case may be, together with the excise duty, by the person who is required to pay that duty.

(3)The Commissioners may by regulations make provision for enabling a taxable person to pay the VAT he is required to pay by virtue of subsection (2) above at a time later than that provided by that subsection; and they may make different provisions for different descriptions of taxable persons and for different descriptions of goods and services.]

Textual Amendments

F61S. 18D inserted (29.4.1996 for specified purposes otherwise 1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after 1.6.1996) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 5; S.I. 1996/1249, art. 2

[F6218E Deficiency in fiscally warehoused goods.U.K.

(1)This section applies where goods have been subject to a fiscal warehousing regime and, before being lawfully removed from the fiscal warehouse, they are found to be missing or deficient.

(2)In any case where this section applies, unless it is shown to the satisfaction of the Commissioners that the absence of or deficiency in the goods can be accounted for by natural waste or other legitimate cause, the Commissioners may require the fiscal warehousekeeper to pay immediately in respect of the missing goods or of the whole or any part of the deficiency, as they see fit, the VAT that would have been chargeable.

(3)In subsection (2) “VAT that would have been chargeable” means VAT that would have been chargeable on a supply of the missing goods, or the amount of goods by which the goods are deficient, taking place at the time immediately before the absence arose or the deficiency occurred, if the value of that supply were the open market value; but where that time cannot be ascertained to the Commissioners’ satisfaction, that VAT shall be the greater of the amounts of VAT which would have been chargeable on a supply of those goods—

(a)if the value of that supply were the highest open market value during the period (the relevant period) commencing when the goods were placed in the fiscal warehousing regime and ending when the absence or deficiency came to the notice of the Commissioners, or

(b)if the rate of VAT chargeable on that supply were the highest rate chargeable on a supply of such goods during the relevant period and the value of that supply were the highest open market value while that rate prevailed.

(4)This section has effect without prejudice to any penalty incurred under any other provision of this Act or regulations made under it.]

Textual Amendments

F62S. 18E inserted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 5; S.I. 1996/1249, art. 2

[F6318F Sections 18A to 18E: supplementary.U.K.

(1)In sections 18A to 18E and this section—

(2)Any reference in sections 18A to 18E or this section to goods being subject to a fiscal warehousing regime is, subject to any regulations made under subsection (8)(e) below, a reference to eligible goods being kept in a fiscal warehouse or being transferred between fiscal warehouses in accordance with such regulations; and any reference to the removal of goods from a fiscal warehousing regime shall be construed accordingly.

(3)Subject to subsection (2) above, any reference in sections 18C and 18D to goods being subject to a warehousing regime or to the removal of goods from a warehousing regime shall have the same meaning as in section 18(7).

(4)Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they change their nature but the resulting goods are also eligible goods, the provisions of sections 18B to 18E and this section shall apply as if the resulting goods were the original goods.

(5)Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they cease to be eligible goods, on their ceasing to be so sections 18B to 18E shall apply as if they had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them.

(6)Where—

(a)any person ceases to be a fiscal warehousekeeper; or

(b)any premises cease to have fiscal warehouse status,

sections 18B to 18E and this section shall apply as if the goods of which he is the fiscal warehousekeeper, or the goods in the fiscal warehouse, as the case may be, had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them.

(7)The Commissioners may make regulations governing the deposit, keeping, securing and treatment of goods in a fiscal warehouse, and the removal of goods from a fiscal warehouse.

(8)Regulations may, without prejudice to the generality of subsection (7) above, include provisions—

(a)in relation to—

(i)goods which are, have been or are to be subject to a fiscal warehousing regime,

(ii)other goods which are, have been or are to be kept in fiscal warehouses,

(iii)fiscal warehouse premises, and

(iv)fiscal warehousekeepers and their businesses,

as to the keeping, preservation and production of records and the furnishing of returns and information by fiscal warehousekeepers and any other persons;

(b)requiring goods deposited in a fiscal warehouse to be produced to or made available for inspection by an authorised person on request by him;

(c)prohibiting the carrying out on fiscally warehoused goods of such operations as they may prescribe;

(d)regulating the transfer of goods from one fiscal warehouse to another;

(e)concerning goods which, though kept in a fiscal warehouse, are not eligible goods or are not intended by a relevant person to be goods in respect of which reliefs are to be enjoyed under sections 18A to 18E and this section;

(f)prohibiting the fiscal warehousekeeper from allowing goods to be removed from the fiscal warehousing regime without payment of any VAT payable under section 18D on or by reference to that removal and, if in breach of that prohibition he allows goods to be so removed, making him liable for the VAT jointly and severally with the remover,

and may contain such incidental or supplementary provisions as the Commissioners think necessary or expedient.

(9)Regulations may make different provision for different cases, including different provision for different fiscal warehousekeepers or descriptions of fiscal warehousekeeper, for fiscal warehouses of different descriptions or for goods of different classes or descriptions or of the same class or description in different circumstances.]

Textual Amendments

F63S. 18F inserted (29.4.1996 for specified purposes otherwise 1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after 1.6.1996) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 5; S.I. 1996/1249, art. 2

Determination of valueU.K.

19 Value of supply of goods or services.U.K.

(1)For the purposes of this Act the value of any supply of goods or services shall, except as otherwise provided by or under this Act, be determined in accordance with this section and Schedule 6, and for those purposes subsections (2) to (4) below have effect subject to that Schedule.

(2)If the supply is for a consideration in money its value shall be taken to be such amount as, with the addition of the VAT chargeable, is equal to the consideration.

(3)If the supply is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as, with the addition of the VAT chargeable, is equivalent to the consideration.

(4)Where a supply of any goods or services is not the only matter to which a consideration in money relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.

(5)For the purposes of this Act the open market value of a supply of goods or services shall be taken to be the amount that would fall to be taken as its value under subsection (2) above if the supply were for such consideration in money as would be payable by a person standing in no such relationship with any person as would affect that consideration.

Modifications etc. (not altering text)

C8S. 19(5) modified (20.10.1995) by S.I. 1995/2518, reg. 77

20 Valuation of acquisitions from other member States.U.K.

(1)[F64Subject to section 18C,]for the purposes of this Act the value of any acquisition of goods from another member State shall be taken to be the value of the transaction in pursuance of which they are acquired.

(2)Where goods are acquired from another member State otherwise than in pursuance of a taxable supply, the value of the transaction in pursuance of which they are acquired shall be determined for the purposes of subsection (1) above in accordance with this section and Schedule 7, and for those purposes—

(a)subsections (3) to (5) below have effect subject to that Schedule; and

(b)section 19 and Schedule 6 shall not apply in relation to the transaction.

(3)If the transaction is for a consideration in money, its value shall be taken to be such amount as is equal to the consideration.

(4)If the transaction is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as is equivalent to the consideration.

(5)Where a transaction in pursuance of which goods are acquired from another member State is not the only matter to which a consideration in money relates, the transaction shall be deemed to be for such part of the consideration as is properly attributable to it.

Textual Amendments

F64Words in s. 20(1) inserted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 6; S.I. 1996/1249, art. 2

21 Value of imported goods.U.K.

(1)For the purposes of this Act, the value of goods imported from a place outside the member States shall (subject to subsections (2) [F65to (4)] below) be determined according to the rules applicable in the case of [F47EU] customs duties, whether or not the goods in question are subject to any such duties.

(2)For the purposes of this Act the value of any goods imported from a place outside the member States shall [F66(subject to subsection (2A) below)] be taken to include the following so far as they are not already included in that value in accordance with the rules mentioned in subsection (1) above, that is to say—

(a)all taxes, duties and other charges levied either outside or, by reason of importation, within the United Kingdom (except VAT); F67. . .

[F68(b)all incidental expenses, such as commission, packing, transport and insurance costs, up to the goods’ first destination in the United Kingdom; and

(c)if at the time of the importation of the goods from a place outside the member States a further destination for the goods is known, and that destination is within the United Kingdom or another member State, all such incidental expenses in so far as they result from the transport of the goods to that other destination;

and in this subsection “the goods’ first destination” means the place mentioned on the consignment note or any other document by means of which the goods are imported into the United Kingdom, or in the absence of such documentation it means the place of the first transfer of cargo in the United Kingdom.]

[F69(2A)Where—

(a)any goods falling within subsection (5) below are sold by auction at a time when they are subject to the procedure specified in subsection (2B) below, and

(b)arrangements made by or on behalf of the purchaser of the goods following the sale by auction result in the importation of the goods from a place outside the member States,

the value of the goods shall not be taken for the purposes of this Act to include, in relation to that importation, any commission or premium payable to the auctioneer in connection with the sale of the goods.

(2B)That procedure is the customs procedure for temporary importation with total relief from import duties provided for in Articles 137 to 141 of Council Regulation 2913/92/EEC establishing the Community Customs Code.]

(3)Subject to subsection (2) above, where—

(a)goods are imported from a place outside the member States for a consideration which is or includes a price in money payable as on the transfer of property;

(b)the terms on which those goods are so imported allow a discount for prompt payment of that price;

(c)those terms do not include provision for payment of that price by instalments; and

(d)payment of that price is made in accordance with those terms so that the discount falls to be allowed,

the value of the goods shall be taken for the purposes of this Act to be reduced by the amount of the discount.

[F70(4)[F71Subject to subsection (6D) below,] For the purposes of this Act, the value of any goods falling within subsection (5) below which are imported from a place outside the member States shall be taken to be an amount equal to [F7225 per cent] of the amount which, apart from this subsection, would be their value for those purposes.

F73[(5)The goods that fall within this subsection are—

(a)any work of art;

(b)any antique, not falling within paragraph (a) above or (c) below, that is more than one hundred years old;

(c)any collection or collector’s piece that is of zoological, botanical, mineralogical, anatomical, historical, archaeological, palaeontological, ethnographic, numismatic or philatelic interest.

(6)In this section “work of art” means, subject to subsections (6A) and (6B) below—

(a)any mounted or unmounted painting, drawing, collage, decorative plaque or similar picture that was executed by hand;

(b)any original engraving, lithograph or other print which—

(i)was produced from one or more plates executed by hand by an individual who executed them without using any mechanical or photomechanical process; and

(ii)either is the only one produced from the plate or plates or is comprised in a limited edition;

(c)any original sculpture or statuary, in any material;

(d)any sculpture cast which—

(i)was produced by or under the supervision of the individual who made the mould or became entitled to it by succession on the death of that individual; and

(ii)either is the only cast produced from the mould or is comprised in a limited edition;

(e)any tapestry or other hanging which—

(i)was made by hand from an original design; and

(ii)either is the only one made from the design or is comprised in a limited edition;

(f)any ceramic executed by an individual and signed by him;

(g)any enamel on copper which—

(i)was executed by hand;

(ii)is signed either by the person who executed it or by someone on behalf of the studio where it was executed;

(iii)either is the only one made from the design in question or is comprised in a limited edition; and

(iv)is not comprised in an article of jewellery or an article of a kind produced by goldsmiths or silversmiths;

(h)any mounted or unmounted photograph which—

(i)was printed by or under the supervision of the photographer;

(ii)is signed by him; and

(iii)either is the only print made from the exposure in question or is comprised in a limited edition;

(6A)The following do not fall within subsection (5) above by virtue of subsection (6)(a) above, that is to say—

(a)any technical drawing, map or plan;

(b)any picture comprised in a manufactured article that has been hand-decorated; or

(c)anything in the nature of scenery, including a backcloth.

(6B)An item comprised in a limited edition shall be taken to be so comprised for the purposes of subsection (6)(d) to (h) above only if—

(a)in the case of sculpture casts—

(i)the edition is limited so that the number produced from the same mould does not exceed eight; or

(ii)the edition comprises a limited edition of nine or more casts made before 1st January 1989 which the Commissioners have directed should be treated, in the exceptional circumstances of the case, as a limited edition for the purposes of subsection (6)(d) above;

(b)in the case of tapestries and hangings, the edition is limited so that the number produced from the same design does not exceed eight;

(c)in the case of enamels on copper—

(i)the edition is limited so that the number produced from the same design does not exceed eight; and

(ii)each of the enamels in the edition is numbered and is signed as mentioned in subsection (6)(g)(ii) above;

(d)in the case of photographs—

(i)the edition is limited so that the number produced from the same exposure does not exceed thirty; and

(ii)each of the prints in the edition is numbered and is signed as mentioned in subsection (6)(h)(ii) above.

(6C)For the purposes of this section a collector’s piece is of philatelic interest if—

(a)it is a postage or revenue stamp, a postmark, a first-day cover or an item of pre-stamped stationery; and

(b)it is franked or (if unfranked) it is not legal tender and is not intended for use as such.

(6D)Subsection (4) above does not apply in the case of any goods imported from outside the member States if—

(a)the whole of the VAT chargeable on their importation falls to be relieved by virtue of an order under section 37(1); or

(b)they were exported from the United Kingdom during the period of twelve months ending with the date of their importation [F74in circumstances where the exportation and subsequent importation were effected to obtain the benefit of that subsection].]

(7)An order under section 2(2) may contain provision making such alteration of the percentage for the time being specified in subsection (4) above as the Treasury consider appropriate in consequence of any increase or decrease by that order of the rate of VAT.]

Textual Amendments

F65Words in s. 21(1) substituted (1.5.1995 with effect as mentioned in s. 22(2) of the amending Act) by 1995 c. 4, s. 22(1)

F66Words in s. 21(2) inserted (1.9.2006) by Finance Act 2006 (c. 25), s. 18(2)(4); S.I. 2006/2149, art. 2

F67Word in s. 21(2)(a) repealed (29.4.1996 with effect in relation to goods imported on or after 1.1.1996) by 1996 c. 8, ss. 27(2)(4), 205, Sch. 41 Pt. IV(3) Note

F68S. 21(2)(b)(c) substituted (29.4.1996 with effect in relation to goods imported on or after 1.1.1996) for s. 21(2)(b) by 1996 c. 8, s. 27(3)(4)

F69S. 21(2A)(2B) inserted (1.9.2006) by Finance Act 2006 (c. 25), s. 18(3)(4); S.I. 2006/2149, art. 2

F70S. 21(4)-(7) inserted (1.5.1995 with effect as mentioned in s. 22(2) of the amending Act) by 1995 c. 4, s. 22(1)

F71Words in s.21(4) inserted (27.7.1999 with effect as mentioned in s. 12(3) of the amending Act) by 1999 c. 16, s. 12(1)(a)

F72Words in s. 21(4) substituted (27.7.2010) by Finance (No. 2) Act 2010 (c. 31), s. 3(2)

F73S. 21(5)-(6D) substituted (27.7.1999 with effect as mentioned in s. 12(3) of the amending Act) for s. 21(5)(6) by 1999 c. 16, s. 12(2)

F74Words in s. 21(6D)(b) inserted (with effect in accordance with art. 17(2) of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2009 (S.I. 2009/730), arts. 1(1), 17(1)

F7522. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F75S. 22 repealed (29.4.1996 with application in relation to supplies made on or after 1.1.1996) by 1996 c. 8, ss. 28, 205, Sch. 41 Pt. IV(2)

[F7623Value of supplies involving relevant machine gamesU.K.

(1)If a person plays a relevant machine game, then for the purposes of VAT the amount paid by the person is to be treated as consideration for a supply of services to that person.

(2)“Relevant machine game” is defined in section 23A.

(3)The value to be taken as the value of supplies made by a person (“the supplier”) in the circumstances mentioned in subsection (1) in any period is to be determined as if the consideration for the supplies were reduced by an amount equal to X.

(4)X is the amount (if any) paid out in that period by way of winnings in respect of relevant machine games made available by the supplier (whether the games were played in the same period or an earlier one).

(5)X does not include any winnings paid out to the supplier or a person acting on the supplier's behalf.

(6)Inserting a token into a machine on which a relevant machine game is played is to be treated for the purposes of subsection (1) as the payment of an amount equal to that for which the token can be obtained.

(7)Providing a specified kind of token by way of winnings is to be treated for the purposes of subsection (4) as the payment out of an amount by way of winnings equal to the value of the token.

(8)A specified kind of token is—

(a)a token that can be inserted into the same machine to enable games to be played on the machine, or

(b)a token that is not of such a kind but can be exchanged for money.

(9)The value of a specified kind of token is—

(a)for a token within subsection (8)(a), an amount equal to that for which the token can be obtained, and

(b)for a token within subsection (8)(b), an amount equal to that for which the token can be exchanged.

(10)If it is not reasonably practicable to attribute payments and winnings to relevant machine games or to apportion them between relevant machine games and other games or other activities, any attribution or apportionment is to be done on a just and reasonable basis.

(11)For the purposes of this section, a person plays a game if the person participates in the game—

(a)whether or not there are other participants in the game, and

(b)whether or not a computer generates images or data taken to represent the actions of other participants in the game.

Textual Amendments

F76Ss. 23, 23A substituted for s. 23 (with effect in accordance with Sch. 24 para. 66(4) of the amending Act) by Finance Act 2012 (c. 14), Sch. 24 para. 63

23AMeaning of “relevant machine game”U.K.

(1)A “relevant machine game” is a game (whether of skill or chance or both) that—

(a)is played on a machine for a prize, and

(b)is not excluded by subsection (2).

(2)A game is excluded by this subsection if—

(a)takings and payouts in respect of it are taken into account in determining any charge to machine games duty,

(b)it involves betting on future real events,

(c)bingo duty is charged on the playing of it or would be so charged but for paragraphs 1 to 5 of Schedule 3 to the Betting and Gaming Duties Act 1981 (exemptions from bingo duty),

(d)lottery duty is charged on the taking of a ticket or chance in it or would be so charged but for an express exception,

(e)it is a real game of chance and playing it amounts to dutiable gaming for the purposes of section 10 of the Finance Act 1997 or would do so but for subsection (3), (3B) or (4) of that section, or

(f)playing it amounts to remote gaming within the meaning of [F77section 154(1) of the Finance Act 2014 (meaning of remote gaming)].

(3)In this section—

(4)The Treasury may by order amend this section.]

Textual Amendments

F76Ss. 23, 23A substituted for s. 23 (with effect in accordance with Sch. 24 para. 66(4) of the amending Act) by Finance Act 2012 (c. 14), Sch. 24 para. 63

F77Words in s. 23A(2)(f) substituted (1.12.2014) by Finance Act 2014 (c. 26), s. 198(2)(c), Sch. 28 para. 19(2) (with Sch. 29)

F78Words in s. 23A(3) substituted (1.12.2014) by Finance Act 2014 (c. 26), s. 198(2)(c), Sch. 28 para. 19(3) (with Sch. 29)

Payment of VAT by taxable personsU.K.

24 Input tax and output tax.U.K.

(1)Subject to the following provisions of this section, “input tax”, in relation to a taxable person, means the following tax, that is to say—

(a)VAT on the supply to him of any goods or services;

(b)VAT on the acquisition by him from another member State of any goods; and

(c)VAT paid or payable by him on the importation of any goods from a place outside the member States,

being (in each case) goods or services used or to be used for the purpose of any business carried on or to be carried on by him.

(2)Subject to the following provisions of this section, “output tax”, in relation to a taxable person, means VAT on supplies which he makes or on the acquisition by him from another member State of goods (including VAT which is also to be counted as input tax by virtue of subsection (1)(b) above).

F79(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)The Treasury may by order provide with respect to any description of goods or services that, where goods or services of that description are supplied to a person who is not a taxable person, they shall, in such circumstances as may be specified in the order, be treated for the purposes of subsections (1) and (2) above as supplied to such other person as may be determined in accordance with the order.

(5)Where goods or services supplied to a taxable person, goods acquired by a taxable person from another member State or goods imported by a taxable person from a place outside the member States are used or to be used partly for the purposes of a business carried on or to be carried on by him and partly for other purposes [F80

(a)VAT on supplies, acquisitions and importations shall be apportioned so that so much as is referable to the taxable person's business purposes is counted as that person's input tax, and

(b)the remainder of that VAT (“the non-business VAT”) shall count as that person's input tax only to the extent (if any) provided for by regulations under subsection (6)(e).]

[F81(5A)For the purposes of subsections (1) and (5), a relevant asset held for the purposes of a business carried on or to be carried on by a taxable person is not, in any circumstances, to be regarded as used or to be used for the purposes of the business if, and to the extent that, it is used or to be used for that person's private use or the private use of that person's staff.

(5B)In subsection (5A) “relevant asset” means—

(a)any interest in land,

(b)any building or part of a building,

(c)any civil engineering work or part of such a work,

(d)any goods incorporated or to be incorporated in a building or civil engineering work (whether by being installed as fixtures or fittings or otherwise),

(e)any ship, boat or other vessel, or

(f)any aircraft.]

(6)Regulations may provide—

(a)for VAT on the supply of goods or services to a taxable person, VAT on the acquisition of goods by a taxable person from other member States and VAT paid or payable by a taxable person on the importation of goods from places outside the member States to be treated as his input tax only if and to the extent that the charge to VAT is evidenced and quantified by reference to such documents [F82or other information] as may be specified in the regulations or the Commissioners may direct either generally or in particular cases or classes of cases;

(b)for a taxable person to count as his input tax, in such circumstances, to such extent and subject to such conditions as may be prescribed, VAT on the supply to him of goods or services or on the acquisition of goods by him from another member State or paid by him on the importation of goods from places outside the member States notwithstanding that he was not a taxable person at the time of the supply, acquisition or payment;

(c)for a taxable person that is a body corporate to count as its input tax, in such circumstances, to such extent and subject to such conditions as may be prescribed, VAT on the supply, acquisition or importation of goods before the company’s incorporation for appropriation to the company or its business or on the supply of services before that time for its benefit or in connection with its incorporation;

(d)in the case of a person who has been, but is no longer, a taxable person, for him to be paid by the Commissioners the amount of any VAT on a supply of services made to him for the purposes of the business carried on by him when he was a taxable person.

[F83(e)in cases where an apportionment is made under subsection (5), for the non-business VAT to be counted as the taxable person's input tax for the purposes of any provision made by or under section 26 in such circumstances, to such extent and subject to such conditions as may be prescribed.]

[F84(6A)Regulations under subsection (6) may contain such supplementary, incidental, consequential and transitional provisions as appear to the Commissioners to be necessary or expedient.]

F85(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F79S. 24(3) omitted (with application in accordance with Sch. 8 para. 1(8)(9) of the amending Act) by virtue of Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 1(2)(8)

F80Words in s. 24(5) substituted (16.12.2010) by Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 1(3)

F81S. 24(5A)(5B) inserted (with application in accordance with Sch. 8 para. 1(8)(9) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 1(4)(8)

F82Words in s. 24(6)(a) inserted (retrospective to 10.4.2003) by Finance Act 2003 (c. 14), s. 17(2)(8)

F83S. 24(6)(e) inserted (16.12.2010) by Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 1(5)

F84S. 24(6A) inserted (16.12.2010) by Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 1(6)

F85S. 24(7) omitted (with application in accordance with Sch. 8 para. 1(8)(9) of the amending Act) by virtue of Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 1(7)(8)

25 Payment by reference to accounting periods and credit for input tax against output tax.U.K.

(1)A taxable person shall—

(a)in respect of supplies made by him, and

(b)in respect of the acquisition by him from other member States of any goods,

account for and pay VAT by reference to such periods (in this Act referred to as “prescribed accounting periods”) at such time and in such manner as may be determined by or under regulations and regulations may make different provision for different circumstances.

(2)Subject to the provisions of this section, he is entitled at the end of each prescribed accounting period to credit for so much of his input tax as is allowable under section 26, and then to deduct that amount from any output tax that is due from him.

(3)If either no output tax is due at the end of the period, or the amount of the credit exceeds that of the output tax then, subject to subsections (4) and (5) below, the amount of the credit or, as the case may be, the amount of the excess shall be paid to the taxable person by the Commissioners; and an amount which is due under this subsection is referred to in this Act as a “VAT credit”.

(4)The whole or any part of the credit may, subject to and in accordance with regulations, be held over to be credited in and for a subsequent period; and the regulations may allow for it to be so held over either on the taxable person’s own application or in accordance with general or special directions given by the Commissioners from time to time.

(5)Where at the end of any period a VAT credit is due to a taxable person who has failed to submit returns for any earlier period as required by this Act, the Commissioners may withhold payment of the credit until he has complied with that requirement.

(6)A deduction under subsection (2) above and payment of a VAT credit shall not be made or paid except on a claim made in such manner and at such time as may be determined by or under regulations; and, in the case of a person who has made no taxable supplies in the period concerned or any previous period, payment of a VAT credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to repayment in specified circumstances.

(7)The Treasury may by order provide, in relation to such supplies, acquisitions and importations as the order may specify, that VAT charged on them is to be excluded from any credit under this section; and—

(a)any such provision may be framed by reference to the description of goods or services supplied or goods acquired or imported, the person by whom they are supplied, acquired or imported or to whom they are supplied, the purposes for which they are supplied, acquired or imported, or any circumstances whatsoever; and

(b)such an order may contain provision for consequential relief from output tax.

Modifications etc. (not altering text)

C9S. 25(6) modified (retrospective to 19.3.2008) by Finance Act 2008 (c. 9), s. 121(2)(4)

26 Input tax allowable under section 25.U.K.

(1)The amount of input tax for which a taxable person is entitled to credit at the end of any period shall be so much of the input tax for the period (that is input tax on supplies, acquisitions and importations in the period) as is allowable by or under regulations as being attributable to supplies within subsection (2) below.

(2)The supplies within this subsection are the following supplies made or to be made by the taxable person in the course or furtherance of his business—

(a)taxable supplies;

(b)supplies outside the United Kingdom which would be taxable supplies if made in the United Kingdom;

(c)such other supplies outside the United Kingdom and such exempt supplies as the Treasury may by order specify for the purposes of this subsection.

(3)The Commissioners shall make regulations for securing a fair and reasonable attribution of input tax to supplies within subsection (2) above, and any such regulations may provide for—

(a)determining a proportion by reference to which input tax for any prescribed accounting period is to be provisionally attributed to those supplies;

(b)adjusting, in accordance with a proportion determined in like manner for any longer period comprising two or more prescribed accounting periods or parts thereof, the provisional attribution for any of those periods;

(c)the making of payments in respect of input tax, by the Commissioners to a taxable person (or a person who has been a taxable person) or by a taxable person (or a person who has been a taxable person) to the Commissioners, in cases where events prove inaccurate an estimate on the basis of which an attribution was made; and

(d)preventing input tax on a supply which, under or by virtue of any provision of this Act, a person makes to himself from being allowable as attributable to that supply.

(4)Regulations under subsection (3) above may make different provision for different circumstances and, in particular (but without prejudice to the generality of that subsection) for different descriptions of goods or services; and may contain such incidental[F86, supplementary, consequential and transitional] provisions as appear to the Commissioners necessary or expedient.

Textual Amendments

F86Words in s. 26(4) substituted (16.12.2010) by Finance (No. 3) Act 2010 (c. 33), Sch. 8 para. 2

Modifications etc. (not altering text)

C10S. 26 excluded (27.7.1999) by 1999 c. 16, s. 13(1)

[F8726A Disallowance of input tax where consideration not paidU.K.

(1)Where—

(a)a person has become entitled to credit for any input tax, and

(b)the consideration for the supply to which that input tax relates, or any part of it, is unpaid at the end of the period of 6 months following the relevant date,

he shall be taken, as from the end of that period, not to have been entitled to credit for input tax in respect of the VAT that is referable to the unpaid consideration or part.

[F88(1A)Subsection (1) is subject to section 26AA (disapplication of disallowance under section 26A in insolvency).]

(2)For the purposes of subsection (1) above “the relevant date”, in relation to any sum representing consideration for a supply, is—

(a)the date of the supply, or

(b)if later, the date on which the sum became payable.

(3)Regulations may make such supplementary, incidental, consequential or transitional provisions as appear to the Commissioners to be necessary or expedient for the purposes of this section.

(4)Regulations under this section may in particular—

(a)make provision for restoring the whole or any part of an entitlement to credit for input tax where there is a payment after the end of the period mentioned in subsection (1) above;

(b)make rules for ascertaining whether anything paid is to be taken as paid by way of consideration for a particular supply;

(c)make rules dealing with particular cases, such as those involving payment of part of the consideration or mutual debts.

(5)Regulations under this section may make different provision for different circumstances.

(6)Section 6 shall apply for determining the time when a supply is to be treated as taking place for the purposes of construing this section.]

Textual Amendments

F87S. 26A inserted (with effect as mentioned in s. 22(3) of the amending Act) by Finance Act 2002 (c. 23), s. 22(1); S.I. 2002/3028, art. 2

F88S. 26A(1A) inserted (with effect in accordance with art. 9 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2017 (S.I. 2017/495), arts. 1, 7(2)

[F8926AADisapplication of disallowance under section 26A in insolvencyU.K.

(1)Section 26A(1) does not apply to a person in relation to credit for input tax which relates to a supply where—

(a)at the time of the supply, no insolvency procedure had effect in relation to the person,

(b)at any time during the relevant period, an insolvency procedure had effect in relation to that person (“the insolvent person”), and

(c)the Commissioners have been notified in writing of the matter mentioned in paragraph (b) by or on behalf of a person authorised to deal with the insolvent person’s affairs.

(2)But where the insolvency procedure mentioned in subsection (1)(b) is a bankruptcy order, award of sequestration, protected trust deed or voluntary arrangement and that bankruptcy order is annulled, that award of sequestration is recalled or that protected trust deed or voluntary arrangement has come to an end prematurely—

(a)the disapplication of section 26A(1) by subsection (1) above ceases to have effect, and

(b)the person to which the bankruptcy order, award of sequestration, protected trust deed or voluntary arrangement relates is to be taken for the purposes of section 26A(1) as not being entitled to the credit for the input tax concerned as from whichever is the later of—

(i)the end of the relevant period, and

(ii)the date on which the bankruptcy order was annulled, the award of sequestration recalled or the protected trust deed or voluntary arrangement has come to an end prematurely.

(3)Where the person mentioned in section 26A(1) is entitled as a member of a partnership to credit for input tax this section has effect as if—

(a)the references in subsections (1)(a) and (b) to “the person” and “that person” were references to the partnership,

(b)the reference in subsection (1)(c) to “the insolvent person’s affairs” were a reference to the insolvent partnership’s affairs, and

(c)the reference in subsection (2)(b) to “the person”, in connection with a bankruptcy order or a voluntary arrangement, were a reference to the person who is a member of the partnership to which the bankruptcy order or voluntary arrangement relates.

(4)Subsection (1) does not apply where the insolvency procedure referred to in subsection (1)(b) has effect as part of, or as a consequence of, arrangements where the main purpose, or one of the main purposes, of those arrangements is to obtain a tax advantage by the operation of this section.

(5)Regulations may make such supplementary, incidental, consequential or transitional provisions as appear to the Commissioners to be necessary or expedient for the purposes of this section.

(6)For the purposes of this section “the relevant period”, in relation to a supply, is the period beginning immediately after the supply took place and ending six months after—

(a)the date of that supply, or

(b)if later, the date on which the relevant part of the consideration for the supply is payable.

(7)For the purposes of subsection (6) the relevant part of the consideration is the part of the consideration referable to the credit for input tax which would (ignoring the effect of this section) be disallowed under section 26A(1).

(8)For the purposes of this section an insolvency procedure has effect in relation to a person at a time when any of the following apply—

(a)a bankruptcy order has been made under Chapter 1 of Part 9 of the Insolvency Act 1986 in relation to that person and has not been annulled,

(b)a warrant has been granted for a petition for sequestration to be served on that person which has resulted in the sequestration of that person’s estate or an award of sequestration has been made on an application by that person, in both cases under section 22 of the Bankruptcy (Scotland) Act 2016, and in either case the award of sequestration has not been recalled,

(c)a bankruptcy order has been made under Chapter 1 of Part 9 of the Insolvency (Northern Ireland) Order 1989 in relation to that person and has not been annulled,

(d)where that person is a company registered under the Companies Act 2006 in England and Wales or Scotland or an unregistered company as defined in section 220 of the Insolvency Act 1986 which is deemed to be registered in England and Wales or Scotland under section 221 of that Act, a petition has been presented to the court which has resulted in a winding-up order being made under Chapter 6 of Part 4 or Part 5 of the Insolvency Act 1986 in relation to that person and that person has not been dissolved or that winding-up order has not been stayed or sisted,

(e)where that person is a company registered under the Companies Act 2006 in Northern Ireland, or an unregistered company as defined in article 184 of the Insolvency (Northern Ireland) Order 1989 which is deemed to be registered in Northern Ireland under article 185 of that Order, a petition has been presented to the court which has resulted in a winding-up order being made under Part 5 or Part 6 of the Insolvency (Northern Ireland) Order 1989 and that person has not been dissolved or that winding-up order has not been stayed,

(f)that person is in administration for the purposes of Schedule B1 to the Insolvency Act 1986 or Schedule B1 to the Insolvency (Northern Ireland) Order 1989,

(g)an appointment of an administrative receiver is in force in relation to that person disregarding any temporary vacancy in the office of receiver,

(h)an appointment of a liquidator is in force as a consequence of a creditors’ voluntary winding up under Chapter 4 of Part 4 of the Insolvency Act 1986 or Chapter 4 of Part 5 of the Insolvency (Northern Ireland) Order 1989 in relation to that person disregarding any temporary vacancy in the office of liquidator,

(i)a voluntary arrangement has been approved in accordance with Part 1 or Part 8 of the Insolvency Act 1986 or Part 2 or Chapter 2 of Part 8 of the Insolvency (Northern Ireland) Order 1989 in relation to that person and that voluntary arrangement has not come to an end prematurely,

(j)a county court administration order has been made under Part 6 of the County Courts Act 1984 or Part 6 of the Judgments Enforcement (Northern Ireland) Order 1981 in relation to that person and has not ceased to take effect,

(k)a compromise or arrangement sanctioned by the court and delivered to the registrar in accordance with section 899 of the Companies Act 2006 is in place in relation to that person,

(l)that person’s estate is vested in any other person as that person’s trustee under a trust deed and that trust deed has become a protected trust deed,

(m)that person has died and an insolvency administration order has been made which has not been discharged in respect of that person’s estate in accordance with an order under section 421 of the Insolvency Act 1986 or article 365 of the Insolvency (Northern Ireland) Order 1989 or that person’s estate has been sequestrated under section 22 of the Bankruptcy (Scotland) Act 2016 and the award of sequestration has not been recalled,

(n)a voluntary arrangement has been approved in accordance with Part 1 of the Insolvency Act 1986 as applied by Part 2 of the Insolvent Partnerships Order 1994 or Part 2 of the Insolvency (Northern Ireland) Order 1989 as applied by Part 2 of the Insolvent Partnerships Order (Northern Ireland) 1995 in relation to that person and that voluntary arrangement has not come to an end prematurely,

(o)an appointment of a liquidator is in force as a consequence of a creditors’ voluntary winding up under Chapter 4 of Part 4 of the Insolvency Act 1986 as applied by Parts 4 and 5 of the Insolvent Partnerships Order 1994, or Chapter 4 of Part 5 of the Insolvency (Northern Ireland) Order 1989 as applied by Part 4 of the Insolvent Partnerships Order (Northern Ireland) 1995 in relation to that person disregarding any temporary vacancy in the office of liquidator,

(p)that person is in administration for the purposes of Schedule B1 to the Insolvency Act 1986 as applied by Part 3 of the Insolvent Partnerships Order 1994 or Schedule B1 to the Insolvency (Northern Ireland) Order 1989 as applied by Part 3 of the Insolvent Partnerships Order (Northern Ireland) 1995,

(q)a voluntary arrangement has been approved in accordance with Part 1 of the Insolvency Act 1986 as applied by Part 4 of the Limited Liability Partnerships Regulations 2001 or Part 2 of the Insolvency (Northern Ireland) Order 1989 as applied by Part 4 of the Limited Liability Partnerships Regulations (Northern Ireland) 2004 in relation to that person and that voluntary arrangement has not come to an end prematurely,

(r)an appointment of a liquidator is in force as a consequence of a creditors’ voluntary winding up under Chapter 4 of Part 4 of the Insolvency Act 1986 as applied by Part 4 of the Limited Liability Partnerships Regulations 2001 or Chapter 4 of Part 5 of the Insolvency (Northern Ireland) Order 1989 as applied by Part 4 of the Limited Liability Partnerships Regulations (Northern Ireland) 2004 in relation to that person disregarding any temporary vacancy in the office of liquidator,

(s)that person is in administration for the purposes of Schedule B1 to the Insolvency Act 1986 as applied by Part 4 of the Limited Liability Partnerships Regulations 2001 or Schedule B1 to the Insolvency (Northern Ireland) Order 1989 as applied by Part 4 of the Limited Liability Partnerships Regulations (Northern Ireland) 2004.

(9)In this section—

(10)In this section a voluntary arrangement comes to an end prematurely if it would be regarded as having come to an end prematurely under—

(a)section 7B or section 262C of the Insolvency Act 1986; or

(b)article 20B or article 236C of the Insolvency (Northern Ireland) Order 1989.

(11)Section 6 applies for determining the time when a supply is to be treated as taking place for the purposes of construing this section.]

Textual Amendments

F89S. 26AA inserted (with effect in accordance with art. 9 of the amending S.I.) by The Enactment of Extra-Statutory Concessions Order 2017 (S.I. 2017/495), arts. 1, 7(3)

Modifications etc. (not altering text)

[F9026ABAdjustment of output tax in respect of supplies under section 55AU.K.

(1)This section applies if—

(a)a person is, as a result of section 26A, taken not to have been entitled to any credit for input tax in respect of any supply, and

(b)the supply is one in respect of which the person is required under section 55A(6) to account for and pay VAT.

(2)The person is entitled to make an adjustment to the amount of VAT which he is so required to account for and pay.

(3)The amount of the adjustment is to be equal to the amount of the credit for the input tax to which the person is taken not to be entitled.

(4)Regulations may make such supplementary, incidental, consequential or transitional provisions as appear to the Commissioners to be necessary or expedient for the purposes of this section.

(5)Regulations under this section may in particular—

(a)make provision for the manner in which, and the period for which, the adjustment is to be given effect,

(b)require the adjustment to be evidenced and quantified by reference to such records and other documents as may be specified by or under the regulations,

(c)require the person entitled to the adjustment to keep, for such period and in such form and manner as may be so specified, those records and documents,

(d)make provision for readjustments if any credit for input tax is restored under section 26A.

(6)Regulations under this section may make different provision for different circumstances.]

Textual Amendments

[F9126B Flat-rate schemeU.K.

(1)The Commissioners may by regulations make provision under which, where a taxable person so elects, the amount of his liability to VAT in respect of his relevant supplies in any prescribed accounting period shall be the appropriate percentage of his relevant turnover for that period.

A person whose liability to VAT is to any extent determined as mentioned above is referred to in this section as participating in the flat-rate scheme.

(2)For the purposes of this section—

(a)a person’s “relevant supplies” are all supplies made by him except supplies made at such times or of such descriptions as may be specified in the regulations;

(b)the “appropriate percentage” is the percentage so specified for the category of business carried on by the person in question;

(c)a person’s “relevant turnover” is the total of—

(i)the value of those of his relevant supplies that are taxable supplies, together with the VAT chargeable on them, and

(ii)the value of those of his relevant supplies that are exempt supplies.

(3)The regulations may designate certain categories of business as categories in relation to which the references in subsection (1) above to liability to VAT are to be read as references to entitlement to credit for VAT.

(4)The regulations may provide for persons to be eligible to participate in the flat-rate scheme only in such cases and subject to such conditions and exceptions as may be specified in, or determined by or under, the regulations.

(5)Subject to such exceptions as the regulations may provide for, a participant in the flat-rate scheme shall not be entitled to credit for input tax.

This is without prejudice to subsection (3) above.

(6)The regulations may—

(a)provide for the appropriate percentage to be determined by reference to the category of business that a person is expected, on reasonable grounds, to carry on in a particular period;

(b)provide, in such circumstances as may be prescribed, for different percentages to apply in relation to different parts of the same prescribed accounting period;

(c)make provision for determining the category of business to be regarded as carried on by a person carrying on businesses in more than one category.

(7)The regulations may provide for the following matters to be determined in accordance with notices published by the Commissioners—

(a)when supplies are to be treated as taking place for the purposes of ascertaining a person’s relevant turnover for a particular period;

(b)the method of calculating any adjustments that fall to be made in accordance with the regulations in a case where a person begins or ceases to participate in the flat-rate scheme.

(8)The regulations may make provision enabling the Commissioners—

(a)to authorise a person to participate in the flat-rate scheme with effect from—

(i)a day before the date of his election to participate, or

(ii)a day that is not earlier than that date but is before the date of the authorisation;

(b)to direct that a person shall cease to be a participant in the scheme with effect from a day before the date of the direction.

The day mentioned in paragraph (a)(i) above may be a day before the date on which the regulations come into force.

(9)Regulations under this section—

(a)may make different provision for different circumstances;

(b)may make such incidental, supplemental, consequential or transitional provision as the Commissioners think fit, including provision disapplying or applying with modifications any provision contained in or made under this Act.]

Textual Amendments

F91S. 26B inserted (retropective to 24.4.2002) by Finance Act 2002 (c. 23), s. 23(1)(4)

27 Goods imported for private purposes.U.K.

(1)Where goods are imported by a taxable person from a place outside the member States and—

(a)at the time of importation they belong wholly or partly to another person; and

(b)the purposes for which they are to be used include private purposes either of himself or of the other,

VAT paid or payable by the taxable person on the importation of the goods shall not be regarded as input tax to be deducted or credited under section 25; but he may make a separate claim to the Commissioners for it to be repaid.

(2)The Commissioners shall allow the claim if they are satisfied that to disallow it would result, in effect, in a double charge to VAT; and where they allow it they shall do so only to the extent necessary to avoid the double charge.

(3)In considering a claim under this section, the Commissioners shall have regard to the circumstances of the importation and, so far as appearing to them to be relevant, things done with, or occurring in relation to, the goods at any subsequent time.

(4)Any amount allowed by the Commissioners on the claim shall be paid by them to the taxable person.

(5)The reference above to a person’s private purposes is to purposes which are not those of any business carried on by him.

28 Payments on account of VAT.U.K.

(1)The Treasury may make an order under this section if they consider it desirable to do so in the interests of the national economy.

(2)An order under this section may provide that a taxable person of a description specified in the order shall be under a duty—

(a)to pay, on account of any VAT he may become liable to pay in respect of a prescribed accounting period, amounts determined in accordance with the order, and

(b)to do so at such times as are so determined.

[F92(2AA)An order under this section may provide for the matters with respect to which an appeal under section 83 lies to a tribunal to include such decisions of the Commissioners under that or any other order under this section as may be specified in the order.]

[F93(2A)The Commissioners may give directions, to persons who are or may become liable by virtue of any order under this section to make payments on account of VAT, about the manner in which they are to make such payments; and where such a direction has been given to any person and has not subsequently been withdrawn, any duty of that person by virtue of such an order to make such a payment shall have effect as if it included a requirement for the payment to be made in the manner directed.]

(3)Where an order is made under this section, the Commissioners may make regulations containing such supplementary, incidental or consequential provisions as appear to the Commissioners to be necessary or expedient.

(4)A provision of an order or regulations under this section may be made in such way as the Treasury or, as the case may be, the Commissioners think fit (whether by amending provisions of or made under the enactments relating to VAT or otherwise).

(5)An order or regulations under this section may make different provision for different circumstances.

Textual Amendments

F92S. 28(2AA) inserted (29.4.1996) by 1997 c. 16, s. 43

F93S. 28(2A) inserted (29.4.1996) by 1996 c. 8, s. 34

29 Invoices provided by recipients of goods or services.U.K.

Where—

(a)a taxable person (“the recipient”) provides a document to himself which purports to be an invoice in respect of a taxable supply of goods or services to him by another taxable person; and

(b)that document understates the VAT chargeable on the supply,

the Commissioners may, by notice served on the recipient and on the supplier, elect that the amount of VAT understated by the document shall be regarded for all purposes as VAT due from the recipient and not from the supplier.

Part IIU.K. Reliefs, exemptions and repayments

Reliefs etc. generally availableU.K.

[F9429A Reduced rateU.K.

(1)VAT charged on—

(a)any supply that is of a description for the time being specified in Schedule 7A, or

(b)any equivalent acquisition or importation,

shall be charged at the rate of 5 per cent.

(2)The reference in subsection (1) above to an equivalent acquisition or importation, in relation to any supply that is of a description for the time being specified in Schedule 7A, is a reference (as the case may be) to—

(a)any acquisition from another member State of goods the supply of which would be such a supply; or

(b)any importation from a place outside the member States of any such goods.

(3)The Treasury may by order vary Schedule 7A by adding to or deleting from it any description of supply or by varying any description of supply for the time being specified in it.

(4)The power to vary Schedule 7A conferred by subsection (3) above may be exercised so as to describe a supply of goods or services by reference to matters unrelated to the characteristics of the goods or services themselves. In the case of a supply of goods, those matters include, in particular, the use that has been made of the goods.]

Textual Amendments

F94S. 29A inserted (11.5.2001 with effect as mentioned in s. 99(7)(c) of the amending Act) by 2001 c. 9, s. 99(4)

30 Zero-rating.U.K.

(1)Where a taxable person supplies goods or services and the supply is zero-rated, then, whether or not VAT would be chargeable on the supply apart from this section—

(a)no VAT shall be charged on the supply; but

(b)it shall in all other respects be treated as a taxable supply;

and accordingly the rate at which VAT is treated as charged on the supply shall be nil.

(2)A supply of goods or services is zero-rated by virtue of this subsection if the goods or services are of a description for the time being specified in Schedule 8 or the supply is of a description for the time being so specified.

[F95(2A)A supply by a person of services which consist of applying a treatment or process to another person’s goods is zero-rated by virtue of this subsection if by doing so he produces goods, and either—

(a)those goods are of a description for the time being specified in Schedule 8; or

(b)a supply by him of those goods to the person to whom he supplies the services would be of a description so specified.]

(3)Where goods of a description for the time being specified in that Schedule, or of a description forming part of a description of supply for the time being so specified, are acquired in the United Kingdom from another member State or imported from a place outside the member States, no VAT shall be chargeable on their acquisition or importation, except as otherwise provided in that Schedule.

(4)The Treasury may by order vary Schedule 8 by adding to or deleting from it any description or by varying any description for the time being specified in it.

[F96(5)The export of any goods by a charity to a place outside the member States shall for the purposes of this Act be treated as a supply made by the charity—

(a)in the United Kingdom, and

(b)in the course or furtherance of a business carried on by the charity.]

(6)A supply of goods is zero-rated by virtue of this subsection if the Commissioners are satisfied that the person supplying the goods—

(a)has exported them to a place outside the member States; or

(b)has shipped them for use as stores on a voyage or flight to an eventual destination outside the United Kingdom, or as merchandise for sale by retail to persons carried on such a voyage or flight in a ship or aircraft,

and in either case if such other conditions, if any, as may be specified in regulations or the Commissioners may impose are fulfilled.

(7)Subsection (6)(b) above shall not apply in the case of goods shipped for use as stores on a voyage or flight to be made by the person to whom the goods were supplied and to be made for a purpose which is private.

(8)Regulations may provide for the zero-rating of supplies of goods, or of such goods as may be specified in the regulations, in cases where—

(a)the Commissioners are satisfied that the goods have been or are to be exported to a place outside the member States or that the supply in question involves both—

(i)the removal of the goods from the United Kingdom; and

(ii)their acquisition in another member State by a person who is liable for VAT on the acquisition in accordance with provisions of the law of that member State corresponding, in relation to that member State, to the provisions of section 10; and

(b)such other conditions, if any, as may be specified in the regulations or the Commissioners may impose are fulfilled.

[F97(8A)Regulations may provide for the zero-rating of supplies of goods, or of such goods as may be specified in regulations, in cases where—

(a)the Commissioners are satisfied that the supply in question involves both—

(i)the removal of the goods from a fiscal warehousing regime within the meaning of section 18F(2); and

(ii)their being placed in a warehousing regime in another member State, or in such member State or States as may be prescribed, where that regime is established by provisions of the law of that member State corresponding, in relation to that member State, to the provisions of sections 18A and 18B; and

(b)such other conditions, if any, as may be specified in the regulations or the Commissioners may impose are fulfilled.]

(9)Regulations may provide for the zero-rating of a supply of services which is made where goods are let on hire and the Commissioners are satisfied that the goods have been or are to be removed from the United Kingdom during the period of the letting, and such other conditions, if any, as may be specified in the regulations or the Commissioners may impose are fulfilled.

(10)Where the supply of any goods has been zero-rated by virtue of subsection (6) above or in pursuance of regulations made under [F98subsection (8), (8A) or (9)] above and—

(a)the goods are found in the United Kingdom after the date on which they were alleged to have been or were to be exported or shipped or otherwise removed from the United Kingdom; or

(b)any condition specified in the relevant regulations under [F98subsection (6), (8), (8A) or (9)] above or imposed by the Commissioners is not complied with,

and the presence of the goods in the United Kingdom after that date or the non-observance of the condition has not been authorised for the purposes of this subsection by the Commissioners, the goods shall be liable to forfeiture under the Management Act and the VAT that would have been chargeable on the supply but for the zero-rating shall become payable forthwith by the person to whom the goods were supplied or by any person in whose possession the goods are found in the United Kingdom; but the Commissioners may, if they think fit, waive payment of the whole or part of that VAT.

Textual Amendments

F95S. 30(2A) inserted (29.4.1996 with effect as mentioned in s. 29(5) of the amending Act) by 1996 c. 8, s. 29(2)(5)

F96S. 30(5) substituted (1.5.1995 with effect as mentioned in s. 28(2) of the amending Act) by 1995 c. 4, s. 28(1)

F97S. 30(8A) inserted (29.4.1996 for specified purposes and otherwise 1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after 1.6.1996) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 7; S.I. 1996/1249, art. 2

F98Words in s. 30(10) substituted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 7; S.I. 1996/1249, art. 2

31 Exempt supplies and acquisitions.U.K.

(1)A supply of goods or services is an exempt supply if it is of a description for the time being specified in Schedule 9 and an acquisition of goods from another member State is an exempt acquisition if the goods are acquired in pursuance of an exempt supply.

(2)The Treasury may by order vary that Schedule by adding to or deleting from it any description of supply or by varying any description of supply for the time being specified in it, and the Schedule may be varied so as to describe a supply of goods by reference to the use which has been made of them or to other matters unrelated to the characteristics of the goods themselves.

[F99(3)The Treasury may by regulations make an exemption of a group 16 supply of a description specified in the regulations subject to conditions.

(4)Regulations under subsection (3) may—

(a)make different provision for different cases, and

(b)make consequential or transitional provision (including provision amending this Act).

(5)In subsection (3) “group 16 supply” means a supply falling within Group 16 of Schedule 9.]

Textual Amendments

F99S. 31(3)-(5) inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 197(3)

Modifications etc. (not altering text)

C12S. 31(2) extended (27.7.1999) by 1999 c. 16, s. 13(2)

F10032. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F100S. 32 repealed (1.6.1995) by 1995 c. 4, ss. 24(2), 162, Sch. 29 Pt. VI(3) Note; S.I. 1995/1374, art. 2

33 Refunds of VAT in certain cases.U.K.

(1)Subject to the following provisions of this section, where—

(a)VAT is chargeable on the supply of goods or services to a body to which this section applies, on the acquisition of any goods by such a body from another member State or on the importation of any goods by such a body from a place outside the member States, and

(b)the supply, acquisition or importation is not for the purpose of any business carried on by the body,

the Commissioners shall, on a claim made by the body at such time and in such form and manner as the Commissioners may determine, refund to it the amount of the VAT so chargeable.

(2)Where goods or services so supplied to or acquired or imported by the body cannot be conveniently distinguished from goods or services supplied to or acquired or imported by it for the purpose of a business carried on by it, the amount to be refunded under this section shalVATl be such amount as remains after deducting from the whole of the chargeable on any supply to or acquisition or importation by the body such proportion thereof as appears to the Commissioners to be attributable to the carrying on of the business; but where—

(a)the VAT so attributable is or includes VAT attributable, in accordance with regulations under section 26, to exempt supplies by the body, and

(b)the VAT attributable to the exempt supplies is in the opinion of the Commissioners an insignificant proportion of the VAT so chargeable,

they may include it in the VAT refunded under this section.

(3)The bodies to which this section applies are—

(a)a local authority [F101and a combined authority established by an order made under section 103(1) of the Local Democracy, Economic Development and Construction Act 2009];

[F102(aa)a fire and rescue authority under the Fire and Rescue Services Act 2004, if the authority does not fall within paragraph (a);

(ab)the Scottish Fire and Rescue Service;]

(b)a river purification board established under section 135 of the M2Local Government (Scotland) Act 1973, and a water development board within the meaning of section 109 of the M3Water (Scotland) Act 1980;

(c)an internal drainage board;

(d)[F103a passenger transport authority or executive within the meaning of Part II of the M4Transport Act 1968;]

[F103an Integrated Transport Authority, Passenger Transport Authority or Passenger Transport Executive for the purposes of Part 2 of the Transport Act 1968;]

(e)a port health authority within the meaning of the M5Public Health (Control of Disease) Act 1984, F104...;

(f)[F105a police and crime commissioner, the Mayor's Office for Policing and Crime and] F106... the Receiver for the Metropolitan Police District;

[F107(fa)the Scottish Police Authority;

(fb)the Police Service of Northern Ireland and the Northern Ireland Policing Board;]

(g)a development corporation within the meaning of the M6New Towns Act 1981 or the M7New Towns (Scotland) Act 1968, a new town commission within the meaning of the M8New Towns Act (Northern Ireland) 1965 and the Commission for the New Towns;

(h)a general lighthouse authority within the meaning of [F108Part VIII of the M9Merchant Shipping Act 1995];

(i)the British Broadcasting Corporation;

[F109(j)the appointed news provider referred to in section 280 of the Communications Act 2003; and]

(k)any body specified for the purposes of this section by an order made by the Treasury.

(4)No VAT shall be refunded under this section to a general lighthouse authority which in the opinion of the Commissioners is attributable to activities other than those concerned with the provision, maintenance or management of lights or other navigational aids.

(5)No VAT shall be refunded under this section to [F110an appointed] news provider which in the opinion of the Commissioners is attributable to activities other than the provision of news programmes for broadcasting by holders of regional Channel 3 licences (within the meaning of Part I of the M10Broadcasting Act 1990).

(6)References in this section to VAT chargeable do not include any VAT which, by virtue of any order under section 25(7), is excluded from credit under that section.

Textual Amendments

F101Words in s. 33(3)(a) inserted (with effect in accordance with s. 39(6) of the amending Act) by Finance Act 2018 (c. 3), s. 39(2)

F102S. 33(3)(aa)(ab) inserted (with effect in accordance with s. 39(6) of the amending Act) by Finance Act 2018 (c. 3), s. 39(3)

F106Words in s. 33(3)(f) omitted (with effect in accordance with s. 39(6) of the amending Act) by virtue of Finance Act 2018 (c. 3), s. 39(4)

F107S. 33(3)(fa)(fb) inserted (with effect in accordance with s. 39(6) of the amending Act) by Finance Act 2018 (c. 3), s. 39(5)

F108Words in s. 33(3)(h) substituted (1.1.1996) by 1995 c. 21, ss. 314(2), 316(2), Sch. 13 para. 95 (with s. 312(1))

Modifications etc. (not altering text)

C13S. 33 applied (15.8.1995) (temp. until 1.4.1996) by S.I. 1995/1878, art. 4

Marginal Citations

33AF111 Refunds of VAT to museums and galleriesU.K.

(1)Subsections (2) to (5) below apply where—

(a)VAT is chargeable on—

(i)the supply of goods or services to a body to which this section applies,

(ii)the acquisition of any goods by such a body from another member State, or

(iii)the importation of any goods by such a body from a place outside the member States,

(b)the supply, acquisition or importation is attributable to the provision by the body of free rights of admission to a relevant museum or gallery, and

(c)the supply is made, or the acquisition or importation takes place, on or after 1st April 2001.

(2)The Commissioners shall, on a claim made by the body in such form and manner as the Commissioners may determine, refund to the body the amount of VAT so chargeable.

(3)The claim must be made before the end of the claim period.

(4)Subject to subsection (5) below, “the claim period” is the period of [F1124 years] beginning with the day on which the supply is made or the acquisition or importation takes place.

(5)If the Commissioners so determine, the claim period is such shorter period beginning with that day as the Commissioners may determine.

(6)Subsection (7) below applies where goods or services supplied to, or acquired or imported by, a body to which this section applies that are attributable to free admissions cannot conveniently be distinguished from goods or services supplied to, or acquired or imported by, the body that are not attributable to free admissions.

(7)The amount to be refunded on a claim by the body under this section shall be such amount as remains after deducting from the VAT related to the claim such proportion of that VAT as appears to the Commissioners to be attributable otherwise than to free admissions.

(8)For the purposes of subsections (6) and (7) above—

(a)goods or services are, and VAT is, attributable to free admissions if they are, or it is, attributable to the provision by the body of free rights of admission to a relevant museum or gallery;

(b)the VAT related to a claim is the whole of the VAT chargeable on—

(i)the supplies to the body, and

(ii)the acquisitions and importations by the body,

to which the claim relates.

(9)The Treasury may by order—

(a)specify a body as being a body to which this section applies;

(b)when specifying a body under paragraph (a), specify any museum or gallery that, for the purposes of this section, is a “relevant” museum or gallery in relation to the body;

(c)specify an additional museum or gallery as being, for the purposes of this section, a “relevant” museum or gallery in relation to a body to which this section applies;

(d)when specifying a museum or gallery under paragraph (b) or (c), provide that this section shall have effect in the case of the museum or gallery as if in subsection (1)(c) there were substituted for 1st April 2001 a later date specified in the order.

(10)References in this section to VAT do not include any VAT which, by virtue of any order under section 25(7), is excluded from credit under that section.

Textual Amendments

F111S. 33A inserted (11.5.2001 for specified purposes otherwise 1.9.2001) by 2001 c. 9, s. 98(2)(10)(11)

F112Words in s. 33A(4) substituted (1.4.2009) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 33; S.I. 2009/403, art. 2(1) (with art. 3)

Modifications etc. (not altering text)

C15S. 33A applied (with modifications) (1.9.2001) by S.I. 2001/2879, arts. 2-4, Sch.

[F11333BRefunds of VAT to AcademiesU.K.

(1)This section applies where—

(a)VAT is chargeable on—

(i)the supply of goods or services to the proprietor of an Academy,

(ii)the acquisition of any goods from another member State by the proprietor of an Academy, or

(iii)the importation of any goods from a place outside the member States by the proprietor of an Academy, and

(b)the supply, acquisition or importation is not for the purposes of any business carried on by the proprietor of the Academy.

(2)The Commissioners shall, on a claim made by the proprietor of the Academy at such time and in such form and manner as the Commissioners may determine, refund to that proprietor the amount of VAT so chargeable.

(3)Subject to subsection (4), the claim must be made before the end of the period of 4 years beginning with the day on which the supply is made or the acquisition or importation takes place.

(4)If the Commissioners so determine, the claim period is such shorter period beginning with that day as the Commissioners may determine.

(5)Subsection (6) applies where goods or services supplied to, or acquired or imported by, the proprietor of the Academy cannot be conveniently distinguished from goods or services supplied to, or acquired or imported by, it for the purpose of a business carried on by that proprietor.

(6)The amount to be refunded under this section is such amount as remains after deducting from the whole of the VAT chargeable on any supply to, or acquisition or importation by, the proprietor of the Academy such proportion of that VAT as appears to the Commissioners to be attributable to the carrying on of the business.

(7)References in this section to VAT do not include any VAT which, by virtue of an order under section 25(7), is excluded from credit under section 25.

(8)In this section—

(a)references to the proprietor of an Academy are to the proprietor of the Academy acting in that capacity, and

(b)Academy” and “proprietor” have the same meaning as in the Education Act 1996 (see section 579 of that Act).]

Textual Amendments

F113S. 33B inserted (with effect in accordance with s. 76(5) of the amending Act) by Finance Act 2011 (c. 11), s. 76(1)

[F11433CRefunds of VAT to charities within section 33DU.K.

(1)This section applies to a charity that falls within any of the descriptions in section 33D.

A charity to which this section applies is referred to in this section as a “qualifying charity”.

(2)This section applies where—

(a)VAT is chargeable on—

(i)the supply of goods or services to a qualifying charity,

(ii)the acquisition of any goods from another member State by a qualifying charity, or

(iii)the importation of any goods from a place outside the member States by a qualifying charity, and

(b)the supply, acquisition or importation is not for the purpose of any business carried on by the qualifying charity.

(3)The Commissioners shall, on a claim made by the qualifying charity at such time and in such form and manner as the Commissioners may determine, refund to the qualifying charity the amount of the VAT so chargeable.

(4)A claim under subsection (3) above in respect of a supply, acquisition or importation must be made before the end of the period of 4 years beginning with the day on which the supply is made or the acquisition or importation takes place.

(5)Subsection (6) applies where goods or services supplied to, or acquired or imported by, a qualifying charity otherwise than for the purpose of any business carried on by the qualifying charity cannot be conveniently distinguished from goods or services supplied to, or acquired or imported by, the qualifying charity for the purpose of such a business.

(6)The amount to be refunded under this section is such amount as remains after deducting from the whole of the VAT chargeable on any supply to, or acquisition or importation by, the qualifying charity such proportion of that VAT as appears to the Commissioners to be attributable to the carrying on of the business.

(7)References in this section to VAT do not include any VAT which, by virtue of an order under section 25(7), is excluded from credit under section 25.

Textual Amendments

F114Ss. 33C, 33D inserted (with effect in accordance with s. 66(5) of the amending Act) by Finance Act 2015 (c. 11), s. 66(1) (with s. 66(6))

33DCharities to which section 33C appliesU.K.

Palliative care charities

(1)Palliative care charity” means a charity the main purpose of which is the provision of palliative care at the direction of, or under the supervision of, a medical professional to persons who are in need of such care as a result of having a terminal illness.

(2)In subsection (1) “medical professional” means—

(a)a registered medical practitioner, or

(b)a registered nurse.

Air ambulance charities

(3)Air ambulance charity” means a charity the main purpose of which is to provide an air ambulance service in pursuance of arrangements made by, or at the request of, a relevant NHS body.

(4)In subsection (3) “relevant NHS body” means a body the main purpose of which is to provide ambulance services and which is—

(a)an NHS foundation trust in England,

(b)an NHS trust in Wales,

(c)a Special Health Board constituted under section 2 of the National Health Service (Scotland) Act 1978, or

(d)a Health and Social Care trust established under the Health and Personal Social Services (Northern Ireland) Order 1991.

Search and rescue charities

(5)Search and rescue charity” means a charity that meets condition A or B.

(6)Condition A is that—

(a)the main purpose of the charity is to carry out search and rescue activities in the United Kingdom or the UK marine area, and

(b)the search and rescue activities carried out by the charity are co-ordinated by a relevant authority.

(7)Condition B is that the main purpose of the charity is to support, develop and promote the activities of a charity which meets condition A.

(8)For the purposes of subsection (6)—

Medical courier charities

(9)Medical courier charity” means a charity that meets condition A or B.

(10)Condition A is that the main purpose of the charity is to provide services for the transportation of items intended for use for medical purposes, including in particular—

(a)blood;

(b)medicines and other medical supplies;

(c)items relating to people who are undergoing medical treatment.

(11)Condition B is that the main purpose of the charity is to support, develop and promote the activities of a charity which meets condition A.

(12)In subsection (10) “item” includes any substance.]

Textual Amendments

F114Ss. 33C, 33D inserted (with effect in accordance with s. 66(5) of the amending Act) by Finance Act 2015 (c. 11), s. 66(1) (with s. 66(6))

[F11533EPower to extend refunds of VAT to other personsU.K.

(1)This section applies where—

(a)VAT is chargeable on—

(i)the supply of goods or services to a specified person,

(ii)the acquisition of any goods from another member State by a specified person, or

(iii)the importation of any goods from a place outside the member States by a specified person, and

(b)the supply, acquisition or importation is not for the purpose of—

(i)any business carried on by the person, or

(ii)a supply by the person which, by virtue of section 41A, is treated as a supply in the course or furtherance of a business.

(2)If and to the extent that the Treasury so direct, the Commissioners shall, on a claim made by the specified person at such time and in such form and manner as the Commissioners may determine, refund to the person the amount of the VAT so chargeable.

This is subject to subsection (3) below.

(3)A specified person may not make a claim under subsection (2) above unless it has been agreed with the Treasury that, in the circumstances specified in the agreement, the amount of the person's funding is to be reduced by all or part of the amount of the VAT so chargeable.

(4)A claim under subsection (2) above in respect of a supply, acquisition or importation must be made on or before the relevant day.

(5)The “relevant day” is—

(a)in the case of a person who is registered, the last day on which the person may make a return under this Act for the prescribed accounting period containing the last day of the financial year in which the supply is made or the acquisition or importation takes place;

(b)in the case of a person who is not registered, the last day of the period of 3 months beginning immediately after the end of the financial year in which the supply is made or the acquisition or importation takes place.

(6)Subsection (7) applies where goods or services supplied to, or acquired or imported by, a specified person otherwise than for the purpose of—

(a)any business carried on by the person, or

(b)a supply falling within subsection (1)(b)(ii) above,

cannot be conveniently distinguished from goods or services supplied to, or acquired or imported by, the person for such a purpose.

(7)The amount to be refunded under this section is such amount as remains after deducting from the whole of the VAT chargeable on any supply to, or acquisition or importation by, the specified person such proportion of that VAT as appears to the Commissioners to be attributable to the carrying on of the business or (as the case may be) the making of the supply.

(8)In this section, “specified person” means a person specified in an order made by the Treasury.

(9)An order under subsection (8) may make transitional provision or savings.

(10)References in this section to VAT do not include any VAT which, by virtue of an order under section 25(7), is excluded from credit under section 25.]

Textual Amendments

F115S. 33E inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 122

34 Capital goods.U.K.

(1)The Treasury may by order make provision for the giving of relief, in such cases, to such extent and subject to such exceptions as may be specified in the order, from VAT paid on the supply, acquisition or importation for the purpose of a business carried on by any person of machinery or plant or any specified description of machinery or plant in cases where that VAT or part of that VAT cannot be credited under section 25 and such other conditions are satisfied as may be specified in the order.

(2)Without prejudice to the generality of subsection (1) above, an order under this section may provide for relief to be given by deduction or refunding of VAT and for aggregating or excluding the aggregation of value where goods of the same description are supplied, acquired or imported together.

35 Refund of VAT to persons constructing certain buildings.U.K.

[F116(1)Where—

(a)a person carries out works to which this section applies,

(b)his carrying out of the works is lawful and otherwise than in the course or furtherance of any business, and

(c)VAT is chargeable on the supply, acquisition or importation of any goods used by him for the purposes of the works,

the Commissioners shall, on a claim made in that behalf, refund to that person the amount of VAT so chargeable.

(1A)The works to which this section applies are—

(a)the construction of a building designed as a dwelling or number of dwellings;

(b)the construction of a building for use solely for a relevant residential purpose or relevant charitable purpose; and

(c)a residential conversion.

(1B)For the purposes of this section goods shall be treated as used for the purposes of works to which this section applies by the person carrying out the works in so far only as they are building materials which, in the course of the works, are incorporated in the building in question or its site.

(1C)Where—

(a)a person (“the relevant person”) carries out a residential conversion by arranging for any of the work of the conversion to be done by another (“a contractor”),

(b)the relevant person’s carrying out of the conversion is lawful and otherwise than in the course or furtherance of any business,

(c)the contractor is not acting as an architect, surveyor or consultant or in a supervisory capacity, and

(d)VAT is chargeable on services consisting in the work done by the contractor,

the Commissioners shall, on a claim made in that behalf, refund to the relevant person the amount of VAT so chargeable.

(1D)For the purposes of this section works constitute a residential conversion to the extent that they consist in the conversion of a non-residential building, or a non-residential part of a building, into—

(a)a building designed as a dwelling or a number of dwellings;

(b)a building intended for use solely for a relevant residential purpose; or

(c)anything which would fall within paragraph (a) or (b) above if different parts of a building were treated as separate buildings.]

(2)The Commissioners shall not be required to entertain a claim for a refund of VAT under this section unless the claim—

(a)is made within such time and in such form and manner, and

(b)contains such information, and

(c)is accompanied by such documents, whether by way of evidence or otherwise,

[F117as may be specified by regulations or by the Commissioners in accordance with regulations.]

(3)This section shall have effect—

(a)as if the reference in subsection (1) above to the VAT chargeable on the supply of any goods included a reference to VAT chargeable on the supply in accordance with the law of another member State; and

(b)in relation to VAT chargeable in accordance with the law of another member State, as if references to refunding VAT to any person were references to paying that person an amount equal to the VAT chargeable in accordance with the law of that member State;

and the provisions of this Act and of any other enactment or subordinate legislation (whenever passed or made) so far as they relate to a refund under this section shall be construed accordingly.

[F118(4)The notes to Group 5 of Schedule 8 shall apply for construing this section as they apply for construing that Group.

(5)The power of the Treasury by order under section 30 to vary Schedule 8 shall include—

(a)power to apply any variation made by the order for the purposes of this section; and

(b)power to make such consequential modifications of this section as they may think fit [F119but this is subject to subsection (4A) below.].]

[F120(4A)The meaning of “non-residential” given by Note (7A) of Group 5 of Schedule 8 (and not that given by Note (7) of that Group) applies for the purposes of this section but as if—

(a)references in that Note to item 3 of that Group were references to this section, and

(b)paragraph (b)(iii) of that Note were omitted.]

Textual Amendments

F116S. 35(1)(1A)-(1D) substituted (29.4.1996 with application as mentioned in s. 30(4) of the amending Act) for s. 35(1) by 1996 c. 8, s. 30(1)

F117Words in s. 35(2) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 4

F118S. 35(4)(5) inserted (29.4.1996 with application as mentioned in s. 30(4) of the amending Act) by 1996 c. 8, s. 30(3)

F119Words in s. 35(4) inserted (1.8.2001) by S.I. 2001/2305, art. 4(a)

F120S. 35(4A) inserted (1.8.2001) by S.I. 2001/2305, art. 4(b)

36 Bad debts.U.K.

(1)Subsection (2) below applies where—

(a)a person has supplied goods or services F121. . . and has accounted for and paid VAT on the supply,

(b)the whole or any part of the consideration for the supply has been written off in his accounts as a bad debt, and

(c)a period of 6 months (beginning with the date of the supply) has elapsed.

(2)Subject to the following provisions of this section and to regulations under it the person shall be entitled, on making a claim to the Commissioners, to a refund of the amount of VAT chargeable by reference to the outstanding amount.

[F122(3)In subsection (2) above “the outstanding amount” means—

(a)if at the time of the claim no part of the consideration written off in the claimant’s accounts as a bad debt has been received, an amount equal to the amount of the consideration so written off;

(b)if at that time any part of the consideration so written off has been received, an amount by which that part is exceeded by the amount of the consideration written off;

and in this subsection “received” means received either by the claimant or by a person to whom has been assigned a right to receive the whole or any part of the consideration written off.]

[F123(3A)For the purposes of this section, where the whole or any part of the consideration for the supply does not consist of money, the amount in money that shall be taken to represent any non-monetary part of the consideration shall be so much of the amount made up of—

(a)the value of the supply, and

(b)the VAT charged on the supply,

as is attributable to the non-monetary consideration in question.]

(4)A person shall not be entitled to a refund under subsection (2) above unless—

(a)the value of the supply is equal to or less than its open market value, F124. . .

F124(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4A)F125. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Regulations under this section may—

(a)require a claim to be made at such time and in such form and manner as may be specified by or under the regulations;

(b)require a claim to be evidenced and quantified by reference to such records and other documents as may be so specified;

(c)require the claimant to keep, for such period and in such form and manner as may be so specified, those records and documents and a record of such information relating to the claim and to [F126anything subsequently received] by way of consideration as may be so specified;

(d)require the repayment of a refund allowed under this section where any requirement of the regulations is not complied with;

(e)require the repayment of the whole or, as the case may be, an appropriate part of a refund allowed under this section [F127where any part (or further part) of the consideration written off in the claimant’s accounts as a bad debt is subsequently received either by the claimant or, except in such circumstances as may be prescribed, by a person to whom has been assigned a right to receive the whole or any part of that consideration;]

(ea)F128. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)include such supplementary, incidental, consequential or transitional provisions as appear to the Commissioners to be necessary or expedient for the purposes of this section;

(g)make different provision for different circumstances.

(6)The provisions which may be included in regulations by virtue of subsection (5)(f) above may include rules for ascertaining—

(a)whether, when and to what extent consideration is to be taken to have been written off in accounts as a bad debt;

(b)whether [F129anything received] is to be taken as received by way of consideration for a particular supply;

(c)whether, and to what extent, [F129anything received] is to be taken as received by way of consideration written off in accounts as a bad debt.

(7)The provisions which may be included in regulations by virtue of subsection (5)(f) above may include rules dealing with particular cases, such as those involving [F130receipt of part of the consideration] or mutual debts; and in particular such rules may vary the way in which the following amounts are to be calculated—

(a)the outstanding amount mentioned in subsection (2) above, and

(b)the amount of any repayment where a refund has been allowed under this section.

(8)Section 6 shall apply for determining the time when a supply is to be treated as taking place for the purposes of construing this section.

Textual Amendments

F121Words in s. 36(1)(a) repealed (31.7.1998 with effect as mentioned in s. 23(7) of the amending Act) by 1998 c. 36, ss. 23(1)(7), 165, Sch. 27 Pt. II Note

F122S. 36(3) substituted (27.7.1999 with effect as mentioned in s. 15(5) of the amending Act) by S.I. 1999 c. 16, s. 15(1)

F123S. 36(3A) inserted (31.7.1998 with effect as mentioned in s. 23(7) of the amending Act) by 1998 c. 36, s. 23(3)(7)

F124S. 36(4)(b) and word “and” immediately preceding it repealed (19.3.1997 with effect as mentioned in s. 39 of the amending Act) by 1997 c. 16, ss. 39, 113, Sch. 18 Pt. IV(3) Note

F125S. 36(4A) repealed (with effect as mentioned in s. 22(3) of the amending Act) by Finance Act 2002 (c. 23), s. 22(2), Sch. 40 Pt. 2(1); S.I. 2002/3028, art. 2

F126Words in s. 36(5)(c) substituted (31.7.1998) by 1998 c. 36, s. 23(4)(a)

F127Words in s. 36(5)(e) substituted (27.7.1999 with effect as mentioned in s. 15(5) of the amending Act) by 1999 c. 16, s. 15(2)

F128S. 36(5)(ea) repealed (with effect as mentioned in s. 22(3) of the amending Act) by Finance Act 2002 (c. 23), s. 22(2), Sch. 40 Pt. 2(1); S.I. 2002/3028, art. 2

F129Words in s. 36(6)(b)(c) substituted (31.7.1998) by 1998 c. 36, s. 23(5)

F130Words in s. 36(7) substituted (31.7.1998) by 1998 c. 36, s. 23(6)

[F131AcquisitionsU.K.

Textual Amendments

F131S. 36A and preceding cross heading inserted (24.7.2002) by Finance Act 2002 (c.23), s. 25

[F13236A Relief from VAT on acquisition if importation would attract reliefU.K.

(1)The Treasury may by order make provision for relieving from VAT the acquisition from another member State of any goods if, or to the extent that, relief from VAT would be given by an order under section 37 if the acquisition were an importation from a place outside the member States.

(2)An order under this section may provide for relief to be subject to such conditions as appear to the Treasury to be necessary or expedient.

These may—

(a)include conditions prohibiting or restricting the disposal of or dealing with the goods concerned;

(b)be framed by reference to the conditions to which, by virtue of any order under section 37 in force at the time of the acquisition, relief under such an order would be subject in the case of an importation of the goods concerned.

(3)Where relief from VAT given by an order under this section was subject to a condition that has been breached or not complied with, the VAT shall become payable at the time of the breach or, as the case may be, at the latest time allowed for compliance.]]

Textual Amendments

F132S. 36A and preceding cross heading inserted (24.7.2002) by Finance Act 2002 (c. 23), s. 25

Imports, overseas businesses etcU.K.

37 Relief from VAT on importation of goods.U.K.

(1)The Treasury may by order make provision for giving relief from the whole or part of the VAT chargeable on the importation of goods from places outside the member States, subject to such conditions (including conditions prohibiting or restricting the disposal of or dealing with the goods) as may be imposed by or under the order, if and so far as the relief appears to the Treasury to be necessary or expedient, having regard to any international agreement or arrangements.

(2)In any case where—

(a)it is proposed that goods which have been imported from a place outside the member States by any person (“the original importer”) with the benefit of relief under subsection (1) above shall be transferred to another person (“the transferee”), and

(b)on an application made by the transferee, the Commissioners direct that this subsection shall apply,

this Act shall have effect as if, on the date of the transfer of the goods (and in place of the transfer), the goods were exported by the original importer and imported by the transferee and, accordingly, where appropriate, provision made under subsection (1) above shall have effect in relation to the VAT chargeable on the importation of the goods by the transferee.

(3)The Commissioners may by regulations make provision for remitting or repaying, if they think fit, the whole or part of the VAT chargeable on the importation of any goods from places outside the member States which are shown to their satisfaction to have been previously exported from the United Kingdom or removed from any member State.

(4)The Commissioners may by regulations make provision for remitting or repaying the whole or part of the VAT chargeable on the importation of any goods from places outside the member States if they are satisfied that the goods have been or are to be re-exported or otherwise removed from the United Kingdom and they think fit to do so in all the circumstances and having regard—

(a)to the VAT chargeable on the supply of like goods in the United Kingdom;

(b)to any VAT which may have become chargeable in another member State in respect of the goods.

Modifications etc. (not altering text)

C16S. 37(1) extended (27.7.1999) by 1999 c. 16, s. 13(3)

38 Importation of goods by taxable persons.U.K.

The Commissioners may by regulations make provision for enabling goods imported from a place outside the member States by a taxable person in the course or furtherance of any business carried on by him to be delivered or removed, subject to such conditions or restrictions as the Commissioners may impose for the protection of the revenue, without payment of the VAT chargeable on the importation, and for that VAT to be accounted for together with the VAT chargeable on the supply of goods or services by him or on the acquisition of goods by him from other member States.

39 Repayment of VAT to those in business overseas.U.K.

(1)The Commissioners may, by means of a scheme embodied in regulations, provide for the repayment, to persons to whom this section applies, of VAT on supplies to them in the United Kingdom or on the importation of goods by them from places outside the member States which would be input tax of theirs if they were taxable persons in the United Kingdom.

(2)This section—

(a)applies to persons carrying on business in another member State, and

(b)shall apply also to persons carrying on business in other countries, if, pursuant to any [F47EU] Directive, rules are adopted by the Council of the [F46European Union] about refunds of VAT to persons established elsewhere than in the member States,

but does not apply to persons carrying on business in the United Kingdom.

(3)Repayment shall be made in such cases [F133and to such extent] only, and subject to such conditions, as the scheme may prescribe (being conditions specified in the regulations or imposed by the Commissioners either generally or in particular cases); and the scheme may provide—

[F134(za)for claims to be made in such form and manner as may be specified in the scheme or by the Commissioners in accordance with the scheme;]

(a)for claims and repayments to be made only through agents in the United Kingdom;

(b)either generally or for specified purposes—

(i)for the agents to be treated under this Act as if they were taxable persons; and

(ii)for treating claims as if they were returns under this Act [F135in respect of such period as may be prescribed] and repayments as if they were repayments of input tax; F136...

[F137(ba)for and in connection with the payment of interest to or by the Commissioners (including in relation to the repayment of interest wrongly paid), and]

[F138(c)for generally regulating—

(i)the time by which claims must be made, and

(ii)the methods by which the amount of any repayment is to be determined and the repayment is to be made.]

Textual Amendments

F133Words in s. 39(3) inserted (21.7.2009) by Finance Act 2009 (c. 10), s. 77(2)(a)

F134S. 39(3)(za) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 5(2)

F135Words in s. 39(3)(b)(ii) inserted (21.7.2009) by Finance Act 2009 (c. 10), s. 77(2)(b)

F136Word in s. 39(3)(b)(ii) omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), s. 77(2)(b)

F137S. 39(3)(ba) inserted (21.7.2009) by Finance Act 2009 (c. 10), s. 77(2)(c)

F138S. 39(3)(c) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 5(3)

[F13939AApplications for forwarding of VAT repayment claims to other member StatesU.K.

The Commissioners must make arrangements for dealing with applications made to the Commissioners by taxable persons, in accordance with Council Directive 2008/9/EC, for the forwarding to the tax authorities of another member State of claims for refunds of VAT on—

(a)supplies to them in that member State, or

(b)the importation of goods by them into that member State from places outside the member States.]

Textual Amendments

F139S. 39A inserted (21.7.2009) by Finance Act 2009 (c. 10), s. 77(3)

40 Refunds in relation to new means of transport supplied to other member States.U.K.

(1)Subject to subsection (2) below, where a person who is not a taxable person makes such a supply of goods consisting in a new means of transport as involves the removal of the goods to another member State, the Commissioners shall, on a claim made in that behalf, refund to that person, as the case may be—

(a)the amount of any VAT on the supply of that means of transport to that person, or

(b)the amount of any VAT paid by that person on the acquisition of that means of transport from another member State or on its importation from a place outside the member States.

(2)The amount of VAT refunded under this section shall not exceed the amount that would have been payable on the supply involving the removal if it had been a taxable supply by a taxable person and had not been zero-rated.

(3)The Commissioners shall not be entitled to entertain a claim for refund of VAT under this section unless the claim—

(a)is made within such time and in such form and manner;

(b)contains such information; and

(c)is accompanied by such documents, whether by way of evidence or otherwise,

as the Commissioners may by regulations prescribe.

Part IIIU.K. Application of Act in particular cases

41 Application to the Crown.U.K.

(1)This Act shall apply in relation to taxable supplies by the Crown as it applies in relation to taxable supplies by taxable persons.

F140(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Where VAT is chargeable on the supply of goods or services to a Government department, on the acquisition of any goods by a Government department from another member State or on the importation of any goods by a Government department from a place outside the member States and the supply, acquisition or importation is not for the purpose—

(a)of any business carried on by the department, or

(b)of a supply by the department which, by virtue of [F141section 41A,] is treated as a supply in the course or furtherance of a business,

then, if and to the extent that the Treasury so direct and subject to subsection (4) below, the Commissioners shall, on a claim made by the department at such time and in such form and manner as the Commissioners may determine, refund to it the amount of the VAT so chargeable.

(4)The Commissioners may make the refunding of any amount due under subsection (3) above conditional upon compliance by the claimant with requirements with respect to the keeping, preservation and production of records relating to the supply, acquisition or importation in question.

(5)For the purposes of this section goods or services obtained by one Government department from another Government department shall be treated, if and to the extent that the Treasury so direct, as supplied by that other department and similarly as regards goods or services obtained by or from the Crown Estate Commissioners.

(6)In this section “Government department” includes [F142the Scottish Administration][F143, the [F144Welsh Assembly Government],] a Northern Ireland department, a Northern Ireland health and social services body, any body of persons exercising functions on behalf of a Minister of the Crown, including F145. . . any part of a Government department (as defined in the foregoing) designated for the purposes of this subsection by a direction of the Treasury.

(7)For the purposes of subsection (6) [F146each of the following is to be regarded as a body of persons exercising functions on behalf of a Minister of the Crown] [F147

(a)][F148a health service body as defined in section 60(7) of the National Health Service and Community Care Act 1990,

[F149(b)] a National Health Service trust established under Part I of that Act] or the M11National Health Service (Scotland) Act 1978 [F150,

(c)][F151 an NHS foundation trust][F152[F153,

(d)]a Primary Care Trust] [F154[F155,

(e)]a Local Health Board] [F156[F157,

(f)]a clinical commissioning group,

[F158(g)]the Health and Social Care Information Centre,

[F159(h)]the National Health Service Commissioning Board[F160,

(i)]the National Institute for Health and Care Excellence][F161,

[F162(j)]Health Education England (established by the Care Act 2014), F163...

[F164(k)] the Health Research Authority (also established by that Act),]

[F165(l)a strategic highways company appointed under section 1 of the Infrastructure Act 2015.]

(8)In subsection (6) “a Northern Ireland health and social services body” means—

(a)a health and social services body as defined in Article 7(6) of the M12Health and Personal Social Services (Northern Ireland) Order 1991; and

(b)a Health and Social Services trust established under that Order.

Textual Amendments

F140S. 41(2) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), s. 198(2)(a)

F141Words in s. 41(3)(b) substituted (17.7.2012) by Finance Act 2012 (c. 14), s. 198(2)(b)

F142Words in s. 41(6) inserted (6.5.1999) by 1998 c. 46, s. 125, Sch. 8 para. 30 (with s. 126(3)); S.I. 1998/3178, art. 2(2), Sch. 3

F143Words in s. 41(6) inserted (1.4.1999) by 1998 c. 38, s. 125, Sch. 12 para. 35 (with ss. 139(2), 143(2)); S.I. 1999/782, art. 2

F144Words in s. 41(6) substituted by Government of Wales Act 2006 (c. 32), ss. 160, 163, Sch. 10 para. 39 (with Sch. 11 para. 22), the amending provision coming into force immediately after "the 2007 election" (held on 3.5.2007) subject to s. 161(1)(4)(5) of the amending Act, which provides for certain provisions to come into force for specified purposes immediately after the end of "the initial period" (which ended with the day of the first appointment of a First Minister on 25.5.2007) - see ss. 46, 161(4)(5) of the amending Act.

F145Words in s. 41(6) omitted (8.2.2000) by virtue of S.I. 2000/90, art. 3(1), Sch. 1 para. 29(a) (with art. 2(5))

F146Words in s. 41(7) inserted (1.4.2015) by Finance Act 2015 (c. 11), s. 67(1)(a)(2)

F147Word in s. 41(7) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(a)

F148Words in s. 41(7) substituted (8.2.2000) by S.I. 2000/90, art. 3(1), Sch. 1 para. 29(b) (with art. 2(5))

F149Word in s. 41(7) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(b)

F150Word in s. 41(7) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(c)

F152Words in s. 41(7) inserted (1.4.2000 (E.W.) otherwise 11.5.2001) by 1999 c. 8, s. 65, Sch. 4 para. 86; S.I. 1999/2342, art. 2(4)(b)(iii); S.I. 2001/1985, art. 2(4)

F153Word in s. 41(7) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(d)

F154Words in s. 41(7) inserted (10.10.2002 for W., 1.3.2007 in so far as not already in force, immediately before the National Health Service Act 2006 comes into force) by National Health Service Reform and Health Care Professions Act 2002 (c. 17), s. 42(3), Sch. 5 para. 40; S.I. 2002/2532, art. 2, Sch.; S.I. 2006/1407, art. 1(1), Sch. 1 para. 12 (with art. 4)

F155Word in s. 41(7) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(e)

F156Words in s. 41(7) inserted (retrospective to 1.4.2013) by Finance Act 2013 (c. 29), s. 191(1)(2)

F157Word in s. 41(7) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(f)

F158Word in s. 41(7) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(g)

F159Word in s. 41(7) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(h)

F160Word in s. 41(7) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(i)

F161Words in s. 41(7) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(1)

F162Word in s. 41(7) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(j)

F163Word in s. 41(7) omitted (1.4.2015) by virtue of Finance Act 2015 (c. 11), s. 67(1)(b)(2)

F164Word in s. 41(7) inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 107(2)(k)(l)

F165S. 41(7)(l) substituted for words (1.4.2015) by Finance Act 2015 (c. 11), s. 67(1)(c)(2)

Modifications etc. (not altering text)

C17S. 41 modified (2.12.1999) by S.I. 1999/3145, art. 8; S.I. 1999/3208, art. 2

Marginal Citations

[F16641ASupply of goods or services by public bodiesU.K.

(1)This section applies where goods or services are supplied by a body mentioned in Article 13(1) of the VAT Directive (status of public bodies as taxable persons) in the course of activities or transactions in which it is engaged as a public authority.

(2)If the supply is in respect of an activity listed in Annex I to the VAT Directive (activities in respect of which public bodies are to be taxable persons), it is to be treated for the purposes of this Act as a supply in the course or furtherance of a business unless it is on such a small scale as to be negligible.

(3)If the supply is not in respect of such an activity, it is to be treated for the purposes of this Act as a supply in the course or furtherance of a business if (and only if) not charging VAT on the supply would lead to a significant distortion of competition.

(4)In this section “the VAT Directive” means Council Directive 2006/112/EC on the common system of value added tax.]

Textual Amendments

F166S. 41A inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 198(3)

42 Local authorities.U.K.

A local authority which makes taxable supplies is liable to be registered under this Act, whatever the value of the supplies; and accordingly Schedule 1 shall apply, in a case where the value of the taxable supplies made by a local authority in any period of one year does not exceed the sum for the time being specified in paragraph 1(1)(a) of that Schedule, as if that value exceeded that sum.

43 Groups of companies.U.K.

(1)Where under [F167sections 43A to 43D] any bodies corporate are treated as members of a group, any business carried on by a member of the group shall be treated as carried on by the representative member, and—

(a)any supply of goods or services by a member of the group to another member of the group shall be disregarded; and

(b)any [F168supply which is a supply to which paragraph (a) above does not apply and is a supply] of goods or services by or to a member of the group shall be treated as a supply by or to the representative member; and

(c)any VAT paid or payable by a member of the group on the acquisition of goods from another member State or on the importation of goods from a place outside the member States shall be treated as paid or payable by the representative member and the goods shall be treated—

(i)in the case of goods acquired from another member State, for the purposes of section 73(7); and

(ii)in the case of goods imported from a place outside the member States, for those purposes and the purposes of section 38,

as acquired or, as the case may be, imported by the representative member;

and all members of the group shall be liable jointly and severally for any VAT due from the representative member.

[F169(1AA)Where—

(a) it is material, for the purposes of any provision made by or under this Act (“ the relevant provision ”), whether the person by or to whom a supply is made, or the person by whom goods are acquired or imported, is a person of a particular description,

(b)paragraph (b) or (c) of subsection (1) above applies to any supply, acquisition or importation, and

(c)there is a difference that would be material for the purposes of the relevant provision between—

(i)the description applicable to the representative member, and

(ii)the description applicable to the body which (apart from this section) would be regarded for the purposes of this Act as making the supply, acquisition or importation or, as the case may be, as being the person to whom the supply is made,

the relevant provision shall have effect in relation to that supply, acquisition or importation as if the only description applicable to the representative member were the description in fact applicable to that body.

(1AB)Subsection (1AA) above does not apply to the extent that what is material for the purposes of the relevant provision is whether a person is a taxable person.]

(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)An order under section 5(5) or (6) may make provision for securing that any goods or services which, if all the members of the group were one person, would fall to be treated under that section as supplied to and by that person, are treated as supplied to and by the representative member [F170and may provide for that purpose that the representative member is to be treated as a person of such description as may be determined under the order.].

[F171(2A) A supply made by a member of a group (“ the supplier ”) to another member of the group (“ the UK member ”) shall not be disregarded under subsection (1)(a) above if—

(a)it would (if there were no group) be a supply of services [F172to which section 7A(2)(a) applies made] to a person belonging in the United Kingdom;

(b)those services are not within any of the descriptions specified in Schedule 9;

(c)the supplier has been supplied (whether or not by a person belonging in the United Kingdom) with [F173any services F174... which do not fall within any of the descriptions specified in Schedule 9 [F175and section 7A(2)(a) applied to the supply];]

(d)the supplier belonged outside the United Kingdom when it was supplied with the services mentioned in paragraph (c) above; and

(e)the services so mentioned have been used by the supplier for making the supply to the UK member.

(2B)Subject to subsection (2C) below, where a supply is excluded by virtue of subsection (2A) above from the supplies that are disregarded in pursuance of subsection (1)(a) above, all the same consequences shall follow under this Act as if that supply—

(a)were a taxable supply in the United Kingdom by the representative member to itself, and

(b)without prejudice to that, were made by the representative member in the course or furtherance of its business.

(2C)[F176Except in so far as the Commissioners may by regulations otherwise provide,] a supply which is deemed by virtue of subsection (2B) above to be a supply by the representative member to itself—

(a)shall not be taken into account as a supply made by the representative member when determining any allowance of input tax under section 26(1) in the case of the representative member;

(b)shall be deemed for the purposes of paragraph 1 of Schedule 6 to be a supply in the case of which the person making the supply and the person supplied are connected within the meaning of [F177section 1122 of the Corporation Tax Act 2010] (connected persons); and

(c)subject to paragraph (b) above [F178and paragraph 8A of Schedule 6], shall be taken to be a supply the value and time of which are determined as if it were a supply of services which is treated by virtue of section 8 as made by the person by whom the services are received.

(2D)For the purposes of subsection (2A) above where—

(a) there has been a supply of the assets of a business of a person (“ the transferor ”) to a person to whom the whole or any part of that business was transferred as a going concern (“ the transferee ”),

(b)that supply is either—

(i)a supply falling to be treated, in accordance with an order under section 5(3), as being neither a supply of goods nor a supply of services, or

(ii)a supply that would have fallen to be so treated if it had taken place in the United Kingdom,

and

(c)the transferor was supplied with services F179... at a time before the transfer when the transferor belonged outside the United Kingdom [F180and section 7A(2)(a) applied to the supply],

those services, so far as they are used by the transferee for making any supply [F181to which section 7A(2)(a) applies,] shall be deemed to have been supplied to the transferee at a time when the transferee belonged outside the United Kingdom.

(2E)Where, in the case of a supply of assets falling within paragraphs (a) and (b) of subsection (2D) above—

(a)the transferor himself acquired any of the assets in question by way of a previous supply of assets falling within those paragraphs, and

(b)[F182there is a supply to which section 7A(2)(a) applies of services which, if used by the transferor for making such a supply,] would be deemed by virtue of that subsection to have been supplied to the transferor at a time when he belonged outside the United Kingdom,

that subsection shall have effect, notwithstanding that the services have not been so used by the transferor, as if the transferor were a person to whom those services were supplied and as if he were a person belonging outside the United Kingdom at the time of their deemed supply to him; and this subsection shall apply accordingly through any number of successive supplies of assets falling within paragraphs (a) and (b) of that subsection.]

F183(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F184(5A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F185(9)Schedule 9A (which makes provision for ensuring that this section is not used for tax avoidance) shall have effect.]

Textual Amendments

F167Words in s. 43(1) substituted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(3)

F168Words in s. 43(1)(b) substituted (1.5.1995 with effect as mentioned in s. 25(5) of the amending Act) by 1995 c. 4, s. 25(2)(5)

F169S. 43(1AA)(1AB) inserted (with effect in relation to any supply made after 26.11.1996 and in relation to any acquisition or importation taking place after that date) by 1997 c. 16, s. 40(1)(3)

F170Words in s. 43(2) inserted (19.3.1997) by 1997 c. 16, s. 40(2)

F171S. 43(2A)-(2E) inserted (with effect in relation to supplies made on or after 26.11.1996) by 1997 c. 16, s. 41(1)(2)

F172Words in s. 43(2A)(a) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 paras. 7(2)(a), 14(2) (with Sch. 36 paras. 14(2), 19)

F173Words in s. 43(2A) substituted (19.3.1997) by 1997 c. 16, s. 41(3)(4)

F174Words in s. 43(2A)(c) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 paras. 7(2)(b)(i), 14(2) (with Sch. 36 paras. 14(2), 19)

F175Words in s. 43(2A)(c) inserted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 paras. 7(2)(b)(ii), 14(2) (with Sch. 36 paras. 14(2), 19)

F176Words in s. 43(2C) inserted (19.3.1997) by 1997 c. 16, s. 41(3)(5)

F177Words in s. 43(2C)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 285(a) (with Sch. 2)

F178Words in s. 43(2C)(c) inserted (with effect in accordance with s. 200(8) of the amending Act) by Finance Act 2012 (c. 14), s. 200(2)

F179Words in s. 43(2D)(c) omitted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 36 paras. 7(3)(a)(i), 14(2) (with Sch. 36 paras. 14(2), 19)

F180Words in s. 43(2D)(c) inserted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 paras. 7(3)(a)(ii), 14(2) (with Sch. 36 paras. 14(2), 19)

F181Words in s. 43(2D) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 paras. 7(3)(b), 14(2) (with Sch. 36 paras. 14(2), 19)

F182Words in s. 43(2E)(b) substituted (with effect in accordance with Sch. 36 para. 14(3) of the amending Act) by Finance Act 2009 (c. 10), Sch. 36 paras. 7(4), 14(2) (with Sch. 36 paras. 14(2), 19)

F183S 43(3)-(8) repealed (27.7.1999 with effect as mentioned in Sch. 2 para. 6 of the amending Act)) by 1999 c. 16, ss. 16, 139, Sch. 2 para. 1(3), Sch. 20 Pt. II(1)

F184S. 43(5A) inserted (1.5.1995 with effect as mentioned in s. 25(5) of the amending Act) by 1995 c. 4, s. 25(4)(5)

F185S. 43(9) inserted (29.4.1996) by 1996 c. 8, s. 31(1)

[43AF186Groups: eligibility.U.K.

(1)Two or more bodies corporate are eligible to be treated as members of a group if each is established or has a fixed establishment in the United Kingdom and—

(a)one of them controls each of the others,

(b)one person (whether a body corporate or an individual) controls all of them, or

(c)two or more individuals carrying on a business in partnership control all of them.

(2)For the purposes of this section a body corporate shall be taken to control another body corporate if it is empowered by statute to control that body’s activities or if it is that body’s holding company within the meaning of section [F1871159 of and Schedule 6 to] the Companies Act [F1872006].

(3)For the purposes of this section an individual or individuals shall be taken to control a body corporate if he or they, were he or they a company, would be that body’s holding company within the meaning of [F188those provisions].]

Textual Amendments

F186Ss. 43A-43C inserted (27.7.1999) by 1999 c. 16, s. 16, Sch. 2 para. 2

Modifications etc. (not altering text)

C19Ss. 43A-43D applied (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 45(3)

[F18943AAPower to alter eligibility for groupingU.K.

(1)The Treasury may by order provide for section 43A to have effect with specified modifications in relation to a specified class of person.

(2)An order under subsection (1) may, in particular—

(a)make provision by reference to generally accepted accounting practice;

(b)define generally accepted accounting practice for that purpose by reference to a specified document or instrument (and may provide for the reference to be read as including a reference to any later document or instrument that amends or replaces the first);

(c)adopt any statutory or other definition of generally accepted accounting practice (with or without modification);

(d)make provision by reference to what would be required or permitted by generally accepted accounting practice if accounts, or accounts of a specified kind, were prepared for a person.

(3)An order under subsection (1) may also, in particular, make provision by reference to—

(a)the nature of a person;

(b)past or intended future activities of a person;

(c)the relationship between a number of persons;

(d)the effect of including a person within a group or of excluding a person from a group.

(4)An order under subsection (1) may—

(a)make provision which applies generally or only in specified circumstances;

(b)make different provision for different circumstances;

(c)include supplementary, incidental, consequential or transitional provision.]

Textual Amendments

F189S. 43AA inserted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(1)

Modifications etc. (not altering text)

C19Ss. 43A-43D applied (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 45(3)

[F19043B Groups: applications.U.K.

(1)This section applies where an application is made to the Commissioners for two or more bodies corporate, which are eligible [F191by virtue of section 43A], to be treated as members of a group.

(2)This section also applies where two or more bodies corporate are treated as members of a group and an application is made to the Commissioners—

(a)for another body corporate, which is eligible [F192by virtue of section 43A] to be treated as a member of the group, to be treated as a member of the group,

(b)for a body corporate to cease to be treated as a member of the group,

(c)for a member to be substituted as the group’s representative member, or

(d)for the bodies corporate no longer to be treated as members of a group.

(3)An application with respect to any bodies corporate—

(a)must be made by one of them or by the person controlling them, and

(b)in the case of an application for the bodies to be treated as a group, must appoint one of them as the representative member.

(4)Where this section applies in relation to an application it shall, subject to subsection (6) below, be taken to be granted with effect from—

(a)the day on which the application is received by the Commissioners, or

(b)such earlier or later time as the Commissioners may allow.

(5)The Commissioners may refuse an application, within the period of 90 days starting with the day on which it was received by them, if it appears to them—

(a)in the case of an application such as is mentioned in subsection (1) above, that the bodies corporate are not eligible [F193by virtue of section 43A] to be treated as members of a group,

(b)in the case of an application such as is mentioned in subsection (2)(a) above, that the body corporate is not eligible [F194by virtue of section 43A] to be treated as a member of the group, or

(c)in any case, that refusal of the application is necessary for the protection of the revenue.

(6)If the Commissioners refuse an application it shall be taken never to have been granted.]

Textual Amendments

F190Ss. 43A-43C inserted (27.7.1999) by 1999 c. 16, s. 16, Sch. 2 para. 2

F191Words in s. 43B(1) substituted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(4)

F192Words in s. 43B(2)(a) substituted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(4)

F193Words in s. 43B(5)(a) substituted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(4)

F194Words in s. 43B(5)(b) substituted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(4)

Modifications etc. (not altering text)

C19Ss. 43A-43D applied (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 45(3)

[F19543C Groups: termination of membership.U.K.

(1)The Commissioners may, by notice given to a body corporate, terminate its treatment as a member of a group from a date—

(a)which is specified in the notice, and

(b)which is, or falls after, the date on which the notice is given.

(2)The Commissioners may give a notice under subsection (1) above only if it appears to them to be necessary for the protection of the revenue.

(3)Where—

(a)a body is treated as a member of a group, and

(b)it appears to the Commissioners that the body is not, or is no longer, eligible [F196by virtue of section 43A] to be treated as a member of the group,

the Commissioners shall, by notice given to the body, terminate its treatment as a member of the group from a date specified in the notice.

(4)The date specified in a notice under subsection (3) above may be earlier than the date on which the notice is given but shall not be earlier than—

(a)the first date on which, in the opinion of the Commissioners, the body was not eligible to be treated as a member of the group, or

(b)the date on which, in the opinion of the Commissioners, the body ceased to be eligible to be treated as a member of the group.]

Textual Amendments

F195Ss. 43A-43C inserted (27.7.1999) by 1999 c. 16, s. 16, Sch. 2 para. 2

F196Words in s. 43C(3)(b) substituted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(4)

Modifications etc. (not altering text)

C19Ss. 43A-43D applied (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 45(3)

[F19743DGroups: duplicationU.K.

(1)A body corporate may not be treated as a member of more than one group at a time.

(2)A body which is a member of one group is not eligible by virtue of section 43A to be treated as a member of another group.

(3)If—

(a)an application under section 43B(1) would have effect from a time in accordance with section 43B(4), but

(b)at that time one or more of the bodies specified in the application is a member of a group (other than that to which the application relates),

the application shall have effect from that time, but with the exclusion of the body or bodies mentioned in paragraph (b).

(4)If—

(a)an application under section 43B(2)(a) would have effect from a time in accordance with section 43B(4), but

(b)at that time the body specified in the application is a member of a group (other than that to which the application relates),

the application shall have no effect.

(5)Where a body is a subject of two or more applications under section 43B(1) or (2)(a) that have not been granted or refused, the applications shall have no effect.]

Textual Amendments

F197S. 43D inserted (22.7.2004) by Finance Act 2004 (c. 12), s. 20(2)

Modifications etc. (not altering text)

C19Ss. 43A-43D applied (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 45(3)

44 Supplies to groups.U.K.

(1)Subject to subsections (2) to (4) below, subsection (5) below applies where—

(a)a business, or part of a business, carried on by a taxable person is transferred as a going concern to a body corporate treated as a member of a group under section 43;

(b)on the transfer of the business or part, chargeable assets of the business are transferred to the body corporate; and

(c)the transfer of the assets is treated by virtue of section 5(3)(c) as neither a supply of goods nor a supply of services.

(2)Subsection (5) below shall not apply if the representative member of the group is entitled to credit for the whole of the input tax on supplies to it and acquisitions and importations by it—

(a)during the prescribed accounting period in which the assets are transferred, and

(b)during any longer period to which regulations under section 26(3)(b) relate and in which the assets are transferred.

(3)Subsection (5) below shall not apply if the Commissioners are satisfied that the assets were assets of the taxable person transferring them more than 3 years before the day on which they are transferred.

(4)Subsection (5) below shall not apply to the extent that the chargeable assets consist of capital items in respect of which regulations made under section 26(3) and (4), and in force when the assets are transferred, provide for adjustment to the deduction of input tax.

(5)The chargeable assets shall be treated for the purposes of this Act as being, on the day on which they are transferred, both supplied to the representative member of the group for the purpose of its business and supplied by that member in the course or furtherance of its business.

(6)A supply treated under subsection (5) above as made by a representative member shall not be taken into account as a supply made by him when determining the allowance of input tax in his case under section 26.

(7)The value of a supply treated under subsection (5) above as made to or by a representative member shall be taken to be the open market value of the chargeable assets.

(8)For the purposes of this section, the open market value of any chargeable assets shall be taken to be the price that would be paid on a sale (on which no VAT is payable) between a buyer and a seller who are not in such a relationship as to affect the price.

(9)The Commissioners may reduce the VAT chargeable by virtue of subsection (5) above in a case where they are satisfied that the person by whom the chargeable assets are transferred has not received credit for the full amount of input tax arising on the supply to or acquisition or importation by him of the chargeable assets.

(10)For the purposes of this section, assets are chargeable assets if their supply in the United Kingdom by a taxable person in the course or furtherance of his business would be a taxable supply (and not a zero-rated supply).

45 Partnerships.U.K.

(1)The registration under this Act of persons—

(a)carrying on a business in partnership, or

(b)carrying on in partnership any other activities in the course or furtherance of which they acquire goods from other member States,

may be in the name of the firm; and no account shall be taken, in determining for any purpose of this Act whether goods or services are supplied to or by such persons or are acquired by such persons from another member State, of any change in the partnership.

(2)Without prejudice to section 36 of the M13Partnership Act 1890 (rights of persons dealing with firm against apparent members of firm), until the date on which a change in the partnership is notified to the Commissioners a person who has ceased to be a member of a partnership shall be regarded as continuing to be a partner for the purposes of this Act and, in particular, for the purpose of any liability for VAT on the supply of goods or services by the partnership or on the acquisition of goods by the partnership from another member State.

(3)Where a person ceases to be a member of a partnership during a prescribed accounting period (or is treated as so doing by virtue of subsection (2) above) any notice, whether of assessment or otherwise, which is served on the partnership and relates to, or to any matter arising in, that period or any earlier period during the whole or part of which he was a member of the partnership shall be treated as served also on him.

(4)Without prejudice to section 16 of the M14Partnership Act 1890 (notice to acting partner to be notice to the firm) any notice, whether of assessment or otherwise, which is addressed to a partnership by the name in which it is registered by virtue of subsection (1) above and is served in accordance with this Act shall be treated for the purposes of this Act as served on the partnership and, accordingly, where subsection (3) above applies, as served also on the former partner.

(5)Subsections (1) and (3) above shall not affect the extent to which, under section 9 of the M15Partnership Act 1890, a partner is liable for VAT owed by the firm; but where a person is a partner in a firm during part only of a prescribed accounting period, his liability for VAT on the supply by the firm of goods or services during that accounting period or on the acquisition during that period by the firm of any goods from another member State shall be such proportion of the firm’s liability as may be just.

46 Business carried on in divisions or by unincorporated bodies, personal representatives etc.U.K.

(1)The registration under this Act of a body corporate carrying on a business in several divisions may, if the body corporate so requests and the Commissioners see fit, be in the names of those divisions.

(2)The Commissioners may by regulations make provision for determining by what persons anything required by or under this Act to be done by a person carrying on a business is to be done where a business is carried on in partnership or by a club, association or organisation the affairs of which are managed by its members or a committee or committees of its members.

(3)The registration under this Act of any such club, association or organisation may be in the name of the club, association or organisation; and in determining whether goods or services are supplied to or by such a club, association or organisation or whether goods are acquired by such a club, association or organisation from another member State, no account shall be taken of any change in its members.

(4)The Commissioners may by regulations make provision for persons who carry on a business of a taxable person who has died or become bankrupt or has had his estate sequestrated or has become incapacitated to be treated for a limited time as taxable persons, and for securing continuity in the application of this Act in cases where persons are so treated.

(5)In relation to a company which is a taxable person, the reference in subsection (4) above to the taxable person having become bankrupt or having had his estate sequestrated or having become incapacitated shall be construed as a reference to its being in liquidation or receivership or [F198administration].

(6)References in this section to a business include references to any other activities in the course or furtherance of which any body corporate or any club, association, organisation or other unincorporated body acquires goods from another member State.

Textual Amendments

47 Agents etc.U.K.

(1)Where—

(a)goods are acquired from another member State by a person who is not a taxable person and a taxable person acts in relation to the acquisition, and then supplies the goods as agent for the person by whom they are so acquired; or

(b)goods are imported from a place outside the member States by a taxable person who supplies them as agent for a person who is not a taxable person,

[F199then, if the taxable person acts in relation to the supply in his own name, the goods shall] be treated for the purposes of this Act as acquired and supplied or, as the case may be, imported and supplied by the taxable person as principal.

(2)For the purposes of subsection (1) above a person who is not resident in the United Kingdom and whose place or principal place of business is outside the United Kingdom may be treated as not being a taxable person if as a result he will not be required to be registered under this Act.

[F200(2A)Where, in the case of any supply of goods to which subsection (1) above does not apply, goods are supplied through an agent who acts in his own name, the supply shall be treated both as a supply to the agent and as a supply by the agent.]

(3)Where F201. . . services[F202, other than electronically supplied services and telecommunication services,] are supplied through an agent who acts in his own name the Commissioners may, if they think fit, treat the supply both as a supply to the agent and as a supply by the agent.

[F203(4)Where electronically supplied services or telecommunication services are supplied through an agent, the supply is to be treated both as a supply to the agent and as a supply by the agent.

(5)For the purposes of subsection (4) “agent” means a person (“A”) who acts in A's own name but on behalf of another person within the meaning of Article 28 of Council Directive 2006/112/EC on the common system of value added tax.

(6)In this section “electronically supplied services” and “telecommunication services” have the same meaning as in Schedule 4A (see paragraph 9(3) and (4) and [F204paragraph 9E(2)] of that Schedule).]

Textual Amendments

F199Words in s. 47(1) substituted (1.5.1995 with effect as mentioned in s. 23(4)(a) of the amending Act) by 1995 c. 4, s. 23(1)

F200S. 47(2A) inserted (1.5.1995 with effect as mentioned in s. 23(4)(b) of the amending Act) by 1995 c. 4, s. 23(2)

F201Words in s. 47(3) repealed (1.5.1995 with effect as mentioned in s. 23(4)(b) of the amending Act) by 1995 c. 4, ss. 23(3), 162, Sch. 29 Pt. VI(2) Note

F202Words in s. 47(3) inserted (with effect in accordance with s. 106(4) of the amending Act) by Finance Act 2014 (c. 26), s. 106(2)

F203S. 47(4)-(6) inserted (with effect in accordance with s. 106(4) of the amending Act) by Finance Act 2014 (c. 26), s. 106(3)

F204Words in s. 47(6) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Place of Supply of Services) (Telecommunication Services) Order 2017 (S.I. 2017/778), arts. 1(1), 5

48 VAT representatives [F205and security].U.K.

(1)[F206Subsection (1ZA) applies where] any person—

(a)is a taxable person for the purposes of this Act or, without being a taxable person, is a person who makes taxable supplies or who acquires goods in the United Kingdom from one or more other member States;

F207[(b)is not established, and does not have any fixed establishment, in the United Kingdom;

(ba)is established in a country or territory in respect of which it appears to the Commissioners that the condition specified in subsection (1A) below is satisfied; and]

(c)in the case of an individual, does not have his usual place of residence [F208or permanent address] in the United Kingdom,

F209...

[F210(1ZA)The Commissioners may direct the person to secure that there is a UK-established person who is—

(a)appointed to act on the person's behalf in relation to VAT, and

(b)registered against the name of the person in accordance with any regulations under subsection (4).]

F211[(1A)The condition mentioned in subsection (1)(ba) above is that—

(a)the country or territory is neither a member State nor a part of a member State, and

(b)there is no provision for mutual assistance between the United Kingdom and the country or territory similar in scope to the assistance provided for between the United Kingdom and each other member State by the mutual assistance provisions.

(1B)In subsection (1A) above “the mutual assistance provisions” means—

[F212(a)section 87 of the Finance Act 2011 (mutual assistance for recovery of taxes etc) and Schedule 25 to that Act;

(b)section 173 of the Finance Act 2006 (international tax enforcement arrangements);]

[F213(c)Council Regulation (EC) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax.]]

F214[(2)With the agreement of the Commissioners, a person—

(a)who has not been [F215given a direction under subsection (1ZA)] , and

(b)in relation to whom the conditions specified in paragraphs (a), (b) and (c) of [F216subsection (1)] are satisfied,

may appoint [F217a UK-established] person to act on his behalf in relation to VAT.

(2A)In this Act “VAT representative” means a person appointed under subsection [F218(1ZA)] or (2) above.]

(3)Where any person is appointed by virtue of this section to be the VAT representative of another (“his principal”), then, subject to subsections (4) to (6) below, the VAT representative—

(a)shall be entitled to act on his principal’s behalf for any of the purposes of this Act, of any other enactment (whenever passed) relating to VAT or of any subordinate legislation made under this Act or any such enactment;

(b)shall, subject to such provisions as may be made by the Commissioners by regulations, secure (where appropriate by acting on his principal’s behalf) his principal’s compliance with and discharge of the obligations and liabilities to which his principal is subject by virtue of this Act, any such other enactment or any such subordinate legislation; and

(c)shall be personally liable in respect of—

(i)any failure to secure his principal’s compliance with or discharge of any such obligation or liability; and

(ii)anything done for purposes connected with acting on his principal’s behalf,

as if the obligations and liabilities imposed on his principal were imposed jointly and severally on the VAT representative and his principal.

(4)A VAT representative shall not be liable by virtue of subsection (3) above himself to be registered under this Act, but regulations made by the Commissioners may—

(a)require the registration of the names of VAT representatives against the names of their principals in any register kept for the purposes of this Act; F219...

(b)make it the duty of a VAT representative, for the purposes of registration, to notify the Commissioners, within such period as may be prescribed, that his appointment has taken effect or has ceased to have effect.

[F220(c)give the Commissioners power to refuse to register a person as a VAT representative, or to cancel a person's registration as a VAT representative, in such circumstances as may be specified in the regulations.]

[F221(4A)Regulations under subsection (4) may require a notification under that subsection to be made in such form and manner, and to contain such particulars, as may be specified in the regulations or by the Commissioners in accordance with the regulations.]

(5)A VAT representative shall not by virtue of subsection (3) above be guilty of any offence except in so far as—

(a)the VAT representative has consented to, or connived in, the commission of the offence by his principal;

(b)the commission of the offence by his principal is attributable to any neglect on the part of the VAT representative; or

(c)the offence consists in a contravention by the VAT representative of an obligation which, by virtue of that subsection, is imposed both on the VAT representative and on his principal.

(6)The Commissioners may by regulations make provision as to the manner and circumstances in which a person is to be appointed, or is to be treated as having ceased to be, another’s VAT representative; and regulations under this subsection may include such provision as the Commissioners think fit for the purposes of subsection (4) above with respect to the making or deletion of entries in any register.

(7)[F222The Commissioners may require a person in relation to whom the conditions specified in paragraphs (a), (b) and (c) of subsection (1) are satisfied] to provide such security, or further security, as they may think appropriate for the payment of any VAT which is or may become due from him.

[F223(7A)A sum required by way of security under subsection (7) above shall be deemed for the purposes of—

(a)section 51 of the Finance Act 1997 (enforcement [F224by taking control of goods or, in Northern Ireland,] by distress) and any regulations under that section, and

(b)section 52 of that Act (enforcement by diligence),

to be recoverable as if it were VAT due from the person who is required to provide it.]

[F225(7B)A direction under subsection (1ZA)—

(a)may specify a time by which it (or any part of it) must be complied with;

(b)may be varied;

(c)continues to have effect (subject to any variation) until it is withdrawn or the conditions specified in subsection (1) are no longer satisfied.

(7C)A requirement under subsection (7)—

(a)may specify a time by which it (or any part of it) must be complied with;

(b)may be varied;

(c)continues to have effect (subject to any variation) until it is withdrawn.]

(8)For the purposes of this Act a person shall not be treated as having been directed to appoint a VAT representative, or as having been required to provide security under subsection (7) above, unless the Commissioners have either—

(a)served notice of the direction or requirement on him; or

(b)taken all such other steps as appear to them to be reasonable for bringing the direction or requirement to his attention.

[F226(8A)For the purposes of subsections (1ZA) and (2)—

(a)a person is UK-established if the person is established, or has a fixed establishment, in the United Kingdom, and

(b)an individual is also UK-established if the person's usual place of residence or permanent address is in the United Kingdom.]

[F227(9)The Treasury may by order amend the definition of “the mutual assistance provisions” in subsection (1B) above.]

Textual Amendments

F205Words in s. 48 heading inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(2)

F206Words in s. 48(1) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(3)(a)

F207S. 48(1)(b)(ba) substituted for s. 48(1)(b) (31.12.2001) by 2001 c. 9, s. 100(1)(4)

F208Words in s. 48(1)(c) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(3)(b)

F209Words in s. 48(1) omitted (15.9.2016) by virtue of Finance Act 2016 (c. 24), s. 123(3)(c)

F210S. 48(1ZA) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(4)

F211S. 48(1A)(1B) inserted (31.12.2001) by 2001 c. 9, s. 100(2)(4)

F212S. 48(1B)(a)(b) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(5)

F213S. 48(1B)(c) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 6(2)

F214S. 48(2)(2A) substituted for s. 48(2) (31.12.2001) by 2001 c. 9, s. 100(3)(4)

F215Words in s. 48(2)(a) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(6)(a)

F216Words in s. 48(2)(b) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(6)(b)

F217Words in s. 48(2) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(6)(c)

F218Word in s. 48(2A) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(7)

F219Word in s. 48(4)(a) omitted (15.9.2016) by virtue of Finance Act 2016 (c. 24), s. 123(8)(a)

F220S. 48(4)(c) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(8)(b)

F221S. 48(4A) inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 6(3)

F222Words in s. 48(7) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(9)

F223S. 48(7A) inserted (1.7.1997) by 1997 c. 16, s. 53(6); S.I. 1997/1432, art. 2

F225S. 48(7B)(7C) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(10)

F226S. 48(8A) inserted (15.9.2016) by Finance Act 2016 (c. 24), s. 123(11)

F227S. 48(9) inserted (10.7.2003) by Finance Act 2003 (c. 14), s. 197(7)(b)

49 Transfers of going concerns.U.K.

(1)Where a business [F228, or part of a business,] carried on by a taxable person is transferred to another person as a going concern, then—

(a)for the purpose of determining whether the transferee is liable to be registered under this Act he shall be treated as having carried on the business [F229or part of the business] before as well as after the transfer and supplies by the transferor shall be treated accordingly; F230...

F230(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Without prejudice to subsection (1) above, the Commissioners may by regulations make provision for securing continuity in the application of this Act in cases where a business [F231, or part of a business,] carried on by a taxable person is transferred to another person as a going concern and the transferee is registered under this Act in substitution for the transferor.

[F232(2A)Regulations under subsection (2) above may, in particular, provide for the duties under this Act of the transferor to preserve records relating to the business or part of the business for any period after the transfer to become duties of the transferee unless the Commissioners, at the request of the transferor, otherwise direct.]

(3)Regulations under subsection (2) above may, in particular, provide—

(a)for liabilities and duties under this Act (excluding sections 59 to 70) of the transferor [F233(other than the duties mentioned in subsection (2A) above)] to become, to such extent as may be provided by the regulations, liabilities and duties of the transferee; and

(b)for any right of either of them to repayment or credit in respect of VAT to be satisfied by making a repayment or allowing a credit to the other;

but no such provision as is mentioned in paragraph (a) or (b) of this subsection shall have effect in relation to any transferor and transferee unless an application in that behalf has been made by them under the regulations.

[F234(4)Subsection (5) below applies where—

(a)a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, and

(b)the transferor continues to be required under this Act to preserve for any period after the transfer any records relating to the business or part of the business.

(5)So far as is necessary for the purpose of complying with the transferee's duties under this Act, the transferee (“E”) may require the transferor—

(a)to give to E, within such time and in such form as E may reasonably require, such information contained in the records as E may reasonably specify,

(b)to give to E, within such time and in such form as E may reasonably require, such copies of documents forming part of the records as E may reasonably specify, and

(c)to make the records available for E's inspection at such time and place as E may reasonably require (and permit E to take copies of, or make extracts from, them).

(6)Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, the Commissioners may disclose to the transferee any information relating to the business when it was carried on by the transferor for the purpose of enabling the transferee to comply with the transferee's duties under this Act.]

Textual Amendments

F228Words in s. 49(1) inserted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(2)(a)

F229Words in s. 49(1)(a) inserted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(2)(b)

F230 S. 49(1)(b) and word omitted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(2)(c), Sch. 27 Pt. 6(2)

F231Words in s. 49(2) inserted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(3)

F232S. 49(2A) inserted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(4)

F233Words in s. 49(3)(a) inserted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(5)

F234S. 49(4)-(6) inserted (with effect in accordance with s. 100(10) of the amending Act) by Finance Act 2007 (c. 11), s. 100(6)

50 Terminal markets.U.K.

(1)The Treasury may by order make provision for modifying the provisions of this Act in their application to dealings on terminal markets and such persons ordinarily engaged in such dealings as may be specified in the order, subject to such conditions as may be so specified.

(2)Without prejudice to the generality of subsection (1) above, an order under this section may include provision—

(a)for zero-rating the supply of any goods or services or for treating the supply of any goods or services as exempt;

(b)for the registration under this Act of any body of persons representing persons ordinarily engaged in dealing on a terminal market and for disregarding such dealings by persons so represented in determining liability to be registered under this Act, and for disregarding such dealings between persons so represented for all the purposes of this Act;

(c)for refunding, to such persons as may be specified by or under the order, input tax attributable to such dealings on a terminal market as may be so specified,

and may contain such incidental and supplementary provisions as appear to the Treasury to be necessary or expedient.

(3)An order under this section may make different provision with respect to different terminal markets and with respect to different commodities.

[F23550A Margin schemes.U.K.

(1)The Treasury may by order provide, in relation to any such description of supplies to which this section applies as may be specified in the order, for a taxable person to be entitled to opt that, where he makes supplies of that description, VAT is to be charged by reference to the profit margin on the supplies, instead of by reference to their value.

(2)This section applies to the following supplies, that is to say—

(a)supplies of works of art, antiques or collectors’ items;

(b)supplies of motor vehicles;

(c)supplies of second-hand goods; and

(d)any supply of goods through a person who acts as an agent, but in his own name, in relation to the supply.

(3)An option for the purposes of an order under this section shall be exercisable, and may be withdrawn, in such manner as may be required by such an order.

(4)Subject to subsection (7) below, the profit margin on a supply to which this section applies shall be taken, for the purposes of an order under this section, to be equal to the amount (if any) by which the price at which the person making the supply obtained the goods in question is exceeded by the price at which he supplies them.

(5)For the purposes of this section the price at which a person has obtained any goods and the price at which he supplies them shall each be calculated in accordance with the provisions contained in an order under this section; and such an order may, in particular, make provision stipulating the extent to which any VAT charged on a supply, acquisition or importation of any goods is to be treated as included in the price at which those goods have been obtained or are supplied.

(6)An order under this section may provide that the consideration for any services supplied in connection with a supply of goods by a person who acts as an agent, but in his own name, in relation to the supply of the goods is to be treated for the purposes of any such order as an amount to be taken into account in computing the profit margin on the supply of the goods, instead of being separately chargeable to VAT as comprised in the value of the services supplied.

(7)An order under this section may provide for the total profit margin on all the goods of a particular description supplied by a person in any prescribed accounting period to be calculated by—

(a)aggregating all the prices at which that person obtained goods of that description in that period together with any amount carried forward to that period in pursuance of paragraph (d) below;

(b)aggregating all the prices at which he supplies goods of that description in that period;

(c)treating the total profit margin on goods supplied in that period as being equal to the amount (if any) by which, for that period, the aggregate calculated in pursuance of paragraph (a) above is exceeded by the aggregate calculated in pursuance of paragraph (b) above; and

(d)treating any amount by which, for that period, the aggregate calculated in pursuance of paragraph (b) above is exceeded by the aggregate calculated in pursuance of paragraph (a) above as an amount to be carried forward to the following prescribed accounting period so as to be included, for the period to which it is carried forward, in any aggregate falling to be calculated in pursuance of paragraph (a) above.

(8)An order under this section may—

(a)make different provision for different cases; and

(b)make provisions of the order subject to such general or special directions as may, in accordance with the order, be given by the Commissioners with respect to any matter to which the order relates.]

Textual Amendments

F235S. 50A inserted (1.5.1995) by 1995 c. 4, s. 24(1)

51 Buildings and land.U.K.

(1)Schedule 10 shall have effect with respect to buildings and land.

(2)The Treasury may by order amend Schedule 10.

[F23651BFace-value vouchers [F237issued before 1 January 2019] U.K.

[F238(1)]Schedule 10A shall have effect with respect to face-value vouchers.

[F239(2)Schedule 10A does not have effect with respect to a face value voucher (within the meaning of that Schedule) issued on or after 1 January 2019.]]

Textual Amendments

F236S. 51B inserted (with application in accordance with Sch. 1 para. 4 of the amending Act) by Finance Act 2003 (c. 14), Sch. 1 para. 1

F237Words in s. 51B heading inserted (12.2.2019) by Finance Act 2019 (c. 1), Sch. 17 para. 2(a)

F238S. 51B(1): s. 51B renumbered as s. 51B(1) (12.2.2019) by Finance Act 2019 (c. 1), Sch. 17 para. 2(b)

F239S. 51B(2) inserted (12.2.2019) by Finance Act 2019 (c. 1), Sch. 17 para. 2(c)

[F24051CVouchers issued on or after 1 January 2019U.K.

(1)Schedule 10B makes provision about the VAT treatment of vouchers.

(2)Schedule 10B has effect with respect to a voucher (within the meaning of that Schedule) issued on or after 1 January 2019.

Textual Amendments

51DPostage stamps issued on or after 1 January 2019U.K.

(1)The issue of a postage stamp, and any subsequent transfer of it, is a supply of services for the purposes of this Act.

(2)The consideration for the issue or subsequent transfer of a postage stamp is to be disregarded for the purposes of this Act, except to the extent (if any) that it exceeds the face value of the stamp.

(3)The “face value” of the stamp is the amount stated on or recorded in the stamp or the terms and conditions governing its use.

(4)This section has effect with respect to postage stamps issued on or after 1 January 2019.]

Textual Amendments

52 Trading stamp schemes.U.K.

The Commissioners may by regulations modify sections 19 and 20 and Schedules 6 and 7 for the purpose of providing (in place of the provision for the time being contained in those sections and Schedules) for the manner of determining for the purposes of this Act the value of—

(a)a supply of goods, or

(b)a transaction in pursuance of which goods are acquired from another member State,

in a case where the goods are supplied or acquired under a trading stamp scheme (within the meaning of the M16Trading Stamps Act 1964 or the M17Trading Stamps Act (Northern Ireland) 1965) or under any scheme of an equivalent description which is in operation in another member State.

Marginal Citations

53 Tour operators.U.K.

(1)The Treasury may by order modify the application of this Act in relation to supplies of goods or services by tour operators or in relation to such of those supplies as may be determined by or under the order.

(2)Without prejudice to the generality of subsection (1) above, an order under this section may make provision—

(a)for two or more supplies of goods or services by a tour operator to be treated as a single supply of services;

(b)for the value of that supply to be ascertained, in such manner as may be determined by or under the order, by reference to the difference between sums paid or payable to and sums paid or payable by the tour operator;

(c)for account to be taken, in determining the VAT chargeable on that supply, of the different rates of VAT that would have been applicable apart from this section;

(d)excluding any body corporate from the application of section 43;

(e)as to the time when a supply is to be treated as taking place.

(3)In this section “tour operator” includes a travel agent acting as principal and any other person providing for the benefit of travellers services of any kind commonly provided by tour operators or travel agents.

(4)Section 97(3) shall not apply to an order under this section, notwithstanding that it makes provision for excluding any VAT from credit under section 25.

54 Farmers etc.U.K.

(1)The Commissioners may, in accordance with such provision as may be contained in regulations made by them, certify for the purposes of this section any person who satisfies them—

(a)that he is carrying on a business involving one or more designated activities;

(b)that he is of such a description and has complied with such requirements as may be prescribed; and

(c)where an earlier certification of that person has been cancelled, that more than the prescribed period has elapsed since the cancellation or that such other conditions as may be prescribed are satisfied.

(2)Where a person is for the time being certified under this section, then (whether or not that person is a taxable person) so much of any supply by him of any goods or services as, in accordance with provision contained in regulations, is allocated to the relevant part of his business shall be disregarded for the purpose of determining whether he is, has become or has ceased to be liable or entitled to be registered under Schedule 1 [F241or is, has become or has ceased to be liable to be registered under Schedule 1A].

(3)The Commissioners may by regulations provide for an amount included in the consideration for any taxable supply which is made—

(a)in the course or furtherance of the relevant part of his business by a person who is for the time being certified under this section;

(b)at a time when that person is not a taxable person; and

(c)to a taxable person,

to be treated, for the purpose of determining the entitlement of the person supplied to credit under sections 25 and 26, as VAT on a supply to that person.

(4)The amount which, for the purposes of any provision made under subsection (3) above, may be included in the consideration for any supply shall be an amount equal to such percentage as the Treasury may by order specify of the sum which, with the addition of that amount, is equal to the consideration for the supply.

(5)The Commissioners’ power by regulations under section 39 to provide for the repayment to persons to whom that section applies of VAT which would be input tax of theirs if they were taxable persons in the United Kingdom includes power to provide for the payment to persons to whom that section applies of sums equal to the amounts which, if they were taxable persons in the United Kingdom, would be input tax of theirs by virtue of regulations under this section; and references in that section, or in any other enactment, to a repayment of VAT shall be construed accordingly.

(6)Regulations under this section may provide—

(a)for F242... an application for certification under this section, or for the cancellation of any such certification, [F243to be made in the form and manner specified in the regulations or by the Commissioners in accordance with the regulations];

(b)for the cases and manner in which the Commissioners may cancel a person’s certification;

(c)for entitlement to a credit such as is mentioned in subsection (3) above to depend on the issue of an invoice containing such particulars as may be prescribed, or as may be notified by the Commissioners in accordance with provision contained in regulations; and

(d)for the imposition on certified persons of obligations with respect to the keeping, preservation and production of such records as may be prescribed and of obligations to comply with such requirements with respect to any of those matters as may be so notified;

and regulations made by virtue of paragraph (b) above may confer on the Commissioners power, if they think fit, to refuse to cancel a person’s certification, and to refuse to give effect to any entitlement of that person to be registered, until the end of such period after the grant of certification as may be prescribed.

(7)In this section references, in relation to any person, to the relevant part of his business are references—

(a)where the whole of his business relates to the carrying on of one or more designated activities, to that business; and

(b)in any other case, to so much of his business as does so relate.

(8)In this section “designated activities” means such activities, being activities carried on by a person who, by virtue of carrying them on, falls to be treated as a farmer for the purposes of Article 25 of the directive of the Council of the European Communities dated 17th May 1977 No.77/388/EEC (common flat-rate scheme for farmers), as the Treasury may by order designate.

Textual Amendments

F241Words in s. 54(2) inserted (with effect in accordance with Sch. 8 para. 19 of the amending Act) by Finance Act 2012 (c. 14), Sch. 28 para. 4

F242Words in s. 54(6)(a) omitted (17.7.2012) by virtue of Finance Act 2012 (c. 14), Sch. 29 para. 7(a)

F243Words in s. 54(6)(a) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 29 para. 7(b)

55 Customers to account for tax on supplies of gold etc.U.K.

[(1)Where any person makes a supply of gold to another person and that supply is a taxable supply but not a zero rated supply, the supply shall be treated for purposes of [F244Schedules 1 and 1A]

(a)as a taxable supply of that other person (as well as a taxable supply of the person who makes it); and

(b)in so far as that other person is supplied in connection with the carrying on by him of any business, as a supply made by him in the course or furtherance of that business;

but nothing in paragraph (b) above shall require any supply to be disregarded for the purposes of [F245Schedule 1] on the grounds that it is a supply of capital assets of that other person’s business.

(2)Where a taxable person makes a supply of gold to a person who—

(a)is himself a taxable person at the time when the supply is made; and

(b)is supplied in connection with the carrying on by him of any business,

it shall be for the person supplied, on the supplier’s behalf, to account for and pay tax on the supply, and not for the supplier.

(3)So much of this Act and of any other enactment or any subordinate legislation as has effect for the purposes of, or in connection with, the enforcement of any obligation to account for and pay VAT shall apply for the purposes of this section in relation to any person who is required under subsection (2) above to account for and pay any VAT as if that VAT were VAT on a supply made by him.

(4)Section 6(4) to (10) shall not apply for determining when any supply of gold is to be treated as taking place.]

(5)References in this section to a supply of gold are references to—

[F246(a)any supply of goods consisting in fine gold, in gold grain of any purity or in gold coins of any purity; or]. . .

(b)any supply of goods containing gold where the consideration for the supply (apart from any VAT) is, or is equivalent to, an amount which does not exceed, or exceeds by no more than a negligible amount, the open market value of the gold contained in the goods [F247; or.

(c)any supply of services consisting in the application to another person’s goods of a treatment or process which produces goods a supply of which would fall within paragraph (a) above.]

(6)The Treasury may by order provide for this section to apply, as it applies to the supplies specified in subsection (5) above, to such other supplies of—

(a)goods consisting in or containing any precious or semi-precious metal or stones; or

(b)services relating to, or to anything containing, any precious or semi-precious metal or stones,

as may be specified or described in the order.

Textual Amendments

F244Words in s. 55(1) substituted (with effect in accordance with Sch. 8 para. 19 of the amending Act) by Finance Act 2012 (c. 14), Sch. 28 para. 5(a)

F245Words in s. 55(1) substituted (with effect in accordance with Sch. 8 para. 19 of the amending Act) by Finance Act 2012 (c. 14), Sch. 28 para. 5(b)

F246S. 55(5)(a) substituted (29.4.1996 with application in relation to any supply after 28.11.1995) by 1996 c. 8, s. 32(1)(2)

F247S. 55(5)(c) inserted (29.4.1996 with application to supplies made on or after 1.1.1996) by 1996 c. 8, s. 29(3)(5)

Modifications etc. (not altering text)

C20S. 55(1)-(4) applied (1.1.2000) by S.I. 1999/3116, art. 4

C21S. 55(2) excluded (1.1.2000) by S.I. 1973/173, art. 7 (as added (1.1.2000) by S.I. 1999/3117, art. 8)

[F24855ACustomers to account for tax on supplies of goods [F249or services] of a kind used in missing trader intra-community fraudU.K.

(1)Subsection (3) applies if—

(a)a taxable (but not a zero-rated) supply of goods [F249or services] (“the relevant supply”) is made to a person (“the recipient”),

(b)the relevant supply is of goods [F249or services] to which this section applies (see subsection (9)),

(c)the relevant supply is not an excepted supply (see subsection (10)), and

(d)the total value of the relevant supply, and of corresponding supplies made to the recipient in the month in which the relevant supply is made, exceeds £1,000 (“the disregarded amount”).

(2)For this purpose a “corresponding supply” means a taxable (but not a zero-rated) supply of goods [F249or services] which—

(a)is a supply of goods [F249or services] to which this section applies, and

(b)is not an excepted supply.

(3)The relevant supply, and the corresponding supplies made to the recipient in the month in which the relevant supply is made, are to be treated for the purposes of [F250Schedules 1 and 1A]

(a)as taxable supplies of the recipient (as well as taxable supplies of the person making them), and

(b)in so far as the recipient is supplied in connection with the carrying on by him of any business, as supplies made by him in the course or furtherance of that business,

but the relevant supply, and those corresponding supplies, are to be so treated only in so far as their total value exceeds the disregarded amount.

(4)Nothing in subsection (3)(b) requires any supply to be disregarded for the purposes of Schedule 1 on the grounds that it is a supply of capital assets of the recipient's business.

(5)For the purposes of subsections (1) and (3), the value of a supply is determined on the basis that no VAT is chargeable on the supply.

(6)If—

(a)a taxable person makes a supply of goods [F249or services] to a person (“the recipient”) at any time,

(b)the supply is of goods [F249or services] to which this section applies and is not an excepted supply, and

(c)the recipient is a taxable person at that time and is supplied in connection with the carrying on by him of any business,

it is for the recipient, on the supplier's behalf, to account for and pay tax on the supply and not for the supplier.

(7)The relevant enforcement provisions apply for the purposes of this section, in relation to any person required under subsection (6) to account for and pay any VAT, as if that VAT were VAT on a supply made by him.

(8)For this purpose “the relevant enforcement provisions” means so much of—

(a)this Act and any other enactment, and

(b)any subordinate legislation,

as has effect for the purposes of, or in connection with the enforcement of, any obligation to account for and pay VAT.

(9)For the purposes of this section, goods[F249or services] are goods [F249or services]to which this section applies if they are of a description specified in an order made by the Treasury.

[F251(9A)An order made under subsection (9) may modify the application of subsection (3) in relation to any description of goods or services specified in the order.]

(10)For the purposes of this section, an “excepted supply” means a supply which is of a description specified in, or determined in accordance with, provision contained in an order made by the Treasury.

(11)Any order made under subsection (10) may describe a supply of goods [F249or services] by reference to—

(a)the use which has been made of the goods [F249or services], or

(b)other matters unrelated to the characteristics of the goods [F249or services] themselves.

(12)The Treasury may by order substitute for the sum for the time being specified in subsection (1)(d) such greater sum as they think fit.

(13)The Treasury may by order make such amendments of any provision of this Act as they consider necessary or expedient for the purposes of this section or in connection with this section.

An order under this subsection may confer power on the Commissioners to make regulations or exercise any other function, but no order may be made under this subsection on or after 22nd March 2009.

(14)Any order made under this section (other than one under subsection (12)) may—

(a)make different provision for different cases, and

(b)contain supplementary, incidental, consequential or transitional provisions.]

Textual Amendments

F249Words in s. 55A inserted (8.4.2010) by Finance Act 2010 (c. 13), s. 50(1)

F250Words in s. 55A(3) substituted (with effect in accordance with Sch. 8 para. 19 of the amending Act) by Finance Act 2012 (c. 14), Sch. 28 para. 6

Modifications etc. (not altering text)

C23S. 55A applied (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Section 55A) (Specified Services and Excepted Supplies) Order 2016 (S.I. 2016/12), arts. 1(2), 3(1)

C24S. 55A applied (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Section 55A) (Specified Services) Order 2019 (S.I. 2019/1015), arts. 1(2), 3, 4

F25256 Fuel for private use.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F252S. 56 omitted (with effect in accordance with Sch. 38 para. 7 of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 38 para. 4

F25357 Determination of consideration for fuel supplied for private use.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F253S. 57 omitted (with effect in accordance with Sch. 38 para. 7(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 38 para. 4

Part IVU.K. Administration, collection and enforcement

General administrative provisionsU.K.

58 General provisions relating to the administration and collection of VAT.U.K.

Schedule 11 shall have effect, subject to section 92(6), with respect to the administration, collection and enforcement of VAT.

[F254Disclosure of avoidance schemesU.K.

Textual Amendments

F254S. 58A and cross-heading inserted (22.7.2004 for specified purposes, 1.8.2004 in so far as not already in force) by Finance Act 2004 (c. 12), s. 19(2), Sch. 2 para. 1; S.I. 2004/1934, art. 2

58ADisclosure of avoidance schemesU.K.

Schedule 11A (which imposes disclosure requirements relating to the use of schemes for avoiding VAT) shall have effect.]

Modifications etc. (not altering text)

C25S. 58A modified (16.11.2017 for specified purposes, 1.1.2018 in so far as not already in force) by Finance (No. 2) Act 2017 (c. 32), s. 66(2)(4)

[F25558BPayment by chequeU.K.

Regulations under section 95(1) of the Finance Act 2007 (payment by cheque) may, in particular, provide for a payment which is made by cheque in contravention of regulations under section 25(1) above to be treated as made when the cheque clears, as defined in the regulations under section 95(1) of that Act.]

Textual Amendments

F255S. 58B inserted (19.7.2007) by Finance Act 2007 (c. 11), s. 95(8)

Default surcharges and other penalties and criminal offencesU.K.

59 The default surcharge.U.K.

(1)[F256Subject to subsction (1A) below] if, by the last day on which a taxable person is required in accordance with regulations under this Act to furnish a return for a prescribed accounting period—

(a)the Commissioners have not received that return, or

(b)the Commissioners have received that return but have not received the amount of VAT shown on the return as payable by him in respect of that period,

then that person shall be regarded for the purposes of this section as being in default in respect of that period.

[F257(1A)A person shall not be regarded for the purposes of this section as being in default in respect of any prescribed accounting period if that period is one in respect of which he is required by virtue of any order under section 28 to make any payment on account of VAT.]

(2)Subject to subsections (9) and (10) below, subsection (4) below applies in any case where—

(a)a taxable person is in default in respect of a prescribed accounting period; and

(b)the Commissioners serve notice on the taxable person (a “surcharge liability notice”) specifying as a surcharge period for the purposes of this section a period ending on the first anniversary of the last day of the period referred to in paragraph (a) above and beginning, subject to subsection (3) below, on the date of the notice.

(3)If a surcharge liability notice is served by reason of a default in respect of a prescribed accounting period and that period ends at or before the expiry of an existing surcharge period already notified to the taxable person concerned, the surcharge period specified in that notice shall be expressed as a continuation of the existing surcharge period and, accordingly, for the purposes of this section, that existing period and its extension shall be regarded as a single surcharge period.

(4)Subject to subsections (7) to (10) below, if a taxable person on whom a surcharge liability notice has been served—

(a)is in default in respect of a prescribed accounting period ending within the surcharge period specified in (or extended by) that notice, and

(b)has outstanding VAT for that prescribed accounting period,

he shall be liable to a surcharge equal to whichever is the greater of the following, namely, the specified percentage of his outstanding VAT for that prescribed accounting period and £30.

(5)Subject to subsections (7) to (10) below, the specified percentage referred to in subsection (4) above shall be determined in relation to a prescribed accounting period by reference to the number of such periods in respect of which the taxable person is in default during the surcharge period and for which he has outstanding VAT, so that—

(a)in relation to the first such prescribed accounting period, the specified percentage is 2 per cent;

(b)in relation to the second such period, the specified percentage is 5 per cent;

(c)in relation to the third such period, the specified percentage is 10 per cent; and

(d)in relation to each such period after the third, the specified percentage is 15 per cent.

(6)For the purposes of subsections (4) and (5) above a person has outstanding VAT for a prescribed accounting period if some or all of the VAT for which he is liable in respect of that period has not been paid by the last day on which he is required (as mentioned in subsection (1) above) to make a return for that period; and the reference in subsection (4) above to a person’s outstanding VAT for a prescribed accounting period is to so much of the VAT for which he is so liable as has not been paid by that day.

(7)If a person who, apart from this subsection, would be liable to a surcharge under subsection (4) above satisfies the Commissioners or, on appeal, a tribunal that, in the case of a default which is material to the surcharge—

(a)the return or, as the case may be, the VAT shown on the return was despatched at such a time and in such a manner that it was reasonable to expect that it would be received by the Commissioners within the appropriate time limit, or

(b)there is a reasonable excuse for the return or VAT not having been so despatched,

he shall not be liable to the surcharge and for the purposes of the preceding provisions of this section he shall be treated as not having been in default in respect of the prescribed accounting period in question (and, accordingly, any surcharge liability notice the service of which depended upon that default shall be deemed not to have been served).

(8)For the purposes of subsection (7) above, a default is material to a surcharge if—

(a)it is the default which, by virtue of subsection (4) above, gives rise to the surcharge; or

(b)it is a default which was taken into account in the service of the surcharge liability notice upon which the surcharge depends and the person concerned has not previously been liable to a surcharge in respect of a prescribed accounting period ending within the surcharge period specified in or extended by that notice.

(9)In any case where—

(a)the conduct by virtue of which a person is in default in respect of a prescribed accounting period is also conduct falling within section 69(1), and

(b)by reason of that conduct, the person concerned is assessed to a penalty under that section,

the default shall be left out of account for the purposes of subsections (2) to (5) above.

(10)If the Commissioners, after consultation with the Treasury, so direct, a default in respect of a prescribed accounting period specified in the direction shall be left out of account for the purposes of subsections (2) to (5) above.

[F258(11)For the purposes of this section references to a thing’s being done by any day include references to its being done on that day.]

Textual Amendments

F256Words in s. 59(1) inserted (29.4.1996 with effect as mentioned in s. 35(8) of the amending Act) by 1996 c. 8, s. 35(3)

F257S. 59(1A) inserted (29.4.1996 with effect as mentioned in s. 35(8) of the amending Act) by 1996 c. 8, s. 35(3)

F258S. 59(11) inserted (29.4.1996 with effect as mentioned in s. 35(8) of the amending Act) by 1996 c. 8, s. 35(4)

Modifications etc. (not altering text)

C26S. 59 modified by S.I. 1995/2518, reg. 40(5) (as inserted (22.7.2004) by The Value Added Tax (Amendment) (No. 3) Regulations 2004 (S.I. 2004/1675), regs. 1(1), 5)

[F25959A Default surcharge: payments on account.U.K.

(1)For the purposes of this section a taxable person shall be regarded as in default in respect of any prescribed accounting period if the period is one in respect of which he is required, by virtue of an order under section 28, to make any payment on account of VAT and either—

(a)a payment which he is so required to make in respect of that period has not been received in full by the Commissioners by the day on which it became due; or

(b)he would, but for section 59(1A), be in default in respect of that period for the purposes of section 59.

(2)Subject to subsections (10) and (11) below, subsection (4) below applies in any case where—

(a)a taxable person is in default in respect of a prescribed accounting period; and

(b)the Commissioners serve notice on the taxable person (a “surcharge liability notice”) specifying as a surcharge period for the purposes of this section a period which—

(i)begins, subject to subsection (3) below, on the date of the notice; and

(ii)ends on the first anniversary of the last day of the period referred to in paragraph (a) above.

(3)If—

(a)a surcharge liability notice is served by reason of a default in respect of a prescribed accounting period, and

(b)that period ends at or before the expiry of an existing surcharge period already notified to the taxable person concerned,

the surcharge period specified in that notice shall be expressed as a continuation of the existing surcharge period; and, accordingly, the existing period and its extension shall be regarded as a single surcharge period.

(4)Subject to subsections (7) to (11) below, if—

(a)a taxable person on whom a surcharge liability notice has been served is in default in respect of a prescribed accounting period,

(b)that prescribed accounting period is one ending within the surcharge period specified in (or extended by) that notice, and

(c)the aggregate value of his defaults in respect of that prescribed accounting period is more than nil,

that person shall be liable to a surcharge equal to whichever is the greater of £30 and the specified percentage of the aggregate value of his defaults in respect of that prescribed accounting period.

(5)Subject to subsections (7) to (11) below, the specified percentage referred to in subsection (4) above shall be determined in relation to a prescribed accounting period by reference to the number of such periods during the surcharge period which are periods in respect of which the taxable person is in default and in respect of which the value of his defaults is more than nil, so that—

(a)in relation to the first such prescribed accounting period, the specified percentage is 2 per cent.;

(b)in relation to the second such period, the specified percentage is 5 per cent.;

(c)in relation to the third such period, the specified percentage is 10 per cent.; and

(d)in relation to each such period after the third, the specified percentage is 15 per cent.

(6)For the purposes of this section the aggregate value of a person’s defaults in respect of a prescribed accounting period shall be calculated as follows—

(a)where the whole or any part of a payment in respect of that period on account of VAT was not received by the Commissioners by the day on which it became due, an amount equal to that payment or, as the case may be, to that part of it shall be taken to be the value of the default relating to that payment;

(b)if there is more than one default with a value given by paragraph (a) above, those values shall be aggregated;

(c)the total given by paragraph (b) above, or (where there is only one default) the value of the default under paragraph (a) above, shall be taken to be the value for that period of that person’s defaults on payments on account;

(d)the value of any default by that person which is a default falling within subsection (1)(b) above shall be taken to be equal to the amount of any outstanding VAT less the amount of unpaid payments on account; and

(e)the aggregate value of a person’s defaults in respect of that period shall be taken to be the aggregate of—

(i)the value for that period of that person’s defaults (if any) on payments on account; and

(ii)the value of any default of his in respect of that period that falls within subsection (1)(b) above.

(7)In the application of subsection (6) above for the calculation of the aggregate value of a person’s defaults in respect of a prescribed accounting period—

(a)the amount of outstanding VAT referred to in paragraph (d) of that subsection is the amount (if any) which would be the amount of that person’s outstanding VAT for that period for the purposes of section 59(4); and

(b)the amount of unpaid payments on account referred to in that paragraph is the amount (if any) equal to so much of any payments on account of VAT (being payments in respect of that period) as has not been received by the Commissioners by the last day on which that person is required (as mentioned in section 59(1)) to make a return for that period.

(8)If a person who, apart from this subsection, would be liable to a surcharge under subsection (4) above satisfies the Commissioners or, on appeal, a tribunal—

(a)in the case of a default that is material for the purposes of the surcharge and falls within subsection (1)(a) above—

(i)that the payment on account of VAT was despatched at such a time and in such a manner that it was reasonable to expect that it would be received by the Commissioners by the day on which it became due, or

(ii)that there is a reasonable excuse for the payment not having been so despatched,

or

(b)in the case of a default that is material for the purposes of the surcharge and falls within subsection (1)(b) above, that the condition specified in section 59(7)(a) or (b) is satisfied as respects the default,

he shall not be liable to the surcharge and for the purposes of the preceding provisions of this section he shall be treated as not having been in default in respect of the prescribed accounting period in question (and, accordingly, any surcharge liability notice the service of which depended upon that default shall be deemed not to have been served).

(9)For the purposes of subsection (8) above, a default is material to a surcharge if—

(a)it is the default which, by virtue of subsection (4) above, gives rise to the surcharge; or

(b)it is a default which was taken into account in the service of the surcharge liability notice upon which the surcharge depends and the person concerned has not previously been liable to a surcharge in respect of a prescribed accounting period ending within the surcharge period specified in or extended by that notice.

(10)In any case where—

(a)the conduct by virtue of which a person is in default in respect of a prescribed accounting period is also conduct falling within section 69(1), and

(b)by reason of that conduct, the person concerned is assessed to a penalty under section 69,

the default shall be left out of account for the purposes of subsections (2) to (5) above.

(11)If the Commissioners, after consultation with the Treasury, so direct, a default in respect of a prescribed accounting period specified in the direction shall be left out of account for the purposes of subsections (2) to (5) above.

(12)For the purposes of this section the Commissioners shall be taken not to receive a payment by the day on which it becomes due unless it is made in such a manner as secures (in a case where the payment is made otherwise than in cash) that, by the last day for the payment of that amount, all the transactions can be completed that need to be completed before the whole amount of the payment becomes available to the Commissioners.

(13)In determining for the purposes of this section whether any person would, but for section 59(1A), be in default in respect of any period for the purposes of section 59, subsection (12) above shall be deemed to apply for the purposes of section 59 as it applies for the purposes of this section.

(14)For the purposes of this section references to a thing’s being done by any day include references to its being done on that day.]

Textual Amendments

F259S. 59A inserted (29.4.1996 with application as mentioned in s. 35(8) of the amending Act) by 1996 c. 8, s. 35(2)

[F26059B Relationship between sections 59 and 59A.U.K.

(1)This section applies in each of the following cases, namely—

(a)where a section 28 accounting period ends within a surcharge period begun or extended by the service on a taxable person (whether before or after the coming into force of section 59A) of a surcharge liability notice under section 59; and

(b)where a prescribed accounting period which is not a section 28 accounting period ends within a surcharge period begun or extended by the service on a taxable person of a surcharge liability notice under section 59A.

(2)In a case falling within subsection (1)(a) above section 59A shall have effect as if—

(a)subject to paragraph (b) below, the section 28 accounting period were deemed to be a period ending within a surcharge period begun or, as the case may be, extended by a notice served under section 59A; but

(b)any question—

(i)whether a surcharge period was begun or extended by the notice, or

(ii)whether the taxable person was in default in respect of any prescribed accounting period which was not a section 28 accounting period but ended within the surcharge period begun or extended by that notice,

were to be determined as it would be determined for the purposes of section 59.

(3)In a case falling within subsection (1)(b) above section 59 shall have effect as if—

(a)subject to paragraph (b) below, the prescribed accounting period that is not a section 28 accounting period were deemed to be a period ending within a surcharge period begun or, as the case may be, extended by a notice served under section 59;

(b)any question—

(i)whether a surcharge period was begun or extended by the notice, or

(ii)whether the taxable person was in default in respect of any prescribed accounting period which was a section 28 accounting period but ended within the surcharge period begun or extended by that notice,

were to be determined as it would be determined for the purposes of section 59A; and

(c)that person were to be treated as having had outstanding VAT for a section 28 accounting period in any case where the aggregate value of his defaults in respect of that period was, for the purposes of section 59A, more than nil.

(4) In this section “ a section 28 accounting period ”, in relation to a taxable person, means any prescribed accounting period ending on or after the day on which the Finance Act 1996 was passed in respect of which that person is liable by virtue of an order under section 28 to make any payment on account of VAT.]

Textual Amendments

F260S. 59B inserted (29.4.1996 with effect as mentioned in s. 35(8) of the amending Act) by 1996 c. 8, s. 35(5)

F26160 VAT evasion: conduct involving dishonesty.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F261S. 60 repealed (1.4.2008 for specified purposes, 1.7.2008 for specified purposes, 1.1.2009 for specified purposes, 1.4.2009 in so far as not already in force) by Finance Act 2007 (c. 11), s. 97(2), Sch. 24 para. 29(d), Sch. 27 Pt. 5(5) (with transitional provisions in S.I. 2009/511, art, 4(a)(i) and S.I. 2009/571, art. 7); S.I. 2008/568, art. 2(a)(b)(c)(d)(e)(f) (with arts. 3, 4)

F26261 VAT evasion: liability of directors etc.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F262S. 61 repealed (1.4.2008 for specified purposes, 1.7.2008 for specified purposes, 1.1.2009 for specified purposes, 1.4.2009 in so far as not already in force) by Finance Act 2007 (c. 11), s. 97(2), Sch. 24 para. 29(d), Sch. 27 Pt. 5(5) (with transitional provisions in S.I. 2009/511, art, 4(a)(i) and S.I. 2009/571, art. 7); S.I. 2008/568, art. 2(a)(b)(c)(d)(e)(f) (with arts. 3, 4)

62 Incorrect certificates as to zero-rating etc.U.K.

[F263(1)Subject to subsections (3) and (4) below, where—

(a)a person to whom one or more supplies are, or are to be, made—

(i)gives to the supplier a certificate that the supply or supplies fall, or will fall, wholly or partly within [F264any of the Groups of Schedule 7A,] Group 5 or 6 of Schedule 8 or Group 1 of Schedule 9, or

(ii)gives to the supplier a certificate for the purposes of section 18B(2)(d) or 18C(1)(c),

and

(b)the certificate is incorrect,

the person giving the certificate shall be liable to a penalty.

(1A)Subject to subsections (3) and (4) below, where—

(a)a person who makes, or is to make, an acquisition of goods from another member State prepares a certificate for the purposes of section 18B(1)(d), and

(b)the certificate is incorrect,

the person preparing the certificate shall be liable to a penalty.

[F265(1B)Where—

(a)a person gives a certificate for the purposes of Note (5R) to Group 12 of Schedule 8 with respect to a supply of a motor vehicle, and

(b)the certificate is incorrect,

the person giving the certificate is to be liable to a penalty.

(2)The amount of the penalty shall be equal to—

(a)in a case where the penalty is imposed by virtue of subsection (1) above, the difference between—

(i)the amount of the VAT which would have been chargeable on the supply or supplies if the certificate had been correct; and

(ii)the amount of VAT actually chargeable;

(b)in a case where it is imposed by virtue of subsection (1A) above, the amount of VAT actually chargeable on the acquisition.

[F266(c)in a case where it is imposed by virtue of subsection (1B), the difference between—

(i)the amount of the VAT which would have been chargeable on the supply if the certificate had been correct, and

(ii)the amount of VAT actually chargeable.]]

(3)The giving [F267or preparing] of a certificate shall not give rise to a penalty under this section if the person who gave [F268or prepared] it satisfies the Commissioners or, on appeal, a tribunal that there is a reasonable excuse for his having given [F268or prepared] it.

(4)Where by reason of giving [F267or preparing] a certificate a person is convicted of an offence (whether under this Act or otherwise), the giving of the certificate shall not also give rise to a penalty under this section.]

Textual Amendments

F263S. 62(1)(1A)(2) substituted (27.7.1999 with effect as mentioned in s. 17(2) of the amending Act) for s. 62(1)(2) by 1999 c. 16, s. 17(1)

F264Words in s. 62(1)(a)(i) substituted (11.5.2001 with effect as mentioned in s. 99(9)(b) of the amending Act) by 2001 c. 9, s. 99, Sch. 31 para. 3

F265S. 62(1B) inserted (with effect in accordance with Sch. 7 para. 9 of the amending Act) by Finance Act 2017 (c. 10), Sch. 7 para. 3(2)

F266S. 62(2)(c) inserted (with effect in accordance with Sch. 7 para. 9 of the amending Act) by Finance Act 2017 (c. 10), Sch. 7 para. 3(3)

F267Words in s. 62(1)(3)(4) inserted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 8(3); S.I. 1996/1249, art. 2

F268Words in s. 62(3) inserted (1.6.1996 with application to any acquisition of goods from another member State and any supply taking place on or after that day) by 1996 c. 8, ss. 25, 26, Sch. 3 para. 8(4); S.I. 1996/1249, art. 2

F26963 Penalty for misdeclaration or neglect resulting in VAT loss for one accounting period equalling or exceeding certain amounts.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F269S. 63 repealed (1.4.2008 for specified purposes, 1.7.2008 for specified purposes, 1.1.2009 for specified purposes, 1.4.2009 in so far as not already in force) by Finance Act 2007 (c. 11), s. 97(2), Sch. 24 para. 29(d), Sch. 27 Pt. 5(5) (with transitional provisions in S.I. 2009/511, art, 4(a)(i) and S.I. 2009/571, art. 7); S.I. 2008/568, art. 2(a)(b)(c)(d)(e)(f) (with arts. 3, 4)

F27064 Repeated misdeclarations.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F270S. 64 repealed (1.4.2008 for specified purposes, 1.7.2008 for specified purposes, 1.1.2009 for specified purposes, 1.4.2009 in so far as not already in force) by Finance Act 2007 (c. 11), s. 97(2), Sch. 24 para. 29(d), Sch. 27 Pt. 5(5) (with transitional provisions in S.I. 2009/511, art, 4(a)(i) and S.I. 2009/571, art. 7); S.I. 2008/568, art. 2(a)(b)(c)(d)(e)(f) (with arts. 3, 4)

65 [F271Inaccuracies in EC sales statements or in statements relating to section 55A.]