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Value Added Tax Act 1994

Status:

This is the original version (as it was originally enacted).

Section 5.

SCHEDULE 4Matters to be treated as supply of goods or services

1(1)Any transfer of the whole property in goods is a supply of goods; but, subject to sub-paragraph (2) below, the transfer—

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

(b)of the possession of goods,

is a supply of services.

(2)If the possession of goods is transferred—

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

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

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

2Where a person produces goods by applying to another person’s goods a treatment or process, he shall be treated as supplying those goods.

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

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

5(1)Subject to sub-paragraph (2) below, where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, that is a supply by him of goods.

(2)Sub-paragraph (1) above does not apply where the transfer or disposal is—

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

(b)subject to sub-paragraph (3) below, a gift to any person of a sample of any goods.

(3)Where—

(a)a person is given a number of samples by the same person (whether all on one occasion or on different occasions), and

(b)those samples are identical or do not differ in any material respect from each other,

sub-paragraph (1) above shall apply to all except one of those samples or, as the case may be, to all except the first to be given.

(4)Where by or under the directions of a person carrying on a business goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, that is a supply of services.

(5)Neither sub-paragraph (1) nor sub-paragraph (3) above shall require anything which a person carrying on a business does otherwise than for a consideration in relation to any goods to be treated as a supply except in a case where that person is entitled under sections 25 and 26 to credit for the whole or any part of the VAT on the supply, acquisition or importation of those goods or of anything comprised in them.

(6)Anything which is a supply of goods or services by virtue of sub-paragraph (1) or (4) above is to be treated as made in the course or furtherance of the business (if it would not otherwise be so treated); and in the case of a business carried on by an individual—

(a)sub-paragraph (1) above applies to any transfer or disposition of goods in favour of himself personally; and

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

6(1)Where, in a case not falling within paragraph 5(1) above, goods forming part of the assets of any business—

(a)are removed from any member State by or under the directions of the person carrying on the business; and

(b)are so removed in the course or furtherance of that business for the purpose of being taken to a place in a member State other than that from which they are removed,

then, whether or not the removal is or is connected with a transaction for a consideration, that is a supply of goods by that person.

(2)Sub-paragraph (1) above does not apply—

(a)to the removal of goods from any member State in the course of their removal from one part of that member State to another part of the same member State; or

(b)to goods which have been removed from a place outside the member States for entry into the territory of the Community and are removed from a member State before the time when any Community customs debt in respect of any Community customs duty on their entry into that territory would be incurred.

7Where in the case of a business carried on by a taxable person goods forming part of the assets of the business are, under any power exercisable by another person, sold by the other in or towards satisfaction of a debt owed by the taxable person, they shall be deemed to be supplied by the taxable person in the course or furtherance of his business.

8(1)Where a person ceases to be a taxable person, any goods then forming part of the assets of a business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless—

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

(b)the business is carried on by another person who, under regulations made under section 46(4), is treated as a taxable person; or

(c)the VAT on the deemed supply would not be more than £250.

(2)This paragraph does not apply to any goods in the case of which the taxable person can show to the satisfaction of the Commissioners

(a)that no credit for input tax has been allowed to him in respect of the supply of the goods, their acquisition from another member State or their importation from a place outside the member States;

(b)that the goods did not become his as part of the assets of a business which was transferred to him as a going concern by another taxable person; and

(c)that he has not obtained relief in respect of the goods under section 4 of the [1973 c. 51.] Finance Act 1973.

(3)This paragraph does not apply where a person ceases to be a taxable person in consequence of having been certified under section 54.

(4)The Treasury may by order increase or further increase the sum specified in sub-paragraph (1)(c) above.

9(1)Subject to sub-paragraphs (2) and (3) below, paragraphs 5 to 8 above have effect in relation to land forming part of the assets of, or held or used for the purposes of, a business as if it were goods forming part of the assets of, or held or used for the purposes of, a business.

(2)In the application of those paragraphs by virtue of sub-paragraph (1) above, references to transfer, disposition or sale shall have effect as references to the grant or assignment of any interest in, right over or licence to occupy the land concerned.

(3)Except in relation to—

(a)the grant or assignment of a major interest; or

(b)a grant or assignment otherwise than for a consideration,

in the application of paragraph 5(1) above by virtue of sub-paragraph (1) above the reference to a supply of goods shall have effect as a reference to a supply of services.

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