Finance Act 1999

21 Accounting for VAT by Government departments

(1) Where—

(a) a Government department makes supplies of goods or services that are taxable supplies for the purposes of the Value Added Tax Act 1994, and

(b) its receipts include amounts paid to it in respect of the making of those supplies,

the receipts of the department to be paid into the Consolidated Fund shall be confined to the amounts remaining after deducting, from the amounts otherwise falling to be paid into that Fund, all such amounts in respect of the department’s liabilities to pay value added tax to the Commissioners of Customs and Excise as the department may be authorised to deduct in accordance with arrangements made by the Treasury.

(2) Arrangements made by the Treasury for the purposes of this section shall apply only to such Government departments and in such cases, and shall have effect subject to such conditions and to the compliance by the department with such accounting and other requirements, as may be provided for in the arrangements.

(3) In this section “Government department” includes any person or body of persons carrying out functions on behalf of the Crown or of any Minister of the Crown and any part of a Government department (as so defined) which is designated for the purposes of section 41 of the [1994 c. 23.] Value Added Tax Act 1994.

(4) This section has effect in relation to the financial year beginning with 1st April 1999 and subsequent financial years and shall be deemed to have had effect in relation to earlier financial years.

(5) For the purposes of applying this section in relation to the financial year beginning with 1st April 1999 or in relation to any earlier financial year, any arrangements applying to a Government department which—

(a) were made or approved before the passing of this Act, and

(b) allowed that department to deduct amounts in respect of value added tax liabilities before making payments into the Consolidated Fund,

shall be deemed to have been made by the Treasury for the purposes of this section.