The Value Added Tax (General) (Amendment) (No. 5) Regulations 1993

Explanatory Note

(This note is not part of the Regulations)

These Regulations, which come into force on 1st August 1993, make a number of amendments to Part V of the Value Added Tax (General) Regulations 1985 (“the principal Regulations”).

Regulation 3 amends the definition of “exempt input tax” in regulation 29(1) of the principal Regulations so as to include input tax on goods and services used in the making of supplies outside the United Kingdom which would be exempt if made in the United Kingdom, where that input tax is not deductible.

Regulation 4 inserts a new regulation 29A. This regulation clarifies the scope of Part V of the principal Regulations, and confirms the close link which exists between the supplies made in the course of a business and the deduction of input tax.

Regulation 5 merely amends the wording of regulation 32 so as to make it consistent with that of other regulations in Part V of the principal Regulations.

Regulation 6 amends regulation 33 by extending its scope so as to include the input tax which regulation 3 of these Regulations has brought within the definition of “exempt input tax” in regulation 29(1) of the principal Regulations.

Regulation 7 amends regulations 35 and 36 of the principal Regulations to cater for the new regulation 36A which is introduced by regulation 8.

Regulation 8 inserts a new regulation 36A. This brings supplies outside the United Kingdom within the scope of regulations 35 and 36. The effect of this is that such supplies as do not give rise to the right to deduct input tax are differentiated from those supplies which do, irrespective of where the supplies take place.