The Value Added Tax (Input Tax) (Amendment) Order 1998

Explanatory Note

(This note is not part of the Order)

This Order, which comes into force on 13th November 1998, further amends the Value Added Tax (Input Tax) Order 1992 (S.I. 1992/3222). (the principal Order)

Article 2 (a) of the Order clarifies Article 7 (2)(a)(ii) of the principal Order to ensure consistency with the wording of Article 7(1)(a) of the principal Order.

Article 2(b) of the Order amends Article 7(2)(b) of the principal Order to restrict the circumstances in which VAT charged on the leasing charge for a non qualifying motor car may be recovered as input tax. Where a motor car which is prevented from being a qualifying motor car by virtue of the anti avoidance provision contained in article 7(2C) of the principal Order is leased to a person who pre let the car prior to 1st August 1995 that person can now only recover 50% of the VAT charged to them on leasing charges for the motor car incurred after 12th November 1998.