The Value Added Tax (Buildings and Land) Order 2010

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends Schedule 10 (“the Schedule”) to the Value Added Tax Act 1994 (c. 23) (“the Act”) and comes into force on 1^st April 2010. Articles 5 and 6 of this Order have effect in relation to supplies made on or after 1^st April 2010 where the grant in question is on or after that date.

Article 4 amends paragraph 10 of the Schedule. That paragraph provides that, in certain circumstances, an option to tax has no effect in relation to grants made to relevant housing associations (“RHAs”) in relation to land. For the purposes of paragraph 10, RHAs are defined to include registered social landlords within the meaning of Part 1 of the Housing Act 1996 (c. 52). The system of registered social landlords under that Part was established in England and Wales. It was replaced in England by Part 2 of the Housing and Regeneration Act 2008 (c. 17), and preserved in Wales. Article 4(1)(a) inserts a new paragraph 10(3)(za) so that the definition of RHAs includes private registered providers of social housing under the new system for England. Article 4(1)(b) removes the reference to English registered social landlords from paragraph 10(3)(a). Article 4(2) defines “private registered provider of social housing” until the coming into force of provision defining that expression in enactments and instruments generally.

Article 5 inserts sub-paragraph (3A) into paragraph 15. The new sub-paragraph provides that where a person (“P”) who is a development financier, or a person connected with a development financier, is in occupation of the land at any time before the end of the relevant adjustment period as defined in the Schedule, P is treated as not in occupation of the land for the purposes of sub-paragraph (2) at that time if certain building occupation conditions are met.

Article 6 inserts a new paragraph 15A into the Schedule. Sub-paragraphs (1) to (3) set out the building occupation conditions. Sub-paragraph (4) defines “relevant building” and sub-paragraph (6) defines “relevant interest” for the purposes of the new paragraph. Sub-paragraph (5) sets out that the measurement of P’s occupation is to be determined in accordance with conditions specified in a public notice. Sub-paragraph (7) applies sub-paragraphs (4) to (7) of paragraph 18 of the Schedule (meaning of “building”) for the purposes of the paragraph.

Article 7 amends paragraph 23. That paragraph provides that an option to tax any land may be revoked with effect from the day on which it was exercised if certain conditions are met. The amendment removes the condition that the person who exercised the option must not have used the land since the option had effect.

A full and final Impact Assessment has not been produced for this instrument as a negligible impact on the private or voluntary sectors is foreseen.