Part I The charge to tax
Supply of goods or services in the United Kingdom
4 Scope of VAT on taxable supplies.
1
VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him.
2
A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.
C15 Meaning of supply: alteration by Treasury order.
1
Schedule 4 shall apply for determining what is, or is to be treated as, a supply of goods or a supply of services.
2
Subject to any provision made by that Schedule and to Treasury orders under subsections (3) to (6) below—
a
“supply” in this Act includes all forms of supply, but not anything done otherwise than for a consideration;
b
anything which is not a supply of goods but is done for a consideration (including, if so done, the granting, assignment or surrender of any right) is a supply of services.
3
The Treasury may by order provide with respect to any description of transaction—
a
that it is to be treated as a supply of goods and not as a supply of services; or
b
that it is to be treated as a supply of services and not as a supply of goods; or
c
that it is to be treated as neither a supply of goods nor a supply of services;
and without prejudice to the foregoing, such an order may provide that paragraph 5(4) of Schedule 4 is not to apply, in relation to goods of any prescribed description used or made available for use in prescribed circumstances, so as to make that a supply of services under that paragraph F40....
F333A
An order under subsection (3) may provide that paragraph 30 of Schedule 9ZB does not apply, in such circumstances as may be described in the order, so as to make a removal of assets a supply of goods under that paragraph.
4
Without prejudice to subsection (3) above, the Treasury may by order make provision for securing, with respect to services of any description specified in the order, that where—
a
a person carrying on a business does anything which is not a supply of services but would, if done for a consideration, be a supply of services of a description specified in the order; and
b
such other conditions as may be specified in the order are satisfied,
such services are treated for the purposes of this Act as being supplied by him in the course or furtherance of that business.
5
The Treasury may by order make provision for securing, subject to any exceptions provided for by or under the order, that where in such circumstances as may be specified in the order goods of a description so specified are taken possession of or produced by a person in the course or furtherance of a business carried on by him and—
a
are neither supplied to another person nor incorporated in other goods produced in the course or furtherance of that business; but
b
are used by him for the purpose of a business carried on by him,
the goods are treated for the purposes of this Act as being both supplied to him for the purpose of that business and supplied by him in the course or furtherance of it.
6
The Treasury may by order make provision for securing, with respect to services of any description specified in the order, that where—
a
a person, in the course or furtherance of a business carried on by him, does anything for the purpose of that business which is not a supply of services but would, if done for a consideration, be a supply of services of a description specified in the order; and
b
such other conditions as may be specified in the order are satisfied,
such services are treated for the purposes of this Act as being both supplied to him for the purpose of that business and supplied by him in the course or furtherance of it.
7
For the purposes of this section, where goods are manufactured or produced from any other goods, those other goods shall be treated as incorporated in the first-mentioned goods.
8
An order under subsection (4) or (6) above may provide for the method by which the value of any supply of services which is treated as taking place by virtue of the order is to be calculated.
5AF27Supplies of goods facilitated by online marketplaces: deemed supply
1
This section applies where—
a
a person (“P”) makes a taxable supply of goods in the course or furtherance of a business to another person (“R”),
b
that supply is facilitated by an online marketplace, and
F31c
one of the following applies—
i
the imported consignment condition is met, or
ii
the supply of goods to R does not involve those goods being imported, but P is established outside the United Kingdom.
F371A
But this section does not apply in a case where P is established outside the United Kingdom and the imported consignment condition is not met if—
a
R is registered under this Act,
b
R has provided the operator of the online marketplace with R's VAT registration number, and
c
the operator of the online marketplace has provided P with that number and details of the supply before the end of the relevant period.
2
For the purposes of this Act—
a
P is to be treated as having supplied the goods to the operator of the online marketplace, and
b
the operator is to be treated as having supplied the goods to R in the course or furtherance of a business carried on by the operator.
3
The imported consignment condition is met where—
a
the supply of the goods to R involves those goods being imported,
b
the intrinsic value of the consignment of which the goods are part is not more than £135, and
c
the consignment of which the goods are part—
i
does not contain excepted goods, and
ii
is not a consignment in relation to which a postal operator established outside the United Kingdom has an obligation under an agreement with the Commissioners to pay any import VAT that is chargeable on the importation of that consignment into the United Kingdom.
4
For the purposes of subsection (3)(c)(i), “excepted goods” means goods of a class or description subject to any duty of excise whether or not those goods are in fact chargeable with that duty, and whether or not that duty has been paid on the goods.
5
The Commissioners may by regulationsF32—
a
specify the details that must be provided for the purposes of subsection (1A)(c);
b
substitute a different figure for a figure that is at any time specified in subsection (3)(b).
F386
In this section—
“relevant period” means the period of 7 days beginning with the day on which the supply is treated as taking place under section 6 or such longer period as the Commissioners may allow in general or specific directions;
“VAT registration number” means the number allocated by the Commissioners to a person registered under this Act.
6 Time of supply.
1
2
Subject to subsections (4) to (14) below, a supply of goods shall be treated as taking place—
a
if the goods are to be removed, at the time of the removal;
b
if the goods are not to be removed, at the time when they are made available to the person to whom they are supplied;
c
if the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, at the time when it becomes certain that the supply has taken place or, if sooner, 12 months after the removal.
3
Subject to subsections (4) to (14) below, a supply of services shall be treated as taking place at the time when the services are performed.
4
If, before the time applicable under subsection (2) or (3) above, the person making the supply issues a VAT invoice in respect of it or if, before the time applicable under subsection (2)(a) or (b) or (3) above, he receives a payment in respect of it, the supply shall, to the extent covered by the invoice or payment, be treated as taking place at the time the invoice is issued or the payment is received.
5
If, within 14 days after the time applicable under subsection (2) or (3) above, the person making the supply issues a VAT invoice in respect of it, then, unless he has notified the Commissioners in writing that he elects not to avail himself of this subsection, the supply shall (to the extent that it is not treated as taking place at the time mentioned in subsection (4) above) be treated as taking place at the time the invoice is issued.
6
The Commissioners may, at the request of a taxable person, direct that subsection (5) above shall apply in relation to supplies made by him (or such supplies made by him as may be specified in the direction) as if for the period of 14 days there were substituted such longer period as may be specified in the direction.
F417
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F418
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F59
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10
The Commissioners may, at the request of a taxable person, by direction alter the time at which supplies made by him (or such supplies made by him as may be specified in the direction) are to be treated as taking place, either—
a
by directing those supplies to be treated as taking place—
i
at times or on dates determined by or by reference to the occurrence of some event described in the direction; or
ii
at times or on dates determined by or by reference to the time when some event so described would in the ordinary course of events occur,
the resulting times or dates being in every case earlier than would otherwise apply; or
b
by directing that, notwithstanding subsections (5) and (6) above, those supplies shall (to the extent that they are not treated as taking place at the time mentioned in subsection (4) above) be treated as taking place—
i
at the beginning of the relevant working period (as defined in his case in and for the purposes of the direction); or
ii
at the end of the relevant working period (as so defined).
11
Where goods are treated as supplied by an order under section 5(5), the supply is treated as taking place when they are appropriated to the use mentioned in that section.
12
Where there is a supply of goods by virtue only of paragraph 5(1) of Schedule 4, the supply is treated as taking place when the goods are transferred or disposed of as mentioned in that paragraph.
13
Where there is a supply of services by virtue only of paragraph 5(4) of Schedule 4, the supply is treated as taking place when the goods are appropriated to the use mentioned in that paragraph.
14
The Commissioners may by regulations make provision with respect to the time at which (notwithstanding F42subsections (2) to (6) and (11) to (13) above or section 55(4)) a supply is to be treated as taking place in cases where—
a
it is a supply of goods or services for a consideration the whole or part of which is determined or payable periodically, or from time to time, or at the end of any period, or
b
it is a supply of goods for a consideration the whole or part of which is determined at the time when the goods are appropriated for any purpose, or
c
there is a supply to which section 55 applies, or
d
there is a supply of services by virtue of paragraph 5(4) of Schedule 4 or an order under section 5(4);
and for any such case as is mentioned in this subsection the regulations may provide for goods or services to be treated as separately and successively supplied at prescribed times or intervals.
F214A
F11... this section and any regulations under this section or section 8(4) shall have effect subject to section 97A.
15
In this Act “VAT invoice” means such an invoice as is required under F6paragraph 2A of Schedule 11, or would be so required if the person to whom the supply is made were a person to whom such an invoice should be issued.
7Place of supply F9of goods.
1
2
Subject to the following provisions of this section, if the supply of any goods does not involve their removal from or to the United Kingdom they shall be treated as supplied in the United Kingdom if they are in the United Kingdom and otherwise shall be treated as supplied outside the United Kingdom.
3
Goods shall be treated—
a
as supplied in the United Kingdom where their supply involves their installation or assembly at a place in the United Kingdom to which they are removed; and
b
as supplied outside the United Kingdom where their supply involves their installation or assembly at a place outside the United Kingdom to which they are removed.
F444
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F445
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F345A
Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied outside the United Kingdom where the supply—
a
meets the imported consignment condition in section 5A; and
b
is deemed to be to the operator of an online marketplace.
5B
Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—
a
they are supplied by a person in the course or furtherance of a business carried on by that person;
b
the supply involves the goods being imported;
c
the intrinsic value of the consignment of which the goods are part is not more than £135; and
d
the consignment of which the goods are part—
i
does not contain goods of a class or description subject to any duty of excise whether or not those goods are in fact chargeable with that duty, and whether or not that duty has been paid on the goods; and
ii
is not a consignment in relation to which a postal operator established outside the United Kingdom has an obligation under an agreement with the Commissioners to pay any import VAT that is chargeable on the importation of that consignment into the United Kingdom.
6
Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—
a
their supply involves their being imported F45...; and
b
the person who supplies them is the person by whom, or under whose directions, they are so imported.
7
Goods whose place of supply is not determined under any of the preceding provisions of this section but whose supply involves their removal to or from the United Kingdom shall be treated—
a
as supplied in the United Kingdom where their supply involves their removal from the United Kingdom without also involving their previous removal to the United Kingdom; and
b
as supplied outside the United Kingdom in any other case.
8
For the purposes of the preceding provisions of this section, where goods, in the course of their removal from a place in the United Kingdom to another place in the United Kingdom, leave and re-enter the United Kingdom the removal shall not be treated as a removal from or to the United Kingdom.
F479
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F359A
The Commissioners may by regulations substitute a different figure for a figure that is at any time specified in subsection (5B)(c).
F1310
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11
F4612
The Commissioners may by regulations provide that any rule for determining where a supply of goods is made is subject to such conditions relating to the notification of matters to the Commissioners, or such other conditions, as may be specified in the regulations.
7AAF28Reverse charge on goods supplied from abroad
1
This section applies where—
a
goods are supplied by a person (“A”) to another person (“B”),
b
B is registered under this Act,
c
the supply involves the goods being imported,
d
the intrinsic value of the consignment of which the goods are part is not more than £135, and
e
the consignment of which the goods are part—
i
does not contain goods of a class or description subject to any duty of excise whether or not those goods are in fact chargeable with that duty, and whether or not that duty has been paid on the goods, and
ii
is not a consignment in relation to which a postal operator established outside the United Kingdom has an obligation under an agreement with the Commissioners to pay any import VAT that is chargeable on the importation of that consignment into the United Kingdom.
2
This Act has effect as if, instead of there being a supply of the goods by A to B—
a
there were a supply of the goods by B in the course of furtherance of a business carried on by B, and
b
that supply were a taxable supply.
3
The Commissioners may by regulations substitute a different figure for a figure that is at any time specified in subsection (1)(d).
7AF8Place of supply of services
1
This section applies F55, subject to section 57A, for determining, for the purposes of this Act, the country in which services are supplied.
2
A supply of services is to be treated as made—
a
in a case in which the person to whom the services are supplied is a relevant business person, in the country in which the recipient belongs, and
b
otherwise, in the country in which the supplier belongs.
3
The place of supply of a right to services is the same as that in which the supply of the services would be treated as made if made by the supplier of the right to the recipient of the right (whether or not the right is exercised); and for this purpose a right to services includes any right, option or priority with respect to the supply of services and an interest deriving from a right to services.
F484
For the purposes of this Act a person is a relevant business person in relation to a supply of services if—
a
the person carries on a business, and
b
the services are not received by the person wholly for private purposes,
whether or not the services are received in the course of business.
5
Subsection (2) has effect subject to Schedule 4A.
6
The Treasury may by order—
a
amend subsection (4),
b
amend Schedule 4A, or
c
otherwise make provision for exceptions from either or both of the paragraphs of subsection (2).
7
An order under subsection (6) may include incidental, supplemental, consequential and transitional provision.
8 Reverse charge on supplies received from abroad.
F161
Where services are supplied by a person who belongs in a country other than the United Kingdom in circumstances in which this subsection applies, this Act has effect as if (instead of there being a supply of the services by that person)—
a
there were a supply of the services by the recipient in the United Kingdom in the course or furtherance of a business carried on by the recipient, and
b
that supply were a taxable supply.
F162
Subsection (1) above applies if—
a
the recipient is a relevant business person who belongs in the United Kingdom, and
b
the place of supply of the services is inside the United Kingdom,
and, where the supply of the services is one to which any paragraph of Part 1 or 2 of Schedule 4A applies, the recipient is registered under this Act.
3
Supplies which are treated as made by the recipient under subsection (1) above are not to be taken into account as supplies made by him when determining any allowance of input tax in his case under section 26(1).
4
In applying subsection (1) above, the supply of services treated as made by the recipient shall be assumed to have been made at a time to be determined in accordance with regulations prescribing rules for attributing a time of supply in cases within that subsection.
F154A
Subsection (1) does not apply to services of any of the descriptions specified in Schedule 9.
5
The Treasury may by order F17amend subsection (4A) by altering the descriptions of services specified in that subsection.
F186
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F47
8
Without prejudice to the generality of subsection (7) above, the provision that may be made under that subsection includes—
a
provision making such modifications of section 43(2A) to (2E) as the Treasury may think fit in connection with any F21amendment of subsection (4A); and
b
provision modifying the effect of any regulations under subsection (4) above in relation to any services added to F22that subsection.
F109Place where supplier or recipient of services belongs.
1
This section has effect for determining for the purposes of section 7A (or Schedule 4A) or section 8, in relation to any supply of services, whether a person who is the supplier or recipient belongs in one country or another.
2
A person who is a relevant business person is to be treated as belonging in the relevant country.
3
In subsection (2) “the relevant country” means—
a
if the person has a business establishment, or some other fixed establishment, in a country (and none in any other country), that country,
b
if the person has a business establishment, or some other fixed establishment or establishments, in more than one country, the country in which the relevant establishment is, and
c
otherwise, the country in which the person's usual place of residence F25or permanent address is.
4
In subsection (3)(b) “relevant establishment” means whichever of the person's business establishment, or other fixed establishments, is most directly concerned with the supply.
5
A person who is not a relevant business person is to be treated as F26belonging—
a
in the country in which the person's usual place of residence or permanent address is (except in the case of a body corporate or other legal person);
b
in the case of a body corporate or other legal person, in the country in which the place where it is established is.
F496
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9AF7Reverse charge on gas F24, electricity, heat or coolingF39...
1
This section applies if relevant goods are supplied—
a
by a person who is outside the United Kingdom,
b
to a person who is registered under this Act,
for the purposes of any business carried on by the recipient.
C2F361A
This section also applies if relevant goods are supplied by a person (“A”) to another person (“B”) for the purposes of any business carried on by B and—
a
A is in Great Britain and B is registered under this Act and is identified for the purposes of VAT in Northern Ireland, or
b
A is in Northern Ireland and B is so registered but is not so identified.
2
The same consequences follow under this Act (and particularly so much as charges VAT on a supply and entitles a taxable person to credit for input tax) as if—
a
the recipient had himself supplied the relevant goods in the course or furtherance of his business, and
b
that supply were a taxable supply.
3
But supplies which are treated as made by the recipient under subsection (2) are not to be taken into account as supplies made by him when determining any allowance of input tax in his case under section 26(1).
4
In applying subsection (2) the supply of relevant goods treated as made by the recipient shall be assumed to have been made at a time to be determined in accordance with regulations prescribing rules for attributing a time of supply in cases to which this section applies.
F235
Relevant goods” means—
a
F29aa
gas supplied through a natural gas system situated within Northern Ireland or the territory of a member State or any network connected to such a system,
b
electricity, and
c
heat or cooling supplied through a network.
6
Whether a person is outside the United Kingdom F30, in Great Britain or in Northern Ireland is to be determined in accordance with an order made by the Treasury.