Finance Act 1997

39 Bad debt relief

(1) In section 36 of the [1994 c. 23.] Value Added Tax Act 1994, paragraph (b) of subsection (4) (condition of bad debt relief that property in goods supplied has passed) shall not apply in the case of any claim made under that section in relation to a supply of goods made after the day on which this Act is passed.

(2) After that subsection there shall be inserted the following subsection—

“(4A) Where—

(a) a person is entitled under subsection (2) above to be refunded an amount of VAT, and

(b) that VAT has at any time been included in the input tax of another person,

that other person shall be taken, as from the time when the claim for the refund is made, not to have been entitled to any credit for input tax in respect of the VAT that has to be refunded on that claim.”

(3) Subsection (2) above has effect in relation to any entitlement under section 36 of that Act of 1994 to a refund of VAT charged on a supply made after 26th November 1996.

(4) In subsection (5) of that section (regulations), after paragraph (e) there shall be inserted the following paragraph—

“(ea) make provision, where there is a repayment by virtue of paragraph (e) above, for restoring the whole or any part of an entitlement to credit for input tax;”.

(5) No claim for a refund may be made in accordance with section 22 of the [1983 c. 55.] Value Added Tax Act 1983 (old scheme for bad debt relief) at any time after the day on which this Act is passed.