The Value Added Tax (Finance) (No. 2) Order 2003

Explanatory Note

(This note is not part of the Order)

This Order, together with the Value Added Tax (Finance) Order 2003, applies to services performed on or after 1st August 2003. It amends Group 5 of Schedule 9 (exempt financial services) to the Value Added Tax Act 1994 to clarify the scope of the Group following recent litigation. The amendments in Article 2(a) to (c) complement, and form a package with, the amendments made to credit management services in the Value Added Tax (Finance) Order 2003.

The amendments set out in Article 2(d) to (i) redefine the scope of the exemption for services consisting of the management of authorised unit trust schemes, trust based schemes (item 9) and open-ended investment companies (item 10) so as to make it clear that such services are exempt even when supplied by third parties. Previously the exemption only extended to management services supplied by the operators of such schemes or by the authorised corporate director of an open-ended investment company.