Office of Public Sector Information
SCHEDULE 3 continued PART I continued
6 (1) Subject to paragraph 7 below, where a person registered under this Schedule satisfies the Commissioners that he is not liable to be so registered, they shall, if he so requests, cancel his registration with effect from the day on which the request is made or from such later date as may be agreed between them and him.
(2) Subject to paragraph 7 below, where the Commissioners are satisfied that a person registered under this Schedule has ceased since his registration to be registrable under this Schedule, they may cancel his registration with effect from the day on which he so ceased or from such later date as may be agreed between them and him.
(3) Where the Commissioners are satisfied that, on the day on which a person was registered under this Schedule, he—
(a) was not registrable under this Schedule; and
(b) in the case of a person registered under paragraph 4(2) above, did not have the intention by reference to which he was registered,
they may cancel his registration with effect from that day.
(4) Subject to paragraph 7 below, where the Commissioners are satisfied that a person who has been registered under paragraph 4(2) above and is not for the time being liable to be registered under this Schedule—
(a) has not begun, by the date specified in his request to be registered, to make relevant acquisitions; or
(b) has contravened any condition of his registration,
they may cancel his registration with effect from the date so specified or, as the case may be, the date of the contravention or from such later date as may be agreed between them and him.
(5) For the purposes of this paragraph a person is registrable under this Schedule at any time when he is liable to be registered under this Schedule or is a person who makes relevant acquisitions.
7 (1) The Commissioners shall not, under paragraph 6(1) above, cancel a person’s registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement to be registered under this Act.
(2) The Commissioners shall not, under paragraph 6(2) or (4) above, cancel a person’s registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement, or entitled, to be registered under this Act.
(3) Subject to sub-paragraph (4) below, the registration of a person who—
(a) is registered under paragraph 4 above; or
(b) would not, if he were not registered, be liable or entitled to be registered under any provision of this Act except paragraph 4 above,
shall not be cancelled with effect from any time before the 1st January which is, or next follows, the second anniversary of the date on which his registration took effect.
(4) Sub-paragraph (3) above does not apply to cancellation under paragraph 6(3) or (4) above.
(5) In determining for the purposes of this paragraph whether a person would be subject to a requirement, or entitled, to be registered at any time, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when he is already registered or when he is so liable under any other provision shall be disregarded.
8 (1) Notwithstanding the preceding provisions of this Schedule, where a person who makes or intends to make relevant acquisitions satisfies the Commissioners that any such acquisition would be an acquisition in pursuance of a transaction which would be zero-rated if it were a taxable supply by a taxable person, they may, if he so requests and they think fit, exempt him from registration under this Schedule until it appears to them that the request should no longer be acted upon or is withdrawn.
(2) Where a person who is exempted under this paragraph from registration under this Schedule makes any relevant acquisition in pursuance of any transaction which would, if it were a taxable supply by a taxable person, be chargeable to tax otherwise than as a zero-rated supply, he shall notify the Commissioners of the change within thirty days of the date on which he made the acquisition.
9 The Treasury may by order substitute for any of the sums for the time being specified in this Schedule such greater sums as they think fit.
10 Any notification required under this Schedule shall be made in such form and shall contain such particulars as the Commissioners may by regulations prescribe.
11 For the purposes of this Schedule an acquisition of goods from another member State is a relevant acquisition where—
(a) it is a taxable acquisition of goods other than goods which are subject to a duty of excise or consist in a new means of transport;
(b) it is an acquisition otherwise than in pursuance of a taxable supply and is treated, for the purposes of this Act, as taking place in the United Kingdom; and
(c) the event which, in relation to that acquisition, is the first relevant event for the purposes of taxing that acquisition occurs after the coming into force of this Schedule.”
60 (1) In Schedule 2 (matters to be treated as supplies of goods or services), after paragraph 5 there shall be inserted the following paragraph—
“5A (1) Where, in a case not falling within paragraph 5(1) above, goods forming part of the assets of any business—
(a) are removed from any member State by or under the directions of the person carrying on the business; and
(b) are so removed in the course or furtherance of that business for the purpose of being taken to a place in a member State other than that from which they are removed,
then, whether or not the removal is or is connected with a transaction for a consideration, that is a supply of goods by that person.
(2) Sub-paragraph (1) above does not apply—
(a) to the removal of goods from any member State in the course of their removal from one part of that member State to another part of the same member State; or
(b) to goods which have been removed from a place outside the member States for entry into the territory of the Community and are removed from a member State before the time when any Community customs debt in respect of any Community customs duty on their entry into that territory would be incurred.”
(2) In paragraph 7(2) of that Schedule (deemed supply where person ceases to be a taxable person)—
(a) in paragraph (a), for the words from “in respect of” to the end of the paragraph there shall be substituted “has been allowed to him in respect of the supply of the goods, their acquisition from another member State or their importation from a place outside the member States”; and
(b) in paragraph (b), for “were not acquired by him” there shall be substituted “did not become his”.
61 (1) In Schedule 4, paragraphs 2 and 5 (valuation for purposes of tax on importation where persons connected and prompt payment discounts) shall cease to have effect.
(2) After paragraph 3 of that Schedule there shall be inserted the following paragraph—
“3A (1) Where—
(a) any goods whose supply involves their removal to the United Kingdom—
(i) are charged in connection with their removal to the United Kingdom with a duty of excise or with car tax; or
(ii) on that removal are subject, in accordance with any provision for the time being having effect for transitional purposes in connection with the accession of any State to the European Communities, to any Community customs duty or agricultural levy of the Economic Community;
or
(b) the time of supply of any dutiable goods, or of any goods which comprise a mixture of dutiable goods and other goods, is determined under section 35(4) of this Act to be the duty point,
then the value of the supply shall be taken for the purposes of this Act to be the sum of its value apart from this paragraph and the amount, so far as not already included in that value, of the duty, tax or, as the case may be, agricultural levy which has been or is to be paid in respect of the goods.
(2) In this paragraph “dutiable goods” and “duty point” have the same meanings as in section 35 of this Act.”
(3) In paragraph 7 of that Schedule (valuation of supplies where there is no consideration)—
(a) at the beginning there shall be inserted “(1)”;
(b) in sub-paragraph (b), after “paragraph 5(1)” there shall be inserted “or 5A”; and
(c) for the words from “the value” to the end of the paragraph there shall be substituted— “then, except where paragraph 10 below applies, the value of the supply shall be determined as follows.
(2) The value of the supply shall be taken to be—
(a) such consideration in money as would be payable by the person making the supply if he were, at the time of the supply, to purchase goods identical in every respect (including age and condition) to the goods concerned; or
(b) where the value cannot be ascertained in accordance with paragraph (a) above, such consideration in money as would be payable by that person if he were, at that time, to purchase goods similar to, and of the same age and condition as, the goods concerned; or
(c) where the value can be ascertained in accordance with neither paragraph (a) nor paragraph (b) above, the cost of producing the goods concerned if they were produced at that time.
(3) For the purposes of sub-paragraph (2) above the amount of consideration in money that would be payable by any person if he were to purchase any goods shall be taken to be the amount that would be so payable after the deduction of any amount included in the purchase price in respect of value added tax on the supply of the goods to that person.”
(4) After paragraph 8 of that Schedule there shall be inserted the following paragraph—
“8A Where any supply of services is treated by virtue of section 7 of this Act as made by the person by whom they are received, the value of the supply shall be taken—
(a) in a case where the consideration for which the services were in fact supplied to him was a consideration in money, to be such amount as is equal to that consideration; and
(b) in a case where that consideration did not consist or not wholly consist of money, to be such amount in money as is equivalent to that consideration.”
(5) For paragraph 11 of that Schedule (rates of exchange) there shall be substituted the following paragraph—
“11 (1) Subject to the following provisions of this paragraph, where—
(a) there is a supply of goods or services; and
(b) any sum relevant for determining the value of the supply is expressed in a currency other than sterling,
then, for the purpose of valuing the supply, that sum is to be converted into sterling at the market rate which, on the relevant day, would apply in the United Kingdom to a purchase with sterling by the person to whom they are supplied of that sum in the currency in question.
(2) Where the Commissioners have published a notice which, for the purposes of this paragraph, specifies—
(a) rates of exchange; or
(b) methods of determining rates of exchange,
a rate specified in or determined in accordance with the notice, as for the time being in force, shall apply (instead of the rate for which sub-paragraph (1) above provides) in the case of any supply by a person who opts, in such manner as may be allowed by the Commissioners, for the use of that rate in relation to that supply.
(3) An option for the purposes of sub-paragraph (2) above for the use of a particular rate or method of determining a rate—
(a) shall not be exercised by any person except in relation to all such supplies by him as are of a particular description or after a particular date; and
(b) shall not be withdrawn or varied except with the consent of the Commissioners and in such manner as they may require.
(4) In specifying a method of determining a rate of exchange a notice published by the Commissioners under sub-paragraph (2) above may allow a person to apply to the Commissioners for the use, for the purpose of valuing some or all of his supplies, of a rate of exchange which is different from any which would otherwise apply.
(5) On an application made in accordance with provision contained in a notice under sub-paragraph (4) above, the Commissioners may authorise the use with respect to the applicant of such a rate of exchange, in such circumstances, in relation to such supplies and subject to such conditions as they think fit.
(6) A notice published by the Commissioners for the purposes of this paragraph may be withdrawn or varied by a subsequent notice published by the Commissioners.
(7) The time by reference to which the appropriate rate of exchange is to be determined for the purpose of valuing any supply is the time when the supply takes place; and, accordingly, the day on which it takes place is the relevant day for the purposes of sub-paragraph (1) above.”
62 After Schedule 4 there shall be inserted the following Schedule—
1 (1) Where, in the case of the acquisition of any goods from another member State—
(a) the relevant transaction is for a consideration in money;
(b) the value of the relevant transaction is (apart from this paragraph) less than the transaction’s open market value;
(c) the supplier and the person who acquires the goods are connected; and
(d) that person is not entitled under sections 14 and 15 of this Act to credit for all the tax on the acquisition,
the Commissioners may direct that the value of the relevant transaction shall be taken to be its open market value.
(2) A direction under this paragraph shall be given by notice in writing to the person by whom the acquisition in question is made; but no direction may be given more than three years after the relevant time.
(3) A direction given to a person under this paragraph in respect of a transaction may include a direction that the value of any transaction—
(a) in pursuance of which goods are acquired by him from another member State after the giving of the notice, or after such later date as may be specified in the notice; and
(b) as to which the conditions in paragraphs (a) to (d) of sub-paragraph (1) above are satisfied,
shall be taken to be its open market value.
(4) For the purposes of this paragraph the open market value of a transaction in pursuance of which goods are acquired from another member State shall be taken to be the amount which would fall to be taken as its value under section 10A(3) of this Act if it were for such consideration in money as would be payable by a person standing in no such relationship with any person as would affect that consideration.
(5) For the purposes of this paragraph any question whether a person is connected with another shall be determined in accordance with section 839 of the [1988 c. 1.] Income and Corporation Taxes Act 1988.
(6) A direction under this paragraph may be varied or withdrawn by the Commissioners by a further direction given by notice in writing.
2 (1) Where, in such cases as the Commissioners may by regulations prescribe, goods acquired in the United Kingdom from another member State—
(a) are charged in connection with their removal to the United Kingdom with a duty of excise or with car tax; or
(b) on that removal are subject, in accordance with any provision for the time being having effect for transitional purposes in connection with the accession of any State to the European Communities, to any Community customs duty or agricultural levy of the Economic Community,
then the value of the relevant transaction shall be taken for the purposes of this Act to be the sum of its value apart from this paragraph and the amount, so far as not already included in that value, of the duty, tax or, as the case may be, agricultural levy which has been or is to be paid in respect of those goods.
(2) Sub-paragraph (1) above shall not require the inclusion of any amount of duty or agricultural levy in the value of a transaction in pursuance of which there is an acquisition of goods which, under subsection (4) of section 35 of this Act, is treated as taking place before the time which is the duty point within the meaning of that section.
3 (1) Where goods are acquired from another member State in pursuance of anything which is treated as a supply for the purposes of this Act by virtue of paragraph 5(1) or 5A of Schedule 2 to this Act, the value of the relevant transaction shall be determined, in a case where there is no consideration, as follows.
(2) The value of the transaction shall be taken to be—
(a) such consideration in money as would be payable by the supplier if he were, at the time of the acquisition, to purchase goods identical in every respect (including age and condition) to the goods concerned; or
(b) where the value cannot be ascertained in accordance with paragraph (a) above, such consideration in money as would be payable by the supplier if he were, at that time, to purchase goods similar to, and of the same age and condition as, the goods concerned; or
(c) where the value can be ascertained in accordance with neither paragraph (a) nor paragraph (b) above, the cost of producing the goods concerned if they were produced at that time.
(3) For the purposes of sub-paragraph (2) above the amount of consideration in money that would be payable by any person if he were to purchase any goods shall be taken to be the amount that would be so payable after the deduction of any amount included in the purchase price in respect of value added tax on the supply of the goods to that person.
4 (1) Subject to the following provisions of this paragraph, where—
(a) goods are acquired from another member State; and
(b) any sum relevant for determining the value of the relevant transaction is expressed in a currency other than sterling,
then, for the purpose of valuing the relevant transaction, that sum is to be converted into sterling at the market rate which, on the relevant day, would apply in the United Kingdom to a purchase with sterling by the person making the acquisition of that sum in the currency in question.
(2) Where the Commissioners have published a notice which, for the purposes of this paragraph, specifies—
(a) rates of exchange; or
(b) methods of determining rates of exchange,
a rate specified in or determined in accordance with the notice, as for the time being in force, shall apply (instead of the rate for which sub-paragraph (1) above provides) in the case of any transaction in pursuance of which goods are acquired by a person who opts, in such manner as may be allowed by the Commissioners, for the use of that rate in relation to that transaction.
(3) An option for the purposes of sub-paragraph (2) above for the use of a particular rate or method of determining a rate—
(a) shall not be exercised by any person except in relation to all such transactions in pursuance of which goods are acquired by him from another member State as are of a particular description or after a particular date; and
(b) shall not be withdrawn or varied except with the consent of the Commissioners and in such manner as they may require.
(4) In specifying a method of determining a rate of exchange a notice published by the Commissioners under sub-paragraph (2) above may allow a person to apply to the Commissioners for the use, for the purpose of valuing some or all of the transactions in pursuance of which goods are acquired by him from another member State, of a rate of exchange which is different from any which would otherwise apply.
(5) On an application made in accordance with provision contained in a notice under sub-paragraph (4) above, the Commissioners may authorise the use with respect to the applicant of such a rate of exchange, in such circumstances, in relation to such transactions and subject to such conditions as they think fit.
(6) A notice published by the Commissioners for the purposes of this paragraph may be withdrawn or varied by a subsequent notice published by the Commissioners.
(7) Where goods are acquired from another member State, the appropriate rate of exchange is to be determined for the purpose of valuing the relevant transaction by reference to the relevant time; and, accordingly, the day on which that time falls is the relevant day for the purposes of sub-paragraph (1) above.
5 In this Schedule—
“relevant transaction”, in relation to any acquisition of goods from another member State, means the transaction in pursuance of which the goods are acquired;
“the relevant time”, in relation to any such acquisition, means—
if the person by whom the goods are acquired is not a taxable person and the time of acquisition does not fall to be determined in accordance with regulations made under section 8B(3) above, the time of the event which, in relation to that acquisition, is the first relevant event for the purposes of taxing the acquisition; and
in any other case, the time of acquisition.”
63 (1) In Schedule 5 (zero-rated supplies), in Note (1) of Group 14 (goods imported by handicapped person and charities), for “imported” there shall be substituted “acquired from another member State or imported from a place outside the member States”.
(2) In that Schedule, in Item 1 of Group 15 (supply of imported goods before entry), the words “of imported goods” shall be omitted, and at the end of the Item there shall be inserted “of goods imported from a place outside the member States.”
(3) In that Schedule—
(a) in Item 4 of Group 15 (supply to overseas authority etc. of goods used in the United Kingdom for the manufacture of goods for export), after “for export” there shall be inserted “to places outside the member States.”; and
(b) in Note (6) to Group 15 (restriction on application of Item 4), at the end there shall be inserted “another member State, any part of or place in another member State, the government of any such member State, part or place, a body established in another member State or a person who carries on business, or has a place of business, in another member State.”
(4) In that Schedule, in Item 3 of Group 16 (exports by charities), at the end there shall be inserted “to a place outside the member States.”
64 (1) In paragraph 2 of Schedule 7 (regulations about accounting for and paying tax), in sub-paragraph (1)—
(a) for “to other taxable persons to provide them” there shall be substituted “in such cases, or to persons of such descriptions, as may be so specified to provide the persons supplied”; and
(b) for the words from “the tax chargeable” onwards there shall be substituted “and of the persons by and to whom the goods or services are supplied and containing such an indication as may be required by the regulations of whether value added tax is chargeable on the supply under this Act or the law of another member State and such particulars of any value added tax which is so chargeable as may be so specified.”
(2) In sub-paragraph (2) of that paragraph, for “and may allow for that time to be extended” there shall be substituted “or at such time before the supply is treated as taking place as may be required by the regulations, and may allow for an invoice to be issued later than required by the regulations where it is issued”.
(3) After sub-paragraph (2) of that paragraph there shall be inserted the following sub-paragraphs—
“(2A) Regulations under this paragraph may require the submission to the Commissioners by taxable persons, at such times and intervals, in such cases and in such form and manner as may be—
(a) specified in the regulations; or
(b) determined by the Commissioners in accordance with powers conferred by the regulations,
of statements containing such particulars of transactions in which the taxable persons are concerned and which involve the movement of goods between member States, and of the persons concerned in those transactions, as may be prescribed.
(2B) Regulations under this paragraph may make provision in relation to cases where—
(a) any goods which are subject to a duty of excise or consist in a new means of transport are acquired in the United Kingdom from another member State by any person;
(b) the acquisition of the goods is a taxable acquisition and is not in pursuance of a taxable supply; and
(c) that person is not a taxable person at the time of the acquisition,
for requiring the person who acquires the goods to give to the Commissioners such notification of the acquisition, and for requiring any tax on the acquisition to be paid, at such time and in such form or manner as may be specified in the regulations.
(2C) Regulations under this paragraph may provide for a notification required by virtue of sub-paragraph (2B) above—
(a) to contain such particulars relating to the notified acquisition and any tax chargeable thereon as may be specified in the regulations; and
(b) to be given, in prescribed cases, by the personal representative, trustee in bankruptcy, receiver, liquidator or person otherwise acting in a representative capacity in relation to the person who makes that acquisition.”
(4) After sub-paragraph (3A) of that paragraph there shall be inserted the following sub-paragraphs—
“(3B) Regulations under this paragraph may make provision whereby, in such cases and subject to such conditions as may be determined by or under the regulations—
(a) tax in respect of any supply by a taxable person of dutiable goods or of a chargeable vehicle within the meaning of the [1983 c. 53.] Car Tax Act 1983; or
(b) tax in respect of an acquisition by any person from another member State of dutiable goods or of such a vehicle,
may be accounted for and paid, and any question as to the inclusion of any duty, car tax or agricultural levy in the value of the supply or acquisition determined, by reference to the duty point or, as the case may be, the time when the car tax becomes due or by reference to such later time as the Commissioners may allow.
In this sub-paragraph “dutiable goods” and “duty point” have the same meanings as in section 35 of this Act.
(3C) Regulations under this paragraph may provide for the time when any invoice described in regulations made for the purposes of section 5(3B)(b) or 8B(1)(b) of this Act is to be treated as having been issued and provide for tax accounted for and paid by reference to the date of issue of such an invoice to be confined to tax on so much of the value of the supply or acquisition as is shown on the invoice.”
65 In paragraph 3 of that Schedule (computer records of particulars contained in tax invoices), after sub-paragraph (2) there shall be inserted the following sub-paragraph—
“(2A) Without prejudice to the generality of the powers conferred by virtue of sub-paragraph (3C) of paragraph 2 above, regulations made by virtue of that sub-paragraph may provide for the preceding provisions of this paragraph to apply, subject to such exceptions and adaptations as may be prescribed, in relation to any invoice which is described in regulations made for the purposes of section 5(3B)(b) or 8B(1)(b) of this Act, as they apply in relation to tax invoices.”
66 (1) In sub-paragraph (2A) of paragraph 4 of that Schedule (power of Commissioners to assess tax due), after “Schedule 1 to this Act” there shall be inserted “, paragraph 6(2) of Schedule 1A to this Act or paragraph 6(2) or (3) of Schedule 1B to this Act”.
(2) In sub-paragraph (5) of that paragraph (time limits)—
(a) after the word “period”, in the first place where it occurs, there shall be inserted “must be made within the time limits provided for in section 22 of the [1985 c. 54.] Finance Act 1985 (ultimate time limits on assessments) and”; and
(b) for the words after paragraph (b) there shall be substituted— “but (subject to that section) where further such evidence comes to the Commissioners' knowledge after the making of an assessment under sub-paragraph (1), (2) or (2A) above, another assessment may be made under that sub-paragraph, in addition to any earlier assessment.”
(3) In sub-paragraph (6) of that paragraph (deficiency of goods)—
(a) for the words from “acquired” to the word “him”, in the first place where it occurs, there shall be substituted “in the course or furtherance of a business carried on by him, been supplied with any goods, acquired any goods from another member State or otherwise obtained possession or control of any goods or has, in the course or furtherance of such a business, imported any goods from a place outside the member States,”; and
(b) for “from the United Kingdom otherwise than” there shall be substituted “or otherwise removed from the United Kingdom without being exported or so removed”.
67 After paragraph 4 of that Schedule there shall be inserted the following paragraph—
4A (1) Where a person who has, at a time when he was not a taxable person, acquired in the United Kingdom from another member State any goods subject to a duty of excise or consisting in a new means of transport and—
(a) no notification of that acquisition has been given to the Commissioners by the person who is required to give one by regulations under paragraph 2(2B) above;
(b) the Commissioners are not satisfied that the particulars relating to the acquisition in any notification given to them are accurate and complete; or
(c) there has been a failure to supply the Commissioners with the information necessary to verify the particulars contained in any such notification,
they may assess the amount of tax due on the acquisition to the best of their judgment and notify their assessment to that person.
(2) An assessment under this paragraph must be made within the time limits provided for in section 22 of the [1985 c. 54.] Finance Act 1985 (ultimate time limits on assessments) and shall not be made after whichever is the later of the following—
(a) two years after the time when a notification of the acquisition of the goods in question is given to the Commissioners by the person who is required to give one by regulations under paragraph 2(2B) above;
(b) one year after evidence of the facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge,
but (subject to that section) where further such evidence comes to the Commissioners' knowledge after the making of an assessment under this paragraph, another assessment may be made under this paragraph, in addition to any earlier assessment.
(3) Where an amount has been assessed and notified to any person under this paragraph, it shall, subject to the provisions of this Act as to appeals, be deemed to be an amount of tax due from him and may be recovered accordingly, unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.
(4) For the purposes of this paragraph notification to a personal representative, trustee in bankruptcy, receiver, liquidator or person otherwise acting in a representative capacity in relation to the person who made the acquisition in question shall be treated as notification to the person in relation to whom he so acts.”
68 In paragraph 5(2) of that Schedule (requirement of security), at the beginning there shall be inserted “Without prejudice to their power under section 32A(7) of this Act,”.
69 In paragraph 6 of that Schedule (enforcement and recovery of tax), after sub-paragraph (9) there shall be inserted the following sub-paragraph—
“(10) The preceding provisions of this paragraph shall have effect as if any sum required by way of security under section 32A(7) of this Act were recoverable as if it were tax due from the person who is required to provide it.”
70 In paragraph 7(1) of that Schedule (duty to keep records), at the end there shall be inserted “and every person who, at a time when he is not a taxable person, acquires in the United Kingdom from another member State any goods which are subject to a duty of excise or consist in a new means of transport shall keep such records with respect to the acquisition (if it is a taxable acquisition and is not in pursuance of a taxable supply) as the Commissioners may so require.”
Finance (No. 2) Act 1992