Office of Public Sector Information
PART I continued
(1) For the purposes of this Act goods are imported from a place outside the member States where—
(a) having been removed from a place outside the member States, they enter the territory of the Community;
(b) they enter that territory by being removed to the United Kingdom or are removed to the United Kingdom after entering that territory; and
(c) the circumstances are such that it is on their removal to the United Kingdom or subsequently while they are in the United Kingdom that any Community customs debt in respect of duty on their entry into the territory of the Community would be incurred.
(2) Accordingly—
(a) goods shall not be treated for the purposes of this Act as imported at any time before a Community customs debt in respect of duty on their entry into the territory of the Community would be incurred, and
(b) the person who is to be treated for the purposes of this Act as importing any goods from a place outside the member States is the person who would be liable to discharge any such Community customs debt.
(3) Subsections (1) and (2) above shall not apply, except in so far as the context otherwise requires or provision to the contrary is contained in regulations under section 16(1), for construing any references to importation or to an importer in any enactment or subordinate legislation applied for the purposes of this Act by section 16(1).
(1) Subject to such exceptions and adaptations as the Commissioners may by regulations prescribe and except where the contrary intention appears—
(a) the provision made by or under the Customs and Excise Acts 1979 and the other enactments and subordinate legislation for the time being having effect generally in relation to duties of customs and excise charged on the importation of goods into the United Kingdom; and
(b) the Community legislation for the time being having effect in relation to Community customs duties charged on goods entering the territory of the Community,
shall apply (so far as relevant) in relation to any VAT chargeable on the importation of goods from places outside the member States as they apply in relation to any such duty of customs or excise or, as the case may be, Community customs duties.
(2) Regulations under section 16 of the [1953 c. 36.] Post Office Act 1953 (which provides for the application of customs enactments to postal packets) may make special provision in relation to VAT.
(1) This section applies in relation to VAT chargeable on the importation of goods from places outside the member States; and in this section“free zone” has the meaning given by section 100A(2) of the Management Act.
(2) Subject to any contrary provision made by any directly applicable Community provision, goods which are chargeable with VAT may be moved into a free zone and may remain as free zone goods without payment of VAT.
(3) The Commissioners may by regulations (“free zone regulations”) make provision with respect to the movement of goods into, and the removal of goods from, any free zone and the keeping, securing and treatment of goods which are within a free zone, and subject to any provision of the regulations,“free zone goods” means goods which are within a free zone.
(4) Without prejudice to the generality of subsection (3), free zone regulations may make provision—
(a) for enabling the Commissioners to allow goods to be removed from a free zone without payment of VAT in such circumstances and subject to such conditions as they may determine;
(b) for determining where any VAT becomes payable in respect of goods which cease to be free zone goods—
(i) the rates of any VAT applicable; and
(ii) the time at which those goods cease to be free zone goods;
(c) for determining for the purpose of enabling VAT to be charged in respect of free zone goods in a case where a person wishes to pay that VAT notwithstanding that the goods will continue to be free zone goods, the rate of VAT to be applied; and
(d) permitting free zone goods to be destroyed without payment of VAT in such circumstances and subject to such conditions as the Commissioners may determine.
(5) The Commissioners, with respect to free zone goods or the movement of goods into any free zone, may by regulations make provision—
(a) for relief from the whole or part of any VAT chargeable on the importation of goods into the United Kingdom in such circumstances as they may determine;
(b) in place of, or in addition to, any provision made by section 6 or any other enactment, for determining the time when a supply of goods which are or have been free zone goods is to be treated as taking place for the purposes of the charge to VAT; and
(c) as to the treatment, for the purposes of VAT, of goods which are manufactured or produced within a free zone from other goods or which have other goods incorporated in them while they are free zone goods.
(1) Where—
(a) any goods have been removed from a place outside the member States and have entered the territory of the Community;
(b) the material time for any acquisition of those goods from another member State or for any supply of those goods is while they are subject to a warehousing regime and before the duty point; and
(c) those goods are not mixed with any dutiable goods which were produced or manufactured in the United Kingdom or acquired from another member State,
then the acquisition or supply mentioned in paragraph (b) above shall be treated for the purposes of this Act as taking place outside the United Kingdom.
(2) Subsection (3) below applies where—
(a) any dutiable goods are acquired from another member State; or
(b) any person makes a supply of—
(i) any dutiable goods which were produced or manufactured in the United Kingdom or acquired from another member State; or
(ii) any goods comprising a mixture of goods falling within sub-paragraph (i) above and other goods.
(3) Where this subsection applies and the material time for the acquisition or supply mentioned in subsection (2) above is while the goods in question are subject to a warehousing regime and before the duty point, that acquisition or supply shall be treated for the purposes of this Act as taking place outside the United Kingdom if the material time for any subsequent supply of those goods is also while the goods are subject to the warehousing regime and before the duty point.
(4) Where the material time for any acquisition or supply of any goods in relation to which subsection (3) above applies is while the goods are subject to a warehousing regime and before the duty point but the acquisition or supply nevertheless falls, for the purposes of this Act, to be treated as taking place in the United Kingdom—
(a) that acquisition or supply shall be treated for the purposes of this Act as taking place at the earlier of the following times, that is to say, the time when the goods are removed from the warehousing regime and the duty point; and
(b) in the case of a supply, any VAT payable on the supply shall be paid (subject to any regulations under subsection (5) below)—
(i) at the time when the supply is treated as taking place under paragraph (a) above; and
(ii) by the person by whom the goods are so removed or, as the case may be, together with the duty or agricultural levy, by the person who is required to pay the duty or levy.
(5) The Commissioners may by regulations make provision—
(a) for enabling goods to be removed from a warehousing regime by a taxable person without payment of VAT chargeable in respect of those goods by virtue of subsection (4)(a) above; and
(b) for that VAT to be accounted for together with the VAT chargeable on supplies of goods and services by that person.
(6) In this section—
“dutiable goods” means any goods which are subject—
to a duty of excise; or
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 European Community;
“the duty point”, in relation to any goods, means—
in the case of goods which are subject to a duty of excise, the time when the requirement to pay the duty on those goods takes effect; and
in the case of goods which are not so subject, the time when any Community customs debt in respect of duty on the entry of the goods into the territory of the Community would be incurred or, as the case may be, the corresponding time in relation to any such duty or levy as is mentioned in paragraph (b) of the definition of dutiable goods;
“material time”—
in relation to any acquisition or supply the time of which is determined in accordance with regulations under section 6(14) or 12(3), means such time as may be prescribed for the purpose of this section by those regulations;
in relation to any other acquisition, means the time of the event which, in relation to the acquisition, is the first relevant event for the purposes of taxing it; and
in relation to any other supply, means the time when the supply would be treated as taking place in accordance with subsection (2) of section 6 if paragraph (c) of that subsection were omitted;
“warehouse” means any warehouse where goods may be stored in any member State without payment of any one or more of the following, that is to say—
Community customs duty;
any agricultural levy of the European Community;
VAT on the importation of the goods into any member State;
any duty of excise or any duty which is equivalent in another member State to a duty of excise.
(7) References in this section to goods being subject to a warehousing regime is a reference to goods being kept in a warehouse or being transported between warehouses (whether in the same or different member States) without the payment in a member State of any duty, levy or VAT; and references to the removal of goods from a warehousing regime shall be construed accordingly.
(1) For the purposes of this Act the value of any supply of goods or services shall, except as otherwise provided by or under this Act, be determined in accordance with this section and Schedule 6, and for those purposes subsections (2) to (4) below have effect subject to that Schedule.
(2) If the supply is for a consideration in money its value shall be taken to be such amount as, with the addition of the VAT chargeable, is equal to the consideration.
(3) If the supply is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as, with the addition of the VAT chargeable, is equivalent to the consideration.
(4) Where a supply of any goods or services is not the only matter to which a consideration in money relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it.
(5) For the purposes of this Act the open market value of a supply of goods or services shall be taken to be the amount that would fall to be taken as its value under subsection (2) above if the supply 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.
(1) For the purposes of this Act the value of any acquisition of goods from another member State shall be taken to be the value of the transaction in pursuance of which they are acquired.
(2) Where goods are acquired from another member State otherwise than in pursuance of a taxable supply, the value of the transaction in pursuance of which they are acquired shall be determined for the purposes of subsection (1) above in accordance with this section and Schedule 7, and for those purposes—
(a) subsections (3) to (5) below have effect subject to that Schedule; and
(b) section 19 and Schedule 6 shall not apply in relation to the transaction.
(3) If the transaction is for a consideration in money, its value shall be taken to be such amount as is equal to the consideration.
(4) If the transaction is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as is equivalent to the consideration.
(5) Where a transaction in pursuance of which goods are acquired from another member State is not the only matter to which a consideration in money relates, the transaction shall be deemed to be for such part of the consideration as is properly attributable to it.
(1) For the purposes of this Act, the value of goods imported from a place outside the member States shall (subject to subsections (2) and (3) below) be determined according to the rules applicable in the case of Community customs duties, whether or not the goods in question are subject to any such duties.
(2) For the purposes of this Act the value of any goods imported from a place outside the member States shall be taken to include the following so far as they are not already included in that value in accordance with the rules mentioned in subsection (1) above, that is to say—
(a) all taxes, duties and other charges levied either outside or, by reason of importation, within the United Kingdom (except VAT); and
(b) all costs by way of commission, packing, transport and insurance up to the port or place of importation.
(3) Subject to subsection (2) above, where—
(a) goods are imported from a place outside the member States for a consideration which is or includes a price in money payable as on the transfer of property;
(b) the terms on which those goods are so imported allow a discount for prompt payment of that price;
(c) those terms do not include provision for payment of that price by instalments; and
(d) payment of that price is made in accordance with those terms so that the discount falls to be allowed,
the value of the goods shall be taken for the purposes of this Act to be reduced by the amount of the discount.
(1) Where a person makes a supply on which VAT is chargeable by applying, or causing to be applied, any treatment or process to another person’s goods, then if the goods—
(a) are not goods to which subsection (3) below applies, but
(b) become as a result of the treatment or process goods to which that subsection applies,
the amount of the VAT chargeable shall, subject to the following provisions of this section, be determined as if the supply had been a sale for full consideration of the goods resulting from the treatment or process.
(2) Subsection (1) above does not apply where the person to whom the supply is made—
(a) is registered under this Act; and
(b) gives to the person making the supply a certificate, in such form and containing such particulars as the Commissioners may by regulations prescribe, that the supply is for the purpose of a business carried on or to be carried on by him.
(3) This subsection applies to aircraft of a weight of 8,000 kilogrammes or more, and hovercraft, if (in each case) they have been adapted, but were not designed, for use for recreation or pleasure.
(4) The Treasury may by order vary subsection (3) above by adding to or deleting from it any description of goods or by varying any description of goods for the time being specified in it.
(5) The Treasury may by order make provision for securing a reduction of the VAT chargeable on supplies to which subsection (1) above applies in cases where—
(a) VAT was previously chargeable on a supply or importation of the goods to which the treatment or process is applied; and
(b) such other conditions are satisfied as may be specified in the order or as may be imposed by the Commissioners in pursuance of the order.
(6) A person who applies or causes to be applied a treatment or process to another person’s goods shall, if the goods satisfy the conditions of paragraphs (a) and (b) of subsection (1) above be treated for the purposes of paragraph 2 of Schedule 4, as producing the resulting goods by applying the treatment or process, whether or not he would otherwise fall to be so treated.
(1) Where a person plays a game of chance by means of a gaming machine, then for the purposes of VAT (but without prejudice to subsection (2) below) the amount paid by him to play shall be treated as the consideration for a supply of services to him.
(2) The value to be taken as the value of supplies made in the circumstances mentioned in subsection (1) above in any period shall be determined as if the consideration for the supplies were reduced by an amount equal to the amount (if any) received in that period by persons (other than the person making the supply and persons acting on his behalf) playing successfully.
(3) The insertion of a token into a machine shall be treated for the purposes of subsection (1) above as the payment of an amount equal to that for which the token can be obtained; and the receipt of a token by a person playing successfully shall be treated for the purposes of subsection (2) above—
(a) if the token is of a kind used to play the machine, as the receipt of an amount equal to that for which such a token can be obtained;
(b) if the token is not of such a kind but can be exchanged for money, as the receipt of an amount equal to that for which it can be exchanged.
(4) In this section—
“game of chance” has the same meaning as in the [1968 c. 65.] Gaming Act 1968; and
“gaming machine” means a machine in respect of which the following conditions are satisfied, namely—
it is constructed or adapted for playing a game of chance by means of it; and
a player pays to play the machine (except where he has an opportunity to play payment-free as the result of having previously played successfully), either by inserting a coin or token into the machine or in some other way; and
the element of chance in the game is provided by means of the machine.
(1) Subject to the following provisions of this section,“input tax”, in relation to a taxable person, means the following tax, that is to say—
(a) VAT on the supply to him of any goods or services;
(b) VAT on the acquisition by him from another member State of any goods; and
(c) VAT paid or payable by him on the importation of any goods from a place outside the member States,
being (in each case) goods or services used or to be used for the purpose of any business carried on or to be carried on by him.
(2) Subject to the following provisions of this section,“output tax”, in relation to a taxable person, means VAT on supplies which he makes or on the acquisition by him from another member State of goods (including VAT which is also to be counted as input tax by virtue of subsection (1)(b) above).
(3) For the purposes of subsections (1) and (2) above, where goods or services are supplied to a company, goods are acquired by a company from another member State or goods are imported by a company from a place outside the member States and the goods or services which are so supplied, acquired or imported are used or to be used in connection with the provision of accommodation by the company, they shall not be treated as used or to be used for the purposes of any business carried on by the company to the extent that the accommodation is used or to be used for domestic purposes by—
(a) a director of the company, or
(b) a person connected with a director of the company.
(4) The Treasury may by order provide with respect to any description of goods or services that, where goods or services of that description are supplied to a person who is not a taxable person, they shall, in such circumstances as may be specified in the order, be treated for the purposes of subsections (1) and (2) above as supplied to such other person as may be determined in accordance with the order.
(5) Where goods or services supplied to a taxable person, goods acquired by a taxable person from another member State or goods imported by a taxable person from a place outside the member States are used or to be used partly for the purposes of a business carried on or to be carried on by him and partly for other purposes, VAT on supplies, acquisitions and importations shall be apportioned so that only so much as is referable to his business purposes is counted as his input tax.
(6) Regulations may provide—
(a) for VAT on the supply of goods or services to a taxable person, VAT on the acquisition of goods by a taxable person from other member States and VAT paid or payable by a taxable person on the importation of goods from places outside the member States to be treated as his input tax only if and to the extent that the charge to VAT is evidenced and quantified by reference to such documents as may be specified in the regulations or the Commissioners may direct either generally or in particular cases or classes of cases;
(b) for a taxable person to count as his input tax, in such circumstances, to such extent and subject to such conditions as may be prescribed, VAT on the supply to him of goods or services or on the acquisition of goods by him from another member State or paid by him on the importation of goods from places outside the member States notwithstanding that he was not a taxable person at the time of the supply, acquisition or payment;
(c) for a taxable person that is a body corporate to count as its input tax, in such circumstances, to such extent and subject to such conditions as may be prescribed, VAT on the supply, acquisition or importation of goods before the company’s incorporation for appropriation to the company or its business or on the supply of services before that time for its benefit or in connection with its incorporation;
(d) in the case of a person who has been, but is no longer, a taxable person, for him to be paid by the Commissioners the amount of any VAT on a supply of services made to him for the purposes of the business carried on by him when he was a taxable person.
(7) For the purposes of this section“director” means—
(a) in relation to a company whose affairs are managed by a board of directors or similar body, a member of that board or similar body;
(b) in relation to a company whose affairs are managed by a single director or similar person, that director or person;
(c) in relation to a company whose affairs are managed by the members themselves, a member of the company,
and a person is connected with a director if that person is the director’s wife or husband, or is a relative, or the wife or husband of a relative, of the director or of the director’s wife or husband.
(1) A taxable person shall—
(a) in respect of supplies made by him, and
(b) in respect of the acquisition by him from other member States of any goods,
account for and pay VAT by reference to such periods (in this Act referred to as“prescribed accounting periods”) at such time and in such manner as may be determined by or under regulations and regulations may make different provision for different circumstances.
(2) Subject to the provisions of this section, he is entitled at the end of each prescribed accounting period to credit for so much of his input tax as is allowable under section 26, and then to deduct that amount from any output tax that is due from him.
(3) If either no output tax is due at the end of the period, or the amount of the credit exceeds that of the output tax then, subject to subsections (4) and (5) below, the amount of the credit or, as the case may be, the amount of the excess shall be paid to the taxable person by the Commissioners; and an amount which is due under this subsection is referred to in this Act as a “VAT credit”.
(4) The whole or any part of the credit may, subject to and in accordance with regulations, be held over to be credited in and for a subsequent period; and the regulations may allow for it to be so held over either on the taxable person’s own application or in accordance with general or special directions given by the Commissioners from time to time.
(5) Where at the end of any period a VAT credit is due to a taxable person who has failed to submit returns for any earlier period as required by this Act, the Commissioners may withhold payment of the credit until he has complied with that requirement.
(6) A deduction under subsection (2) above and payment of a VAT credit shall not be made or paid except on a claim made in such manner and at such time as may be determined by or under regulations; and, in the case of a person who has made no taxable supplies in the period concerned or any previous period, payment of a VAT credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to repayment in specified circumstances.
(7) The Treasury may by order provide, in relation to such supplies, acquisitions and importations as the order may specify, that VAT charged on them is to be excluded from any credit under this section; and—
(a) any such provision may be framed by reference to the description of goods or services supplied or goods acquired or imported, the person by whom they are supplied, acquired or imported or to whom they are supplied, the purposes for which they are supplied, acquired or imported, or any circumstances whatsoever; and
(b) such an order may contain provision for consequential relief from output tax.
(1) The amount of input tax for which a taxable person is entitled to credit at the end of any period shall be so much of the input tax for the period (that is input tax on supplies, acquisitions and importations in the period) as is allowable by or under regulations as being attributable to supplies within subsection (2) below.
(2) The supplies within this subsection are the following supplies made or to be made by the taxable person in the course or furtherance of his business—
(a) taxable supplies;
(b) supplies outside the United Kingdom which would be taxable supplies if made in the United Kingdom;
(c) such other supplies outside the United Kingdom and such exempt supplies as the Treasury may by order specify for the purposes of this subsection.
(3) The Commissioners shall make regulations for securing a fair and reasonable attribution of input tax to supplies within subsection (2) above, and any such regulations may provide for—
(a) determining a proportion by reference to which input tax for any prescribed accounting period is to be provisionally attributed to those supplies;
(b) adjusting, in accordance with a proportion determined in like manner for any longer period comprising two or more prescribed accounting periods or parts thereof, the provisional attribution for any of those periods;
(c) the making of payments in respect of input tax, by the Commissioners to a taxable person (or a person who has been a taxable person) or by a taxable person (or a person who has been a taxable person) to the Commissioners, in cases where events prove inaccurate an estimate on the basis of which an attribution was made; and
(d) preventing input tax on a supply which, under or by virtue of any provision of this Act, a person makes to himself from being allowable as attributable to that supply.
(4) Regulations under subsection (3) above may make different provision for different circumstances and, in particular (but without prejudice to the generality of that subsection) for different descriptions of goods or services; and may contain such incidental and supplementary provisions as appear to the Commissioners necessary or expedient.
(1) Where goods are imported by a taxable person from a place outside the member States and—
(a) at the time of importation they belong wholly or partly to another person; and
(b) the purposes for which they are to be used include private purposes either of himself or of the other,
VAT paid or payable by the taxable person on the importation of the goods shall not be regarded as input tax to be deducted or credited under section 25; but he may make a separate claim to the Commissioners for it to be repaid.
(2) The Commissioners shall allow the claim if they are satisfied that to disallow it would result, in effect, in a double charge to VAT; and where they allow it they shall do so only to the extent necessary to avoid the double charge.
(3) In considering a claim under this section, the Commissioners shall have regard to the circumstances of the importation and, so far as appearing to them to be relevant, things done with, or occurring in relation to, the goods at any subsequent time.
(4) Any amount allowed by the Commissioners on the claim shall be paid by them to the taxable person.
(5) The reference above to a person’s private purposes is to purposes which are not those of any business carried on by him.
(1) The Treasury may make an order under this section if they consider it desirable to do so in the interests of the national economy.
(2) An order under this section may provide that a taxable person of a description specified in the order shall be under a duty—
(a) to pay, on account of any VAT he may become liable to pay in respect of a prescribed accounting period, amounts determined in accordance with the order, and
(b) to do so at such times as are so determined.
(3) Where an order is made under this section, the Commissioners may make regulations containing such supplementary, incidental or consequential provisions as appear to the Commissioners to be necessary or expedient.
(4) A provision of an order or regulations under this section may be made in such way as the Treasury or, as the case may be, the Commissioners think fit (whether by amending provisions of or made under the enactments relating to VAT or otherwise).
(5) An order or regulations under this section may make different provision for different circumstances.
Where—
(a) a taxable person (“the recipient”) provides a document to himself which purports to be an invoice in respect of a taxable supply of goods or services to him by another taxable person; and
(b) that document understates the VAT chargeable on the supply,
the Commissioners may, by notice served on the recipient and on the supplier, elect that the amount of VAT understated by the document shall be regarded for all purposes as VAT due from the recipient and not from the supplier.
Value Added Tax Act 1994