Value Added Tax Act 1994

Part IU.K. The charge to tax

Imposition and rate of VATU.K.

1 Value added tax.U.K.

(1)Value added tax shall be charged, in accordance with the provisions of this Act—

(a)on the supply of goods or services in the United Kingdom (including anything treated as such a supply),

F1(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F2(c)on the importation of goods into the United Kingdom,]

and references in this Act to VAT are references to value added tax.

(2)VAT on any supply of goods or services is a liability of the person making the supply and (subject to provisions about accounting and payment) becomes due at the time of supply.

F3(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)VAT on the importation of goods [F4into the United Kingdom] shall be charged and payable as if it were [F5import duty].

2 Rate of VAT.U.K.

(1)Subject to the following provisions [F6and to the provisions of section 29A] of this section F7..., VAT shall be charged at the rate of [F820 per cent] and shall be charged—

(a)on the supply of goods or services, by reference to the value of the supply as determined under this Act; and

F9(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)on the importation of goods F10..., by reference to the value of the goods as determined under this Act.

F11(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11(1B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12(1C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)The Treasury may by order increase or decrease the rate of VAT for the time being in force [F13under this section] by such percentage thereof not exceeding 25 per cent. as may be specified in the order, but any such order [F14that has not previously expired or been revoked] shall cease to be in force at the expiration of a period of one year from the date on which it takes effect, unless continued in force by a further order under this subsection.

(3)In relation to an order made under subsection (2) above to continue, vary or replace a previous order, the reference in that subsection to the rate for the time being in force [F13under this section] is a reference to the rate which would be in force if no order under that subsection had been made.

3 Taxable persons and registration.U.K.

(1)A person is a taxable person for the purposes of this Act while he is, or is required to be, registered under this Act.

(2)[F15Schedules 1 to 3A] shall have effect with respect to registration [F16(and see also Parts 8 and 9 of Schedule 9ZA which contain further provisions about registration)].

(3)Persons registered under any of those Schedules [F17and Part 8 and 9 of Schedule 9ZA] shall be registered in a single register kept by the Commissioners for the purposes of this Act; and, accordingly, references in this Act to being registered under this Act are references to being registered under any of those Schedules [F18or those Parts].

(4)The Commissioners may by regulations make provision as to the inclusion and correction of information in that register with respect to the Schedule under which any person is registered.

F193ASupplies of electronic, telecommunication and broadcasting services: special accounting schemesU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supply of goods or services in the United KingdomU.K.

4 Scope of VAT on taxable supplies.U.K.

(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.

5 Meaning of supply: alteration by Treasury order.U.K.

(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 F20....

[F21(3A)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.

[F225ASupplies of goods facilitated by online marketplaces: deemed supplyU.K.

(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

[F23(c)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.]

[F24(1A)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 regulations[F25—

(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).

[F26(6)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.U.K.

(1)The provisions of this section shall apply, subject to [F27sections 18, 18B [F28, 18C and 57A]] for determining the time when a supply of goods or services is to be treated as taking place for the purposes of the charge to VAT.

(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.

F29(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F29(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F30(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 [F31subsections (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.

[F32(14A)F33... 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 [F34paragraph 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 [F35of goods].U.K.

(1)This section shall apply (subject to [F36sections F37... 18 [F38, 18B and 57A]]) for determining, for the purposes of this Act, whether goods F39... are supplied in the United Kingdom.

(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.

F40(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F40(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F41(5A)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 F42...; 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.

F43(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F44(9A)The Commissioners may by regulations substitute a different figure for a figure that is at any time specified in subsection (5B)(c).]

F45(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)The Treasury may by order provide, in relation to goods F46... generally or to particular goods F46... specified in the order, for varying the rules for determining where a supply of goods F46... is made.

[F47(12)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.]

[F487AAReverse charge on goods supplied from abroadU.K.

(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).]

[F497APlace of supply of servicesU.K.

(1)This section applies [F50, 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.

[F51(4)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.U.K.

[F52(1)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.]

[F52(2)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.

[F53(4A)Subsection (1) does not apply to services of any of the descriptions specified in Schedule 9.]

(5)The Treasury may by order [F54amend subsection (4A) by altering the descriptions of services specified in that subsection].

F55(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F56(7)The power of the Treasury by order to [F57amend subsection (4A)] shall include power to make such incidental, supplemental, consequential and transitional provision in connection with any [F58amendment of that subsection] as they think fit.

(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 [F59amendment of subsection (4A)]; and

(b)provision modifying the effect of any regulations under subsection (4) above in relation to any services added to [F60that subsection].]

[F619Place where supplier or recipient of services belongs.U.K.

(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 [F62or 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 [F63belonging—

(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.]

F64(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F659AReverse charge on gas [F66, electricity, heat or cooling]F67...U.K.

(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.

[F68(1A)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.

[F69(5)Relevant goods” means—

(a)gas supplied through a natural gas system [F70in [F71Great Britain]] or any network connected to [F72a natural gas system in [F71Great Britain]],

[F73(aa)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 [F74, in Great Britain or in Northern Ireland] is to be determined in accordance with an order made by the Treasury.]

Acquisition of goods from member StatesU.K.

F7510 Scope of VAT on acquisitions from member States.U.K.

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F7511 Meaning of acquisition of goods from another member State.U.K.

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F7512 Time of acquisition.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7513 Place of acquisition.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F7514 Acquisitions from persons belonging in other member States.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F76Goods supplied between the UK and member States under call-off stock arrangements]U.K.

F7714ACall-off stock arrangementsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F78 Importation of goods ...U.K.

[F7915Meaning of “importation of goods” into the United KingdomU.K.

(1)This section determines for the purposes of this Act when, and by whom, goods are imported into the United Kingdom.

(2)Goods are imported when they are declared for a Customs procedure under Part 1 of TCTA 2018.

(3)But—

(a)in the case of goods declared under TCTA 2018 for a storage procedure, a transit procedure or an inward processing procedure, the goods are imported when a liability to import duty is, or on the relevant assumptions would be, incurred in respect of them under section 4 of that Act, and

(b)in the case of goods which are liable to forfeiture as a result of section 5(1) of, or paragraph 1(5) or 3(4) of Schedule 1 to, that Act (goods not presented to Customs or Customs declaration not made), the goods are imported when they become liable to forfeiture as a result of those provisions.

(4)Each person who is, or on the relevant assumptions would be, liable to import duty in respect of goods imported into the United Kingdom is a person who has imported the goods.

(5)For the purposes of this section “the relevant assumptions” are—

(a)an assumption that a liability to import duty at a nil rate is replaced by a liability to import duty at a higher rate, and

(b)an assumption that no relief from import duty is available.

(6)If two or more persons are regarded as importing goods, those persons are jointly and severally liable to any VAT that is payable on the importation.

(7)The preceding provisions of this section are to be ignored in reading any reference to importation or to an importer in anything applied for the purposes of this Act by section 16(1) or (2).

(8)But subsection (7) does not apply so far as the context otherwise requires or provision to the contrary is contained in regulations under section 16(3).]

[F8016Application of customs enactmentsU.K.

(1)The provision made by or under—

(a)the Customs and Excise Acts 1979 (as defined in the Management Act), and

(b)the other enactments for the time being having effect generally in relation to duties of customs and excise charged by reference to the importation of goods into the United Kingdom,

apply (so far as relevant) in relation to any VAT chargeable on the importation of goods into the United Kingdom as they apply in relation to any duty of customs or excise.

(2)The provision made by section 1(4) for VAT on the importation of goods to be charged and payable as if it were import duty is to be taken as applying, in relation to any VAT chargeable on the importation of the goods, the provision made by or under Part 1 of TCTA 2018.]

F8116APostal packetsU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 Free zone regulations.U.K.

(1)This section applies in relation to VAT chargeable on the importation of goods F82...; and in this section “free zone” has the meaning given by section 100A(2) of the Management Act.

F83(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 F84... 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.

Goods subject to a warehousing regimeU.K.

18 Place and time of F85... supply.U.K.

[F86(1)A supply of goods which are subject to a warehousing regime is to be treated, for the purposes of this Act, as taking place outside the United Kingdom where —

(a)those goods have been brought into the United Kingdom,

(b)the material time of that supply is while those goods are subject to that 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.]

[F87(1A)The Commissioners may by regulations prescribe circumstances in which subsection (1) above shall not apply.]

(2)Subsection (3) below applies where—

F88(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)any person makes a supply of—

(i)any dutiable goods which were produced or manufactured in the United Kingdom F89...; 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 F90... supply mentioned in subsection (2) above is while the goods in question are subject to a warehousing regime and before the duty point, that F90... 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 F91... 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 F91... supply nevertheless falls, for the purposes of this Act, to be treated as taking place in the United Kingdom—

(a)that F92... 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)F93... 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.

[F94(5)The Commissioners may by regulations make provision for enabling a taxable person to pay the VAT he is required to pay by virtue of paragraph (b) of subsection (4) above at a time later than that provided for by that paragraph.

(5A)Regulations under subsection (5) above may in particular make provision for either or both of the following—

(a)for the taxable person to pay the VAT together with the VAT chargeable on other supplies by him of goods and services;

(b)for the taxable person to pay the VAT together with any duty of excise deferment of which has been granted to him under section 127A of the M1Customs and Excise Management Act 1979;

and they may make different provision for different descriptions of taxable person and for different descriptions of goods.]

(6)In this section—

• “dutiable goods” means any goods which are subject—

  (a)

  to a duty of excise; or

  (b)

  in accordance with any provision for the time being having effect for transitional purposes in connection with the accession of any State to the [F95European Union], to any F96... agricultural levy of the [F95European Union];

• “the duty point”, in relation to any goods, means—

  (a)

  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

  (b)

  in the case of goods which are not so subject, the time when [F97import duty is incurred in respect of the goods] or, as the case may be, [F98the time a debt in respect of any] levy as is mentioned in paragraph (b) of the definition of dutiable goods [F99is incurred in respect of the goods];

• [F100“free zone procedure” has the meaning given by the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 (S.I. 2018/1249) (see regulation 2(3)(b) of those Regulations);]

• “material time”—

  (a)

  in relation to any F101... supply the time of which is determined in accordance with regulations under section 6(14) F101..., means such time as may be prescribed for the purpose of this section by those regulations;

  (b)

  F102... and

  (c)

  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 [F103the United Kingdom] without payment of any one or more of the following, that is to say—

  (a)

  [F104import duty;]

  (b)

  any agricultural levy of the [F95European Union];

  (c)

  VAT on the importation of the goods F105...;

  (d)

  any duty of excise F106... [F107,

  but does not include a warehouse so far as it is used for the storage of goods declared for a free zone procedure.]

(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 F108... without the payment F109... of any duty, levy or VAT; and references to the removal of goods from a warehousing regime shall be construed accordingly.

[F11018A Fiscal warehousing.U.K.

(1)The Commissioners may, if it appears to them proper, upon application approve any registered person as a fiscal warehousekeeper; and such approval shall be subject to such conditions as they shall impose.

(2)Subject to those conditions and to regulations made under section 18F such a person shall be entitled to keep a fiscal warehouse.

(3)“Fiscal warehouse” means such place in the United Kingdom in the occupation or under the control of the fiscal warehousekeeper, not being retail premises, as he shall notify to the Commissioners in writing; and such a place shall become a fiscal warehouse on receipt by the Commissioners of that notification or on the date stated in it as the date from which it is to have effect, whichever is the later, and, subject to subsection (6) below, shall remain a fiscal warehouse so long as it is in the occupation or under the control of the fiscal warehousekeeper or until he shall notify the Commissioners in writing that it is to cease to be a fiscal warehouse.

(4)The Commissioners may in considering an application by a person to be a fiscal warehousekeeper take into account any matter which they consider relevant, and may without prejudice to the generality of that provision take into account all or any one or more of the following—

(a)his record of compliance and ability to comply with the requirements of this Act and regulations made hereunder;

(b)his record of compliance and ability to comply with the requirements of the customs and excise Acts F111... and regulations made thereunder;

F112(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F112(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)if the applicant is a company the records of compliance and ability to comply with the matters set out at [F113(a) and (b)] above of its directors, persons connected with its directors, its managing officers, any shadow directors or any of those persons, and, if it is a close company, the records of compliance and ability to comply with the matters set out at [F113(a) and (b)] above of the beneficial owners of the shares of the company or any of them; and

(f)if the applicant is an individual the records of compliance and ability to comply with the matters set out at [F114(a) and (b)] above of any company of which he is or has been a director, managing officer or shadow director or, in the case of a close company, a shareholder or the beneficial owner of shares,

F115....

[F116(4A)For the purposes of paragraphs (e) and (f) of subsection (4)—

(a)a person is “connected” with a director if that person is the director's spouse or civil partner, or is a relative, or the spouse or civil partner of a relative, of the director or of the director's spouse or civil partner;

(b)“managing officer” in relation to a body corporate, means any manager, secretary or other similar officer of the body corporate or any person purporting to act in any such capacity or as a director;

(c)“shadow director” has the meaning given by section 251 of the Companies Act 2006;

(d)“close company” has the meaning it has in the Corporation Tax Acts (see Chapter 2 of Part 10 of the Corporation Tax Act 2010).]

(5)Subject to subsection (6) below, a person approved under subsection (1) shall remain a fiscal warehousekeeper until he ceases to be a registered person or until he shall notify the Commissioners in writing that he is to cease to be a fiscal warehousekeeper.

(6)The Commissioners may if they consider it appropriate from time to time—

(a)impose conditions on a fiscal warehousekeeper in addition to those conditions, if any, which they imposed under subsection (1), and vary or revoke any conditions previously imposed;

(b)withdraw approval of any person as a fiscal warehousekeeper, and

(c)withdraw fiscal warehouse status from any premises.

(7)Any application by or on behalf of a person to be a fiscal warehousekeeper shall be in writing in such form as the Commissioners may direct and shall be accompanied by such information as they shall require.

(8)Any approval by the Commissioners under subsection (1) above, and any withdrawal of approval or other act by them under subsection (6) above, shall be notified by them to the fiscal warehousekeeper in writing and shall take effect on such notification being made or on any later date specified for the purpose in the notification.

(9)Without prejudice to the provisions of section 43 concerning liability for VAT, in subsections (1) and (2) above “registered person” includes any [F117person who] under that section is for the time being treated as a member of a group.]

[F11818B Fiscally warehoused goods: relief.U.K.

F119(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Subsections (3) and (4) below F120... apply where—

(a)there is a supply of goods;

(b)those goods are eligible goods;

(c)either—

(i)that supply takes place while the goods are subject to a fiscal warehousing regime; or

(ii)after that supply but before the supply, if any, of those goods which next occurs, the person to whom the former supply is made causes the goods to be placed in a fiscal warehousing regime;

(d)in a case falling within paragraph (c)(ii) above, the person to whom the supply is made gives the supplier, not later than the time of the supply, a certificate F121... that he will cause paragraph (c)(ii) to be satisfied; and

(e)the supply is not a retail transaction.

[F122(2A)A certificate under subsection F123... (2)(d) must be in such form as may be specified by regulations or by the Commissioners in accordance with regulations.]

(3)The F124... supply in question shall be treated for the purposes of this Act as taking place outside the United Kingdom if any subsequent supply of those goods is while they are subject to the fiscal warehousing regime.

(4)Where subsection (3) does not apply and the F125... supply in question falls, for the purposes of this Act, to be treated as taking place in the United Kingdom, that F125... supply shall be treated for the purposes of this Act as taking place when the goods are removed from the fiscal warehousing regime.

[F126(5)VAT is chargeable on a supply made by a person who is not a taxable person, but who would be were it not for paragraph 1(9) of Schedule 1, where—

(a)subsection (4) applies to that supply, and

(b)that supply is taxable and not zero-rated.]

[F127(6)In this section “eligible goods” means goods—

(a)of a description falling within Schedule 5A,

(b)in the case of imported goods—

(i)upon which any import duty has been paid or deferred (by virtue of the customs and excise Acts or any subordinate legislation made under those Acts), and

(ii)upon which any VAT chargeable under section 1(1)(c) has been paid, or deferred (by virtue of the customs and excise Acts or any subordinate legislation made under those Acts), and

(c)in the case of goods subject to a duty of excise, upon which any excise duty has been paid or deferred under section 127A of the Management Act.]

(7)For the purposes of this section, apart from subsection (4), [F128a supply] shall be treated as taking place at the material time for [F129the supply].

(8)The Treasury may by order vary Schedule 5A by adding to or deleting from it any goods or varying any description of any goods.]

[F13018C Warehouses and fiscal warehouses: services.U.K.

(1) Where—

(a)a taxable person makes a supply of specified services;

(b)those services are wholly performed on or in relation to goods while those goods are subject to a warehousing or fiscal warehousing regime;

(c)(except where the services are the supply by an occupier of a warehouse or a fiscal warehousekeeper of warehousing or fiscally warehousing the goods) the person to whom the supply is made gives the supplier a certificate F131... that the services are so performed;

(d)the supply of services would (apart from this section) be taxable and not zero-rated; and

(e)the supplier issues to the person to whom the supply is made an invoice of such a description as the Commissioners may by regulations prescribe,

his supply shall be zero-rated.

[F132(1A)A certificate under subsection (1)(c) must be in such form as may be specified by regulations or by the Commissioners in accordance with regulations.]

(2)If a supply of services is zero-rated under subsection (1) above (“the zero-rated supply of services”) then, unless there is a supply of the goods in question the material time for which is—

(a)while the goods are subject to a warehousing or fiscal warehousing regime, and

(b)after the material time for the zero-rated supply of services,

subsection (3) below shall apply.

(3)Where this subsection applies—

(a)a supply of services identical to the zero-rated supply of services shall be treated for the purposes of this Act as being, at the time the goods are removed from the warehousing or fiscal warehousing regime or (if earlier) at the duty point, both made (for the purposes of his business) to the person to whom the zero-rated supply of services was actually made and made by him in the course or furtherance of his business,

(b)that supply shall have the same value as the zero-rated supply of services,

(c)that supply shall be a taxable (and not a zero-rated) supply, and

(d)VAT shall be charged on that supply even if the person treated as making it is not a taxable person.

(4)In this section “specified services” means—

(a)services of an occupier of a warehouse or a fiscal warehousekeeper of keeping the goods in question in a warehousing or fiscal warehousing regime;

(b)in relation to goods subject to a warehousing regime, services of carrying out on the goods operations which are permitted to be carried out under [F133the customs and excise Acts or any subordinate legislation made under those Acts] as the case may be; and

(c)in relation to goods subject to a fiscal warehousing regime, services of carrying out on the goods any physical operations (other than any prohibited by regulations made under section 18F), for example, and without prejudice to the generality of the foregoing words, preservation and repacking operations.]

[F13418D Removal from warehousing: accountability.U.K.

(1)This section applies to any supply to which section 18B(4) or section 18C(3) applies (supply treated as taking place on removal or duty point) F135....

(2)Any VAT payable on the supply F136... shall (subject to any regulations under subsection (3) below) be paid—

(a)at the time when the supply F137... is treated as taking place under the section in question; and

(b)by the person by whom the goods are removed or, as the case may be, together with the excise duty, by the person who is required to pay that duty.

(3)The Commissioners may by regulations make provision for enabling a taxable person to pay the VAT he is required to pay by virtue of subsection (2) above at a time later than that provided by that subsection; and they may make different provisions for different descriptions of taxable persons and for different descriptions of goods and services.]

[F13818E Deficiency in fiscally warehoused goods.U.K.

(1)This section applies where goods have been subject to a fiscal warehousing regime and, before being lawfully removed from the fiscal warehouse, they are found to be missing or deficient.

(2)In any case where this section applies, unless it is shown to the satisfaction of the Commissioners that the absence of or deficiency in the goods can be accounted for by natural waste or other legitimate cause, the Commissioners may require the fiscal warehousekeeper to pay immediately in respect of the missing goods or of the whole or any part of the deficiency, as they see fit, the VAT that would have been chargeable.

(3)In subsection (2) “VAT that would have been chargeable” means VAT that would have been chargeable on a supply of the missing goods, or the amount of goods by which the goods are deficient, taking place at the time immediately before the absence arose or the deficiency occurred, if the value of that supply were the open market value; but where that time cannot be ascertained to the Commissioners’ satisfaction, that VAT shall be the greater of the amounts of VAT which would have been chargeable on a supply of those goods—

(a)if the value of that supply were the highest open market value during the period (the relevant period) commencing when the goods were placed in the fiscal warehousing regime and ending when the absence or deficiency came to the notice of the Commissioners, or

(b)if the rate of VAT chargeable on that supply were the highest rate chargeable on a supply of such goods during the relevant period and the value of that supply were the highest open market value while that rate prevailed.

(4)This section has effect without prejudice to any penalty incurred under any other provision of this Act or regulations made under it.]

[F13918F Sections 18A to 18E: supplementary.U.K.

(1)In sections 18A to 18E and this section—

• [F140“the customs and excise Acts” has the same meaning as in the Management Act;]

• “duty point” has the meaning given by section 18(6);

  “eligible goods” has the meaning given by section 18B(6);

  “fiscal warehouse” means a place notified to the Commissioners under section 18A(3) and from which such status has not been withdrawn;

  “fiscal warehousekeeper” means a person approved under section 18A(1);

  “material time”—

  (a)

  in relation to any F141... supply the time of which is determined in accordance with regulations under section 6(14) F141..., means such time as may be prescribed for the purpose of this section by those regulations;

  (b)

  F142...

  (c)

  in relation to any other supply of goods, 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; and

  (d)

  in relation to any other supply of services, means the time when the services are performed;

• “warehouse”, except in the expression “fiscal warehouse”, has the meaning given by section 18(6);

  F143...

(2)Any reference in sections 18A to 18E or this section to goods being subject to a fiscal warehousing regime is, subject to any regulations made under subsection (8)(e) below, a reference to eligible goods being kept in a fiscal warehouse or being transferred between fiscal warehouses in accordance with such regulations; and any reference to the removal of goods from a fiscal warehousing regime shall be construed accordingly.

(3)Subject to subsection (2) above, any reference in sections 18C and 18D to goods being subject to a warehousing regime or to the removal of goods from a warehousing regime shall have the same meaning as in section 18(7).

(4)Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they change their nature but the resulting goods are also eligible goods, the provisions of sections 18B to 18E and this section shall apply as if the resulting goods were the original goods.

(5)Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they cease to be eligible goods, on their ceasing to be so sections 18B to 18E shall apply as if they had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them.

(6)Where—

(a)any person ceases to be a fiscal warehousekeeper; or

(b)any premises cease to have fiscal warehouse status,

sections 18B to 18E and this section shall apply as if the goods of which he is the fiscal warehousekeeper, or the goods in the fiscal warehouse, as the case may be, had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them.

(7)The Commissioners may make regulations governing the deposit, keeping, securing and treatment of goods in a fiscal warehouse, and the removal of goods from a fiscal warehouse.

(8)Regulations may, without prejudice to the generality of subsection (7) above, include provisions—

(a)in relation to—

(i)goods which are, have been or are to be subject to a fiscal warehousing regime,

(ii)other goods which are, have been or are to be kept in fiscal warehouses,

(iii)fiscal warehouse premises, and

(iv)fiscal warehousekeepers and their businesses,

as to the keeping, preservation and production of records and the furnishing of returns and information by fiscal warehousekeepers and any other persons;

(b)requiring goods deposited in a fiscal warehouse to be produced to or made available for inspection by an authorised person on request by him;

(c)prohibiting the carrying out on fiscally warehoused goods of such operations as they may prescribe;

(d)regulating the transfer of goods from one fiscal warehouse to another;

(e)concerning goods which, though kept in a fiscal warehouse, are not eligible goods or are not intended by a relevant person to be goods in respect of which reliefs are to be enjoyed under sections 18A to 18E and this section;

(f)prohibiting the fiscal warehousekeeper from allowing goods to be removed from the fiscal warehousing regime without payment of any VAT payable under section 18D on or by reference to that removal and, if in breach of that prohibition he allows goods to be so removed, making him liable for the VAT jointly and severally with the remover,

and may contain such incidental or supplementary provisions as the Commissioners think necessary or expedient.

(9)Regulations may make different provision for different cases, including different provision for different fiscal warehousekeepers or descriptions of fiscal warehousekeeper, for fiscal warehouses of different descriptions or for goods of different classes or descriptions or of the same class or description in different circumstances.]

Determination of valueU.K.

19 Value of supply of goods or services.U.K.

(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.

F14420 Valuation of acquisitions from other member States.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21 Value of imported goods.U.K.

[F145(1)For the purposes of this Act, the value of imported goods is (subject to subsections (2) to (4)) their value as if determined under TCTA 2018 for the purposes of import duty (whether or not the goods are subject to import duty).]

(2)For the purposes of this Act the value of any goods imported F146... shall [F147(subject to subsection (2A) below)] 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); F148...

[F149(b)all incidental expenses, such as commission, packing, transport and insurance costs, up to the goods’ first destination in the United Kingdom; and

(c)if at the time of the importation of the goods F150... a further destination for the goods is known, and that destination is within the United Kingdom F150..., all such incidental expenses in so far as they result from the transport of the goods to that other destination;

and in this subsection “the goods’ first destination” means the place mentioned on the consignment note or any other document by means of which the goods are imported into the United Kingdom, or in the absence of such documentation it means the place of the first transfer of cargo in the United Kingdom.]

[F151(2A)Where—

(a)any goods falling within subsection (5) below are sold by auction at a time when they are subject to [F152the temporary admission procedure under Part 1 of TCTA 2018], and

(b)arrangements made by or on behalf of the purchaser of the goods following the sale by auction result in the importation of the goods F153...,

the value of the goods shall not be taken for the purposes of this Act to include, in relation to that importation, any commission or premium payable to the auctioneer in connection with the sale of the goods.]

F154(2B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Subject to subsection (2) above, where—

(a)goods are imported F155... 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.

[F156(4)[F157Subject to subsection (6D) below,] For the purposes of this Act, the value of any goods falling within subsection (5) below which are imported F158... shall be taken to be an amount equal to [F15925 per cent] of the amount which, apart from this subsection, would be their value for those purposes.

F160[(5)The goods that fall within this subsection are—

(a)any work of art;

(b)any antique, not falling within paragraph (a) above or (c) below, that is more than one hundred years old;

(c)any collection or collector’s piece that is of zoological, botanical, mineralogical, anatomical, historical, archaeological, palaeontological, ethnographic, numismatic or philatelic interest.

(6)In this section “work of art” means, subject to subsections (6A) and (6B) below—

(a)any mounted or unmounted painting, drawing, collage, decorative plaque or similar picture that was executed by hand;

(b)any original engraving, lithograph or other print which—

(i)was produced from one or more plates executed by hand by an individual who executed them without using any mechanical or photomechanical process; and

(ii)either is the only one produced from the plate or plates or is comprised in a limited edition;

(c)any original sculpture or statuary, in any material;

(d)any sculpture cast which—

(i)was produced by or under the supervision of the individual who made the mould or became entitled to it by succession on the death of that individual; and

(ii)either is the only cast produced from the mould or is comprised in a limited edition;

(e)any tapestry or other hanging which—

(i)was made by hand from an original design; and

(ii)either is the only one made from the design or is comprised in a limited edition;

(f)any ceramic executed by an individual and signed by him;

(g)any enamel on copper which—

(i)was executed by hand;

(ii)is signed either by the person who executed it or by someone on behalf of the studio where it was executed;

(iii)either is the only one made from the design in question or is comprised in a limited edition; and

(iv)is not comprised in an article of jewellery or an article of a kind produced by goldsmiths or silversmiths;

(h)any mounted or unmounted photograph which—

(i)was printed by or under the supervision of the photographer;

(ii)is signed by him; and

(iii)either is the only print made from the exposure in question or is comprised in a limited edition;

(6A)The following do not fall within subsection (5) above by virtue of subsection (6)(a) above, that is to say—

(a)any technical drawing, map or plan;

(b)any picture comprised in a manufactured article that has been hand-decorated; or

(c)anything in the nature of scenery, including a backcloth.

(6B)An item comprised in a limited edition shall be taken to be so comprised for the purposes of subsection (6)(d) to (h) above only if—

(a)in the case of sculpture casts—

(i)the edition is limited so that the number produced from the same mould does not exceed eight; or

(ii)the edition comprises a limited edition of nine or more casts made before 1st January 1989 which the Commissioners have directed should be treated, in the exceptional circumstances of the case, as a limited edition for the purposes of subsection (6)(d) above;

(b)in the case of tapestries and hangings, the edition is limited so that the number produced from the same design does not exceed eight;

(c)in the case of enamels on copper—

(i)the edition is limited so that the number produced from the same design does not exceed eight; and

(ii)each of the enamels in the edition is numbered and is signed as mentioned in subsection (6)(g)(ii) above;

(d)in the case of photographs—

(i)the edition is limited so that the number produced from the same exposure does not exceed thirty; and

(ii)each of the prints in the edition is numbered and is signed as mentioned in subsection (6)(h)(ii) above.

(6C)For the purposes of this section a collector’s piece is of philatelic interest if—

(a)it is a postage or revenue stamp, a postmark, a first-day cover or an item of pre-stamped stationery; and

(b)it is franked or (if unfranked) it is not legal tender and is not intended for use as such.

(6D)Subsection (4) above does not apply in the case of [F161imported goods] if—

(a)the whole of the VAT chargeable on their importation falls to be relieved by virtue of an order under section 37(1); or

(b)they were exported from the United Kingdom during the period of twelve months ending with the date of their importation [F162in circumstances where the exportation and subsequent importation were effected to obtain the benefit of that subsection].]

(7)An order under section 2(2) may contain provision making such alteration of the percentage for the time being specified in subsection (4) above as the Treasury consider appropriate in consequence of any increase or decrease by that order of the rate of VAT.]

F16322. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

[F16423Value of supplies involving relevant machine gamesU.K.

(1)If a person plays a relevant machine game, then for the purposes of VAT the amount paid by the person is to be treated as consideration for a supply of services to that person.

(2)“Relevant machine game” is defined in section 23A.

(3)The value to be taken as the value of supplies made by a person (“the supplier”) in the circumstances mentioned in subsection (1) in any period is to be determined as if the consideration for the supplies were reduced by an amount equal to X.

(4)X is the amount (if any) paid out in that period by way of winnings in respect of relevant machine games made available by the supplier (whether the games were played in the same period or an earlier one).

(5)X does not include any winnings paid out to the supplier or a person acting on the supplier's behalf.

(6)Inserting a token into a machine on which a relevant machine game is played is to be treated for the purposes of subsection (1) as the payment of an amount equal to that for which the token can be obtained.

(7)Providing a specified kind of token by way of winnings is to be treated for the purposes of subsection (4) as the payment out of an amount by way of winnings equal to the value of the token.

(8)A specified kind of token is—

(a)a token that can be inserted into the same machine to enable games to be played on the machine, or

(b)a token that is not of such a kind but can be exchanged for money.

(9)The value of a specified kind of token is—

(a)for a token within subsection (8)(a), an amount equal to that for which the token can be obtained, and

(b)for a token within subsection (8)(b), an amount equal to that for which the token can be exchanged.

(10)If it is not reasonably practicable to attribute payments and winnings to relevant machine games or to apportion them between relevant machine games and other games or other activities, any attribution or apportionment is to be done on a just and reasonable basis.

(11)For the purposes of this section, a person plays a game if the person participates in the game—

(a)whether or not there are other participants in the game, and

(b)whether or not a computer generates images or data taken to represent the actions of other participants in the game.

23AMeaning of “relevant machine game”U.K.

(1)A “relevant machine game” is a game (whether of skill or chance or both) that—

(a)is played on a machine for a prize, and

(b)is not excluded by subsection (2).

(2)A game is excluded by this subsection if—

(a)takings and payouts in respect of it are taken into account in determining any charge to machine games duty,

(b)it involves betting on future real events,

(c)bingo duty is charged on the playing of it or would be so charged but for paragraphs 1 to 5 of Schedule 3 to the Betting and Gaming Duties Act 1981 (exemptions from bingo duty),

(d)lottery duty is charged on the taking of a ticket or chance in it or would be so charged but for an express exception,

(e)it is a real game of chance and playing it amounts to dutiable gaming for the purposes of section 10 of the Finance Act 1997 or would do so but for subsection (3), (3B) or (4) of that section, or

(f)playing it amounts to remote gaming within the meaning of [F165section 154(1) of the Finance Act 2014 (meaning of remote gaming)].

(3)In this section—

• “game” does not include a sport;

• “machine” means any apparatus that uses or applies mechanical power, electrical power or both;

• “prize”, in relation to a game, does not include the opportunity to play the game again;

• “real game of chance” means a game of chance (within the meaning of [F166Part 3 of the Finance Act 2014 (see section 188(1)(b))]) that is non-virtual.

(4)The Treasury may by order amend this section.]

Payment of VAT by taxable personsU.K.

24 Input tax and output tax.U.K.

(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)F167...; and

(c)VAT paid or payable by him on the importation of any goods F168...,

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 F169....

F170(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 personF171... or goods imported by a taxable person F172... 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 [F173—

(a)VAT on suppliesF174... and importations shall be apportioned so that so much as is referable to the taxable person's business purposes is counted as that person's input tax, and

(b)the remainder of that VAT (“the non-business VAT”) shall count as that person's input tax only to the extent (if any) provided for by regulations under subsection (6)(e).]

[F175(5A)For the purposes of subsections (1) and (5), a relevant asset held for the purposes of a business carried on or to be carried on by a taxable person is not, in any circumstances, to be regarded as used or to be used for the purposes of the business if, and to the extent that, it is used or to be used for that person's private use or the private use of that person's staff.

(5B)In subsection (5A) “relevant asset” means—

(a)any interest in land,

(b)any building or part of a building,

(c)any civil engineering work or part of such a work,

(d)any goods incorporated or to be incorporated in a building or civil engineering work (whether by being installed as fixtures or fittings or otherwise),

(e)any ship, boat or other vessel, or

(f)any aircraft.]

(6)Regulations may provide—

(a)for VAT on the supply of goods or services to a taxable personF176... and VAT paid or payable by a taxable person on the importation of goods F177... 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 [F178or other information] 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 F179... or paid by him on the importation of goods F180... notwithstanding that he was not a taxable person at the time of the supplyF181... 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 supplyF182... 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.

[F183(e)in cases where an apportionment is made under subsection (5), for the non-business VAT to be counted as the taxable person's input tax for the purposes of any provision made by or under section 26 in such circumstances, to such extent and subject to such conditions as may be prescribed.]

[F184(6A)Regulations under subsection (6) may contain such supplementary, incidental, consequential and transitional provisions as appear to the Commissioners to be necessary or expedient.]

F185(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .