Value Added Tax Act 1983 (repealed 1.9.1994)

Imposition and extent of tax

Value added tax

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A tax, to be known as value added tax, shall be charged in accordance with the provisions of this Act on the supply of goods and services in the United Kingdom (including anything treated as such a supply) and on the importation of goods into the United Kingdom.

Scope of tax

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• (1) Tax 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 person who makes or intends to make taxable supplies is a taxable person while he is or is required to be registered under this Act; and a taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply.

• (3) Tax 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.

• (4) Tax on the importation of goods shall be charged and payable as if it were a duty of customs.

• (5) Schedule 1 to this Act shall have effect with respect to registration.

Supply

Meaning of " supply ": alteration by Treasury order

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• (1) Schedule 2 to this Act 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(3) of Schedule 2 to this Act 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.

• (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 acquired 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.

Time of supply

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• (1) The provisions of this section and section 5 below shall apply 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 tax.

• (2) Subject to the provisions of section 5 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 the provisions of section 5 below, a supply of services shall be treated as taking place at the time when the services are performed.

Further provisions relating to time of supply

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• (1) If, before the time applicable under subsection (2) or subsection (3) of section 4 above, the person making the supply issues a tax invoice in respect of it or if, before the time applicable under paragraph (a) or (b) of subsection (2) or subsection (3) of that section, 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.

• (2) If, within 14 days after the time applicable under subsection (2) or subsection (3) of section 4 above, the person making the supply issues a tax 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 (1) above) be treated as taking place at the time the invoice is issued.

• (3) The Commissioners may, at the request of a taxable person, direct that subsection (2) 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.

• (4) Where a taxable person provides a document to himself which—

• (a) purports to be a tax invoice in respect of a supply of goods or services to him by another taxable person; and

• (b) is in accordance with regulations under paragraph 2 of Schedule 7 to this Act treated as the tax invoice required by the regulations to be provided by the supplier,

subsections (2) and (3) above shall have effect in relation to that supply as if—

• (i) the provision of the document to himself by the first-mentioned taxable person were the issue by the supplier of a tax invoice in respect of the supply ; and

• (ii) any notice of election given or request made by the first-mentioned taxable person for the purposes of those provisions had been given or made by the supplier.

• (5) 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 (2) and (3) above, those supplies shall (to the extent that they are not treated as taking place at the time mentioned in subsection (1) 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).

• (6) Where goods are treated as supplied by an order under section 3(5) above, the supply is treated as taking place when they are appropriated to the use mentioned in that section.

• (7) Where there is a supply of goods by virtue only of paragraph 5(1) of Schedule 2 to this Act, the supply is treated as taking place when the goods are transferred or disposed of as mentioned in that paragraph.

• (8) Where there is a supply of services by virtue only of paragraph 5(3) of Schedule 2 to this Act, the supply is treated as taking place when the goods are appropriated to the use mentioned in that paragraph.

• (9) The Commissioners may by regulations make provision with respect to the time at which (notwithstanding section 4 above and subsections (1) to (3) and (6) to (8) above) a supply is to be treated as taking place in cases where it is a supply

• (a) 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) 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 where there is a supply of services by virtue of paragraph 5(3) of Schedule 2 to this Act or an order under section 3(4) above ; 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.

• (10) In this section " tax invoice " means such an invoice as is required under paragraph 2(1) of Schedule 7 to this Act or would be so required if the person to whom the supply is made were a taxable person.

Place of supply

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• (1) This section shall apply for determining, for the purposes of the charge to tax, whether goods or services are supplied in the United Kingdom.

• (2) 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) If the supply of any goods involves their removal from the United Kingdom they shall be treated as supplied in the United Kingdom and if it involves their removal to the United Kingdom they shall be treated as supplied outside the United Kingdom.

• (4) For the purposes of subsections (2) and (3) above, 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.

• (5) A supply of services shall be treated as made—

• (a) in the United Kingdom if the supplier belongs in the United Kingdom; and

• (b) in another country (and not in the United Kingdom), if the supplier belongs in that other country.

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

Reverse charge on supplies received from abroad

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• (1) Subject to subsection (3) below, where relevant services are—

• (a) supplied by a person who belongs in a country other than the United Kingdom ; and

• (b) received by a taxable person who belongs in the United Kingdom for the purposes of any business carried on by him,

then all the same consequences shall follow under this Act (and particularly so much as charges tax on a supply and entitles a taxable person to credit for input tax) as if the taxable person had himself supplied the services in the United Kingdom in the course or furtherance of his business, and that supply were a taxable supply.

• (2) In this section " relevant services " means services of any of the descriptions specified in Schedule 3 to this Act, not being services within any of the descriptions specified in Schedule 6 to this Act.

• (3) Supplies which are treated as made by the taxable person under subsection (1) above are not to be taken into account as supplies made by him when determining the allowance of input tax in his case under section 15(1) below.

• (4) In applying subsection (1) above, the supply of services treated as made by the taxable person shall be assumed to have been made—

• (a) for whatever consideration the services were in fact supplied to him; and

• (b) at a time to be determined in accordance with regulations prescribing rules for attributing a time of supply in cases within that subsection.

• (5) The Treasury may by order add to, or vary, Schedule 3 to this Act.

Place where supplier or recipient of services belongs

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• (1) Subsection (2) below shall apply for determining, in relation to any supply of services, whether the supplier belongs in one country or another and subsections (3) and (4) below shall apply for determining, in relation to any supply of services, whether the recipient belongs in one country or another.

• (2) The supplier of services shall be treated as belonging in a country if—

• (a) he has there a business establishment or some other fixed establishment and no such establishment elsewhere ; or

• (b) he has no such establishment (there or elsewhere) but his usual place of residence is there ; or

• (c) he has such establishments both in that country and elsewhere and the establishment of his which is most directly concerned with the supply is there.

• (3) If the supply of services is made to an individual and received by him otherwise than for the purposes of any business carried on by him, he shall be treated as belonging in whatever country he has his usual place of residence.

• (4) Where subsection (3) above does not apply, the person to whom the supply is made shall be treated as belonging in a country if—

• (a) either of the conditions mentioned in paragraphs (a) and (b) of subsection (2) above is satisfied ; or

• (b) he has such establishments as are mentioned in subsection (2) above both in that country and elsewhere and the establishment of his at which, or for the purposes of which, the services are most directly used or to be used is in that country.

• (5) For the purposes of this section (but not for any other purposes)—

• (a) a person carrying on a business through a branch or agency in any country shall be treated as having a business establishment there ; and

• (b) " usual place of residence ", in relation to a body corporate, means the place where it is legally constituted.

Rate of tax and determination of value

Rate of tax

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• (1) Subject to the following provisions of this section, tax shall be charged at the rate of 15 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

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

• (2) The Treasury may by order increase or decrease the rate of tax for the time being in force by such percentage thereof not exceeding 25 per cent, as may be specified in the order, but any such order 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 is a reference to the rate which would be in force if no order under that subsection had been made.

Value of supply of goods or services

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• (1) For the purposes of this Act the value of any supply of goods or services shall be determined as follows.

• (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 tax chargeable, is equal to the consideration.

• (3) If the supply is not for a consideration or is for a consideration not consisting or not wholly consisting of money, the value of the supply shall be taken to be its open, market value.

• (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.

• (6) This section has effect subject to Schedule 4 to this Act.

Value of imported goods

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• (1) For the purposes of this Act, the value of imported goods shall be determined as follows.

• (2) If the goods are imported at a price in money payable as on a transfer of the property, there being no other consideration, the value is an amount equal to the price, plus (so far as not already included)—

• (a) all taxes, duties and other charges levied either outside or, by reason of importation, within the United Kingdom (except value added tax); and