Finance (No. 2) Act 1992

SCHEDULE 1A (1) (1) A person who— (a) is not registered under this Act; and (b) is not liable to be registered under Schedule 1 to this Act, becomes liable to be registered under this Schedule on any day if, in the period beginning with 1st January of the year in which that day falls, that person has made relevant supplies whose value exceeds £70,000. (2) A person who is not registered or liable to be registered as mentioned in sub-paragraph (1)(a) and (b) above becomes liable to be registered under this Schedule where— (a) that person has exercised any option, in accordance with the law of any other member State where he is taxable, for treating relevant supplies made by him as taking place outside that member State; (b) the supplies to which the option relates involve the removal of goods from that member State and, apart from the exercise of the option, would be treated, in accordance with the law of that member State, as taking place in that member State; and (c) that person makes a relevant supply at a time when the option is in force in relation to him. (3) A person who is not registered or liable to be registered as mentioned in sub-paragraph (1)(a) and (b) above becomes liable to be registered under this Schedule if he makes a supply in relation to which the following conditions are satisfied, that is to say— (a) it is a supply of goods subject to a duty of excise; (b) it involves the removal of the goods to the United Kingdom by or under the directions of the person making the supply; (c) it is a transaction in pursuance of which the goods are acquired in the United Kingdom from another member State by a person who is not a taxable person; (d) it is made at a time after the coming into force of this Schedule and in the course or furtherance of a business carried on by the supplier; and (e) it is not anything which is treated as a supply for the purposes of this Act by virtue only of paragraph 5(1) or 5A of Schedule 2 to this Act. (4) A person shall be treated as having become liable to be registered under this Schedule at any time when he would have become so liable under the preceding provisions of this paragraph but for any registration which is subsequently cancelled under paragraph 6(2) below, paragraph 10 of Schedule 1 to this Act or paragraph 6(3) of Schedule 1B to this Act. (5) A person shall not cease to be liable to be registered under this Schedule except in accordance with paragraph 2 below. (6) In determining for the purposes of this paragraph the value of any relevant supplies so much of the consideration for any supply as represents any liability of the supplier, under the law of another member State, for value added tax on that supply shall be disregarded. (2) (1) Subject to sub-paragraph (2) below, a person who has become liable to be registered under this Schedule shall cease to be so liable if at any time— (a) the relevant supplies made by him in the year ending with 31st December last before that time did not have a value exceeding £70,000 and did not include any supply in relation to which the conditions mentioned in paragraph 1(3) above were satisfied; and (b) the Commissioners are satisfied that the value of his relevant supplies in the year immediately following that year will not exceed £70,000 and that those supplies will not include a supply in relation to which those conditions are satisfied. (2) A person shall not cease to be liable to be registered under this Schedule at any time when such an option as is mentioned in paragraph 1(2) above is in force in relation to him. (3) (1) A person who becomes liable to be registered under this Schedule shall notify the Commissioners of the liability within the period of thirty days after the day on which the liability arises. (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the day on which the liability arose or from such earlier time as may be agreed between them and him. (4) (1) Where a person who is not liable to be registered under this Act and is not already so registered— (a) satisfies the Commissioners that he intends— (i) to exercise an option such as is mentioned in paragraph 1(2) above and, from a specified date, to make relevant supplies to which that option will relate; (ii) from a specified date to make relevant supplies to which any such option that he has exercised will relate; or (iii) from a specified date to make supplies in relation to which the conditions mentioned in paragraph 1(3) above will be satisfied; and (b) requests to be registered under this Schedule, the Commissioners may, subject to such conditions as they think fit to impose, register him with effect from such date as may be agreed between them and him. (2) Conditions imposed under sub-paragraph (1) above— (a) may be so imposed wholly or partly by reference to, or without reference to, any conditions prescribed for the purposes of this paragraph; and (b) may, whenever imposed, be subsequently varied by the Commissioners. (3) Where a person who is entitled to be registered under paragraph 5 or 5A of Schedule 1 to this Act requests registration under this paragraph, he shall be registered under that Schedule, and not under this Schedule. (5) (1) Any person registered under this Schedule who ceases to be registrable under this Act shall notify the Commissioners of that fact within thirty days of the day on which he does so. (2) A person registered under paragraph 4 above by reference to any intention of his to exercise any option or to make supplies of any description shall notify the Commissioners, within thirty days of exercising that option or, as the case may be, of the first occasion after his registration when he makes such a supply, that he has exercised the option or made such a supply. (3) A person who has exercised such an option as is mentioned in paragraph 1(2) above which, as a consequence of its revocation or otherwise, ceases to have effect in relation to any relevant supplies by him shall notify the Commissioners, within thirty days of the option’s ceasing so to have effect, that it has done so. (4) For the purposes of this paragraph a person ceases to be registrable under this Act where— (a) he ceases to be a person who would be liable or entitled to be registered under this Act if his registration and any enactment preventing a person from being liable to be registered under different provisions at the same time were disregarded; or (b) in the case of a person who (having been registered under paragraph 4 above) has not been such a person during the period of his registration, he ceases to have any such intention as is mentioned in sub-paragraph (1)(a) of that paragraph. (6) (1) Subject to paragraph 7 below, where a person registered under this Schedule satisfies the Commissioners that he is not liable to be so registered, they shall, if he so requests, cancel his registration with effect from the day on which the request is made or from such later date as may be agreed between them and him. (2) Where the Commissioners are satisfied that, on the day on which a person was registered under this Schedule, he— (a) was not liable to be registered under this Schedule; and (b) in the case of a person registered under paragraph 4 above, did not have the intention by reference to which he was registered, they may cancel his registration with effect from that day. (3) Subject to paragraph 7 below, where the Commissioners are satisfied that a person who has been registered under paragraph 4 above and is not for the time being liable to be registered under this Schedule— (a) has not, by the date specified in his request to be registered, begun to make relevant supplies, exercised the option in question or, as the case may be, begun to make supplies in relation to which the conditions mentioned in paragraph 1(3) above are satisfied; or (b) has contravened any condition of his registration, they may cancel his registration with effect from the date so specified or, as the case may be, the date of the contravention or from such later date as may be agreed between them and him. (7) (1) The Commissioners shall not, under paragraph 6(1) above, cancel a person’s registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement to be registered under this Act. (2) The Commissioners shall not, under paragraph 6(3) above, cancel a person’s registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement, or entitled, to be registered under this Act. (3) The registration of a person who has exercised such an option as is mentioned in paragraph 1(2) above shall not be cancelled with effect from any time before the 1st January which is, or next follows, the second anniversary of the date on which his registration took effect. (4) In determining for the purposes of this paragraph whether a person would be subject to a requirement, or entitled, to be registered at any time, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when he is already registered or when he is so liable under any other provision shall be disregarded. (8) The Treasury may by order substitute for any of the sums for the time being specified in this Schedule such greater sums as they think fit. (9) Any notification required under this Schedule shall be made in such form and shall contain such particulars as the Commissioners may by regulations prescribe. (10) For the purposes of this Schedule a supply of goods is a relevant supply where— (a) the supply involves the removal of the goods to the United Kingdom by or under the directions of the person making the supply; (b) the supply does not involve the installation or assembly of the goods at a place in the United Kingdom; (c) the supply is a transaction in pursuance of which goods are acquired in the United Kingdom from another member State by a person who is not a taxable person; (d) the supply is made at a time after the coming into force of this Schedule and in the course or furtherance of a business carried on by the supplier; and (e) the supply is neither an exempt supply nor a supply of goods which are subject to a duty of excise or consist in a new means of transport and is not anything which is treated as a supply for the purposes of this Act by virtue only of paragraph 5(1) or 5A of Schedule 2 to this Act. SCHEDULE 1B (1) (1) A person who— (a) is not registered under this Act; and (b) is not liable to be registered under Schedule 1 or 1A to this Act, becomes liable to be registered under this Schedule at the end of any month if, in the period beginning with 1st January of the year in which that month falls, that person has made relevant acquisitions whose value exceeds £36,600. (2) A person who is not registered or liable to be registered as mentioned in sub-paragraph (1)(a) and (b) above becomes liable to be registered under this Schedule at any time if there are reasonable grounds for believing that the value of his relevant acquisitions in the period of thirty days then beginning will exceed £36,600. (3) A person shall be treated as having become liable to be registered under this Schedule at any time when he would have become so liable under the preceding provisions of this paragraph but for any registration which is subsequently cancelled under paragraph 6(3) below, paragraph 10 of Schedule 1 to this Act or paragraph 6(2) of Schedule 1A to this Act. (4) A person shall not cease to be liable to be registered under this Schedule except in accordance with paragraph 2 below. (5) In determining the value of any person’s relevant acquisitions for the purposes of this paragraph, so much of the consideration for any acquisition as represents any liability of the supplier, under the law of another member State, for value added tax on the transaction in pursuance of which the acquisition is made, shall be disregarded. (2) (1) Subject to sub-paragraph (2) below, a person who has become liable to be registered under this Schedule shall cease to be so liable if at any time— (a) his relevant acquisitions in the year ending with 31st December last before that time did not have a value exceeding £36,600; and (b) the Commissioners are satisfied that the value of his relevant acquisitions in the year immediately following that year will not exceed £36,600. (2) A person shall not cease to be liable to be registered under this Schedule at any time if there are reasonable grounds for believing that the value of that person’s relevant acquisitions in the period of thirty days then beginning will exceed £36,600. (3) (1) A person who becomes liable to be registered under this Schedule shall notify the Commissioners of the liability— (a) in the case of a liability under sub-paragraph (1) of paragraph 1 above, within thirty days of the end of the month when he becomes so liable; and (b) in the case of a liability under sub-paragraph (2) of that paragraph, before the end of the period by reference to which the liability arises. (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the relevant time or from such earlier time as may be agreed between them and him. (3) In this paragraph “the relevant time”— (a) in a case falling within paragraph (a) of sub-paragraph (1) above, means the end of the month following the month at the end of which the liability arose; and (b) in a case falling within paragraph (b) of that sub-paragraph, means the beginning of the period by reference to which the liability arose. (4) (1) Where a person who is not liable to be registered under this Act and is not already so registered satisfies the Commissioners that he makes relevant acquisitions, they shall, if he so requests, register him with effect from the day on which the request is made or from such earlier date as may be agreed between them and him. (2) Where a person who is not liable to be registered under this Act and is not already so registered— (a) satisfies the Commissioners that he intends to make relevant acquisitions from a specified date; and (b) requests to be registered under this Schedule, the Commissioners may, subject to such conditions as they think fit to impose, register him with effect from such date as may be agreed between them and him. (3) Conditions imposed under sub-paragraph (2) above— (a) may be so imposed wholly or partly by reference to, or without reference to, any conditions prescribed for the purposes of this paragraph; and (b) may, whenever imposed, be subsequently varied by the Commissioners. (4) Where a person who is entitled to be registered under paragraph 5 or 5A of Schedule 1 to this Act requests registration under this paragraph, he shall be registered under that Schedule, and not under this Schedule. (5) (1) Any person registered under this Schedule who ceases to be registrable under this Act shall notify the Commissioners of that fact within thirty days of the day on which he does so. (2) A person registered under paragraph 4(2) above shall notify the Commissioners, within thirty days of the first occasion after his registration when he makes a relevant acquisition, that he has done so. (3) For the purposes of this paragraph a person ceases to be registrable under this Act where— (a) he ceases to be a person who would be liable or entitled to be registered under this Act if his registration and any enactment preventing a person from being liable to be registered under different provisions at the same time were disregarded; or (b) in the case of a person who (having been registered under sub-paragraph (2) of paragraph 4 above) has not been such a person during the period of his registration, he ceases to have any intention of making relevant acquisitions. (6) (1) Subject to paragraph 7 below, where a person registered under this Schedule satisfies the Commissioners that he is not liable to be so registered, they shall, if he so requests, cancel his registration with effect from the day on which the request is made or from such later date as may be agreed between them and him. (2) Subject to paragraph 7 below, where the Commissioners are satisfied that a person registered under this Schedule has ceased since his registration to be registrable under this Schedule, they may cancel his registration with effect from the day on which he so ceased or from such later date as may be agreed between them and him. (3) Where the Commissioners are satisfied that, on the day on which a person was registered under this Schedule, he— (a) was not registrable under this Schedule; and (b) in the case of a person registered under paragraph 4(2) above, did not have the intention by reference to which he was registered, they may cancel his registration with effect from that day. (4) Subject to paragraph 7 below, where the Commissioners are satisfied that a person who has been registered under paragraph 4(2) above and is not for the time being liable to be registered under this Schedule— (a) has not begun, by the date specified in his request to be registered, to make relevant acquisitions; or (b) has contravened any condition of his registration, they may cancel his registration with effect from the date so specified or, as the case may be, the date of the contravention or from such later date as may be agreed between them and him. (5) For the purposes of this paragraph a person is registrable under this Schedule at any time when he is liable to be registered under this Schedule or is a person who makes relevant acquisitions. (7) (1) The Commissioners shall not, under paragraph 6(1) above, cancel a person’s registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement to be registered under this Act. (2) The Commissioners shall not, under paragraph 6(2) or (4) above, cancel a person’s registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement, or entitled, to be registered under this Act. (3) Subject to sub-paragraph (4) below, the registration of a person who— (a) is registered under paragraph 4 above; or (b) would not, if he were not registered, be liable or entitled to be registered under any provision of this Act except paragraph 4 above, shall not be cancelled with effect from any time before the 1st January which is, or next follows, the second anniversary of the date on which his registration took effect. (4) Sub-paragraph (3) above does not apply to cancellation under paragraph 6(3) or (4) above. (5) In determining for the purposes of this paragraph whether a person would be subject to a requirement, or entitled, to be registered at any time, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when he is already registered or when he is so liable under any other provision shall be disregarded. (8) (1) Notwithstanding the preceding provisions of this Schedule, where a person who makes or intends to make relevant acquisitions satisfies the Commissioners that any such acquisition would be an acquisition in pursuance of a transaction which would be zero-rated if it were a taxable supply by a taxable person, they may, if he so requests and they think fit, exempt him from registration under this Schedule until it appears to them that the request should no longer be acted upon or is withdrawn. (2) Where a person who is exempted under this paragraph from registration under this Schedule makes any relevant acquisition in pursuance of any transaction which would, if it were a taxable supply by a taxable person, be chargeable to tax otherwise than as a zero-rated supply, he shall notify the Commissioners of the change within thirty days of the date on which he made the acquisition. (9) The Treasury may by order substitute for any of the sums for the time being specified in this Schedule such greater sums as they think fit. (10) Any notification required under this Schedule shall be made in such form and shall contain such particulars as the Commissioners may by regulations prescribe. (11) For the purposes of this Schedule an acquisition of goods from another member State is a relevant acquisition where— (a) it is a taxable acquisition of goods other than goods which are subject to a duty of excise or consist in a new means of transport; (b) it is an acquisition otherwise than in pursuance of a taxable supply and is treated, for the purposes of this Act, as taking place in the United Kingdom; and (c) the event which, in relation to that acquisition, is the first relevant event for the purposes of taxing that acquisition occurs after the coming into force of this Schedule.

Matters to be treated as supplies of goods or services

60

• (1) In Schedule 2 (matters to be treated as supplies of goods or services), after paragraph 5 there shall be inserted the following paragraph—

(5A) (1) Where, in a case not falling within paragraph 5(1) above, goods forming part of the assets of any business— (a) are removed from any member State by or under the directions of the person carrying on the business; and (b) are so removed in the course or furtherance of that business for the purpose of being taken to a place in a member State other than that from which they are removed, then, whether or not the removal is or is connected with a transaction for a consideration, that is a supply of goods by that person. (2) Sub-paragraph (1) above does not apply— (a) to the removal of goods from any member State in the course of their removal from one part of that member State to another part of the same member State; or (b) to goods which have been removed from a place outside the member States for entry into the territory of the Community and are removed from a member State before the time when any Community customs debt in respect of any Community customs duty on their entry into that territory would be incurred.

• (2) In paragraph 7(2) of that Schedule (deemed supply where person ceases to be a taxable person)—

• (a) in paragraph (a), for the words from “in respect of" to the end of the paragraph there shall be substituted “ has been allowed to him in respect of the supply of the goods, their acquisition from another member State or their importation from a place outside the member States ”; and

• (b) in paragraph (b), for “were not acquired by him" there shall be substituted “ did not become his ”.

Special rules for valuation

61

• (1) In Schedule 4, paragraphs 2 and 5 (valuation for purposes of tax on importation where persons connected and prompt payment discounts) shall cease to have effect.

• (2) After paragraph 3 of that Schedule there shall be inserted the following paragraph—

(3A) (1) Where— (a) any goods whose supply involves their removal to the United Kingdom— (i) are charged in connection with their removal to the United Kingdom with a duty of excise or with car tax; or (ii) on that removal are subject, in accordance with any provision for the time being having effect for transitional purposes in connection with the accession of any State to the European Communities, to any Community customs duty or agricultural levy of the Economic Community; or (b) the time of supply of any dutiable goods, or of any goods which comprise a mixture of dutiable goods and other goods, is determined under section 35(4) of this Act to be the duty point, then the value of the supply shall be taken for the purposes of this Act to be the sum of its value apart from this paragraph and the amount, so far as not already included in that value, of the duty, tax or, as the case may be, agricultural levy which has been or is to be paid in respect of the goods. (2) In this paragraph “dutiable goods” and “duty point” have the same meanings as in section 35 of this Act.

• (3) In paragraph 7 of that Schedule (valuation of supplies where there is no consideration)—

• (a) at the beginning there shall be inserted “ (1) ”;

• (b) in sub-paragraph (b), after “paragraph 5(1)" there shall be inserted “ or 5A ”; and

• (c) for the words from “the value" to the end of the paragraph there shall be substituted—

then, except where paragraph 10 below applies, the value of the supply shall be determined as follows. (2) The value of the supply shall be taken to be— (a) such consideration in money as would be payable by the person making the supply if he were, at the time of the supply, to purchase goods identical in every respect (including age and condition) to the goods concerned; or (b) where the value cannot be ascertained in accordance with paragraph (a) above, such consideration in money as would be payable by that person if he were, at that time, to purchase goods similar to, and of the same age and condition as, the goods concerned; or (c) where the value can be ascertained in accordance with neither paragraph (a) nor paragraph (b) above, the cost of producing the goods concerned if they were produced at that time. (3) For the purposes of sub-paragraph (2) above the amount of consideration in money that would be payable by any person if he were to purchase any goods shall be taken to be the amount that would be so payable after the deduction of any amount included in the purchase price in respect of value added tax on the supply of the goods to that person.

• (4) After paragraph 8 of that Schedule there shall be inserted the following paragraph—

(8A) Where any supply of services is treated by virtue of section 7 of this Act as made by the person by whom they are received, the value of the supply shall be taken— (a) in a case where the consideration for which the services were in fact supplied to him was a consideration in money, to be such amount as is equal to that consideration; and (b) in a case where that consideration did not consist or not wholly consist of money, to be such amount in money as is equivalent to that consideration.

• (5) For paragraph 11 of that Schedule (rates of exchange) there shall be substituted the following paragraph—

(11) (1) Subject to the following provisions of this paragraph, where— (a) there is a supply of goods or services; and (b) any sum relevant for determining the value of the supply is expressed in a currency other than sterling, then, for the purpose of valuing the supply, that sum is to be converted into sterling at the market rate which, on the relevant day, would apply in the United Kingdom to a purchase with sterling by the person to whom they are supplied of that sum in the currency in question. (2) Where the Commissioners have published a notice which, for the purposes of this paragraph, specifies— (a) rates of exchange; or (b) methods of determining rates of exchange, a rate specified in or determined in accordance with the notice, as for the time being in force, shall apply (instead of the rate for which sub-paragraph (1) above provides) in the case of any supply by a person who opts, in such manner as may be allowed by the Commissioners, for the use of that rate in relation to that supply. (3) An option for the purposes of sub-paragraph (2) above for the use of a particular rate or method of determining a rate— (a) shall not be exercised by any person except in relation to all such supplies by him as are of a particular description or after a particular date; and (b) shall not be withdrawn or varied except with the consent of the Commissioners and in such manner as they may require. (4) In specifying a method of determining a rate of exchange a notice published by the Commissioners under sub-paragraph (2) above may allow a person to apply to the Commissioners for the use, for the purpose of valuing some or all of his supplies, of a rate of exchange which is different from any which would otherwise apply. (5) On an application made in accordance with provision contained in a notice under sub-paragraph (4) above, the Commissioners may authorise the use with respect to the applicant of such a rate of exchange, in such circumstances, in relation to such supplies and subject to such conditions as they think fit. (6) A notice published by the Commissioners for the purposes of this paragraph may be withdrawn or varied by a subsequent notice published by the Commissioners. (7) The time by reference to which the appropriate rate of exchange is to be determined for the purpose of valuing any supply is the time when the supply takes place; and, accordingly, the day on which it takes place is the relevant day for the purposes of sub-paragraph (1) above.

62

After Schedule 4 there shall be inserted the following Schedule—

SCHEDULE 4A (1) (1) Where, in the case of the acquisition of any goods from another member State— (a) the relevant transaction is for a consideration in money; (b) the value of the relevant transaction is (apart from this paragraph) less than the transaction’s open market value; (c) the supplier and the person who acquires the goods are connected; and (d) that person is not entitled under sections 14 and 15 of this Act to credit for all the tax on the acquisition, the Commissioners may direct that the value of the relevant transaction shall be taken to be its open market value. (2) A direction under this paragraph shall be given by notice in writing to the person by whom the acquisition in question is made; but no direction may be given more than three years after the relevant time. (3) A direction given to a person under this paragraph in respect of a transaction may include a direction that the value of any transaction— (a) in pursuance of which goods are acquired by him from another member State after the giving of the notice, or after such later date as may be specified in the notice; and (b) as to which the conditions in paragraphs (a) to (d) of sub-paragraph (1) above are satisfied, shall be taken to be its open market value. (4) For the purposes of this paragraph the open market value of a transaction in pursuance of which goods are acquired from another member State shall be taken to be the amount which would fall to be taken as its value under section 10A(3) of this Act if it were for such consideration in money as would be payable by a person standing in no such relationship with any person as would affect that consideration. (5) For the purposes of this paragraph any question whether a person is connected with another shall be determined in accordance with section 839 of the Income and Corporation Taxes Act 1988. (6) A direction under this paragraph may be varied or withdrawn by the Commissioners by a further direction given by notice in writing. (2) (1) Where, in such cases as the Commissioners may by regulations prescribe, goods acquired in the United Kingdom from another member State— (a) are charged in connection with their removal to the United Kingdom with a duty of excise or with car tax; or (b) on that removal are subject, in accordance with any provision for the time being having effect for transitional purposes in connection with the accession of any State to the European Communities, to any Community customs duty or agricultural levy of the Economic Community, then the value of the relevant transaction shall be taken for the purposes of this Act to be the sum of its value apart from this paragraph and the amount, so far as not already included in that value, of the duty, tax or, as the case may be, agricultural levy which has been or is to be paid in respect of those goods. (2) Sub-paragraph (1) above shall not require the inclusion of any amount of duty or agricultural levy in the value of a transaction in pursuance of which there is an acquisition of goods which, under subsection (4) of section 35 of this Act, is treated as taking place before the time which is the duty point within the meaning of that section. (3) (1) Where goods are acquired from another member State in pursuance of anything which is treated as a supply for the purposes of this Act by virtue of paragraph 5(1) or 5A of Schedule 2 to this Act, the value of the relevant transaction shall be determined, in a case where there is no consideration, as follows. (2) The value of the transaction shall be taken to be— (a) such consideration in money as would be payable by the supplier if he were, at the time of the acquisition, to purchase goods identical in every respect (including age and condition) to the goods concerned; or (b) where the value cannot be ascertained in accordance with paragraph (a) above, such consideration in money as would be payable by the supplier if he were, at that time, to purchase goods similar to, and of the same age and condition as, the goods concerned; or (c) where the value can be ascertained in accordance with neither paragraph (a) nor paragraph (b) above, the cost of producing the goods concerned if they were produced at that time. (3) For the purposes of sub-paragraph (2) above the amount of consideration in money that would be payable by any person if he were to purchase any goods shall be taken to be the amount that would be so payable after the deduction of any amount included in the purchase price in respect of value added tax on the supply of the goods to that person. (4) (1) Subject to the following provisions of this paragraph, where— (a) goods are acquired from another member State; and (b) any sum relevant for determining the value of the relevant transaction is expressed in a currency other than sterling, then, for the purpose of valuing the relevant transaction, that sum is to be converted into sterling at the market rate which, on the relevant day, would apply in the United Kingdom to a purchase with sterling by the person making the acquisition of that sum in the currency in question. (2) Where the Commissioners have published a notice which, for the purposes of this paragraph, specifies— (a) rates of exchange; or (b) methods of determining rates of exchange, a rate specified in or determined in accordance with the notice, as for the time being in force, shall apply (instead of the rate for which sub-paragraph (1) above provides) in the case of any transaction in pursuance of which goods are acquired by a person who opts, in such manner as may be allowed by the Commissioners, for the use of that rate in relation to that transaction. (3) An option for the purposes of sub-paragraph (2) above for the use of a particular rate or method of determining a rate— (a) shall not be exercised by any person except in relation to all such transactions in pursuance of which goods are acquired by him from another member State as are of a particular description or after a particular date; and (b) shall not be withdrawn or varied except with the consent of the Commissioners and in such manner as they may require. (4) In specifying a method of determining a rate of exchange a notice published by the Commissioners under sub-paragraph (2) above may allow a person to apply to the Commissioners for the use, for the purpose of valuing some or all of the transactions in pursuance of which goods are acquired by him from another member State, of a rate of exchange which is different from any which would otherwise apply. (5) On an application made in accordance with provision contained in a notice under sub-paragraph (4) above, the Commissioners may authorise the use with respect to the applicant of such a rate of exchange, in such circumstances, in relation to such transactions and subject to such conditions as they think fit. (6) A notice published by the Commissioners for the purposes of this paragraph may be withdrawn or varied by a subsequent notice published by the Commissioners. (7) Where goods are acquired from another member State, the appropriate rate of exchange is to be determined for the purpose of valuing the relevant transaction by reference to the relevant time; and, accordingly, the day on which that time falls is the relevant day for the purposes of sub-paragraph (1) above. (5) In this Schedule— - “relevant transaction”, in relation to any acquisition of goods from another member State, means the transaction in pursuance of which the goods are acquired; - “the relevant time”, in relation to any such acquisition, means— 1. if the person by whom the goods are acquired is not a taxable person and the time of acquisition does not fall to be determined in accordance with regulations made under section 8B(3) above, the time of the event which, in relation to that acquisition, is the first relevant event for the purposes of taxing the acquisition; and 2. in any other case, the time of acquisition.

Zero-rated supplies

63

• (1) In Schedule 5 (zero-rated supplies), in Note (1) of Group 14 (goods imported by handicapped person and charities), for “imported" there shall be substituted “ acquired from another member State or imported from a place outside the member States ”.

• (2) In that Schedule, in Item 1 of Group 15 (supply of imported goods before entry), the words “of imported goods" shall be omitted, and at the end of the Item there shall be inserted “ of goods imported from a place outside the member States. ”

• (3) In that Schedule—

• (a) in Item 4 of Group 15 (supply to overseas authority etc. of goods used in the United Kingdom for the manufacture of goods for export), after “for export" there shall be inserted “ to places outside the member States. ”; and

• (b) in Note (6) to Group 15 (restriction on application of Item 4), at the end there shall be inserted “ another member State, any part of or place in another member State, the government of any such member State, part or place, a body established in another member State or a person who carries on business, or has a place of business, in another member State. ”

• (4) In that Schedule, in Item 3 of Group 16 (exports by charities), at the end there shall be inserted “ to a place outside the member States. ”

Administration, collection and enforcement

64

• (1) In paragraph 2 of Schedule 7 (regulations about accounting for and paying tax), in sub-paragraph (1)—

• (a) for “to other taxable persons to provide them" there shall be substituted “ in such cases, or to persons of such descriptions, as may be so specified to provide the persons supplied ”; and

• (b) for the words from “the tax chargeable" onwards there shall be substituted “ and of the persons by and to whom the goods or services are supplied and containing such an indication as may be required by the regulations of whether value added tax is chargeable on the supply under this Act or the law of another member State and such particulars of any value added tax which is so chargeable as may be so specified. ”

• (2) In sub-paragraph (2) of that paragraph, for “and may allow for that time to be extended" there shall be substituted “ or at such time before the supply is treated as taking place as may be required by the regulations, and may allow for an invoice to be issued later than required by the regulations where it is issued ”.

• (3) After sub-paragraph (2) of that paragraph there shall be inserted the following sub-paragraphs—

(2A) Regulations under this paragraph may require the submission to the Commissioners by taxable persons, at such times and intervals, in such cases and in such form and manner as may be— (a) specified in the regulations; or (b) determined by the Commissioners in accordance with powers conferred by the regulations, of statements containing such particulars of transactions in which the taxable persons are concerned and which involve the movement of goods between member States, and of the persons concerned in those transactions, as may be prescribed. (2B) Regulations under this paragraph may make provision in relation to cases where— (a) any goods which are subject to a duty of excise or consist in a new means of transport are acquired in the United Kingdom from another member State by any person; (b) the acquisition of the goods is a taxable acquisition and is not in pursuance of a taxable supply; and (c) that person is not a taxable person at the time of the acquisition, for requiring the person who acquires the goods to give to the Commissioners such notification of the acquisition, and for requiring any tax on the acquisition to be paid, at such time and in such form or manner as may be specified in the regulations. (2C) Regulations under this paragraph may provide for a notification required by virtue of sub-paragraph (2B) above— (a) to contain such particulars relating to the notified acquisition and any tax chargeable thereon as may be specified in the regulations; and (b) to be given, in prescribed cases, by the personal representative, trustee in bankruptcy, receiver, liquidator or person otherwise acting in a representative capacity in relation to the person who makes that acquisition.

• (4) After sub-paragraph (3A) of that paragraph there shall be inserted the following sub-paragraphs—

(3B) Regulations under this paragraph may make provision whereby, in such cases and subject to such conditions as may be determined by or under the regulations— (a) tax in respect of any supply by a taxable person of dutiable goods or of a chargeable vehicle within the meaning of the Car Tax Act 1983; or (b) tax in respect of an acquisition by any person from another member State of dutiable goods or of such a vehicle, may be accounted for and paid, and any question as to the inclusion of any duty, car tax or agricultural levy in the value of the supply or acquisition determined, by reference to the duty point or, as the case may be, the time when the car tax becomes due or by reference to such later time as the Commissioners may allow. In this sub-paragraph “dutiable goods” and “duty point” have the same meanings as in section 35 of this Act. (3C) Regulations under this paragraph may provide for the time when any invoice described in regulations made for the purposes of section 5(3B)(b) or 8B(1)(b) of this Act is to be treated as having been issued and provide for tax accounted for and paid by reference to the date of issue of such an invoice to be confined to tax on so much of the value of the supply or acquisition as is shown on the invoice.

65

In paragraph 3 of that Schedule (computer records of particulars contained in tax invoices), after sub-paragraph (2) there shall be inserted the following sub-paragraph—

(2A) Without prejudice to the generality of the powers conferred by virtue of sub-paragraph (3C) of paragraph 2 above, regulations made by virtue of that sub-paragraph may provide for the preceding provisions of this paragraph to apply, subject to such exceptions and adaptations as may be prescribed, in relation to any invoice which is described in regulations made for the purposes of section 5(3B)(b) or 8B(1)(b) of this Act, as they apply in relation to tax invoices.

66

• (1) In sub-paragraph (2A) of paragraph 4 of that Schedule (power of Commissioners to assess tax due), after “Schedule 1 to this Act" there shall be inserted “ , paragraph 6(2) of Schedule 1A to this Act or paragraph 6(2) or (3) of Schedule 1B to this Act ”.

• (2) In sub-paragraph (5) of that paragraph (time limits)—

• (a) after the word “period", in the first place where it occurs, there shall be inserted “ must be made within the time limits provided for in section 22 of the Finance Act 1985 (ultimate time limits on assessments) and ”; and

• (b) for the words after paragraph (b) there shall be substituted— “ but (subject to that section) where further such evidence comes to the Commissioners’ knowledge after the making of an assessment under sub-paragraph (1), (2) or (2A) above, another assessment may be made under that sub-paragraph, in addition to any earlier assessment. ”

• (3) In sub-paragraph (6) of that paragraph (deficiency of goods)—

• (a) for the words from “acquired" to the word “him", in the first place where it occurs, there shall be substituted “ in the course or furtherance of a business carried on by him, been supplied with any goods, acquired any goods from another member State or otherwise obtained possession or control of any goods or has, in the course or furtherance of such a business, imported any goods from a place outside the member States, ”; and

• (b) for “from the United Kingdom otherwise than" there shall be substituted “ or otherwise removed from the United Kingdom without being exported or so removed ”.

67

After paragraph 4 of that Schedule there shall be inserted the following paragraph—

(4A) (1) Where a person who has, at a time when he was not a taxable person, acquired in the United Kingdom from another member State any goods subject to a duty of excise or consisting in a new means of transport and— (a) no notification of that acquisition has been given to the Commissioners by the person who is required to give one by regulations under paragraph 2(2B) above; (b) the Commissioners are not satisfied that the particulars relating to the acquisition in any notification given to them are accurate and complete; or (c) there has been a failure to supply the Commissioners with the information necessary to verify the particulars contained in any such notification, they may assess the amount of tax due on the acquisition to the best of their judgment and notify their assessment to that person. (2) An assessment under this paragraph must be made within the time limits provided for in section 22 of the Finance Act 1985 (ultimate time limits on assessments) and shall not be made after whichever is the later of the following— (a) two years after the time when a notification of the acquisition of the goods in question is given to the Commissioners by the person who is required to give one by regulations under paragraph 2(2B) above; (b) one year after evidence of the facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge, but (subject to that section) where further such evidence comes to the Commissioners’ knowledge after the making of an assessment under this paragraph, another assessment may be made under this paragraph, in addition to any earlier assessment. (3) Where an amount has been assessed and notified to any person under this paragraph, it shall, subject to the provisions of this Act as to appeals, be deemed to be an amount of tax due from him and may be recovered accordingly, unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced. (4) For the purposes of this paragraph notification to a personal representative, trustee in bankruptcy, receiver, liquidator or person otherwise acting in a representative capacity in relation to the person who made the acquisition in question shall be treated as notification to the person in relation to whom he so acts.

68

In paragraph 5(2) of that Schedule (requirement of security), at the beginning there shall be inserted “ Without prejudice to their power under section 32A(7) of this Act, ”.

69

In paragraph 6 of that Schedule (enforcement and recovery of tax), after sub-paragraph (9) there shall be inserted the following sub-paragraph—

(10) The preceding provisions of this paragraph shall have effect as if any sum required by way of security under section 32A(7) of this Act were recoverable as if it were tax due from the person who is required to provide it.

70

In paragraph 7(1) of that Schedule (duty to keep records), at the end there shall be inserted “ and every person who, at a time when he is not a taxable person, acquires in the United Kingdom from another member State any goods which are subject to a duty of excise or consist in a new means of transport shall keep such records with respect to the acquisition (if it is a taxable acquisition and is not in pursuance of a taxable supply) as the Commissioners may so require. ”

71

• (1) In sub-paragraph (2) of paragraph 8 of that Schedule (furnishing of information and production of documents)—

• (a) after the word “made", in the first place where it occurs, there shall be inserted “ every person who is concerned (in whatever capacity) in the acquisition of goods from another member State ”;

• (b) after the word “goods", in the second place where it occurs, there shall be inserted “ from a place outside the member States ”;

• (c) in paragraph (a) and in the words after paragraph (b), after the word “supply", in each place, there shall be inserted “ acquisition ”.

• (2) In sub-paragraph (4) of that paragraph, for the words from “or the importation of goods" onwards there shall be substituted “ to the acquisition of goods from another member State or to the importation of goods from a place outside the member States shall be taken to include any profit and loss account and balance sheet relating to the business in the course of which the goods or services are supplied or the goods are imported or (in the case of an acquisition from another member State) relating to any business or other activities of the person by whom the goods are acquired. ”

72

In paragraph 9(1) of that Schedule (power to take samples), after “supplies goods" there shall be inserted “ or acquires goods from another member State ”.

73

In paragraph 10(2) of that Schedule (power of entry to premises used in connection with taxable supplies)—

• (a) after “supplies" there shall be inserted “ or with the acquisition of goods under taxable acquisitions from other member States ”; and

• (b) after “supplied" there shall be inserted “ or acquired ”.

74

In paragraph 11(1) of that Schedule (evidence by certificate), after paragraph (b) there shall be inserted the following paragraph—

(ba) that any statement or notification required to be submitted or given to the Commissioners in accordance with any regulations under paragraph 2(2A) or (2B) above has not been submitted or given or had not been submitted or given at any date; or

.

Transitional provisions

75

In paragraph 6 of Schedule 10 (relief for vehicles in respect of which purchase tax was remitted), for the words from “as imported" to the end of the paragraph there shall be substituted “ for the purposes of value added tax in respect of goods acquired from another member State or, as the case may be, value added tax in respect of goods imported from places outside the member States, as so acquired or imported ”.

Part II

Introduction

76

Chapter II of Part I of the Finance Act 1985 (enforcement provisions in relation to value added tax) shall be amended in accordance with the following provisions of this Part of this Schedule.

Civil penalties

77

• (1) In subsection (2) of section 13 (tax evasion)—

• (a) in paragraph (b) (evasion by obtaining refund), after “under" there shall be inserted “ section 20A, ”; and

• (b) after that paragraph there shall be inserted the following paragraph—

(ba) a refund under any regulations made by virtue of section 8C(5) of that Act;

.

• (2) In subsection (3)(b) of that section, after “paragraphs (b)" there shall be inserted “ (ba) ”.

78

In section 14(5B)(b) (references to input tax for purposes of application of section in relation to certain public bodies), after “supplies" there shall be inserted “ acquisitions ”.

79

After section 14A there shall be inserted the following section—

(14B) (1) Where— (a) an EC sales statement containing a material inaccuracy has been submitted by any person to the Commissioners; (b) the Commissioners have, within six months of discovering the inaccuracy, issued that person with a written warning identifying that statement and stating that future inaccuracies might result in the service of a notice for the purposes of this section; (c) another EC sales statement containing a material inaccuracy (“the second inaccurate statement”) has been submitted by that person to the Commissioners; (d) the submission date for the second inaccurate statement fell within the period of two years beginning with the day after the warning was issued; (e) the Commissioners have, within six months of discovering the inaccuracy in the second inaccurate statement, served that person with a notice identifying that statement and stating that future inaccuracies will attract a penalty under this section; (f) yet another EC sales statement containing a material inaccuracy is submitted by that person to the Commissioners; and (g) the submission date for the statement falling within paragraph (f) above is not more than two years after the service of the notice or the date on which any previous statement attracting a penalty was submitted by that person to the Commissioners, that person shall be liable to a penalty of £100 in respect of the statement so falling. (2) Subject to subsections (3) and (4) below, an EC sales statement shall be regarded for the purposes of this section as containing a material inaccuracy if, having regard to the matters required to be included in the statement, the inclusion or omission of any information from the statement is misleading in any material respect. (3) An inaccuracy contained in an EC sales statement shall not be regarded as material for the purposes of this section if— (a) the person who submitted the statement satisfies the Commissioners or, on appeal, a value added tax tribunal that there is a reasonable excuse for the inaccuracy; or (b) at a time when he had no reason to believe that enquiries were being made by the Commissioners into his affairs, that person furnished the Commissioners with full information with respect to the inaccuracy. (4) Where, by reason of the submission of a statement containing a material inaccuracy by any person, that person is convicted of an offence (whether under the principal Act or otherwise), the inaccuracy to which the conviction relates shall be regarded for the purposes of this section as not being material. (5) Where the only statement identified in a warning or notice served for the purposes of subsection (1)(b) or (e) above is one which (whether by virtue of either or both of subsections (3) and (4) above or otherwise) is regarded as containing no material inaccuracies, that warning or notice shall be deemed not to have been issued or served for those purposes. (6) In this section— - “EC sales statement” means any statement which is required to be submitted to the Commissioners in accordance with regulations under paragraph 2(2A) of Schedule 7 to the principal Act; and - “submission date”, in relation to such a statement, means whichever is the earlier of the last day for the submission of the statement to the Commissioners in accordance with those regulations and the day on which it was in fact submitted to the Commissioners.

80

• (1) In subsection (1) of section 15 (penalties for breach of regulatory provisions)—

• (a) in paragraph (a), after “principal Act" there shall be inserted “ with paragraph 3 of Schedule 1A to that Act or with paragraph 3 or 8(2) of Schedule 1B to that Act ”;

• (b) after paragraph (a) there shall be inserted the following paragraph—

(aa) a person fails to comply with a requirement of regulations under paragraph 2(2B) of Schedule 7 to the principal Act (notification of acquisition of excise duty goods or new means of transport), or

.

• (2) In subsection (3) of that section (meaning of “relevant tax")—

• (a) after “means" there shall be inserted “ (subject to subsections (3B) and (3C) below) ”;

• (b) in paragraph (a), after “principal Act" there shall be inserted “ with paragraph 3 of Schedule 1A to that Act or with paragraph 3 of Schedule 1B to that Act ”;

• (c) in paragraph (b), after “principal Act" there shall be inserted “ or with sub-paragraph (2) of paragraph 8 of Schedule 1B to that Act ”;

• (d) after paragraph (b) there shall be inserted the following paragraph—

(ba) in relation to a person’s failure to comply with a requirement of regulations under paragraph 2(2B) of Schedule 7 to the principal Act, the tax on the acquisition to which the failure relates; and

.

• (3) In subsection (3A) of that section (the specified percentage)—

• (a) in paragraph (a), after “nine months" there shall be inserted “ or where the relevant tax is given by paragraph (ba) of that subsection and the failure in question did not continue for more than three months ”; and

• (b) in paragraph (b), for “so given" there shall be substituted “ given by paragraph (a) or (b) of subsection (3) above ” and after “eighteen months" there shall be inserted “ or where that tax is given by paragraph (ba) of that subsection and the failure in question continued for more than three months but did not continue for more than six months ”.

• (4) After subsection (3A) of that section there shall be inserted the following subsections—

(3B) Where— (a) the amount of tax which (apart from this subsection) would be treated for the purposes of subsection (1) above as the relevant tax in relation to a failure mentioned in subsection (3)(a) above includes tax on an acquisition of goods from another member State; and (b) the Commissioners are satisfied that value added tax has been paid under the law of another member State on the supply in pursuance of which those goods were acquired, then, in the determination of the amount of the relevant tax in relation to that failure, an allowance shall be made for the value added tax paid under the law of that member State; and the amount of the allowance shall not exceed the amount of tax due on the acquisition but shall otherwise be equal to the amount of value added tax which the Commissioners are satisfied has been paid on that supply under the law of that member State. (3C) Where— (a) the amount of tax which (apart from this subsection) would be treated for the purposes of subsection (1) above as the relevant tax in relation to a failure mentioned in subsection (3)(a) above includes tax chargeable by virtue of section 6(2B) of the principal Act on any supply; and (b) the Commissioners are satisfied that value added tax has been paid under the law of another member State on that supply, then, in the determination of the amount of the relevant tax in relation to that failure, an allowance shall be made for the tax paid under the law of the other member State; and the amount of the allowance shall not exceed the amount of tax chargeable by virtue of section 6(2B) on that supply but shall otherwise be equal to the amount of tax which the Commissioners are satisfied has been paid on that supply under the law of that other member State.

81

In section 17(1) (penalties for breach of regulatory provisions)—

• (a) in paragraph (a), after “principal Act" there shall be inserted “ paragraph 5 of Schedule 1A to that Act or paragraph 5 of Schedule 1B to that Act ”;

• (b) after paragraph (a) there shall be inserted the following paragraph—

(aa) any regulations made under section 32A of the principal Act requiring a tax representative, for the purposes of registration, to notify the Commissioners that his appointment has taken effect or has ceased to have effect, or

.

82

After section 17 there shall be inserted the following section—

(17A) (1) If by the last day on which a person is required in accordance with regulations under the principal Act to submit an EC sales statement for any prescribed period to the Commissioners, the Commissioners have not received that statement, that person shall be regarded for the purposes of this section as being in default in relation to that statement until it is submitted. (2) Where any person is in default in respect of any EC sales statement the Commissioners may serve notice on him stating— (a) that he is in default in relation to the statement specified in the notice; (b) that (subject to the liability mentioned in paragraph (d) below) no action will be taken if he remedies the default before the end of the period of fourteen days beginning with the day after the service of the notice; (c) that if the default is not so remedied, that person will become liable in respect of his default to penalties calculated on a daily basis from the end of that period in accordance with the following provisions of this section; and (d) that that person will become liable, without any further notices being served under this section, to penalties under this section if he commits any more defaults before a period of twelve months has elapsed without his being in default. (3) Where a person has been served with a notice under subsection (2) above, he shall become liable under this section— (a) if the statement to which the notice relates is not submitted before the end of the period of fourteen days beginning with the day after the service of the notice, to a penalty in respect of that statement; and (b) whether or not that statement is so submitted, to a penalty in respect of any EC sales statement the last day for the submission of which is after the service and before the expiry of the notice and in relation to which he is in default. (4) For the purposes of this section a notice served on any person under subsection (2) above shall continue in force— (a) except in a case falling within paragraph (b) below, until the end of the period of twelve months beginning with the day after the service of the notice; and (b) where at any time in that period of twelve months that person is in default in relation to any EC sales statement other than one in relation to which he was in default when the notice was served, until a period of twelve months has elapsed without that person becoming liable to a penalty under this section in respect of any EC sales statement. (5) The amount of any penalty to which a person who has been served with a notice under subsection (2) above is liable under this section shall be whichever is the greater of £50 and— (a) in the case of a liability in respect of the statement to which the notice relates, a penalty of £5 for every day for which the default continues after the end of the period of fourteen days mentioned in subsection (3)(a) above, up to a maximum of one hundred days; and (b) in the case of a liability in respect of any other statement, a penalty of the relevant amount for every day for which the default continues, up to a maximum of one hundred days. (6) In subsection (5)(b) above “the relevant amount”, in relation to a person served with a notice under subsection (2) above, means— (a) £5, where (that person not having been liable to a penalty under this section in respect of the statement to which the notice relates) the statement in question is the first statement in respect of which that person has become liable to a penalty while the notice has been in force; (b) £10, where the statement in question is the second statement in respect of which he has become so liable while the notice has been in force (counting the statement to which the notice relates where he has become liable in respect of that statement); and (c) £15, in any other case. (7) If a person who, apart from this subsection, would be liable to a penalty under this section satisfies the Commissioners or, on appeal a value added tax tribunal, that— (a) an EC sales statement has been submitted at such a time and in such a manner that it was reasonable to expect that it would be received by the Commissioners within the appropriate time limit; or (b) there is a reasonable excuse for such a statement not having been dispatched, he shall be treated for the purposes of this Act as not having been in default in relation to that statement and, accordingly, he shall not be liable to any penalty under this section in respect of that statement and any notice served under subsection (2) above exclusively in relation to the failure to submit that statement shall have no effect for the purposes of this section. (8) If it appears to the Treasury that there has been a change in the value of money since the coming into force of this section or, as the case may be, the last occasion when the sums specified in subsections (5) and (6) above were varied, they may by order substitute for the sums for the time being specified in those subsections such other sums as appear to them to be justified by the change; but an order under this section shall not apply to any default in relation to a statement the last day for the submission of which was before the order comes into force. (9) A statutory instrument containing an order under subsection (8) above shall be subject to annulment in pursuance of a resolution of the House of Commons. (10) In this section “EC sales statement” means any statement which is required to be submitted to the Commissioners in accordance with regulations under paragraph 2(2A) of Schedule 7 to the principal Act.

Interest on tax

83

In section 18(1)(c) (interest recovered or recoverable on assessment), after “principal Act" there shall be inserted “ or under paragraph 8 of Schedule 1B to that Act ”.

Assessments

84

• (1) In subsection (1) of section 21 (assessment to penalty), for “17", in each place where it occurs, there shall be substituted “ 17A ”.

• (2) After subsection (4) of that section there shall be inserted the following subsection—

(4A) An assessment to a penalty under section 15 above by virtue of subsection (1)(aa) of that section may be combined with an assessment under paragraph 4A of Schedule 7 to the principal Act and the two assessments notified together but the amount of the penalty shall be separately identified in the notice.

• (3) In subsection (5) of that section (notice of assessment while penalty period continuing), after “section 17" there shall be inserted “ or section 17A ”.

• (4) In subsection (6) of that section (remedying of failure etc. after assessment)—

• (a) after the words “section 17", in the first place where they occur, there shall be inserted “ or section 17A ”;

• (b) in paragraph (a), for “falling within section 17(1) above" there shall be substituted “ or default falling within section 17(1) or section 17A(1) above ”; and

• (c) in the words after paragraph (b), after “section 17" there shall be inserted “ section 17A ”.

85

• (1) In subsection (1) of section 22 (time limits for assessments)—

• (a) in paragraph (a), after “paragraph 4" there shall be inserted “ or paragraph 4A ”; and

• (b) after “importation" there shall be inserted “ or acquisition ”.

• (2) In subsection (2) of that section, after “beginning" there shall be inserted—

(a) in the case of a penalty under section 14B or section 17A above, with the time when facts sufficient in the opinion of the Commissioners to indicate, as the case may be— (i) that the statement in question contained a material inaccuracy; or (ii) that there had been a default within the meaning of section 17A(1) above, came to the Commissioners knowledge; and (b) in any other case, with the time

.

• (3) In subsection (7) of that section, after “paragraph 4" there shall be inserted “ or sub-paragraph (2)(b) of paragraph 4A ”.

86

In section 33(5)(a) (interpretation and construction of Chapter II), for “17" there shall be substituted “ 17A ”.

Part III — Consequential amendments of other enactments

The Diplomatic Privileges Act 1964 (c. 81)

87

In section 2(5A) of the Diplomatic Privileges Act 1964 (construction of references to certain duties), at the end there shall be inserted “ and to value added tax charged in accordance with section 2A or 2B of the Value Added Tax Act 1983 (acquisitions from other member States and importations from outside the European Union) ”.

The Commonwealth Secretariat Act 1966 (c. 10)

88

In paragraph 10 of the Schedule to the Commonwealth Secretariat Act 1966 (immunities and privileges), after sub-paragraph (1) there shall be inserted the following sub-paragraph—