Value Added Tax Act 1994

Part I — The charge to tax

Imposition and rate of VAT

Value added tax.

1

• (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),

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) VAT on the importation of goods into the United Kingdom shall be charged and payable as if it were import duty.

Rate of VAT.

2

• (1) Subject to the following provisions and to the provisions of section 29A of this section ..., VAT shall be charged at the rate of 20 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The Treasury may by order increase or decrease the rate of VAT for the time being in force under this section by such percentage thereof not exceeding 25 per cent. as may be specified in the order, but any such order that has not previously expired or been revoked shall cease to be in force at the expiration of a period of one year from the date on which it takes effect, unless continued in force by a further order under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 under this section is a reference to the rate which would be in force if no order under that subsection had been made.

Taxable persons and registration.

3

• (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) Schedules 1 to 3A shall have effect with respect to registration (and see also Parts 8 and 9 of Schedule 9ZA which contain further provisions about registration).

• (3) Persons registered under any of those Schedules and 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 or 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.

Supplies of electronic, telecommunication and broadcasting services: special accounting schemes

3A

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

Supply of goods or services in the United Kingdom

Scope of VAT on taxable supplies.

4

• (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.

Meaning of supply: alteration by Treasury order.

5

• (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 ....

• (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.

Supplies of goods facilitated by online marketplaces: deemed supply

5A

• (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

• (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.

• (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—

• (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).

• (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.

Time of supply.

6

• (1) The provisions of this section shall apply, subject to sections 18, 18B , 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.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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 subsections (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.

• (14A) ... 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 paragraph 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.

Place of supply of goods.

7

• (1) This section shall apply (subject to sections ... 18 , 18B and 57A) for determining, for the purposes of this Act, whether goods ... 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.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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.