Legalize / United Kingdom / Public General Act

Value Added Tax Act 1994

Type Public General Act

Publication 1994-07-05

Last updated 2024-11-04

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(5B) (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) the supply is facilitated by an online marketplace, and (c) either the special scheme condition or the Union goods condition is met. (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 special scheme condition is met where— (a) R belongs in Northern Ireland and is not a taxable person, (b) the supply is a qualifying supply of goods within the meaning of Schedule 9ZE, and (c) the operator of the online marketplace is a participant in a special scheme within the meaning of that Schedule. (4) But the special scheme condition is not met where— (a) P is established in the United Kingdom, and (b) the supply involves the removal of goods from Great Britain or the Isle of Man to Northern Ireland. (5) The Union goods condition is met where— (a) P is not established in Northern Ireland or a member State, (b) R either— (i) belongs in Northern Ireland and is not a taxable person, or (ii) belongs in a member State and is not liable or entitled to be registered for VAT in accordance with the law of that member State, and (c) the supply is a supply of Union goods that are located in Northern Ireland at the time they are supplied. (6) But the Union goods condition is not met where— (a) P is established in Great Britain or the Isle of Man, and (b) R belongs in Northern Ireland. (7) In this section, “Union goods” has the same meaning as in Regulation (EU) 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (see Article 5(23) of that Regulation).

2

Section 77F (exception from liability under section 5A) has effect as if—

(a) in the heading, after “section 5A” there were inserted “ or Part 1 of Schedule 9ZC ”;

(b) in subsection (1), after “section 5A” there were inserted “ or Part 1 of Schedule 9ZC ”;

(c) in subsection (2), after “(as defined in section 5A” there were inserted “ or Part 1 of Schedule 9ZC, as the case may be ”.

2A

In Part 2 of Schedule 8 (zero-rating: the groups), Group 21 (online marketplaces: deemed supply) has effect as if after Item 1 there were inserted—

(2) A supply by a person not established in Northern Ireland or a member State that is deemed to be a supply to an operator of an online marketplace by virtue of section 5B (as it has effect in accordance with paragraph 1B of this Schedule).

3

(1) In Schedule 11, paragraph 6 has effect subject to the following modifications.

(1A) Sub-paragraph (1) has effect as if at the start there were inserted “Subject to paragraph 6ZA,

(2) Sub-paragraph (4C) has effect as if—

(a) the “or” at the end of paragraph (a) were omitted;

(b) after paragraph (b) there were inserted

, or (c) Part 1 of Schedule 9ZC makes provision about who is treated as having imported those goods.

(3) Sub-paragraph (4D) has effect as if—

(a) the “or” at the end of paragraph (b) were omitted;

(b) after paragraph (c) there were inserted

, or (d) is treated as having imported goods under Part 1 of Schedule 9ZC.

3A

Schedule 11 has effect as if after paragraph 6 there were inserted—

(6ZA) (1) An operator of an online marketplace must preserve and make available records relating to a relevant taxable supply in accordance with the requirements of Article 242a of the VAT Directive and Article 54c of the Implementing Regulation. (2) In this paragraph— - “the Implementing Regulation” has the same meaning as in Schedule 9ZE; - “relevant taxable supply” means a supply of goods where that supply is deemed to be a supply by an operator of an online marketplace by virtue of section 5B (as it has effect in accordance with paragraph 1B of this Schedule); - “the VAT Directive” has the same meaning as in Schedule 9ZE.

3B

(1) Sub-paragraph (2) applies (instead of section 6) to a supply of goods deemed to have taken place by section 5B(2)(a) or (b) (as it has effect in accordance with paragraph 1B of this Schedule).

(2) The supply of goods is to be treated as taking place at the time when payment for the goods has been accepted within the meaning of Article 41a of the Implementing Regulation.

(3) In this paragraph, “the Implementing Regulation” has the same meaning as in Schedule 9ZE.

4

(1) Sub-paragraph (2) applies, instead of section 15(4) and (5) (as modified by paragraph 1 of Schedule 9ZB), where—

(a) goods are imported into the United Kingdom as a result of their entry into Northern Ireland in the course or furtherance of a business by a person (“P”),

(b) that importation is in the course of a taxable supply to a person (“R”) who—

(i) is not registered under this Act, or

(ii) is registered under this Act but who has not provided P or, where the supply is facilitated by an online marketplace, the operator of that marketplace, with R's VAT registration number,

(d) 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.

(2) The person who is treated as having imported the goods is—

(a) in a case where the supply is facilitated by an online marketplace, the operator of the online marketplace, or

(b) in any other case, P.

(3) In sub-paragraph (1)(b)(ii), “VAT registration number” means the number allocated by the Commissioners to a person registered under this Act.

(4) For the purposes of sub-paragraph (1)(d)(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 substitute a different figure for a figure that is at any time specified in sub-paragraph (1)(c).

4A

(1) Sub-paragraph (2) applies, instead of paragraph 4(3) , (3A) and (4) of Schedule 9ZB, in relation to a removal of goods from Northern Ireland to Great Britain or, as the case may be, vice versa where—

(a) the removal is in the course of a supply by a person established outside of the United Kingdom (“P”), and

(b) the supply is facilitated by an online marketplace.

(2) The operator of the online marketplace is the person who is treated as having imported the goods.

(3) But sub-paragraph (2) does not apply where the person to whom the goods are supplied (“R”)—

(a) is registered under this Act,

(b) 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.

(4) In sub-paragraph (3)—

“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.

(5) The Commissioners may by regulations specify the details that must be provided for the purposes of sub-paragraph (3)(c).

PART 2 — Modification of the Value Added Tax (Imported Goods) Relief Order 1984

5

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

PART 2A — Modification of the Value Added Tax Regulations 1995

5A

(1) In the Value Added Tax Regulations 1995 (S.I. 1995/2518), Part 3 (VAT invoices and other invoicing requirements) has effect subject to the following modifications.

(2) In regulation 13 (obligation to provide a VAT invoice), paragraph (1C) has effect as if—

(a) in sub-paragraph (a), after “section 5A” there were inserted “ or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act) ”;

(b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “ , or paragraph 38 of Schedule 9ZE to, ”.

(3) In regulation 13A (electronic invoicing), paragraph (5) has effect as if—

(a) in sub-paragraph (a), after “section 5A” there were inserted “ or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act) ”;

(b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “ , or paragraph 38 of Schedule 9ZE to, ”.

(4) Regulation 16B (retailers' and simplified invoices: exceptions), has effect as if—

(a) in sub-paragraph (a), after “section 5A” there were inserted “ or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act) ”;

(b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “ , or paragraph 38 of Schedule 9ZE to, ”.

PART 3 — Registration

Liability to be registered

6

(1) A person who is treated as having imported goods under Part 1 of this Schedule and—

(a) is not registered under this Act, and

(b) is not liable to be registered under Schedule 1, 1A or 9ZA to this Act,

becomes liable to be registered under this Schedule at the point they are so treated.

(2) A person who is not registered or liable to be registered as mentioned in sub-paragraph (1)(a) and (b) becomes liable to be registered under this Schedule at any time if there are reasonable grounds for believing that the person will be treated as having imported goods under Part 1 of this Schedule in the following 30 days.

(3) A person is treated as having become liable to be registered under this Schedule at any time when the person would have become so liable under the preceding provisions of this paragraph but for any registration which is subsequently cancelled under paragraph 11(2) of this Schedule, paragraph 13(3) of Schedule 1, paragraph 11 of Schedule 1A, paragraph 6(2) of Schedule 3A or paragraph 43 or 53 of Schedule 9ZA.

(4) A person does not cease to be liable to be registered under this Schedule except in accordance with paragraph 7.

7

(1) A person who has become liable to be registered under this Schedule ceases to be so liable at any time if the Commissioners are satisfied that the person is no longer a person who is, or will be, treated as having imported goods under Part 1 of this Schedule.

(2) But a person does not cease to be liable to be registered under this Schedule at any time if there are reasonable grounds for believing that the person will be treated as having imported goods under Part 1 of this Schedule in the following 30 days.

Notification of liability and registration

8

(1) A person who becomes liable to be registered under this Schedule must notify the Commissioners of the liability—

(a) in the case of a liability under sub-paragraph (1) of paragraph 6, within 30 days of the person becoming 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 must register any such person (whether or not the person notifies them) with effect from the relevant time.

(3) In this paragraph “the relevant time”—

(a) in a case falling within sub-paragraph (1)(a), means the beginning of the day on which the liability arose, and

(b) in a case falling within sub-paragraph (1)(b), means the beginning of the period by reference to which the liability arose.

Entitlement to be registered etc

9

(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 the person intends to make or facilitate a relevant supply 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 the person with effect from such date as may be agreed between the Commissioners and the person.

(2) Conditions imposed under sub-paragraph (1) may—

(a) be so imposed wholly or partly by reference to, or without reference to, any conditions prescribed for the purposes of this paragraph, and

(b) be subsequently varied by the Commissioners (whenever the conditions were imposed).

(3) Where a person who is entitled to be registered under paragraph 9 or 10 of Schedule 1 requests registration under this paragraph, the person is to be registered under that Schedule, and not under this Schedule.

Notification of matters affecting continuance of registration

10

(1) Any person registered under this Schedule who ceases to be registrable under this Act must notify the Commissioners of that fact within 30 days of the day on which the person ceases to be registrable.

(2) A person registered under paragraph 9(1) must notify the Commissioners, within 30 days of the first occasion after the person's registration when the person makes or facilitates a relevant supply, that the person has made or facilitated that supply.

(3) For the purposes of this paragraph a person ceases to be registrable under this Act where—

(a) the person ceases to be a person who would be liable or entitled to be registered under this Act if the person's 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 9(1)) has not been such a person during the period of the person's registration, the person ceases to have any intention of making or facilitating relevant supplies.

Cancellation of registration

11

(1) Where a person registered under this Schedule satisfies the Commissioners that the person is not liable to be so registered, the Commissioners must, if the person so requests, cancel that registration with effect from the day on which the request is made or from such later date as may be agreed between the Commissioners and the person.

(2) Where the Commissioners are satisfied that a person registered under this Schedule has ceased since the person's registration to be registrable under this Schedule, they may cancel that registration with effect from the day on which the person so ceased or from such later date as may be agreed between the Commissioners and the person.

(3) Where the Commissioners are satisfied that a person who has been registered under paragraph 9(1) and is not for the time being liable to be registered under this Schedule—

(a) has not begun, by the date specified in the person's request to be registered, to make or facilitate relevant supplies, or

(b) has contravened any condition of the person's registration,

the Commissioners may cancel the person's 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 the Commissioners and the person.

(4) But the Commissioners may not, under sub-paragraph (1), (2) or (3), cancel a person⿿s registration with effect from any time unless the Commissioners are satisfied that it is not a time when that person would be subject to a requirement, or in a case falling under sub-paragraph (2) or (3) a requirement or entitlement, to be registered under this Act.

(5) Where the Commissioners are satisfied that, on the day on which a person was registered under this Schedule, the person—

(a) was not registrable under this Schedule, and

(b) in the case of a person registered under paragraph 9(1), did not have the intention by reference to which the person was registered,

the Commissioners may cancel that registration with effect from that day.

(6) In determining, for the purposes of sub-paragraph (4), whether a person would be subject to a requirement, or would be 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 the person is already registered or when the person is so liable under any other provision is to be disregarded.

(7) For the purposes of this paragraph, a person is registrable under this Schedule at any time when the person is liable to be registered under this Schedule or is a person who makes or facilitates relevant supplies.

Notifications

12

Any notification required under this Part of this Schedule must be made in such form and manner and must contain such particulars as may be specified in regulations or by the Commissioners in accordance with regulations.

Meaning of relevant supply

13

For the purposes of this Part of this Schedule a supply is a “relevant supply” if the person making or facilitating it would be treated as having imported goods under Part 1 of this Schedule.

Modification of the Finance Act 2008

14

Paragraph 1 of Schedule 41 to the Finance Act 2008 (penalties: failure to notify etc) has effect as if in the table there were inserted the following entry—

Value added tax	Obligation under paragraph 8 of Schedule 9ZC to VATA 1994 (obligations to notify liability to register and notify matters affecting continuance of registration).

SCHEDULE 9ZD

PART 1 — Introduction

Overview

1

In this Schedule—

(a) Parts 2 and 3 establish a special accounting scheme (the One Stop Shop scheme, referred to in this Schedule as the “OSS scheme”) which may be used by persons making intra-Community distance sales of goods from Northern Ireland to member States;

(b) Part 4 is about persons participating in a non-UK scheme;

(d) Part 6 is about appeals;

(e) Part 7 contains definitions.

“Scheme supply”

2

For the purposes of this Schedule, “scheme supply” means a supply of goods that would be an “intra-Community distance sale of goods” within the meaning given by Article 14(4) of the VAT Directive if references in that Article to a “Member State” were read as if they included a reference to Northern Ireland ....

PART 2 — Registration

The register

3

Persons registered under the OSS scheme are to be registered in a single register kept by the Commissioners for the purposes of the scheme.

Persons who may be registered

4

(1) A person (“P”) may register under the OSS scheme if—

(a) P makes or intends to make one or more scheme supplies in the course of a business that P carries on,

(b) one of the following applies—

(i) P's business is established in Northern Ireland,

(ii) P's business is not established in Northern Ireland or a member State but P has a fixed establishment in Northern Ireland, or

(iii) P's business is not established in Northern Ireland or a member State and P does not have a fixed establishment in Northern Ireland, but P makes or intends to make scheme supplies from Northern Ireland to a member State and does not have a fixed establishment in a member State, and

(i) sub-paragraph (2),

(ii) the second or third paragraph of Article 369a(2) of the VAT Directive, or

(iii) any provision of the Implementing Regulation.

(2) P may not be registered under the OSS scheme if they are a participant in a non-UK scheme (see para 38(1)).

(3) P must register under the OSS scheme if P intends to account for VAT on scheme supplies even if P is ... registered under this Act.

Becoming registered

5

(1) The Commissioners must register a person (“P”) under the OSS scheme if P—

(a) satisfies them that the requirements for registration are met (see paragraph 4), and

(b) makes a request in accordance with this paragraph (a “registration request”).

(2) A registration request must state—

(a) P's name and postal and electronic addresses (including any websites),

(b) whether or not P has begun to make scheme supplies and (if so) the date on which P began to do so, and

(c) whether or not P has previously been identified under a non-UK scheme and (if so) the date on which P was first identified under the scheme concerned.

(3) A registration request must—

(a) contain any further information, and any declaration about its contents, that the Commissioners may by regulations require, and

(b) be made by such electronic means, and in such manner, as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Date on which registration takes effect

6

Where a person (“P”) is registered under this Schedule, P's registration takes effect on the date determined in accordance with Article 57d of the Implementing Regulation.

Further provision about registration

7

The Commissioners may, by means of a notice published by them, make further provision about registration under this Schedule.

Notification of changes etc

8

(1) A person (“P”) registered under the OSS scheme must inform the Commissioners of the date when P first makes scheme supplies (unless P has already given the Commissioners that information under paragraph 5(2)(b)).

(2) That information, and any information P is required to give under Article 57h of the Implementing Regulation (notification of certain changes), must be communicated by such electronic means, and in such manner, as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Cancellation of registration

9

The Commissioners must cancel the registration of a person (“P”) under the OSS scheme if—

(a) P has ceased to make, or no longer intends to make, scheme supplies and has notified the Commissioners of that fact;

(b) the Commissioners otherwise determine that P has ceased to make, or no longer intends to make, such supplies;

(c) P has ceased to satisfy any of the other requirements for registration in paragraph 4(1) and has notified the Commissioners of that fact,

(d) the Commissioners otherwise determine that P has ceased to satisfy any of those conditions, or

(e) the Commissioners determine that P has persistently failed to comply with P's obligations in or under this Schedule or the Implementing Regulation.

PART 3 — Liability, returns, payment etc

Liability to pay ... VAT to Commissioners

10

(1) This paragraph applies where a person (“P”)—

(a) makes a scheme supply, and

(b) is registered under the OSS scheme when the supply is made.

(2) P is liable to pay to the Commissioners the gross amount of VAT on the supply.

(3) The gross amount of VAT on the supply is determined in accordance with sub-paragraphs (4) and (5), without any deduction of VAT pursuant to Article 168 of the VAT Directive.

(4) If the supply is treated as made in the United Kingdom, the amount is the amount of VAT that would be charged on the supply on the assumption for all purposes of this Act relating to the determination of—

(a) whether or not VAT is chargeable under this Act on the supply,

(b) how much VAT is chargeable under this Act on the supply, and

that P is registered under this Act.

(5) If the supply is treated as made in a member State, the amount is the amount of VAT charged on the supply in accordance with the law of that member State.

OSS scheme returns

11

(1) A person (“P”) who is or has been registered under the OSS scheme must submit a return (an “OSS scheme return”) to the Commissioners for each reporting period.

(2) Each quarter for the whole or part of which P is registered under the OSS scheme is a “reporting period” for P.

OSS scheme returns: further requirements

12

(1) An OSS scheme return is to be made out in sterling.

(2) Any conversion from one currency into another for the purposes of sub-paragraph (1) is to be made using the exchange rates published by the European Central Bank—

(a) for the last day of the reporting period to which the OSS scheme return relates, or

(b) if no such rate is published for that day, for the next day for which such a rate is published.

(3) An OSS scheme return—

(a) must be submitted to the Commissioners before the end of the month following the month in which the last day of the reporting period to which it relates falls;

(b) must be submitted by such electronic means, and in such form and manner, as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Payment

13

(1) A person who is required to submit an OSS scheme return must pay, by the deadline for submitting the return, the amounts required in accordance with paragraph 10 in respect of scheme supplies made in the reporting period to which the return relates.

(2) A payment under this paragraph must be made in such manner as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Availability of records

14

(1) A person (“P”) who is registered under the OSS scheme must keep and make available to the Commissioners, on request, ... obligatory records ....

(2) The records must be made available by electronic means.

(3) In sub-paragraph (1) “obligatory records” means records , of transactions entered into by P covered by the scheme, containing the information referred to in Article 63c(1) of the Implementing Regulation.

Amounts required to be paid to member States

15

Section 44 of the Commissioners for Revenue and Customs Act 2005 (requirement to pay receipts into the Consolidated Fund) does not apply to any money received for or on account of VAT that is required to be paid to a member State under Article 46 of Council Regulation (EU) No 904/2010.

Persons registered under the OSS scheme who are also registered under this Act

15A

(1) A person (“P”) who—

(a) is registered under the OSS scheme, and

(b) is also registered, or required to be registered, under this Act,

is not required to discharge any obligation placed on them as a taxable person, to the extent that the obligation relates to a scheme supply treated as made in the United Kingdom.

(2) The reference in sub-paragraph (1) to an obligation placed on P as a taxable person is to an obligation—

(a) to which P is subject under or by virtue of this Act, and

(b) to which P would not be subject if P was neither registered nor required to be registered under this Act.

(3) This paragraph does not prevent P claiming, in reliance on section 25(2) (deduction of input tax from output tax by a taxable person), a credit for input tax incurred on scheme supplies treated as made in the United Kingdom.

PART 4 — Persons registered under non-UK special accounting schemes

Meaning of “a non-UK scheme”

16

(1) In this Schedule “a non-UK scheme” means any provision of the law of a member State which implements Section 3 of Chapter 6 of Title XII of the VAT Directive.

(2) In relation to a non-UK scheme, references to the “administering member State” are to the member State under whose law the scheme is established.

Exemption from requirement to register under this Act

17

(1) A participant in a non-UK scheme is not required to be registered under this Act by virtue of making scheme supplies in respect of which the participant is required to make returns under that other scheme.

(2) Sub-paragraph (1) overrides any contrary provision in this Act.

(3) Where a participant in a non-UK scheme who is not registered under this Act (“the unregistered person”) makes relevant supplies, it is to be assumed for all purposes of this Act relating to the determination of—

(a) whether or not VAT is chargeable under this Act on those supplies,

(b) how much VAT is chargeable under this Act on those supplies,

(d) any other matter that the Commissioners may specify by regulations,

that the unregistered person is registered under this Act.

(4) Scheme supplies made by the unregistered person are “relevant supplies” if—

(a) the value of the supplies must be accounted for in a return required to be made by the unregistered person under a non-UK scheme, and

(b) the supplies are treated as made in the United Kingdom.

De-registration

18

(1) Sub-paragraph (2) applies where a person (“P”) who is registered under Schedule 1A or Part 9 of Schedule 9ZA—

(a) satisfies the Commissioners that P intends to apply for identification under a non-UK scheme, and

(b) asks the Commissioners to cancel P's registration under Schedule 1A or Part 9 of Schedule 9ZA (as the case may be).

(2) The Commissioners may cancel P's registration under Schedule 1A or Part 9 of Schedule 9ZA (as the case may be) with effect from—

(a) the day on which the request is made, or

(b) a later date agreed between P and the Commissioners.

Scheme participants who are also registered under this Act

19

(1) A person (“P”) who—

(a) is a participant in a non-UK scheme, and

(b) is also registered, or required to be registered, under this Act,

is not required to discharge any obligation placed on them as a taxable person, to the extent that the obligation relates to relevant supplies.

(2) The reference in sub-paragraph (1) to an obligation placed on P as a taxable person is to an obligation—

(a) to which P is subject under or by virtue of this Act, and

(b) to which P would not be subject if P was neither registered nor required to be registered under this Act.

(3) A supply made by a participant in a non-UK scheme is a “relevant supply” if—

(a) the value of the supply must be accounted for in a return required to be made by the participant under that scheme, and

(b) the supply is treated as made in the United Kingdom.

(4) The Commissioners may by regulations specify cases in relation to which sub-paragraph (1) is not to apply.

(5) In section 25(2) (deduction of input tax from output tax by a taxable person) the reference to output tax that is due from the taxable person does not include any VAT that the taxable person is liable under a non-UK scheme to pay to the tax authorities for the administering member State.

Value of supplies to connected persons

20

In paragraph 1 of Schedule 6 (valuation: supply to connected person at less than market value) the reference to a supply made by a taxable person is to be read as including a scheme supply that is made by a participant in a non-UK scheme (and is treated as made in the United Kingdom).

Refund of VAT on supplies of goods and services supplied to scheme participant

21

The power of the Commissioners to make regulations under section 39 (repayment of VAT to those in business overseas) includes power to make provision for giving effect to the second sentence of Article 369j of the VAT Directive (which provides for VAT on certain supplies to participants in special accounting schemes to be refunded in accordance with Directive 2008/9/EC).

Availability of records

21A

(1) A person (“P”) who is a participant in a non-UK special scheme must keep and make available to the Commissioners, on request, obligatory records.

(2) The records must be made available by electronic means.

(3) In sub-paragraph (1) “obligatory records” means records, of transactions entered into by P covered by the scheme, containing the information referred to in Article 63c(1) of the Implementing Regulation.

PART 5 — Collection of ...UK VAT

Assessments: general modifications of section 73

22

(1) For the purposes of this Schedule, section 73 (failure to make returns etc) is to be read as if—

(a) the reference in subsection (1) of that section to returns required under this Act included relevant non-UK returns, ...

(b) references in that section to a prescribed accounting period included a tax period , and

(c) references in that section to a VAT credit included a repayment to persons who are not taxable persons of an amount of VAT paid under and in accordance with this Schedule.

(2) See also the modifications in paragraph 23.

(3) In this Schedule “relevant non-UK return” means a non-UK return (see paragraph 38(1)) that is required to be made (wholly or partly) in respect of scheme supplies that are treated as made in the United Kingdom.

Assessments in connection with increase in consideration: modifications

23

(1) Sub-paragraphs (2) and (3) make modifications of section 73 which—

(a) have effect for the purposes of this Schedule, and

(b) are in addition to any other modifications of those sections made by this Schedule.

(2) Section 73 has effect as if, after subsection (3), there were inserted—

(3A) Where a person has failed to make an amendment or notification that the person is required to make under paragraph 33 of Schedule 9ZD in respect of an increase in the consideration for a UK supply (as defined in paragraph 33(7)), the Commissioners may assess the amount of VAT due from the person as a result of the increase to the best of their judgement and notify it to the person. (3B) An assessment under subsection (3A)— (a) is of VAT due for the tax period mentioned in paragraph 33(1)(a) of Schedule 9ZD; (b) must be made within the time limits provided for in section 77, and must not be made after the end of the period of— (i) 2 years after the end of the tax period referred to in paragraph 33(1)(a) of Schedule 9ZD, or if later, (ii) one year after evidence of facts sufficient in the opinion of the Commissioners to justify making the assessment comes to their knowledge. (3C) Subject to section 77, where further evidence such as is mentioned in subsection (3B)(b)(ii) comes to the Commissioners' knowledge after they have made an assessment under subsection (3A), another assessment may be made under that subsection, in addition to any earlier assessment.

(3) The reference in section 73(9) to subsection (1) of that section is taken to include a reference to section 73(3A) (treated as inserted by sub-paragraph (2)).

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

Assessments: consequential modifications

24

References to prescribed accounting periods in section 77 (assessments: time limits, etc) are to be read in accordance with the modifications made by paragraphs 22 and 23—

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

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

Deemed amendments of ... returns

25

(1) Where a person who has made an OSS scheme return or a relevant non-UK return makes a claim under paragraph 31(7)(b) (overpayments) in relation to an error in the return, the ... return is taken for the purposes of this Act to have been amended by the information in the claim.

(2) Where a person who has made an OSS scheme return or a relevant non-UK return gives the Commissioners a notice relating to the return under paragraph 33(2) (increase or decrease in consideration), the ... return is taken for the purposes of this Act to have been amended by that information.

(3) Where (in a case not falling within sub-paragraph (1) or (2)) a person who has made an OSS scheme return or a relevant non-UK return notifies the Commissioners ... of a change that needs to be made to the return to correct an error, or rectify an omission, in it, the ... return is taken for the purposes of this Act to have been amended by that information.

Interest on VAT: “reckonable date”

26

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

Default surcharge: notice of special surcharge period

27

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

Further default after service of notice

28

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

Default surcharge: exceptions for reasonable excuse etc

29

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

Interest in certain cases of official error

30

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

Overpayments

31

(1) A person may make a claim if the person—

(a) has made a non-UK return for a tax period relating wholly or partly to scheme supplies treated as made in the United Kingdom,

(b) has accounted to the tax authorities for the administering member State for VAT in respect of those supplies, and

(c) in doing so has brought into account as UK VAT due to those authorities an amount (“the overpaid amount”) that was not UK VAT due to them.

(2) A person may make a claim if the person has, as a participant in a non-UK scheme, paid (to the tax authorities for the administering member State or to the Commissioners) an amount by way of UK VAT that was not UK VAT due (“the overpaid amount”), otherwise than in the circumstances mentioned in sub-paragraph (1)(c).

(3) A person who is or has been a participant in a non-UK scheme may make a claim if the Commissioners—

(a) have assessed the person to VAT for a tax period, and

(b) in doing so, have brought into account as VAT an amount (“the amount not due”) that was not VAT due.

(4) Where a person makes a claim under sub-paragraph (1) or (2), the Commissioners must repay the overpaid amount to the person.

(5) Where a person makes a claim under sub-paragraph (3), the Commissioners must credit the person with the amount not due.

(6) Where—

(a) as a result of a claim under sub-paragraph (3) an amount is to be credited to a person, and

(b) after setting any sums against that amount under or by virtue of this Act, some or all of the amount remains to the person's credit,

the Commissioners must pay (or repay) to the person so much of the amount as remains to the person's credit.

(7) The reference in sub-paragraph (1) to a claim is to a claim made—

(a) by correcting, in accordance with Article 61 of the Implementing Regulation, the error in the non-UK return mentioned in sub-paragraph (1)(a), or

(b) (after the expiry of the period during which the non-UK return may be amended under Article 61) to the Commissioners.

(8) Sub-paragraphs (1) and (2) do not require any amount to be repaid except to the extent that is required by Article 63 of the Implementing Regulation.

Overpayments: supplementary

32

(1) In section 80 (credit for, or repayment of, overstated or overpaid VAT), subsections (3) to (3C) (unjust enrichment) and (4A) ... and (6) (recovery by assessment of amounts wrongly credited) have effect as if—

(a) a claim—

(i) under paragraph 31(1) were a claim under section 80(1),

(ii) under paragraph 31(2) were a claim under section 80(1B), and

(iii) under paragraph 31(3) were a claim under section 80(1A);

(b) references in that section to a prescribed accounting period included a tax period.

(2) In section 80(3) to (3C), (4A) ... and (6), as modified by sub-paragraph (1), references to the crediting of amounts are to be read as including the payment of amounts.

(3) The Commissioners are not liable to repay the overpaid amount on a claim made—

(a) under paragraph 31(2), or

(b) as mentioned in paragraph 31(7)(b),

if the claim is made more than 4 years after the relevant date.

(4) On a claim made under paragraph 31(3), the Commissioners are not liable to credit the amount not due if the claim is made more than 4 years after the relevant date.

(5) The “relevant date” is—

(a) in the case of a claim under paragraph 31(1), the end of the tax period mentioned in paragraph 31(1)(a), except in the case of a claim resulting from an incorrect disclosure;

(b) in the case of a claim under paragraph 31(1) resulting from an incorrect disclosure, the end of the tax period in which the disclosure was made;

(d) in the case of a claim under paragraph 31(3), the end of the quarter in which the assessment was made.

(6) A person makes an “incorrect disclosure” where—

(a) the person discloses to the tax authorities in question (whether the Commissioners or the tax authorities for the administering member State) that the person has not brought into account for a tax period an amount of UK VAT due for the period (“the disclosed amount”),

(b) the disclosure is made in a later tax period, and

Increase or decrease in consideration for a supply : cases outside Article 61 of the Implementing Regulation

33

(1) This paragraph applies where—

(a) a person makes an OSS scheme return or a non-UK return for a tax period (“the affected tax period”) relating (wholly or partly) to a UK supply, and

(b) after the end of the period during which the person is entitled under Article 61 of the Implementing Regulation to amend their return the amount of the consideration for the UK supply increases or decreases.

(2) The person must, in the tax period in which the increase or decrease is accounted for in the person’s business accounts, notify the Commissioners of the adjustment needed to the figures in the OSS scheme return or non-UK return (as the case may be) because of the increase or decrease.

(3) Where the change to which a notice under sub-paragraph (2) relates is an increase in the consideration for a supply, the person must pay to the Commissioners the difference between—

(a) the amount of VAT that was chargeable on the supply before the increase in consideration, and

(b) the amount of VAT that is chargeable in respect of the whole of the increased consideration for the supply.

(4) Where the change to which an amendment or notice under sub-paragraph (2) relates is a decrease in the consideration for a supply, the amendment or notice has effect as a claim; and where a claim is made the Commissioners must repay any UK VAT paid by the person that would not have been UK VAT due from the person had the consideration for the supply always been the decreased amount.

(5) The Commissioners may by regulations specify—

(a) the latest time by which, and the form and manner in which, a claim or other notice under sub-paragraph (2) must be given;

(b) the latest time by which, and the form in which, a payment under sub-paragraph (3) must be made ....

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

(7) In this paragraph “UK supply” means a scheme supply that is treated as made in the United Kingdom.

Bad debts

34

Where a participant in a non-UK scheme—

(a) has submitted a non-UK return to the tax authorities for the administering member State, and

(b) amends the return to take account of the writing-off as a bad debt of the whole or part of the consideration for a scheme supply that is treated as made in the United Kingdom,

the amending of the return may be treated as the making of a claim to the Commissioners for the purposes of section 36(2) (bad debts: claim for refund of VAT).

Penalties for errors: disclosure

35

Where a person corrects a non-UK return in a way that constitutes telling the tax authorities for the administering member State about—

(a) an inaccuracy in the return,

(b) a supply of false information, or

the person is regarded as telling HMRC about that for the purposes of paragraph 9 of Schedule 24 to the Finance Act 2007.

Set-offs

36

Where a participant in a non-UK scheme is liable to pay UK VAT to the tax authorities for the administering member State in accordance with the scheme, the UK VAT is regarded for the purposes of section 130(6) of the Finance Act 2008 (set-off) as payable to the Commissioners.

PART 6 — Appeals

37

(1) An appeal lies to the tribunal with respect to any of the following—

(a) a refusal to register a person under the OSS scheme;

(b) the cancellation of the registration of any person under the OSS scheme;

(c) a refusal to make a repayment under paragraph 31 (overpayments), or a decision by the Commissioners as to the amount of a repayment due under that provision;

(d) a refusal to make a repayment under paragraph 33(4) (decrease in consideration);

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Part 5 of this Act (reviews and appeals), and any order or regulations under that Part, have effect as if an appeal under this paragraph were an appeal which lies to the tribunal under section 83(1) (but not under any particular paragraph of that subsection).

(3) Where the Commissioners have made an assessment under section 73 in reliance on paragraph 22 or 23—

(a) section 83(1)(p)(i): (appeals against assessments under section 73(1) etc) applies as if the relevant non-UK return were a return under this Act, and

(b) the references in section 84(3) and (5) to the matters mentioned in section 83(1)(p) are to be read accordingly.

PART 7 — Interpretation

38

(1) In this Schedule—

“administering member State”, in relation to a non-UK scheme, has the meaning given by paragraph 16(2);

“the Implementing Regulation” means Council Implementing Regulation (EU) No 282/2011;

“non-UK return” means a return required to be made, for a tax period, under a non-UK scheme;

“non-UK scheme” has the meaning given by paragraph 16(1);

“OSS scheme” has the meaning given by paragraph 1(a);

“OSS scheme return” has the meaning given by paragraph 11(1);

“participant”, in relation to a non-UK scheme, means a person who is identified under that scheme;

“relevant non-UK return” has the meaning given by paragraph 22(3);

“reporting period” is to be read in accordance with paragraph 11(2);

“scheme supply” has the meaning given by paragraph 2;

“tax period” means a period for which a person is required to make a return under a non-UK scheme;

“UK VAT” means VAT in respect of scheme supplies treated as made in the United Kingdom;

“the VAT Directive” means Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.

(2) In relation to a non-UK scheme (or a non-UK return), references in this Schedule to “the tax authorities” are to the tax authorities for the member State under whose law the scheme is established.

(3) References in this Schedule to scheme supplies being “treated as made” in the United Kingdom are to their being treated as made in the United Kingdom by paragraph 29(1) of Schedule 9ZB.

SCHEDULE 9ZE

PART 1 — Introduction

Overview

1

In this Schedule—

(a) Parts 2 and 3 establish a special accounting scheme (the Import One Stop Shop scheme, referred to in this Schedule as the “IOSS scheme”) which may be used by certain persons making supplies of goods—

(i) to Northern Ireland from countries or territories other than Great Britain, the Isle of Man or member States, or

(ii) into the European Union from countries or territories other than Northern Ireland or member States;

(b) Part 4 makes provision about the collection of UK VAT on such supplies;

(d) Part 6 makes supplementary provision;

(e) Part 7 is about appeals;

(f) Part 8 contains definitions.

Qualifying supplies of goods

2

(1) For the purposes of this Schedule, a supply of goods is , subject to sub-paragraph (3), a “qualifying supply of goods” if—

(a) the supply is a distance sale of goods imported from third territories or third countries for the purposes of the second paragraph of Article 14(4) of the VAT Directive (as modified by sub-paragraph (2)),

(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 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 those goods.

(2) For the purposes of sub-paragraph (1)(a), the second paragraph of Article 14(4) of the VAT Directive is to be read as if after “Member State” there were inserted “ or Northern Ireland ”.

(3) A supply of goods is not a “qualifying supply of goods” if—

(a) the goods are in Great Britain or the Isle of Man at the time they are sold,

(b) the supply involves the goods being removed from Great Britain or the Isle of Man to Northern Ireland, and

PART 2 — Registration

The register

3

Persons registered under the IOSS scheme are to be registered in a single register kept by the Commissioners for the purposes of the scheme.

Persons who may be registered

4

A person (“P”) may register under the IOSS scheme if—

(a) P makes or intends to make one or more qualifying supplies of goods in the course of a business that P carries on,

(b) one of the following applies—

(i) P is established in Northern Ireland,

(ii) P is established in a country or territory with which the EU has concluded an agreement making provision corresponding or similar to that contained in Council Directive 2010/24/EU or Regulation (EU) No 904/2010, or

(iii) P is represented by an IOSS representative established in Northern Ireland (see Part 5),

(c) P is not identified under any provision of the law of a member State which implements Section 4 of Chapter 6 of Title XII of the VAT Directive, and

(d) P is not barred from registering by—

(i) the second paragraph of Article 369l(3) of the VAT Directive, or

(ii) any provision of the Implementing Regulation.

Becoming registered

5

(1) The Commissioners must register a person (“P”) under the IOSS scheme if P—

(a) satisfies them that the requirements for registration are met (see paragraph 4), and

(b) makes a request in accordance with this paragraph (a “registration request”).

(2) A registration request must state—

(a) P's name and postal and electronic addresses (including any websites);

(b) the number (if any) P has been allocated by the tax authorities in the country in which P belongs;

(3) A registration request must include a statement—

(a) that P is not established in a member State, or

(b) that P is so established, but is represented by an IOSS representative established in Northern Ireland.

(4) A registration request must—

(a) contain any further information, and any declaration about its contents, that the Commissioners may by regulations require, and

(b) be made by such electronic means, and in such manner, as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Date on which registration takes effect

6

Where a person (“P”) is registered under this Schedule, P's registration takes effect on the date determined in accordance with Article 57d of the Implementing Regulation.

Further provision about registration

7

(1) Where the Commissioners register a person under the IOSS scheme who is an IOSS representative the Commissioners must also register under the IOSS scheme each person represented by the representative.

(2) The Commissioners may, by means of a notice published by them, make further provision about registration under this Schedule.

Notification of changes etc

8

A notification under Article 57h of the Implementing Regulation (notification of certain changes) must be given by such electronic means, and in such manner, as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations prescribe.

Cancellation of registration

9

The Commissioners must cancel the registration of a person (“P”) under the IOSS scheme if—

(a) P has ceased to make, or no longer intends to make, qualifying supplies of goods and has notified the Commissioners of that fact,

(b) the Commissioners otherwise determine that P has ceased to make, or no longer intends to make, such supplies,

(c) P has ceased to satisfy any of the other conditions for registration in paragraph 4 and has notified the Commissioners of that fact,

(d) the Commissioners otherwise determine that P has ceased to satisfy any of those conditions,

(e) the Commissioners determine that P has persistently failed to comply with P's obligations in or under this Schedule or the Implementing Regulation, or

(f) any of the circumstances described in Article 369r(3)(a) to (e) of the VAT Directive occur in relation to P.

PART 3 — Liability, returns, payment etc

Liability to pay VAT to Commissioners

10

(1) This paragraph applies where a person (“P”)—

(a) makes a qualifying supply of goods, and

(b) is registered under the IOSS scheme when the supply is made.

(2) P is liable to pay to the Commissioners the VAT on the supply under and in accordance with this Schedule.

(3) The amount of VAT which a person is liable to pay on the supply is to be determined in accordance with sub-paragraphs (4) to (6), without any deduction of VAT pursuant to Article 168 of the VAT Directive.

(4) If the supply is treated as made in the United Kingdom, the amount is the amount of VAT charged on the supply under this Act (see paragraph 34(2)) and that amount is to be regarded for the purposes of this Act as VAT charged in accordance with this Act.

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

(6) If the supply is treated as made in a member State, the amount is the amount of VAT charged on the supply in accordance with the law of that member State.

IOSS scheme returns

11

(1) A person (“P”) who is, or has been, registered under this Schedule must submit a return (an “IOSS scheme return”) to the Commissioners for each reporting period.

(2) Each month for the whole or any part of which P is registered under this Schedule is a “reporting period” for P.

IOSS scheme returns: further requirements

12

(1) An IOSS scheme return is to be made out in sterling.

(2) Any conversion from one currency into another for the purposes of sub-paragraph (1) is to be made using the exchange rates published by the European Central Bank—

(a) for the last day of the reporting period to which the IOSS scheme return relates, or

(b) if no such rate is published for that day, for the next day for which such a rate is published.

(3) An IOSS scheme return—

(a) must be submitted to the Commissioners before the end of the calendar month following the month in which the last day of the reporting period to which it relates falls;

(b) must be submitted by such electronic means, and in such form and manner, as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Payment

13

(1) A person who is required to submit an IOSS scheme return must pay, by the deadline for submitting the return, the amounts required in accordance with paragraph 10 in respect of qualifying supplies of goods made in the reporting period to which the return relates.

(2) A payment under this paragraph must be made in such manner as the Commissioners may direct (by means of a notice published by them or otherwise) or may by regulations require.

Availability of records : persons registered under the IOSS scheme

14

(1) A person (“P”) who is registered under the IOSS scheme must keep and make available to the Commissioners, on request, ... obligatory records ....

(2) The records must be made available by electronic means.

(3) In sub-paragraph (1) “obligatory records” means records , of transactions entered into by P covered by the scheme, containing the information referred to in Article 63c(2) of the Implementing Regulation.

Amounts required to be paid to member States

15

PART 4 — Collection etc of UK VAT

Assessments: general modifications of section 73

16

(1) For the purposes of this Schedule, section 73 (failure to make returns etc) is to be read as if—

(a) the reference in subsection (1) of that section to returns required under this Act included relevant special scheme returns, ...

(b) references in that section to a prescribed accounting period included a tax period , and

(c) references in that section to a VAT credit included a repayment to persons who are not taxable persons of an amount of VAT paid under and in accordance with this Schedule.

(2) See also the modifications in paragraph 17.

(3) In this Schedule “relevant special scheme return” means a special scheme return (see paragraph 43(1)) that is required to be made (wholly or partly) in respect of qualifying supplies of goods that are treated as made in the United Kingdom.

Assessments in connection with increase in consideration: modifications

17

(1) Sub-paragraphs (2) and (3) make modifications of section 73 which—

(a) have effect for the purposes of this Schedule, and

(b) are in addition to any other modifications of those sections made by this Schedule.

(2) Section 73 has effect as if, after subsection (3), there were inserted—

(3A) Where a person has failed to make an amendment or notification that the person is required to make under paragraph 27 of Schedule 9ZE in respect of an increase in the consideration for a UK supply (as defined in paragraph 27(7)), the Commissioners may assess the amount of VAT due from the person as a result of the increase to the best of their judgement and notify it to the person. (3B) An assessment under subsection (3A)— (a) is of VAT due for the tax period mentioned in paragraph 27(1)(a) of Schedule 9ZE; (b) must be made within the time limits provided for in section 77, and must not be made after the end of the period of— (i) 2 years after the end of the tax period referred to in paragraph 27(1)(a), or if later, (ii) one year after evidence of facts sufficient in the opinion of the Commissioners to justify making the assessment comes to their knowledge. (3C) Subject to section 77, where further evidence such as is mentioned in subsection (3B)(b)(ii) comes to the Commissioners' knowledge after they have made an assessment under subsection (3A), another assessment may be made under that subsection, in addition to any earlier assessment.

(3) The reference in section 73(9) to subsection (1) of that section is taken to include a reference to section 73(3A) (treated as inserted by sub-paragraph (2)).

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

Assessments: consequential modifications

18

References to prescribed accounting periods in section 77 (assessments: time limits etc) are to be read in accordance with the modifications made by paragraphs 16 and 17—

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

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

Deemed amendments of relevant special scheme returns

19

(1) Where a person who has made a relevant special scheme return makes a claim under paragraph 25(7)(b) (overpayments) in relation to an error in the return, the relevant special scheme return is taken for the purposes of this Act to have been amended by the information in the claim.

(2) Where a person who has made a relevant special scheme return gives the Commissioners a notice relating to the return under paragraph 27(2)(b) (increase or decrease in consideration), the relevant special scheme return is taken for the purposes of this Act to have been amended by that information.

(3) Where (in a case not falling within sub-paragraph (1) or (2)) a person who has made a relevant special scheme return notifies the Commissioners (after the expiry of the period during which the special scheme return may be amended under Article 61 of the Implementing Regulation) of a change that needs to be made to the return to correct an error, or rectify an omission, in it, the relevant special scheme return is taken for the purposes of this Act to have been amended by that information.

Interest on VAT: “reckonable date”

20

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

Default surcharge: notice of special surcharge period

21

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

Further default after service of notice

22

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

Default surcharge: exceptions for reasonable excuse etc

23

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

Interest in certain cases of official error

24

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

Overpayments

25

(1) A person may make a claim if the person—

(a) has made a special scheme return for a tax period relating wholly or partly to qualifying supplies of goods treated as made in the United Kingdom,

(b) has accounted to the tax authorities for the administering member State for VAT in respect of those supplies, and

(c) in doing so has brought into account as UK VAT due to those authorities an amount (“the overpaid amount”) that was not UK VAT due to them.

(2) A person may make a claim if the person has, as a participant in a special scheme, paid (to the tax authorities for the administering member State or to the Commissioners) an amount by way of UK VAT that was not UK VAT due (“the overpaid amount”), otherwise than in the circumstances mentioned in sub-paragraph (1)(c).

(3) A person who is or has been a participant in a special scheme may make a claim if the Commissioners—

(a) have assessed the person to VAT for a tax period, and

(b) in doing so, have brought into account as VAT an amount (“the amount not due”) that was not VAT due.

(4) Where a person makes a claim under sub-paragraph (1) or (2), the Commissioners must repay the overpaid amount to the person.

(5) Where a person makes a claim under sub-paragraph (3), the Commissioners must credit the person with the amount not due.

(6) Where—

(a) as a result of a claim under sub-paragraph (3) an amount is to be credited to a person, and

(b) after setting any sums against that amount under or by virtue of this Act, some or all of the amount remains to the person's credit,

the Commissioners must pay (or repay) to the person so much of the amount as remains to the person's credit.

(7) The reference in sub-paragraph (1) to a claim is to a claim made—

(a) by correcting, in accordance with Article 61 of the Implementing Regulation, the error in the special scheme return mentioned in sub-paragraph (1)(a), or

(b) (after the expiry of the period during which the special scheme return may be amended under Article 61) to the Commissioners.

(8) Sub-paragraphs (1) and (2) do not require any amount to be repaid except to the extent that is required by Article 63 of the Implementing Regulation.

Overpayments: supplementary

26

(1) In section 80 (credit for, or repayment of, overstated or overpaid VAT), subsections (3) to (3C) (unjust enrichment) and (4A) ... and (6) (recovery by assessment of amounts wrongly credited) have effect as if—

(a) a claim—

(i) under paragraph 25(1) were a claim under section 80(1),

(ii) under paragraph 25(2) were a claim under section 80(1B), and

(iii) under paragraph 25(3) were a claim under section 80(1A);

(b) references in that section to a prescribed accounting period included a tax period.

(2) In section 80(3) to (3C), (4A) ... and (6), as modified by sub-paragraph (1), references to the crediting of amounts are to be read as including the payment of amounts.

(3) The Commissioners are not liable to repay the overpaid amount on a claim made—

(a) under paragraph 25(2), or

(b) as mentioned in paragraph 25(7)(b),

if the claim is made more than 4 years after the relevant date.

(4) On a claim made under paragraph 25(3), the Commissioners are not liable to credit the amount not due if the claim is made more than 4 years after the relevant date.

(5) The “relevant date” is—

(a) in the case of a claim under paragraph 25(1), the end of the tax period mentioned in paragraph 25(1)(a), except in the case of a claim resulting from an incorrect disclosure;

(b) in the case of a claim under paragraph 25(1) resulting from an incorrect disclosure, the end of the tax period in which the disclosure was made;

(d) in the case of a claim under paragraph 25(3), the end of the quarter in which the assessment was made.

(6) A person makes an “incorrect disclosure” where—

(a) the person discloses to the tax authorities in question (whether the Commissioners or the tax authorities for the administering member State) that the person has not brought into account for a tax period an amount of UK VAT due for the period (“the disclosed amount”),

(b) the disclosure is made in a later tax period, and

Increase or decrease in consideration for a supply

27

(1) This paragraph applies where—

(a) a person makes a special scheme return for a tax period (“the affected tax period”) relating (wholly or partly) to a UK supply, and

(b) after the return has been made the amount of the consideration for the UK supply increases or decreases.

(2) The person must, in the tax period in which the increase or decrease is accounted for in the person's business accounts—

(a) amend the special scheme return to take account of the increase or decrease, or

(b) (if the period during which the person is entitled under Article 61 of the Implementing Regulation to amend the special scheme return has expired) notify the Commissioners of the adjustment needed to the figures in the special scheme return because of the increase or decrease.

(3) Where the change to which an amendment or notice under sub-paragraph (2) relates is an increase in the consideration for a UK supply, the person must pay to the tax authorities for the administering member State (in accordance with Article 62 of the Implementing Regulation) or, in a case falling within sub-paragraph (2)(b), the Commissioners, the difference between—

(a) the amount of VAT that was chargeable on the supply before the increase in consideration, and

(b) the amount of VAT that is chargeable in respect of the whole of the increased consideration for the supply.

(4) Where the change to which an amendment or notice under sub-paragraph (2) relates is a decrease in the consideration for a UK supply, the amendment or notice has effect as a claim; and where a claim is made the Commissioners must repay any VAT paid by the person that would not have been VAT due from the person had the consideration for the supply always been the decreased amount.

(5) The Commissioners may by regulations specify—

(a) the latest time by which, and the form and manner in which, a claim or other notice under sub-paragraph (2)(b) must be given;

(b) the latest time by which, and the form in which, a payment under sub-paragraph (3) must be made in a case within sub-paragraph (2)(b).

(6) A payment made under sub-paragraph (3) in a case within sub-paragraph (2)(a) must be made before the end of the tax period referred to in sub-paragraph (2).

(7) In this paragraph “UK supply” means a qualifying supply of goods that is treated as made in the United Kingdom.

Bad debts

28

Where a participant in a special scheme—

(a) has submitted a special scheme return to the tax authorities for the administering member State, and

(b) amends the return to take account of the writing-off as a bad debt of the whole or part of the consideration for a qualifying supply of goods that is treated as made in the United Kingdom,

the amending of the return may be treated as the making of a claim to the Commissioners for the purposes of section 36(2) (bad debts: claim for refund of VAT).

Penalties for errors: disclosure

29

Where a person corrects a special scheme return in a way that constitutes telling the tax authorities for the administering member State about—

(a) an inaccuracy in the return,

(b) a supply of false information, or

the person is regarded as telling HMRC about that for the purposes of paragraph 9 of Schedule 24 to the Finance Act 2007 (reductions for disclosure).

Set-offs

30

Where a participant in a special scheme is liable to pay UK VAT to the tax authorities for the administering member State in accordance with the scheme, the UK VAT is regarded for the purposes of section 130(6) of the Finance Act 2008 (set-off) as payable to the Commissioners.

Availability of records: participants in a special scheme (other than the IOSS scheme)

30A

(1) A person (“P”) who is a participant in a special scheme (other than the IOSS scheme) must keep and make available to the Commissioners, on request, obligatory records.

(2) The records must be made available by electronic means.

(3) In sub-paragraph (1) “obligatory records” means records, of transactions entered into by P covered by the scheme, containing the information referred to in Article 63c(2) of the Implementing Regulation.

PART 5 — IOSS representatives

Eligibility and representation

31

(1) A person may register as an IOSS representative for the purposes of the IOSS scheme if the person is established in Northern Ireland.

(2) A person may not be represented by more than one IOSS representative at a time.

Register

32

(1) Before a person (“R”) can be registered as an IOSS representative, R must provide to the Commissioners the information required by Article 369p(2) and (3) of the VAT Directive.

(2) The Commissioners may by regulations or by means of a notice published by them make further provision about the registration of a person as an IOSS representative.

(3) The provision that may be made under sub-paragraph (2) includes provision—

(a) requiring the registration of the names of IOSS representatives against the names of the person (or persons) they represent in the register kept for the purposes of this Schedule;

(b) imposing requirements to be met before a person may be registered in that register as an IOSS representative or before such registration may be cancelled;

(c) making it the duty of an IOSS representative, for the purposes of registration, to notify the Commissioners, within such period as may be prescribed, that the representative's appointment has taken effect or has ceased to have effect;

(d) allowing the Commissioners to refuse to register a person as an IOSS representative, or to cancel a person's registration as an IOSS representative, in such circumstances as may be specified in the regulations;

(e) as to the manner and circumstances in which a person is to be appointed, or is to be treated as having ceased to be, an IOSS representative;

(f) about the making or deletion of entries relating to IOSS representatives in the register kept for the purposes of this Schedule.

Duties and obligations

33

Where a person registered under the IOSS scheme (“P”) is represented by an IOSS representative (“R”), R—

(a) may act on P's behalf in relation to the IOSS scheme,

(b) must secure (where appropriate by acting on P's behalf) P's compliance with and discharge of the obligations and liabilities to which P is subject by virtue of or under this Schedule, and

(i) any failure to secure P's compliance with or discharge of any such obligation or liability, and

(ii) anything done for purposes connected with acting on P's behalf,

as if the obligations and liabilities imposed on P were imposed jointly and severally on R and P.

PART 6 — Supplementary provision

Registration under this Act

34

(1) Notwithstanding any provision in this Act to the contrary ..., a participant in a special scheme is not required to be registered under this Act by virtue of making qualifying supplies of goods.

(2) Where a participant in a special scheme (“the scheme participant”) makes relevant supplies, it is to be assumed for all purposes of this Act relating to the determination of—

(a) whether or not VAT is chargeable under this Act on those supplies,

(b) how much VAT is chargeable under this Act on those supplies, and

that the scheme participant is registered under this Act.

(3) A supply made by a participant in a special scheme is a “relevant supply” if—

(a) the value of the supply must be accounted for in a special scheme return, and

(b) the supply is treated as made in the United Kingdom.

(4) References in this Schedule to a person being registered under this Act do not include a reference to that person being registered under the IOSS scheme.

De-registration

35

Where a person (“P”) who is registered under Schedule 1 or 1A solely by virtue of the fact that P makes or intends to make qualifying supplies of goods satisfies the Commissioners that P intends to apply for—

(a) registration under this Schedule, or

(b) identification under any provision of the law of a member State which implements Section 4 of Chapter 6 of Title XII of the VAT Directive,

the Commissioners may, if P so requests, cancel P's registration under Schedule 1 or, as the case may be, 1A with effect from the day on which the request is made or from such later date as may be agreed between P and the Commissioners.

Scheme participants who are also registered under this Act

36

(1) A person who—

(a) is a participant in a special scheme, and

(b) is also registered, or required to be registered, under this Act,

is not required to discharge any obligation placed on the person as a taxable person, so far as the obligation relates to relevant supplies unless the obligation is an input tax obligation.

(2) The reference in sub-paragraph (1) to an obligation placed on the person as a taxable person is to an obligation—

(a) to which the person is subject under or by virtue of this Act, and

(b) to which the person would not be subject if the person were neither registered nor required to be registered under this Act.

(3) A supply made by a participant in a special scheme is a “relevant supply” if—

(a) the value of the supply must be accounted for in a return required to be made by the participant under the special scheme, and

(b) the supply is treated as made in the United Kingdom.

(4) In section 25(2) (deduction of input tax from output tax by a taxable person) the reference to output tax that is due from the taxable person does not include any VAT that the taxable person is liable under a special scheme to pay to the tax authorities for the administering member State.

(5) In this paragraph, “input tax obligation” means an obligation imposed on a taxable person relating to a claim to deduct under section 25(2) or to the payment of a VAT credit.

No VAT chargeable on supplies by special scheme participants not registered for VAT

36A

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

No import VAT chargeable on qualifying supplies of goods

37

(1) No charge to VAT occurs on the importation of goods into the United Kingdom as a result of their entry into Northern Ireland ... where—

(a) that importation ... is in the course of a supply of those goods which is a qualifying supply of goods, and

(b) the person making the supply is a participant in a special scheme.

(2) The Commissioners may by means of a notice published by them make provision about the procedures that must be followed or the conditions that must be complied with to satisfy them that an importation ... falls within sub-paragraph (1).

Time and place of supply of goods

38

(1) Sub-paragraphs (3) and (4) apply (instead of sections 6 and 7) for the purposes of determining when and where a supply of goods within sub-paragraph (2) takes place.

(2) A supply of goods is within this sub-paragraph where—

(a) the supply of those goods is a qualifying supply of goods,

(b) the supply is not facilitated by an online marketplace,

(d) the goods are supplied to a person in Northern Ireland or a member State.

(3) The supply of goods is to be treated as taking place at the time when payment for the goods has been accepted, within the meaning of Article 61b of the Implementing Regulation.

(4) The goods are to be treated as supplied—

(a) in the case of goods supplied to a person in Northern Ireland, in the United Kingdom;

(b) in the case of goods supplied to a person in a member State, in that member State.

Place of supply of goods: supplies facilitated by online marketplaces

39

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

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

(3) Sub-paragraph (4) applies (instead of section 7) to a supply of goods deemed to have taken place by section 5B(2)(a) where the operator of the online marketplace that facilitated the supply of goods from P to R (within the meaning of that section) is a participant in a special scheme.

(4) The supply of goods is to be treated as taking place outside the United Kingdom.

(5) Sub-paragraph (6) applies (instead of section 7) to a supply of goods deemed to have taken place by section 5B(2)(b) where the operator of the online marketplace that facilitated the supply of goods from P to R (within the meaning of that section) is a participant in a special scheme.

(6) The supply of goods is to be treated as taking place in the United Kingdom.

VAT representatives

40

Section 48(1ZA) (VAT representatives) does not permit the Commissioners to direct a participant in a special scheme to appoint a VAT representative.

Refund of UK VAT

41

(1) Part 21 of the Value Added Tax Regulations 1995 (S.I. 1995/2518) has effect in relation to a participant in a special scheme as it applies to a trader (within the meaning of those Regulations) subject to the following modifications.

(2) Regulation 186 (repayments of VAT) has effect as if after “imported by him into the United Kingdom” there were inserted “ by virtue of their entry into Northern Ireland ”.

(3) That Part has effect as if regulations 187, 188(1) and 188(2)(b) were omitted (VAT representatives and persons to whom Part 21 applies).

PART 7 — Appeals

Appeals

42

(1) An appeal lies to the tribunal with respect to any of the following—

(a) a refusal to register a person under the IOSS scheme;

(b) the cancellation of the registration of any person under the IOSS scheme;

(c) a refusal to make a repayment under paragraph 25 (overpayments), or a decision by the Commissioners as to the amount of a repayment due under that provision;

(d) a refusal to make a repayment under paragraph 27(4) (decrease in consideration);

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Part 5 of this Act (reviews and appeals), and any order or regulations under that Part, have effect as if an appeal under this paragraph were an appeal which lies to the tribunal under section 83(1) (but not under any particular paragraph of that subsection).

(3) Where the Commissioners have made an assessment under section 73 in reliance on paragraph 16 or 17—

(a) section 83(1)(p)(i) (appeals against assessments under section 73(1) etc) applies as if the special scheme return were a return under this Act, and

(b) the references in section 84(3) and (5) to the matters mentioned in section 83(1)(p) are to be read accordingly.

PART 8 — Interpretation

Interpretation

43

(1) In this Schedule—

“administering member State”, in relation to a special scheme, means the member State under whose law the scheme is established;

“the Implementing Regulation” means Council Implementing Regulation (EU) No 282/2011;

“IOSS scheme” has the meaning given by paragraph 1(a);

“IOSS scheme return” has the meaning given by paragraph 11(1);

“participant in a special scheme” means a person who—is registered under the IOSS scheme, oris identified under any provision of the law of a member State which implements Section 4 of Chapter 6 of Title XII of the VAT Directive;

“qualifying supply of goods” has the meaning given by paragraph 2;

“registration request” is to be construed in accordance with paragraph 5(1)(b);

“relevant special scheme return” has the meaning given by paragraph 16(3);

“reporting period” is to be read in accordance with paragraph 11(2);

“special scheme” means— the IOSS scheme, orany other scheme, under the law of a member State, implementing Section 4 of Chapter 6 of Title XII of the VAT Directive;

“special scheme return” means—an IOSS scheme return, ora value added tax return submitted to the tax authorities of a member State;

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