The Value Added Tax (Treatment of Transactions) Order 1986

Made: 22nd May 1986

Laid before the House of Commons: 3rd June 1986

Coming into Operation: 1st July 1986

The Treasury, in exercise of the powers conferred on them by section 3(3)(c) of the Value Added Tax Act 1983 and of all other powers enabling them in that behalf, hereby make the following Order:

Citation and commencement

1

This Order may be cited as the Value Added Tax (Treatment of Transactions) Order 1986 and shall come into operation on 1st July 1986.

Interpretation

2

In this Order—

• “articles in pawn” means articles subject to a pledge;

• “pawnee”, “pawnor” and “pledge” have the same meaning as in section 189 of the Consumer Credit Act 1974.

Treatment of Transaction

3

The following description of a transaction shall be treated as neither a supply of goods nor a supply of services:

Signed

Tim Sainsbury — Donald Thompson — Two of the Lords Commissioners of Her Majesty's Treasury — 22nd May 1986

Explanatory note

EXPLANATORY NOTE

This Order removes from the scope of value added tax disposals by pawn-brokers of goods to the pawnor within three months of the property in the goods passing to the pawnbroker under section 120(1)(a) of the Consumer Credit Act 1974. Any such disposals would otherwise be a supply of goods and would be chargeable with tax under section 2(1) of the Value Added Tax Act 1983.