Legalize / United Kingdom / Statutory-Instrument

The Value Added Tax Regulations 1995

Type Statutory-Instrument

Publication 1995-09-27

Last updated 2025-06-13

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Reform history JSON API

[^key-d56b66e6719519c00f8f8b4889166d44]: Reg. 201(1)(b)(vi) and word inserted (5.12.2023) by The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023 (S.I. 2023/1201), regs. 1(1), 2(4)(b)(iii) (with reg. 1(2))

[^key-21943169cc4862ad41d261c3cd647e07]: Reg. 201(2) inserted (5.12.2023) by The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023 (S.I. 2023/1201), regs. 1(1), 2(4)(c) (with reg. 1(2))

[^key-dccc98bbdf20120cfc75ff22094d0504]: Word in reg. 4B(1) omitted (5.12.2023) by virtue of The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023 (S.I. 2023/1201), regs. 1(1), 2(2)(a) (with reg. 1(2))

[^key-1d6558919faf9c117ba5679cdd29c024]: Reg. 4B(1)(k) and word inserted (5.12.2023) by The Value Added Tax (Refunds to “Do-It-Yourself” Builders) (Amendment of Method and Time for Making Claims) Regulations 2023 (S.I. 2023/1201), regs. 1(1), 2(2)(b) (with reg. 1(2))

[^key-34e00a5571c58bf124cd83ded2abc995]: Regulations modified (1.7.2021 for specified purposes, 10.6.2021 for specified purposes, 1.3.2024 in so far as not already in force) by 1994 c. 23, Sch. 9ZF para. 18 (as inserted by Finance Act 2021 (c. 26), s. 95(6)(a), Sch. 18 para. 6; S.I. 2021/770, regs. 3, 4 (with regs. 5-7); S.I. 2024/130, regs. 3, 4)

[^key-436b816ccedbfb92feb16e1b18b658ce]: Reg. 25(4AA) inserted (13.6.2025 with effect in accordance with reg. 1(2) of the amending S.I.) by The Value Added Tax (Amendment) Regulations 2025 (S.I. 2025/578), regs. 1(2), 2

[^M_F_5ebc73ce-3b9f-456b-845c-8afdfe8eb37b]: Words in reg. 84(5)(d) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2008 (S.I. 2008/1146), art. 1(1), Sch. 1 para. 17(c) (with Sch. 2)

[^M_F_84f38a57-b88c-4de2-dbad-3cfced3d59db]: Words in reg. 84(3)(4)(b) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2008 (S.I. 2008/1146), art. 1(1), Sch. 1 para. 17(a) (with Sch. 2)

[^M_F_4954da49-7547-4235-86a2-d56120367f67]: Reg. 84(5)(b)(ba) substituted for reg. 84(5)(b) (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2008 (S.I. 2008/1146), art. 1(1), Sch. 1 para. 17(b) (with Sch. 2)

[^M_F_27dac321-68df-4b3c-9eab-08a6abd17837]: Words in reg. 94B(1)(a)(c) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2008 (S.I. 2008/1146), art. 1(1), Sch. 1 para. 18 (with Sch. 2)

PART XVI(A) — FISCAL AND OTHER WAREHOUSING REGIMES

Interpretation of Part XVI(A)

145A

(1) In this Part unless the context otherwise requires—

“eligible goods” has the meaning given by section 18B(6);

“fiscal warehouse” includes all fiscal warehouses kept by the same fiscal warehousekeeper;

“material time” has the meaning given by section 18F(1) in the case of a fiscal warehousing regime and section 18(6) in the case of a warehousing regime;

“regulation” or “regulations” refers to the relevant regulation or regulations of these Regulations; and,

“section” or “sections” refers to the relevant section or sections of the Act.

(2) For the purposes of this Part, where a fiscal warehousekeeper keeps one or more fiscal warehouses there shall be associated with him a single fiscal warehousing regime; and “relevant fiscal warehousekeeper”, “relevant fiscal warehouse”, “relevant fiscal warehousing regime”, “his fiscal warehouse”, “his fiscal warehousing regime” and similar expressions shall be construed in this light.

Fiscal warehousing certificates

145B

(1) ... The certificate referred to in section 18B(2)(d) (supplies of goods intended for fiscal warehousing) shall contain the information indicated in the form specified in a notice published by the Commissioners.

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

Certificates connected with services in fiscal or other warehousing regimes

145C

The certificate referred to in section 18C(1)(c) (certificate required for the zero-rating of certain services performed on or in relation to goods while those goods are subject to a fiscal or other warehousing regime) shall contain the information indicated in the form specified in a notice published by the Commissioners.

VAT invoices relating to services performed in fiscal or other warehousing regimes

145D

(1) This regulation applies to the invoice referred to in section 18C(1)(e) (invoice required for the zero-rating of the supply of certain services performed on or in relation to goods while those goods are subject to a fiscal or other warehousing regime).

(2) The invoice shall be known as a VAT invoice and shall state the following particulars (unless the Commissioners allow any requirement of this paragraph to be relaxed or dispensed with)—

(a) an identifying number,

(b) the material time of the supply of the services in question,

(d) the name, an address and the registration number of the supplier,

(e) the name and an address of the person to whom the services are supplied,

(f) a description sufficient to identify the nature of the services supplied,

(g) the extent of the services and the amount payable, excluding VAT, expressed in sterling,

(h) the rate of any cash discount offered,

(i) the rate of VAT as zero per cent, and

(j) a declaration that in respect of the supply of services in question, the requirements of section 18C(1) will be or have been satisfied.

(3) The supplier of the services in question shall issue the invoice to the person to whom the supply is made within thirty days of the material time of that supply of services (or within such longer period as the Commissioners may allow in general or special directions).

Fiscal warehousing regimes

145E

(1) Upon any eligible goods entering a fiscal warehouse the relevant fiscal warehousekeeper shall record their entry in his relevant fiscal warehousing record.

(2) Eligible goods shall only be subject to or in a fiscal warehousing regime at any time—

(a) while they are allocated to that regime in the relevant fiscal warehousing record;

(b) while they are not identified in that record as having been transferred; or,

The fiscal warehousing record and stock control

145F

(1) In addition to the records referred to in regulation 31, a fiscal warehousekeeper shall maintain a fiscal warehousing record for any fiscal warehouse in respect of which he is the relevant fiscal warehousekeeper.

(2) The fiscal warehousing record may be maintained in any manner acceptable to the Commissioners. In particular, it shall be capable of—

(a) ready use by any proper officer in the course of his duties; and

(b) reproduction into a form suitable for any proper officer to readily use at a place other than the relevant fiscal warehouse.

(3) Subject to paragraph (4) below, the fiscal warehousing record shall have the features and shall comply with the requirements set out in Schedule 1A to these Regulations.

(4) In respect of any goods the relevant fiscal warehousing record shall not be required to record events more than six years following—

(a) the transfer or removal of those goods from the relevant fiscal warehousing regime; or,

(b) the exit of those goods from the relevant fiscal warehouse (in the case of goods which were not allocated to the relevant fiscal warehousing regime).

(5) A fiscal warehousekeeper, upon receiving a request to do so from any proper officer, shall—

(a) produce his fiscal warehousing record to that officer and permit him to inspect or take copies of it or of any part of it (as that officer shall require); or,

(b) facilitate and permit that officer to inspect any goods which are stored or deposited in his fiscal warehouse (whether or not those goods are allocated to the relevant fiscal warehousing regime).

Fiscal warehousing transfers in the United Kingdom

145G

(1) Subject to paragraphs (2) and (3) below, a fiscal warehousekeeper (“the original fiscal warehousekeeper”) may permit eligible goods which are subject to his fiscal warehousing regime (“the original regime”) to be transferred to another fiscal warehousing regime (“the other regime”) without those goods being treated as removed from the original regime.

(2) The original fiscal warehousekeeper shall not allow eligible goods to exit from his fiscal warehouse in pursuance of this regulation before he receives a written undertaking from the fiscal warehousekeeper in relation to that other fiscal warehousing regime (“the other fiscal warehousekeeper”) that, in respect of those eligible goods, the other fiscal warehousekeeper will comply with the requirements of paragraph (3) below.

(3) The other fiscal warehousekeeper, upon the entry of the goods to his fiscal warehouse, shall—

(a) record that entry in his fiscal warehousing record; and,

(b) allocate those goods to his fiscal warehousing regime.

Furthermore, within 30 days commencing with the day on which those goods left the original fiscal warehouse, he shall—deliver or cause to be delivered to the original fiscal warehousekeeper a certificate in a form acceptable to the Commissioners confirming that he has recorded the entry of those goods to his fiscal warehouse and allocated them to his fiscal warehousing regime; and,retain a copy of that certificate as part of his fiscal warehousing record.

Removal of goods from a fiscal warehousing regime and transfers outside Great Britain

145H

(1) Without prejudice to sections 18F(5), 18F(6) and the following paragraphs of this regulation, eligible goods which are allocated to a fiscal warehousing regime shall only be removed from that regime at the time and in any of the following circumstances—

(a) when an entry in respect of those eligible goods is made in the relevant fiscal warehousing record which indicates the time and date of their removal from that regime;

(b) when the eligible goods are moved outside the fiscal warehouse in respect of which they are allocated to a fiscal warehousing regime (except in the case of movements between fiscal warehouses kept by the same fiscal warehousekeeper); or,

The person who shall be treated as the person who removes or causes the removal of the relevant goods from the relevant fiscal warehousing regime in any of the circumstances described above shall be, as the case requires, either the person who causes any of those circumstances to occur or, in the case of sub-paragraph (c), the person who makes the retail sale referred to there.

(2) Subject to paragraph (3) below, eligible goods which are subject to a fiscal warehousing regime shall not be treated as removed from that regime but shall be treated as transferred or as being in the process of transfer, as the case requires, in any of the following circumstances—

(a) where the goods in question are transferred or are in the process of transfer to another fiscal warehousing regime in pursuance of regulation 145G(1) above;

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

(c) where the goods in question are exported or are in the process of being exported to a place outside Great Britain; or,

(d) where the goods in question are moved temporarily to a place other than the relevant fiscal warehouse for repair, processing, treatment or other operations (subject to the prior agreement of and to conditions to be imposed by the Commissioners).

(3) Where any relevant document referred to in paragraph (4) below is not received by the relevant fiscal warehousekeeper within the time period indicated there (commencing on the day on which the relevant eligible goods leave his fiscal warehouse), he shall—

(a) make an entry by way of adjustment to his fiscal warehousing record to show the relevant goods as having been removed from his fiscal warehousing regime at the time and on the day when they left;

(b) identify in his fiscal warehousing record the person on whose instructions he allowed the goods to leave his fiscal warehouse as the person removing those goods and that person’s address and registration number (if any); and,

(c) notify the person on whose instructions he allowed the goods to leave his fiscal warehouse that the relevant document has not been received by him in time.

(4) The document and time period referred to in paragraph (3) above is, as the case requires, either—

(a) the certificate referred to in regulation 145G(3)(c) confirming the completion of a transfer of eligible goods from the relevant fiscal warehousing regime to another fiscal warehousing regime (30 days);

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or,

(c) a document evidencing the export of the eligible goods from the relevant fiscal warehousing regime to a place outside Great Britain (60 days).

145I

(1) A fiscal warehousekeeper shall not remove or allow the removal of any eligible goods from his fiscal warehousing regime at any time before—

(a) he has inspected and placed on his fiscal warehousing record a copy of the relevant document issued by the Commissioners under regulation 145J(1) (removal document); or,

(b) he is provided with the registration number of a person registered under the Act and a written undertaking from that person that any VAT payable by that person as the result of any removal of eligible goods from that fiscal warehousing regime will be accounted for on that person’s return in accordance with regulation 40(1)(c).

(2) Without prejudice to section 18E, where a fiscal warehousekeeper allows the removal of any eligible goods to take place from his fiscal warehousing regime otherwise than in accordance with this regulation, he shall be jointly and severally liable with the person who removes the goods for the payment of the VAT payable under section 18D(2) to the Commissioners.

(3) Paragraphs (1) and (2) above shall not apply to a removal which is the result of an entry in the relevant fiscal warehousing record made by the relevant fiscal warehousekeeper in compliance with regulation 145H(3)(a) (non-receipt of a document following transfer or export).

Payment on removal of goods from a fiscal warehousing regime

145J

(1) The Commissioners may, in respect of a person who is seeking to remove or cause the removal of eligible goods from a fiscal warehousing regime,—

(a) accept from or on behalf of that person payment of the VAT payable (if any) as a result of that removal, and

(b) issue to that person a document bearing a reference or identification number.

(2) The Commissioners need not act in accordance with paragraph (1) above unless, as the case requires, they are satisfied as to—

(a) the value and material time of any supply of the relevant goods in the fiscal warehousing regime which is treated as taking place in the United Kingdom under section 18B(4) and the status of the person who made that supply;

(b) the nature and quantity of the relevant eligible goods;

(c) the value of any relevant self-supplies of specified services treated as made under section 18C(3) in the course or furtherance of his business by the person who is to remove the relevant goods, or by the person on whose behalf the goods are to be removed, at the time they are removed from the fiscal warehousing regime; and,

(d) the nature and material time of any relevant supplies of specified services in respect of which the self-supplies referred to in sub-paragraph (c) above are treated as being identical (certain supplies of services on or in relation to goods while those goods are subject to the fiscal warehousing regime).

(3) In paragraph (2)(a) “status” is a reference to whether the person in question is or is required to be registered under the Act or would be required to register under the Act were it not for paragraph 1(9) of Schedule 1, or paragraph 38(6) or paragraph 48(7) of Schedule 9ZA, to the Act.

Information to be indicated:

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

declare that (name of company) intends to enter to the fiscal warehousing regime at the fiscal warehouse shown below on (date), or within… days commencing today, the goods indicated below:

name and address of fiscal warehouse

authorisation number of the fiscal warehousekeeper

description of goods

quantity of goods

I certify that the supply of goods/acquisition is eligible to be relieved from VAT under the following provisions of the Value Added Tax Act 1994 [delete as appropriate]:

sections 18B(2)(d)/18B(3) (purchases) or sections 18B(1)(d)/18B(3) (acquisitions).

(signature)

(date)

NOTE: You should be aware that there are severe penalties for making a false declaration. If there is any doubt about the eligiblity of the goods or about the fiscal warehouse to which they are being sent you should consult the local Customs and Excise office before preparing the certificate.A copy of the certificate should be filed with the supplier’s invoice and a copy of the delivery note.

Form No. 16

Regulation 178(1)(b)(i)

SCHEDULE 1A

The fiscal warehousing record which is referred to in paragraph (3) of regulation 145F shall have the features and comply with the requirements set out below.

1

Goods in and out of a fiscal warehouse and its regime

(a) It shall accurately identify any eligible goods which enter or exit the fiscal warehouse, their nature and quantity, and the time and date when they so enter or exit.

(b) It shall accurately identify any goods which are not eligible goods and which enter or exit the fiscal warehouse for storage (other than goods which enter for purposes wholly incidental to such storage), their nature and quantity, and time and date when they so enter or exit.

(c) It shall accurately identify all eligible goods which are allocated to or removed from the fiscal warehousing regime associated with the relevant fiscal warehousekeeper, the time and date when the allocation or removal takes place, and the location of the eligible goods while they are allocated to the relevant regime.

(d) It shall accurately identify as “transferred goods” all eligible goods which are transferred directly from the fiscal warehousing regime to another fiscal warehousing regime, the time and date when the transfer starts, and the address of the fiscal warehouse to which the goods in question are transferred.

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

(f) It shall accurately identify as “transferred goods (by reason of export)” all eligible goods which are directly exported from the fiscal warehousing regime to a place outside Great Britain under regulation 145H(2)(c), the date and time when the movement of the goods which is directly associated with the export starts, and the address of the place outside Great Britain to which the goods in question are consigned.

2

Specified services performed in a fiscal warehouse

3

Documents relating to transfers and specified services

(a) It shall include the written undertaking from the other fiscal warehousekeeper relating to a transfer made within the United Kingdom referred to in regulation 145G(2), the certificate from the other fiscal warehousekeeper confirming a transfer made within the United Kingdom referred to in regulation 145G(3)(c), and it shall relate them to the relevant transfer.

(b) It shall include the copy of the certificate relating to a transfer received by the relevant fiscal warehousekeeper from another fiscal warehousing regime within the United Kingdom referred to in regulation 145G(3)(d) and it shall relate that copy to the relevant allocation to his relevant fiscal warehousing regime.

(d) It shall include the document relating to the completion of an export to a place outside Great Britain referred to in regulation 145H(4)(c) and it shall relate that document to the export in question.

4

Procedures where transfers are not completed

(a) It shall be adjusted to show a removal (and not a transfer) where the certificate of transfer within the United Kingdom referred to in regulation 145G(3)(c) is not received in time from the other fiscal warehousekeeper.

(b) It shall be adjusted to show a removal (and not a transfer) where the document referred to in regulation 145H(4)(c) concerning goods which have been transferred to corresponding arrangements in Great Britain, or which have been exported to a place outside Great Britain, is not received in time.

(c) It shall evidence any notification made under regulation 145H(3)(c) to the person on whose instructions the goods were allowed to leave the fiscal warehouse.

5

Removals from a fiscal warehousing regime

(a) It shall identify the name and address of any person who at any time removes or causes the removal of any goods from the fiscal warehousing regime and that person’s registration number if he is registered under the Act.

(b) It shall include a copy of the removal document issued by the Commissioners under regulation 145J(1) and shall relate it to the relevant removal.

6

Miscellaneous

(a) It shall incorporate any modifications to the features or requirements set out in paragraphs 1 to 5 above which the Commissioners may require in respect of the relevant fiscal warehousekeeper.

(b) A fiscal warehousekeeper may, with the prior agreement of the Commissioners, maintain a fiscal warehousing record in which any of the features or requirements set out in paragraphs 1 to 5 above are relaxed or dispensed with.

40A

Where the Commissioners in exercise of their power under section 28(2A) of the Act have directed the manner in which payments on account under section 28 of the Act are to be made, a person who is liable to make such payments shall also pay any amount of VAT payable in respect of a return for any prescribed accounting period in the like manner.

46A

(1) A payment on account and a payment in respect of a return to which regulation 40A above applies shall not be treated as having been made by the last day on which it is required to be made unless it is made in such a manner as secures that all the transactions can be completed that need to be completed before the whole of the amount becomes available to the Commissioners.

(2) For the purposes of this regulation and regulation 47 below, references to a payment being made by any day include references to its being made on that day.

A212

In this Part—

“Job Band” followed by a number between “1” and “12” means the band for the purposes of pay and grading in which the job an officer performs is ranked in the system applicable to Customs and Excise.

Time within which a claim must be made

165A

(1) Subject to paragraph (3) and (4) below, a claim shall be made within the period of 4 years and 6 months following the later of—

(a) the date on which the consideration (or part) which has been written off as a bad debt becomes due and payable to or to the order of the person who made the relevant supply; and

(b) the date of the supply.

(2) A person who is entitled to a refund by virtue of section 36 of the Act, but has not made a claim within the period specified in paragraph (1) shall be regarded for the purposes of this Part as having ceased to be entitled to a refund accordingly.

(3) This regulation does not apply insofar as the date mentioned at sub-paragraph (a) or (b) of paragraph (1) above, whichever is the later, falls before 1st May 1997.

(4) A person shall be regarded for the purposes of this Part as having ceased to be entitled to a refund where the date mentioned at subparagraph (a) or (b) of paragraph (1) above, whichever is the later, is on or before 30th September 2005.

The making of a claim to the Commissioners

Notice to purchaser of claim

166A

Where the purchaser is a taxable person , and the relevant supply was made before 1st January 2003, the claimant shall not before, but within 7 days from, the day he makes a claim give to the purchaser a notice in writing containing the following information—

(a) the date of issue of the notice;

(b) the date of the claim;

(d) the amount of the consideration for each relevant supply which the claimant has written off as a bad debt;

(e) the amount of the claim.

Evidence required of the claimant in support of the claim

Records required to be kept by the claimant

Preservation of documents and records and duty to produce

Attribution of payments

Repayment of a refund

Writing off debts

Writing off debts—margin schemes

172A

(1) This regulation applies where, by virtue of the claimant’s having exercised an option under an order made under section 50A of the Act, the VAT chargeable on the relevant supply is charged by reference to the profit margin.

(2) Where this regulation applies the consideration for the relevant supply which is to be taken to have been written off as a bad debt shall not exceed the relevant amount.

(3) For the purposes of paragraph (2) above the relevant amount is—

(a) where either—

(i) no payment has been received in relation to the relevant supply, or

(ii) the total of such payments as have been received does not exceed the non-profit element,

the profit margin; or

(b) where the total of such payments as have been received exceeds the non-profit element, the amount (if any) by which the consideration for the relevant supply exceeds that total.

(4) In paragraph (3) above—

“non-profit element” means the consideration for the relevant supply less the profit margin.

Writing off debts—tour operators margin scheme

172B

(1) This regulation applies where, by virtue of an order under section 53 of the Act, the value of the relevant supply falls to be determined otherwise than in accordance with section 19 of the Act.

(2) Where this regulation applies the consideration for the relevant supply which is to be taken to have been written off as a bad debt shall not exceed the relevant amount.

(3) For the purposes of paragraph (2) above the relevant amount is—

(a) where either—

(i) no payment has been received in relation to the relevant supply, or

(ii) the total of any such payments as have been received does not exceed the non-profit element,

the profit element; or

(b) where the total of such payments as have been received exceeds the non-profit element, the amount (if any) by which the consideration for the relevant supply exceeds that total.

(4) In this regulation—

“non-profit element” means the consideration for the relevant supply less the profit element;

“profit element” means the sum of—the value of the relevant supply; andthe VAT chargeable on the relevant supply.

PART XIXA — REPAYMENT OF INPUT TAX WHERE CLAIM MADE UNDER PART XIX

Interpretation of Part XIXA

172C

Any expression used in this Part to which a meaning is given in Part XIX of these Regulations shall, unless the contrary intention appears, have the same meaning in this Part as it has in that Part.

Repayment of input tax

172D

(1) Where—

(a) a claim has been made; and

(b) the purchaser has claimed deduction of the whole or part of the VAT on the relevant supply as input tax (“the deduction”),

the purchaser shall make an entry in his VAT account in accordance with paragraphs (2) and (3) below.

(2) The purchaser shall make a negative entry in the VAT allowable portion of that part of his VAT account which relates to the prescribed accounting period of his in which the claim has been made.

(3) The amount of the negative entry referred to in paragraph (2) above shall be such amount as is found by multiplying the amount of the deduction by a fraction of which the numerator is the amount of the claim and the denominator is the total VAT chargeable on the relevant supply.

(4) None of the circumstances to which this regulation applies is to be regarded as giving rise to any application of regulations 34 and 35.

Restoration of an entitlement to credit for input tax

172E

(1) Where—

(a) the purchaser has made an entry in his VAT account in accordance with regulation 172D (“the input tax repayment”);

(b) he has made the return for the prescribed accounting period concerned, and has paid any VAT payable by him in respect of that period; and

the purchaser shall make an entry in his VAT account in accordance with paragraphs (2) and (3) below.

(2) The purchaser shall make a positive entry in the VAT allowable portion of that part of his VAT account which relates to the prescribed accounting period of his in which the repayment has been made.

(3) The amount of the positive entry referred to in paragraph (2) above shall be such amount as is found by multiplying the amount of the input tax repayment by a fraction of which the numerator is the amount repaid by the claimant and the denominator is the total amount of the claim.

(4) None of the circumstances to which this regulation applies is to be regarded as giving rise to any application of regulations 34 and 35.

90A

Where—

(a) relevant services are supplied for a period for a consideration the whole or part of which is determined or payable periodically or from time to time;

(b) the period covered by the payment referred to in sub-paragraph (c) below ends on or after 1st July 1997; and

the services shall be treated as supplied on 1st July 1997.

90B

Where relevant services are treated as supplied on or after 1st July 1997 by virtue of regulation 90 or 90A above, the supply shall be treated as taking place only to the extent covered by the lower of—

(a) the payment; and

(b) so much of the payment as is properly attributable to such part of the period covered by the payment as falls after 30th June 1997.

PART VA — REIMBURSEMENT ARRANGEMENTS

Interpretation of Part VA

43A

In this Part—

“claim” means—a claim made under section 80 of the Act for credit of an amount accounted for to the Commissioners or assessed by them as output tax which was not output tax due to them; ......and “claimed” and “claimant” are to be construed accordingly;.

“reimbursement arrangements” means any arrangements (whether made before, on or after 30th January 1998) for the purposes of a claim which—are made by a claimant for the purpose of securing that he is not unjustly enriched by the repayment crediting of any amount in pursuance of the claim; andprovide for the reimbursement of persons (consumers) who have, for practical purposes, borne the whole or any part of the cost of the original payment of that amount to the Commissioners original amount brought into account as output tax that was not output tax due;

“relevant amount” means that part (which may be the whole) of the amount of a claim which the claimant has reimbursed or intends to reimburse to consumers.

Reimbursement arrangements—general

43B

Without prejudice to regulation 43H below, for the purposes of section 80(3) of the Act (defence by the Commissioners that repayment crediting by them of an amount claimed would unjustly enrich the claimant) reimbursement arrangements made by a claimant shall be disregarded except where they—

(a) include the provisions described in regulation 43C below; and

(b) are supported by the undertakings described in regulation 43G below.

Reimbursement arrangements—provisions to be included

43C

The provisions referred to in regulation 43B(a) above are that—

(a) reimbursement for which the arrangements provide will be completed by no later than 90 days after the repayment crediting of the amount to which it relates;

(b) no deduction will be made from the relevant amount by way of fee or charge (howsoever expressed or effected);

(d) any part of the relevant amount that is not reimbursed by the time mentioned in paragraph (a) above will be repaid by the claimant to the Commissioners;

(d) any part of the relevant amount credited to the claimant that is not reimbursed by the time mentioned in paragraph (a) above will be notified by the claimant to the Commissioners;

(da) any part of the relevant amount paid (or repaid) to the claimant that is not reimbursed by the time mentioned in paragraph (a) above will be repaid by the claimant to the Commissioners;

(e) any interest paid by the Commissioners on any relevant amount repaid paid (or repaid) by them will also be treated by the claimant in the same way as the relevant amount falls to be treated under paragraphs (a) and (b) above; and

(f) the records described in regulation 43E below will be kept by the claimant and produced by him to the Commissioners, or to an officer of theirs in accordance with regulation 43F below.

Repayments to the Commissioners

43D

The claimant shall, without prior demand, make any repayment to the Commissioners that he is required to make by virtue of regulation 43C(d) and (e) above within 14 days of the expiration of the period of 90 days referred to in regulation 43C(a) above.

Records

43E

The claimant shall keep records of the following matters—

(a) the names and addresses of those consumers whom he has reimbursed or whom he intends to reimburse;

(b) the total amount reimbursed to each such consumer;

(d) the date that each reimbursement is made.

Production of records

43F

(1) Where a claimant is given notice in accordance with paragraph (2) below, he shall, in accordance with such notice produce to the Commissioners, or to an officer of theirs, the records that he is required to keep pursuant to regulation 43E above.

(2) A notice given for the purposes of paragraph (1) above shall—

(a) be in writing;

(b) state the place and time at which, and the date on which the records are to be produced; and

and may be given before or after, or both before and after the Commissioners have paid credited the relevant amount to the claimant.

Undertakings

43G

(1) Without prejudice to regulation 43H(b) below, the undertakings referred to in regulation 43B(b) above shall be given to the Commissioners by the claimant no later than the time at which he makes the claim for which the reimbursement arrangements have been made.

(2) The undertakings shall be in writing, shall be signed and dated by the claimant, and shall be to the effect that—

(a) at the date of the undertakings he is able to identify the names and addresses of those consumers whom he has reimbursed or whom he intends to reimburse;

(b) he will apply the whole of the relevant amount repaid credited to him, without any deduction by way of fee or charge or otherwise, to the reimbursement in cash or by cheque, of such consumers by no later than 90 days after his receipt of that amount (except insofar as he has already so reimbursed them);

(c) he will apply any interest paid to him on the relevant amount repaid paid (or repaid) to him wholly to the reimbursement of such consumers by no later than 90 days after his receipt of that interest;

(d) he will repay to the Commissioners without demand the whole or such part of the relevant amount repaid to him or of any interest paid to him as he fails to apply in accordance with the undertakings mentioned in sub-paragraphs (b) and (c) above;

he will notify the Commissioners of the whole or such part of the relevant amount credited to him as he fails to apply in accordance with the undertakings mentioned in sub-paragraphs (b) and (c) above;

(da) he will repay to the Commissioners without demand the whole or such part of the relevant amount paid (or repaid) to him or of any interest paid to him as he fails to apply in accordance with the undertakings mentioned in sub-paragraphs (b) and (c) above;

(e) he will keep the records described in regulation 43E above; and

(f) he will comply with any notice given to him in accordance with regulation 43F above concerning the production of such records.

Reimbursement arrangements made before 11th February 1998

43H

Reimbursement arrangements made by a claimant before 11th February 1998 shall not be disregarded for the purposes of section 80(3) of the Act if, not later than 11th March 1998—

(a) he includes in those arrangements (if they are not already included) the provisions described in regulation 43C above; and

(b) gives the undertakings described in regulation 43G above.

94A

In this Part a reference to receipt of payment (however expressed) includes a reference to receipt by a person to whom a right to receive it has been assigned.

31A

(1) This regulation applies where a person—

(a) makes a supply of investment gold of a description falling within item 1 of Group 15 of Schedule 9 to the Act, or

(b) makes a supply of a description falling within item 2 of Group 15 of Schedule 9 to the Act, which subsequently results in the transfer of the possession of the investment gold.

(2) Subject to paragraph (6) below (and save as the Commissioners may otherwise allow in relation to supplies where the value is less than an amount equivalent to £13,000 at a rate specified in any notice published by the Commissioners for the purposes of this regulation) in addition to the requirements upon every taxable person under this Part, a person making a supply of a description falling within paragraph (1) above shall—

(a) without prejudice to regulations 13 and 14, issue an invoice in respect of the supply containing such details as may be specified in a notice published by the Comissioners for the purposes of this regulation;

(b) keep and maintain a record of the supply containing such details as may be specified in a notice published by the Commissioners for the purposes of this regulation;

(c) retain such documents in relation to the supply as may be specified in a notice published by the Commissioners for the purposes of this regulation;

(d) keep and maintain a record of the recipient of the supply containing such particulars pertaining to the recipient as may be specified in a notice published by the Commissioners for the purposes of this regulation;

(e) keep and maintain such other records and documents as may be specified in a notice published by the Commissioners for the purposes of this regulation to allow the proper identification of each recipient of the supply;

(f) notify the Commissioners in writing that he is making such supplies within 28 days of the first supply;

(g) furnish to the Commissioners such information in relation to his making of the supply as may be specified in a notice published by them.

(3) A taxable person shall keep and maintain, together with the account he is required to keep and maintain under regulation 32 below, a record of exempt supplies of a description falling within item 1 or 2 of Group 15 of Schedule 9 to the Act, that he makes to another taxable person.

(4) Where there is a sale of investment gold, which would if that person were supplying investment gold in the course or furtherance of any business, fall within item 1 or 2 of Group 15 of Schedule 9 to the Act, by a person who is not trading in investment gold, to a person who is so trading, the purchaser shall issue on behalf of the seller an invoice containing such particulars as may be set out in a notice published by the Commissioners for the purposes of this regulation and the seller shall sign such form of declaration as may be set out in a notice published by the Commissioners for the purposes of this regulation.

(5) The records required to be kept and the documents required to be retained under paragraphs (1) to (4) above shall be preserved for a minimum period of 6 years.

(6) Paragraphs (2) to (5) above shall not apply to any person in respect of a supply by him of a description falling within item 1 or 2 of Goup 15 of Schedule 9 to the Act the value of which does not exceed £5,000, unless the total value of those supplies to any person over the last 12 months exceeds £10,000.

31B

Where a person receives a supply of a description falling within article 31A(1) above that person shall retain the purchase invoice in relation to that supply for a minimum period of 6 years.

31C

Paragraph 10(2) of Schedule 11 to the Act shall apply in relation to supplies of a description falling within items 1 and 2 of Group 15 of Schedule 9 to the Act as it applies in relation to the supply of goods under taxable supplies.

33A

A person making supplies of a description falling within article 4 of the Value Added Tax (Terminal Markets) Order 1973 shall not be required to keep in relation to those supplies the records specified in regulations 31 (save for paragraph (1)(a) of that regulation), 31A, 32 and 33 of these Regulations.

33B

Where a person of a description in article 6 of the Value Added Tax (Terminal Markets) Order 1973 who makes or receives supplies of a description falling within that article, the following Parts of these Regulations shall not apply in relation to those supplies, that is to say—

(a) Part IV;

(b) Part V.

103A

(1) This regulation applies to a taxable person who makes supplies of a description falling within item 1 or 2 of Group 15 of Schedule 9 to the Act.

(2) Input tax incurred by him in any prescribed accounting period in respect of supplies by him of a description falling within paragraph (1) above shall be allowable as being attributable to those supplies only to the following extent, that is to say where it is incurred—

(a) on investment gold supplied to him which but for an election made under the Value Added Tax (Investment Gold) Order 1999, or but for Note 4(b) to Group 15 of Schedule 9 to the Act would have fallen within item 1 or 2 of that Group, or on investment gold acquired by him;

(b) on a supply to him, an acquisition by him, or on an importation by him of gold other than investment gold which is to be transformed by him or on his behalf into investment gold;

(3) Where a taxable person produces investment gold or transforms any gold into investment gold he shall also be entitled to credit for input tax incurred by him on any goods or services supplied to him, any acquisitions of goods by him or any importations of goods by him, but only to the extent that they are linked to the production or transformation of that gold into investment gold.

(4) Where input tax has been incurred on goods or services which are used or to be used in making supplies of a description falling within item 1 or 2 of Group 15 of Schedule 9 to the Act and any other supply, that input tax shall be attributed to the supplies falling within item 1 or 2 to the extent that the goods or services are so used or to be used, expressed as a proportion of the whole use or intended use.

(5) Where input tax is attributed to supplies of a description falling within item 1 or 2 of Group 15 to Schedule 9 to the Act under paragraph (4) above, the taxable person shall be entitled to credit for only so much input tax as is reasonably allowable under paragraph (2) or (3) above.

(6) For the purpose of attributing input tax to supplies of a description falling within item 1 or 2 of Group 15 of Schedule 9 to the Act under paragraph (4) above, any input tax of the description in that paragraph shall be deemed to be the only input tax incurred by the taxable person in the prescribed accounting period concerned.

Form No. 15

Regulation 178(1)(a)

Form No. 18

CERTIFICATE REQUIRED TO SECURE ZERO-RATING OF SERVICES (OTHER THAN THE SUPPLY OF WAREHOUSING) PERFORMED IN A FISCAL OR OTHER WAREHOUSE

106A

(1) This regulation applies where regulation 107A applies.

(2) Where, taken together with the amount of any adjustment under regulation 107A, input tax attributed under regulations 101, 103 , 103A and 103B to exempt supplies, or to supplies outside the United Kingdom which would be exempt if made in the United Kingdom (in each case not being supplies specified in an Order made under section 26(2)(c) of the Act)—

(a) does not amount to more than £625 per month on average, and

(b) does not exceed one half of all his input tax for the period concerned,

all such input tax in that period shall be treated as attributable to taxable supplies.

(3) Where, in accordance with regulations 101, 103 , 103A and 103B, a taxable person has attributed an amount of input tax to exempt supplies, or to supplies outside the United Kingdom which would be exempt if made in the United Kingdom (in each case not being supplies specified in an Order made under section 26(2)(c) of the Act) and, after applying regulation 107A, he is entitled to treat all his input tax as attributable to taxable supplies under paragraph (2) above, he shall—

(a) calculate the difference between—

(i) the total amount of input tax for that prescribed accounting period, and

(ii) the amount of input tax deducted in that prescribed accounting period, taken together with the amount of any adjustment under regulation 107A, and

(b) include this difference as an under-deduction in a return for the first prescribed accounting period next following the prescribed accounting period referred to in regulation 107A(1), except where the Commissioners allow another return to be used for this purpose.

(4) Where in a prescribed accounting period a taxable person has treated input tax as attributable to taxable supplies under regulation 106(1) but is not entitled to do so because of the operation of paragraph (2) above, he shall include the amount so treated as an over-deduction in a return for the first prescribed accounting period next following the prescribed accounting period referred to in regulation 107A(1), except where the Commissioners allow another return to be used for this purpose.

(5) But where a registered person has his registration cancelled at or before the end of the prescribed accounting period referred to in regulation 107A(1), he shall account for any adjustment under this regulation on his final return.

107A

(1) This regulation applies where a taxable person has made an attribution under regulation 101(2)(b) and (d) and the prescribed accounting period does not form part of a longer period, and the attribution differs substantially from one which represents the extent to which the goods or services are used by him or are to be used by him, or a successor of his, in making taxable supplies.

(2) Where this regulation applies, the taxable person shall calculate the difference and account for it on the return for the first prescribed accounting period next following the prescribed accounting period referred to in paragraph (1) above, except where the Commissioners allow another return to be used for this purpose.

(3) But where a registered person has his registration cancelled at or before the end of the prescribed accounting period referred to in paragraph (1) above, he shall account for any adjustment under this regulation on his final return.

107B

(1) Other than where input tax falls to be attributed under regulation 101(8) or regulation 107(1)(b) or (c), this regulation applies where a taxable person has made an attribution under regulation 107(1)(a) or (d) according to the method specified in regulation 101 and that attribution differs substantially from one which represents the extent to which the goods or services are used by him or are to be used by him, or a successor of his, in making taxable supplies.

(2) Where this regulation applies the taxable person shall—

(a) calculate the difference, and

(b) in addition to any amount required to be included under regulation 107(1)(g), account for the amount so calculated on the return for the first prescribed accounting period next following the longer period or the return for the last prescribed accounting period in the longer period if applicable, except where the Commissioners allow another return to be used for this purpose.

(3) But where a registered person has his registration cancelled at or before the end of a longer period, he shall account for any adjustment under this regulation on his final return.

107C

For the purposes of regulations 107A and 107B, a difference is substantial if it exceeds—

(a) £50,000; or

(b) 50% of the amount of input tax falling to be apportioned under regulation 101(2)(d) within the prescribed accounting period referred to in regulation 107A(1), or longer period, as the case may be, but is not less than £25,000.

107D

For the purposes of regulations 107A and 107B a person is the successor of another if he is a person to whom that other person has—

(a) transferred assets of his business by a transfer of that business, or part of it, as a going concern; and

(b) the transfer of the assets is one falling by virtue of an Order under section 5(3) of the Act to be treated as neither a supply of goods nor a supply of services;

and the reference in this regulation to a person’s successor includes references to the successors of his successors through any number of transfers.

107E

(1) Regulations 107A and 107B shall not apply where the amount of input tax falling to be apportioned under regulation 101(2)(d) within the prescribed accounting period referred to in regulation 107A(1), or longer period, as the case may be, does not exceed—

(a) in the case of a person who is a group undertaking in relation to one or more other undertakings (other than undertakings which are treated under sections 43A to 43C of the Act as members of the same group as the person), £25,000 per annum, adjusted in proportion for a period that is not 12 months; or

(b) in the case of any other person, £50,000 per annum, adjusted in proportion for a period that is not 12 months.

(2) For the purposes of paragraph (1) above, “undertaking” and “group undertaking” have the same meaning as in section 1161 of the Companies Act 2006.

PART VIIA — FLAT-RATE SCHEME FOR SMALL BUSINESSES

Interpretation of Part VIIA

55A

(1) In this Part—

“capital expenditure goods” means any goods of a capital nature but does not include any goods acquired by a flat-rate trader (whether before he is a flat-rate trader or not)—for the purpose of resale or incorporation into goods supplied by him,for consumption by him within one year, orto generate income by being leased, let or hired;

“EDR” means the day with effect from which a person is registered under the Act;

“end date” has the meaning given in regulation 55Q(2);

“flat-rate trader” means a person who is, for the time being, authorised by the Commissioners in accordance with regulation 55B(1);

“relevant purchase” has the meaning given in regulation 55C;

“start date” has the meaning given in regulation 55B(2);

“the scheme” means the flat-rate scheme for small businesses established by this Part;

“the Table” means the table set out in regulation 55K.

(2) For the purposes of this Part, a person is associated with another person at any time if that other person makes supplies in the course or furtherance of a business carried on by him, and—

(a) the business of one is under the dominant influence of the other, or

(b) the persons are closely bound to one another by financial, economic and organisational links.

(3) For the purposes of this Part, “relevant date”, in relation to a flat-rate trader, means any of the following—

(a) his start date;

(b) the first day of the prescribed accounting period current at any anniversary of his start date;

(d) any day on which he no longer carries on an existing business activity;

(e) any day with effect from which the Table is amended in relation to him;

(f) where regulation 55JB (reduced rate for newly registered period) applies—

(i) the day that his newly registered period begins, and

(ii) the first anniversary of his EDR.

(4) For the purposes of this Part, “limited-cost trader” is a flat-rate trader whose expenditure on relevant goods in any prescribed accounting period, together with any VAT chargeable on that expenditure, is less than the specified amount, and—

(a) “relevant goods” are goods used or to be used by a flat-rate trader exclusively for the purposes of the trader’s business but excluding the following—

(i) vehicles, vehicle parts and fuel except where the category of business applicable to the flat-rate trader in the Table is, in that prescribed accounting period, “Transport or storage, including couriers, freight, removals and taxis” and the flat-rate trader owns or leases a vehicle for that business;

(ii) food or beverages for consumption by the flat-rate trader or employees of the flat-rate trader;

(iii) capital expenditure goods;

(iv) goods for the purpose of resale, leasing, letting or hiring out except where the main business activity of the flat-rate trader ordinarily consists of selling, leasing, letting or hiring out such goods;

(v) goods for disposal as promotional items, gifts or donations;

(b) “specified amount” is the higher of—

(i) 2 per cent of the trader’s relevant turnover in the prescribed accounting period; and

(ii) where the prescribed accounting period is one year, £1000, and, in any other case, such proportion of £1000 as the length of the accounting period bears to the period of one year.

Flat-rate scheme for small businesses

55B

(1) The Commissioners may, subject to the requirements of this Part, authorise a taxable person to account for and pay VAT in respect of his relevant supplies in accordance with the scheme with effect from—

(a) the beginning of his next prescribed accounting period after the date on which the Commissioners are notified ... of his desire to be so authorised, or

(b) such earlier or later date as may be agreed between him and the Commissioners.

(2) The date with effect from which a person is so authorised shall be known as his start date.

(3) The Commissioners may refuse to so authorise a person if they consider it is necessary for the protection of the revenue that he is not so authorised.

(4) A flat-rate trader shall continue to account for VAT in accordance with the scheme until his end date.

Relevant supplies and purchases

55C

(1) Subject to paragraphs (3) , (5) and (6), any—

(a) supply of any goods or services to,

(b) acquisition of any goods from another member State by, or

a flat-rate trader is a relevant purchase of his.

(2) Subject to the following provisions of this regulation, any supply made by a person when he is not a flat-rate trader is not a relevant supply of his.

(3) Subject to paragraphs (4) and (6) below, where—

(a) a supply is made to, or made by, a person at a time when he is not a flat-rate trader, and

(b) the operative date for VAT accounting purposes is, by virtue of regulation 57 (cash accounting scheme), a date when he is a flat-rate trader,

that supply is a relevant supply or a relevant purchase of his, as the case may be, if otherwise it would not be by virtue of paragraph (2) above.

(4) Where a person—

(a) is entitled to any credit for input tax in respect of the supply to, or acquisition or importation by, him of capital expenditure goods,

(b) claims any such credit, and

the supply made by him is not a relevant supply of his, if otherwise it would be.

(5) Where by virtue of any provision of, or made under, the Act a supply is treated as made by a flat-rate trader, whether to himself or otherwise, that supply is neither a relevant supply nor a relevant purchase of his.

(6) Where a supply of goods or services to which section 55A(6) of the Act applies (customers to account for tax on supplies of goods or services of a kind used in missing trader ... fraud) is made to, or made by, a flat rate trader, that supply is neither a relevant purchase nor a relevant supply of his.

Method of accounting

55D

Subject to regulations 55H, 55JB and 55KA below, for any prescribed accounting period of a flat-rate trader, the output tax due from him in respect of his relevant supplies shall be deemed to be the appropriate percentage of his relevant turnover for that period.

Input tax

55E

(1) For any prescribed accounting period of a flat-rate trader, he is entitled to credit for input tax in respect of any relevant purchase of his of capital expenditure goods with a value, together with the VAT chargeable, of more than £2,000.

(2) Where paragraph (1) above applies, the whole of the input tax on the goods concerned shall be regarded as used or to be used by the flat-rate trader exclusively in making taxable supplies.

(3) Section 26B(5) of the Act shall not apply to prevent a taxable person from being entitled to credit for input tax in respect of any supply, acquisition or importation by him that is not a relevant purchase of his.

(4) Nothing in this regulation gives an entitlement to credit for input tax where such entitlement is excluded by virtue of any order made under section 25(7) of the Act.

Exceptional claims for VAT relief

55F

(1) This regulation applies where—

(a) the first prescribed accounting period for which a taxable person is authorised to account for and pay VAT in accordance with the scheme is the first prescribed accounting period for which he is, or is required to be, registered under the Act, and

(b) the taxable person makes a claim in accordance with regulation 111 (exceptional claims for VAT relief).

(2) Where this regulation applies, section 26B(5) of the Act shall not apply to prevent the taxable person from being entitled to credit for input tax in relation to the matters for which he makes the claim described in paragraph (1)(b) above.

(3) Where—

(a) this regulation applies, and

(b) the Commissioners authorise the claim described in paragraph (1)(b) above,

the whole of the input tax on the goods or services concerned shall be regarded as used or to be used by the taxable person exclusively in making taxable supplies.

Determining relevant turnover

55G

(1) The Commissioners shall prescribe, in a notice published by them, three methods to determine when supplies are to be treated as taking place for the purpose of ascertaining the relevant turnover of a flat-rate trader for a particular period, as follows—

(a) “the basic turnover method”, which shall be a method based on consideration for supplies taking place in a period;

(b) “the cash turnover method”, which shall be a method based on the actual consideration received in a period;

(2) When exercising their power to prescribe these methods, the Commissioners shall prescribe what rules are to apply when a flat-rate trader ceases to use one of the methods and begins to use a different method.

(3) In any prescribed accounting period, a flat-rate trader must use one of the methods to determine the value of his relevant turnover.

Appropriate percentage

55H

(1) Subject to regulation 55KA, the appropriate percentage to be applied by a flat-rate trader for any prescribed accounting period, or part of a prescribed accounting period (as the case may be), shall be determined in accordance with this regulation and regulations 55JB and 55K.

(2) For any prescribed accounting period—

(a) not falling within (b), the appropriate percentage shall be that specified in the Table for the category of business that he is expected, on the first day of the period, on reasonable grounds, to carry on in that period;

(b) current at his start date but not beginning with his start date, the appropriate percentage shall be that specified in the Table for the category of business that he is expected, at his start date, on reasonable grounds, to carry on in the remainder of the period;

(3) Except that, where a relevant date other than his start date occurs on a day other than the first day of a prescribed accounting period, the following rules shall apply for the remainder of that prescribed accounting period—

(a) for the remaining portion, the appropriate percentage shall be that specified in the Table for the category of business that he is expected, at the relevant date, on reasonable grounds, to carry on in that period;

(b) “remaining portion” means that part of the prescribed accounting period in which the relevant date occurs—

(i) starting with the relevant date, and

(ii) ending on the last day of that prescribed accounting period;

(c) the appropriate percentage specified in sub-paragraph (a) shall be applied to his relevant turnover in the remaining portion described;

(d) if the rules set out in paragraphs (a) to (c) apply and then another relevant date occurs in the same prescribed accounting period, then—

(i) the existing remaining portion ends on the day before the latest relevant date,

(ii) another remaining portion begins on the latest relevant date, and

(iii) the rules in paragraph (a) to (c) shall be applied again in respect of the latest remaining portion.

55J

(1) This regulation applies where a flat-rate trader—

(a) begins to carry on a new business activity, or

(b) ceases to carry on an existing business activity.

(2) The first day on which he—

(a) carries on the new business activity, or

(b) no longer carries on the existing business activity,

shall be known as “the change date”.

(3) For the unelapsed portion, the appropriate percentage shall be that specified in the Table for the category of business that he is expected, at the change date, on reasonable grounds, to carry on in that period.

(4) “Unelapsed portion” means that part of the prescribed accounting period in which the change date occurs starting with the change date and ending on the last day of that prescribed accounting period.

(5) For any prescribed accounting period that falls between the prescribed accounting period current at the change date and the prescribed accounting period current at the next anniversary of his start date, the appropriate percentage shall be that applicable for the unelapsed portion.

(6) The appropriate percentages specified in paragraphs (3) and (5) above shall be applied to the relevant turnover in the periods described.

Category of business

55K

(1) Where, at a relevant date, a flat-rate trader is expected, on reasonable grounds, to carry on business in more than one category in the period concerned, paragraph (3) below shall apply.

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

(3) He shall be regarded as being expected, on reasonable grounds, to carry on that category of business which is expected, on reasonable grounds, to be his main business activity in that period.

(4) In paragraph (3) above, his main business activity in a period is to be determined by reference to the respective proportions of his relevant turnover expected, on reasonable grounds, to be generated by each business activity expected, on reasonable grounds, to be carried on in the period.

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