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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

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(a) is being held by that person in order to be put to use by him for particular purposes, and

(b) is not land of which he is in occupation for any other purpose,

that person shall be deemed, for so long as the conditions in sub-paragraphs (a) and (b) above are satisfied, to be in occupation of the land for the purposes for which he proposes to use it.

(13) Paragraphs (9) to (12) above shall have effect where land is in the occupation of a person who–

(a) is not a taxable person, but

(b) is a person whose supplies are treated for the purposes of the Act as supplies made by another person who is a taxable person,

as if the person in occupation of the land and that other person were a single taxable person.

(14) For the purposes of this regulation a person shall be taken to be in occupation of any land whether he occupies it alone or together with one or more other persons and whether he occupies all of that land or only part of it.

(15) For the purposes of this regulation, any question as to whether one person is connected with another shall be determined in accordance with section 839 of the Taxes Act ; but this is subject to paragraph (16).

(16) For the purposes of this regulation—

(a) a company is not connected with another company only because both are under the control of—

(i) the Crown,

(ii) a Minister of the Crown,

(iii) a government department, or

(iv) a Northern Ireland department; and

(b) “company” and “control” have the same meaning as in section 839 of the Taxes Act.

General

94

Subject to regulation 90B above, where under this Part of these Regulations a supply is treated as taking place each time that a payment (however expressed) is received or an invoice is issued, the supply is to be treated as taking place only to the extent covered by the payment or invoice.

Supplies spanning change of rate etc.

95

Section 88 of the Act shall apply as if the references in subsection (2) of that section to section 6(4), (5), (6) and (10) of the Act included references to regulations 81, 82, 82A, 84, 85, 86(1) to (4) , and 94B of these Regulations.

PART XII — VALUATION OF ACQUISITIONS

Interpretation of Part XII

96

In this Part—

“relevant transaction”, in relation to any acquisition of goods from another member State, and “relevant time” in relation to any such acquisition, have the meanings given in paragraph 13 of Schedule 9ZA to the Act.

Valuation of acquisitions

97

—

(1) Subject to paragraph (2) below, the value of the relevant transaction in relation to any goods acquired in Northern Ireland from a member State where—

(a) the goods are charged in connection with their removal to Northern Ireland with a duty of excise; or

(b) on that removal are subject, in accordance with any provision for the time being having effect for transitional purposes in connection with the accession of any State to the European Union, to any EU customs duty or agricultural levy of the EU,

shall be taken, for the purposes of the Act, to be the sum of its value apart from paragraph 10 of Schedule 9ZA to the Act and the amount, so far as not already included in that value, of the excise duty, EU customs duty or, as the case may be, agricultural levy which has been or is to be paid in respect of those goods.

(2) Paragraph (1) above does not apply to a transaction in pursuance of which there is an acquisition of goods which, under subsection (4) of section 18 of the Act, is treated as taking place before the duty point within the meaning of that section.

PART XIII — PLACE OF SUPPLY

Distance sales from the United Kingdom

98

—

(1) Where a person has exercised an option in the United Kingdom corresponding to an option mentioned in paragraph 48(2) of Schedule 9ZA to the Act, in respect of supplies involving the removal of goods from Northern Ireland to a member State, he shall notify the Commissioners in writing of the exercise of that option not less than 30 days before the date on which the first supply to which the option relates is made.

(2) The notification referred to in paragraph (1) above shall contain the name of the member State to which the goods have been, or are to be, removed under the direction or control of the person making the supply.

(3) Any person who has notified the Commissioners in accordance with paragraph (1) above shall within 30 days of the date of the first supply as is mentioned in that paragraph furnish to the Commissioners documentary evidence that he has notified the member State of the exercise of his option.

(4) Where a person has notified the Commissioners in accordance with paragraph (1) above he may withdraw his notification by giving a further written notification but that further notification must specify the date upon which the first notification is to be withdrawn, which date must not be earlier than—

(a) the 1st January which is, or next follows, the second anniversary of the date of the making of the first supply mentioned above to which the option relates, and

(b) the day 30 days after the receipt by the Commissioners of the further notification,

and not later than 30 days before the date of the first supply which he intends to make after the withdrawal.

PART XIV — INPUT TAX AND PARTIAL EXEMPTION

Interpretation of Part XIV and longer periods

99

—

(1) In this Part—

(a) “exempt input tax” means input tax incurred by a taxable person on goods imported or acquired by, or goods or services supplied to, him in so far as they are used by him or are to be used by him, or a successor of his, in making exempt supplies, or supplies outside the United Kingdom which would be exempt if made in the United Kingdom, other than any input tax which is allowable under regulation 101, 102, 103, 103A or 103B;

and “successor” in this paragraph has the same meaning as in regulation 107D;

(b) “prescribed accounting period” means—

(i) a prescribed accounting period such as is referred to in regulation 25, or

(ii) a special accounting period, where the first prescribed accounting period would otherwise be 6 months or longer, save that this paragraph shall not apply where the reference to the prescribed accounting period is used solely in order to identify a particular return;

(c) “special accounting period” means each of a succession of periods of the same length as the next prescribed accounting period which does not exceed 3 months, and—

(i) the last such period shall end on the day before the commencement of that next prescribed accounting period, and

(ii) the first such period shall commence on the effective date of registration determined in accordance with Schedule 1 , 1A, 3A, Part 8 or 9 of Schedule 9ZA or Schedule 9ZC to the Act and end on the day before the commencement of the second such period;

(d) the “tax year” of a taxable person means—

(i) the first period of 12 calendar months commencing on the first day of April, May or June, according to the prescribed accounting periods allocated to him, next following his effective date of registration determined in accordance with Schedule 1 , 1A, 3A, Part 8 or 9 of Schedule 9ZA or Schedule 9ZC to the Act, or

(ii) any subsequent period of 12 calendar months commencing on the day following the end of his first, or any subsequent, tax year,

save that the Commissioners may approve or direct that a tax year shall be a period of other than 12 calendar months or that it shall commence on a date other than that determined in accordance with paragraph (i) or (ii) above;

(e) the “registration period” of a taxable person means the period commencing on his effective date of registration determined in accordance with Schedule 1 , 1A, 3A, Part 8 or 9 of Schedule 9ZA or Schedule 9ZC to the Act and ending on the day before the commencement of his first tax year.

(1A) In this Part “non-business VAT” has the meaning given in section 24(5)(b) of the Act.

(2) In this Part, any reference to goods or services shall be construed as including a reference to anything which is supplied by way of a supply of goods or a supply of services respectively.

(3) The provisions of paragraphs (4), (5), (6) and (7) below shall be used for determining the longer period applicable to taxable persons under this Part.

(4) A taxable person who incurs exempt input tax during any tax year shall have applied to him a longer period which shall correspond with that tax year unless he did not incur exempt input tax during his immediately preceding tax year or registration period, in which case his longer period shall—

(a) begin on the first day of the first prescribed accounting period in which he incurs exempt input tax, and

(b) end on the last day of that tax year,

except where he incurs exempt input tax only in the last prescribed accounting period of his tax year, in which case no longer period shall be applied to him in respect of that tax year.

(5) A taxable person who incurs exempt input tax during his registration period shall have applied to him a longer period which shall begin on the first day on which he incurs exempt input tax and end on the day before the commencement of his first tax year.

(6) In the case of a taxable person ceasing to be taxable during a longer period applicable to him, that longer period shall end on the day when he ceases to be taxable.

(7) The Commissioners may approve in the case of a taxable person who incurs exempt input tax, or a class of such persons, that a longer period shall apply which need not correspond with a tax year.

100

Nothing in this Part shall be construed as allowing a taxable person to deduct the whole or any part of VAT on the importation or acquisition by him of goods or the supply to him of goods or services where those goods or services are not used or to be used by him in making supplies in the course or furtherance of a business carried on by him.

Attribution of input tax to taxable supplies

101

—

(1) Subject to regulations 102, 103A, 105A and 106ZA, the amount of input tax which a taxable person shall be entitled to deduct provisionally shall be that amount which is attributable to taxable supplies in accordance with this regulation.

(2) Subject to paragraph (8) below and regulation 107(1)(g)(ii), in respect of each prescribed accounting period—

(a) goods imported or acquired by and, ... goods or services supplied to, the taxable person in the period shall be identified,

(b) there shall be attributed to taxable supplies the whole of the input tax on such of those goods or services as are used or to be used by him exclusively in making taxable supplies,

(c) no part of the input tax on such of those goods or services as are used or to be used by him exclusively in making exempt supplies, or in carrying on any activity other than the making of taxable supplies, shall be attributed to taxable supplies, ...

(d) where a taxable person does not have an immediately preceding longer period and subject to subparagraph (e) below, there shall be attributed to taxable supplies such proportion of the residual input tax as bears the same ratio to the total of such input tax as the value of taxable supplies made by him bears to the value of all supplies made by him in the period.

(e) the attribution required by subparagraph (d) above may be made on the basis of the extent to which the goods or services are used or to be used by him in making taxable supplies,

(f) where a taxable person has an immediately preceding longer period and subject to subparagraph (g) below, his residual input tax shall be attributed to taxable supplies by reference to the percentage recovery rate for that immediately preceding longer period, and

(g) the attribution required by subparagraph (f) above may be made using the calculation specified in subparagraph (d) above provided that that calculation is used for all the prescribed accounting periods which fall within any longer period applicable to a taxable person.

(3) In calculating the proportion under paragraph (2)(d) or (g) above, there shall be excluded—

(a) any sum receivable by the taxable person in respect of any supply of capital goods used by him for the purposes of his business,

(b) any sum receivable by the taxable person in respect of any of the following descriptions of supplies made by him, where such supplies are incidental to one or more of his business activities—

(i) any supply of a description falling within Group 5 of Schedule 9 to the Act,,

(ii) any other financial transaction, and

(iii) any real estate transaction,

(c) that part of the value of any supply of goods on which output tax is not chargeable by virtue of any order made by the Treasury under section 25(7) of the Act unless the taxable person has imported, acquired or been supplied with the goods for the purpose of selling them, ...

(d) the value of any supply which, under or by virtue of any provision of the Act, the taxable person makes to himself, ...

(e) supplies of a description falling within paragraph (8) below , and

(f) the value of supplies made from an establishment situated outside the United Kingdom,

(g) where a removal of goods is treated as a taxable supply by virtue of paragraph 31A(1) of Schedule 9ZB to the Act, the value of that supply.

(4) The ratio calculated for the purpose of paragraph (2)(d) , (e) or (g) above shall be expressed as a percentage and, if that percentage is not a whole number, it shall be rounded up as specified in paragraph (5) below.

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

(5) The percentage shall be rounded up—

(a) where in any prescribed accounting period or longer period which is applied the amount of input tax which is available for attribution under paragraph 2(d) , (e) or (g) above prior to any such attribution being made does not amount to more than £400,000 per month on average, to the next whole number, and

(b) in any other case, to two decimal places.

(6) For the purposes of this regulation, a “real estate transaction” includes any grant, assignment (including any transfer, disposition or sale), surrender or reverse surrender of any interest in, right over or licence to occupy land.

(7) In this regulation “taxable supplies” include supplies of a description falling within regulation 103.

(8) Input tax incurred on goods or services acquired by or supplied to a taxable person which are used or to be used by him in whole or in part in making—

(a) supplies falling within either item 1 or item 6 of Group 5 of Schedule 9 to the Act; ...

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

shall, whether the supply in question is made within or outside the United Kingdom, be attributed to taxable supplies on the basis of the extent to which the goods or services are used or to be used by him in making taxable supplies.

(9) For the purposes of this regulation in relation to a taxable person—

(a) “immediately preceding longer period” means the longer period applicable to him which ends immediately before the longer period in which the prescribed accounting period in respect of which he is making the attribution required by paragraph (2)(d) to (g) above falls;

(b) “percentage recovery rate” means the amount of relevant residual input tax which he was entitled to attribute to taxable supplies under regulation 107(1)(a) to (d), expressed as a percentage of the total amount of the residual input tax which fell to be so attributed and rounded up in accordance with paragraphs (4) and (5) above;

(c) “relevant residual input tax” means all residual input tax other than that which falls to be attributed under paragraph (8) above.

(10) In this regulation “residual input tax” means input tax incurred by a taxable person on goods or services which are used or to be used by him in making both taxable and exempt supplies.

Use of other methods

102

—

(1) Subject to paragraphs (2) and (9) below and regulations 103, 103A , 103B, 105A and 106ZA, the Commissioners may approve or direct the use by a taxable person of a method other than that specified in regulation 101...

(1A) A method approved or directed under paragraph (1) above—

(a) shall be in writing,

(b) may attribute input tax which would otherwise fall to be attributed under regulation 103 provided that, where it attributes any such input tax, it shall attribute it all, ...

(c) shall identify the supplies in respect of which it attributes input tax by reference to the relevant paragraph or paragraphs of section 26(2) of the Act,

(d) may be based on sectors provided that the method reflects the use made of the goods and services in the business and each sector reflects—

(i) the use made of the goods and services in that sector,

(ii) the structure of the business, and

(iii) the type of activity undertaken by that sector, and

(e) must exclude the value of supplies made from an establishment situated outside the United Kingdom where the method is not based on sectors.

(2) Notwithstanding any provision of any method approved or directed to be used under this regulation which purports to have the contrary effect, in calculating the proportion of any input tax on goods or services used or to be used by the taxable person in making both taxable and exempt supplies which is to be treated as attributable to taxable supplies, the value of any supply of a description falling within regulation 101(3)(a) to (d) and (g) whether made within or outside the United Kingdom shall be excluded.

(2A) Notwithstanding any provision of any method approved or directed to be used under this regulation which purports to have the contrary effect, where the method attributes input tax to exempt supplies specified by the Treasury in an order made under section 26(2)(c) of the Act—-

(a) no attribution is to be made in relation to any supplies that are made within the United Kingdom unless—

(i) the supply is directly linked to the export of goods and the recipient of the goods is located outside the United Kingdom, or

(ii) the supply is between a United Kingdom based intermediary and a United Kingdom based service provider and the recipient of any supply being arranged by the intermediary is located outside the United Kingdom, and

(b) attribution may be made in relation to any supplies that are made within the European Union.

(3) A taxable person using a method as approved or directed to be used by the Commissioners under paragraph (1) above shall continue to use that method unless the Commissioners approve or direct the termination of its use.

(4) Any direction under paragraph (1) or (3) above shall take effect from the date upon which the Commissioners give such direction or from such later date as they may specify.

(5) Any approval given or direction made under this regulation shall only have effect if it is in writing in the form of a document which identifies itself as being such an approval or direction.

(6) Where a taxable person who is using a method which has been approved or directed under this regulation incurs input tax of the description in paragraph (7) below, that input tax shall be attributed to taxable supplies to the extent that the goods or services are used or to be used in making taxable supplies expressed as a proportion of the whole use or intended use.

(7) The input tax referred to in paragraph (6) above is input tax—

(a) the attribution of which to taxable supplies is not prescribed in whole or in part by the method referred to in paragraph (6) above, and

(b) which does not fall to be attributed to taxable or other supplies as specified under regulations 103, 103A or 103B.

(8) Where the input tax specified in paragraph (7)(a) above is input tax the attribution of which to taxable supplies is only in part not prescribed by the method, only that part the attribution of which is not so prescribed shall fall within that paragraph.

(9) With effect from 1st April 2007 the Commissioners shall not approve the use of a method under this regulation unless the taxable person has made a declaration to the effect that to the best of his knowledge and belief the method fairly and reasonably represents the extent to which goods or services are used by or are to be used by him in making taxable supplies.

(10) The declaration referred to in paragraph (9) above shall—

(a) be in writing,

(b) be signed by the taxable person or by a person authorised to sign it on his behalf, and

(c) include a statement that the person signing it has taken reasonable steps to ensure that he is in possession of all relevant information.

(11) Where it appears to the Commissioners that a declaration made under this regulation is incorrect in that—

(a) the method does not fairly and reasonably represent the extent to which goods or services are used by or are to be used by the taxable person in making taxable supplies, and

(b) the person who signed the declaration knew or ought reasonably to have known this at the time when the declaration was made by the taxable person,

they may subject to paragraph (12) below serve on the taxable person a notice to that effect setting out their reasons in support of that notification and stating the effect of the notice.

(12) The Commissioners shall not serve a notice under this regulation unless they are satisfied that the overall result of the application of the method is an over-deduction of input tax by the taxable person.

(13) Subject to paragraph (14) below, the effect of a notice served under this regulation is that regulation 102B(1) shall apply to the person served with the notice in relation to—

(a) prescribed accounting periods commencing on or after the effective date of the method, and

(b) longer periods to the extent of that part of the longer period falling on or after the effective date of the method, save that no adjustment shall be required in relation to any part of any prescribed accounting period,

unless or until the method is terminated under regulation 102(3).

(14) In relation to any past prescribed accounting periods, the Commissioners may assess the amount of VAT due to the best of their judgement and notify it to the taxable person unless they allow him to account for the difference in such manner and within such time as they may require.

(15) The service of a notice on a taxable person under this regulation shall be without prejudice to the Commissioners’ powers to serve a notice on him under regulation 102A and any notice served under regulation 102A shall take priority in relation to the periods which it covers.

(16) In this regulation “the effective date of the method” is the date when the method to which the declaration relates first takes effect and may predate the date when the declaration was made.

(17) In this regulation and in regulations 102A, 102B, 102C and 107, where paragraph (1A)(b) above applies, “taxable supplies” includes supplies of a description falling within regulation 103.

Attribution of input tax to foreign and specified supplies

103

—

(1) Other than where it falls to be attributed under regulation 101 or a method approved or directed by the Commissioners under regulation 102, subject to paragraph (1A) input tax incurred by a taxable person in any prescribed accounting period on goods imported or acquired by, or goods or services supplied to, him which are used or to be used by him in whole or in part in making—

(a) supplies outside the United Kingdom which would be taxable supplies if made in the United Kingdom, or

(b) supplies specified in an Order under section 26(2)(c) of the Act, other than supplies of a description falling within regulation 103A below,

shall be attributed to taxable supplies 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.

(1A) In calculating the proportion of any input tax incurred on goods or services used or to be used by a taxable person in making both taxable and exempt supplies which is to be attributed or treated as attributed to taxable supplies, the calculation—

(a) may be based on sectors provided that the calculation reflects the use made of the goods and services in the business and each sector reflects—

(i) the use made of the goods and services in that sector,

(ii) the structure of the business, and

(ii) the type of activity undertaken by that sector; and

(b) must exclude the value of supplies made from an establishment situated outside the United Kingdom where the calculation is not based on sectors.

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

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

Attribution of input tax on self-supplies

104

Where under or by virtue of any provision of the Act a person makes a supply to himself, the input tax on that supply shall not be allowable as attributable to that supply.

Treatment of input tax attributable to exempt supplies as being attributable to taxable supplies

105

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

106

(1) Where regulation 105A does not apply then, subject to regulations 106A and 106ZA(1), where relevant input tax—

(a) in any prescribed accounting period, or

(b) in the case of a longer period, taken together with the amount of any adjustment in respect of that period under regulation 107B—

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

(ii) 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.

(2) In the application of paragraph (1) above to a longer period—

(a) any treatment of relevant input tax as attributable to taxable supplies in any prescribed accounting period shall be disregarded, and

(b) no account shall be taken of any amount or amounts which may be deductible or payable under regulation 115.

(3) For the purposes of this regulation, relevant input tax is input tax attributed under regulations 101, 102, 103, 103A , 103B and, where the case arises, regulation 107, to exempt supplies or to supplies outside the United Kingdom which would be exempt if made in the United Kingdom (not being supplies specified in an Order made under section 26(2)(c) of the Act).

Adjustment of attribution

107

—

(1) Subject to regulation 105A(1)(b), where a taxable person to whom a longer period is applicable has provisionally attributed an amount of input tax to taxable supplies in accordance with a method or treated an amount of input tax as attributable to taxable supplies under regulation 105A(1)(a) or regulation 106ZA(1) ... and save as the Commissioners may dispense with the following requirement to adjust, he ...—

(a) shall, subject to sub-paragraphs (b), (c), (d) and (da) below, determine for the longer period the amount of input tax which is attributable to taxable supplies according to the method used in the prescribed accounting periods,

(b) shall, where he has provisionally attributed input tax in accordance with regulation 101(2)(e) in any prescribed accounting period, determine for the longer period the amount of residual input tax which is attributable to taxable supplies on the basis of the extent to which the goods or services are used or to be used by him in making taxable supplies,

(c) may, where he has not provisionally attributed input tax in accordance with regulation 101(2)(e) but was nevertheless entitled to do so, determine for the longer period the amount of residual input tax which is attributable to taxable supplies on the basis of the extent to which the goods or services are used or to be used by him in making taxable supplies,

(d) shall, where he has provisionally attributed residual input tax under regulation 101(2)(f), determine for the longer period the amount of residual input tax which is attributable to taxable supplies using the calculation specified in regulation 101(2)(d) subject to the provisions of regulation 101(3) to (5),

(da) shall, where he has treated an amount of input tax as attributable to taxable supplies under regulation 105A(1)(a) or regulation 106ZA(1), determine for the longer period the amount of input tax that is attributable to taxable supplies in accordance with sub-paragraphs (a) to (d) above as appropriate,

(e) shall , except where a taxable person is using a method provided for in regulation 102(1) to make the apportionment referred to in regulation 102ZA(1), apply the tests set out in regulation 106 to determine whether all input tax in the longer period in question shall be treated as attributable to taxable supplies,

(f) shall calculate the difference between the amount of input tax determined to be attributable to taxable supplies under subparagraphs (a) to (e) above and the amounts of input tax, if any, which were deducted in the returns for the prescribed accounting periods, and

(g) shall include any such amount of over-deduction or under-deduction in a return for—

(i) the first prescribed accounting period next following the longer period, or

(ii) the last prescribed accounting period in the longer period,

except where the Commissioners allow another return to be used.

(2) Where a taxable person makes no adjustment as required by paragraph (1) above, the requirement shall be that the adjustment is made in the return for the first prescribed accounting period next following the longer period.

(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.

(4) In this regulation “residual input tax” has the same meaning as in regulation 101(10).

108

—

(1) This regulation applies where a taxable person has deducted an amount of input tax which has been attributed to taxable supplies because he intended to use the goods or services in making either—

(a) taxable supplies, or

(b) both taxable and exempt supplies,

and during a period of 6 years commencing on the first day of the prescribed accounting period in which the attribution was determined and before that intention is fulfilled, he uses or forms an intention to use the goods or services concerned in making exempt supplies or, in the case of an attribution within sub-paragraph (a) above, in making both taxable and exempt supplies.

(2) Subject to regulation 110 and save as the Commissioners otherwise allow, where this regulation applies the taxable person shall on the return for the prescribed accounting period in which the use occurs or the intention is formed, as the case may be, account for an amount equal to the input tax which has ceased to be attributable to taxable supplies in accordance with the method which he was required to use when the input tax was first attributed and he shall repay the said amount to the Commissioners.

(3) For the purposes of this regulation any question as to the nature of any supply shall be determined in accordance with the provisions of the Act and any Regulations or Orders made thereunder in force at the time when the input tax was first attributed.

109

—

(1) This regulation applies where a taxable person has incurred an amount of input tax which has not been attributed to taxable supplies because he intended to use the goods or services in making either—

(a) exempt supplies, or

(b) both taxable and exempt supplies,

and during a period of 6 years commencing on the first day of the prescribed accounting period in which the attribution was determined and before that intention is fulfilled, he uses or forms an intention to use the goods or services concerned in making taxable supplies or, in the case of an attribution within sub-paragraph (a) above, in making both taxable and exempt supplies.

(2) Subject to regulation 110 and where this regulation applies, the Commissioners shall, on receipt of an application made by the taxable person in such form and manner and containing such particulars as they may direct, pay to him an amount equal to the input tax which has become attributable to taxable supplies in accordance with the method which he was required to use when the input tax was first attributed.

(3) For the purposes of this regulation any question as to the nature of any supply shall be determined in accordance with the provisions of the Act and any Regulations or Orders made thereunder in force at the time when the input tax was first attributed.

110

(1) Subject to paragraph (2) below, in this regulation, in regulations 103B, 108 and 109 above and in Part XV of these Regulations—

(a) “exempt supplies” includes supplies outside the United Kingdom which would be exempt if made in the United Kingdom, other than supplies of a description falling within subparagraph (b) below; and

(b) “taxable supplies” includies supplies of a description falling within regulation 103 above.

(2) Subject to paragraph (3) below, for the purposes of identifying the use, or intended use, of goods and services in regulations 108 and 109 above and in Part XV of these Regulations—

(a) “exempt supplies” shall be construed as including supplies of a description falling within regulation 103A(1) above, but only to the extent that there is, or would be, no credit for input tax on goods and services under that regulation; and

(b) “taxable supplies” shall be construed as including supplies of a description falling within regulation 103A(1) above, but only to the extent that there is, or would be , credit for input tax on goods and services under that regulation.

(3) Any adjustment under regulations 108 and 109 above shall not cause any more or any less input tax to be credited, as the case may be, in respect of supplies of a description falling within regulation 103A(1) above than would be allowed or required under that regulation.

(4) Subject to regulations 103 and 103B, where—

(a) regulation 108 or 109 applies,

(b) the use to which the goods or services concerned are put, or to which they are intended to be put, includes the making of any supplies outside the United Kingdom, and

(c) at the time when the taxable person was first required to attribute the input tax he was not required to use a method approved or directed under regulation 102 or that method did not provide expressly for the attribution of input tax attributable to supplies outside the United Kingdom,

the amount for which the taxable person shall be liable to account under regulation 108 or the amount which he is entitled to be paid under regulation 109, as the case may be, shall be calculated by reference to the extent to which the goods or services concerned are used or intended to be used in making taxable supplies, expressed as a proportion of the whole use or intended use.

(5) In regulations 108 and 109 a reference to—

(a) “exempt supplies” includes a reference to non-business activities that give rise to an amount of non-business VAT;

(b) a method which a taxable person is required to use includes a reference to an apportionment which a taxable person is required to make under section 24(5) of the Act.

Exceptional claims for VAT relief

111

—

(1) Subject to paragraphs (2) and (4) below, on a claim made in accordance with paragraph (3) below, the Commissioners may authorise a taxable person to treat as if it were input tax—

(a) VAT on the supply of goods or services to the taxable person before the date with effect from which he was, or was required to be, registered, or paid by him on the importation or acquisition of goods before that date, for the purpose of a business which either was carried on or was to be carried on by him at the time of such supply or payment, and

(b) in the case of a body corporate, VAT on goods obtained for it before its incorporation, or on the supply of services before that time for its benefit or in connection with its incorporation, provided that the person to whom the supply was made or who paid VAT on the importation or acquisition—

(i) became a member, officer or employee of the body and was reimbursed, or has received an undertaking to be reimbursed, by the body for the whole amount of the price paid for the goods or services,

(ii) was not at the time of the importation, acquisition or supply a taxable person, and

(iii) imported, acquired or was supplied with the goods, or received the services, for the purpose of a business to be carried on by the body and has not used them for any purpose other than such a business.

(2) No VAT may be treated as if it were input tax under paragraph (1) above—

(a) in respect of—

(i) goods or services which had been supplied, or

(ii) save as the Commissioners may otherwise allow, goods which had been consumed,

by the relevant person before the date with effect from which the taxable person was, or was required to be, registered;

(b) subject to paragraph (2A) , (2C) and (2D) below, in respect of goods which had been supplied to, or imported or acquired by, the relevant person more than 4 years before the date with effect from which the taxable person was, or was required to be, registered;

(d) in respect of services which had been supplied to the relevant person more than 6 months before the date with effect from which the taxable person was, or was required to be, registered; or

(e) in respect of capital items of a description falling within regulation 113.

(2A) Paragraph (2)(b) above does not apply where—

(a) the taxable person was registered before 1st May 1997; and

(b) he did not make any returns before that date.

(2B) In paragraph (2) above references to the relevant person are references to—

(a) the taxable person; or

(b) in the case of paragraph (1)(b) above, the person to whom the supply had been made, or who had imported or acquired the goods, as the case may be.

(2C) Where the relevant person was, or was required to be, registered on or before 1st April 2009, no VAT may be treated as if it were input tax under paragraph (1) above in respect of goods which were supplied to, or imported or acquired by the relevant person more than 3 years before the date with effect from which that person was, or was required to be, registered.

(2D) Where the relevant person was or was required to be registered on or before 31st March 2010 and paragraph (2C) above does not apply, no VAT may be treated as if it were input tax under paragraph (1) above in respect of goods which were supplied to, or imported or acquired by, the relevant person on or before 31st March 2006.

(3) Subject to paragraphs (3A) and (3B) below, a claim under paragraph (1) above shall, save as the Commissioners may otherwise allow, be made on the first return the taxable person is required to make and, as the Commissioners may require, be supported by invoices and other evidence.

(3A) Where the taxable person was registered before 1st May 1997 and has not made any returns before that date paragraph (3) above shall have effect as if for the words “the first return the taxable person is required to make” there were substituted the words “the first return the taxable person makes”.

(3B) Subject to paragraph (3C) the Commissioners shall not allow a person to make any claim under paragraph (3) above in terms such that the VAT concerned would fall to be claimed as if it were input tax more than 4 years after the date by which the first return he is required to make is required to be made.

(3C) The Commissioners shall not allow a person to make any claim under paragraph (3) above in the circumstances where the first return the taxable person was required to make was required to be made on or before 31st March 2006.

(4) A taxable person making a claim under paragraph (1) above shall compile and preserve for such period as the Commissioners may require—

(a) in respect of goods, a stock account showing separately quantities purchased, quantities used in the making of other goods, date of purchase and date and manner of subsequent disposals of both such quantities, and

(b) in respect of services, a list showing their description, date of purchase and date of disposal, if any.

(5) Subject to paragraph (6) below, if a person who has been, but is no longer, a taxable person makes a claim in such manner and supported by such evidence as the Commissioners may require, they may pay to him the amount of any VAT on the supply of services to him after the date with effect from which he ceased to be, or to be required to be, registered and which was attributable to any taxable supply made by him in the course or furtherance of any business carried on by him when he was, or was required to be, registered.

(6) Subject to paragraph (7) and (8) below, no claim under paragraph (5) above may be made more than 4 years after the date on which the supply of services was made.

(7) Paragraph (6) above does not apply where—

(a) the person ceased to be, or ceased to be required to be, registered before 1st May 1997; and

(b) the supply was made before that date.

(8) No claim may be made under paragraph (5) above in relation to a supply of services which was made on or before 31st March 2006.

PART XV — ADJUSTMENTS TO THE DEDUCTION OF INPUT TAXON CAPITAL ITEMS

Interpretation of Part XV

112

—

(1) Any expression used in this Part to which a meaning is given in Part XIV of these Regulations shall, unless the contrary intention appears, have the same meaning in this Part as it has in that Part and in particular, exempt supplies and taxable supplies shall be accorded the same meanings as defined in regulation 110 above.

(2) Any reference in this Part to a capital item shall be construed as a reference to a capital item to which this Part applies by virtue of regulation 113, being an item which a person who has or acquires an interest in the item in question (hereinafter referred to as “the owner”) uses in the course or furtherance of a business carried on by him, and for the purpose of that business, otherwise than solely for the purpose of selling the item.

(3) In this regulation and in regulation 114, an interest includes an interest which is treated as being supplied to a person under paragraph 37(1) of Schedule 10 to the Act provided that the numerator of the fraction in paragraph 37(3) of that Schedule is 36 or more.

(4) The reference to “owner” in paragraph (2) shall be taken to refer to—

(a) subject to sub-paragraph (b), the transferee where the whole or part of a capital item is transferred from one person to another and that transfer is not treated as a supply for the purposes of VAT; and

(b) the representative member of a group under section 43 of the Act if the capital item is owned by a member of the group.

(5) Where the owner is a transferee or representative member, that person shall be treated as having done everything that the transferor or group member (as may be the case) has done in respect of the capital item.

Capital items to which this Part applies

113

(1) The capital items to which this Part applies are any of the items specified in paragraph (2) on or in relation to which the owner incurs VAT bearing capital expenditure of a type specified in paragraph (3), the value of which is not less than that specified in paragraph (4).

(2) The items are—

(a) land;

(b) a building or part of a building;

(d) a computer or an item of computer equipment;

(e) an aircraft;

(f) a ship, boat or other vessel.

(3) The expenditure—

(a) in the case of an item falling within paragraph (2)(a) or (d), is the expenditure relating to its acquisition;

(b) in the case of an item falling within paragraph (2)(b), (c), (e) or (f), is the expenditure relating to its—

(i) acquisition,

(ii) construction (including where appropriate manufacture),

(iii) refurbishment,

(iv) fitting out,

(v) alteration, or

(vi) extension (including the construction of an annex).

(4) The value for the purposes of paragraph (3) is—

(a) not less than £250,000 where the item falls within paragraph (2)(a), (b) or (c);

(b) not less than £50,000 where the item falls within paragraph (2)(d), (e) or (f).

Period of adjustment

114

—

(1) The proportion (if any) of the total input tax on a capital item which may be deducted under Part XIV shall be subject to adjustments in accordance with the provisions of this Part.

(2) Adjustments shall be made over a period determined in accordance with the following paragraphs of this regulation.

(3) Subject to paragraphs (3A) and (3B), the period of adjustment is—

(a) 10 successive intervals in the case of a capital item of a description falling within regulation 113(2)(a) to (c);

(b) 5 successive intervals in the case of a capital item of a description falling within regulation 113(2)(d) to (f),

determined in accordance with paragraphs (4) to (5B) and (7).

(3A) If, at the time of the owner’s first use, the number of intervals specified in paragraph (3)(a) or (b) (as may be the case) exceeds the number of complete years that the owner’s interest in the capital item has to run by more than one, the number of intervals shall be reduced to one more than the number of complete years that the owner’s interest has to run calculated from the date of the owner’s first use of the item (but not to less than three intervals).

(3B) Where the owner’s interest falls within regulation 112(3), the number of intervals shall be the same as the numerator of the fraction in paragraph 37(3) of Schedule 10 to the Act divided by 12 and rounded up to the next whole number.

(3C) Where paragraph (3A) or (3B) applies, the relevant denominator in regulation 115(1) shall be adjusted accordingly.

(3D) Where a person who registers for VAT already owns an item of a description falling within regulation 113, for the purposes of calculating the period of adjustment—

(a) one complete interval shall be deducted for each complete year which has elapsed since the date of that person’s first use of the capital item prior to the date of VAT registration, and

(b) the first interval applicable to the capital item which ends after the date of VAT registration shall be treated as a subsequent interval for the purposes of regulation 115(1).

(4) Subject to paragraphs (5A), (5B) and (7), the first interval applicable to a capital item shall commence on the day on which the owner first uses the capital item and shall end on the day before the start of his next tax year whether or not this is his first tax year.

(5) Subject to paragraphs (5A), (5B) and (7) below, each subsequent interval applicable to a capital item shall correspond with a longer period applicable to the owner, or if no longer period applies to him, a tax year of his.

(5A) On the first occasion during the period of adjustment applicable to a capital item that the owner of the item—

(a) being a registered person subsequently becomes a member of a group under section 43 of the Act;

(b) being a member of a group under section 43 ceases to be a member of that group (whether or not he becomes a member of another such group immediately thereafter); or

(c) transfers the item in the course of the transfer of his business or part of his business as a going concern (the item therefore not being treated as supplied) in circumstances where the new owner is not, under regulation 6(1) above, registered with the registration number of and in substitution for the transferor,

the interval then applying shall end on the day before he becomes a member of a group or the day that he ceases to be a member of the group or transfers the business or part of the business (as the case may require) and thereafter each subsequent interval (if any) applicable to the capital item shall end on the successive anniversaries of that day.

(5B) Where the extent to which a capital item is used in making taxable supplies does not change between what would, but for this paragraph, have been the first interval and the first subsequent interval applicable to it and the length of the two intervals taken together does not exceed 12 months the first interval applicable to the capital item shall end on what would have been the day that the first subsequent interval expired.

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

(7) Where the owner of a capital item transfers it during the period of adjustment applicable to it in the course of the transfer of his business or a part of his business as a going concern (the item therefore not being treated as supplied) and the new owner is, under regulation 6(1) above, registered with the registration number of, and in substitution for the transferor, the interval applying to the capital item at the time of the transfer shall end on the last day of the longer period applying to the new owner immediately after the transfer or, if no longer period then applies to him, shall end on the last day of his tax year following the day of transfer.

Method of adjustment

115

—

(1) Where in a subsequent interval applicable to a capital item, the extent to which it is used in making taxable supplies increases from the extent to which it was so used or to be used at the time that the original entitlement to deduction of the input tax was determined, the owner may deduct for that subsequent interval an amount calculated as follows—

(a) where the capital item falls within regulation 114(3)(b)—

$the total input tax on the capital item5×the adjustment percentage;$

(b) where the capital item falls within regulation 114(3)(a)—

$the total input tax on the capital item10×the adjustment percentage.$

(2) Where in a subsequent interval applicable to a capital item, the extent to which it is used in making taxable supplies decreases from the extent to which it was so used or to be used at the time that the original entitlement to deduction of the input tax was determined, the owner shall pay to the Commissioners for that subsequent interval an amount calculated in the manner described in paragraph (1) above.

(3) Paragraph (3ZA) applies where, during an interval other than the last interval applicable to a capital item, the owner—

(a) supplies the whole or part of his interest in the capital item, or

(b) is deemed to supply the whole or part of his interest in the capital item, or

(c) would have been deemed to supply the whole of his interest in the capital item but for the fact that the VAT on the deemed supply (whether by virtue of its value or because it is zero-rated or exempt) would not have exceeded the sum specified in paragraph 8(1)(c) of Schedule 4 to the Act.

(3ZA) If the supply (or deemed supply) of the capital item referred to in paragraph (3) is—

(a) a taxable supply, the owner shall be treated as using the whole or part (as may be the case) of the capital item for each of the remaining complete intervals applicable to it wholly in making taxable supplies, or

(b) an exempt supply, the owner shall be treated as not using the whole or part (as may be the case) of the capital item for any of the remaining complete intervals applicable to it in making any taxable supplies,

and, in each case, the owner shall, except where paragraph (3A) applies, calculate for each of the remaining complete intervals applicable to the capital item, in accordance with paragraph (1) or (2) as the case may require, such amount as the owner may deduct or be liable to pay to the Commissioners.

(3A) This paragraph applies if the total amount of input tax deducted or deductible by the owner of a capital item as a result of the initial deduction, any adjustments made under paragraph (1) or (2) above and the adjustment which would apart from this paragraph fall to be made under paragraph (3ZA) above would exceed the output tax chargeable by him on the supply of the whole or part of that capital item.

(3B) Save as the Commissioners may otherwise allow, where paragraph (3A) above applies the owner may deduct, or as the case may require, shall pay to the Commissioners such amount as results in the total amount of input tax deducted or deductible being equal to the output tax chargeable by him on the supply of the whole or part of the capital item.

(4) If a capital item is irretrievably lost or stolen or is totally destroyed, no further adjustment shall be made in respect of any remaining complete intervals applicable to it.

(5) Subject to paragraph (5A), for the purposes of this Part —

“the adjustment percentage” means the difference (if any) between the extent, expressed as a percentage, to which the whole or part as appropriate of the capital item was used or to be used for the making of taxable supplies at the time the original entitlement to deduction of the input tax was determined and the extent to which the whole or part of it as appropriate is so used, or is treated under paragraph (3ZA) as being so used, in the subsequent interval in question;

“the original entitlement to deduction” means the entitlement to deduction under sections 24 to 26 of the Act and regulations made under those sections;

“the total input tax on the capital item” means—in relation to any capital item, all VAT incurred by the owner on the capital expenditure on that item (whether or not the person incurring it is VAT registered at the time that it is incurred) including any non-business VAT; andwhere a person is treated as making a supply to himself under paragraph 37(1) of Schedule 10 to the Act, the VAT charged on that supply;

“VAT bearing capital expenditure” means capital expenditure on which VAT is charged at the standard rate or at a reduced rate.

(5A) Where paragraph (3ZA) applies in respect of part of a capital item, for the remaining complete intervals the total VAT incurred on the capital item as defined in paragraph (5) shall be reduced accordingly.

(5B) The person responsible for making an adjustment under paragraph (1), (2) or (3ZA) shall be the person who is treated as the owner of the capital item under regulation 112 at the point immediately prior to the end of the interval in question or, in the case of an adjustment under paragraph (3ZA), the event specified in paragraph (3).

(6) Subject to paragraphs (9) and (11) below a taxable person claiming any amount pursuant to paragraph (1) above, or liable to pay any amount pursuant to paragraph (2) above, shall include such amount in a return for the second prescribed accounting period next following the interval to which that amount relates, except where the Commissioners allow another return to be used for this purpose,

...

(7) Subject to paragraphs (9) and (11) below a taxable person claiming any amount or amounts, or liable to pay any amount or amounts, pursuant to paragraph (3ZA) above, shall include such amount or amounts in a return for the second prescribed accounting period next following the interval in which the supply (or deemed supply) in question takes place except where the Commissioners allow another return to be used for this purpose.

(8) For the purposes of paragraph (9), a “specified return” means a return specified in paragraph (6) or (7).

(9) ... The Commissioners shall not allow the taxable person to use a return other than a specified return unless it is the return for a prescribed accounting period commencing within 4 years of the end of the prescribed accounting period to which the specified return relates.

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) Where a person is required to make an adjustment under paragraph (1), (2) or (3ZA) at a time when he is no longer registered for VAT, he shall make the required adjustment in his final VAT return.

Ascertainment of taxable use of a capital item

116

—

(1) Subject to regulation 115(3) and (3B) and paragraphs (2) , (A2) and (3) below, for the purposes of this Part, an attribution of the total input tax on the capital item shall be determined for each subsequent interval applicable to it in accordance with the provisions of sections 24 to 26 of the Act and regulations made under those sections as they apply to that interval and the proportion of the input tax thereby determined to be attributable to taxable supplies shall be treated as being the extent to which the capital item is used in making taxable supplies in that subsequent interval.

(A2) Subject to paragraph (2) below, the attribution of the total input tax on a capital item for subsequent intervals determined in accordance with regulation 114(5A) above shall be determined by such method as is agreed with the Commissioners.

(2) In any particular case the Commissioners may allow another method by which, or may direct the manner in which, the extent to which a capital item is used in making taxable supplies in any subsequent interval applicable to it is to be ascertained.

(3) Where the owner of a building which is a capital item of his grants or assigns a tenancy or lease in the whole or any part of that building and that grant or assignment is a zero-rated supply to the extent only as provided by—

(a) note (14) to Group 5 of Schedule 8 to the Act, or

(b) that note as applied to Group 6 of that Schedule by note (3) to Group 6, or

any subsequent exempt supply of his arising directly from that grant or assignment shall be disregarded in determining the extent to which the capital item is used in making taxable supplies in any interval applicable to it.

PART XVI — IMPORTATIONS, EXPORTATIONS AND REMOVALS IN RESPECT OF GREAT BRITAIN

Interpretation of Part XVI

117

—

(1) In regulation 127 “approved inland clearance depot” means any inland premises approved by the Commissioners for the clearance of goods for customs and excise purposes.

(2) For the purposes of regulation 128 “container” means an article of transport equipment (lift-van, moveable tank or other similar structure)—

(a) fully or partially enclosed to constitute a compartment intended for containing goods,

(b) of a permanent character and accordingly strong enough to be suitable for repeated use,

(c) specially designed to facilitate the carriage of goods, by one or more modes of transport, without intermediate reloading,

(d) designed for ready handling, particularly when being transferred from one mode of transport to another,

(e) designed to be easy to fill and to empty, and

(f) having an internal volume of one cubic metre or more,

and the term “container” shall include the accessories and equipment of the container, appropriate for the type concerned, provided that such accessories and equipment are carried with the container, but shall not include vehicles, accessories or spare parts of vehicles, or packaging.

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

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

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

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

(7) For the purposes of regulation 129 “overseas authority” means any country other than the United Kingdom or any part of or place in such a country or the government of any such country, part or place.

(7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) In regulation 132 “overseas visitor” means a person who, during the 2 years immediately preceding ... the date of the application mentioned in regulation 132, has not been in Great Britain for more than 365 days, or who, ... during the 6 years immediately preceding the date of the application has not been in Great Britain for more than 1,095 days.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) In regulations 119 and 121D “UK Reliefs document” has the same meaning as in regulation 2 of the Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020.

(13) Unless otherwise specified, in this Part—

(a) “importation” means—

(i) the importation of goods from outside the United Kingdom (but not the Isle of Man) as a result of their entry into Great Britain; and

(ii) the entry of goods into Great Britain following their removal from Northern Ireland,

and related expressions are to be interpreted accordingly.

(b) “export” means—

(i) the export of goods from Great Britain to a place outside the United Kingdom (but not the Isle of Man); and

(ii) the removal of goods from Great Britain to Northern Ireland,

and related expressions are to be interpreted accordingly.

Enactments excepted

118

There shall be excepted from the enactments which are to apply to importations as mentioned in section 16(1) of the Act—

(a) the Alcoholic Liquor Duties Act 1979[^f00016]—

(ai) section 5A (exemption from duty on spirits in flavourings),

(i) section 7 (exemption from duty on spirits in articles used for medical purposes),

(ii) section 8 (repayment of duty on spirits for medical or scientific purposes),

(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iv) section 10 (remission of duty on spirits for use in art or manufacture),

(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(vi) sections 42 ... (drawback on exportation and warehousing of beer),

(b) the Hydrocarbon Oil Duties Act 1979[^f00017]—

(i) section 9 (relief for certain industrial uses),

(ii) section 15 (drawback of duty on exportation etc. of certain goods),

(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iv) section 17 (repayment of duty on heavy oil used by horticultural producers),

(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(vi) section 19 (repayment of duty on fuel used in fishing boats etc.),

(vii) section 20 (relief from duty on oil contaminated or accidentally mixed in warehouse), and

(viii) section 20AA (power to allow reliefs),

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(iii) section 126 (charge of excise duty on manufactured or composite imported articles), and

(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ca) the Taxation (Cross-border Trade) Act 2018—

(i) section 16 (value of chargeable goods),

(ii) section 36 (outward processing procedure),

(iii) Schedule 2, Part 5 (authorised use procedure), except to the extent that it relates to the matters referred to in regulation 119(2)(a), and

(iv) Schedule 2, Part 6 (temporary admission procedure), except to the extent that it relates to full relief from a liability to import duty in relation to a temporary admission procedure,

(d) the Customs and Excise Duties (General Reliefs) Act 1979[^f00019] other than sections 8 and 9(b),

(e) the Isle of Man Act 1979[^f00020], sections 8 and 9 (removal of goods from Isle of Man to United Kingdom), ...

(f) the Tobacco Products Duty Act 1979[^f00021], section 2(2) (remission or repayment of duty on tobacco products) , and

(fa) the Finance Act 1995, section 5 (denatured alcohol);

(g) the Finance Act 1999, sections 126 and 127 (interest on unpaid customs debts and on certain repayments relating to customs duty)

Regulations excepted

119

(1) The provision made by or under the following subordinate legislation is excepted from applying to importations—

(a) regulations 16(4) and (5) and 19(1)(b) of the Excise Warehousing (Etc) Regulations 1988) (certain removals from warehouse);

(b) any regulations made under section 197(2)(f) of the Finance Act 1996 (rate of interest on overdue customs duty and on repayments of amounts paid by way of customs duty);

(c) any regulation made under section 19 of the Taxation (Cross-border Trade) Act 2018 conferring full or partial relief from a liability to import duty; and

(d) regulations 45 (interest on late payment of import duty) and 68 (interest payable by HMRC) of the Customs (Import Duty) (EU Exit) Regulations 2018.

(2) But paragraph (1)(c) does not include the following—

(a) regulations 32 and 33 (authorised use procedure) of the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 and regulation 20 of the Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020 including the authorised use rates document referred to in that regulation, in so far as these regulations relate to relief from import duty in respect of goods admitted into territorial waters—

(i) in order to be incorporated into drilling or production platforms as part of the process of constructing, repairing, maintaining, altering or fitting-out of such platforms, or in order to link such platforms to the mainland of the United Kingdom; or

(ii) for the fuelling and provisioning of drilling or production platforms;

(b) regulations 35 to 40 (temporary admission procedure) of the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018, in so far as these regulations confer full relief from a liability to import duty in relation to a temporary admission procedure; and

(c) the Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020, in so far as these Regulations confer a relief from import duty in relation to returned goods relief, as detailed at sections 37 to 39 of the UK Reliefs document, subject to the modifications and exceptions set out in regulation 121D.

Community legislation excepted

120

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

Adaptations

121

(1) The provision made by the following enactments shall apply to importations, as mentioned in section 16(1) of the Act, subject to the adaptations prescribed by this regulation.

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

(3) Section 129 of the Finance Act 1999 (recovery of certain amounts by the Commissioners) shall be regarded as providing for the recovery of a repayment of any relevant VAT (import VAT).

Postal importations by registered persons in the course of business

122

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

Temporary importations

123

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

Reimportation of certain goods by non-taxable persons

124

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

Reimportation of certain goods by taxable persons

125

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

Reimportation of goods exported for treatment or process

126

(1) Subject to such conditions as the Commissioners may impose, VAT chargeable on the importation of goods which have been temporarily exported and are re-imported after having undergone repair, process or adaptation outside Great Britain, or after having been made up or reworked outside Great Britain, shall be payable as if such treatment or process had been carried out in Great Britain, if the Commissioners are satisfied that—

(a) at the time of exportation the goods were intended to be re-imported after completion of the treatment or process outside Great Britain, and

(b) the ownership in the goods was not transferred to any other person at exportation or during the time they were abroad.

(2) For the purposes of this regulation—

(a) the reference to the importation of goods does not include the removal of goods from Northern Ireland to Great Britain, and related expressions are to be interpreted accordingly;

(b) any reference to the exportation of goods does not include the removal of goods from Great Britain to Northern Ireland, and related expressions are to be interpreted accordingly.

Supplies to export houses

127

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

Export of freight containers

128

Where the Commissioners are satisfied that a container is to be exported to a place outside Great Britain, its supply, subject to such conditions as they may impose, shall be zero-rated.

Supplies to overseas persons

129

—

(1) Where the Commissioners are satisfied that—

(a) goods intended for export to a place outside Great Britain other than Northern Ireland have been supplied at a time when they were located in Great Britain ... to—

(i) a person not resident in Great Britain,

(ii) a trader who has no business establishment in Great Britain from which taxable supplies are made, or

(iii) an overseas authority, ...

(b) the goods were exported to a place outside Great Britain other than Northern Ireland, and

(c) the goods are not personal gifts on export as defined in regulation 2 of the Customs (Export) (EU Exit) Regulations 2019, and

(d) any conditions that may be specified by the Commissioners in a notice published by them have been met,

the supply, subject to such other conditions as they may impose, shall be zero-rated.

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

Supplies to persons departing from the member States

130

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

131

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

132

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