The Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020

Made: 9th December 2020

Laid before the House of Commons: 10th December 2020

Coming into force in accordance with regulations 1(2)

The Treasury, in exercise of the powers conferred by sections 51, 52 and 56 of the Taxation (Cross-border Trade) Act 2018 (“TCTA”), and section 86(1) of, and paragraph 1(3) of Schedule 23 to, the Finance Act 2011 , and the Commissioners for Her Majesty's Revenue and Customs, in exercise of the powers conferred by sections 16A of the Value Added Tax Act 1994 , and sections 20 and 52 of, and paragraph 3(1)(c) of Schedule 6 to, TCTA 2018 , make the following regulations.

The Treasury consider it appropriate in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the EU to make provision in relation to value added tax, including such provision as might be made by Act of Parliament, and to make provision, including transitional, transitory or saving provision, in consequence of, and in connection with the coming into force of, TCTA 2018.

In accordance with section 52(2) of TCTA 2018, the Commissioners and the Treasury consider it appropriate in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the EU, for these Regulations to come into force on such day or days as the Treasury may by regulations under section 52 of TCTA 2018 appoint.

PART 1 — Preliminary

Citation and commencement

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• (1) These Regulations may be cited as the Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020.

• (2) These Regulations come into force on such day or days as the Treasury may by regulations under section 52 of the Taxation (Cross-border Trade) Act 2018 appoint.

Interpretation - general

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In these Regulations—

• “Commissioners” means HMRC Commissioners;

• “TCTA 2018” means the Taxation (Cross-border Trade) Act 2018;

• “the VAT Regulations” means the Value Added Tax Regulations 1995 ;

• “VATA 1994” means the Value Added Tax Act 1994 .

PART 2 — Phasing in of border controls: accounting for import VAT

CHAPTER 1 — Preliminary

Interpretation of Part 2

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In Part 2—

• “import VAT” means value added tax chargeable by virtue of section 1(1)(c) of VATA 1994;

• “prescribed accounting period” has the meaning given by section 25(1) of VATA 1994;

• “registered for VAT” refers to registration under Schedule 1 or 3A to VATA 1994 ;

• “relevant importation” has the meaning given by regulation 6;

• “transitional EIDR procedure” has the meaning given by regulation 29D(1) of the Customs (Import Duty) (EU Exit) Regulations 2018 and “transitional simplified Customs declaration” has the meaning given by regulation 14 of those Regulations.

CHAPTER 2 — Accounting for import VAT by VAT registered persons making transitional simplified Customs declarations using the EIDR procedure

Application of this Chapter

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This Chapter applies to a person who—

• (a) makes a transitional simplified Customs declaration in accordance with regulation 29C(1)(a) of the Customs (Import Duty) (EU Exit) Regulations 2018, or makes a declaration that is treated as being made for the purposes of that regulation by regulation 37(1A) of those Regulations, in respect of an importation of goods ..., and

• (b) is registered, or required to be registered, for VAT at the time the person makes that declaration.

Obligation to account for and pay import VAT in accordance with this Chapter

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• (1) A person to whom this Chapter applies (P) must account for and pay import VAT on goods which comprise a relevant importation in accordance with the provision made by this Chapter.

• (2) The effect of section 16(2) of VATA 1994 (application of customs enactments) is modified to the extent that this Chapter makes different provision for accounting for import VAT, including the timing of such accounting, on a relevant importation.

Relevant importation

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In this Chapter a “relevant importation” is an importation of goods ... where the goods are—

• (a) chargeable with import VAT for which P is liable,

• (b) used or to be used by P for the purposes of a business P carries on,

• (c) required to be declared for the free circulation procedure under Part 1 of TCTA 2018 ..., and

• (d) not of a description excluded from the transitional EIDR procedure by virtue of regulation 29C(4) of the Customs (Import Duty) (EU Exit) Regulations 2018.

Obligation to account for import VAT on VAT return

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P must account for and pay the import VAT on goods which comprise a relevant importation on the return that P is required to make for the prescribed accounting period in which the liability for the import VAT is incurred.

Application with modifications of the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019

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The following provisions of the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019 apply for the purposes of this Chapter with, where applicable, the stated modification—

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

• (b) regulation 10(2) (appeals).

Modification of the VAT Regulations where this Chapter applies

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Where this Chapter applies the following provisions of the VAT Regulations are to be applied with the stated modifications—

• (a) regulation 28 (estimation of output tax) is to be read as if—

• (i) the reference to “output tax” includes import VAT chargeable on goods comprising a relevant importation; and

• (ii) the words from “in the next prescribed accounting period” to the end were “in the prescribed accounting period in which the Commissioners make available to the person details of the amount of import duty due from the person on goods comprising a relevant importation (and in this regulation “import duty” means import duty charged under section 1 of the Taxation (Cross-border Trade) Act 2018).”;

• (b) regulation 29(3) (claims for input tax) is to be read as if the words from “in the next prescribed accounting period” to the end read “in the prescribed accounting period in which the Commissioners make available to the person details of the amount of import duty due from the person in that prescribed accounting period on goods comprising a relevant importation (and “import duty” in this regulation means import duty charged under section 1 of the Taxation (Cross-border Trade) Act 2018).”;

• (c) regulation 32(3)(baa) (the VAT account) and regulation 40(1)(ba) (VAT to be accounted for on returns and payment of VAT) are to be read as if after “2019” were added “ or Chapter 2 of Part 2 of the Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 , ”.

CHAPTER 3 — Accounting for import VAT: other circumstances

Power to make provision by public notice for bringing into account import VAT

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• (1) The Commissioners may by public notice make such provision for, or in connection with, the bringing into account of import VAT as they consider appropriate in the circumstances specified in paragraph (2).

• (2) The circumstances referred to in paragraph (1) are that a person purports to make a transitional simplified Customs declaration in accordance with regulation 29C(1)(a) of the Customs (Import Duty) (EU Exit) Regulations 2018 in respect of an importation of goods ... but—

• (a) the person is ineligible to do so;

• (b) the person purports to do so in respect of goods which are of a description not eligible for the transitional EIDR procedure; or

• (c) the declaration is incomplete.

PART 3 — Saving and transitional provision for repayments to Community traders

Saving and transitional provision for repayments to Community traders

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• (1) The omission of Part 20 (repayments to Community traders) (regulations 173 to 184) of the VAT Regulations by regulation 71 of the Value Added Tax (Miscellaneous Amendments and Revocations) (EU Exit) Regulations 2019 does not have effect where—

• (a) a relevant claim is made on or after IP completion day; or

• (b) a relevant claim is made before IP completion day but is still being processed by the Commissioners at IP completion day; or

• (c) a claimant who has made a relevant claim is required to repay an amount to the Commissioners under regulation 173D(3) on or after IP completion day.

• (2) In this regulation a relevant claim is a claim—

• (a) for a repayment of VAT under regulation 173B, or

• (b) for an additional repayment of VAT under regulation 173D(2),

that, in either case, as at IP completion day the claimant was entitled to make under Part 20 as it had effect immediately before IP completion day.

• (3) A person may make a relevant claim in accordance with this regulation provided that the person does so on or before 31st March 2021.

• (4) Where paragraph (1)(a) applies, a relevant claim must relate to either of the following periods, which are “repayment periods” for the purpose of regulation 173G—

• (a) the period from 1st January to 31st December 2019, or

• (b) the period from 1st January 2020 to IP completion day.

• (5) Where the Commissioners receive a relevant claim they must forward it on or before 30th April 2021 to the tax authorities of the member State from which the repayment or additional repayment is claimed, and to this extent the omission of section 39A (applications for forwarding of VAT repayment claims to other member States) of the Value Added Tax Act 1994 by paragraph 42 of Schedule 8 to the Taxation (Cross-border Trade) Act 2018 does not have effect.

• (6) Where, in relation to a relevant claim that falls within paragraph (1)(a) or (b), the Commissioners make a request under regulation 173R (requests for further information or a document), for paragraph (1)(b) of that regulation read “a request made to the competent authority of a member State of the EU”.

• (7) Where paragraph (1)(c) applies, the amount must be repaid to the Commissioners in such form or manner and at such time as the Commissioners may prescribe in a public notice .

• (8) Where a person has made a relevant claim in relation to the period in paragraph (4)(a) and that claim was based on a provisional attribution of input tax under Article 175(2) of Directive 2006/112/EC as applied in the claimant's member State, the subsequent adjustment to the attribution of input tax under Article 175(3) of that Directive must be made on or before 31st March 2021.

• (9) Where a person has made a relevant claim in relation to the period in paragraph (4)(b) and the claim is based on a provisional attribution of input tax under Article 175(2) of Directive 2006/112/EC as applied in the claimant's member State, any subsequent adjustment to the attribution of input tax must be made under regulation 12 of these Regulations.

Transitional provision for partial exemption adjustments relating to the period from 1st January 2020 to IP completion day

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• (1) Subject to paragraph (2), where regulation 11(9) applies and a person is required or wishes to make an adjustment to a provisional attribution of input tax for the period from 1st January 2020 to IP completion day, the person must do so by making a claim using the procedure in Part 21 (regulations 185 to 197) of the VAT Regulations as it has effect on and after IP completion day.

• (2) Any claim relating to the period from 1st January 2020 to IP completion day must be made on or before 31st December 2021.

PART 4 — Saving provision for electronic, telecommunication and broadcasting services: non-Union and Union schemes

Interpretation of Part 4

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In Part 4—

• “Part 26” means Part 26 (UK Union and non-Union special accounting schemes: registration, notification of changes, and returns) (regulations 214 to 218) of the VAT Regulations ;

• “Part 27” means Part 27 (non-UK Union and non-Union special accounting schemes: adjustments, claims and error correction) (regulations 219 to 223) of the VAT Regulations ;

• “Schedule 3B” means Schedule 3B (electronic, telecommunication and broadcasting services: non-Union scheme) to VATA 1994 ;

• “Schedule 3BA” means Schedule 3BA (electronic, telecommunication and broadcasting services: Union scheme) to the VATA 1994 .

Saving provision for electronic, telecommunication and broadcasting services: non-Union scheme

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• (1) Schedule 3B continues to apply in relation to supplies made before IP completion day despite its omission by paragraph 86 of Schedule 8 to TCTA 2018 .

• (2) To the extent that it continues to apply, Schedule 3B has effect subject to such modifications as may be specified in a notice published by the Commissioners .

Saving provision for electronic, telecommunication and broadcasting services: Union scheme

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• (1) Schedule 3BA continues to apply in relation to supplies made before IP completion day despite its omission by paragraph 87 of Schedule 8 to TCTA 2018 .

• (2) To the extent that it continues to apply, Schedule 3BA has effect subject to such modifications as may be specified in a notice published by the Commissioners .

Saving provision for references to Schedules 3B and 3BA in VATA 1994

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• (1) Any references to Schedule 3B or to Schedule 3BA in VATA 1994 (other than those mentioned in regulations 14 and 15) that have been omitted by Schedule 8 to TCTA 2018 continue to apply in relation to supplies made before IP completion day as if they had not been so omitted, but only to the extent that Schedules 3B and 3BA continue to have effect in accordance with these Regulations.

• (2) To the extent that they continue to apply, references to Schedule 3B or to Schedule 3BA in VATA 1994 have effect subject to such modifications as may be specified in a notice published by the Commissioners .

Saving provision for Part 26 of the Value Added Tax Regulations 1995 (UK Union and non-Union special accounting schemes: registration, notification of changes, and returns)

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• (1) Part 26 continues to apply in relation to supplies made before IP completion day despite its omission by regulation 79 of the Value Added Tax (Miscellaneous Amendments and Revocations) (EU Exit) Regulations 2019 .

• (2) To the extent that it continues to apply, Part 26 has effect subject to such modifications as may be specified in a notice published by the Commissioners .

Saving provision for Part 27 of the Value Added Tax Regulations 1995 (non-UK Union and non-Union special accounting schemes: adjustments, claims and error correction)

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• (1) Part 27 continues to apply in relation to supplies made before IP completion day despite its omission by regulation 80 of the Value Added Tax (Miscellaneous Amendments and Revocations) (EU Exit) Regulations 2019 .

• (2) To the extent that it continues to apply, Part 27 has effect subject to such modifications as may be specified in a notice published by the Commissioners .

PART 5 — Amendments to EU Exit Regulations

Amendment of the Value Added Tax (Miscellaneous Amendments and Revocations) (EU Exit) Regulations 2019

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• (1) The Value Added Tax (Miscellaneous Amendments and Revocations) (EU Exit) Regulations 2019 are amended as follows.

• (2) In regulation 83 (amendment of the Value Added Tax (Place of Supply of Goods) Order 2004 ), after paragraph (2) insert—

(3) Omit Part 4 (chain transactions) (regulations 15 to 18).

Amendment of the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019

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• (1) The Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019 are amended as follows.

• (2) In regulation 2 (interpretation), for the definition of “relevant goods” substitute—

“relevant goods” means goods imported into the United Kingdom by a registered person which are used or to be used for the purposes of any business carried on by the registered person, but does not include goods which are the subject of a declaration by a qualifying traveller within the meaning of regulation 39B of the Customs (Import Duty) (EU Exit) Regulations 2018 ;

• (3) In regulation 3(1), after “relevant goods” insert “ (but this is subject to Part 2 of the Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 ) ”.

• (4) In regulation 12—

• (a) in paragraph (3)(b), for the full stop after “2019” substitute a comma;

• (b) for sub-paragraph (a) of paragraph (4) substitute—

(a) in paragraph (2), omit “, except that the total of the output tax due” to the end except for the final full stop; and

Amendment of the Taxation (Cross-border Trade) Act 2018 (Value Added Tax Transitional Provisions) (EU Exit) Regulations 2019

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• (1) The Taxation (Cross-border Trade) Act 2018 (Value Added Tax Transitional Provisions) (EU Exit) Regulations 2019 are amended as follows.

• (2) In regulation 2, omit the definition for “Chapter 7”.

• (3) In regulation 3, in each place it occurs, for “exit day” substitute “ IP completion day ”.

• (4) For regulation 4, substitute—

(4) The amendments made by Part 3 of the Act do not have effect in relation to a supply of goods dispatched or transported from the territory of the United Kingdom to the territory of a member State of the EU, or vice versa, provided that the dispatch or transport started before IP completion day and ended thereafter.

• (5) In regulation 5, in each place it occurs, for “exit day” substitute “ IP completion day ”.

Amendment of the Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019

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