Finance Act 1989

Part I U.K. Customs and Excise, Value Added Tax and Car Tax

CHAPTER I U.K. Customs and Excise

Hydrocarbon oil duties U.K.

1 Rates. U.K.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1

(2) In section 13A of that Act (rebate on unleaded petrol), for “£0.0202” there shall be substituted “£0.0272”.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1

(4) This section shall be deemed to have come into force at 6 o’clock in the evening of 14th March 1989.

Textual Amendments

F1 S. 1(1)(3) repealed by Finance Act 1990 (c. 29, SIF 40:1),s. 132, Sch. 19 Pt. I Note

2 Reliefs. U.K.

(1) The following section shall be inserted after section 20A of the M1 Hydrocarbon Oil Duties Act 1979—

“20AA Power to allow reliefs.

(1) The Commissioners may make regulations allowing reliefs as regards—

(a) any duty of excise which has been charged in respect of hydrocarbon oil, petrol substitute, spirits used for making power methylated spirits, or road fuel gas;

(b) any amount which has been paid to the Commissioners under section 12(2)above;

(c) any amount which would (apart from the regulations) be payable to the Commissioners under section 12(2) above.

(2) The regulations may include such provision as the Commissioners think fit in connection with allowing reliefs, and in particular may—

(a) provide for relief to take the form of a repayment or remission;

(b) provide for relief to be allowed in cases or classes of case set out in the regulations;

(c) provide for relief to be allowed to the extent set out in the regulations;

(d) provide for relief to be allowed subject to conditions imposed by the regulations;

(e) provide for relief to be allowed subject to such conditions as the Commissioners may impose on the person claiming relief;

(f) provide for the taking of samples of hydrocarbon oil in order to as certain whether relief should be allowed or has been properly allowed;

(g) make provision as to administration (which may include provision requiring the making of applications for relief);

(h) make different provision in relation to different cases or classes of case;

(i) include such supplementary, incidental, consequential or transitional provisions as appear to the Commissioners to be necessary or expedient.

(3) The conditions which may be imposed as mentioned in subsection (2)(d) or(e) above may include conditions as to the physical security of premises, the provision (by bond or otherwise) of security for payment, or such other matters as the Commissioners think fit.

(4) Where a person contravenes or fails to comply with any regulation made under this section or any condition imposed by or under such a regulation—

(a) he shall be liable on summary conviction to a penalty of three times the value of any goods in respect of which the contravention or failure occurred or a penalty of an amount represented by level 3 on the standard scale, whichever is the greater, and

(b) any goods in respect of which the contravention or failure occurred shall be liable to forfeiture.

(5) A reference in this section to a duty of excise includes a reference to any addition to such duty by virtue of section 1 of the Excise Duties (Surcharges or Rebates) Act 1979.

(6) Schedule 5 to this Act shall have effect with respect to any sample of hydrocarbon oil taken in pursuance of regulations made under this section.”

(2) In consequence of subsection (1) above, in paragraph 6 of Schedule 5 to the M2 Hydrocarbon Oil Duties Act 1979 after “section” there shall be inserted “20AA or”.

Marginal Citations

M1 1979c. 5.

M2 1979 c. 5.

Alcoholic liquor duties U.K.

3 Original gravity of beer. U.K.

(1) In section 3(5) of the M3 Alcoholic Liquor Duties Act 1979(under which the gravity of worts as ascertained by the proper officer is relevant for certain purposes) for the words from “proper officer” to the end there shall be substituted the words “brewer in accordance with subsection (2) above and recorded by him in pursuance of regulations made under section 49 below.”

(2) This section applies to worts if the brewer ascertains their gravity in accordance with section 3(2) of the Alcoholic Liquor Duties Act 1979, for the purpose of the record kept by him in pursuance of regulations under section49 of that Act, on or after the day on which this Act is passed.

Marginal Citations

M3 1979 c. 4.

4 Blending made-wines etc. U.K.

(1) Section 55 of the Alcoholic Liquor Duties Act 1979 (charge of excise duty on made-wine) shall be amended as follows.

(2) In subsection (5) (which, where certain conditions are satisfied, lifts the requirement to hold a licence for premises where made-wine is produced),after paragraph (d) there shall be added “and

(e) he does not blend or otherwise mix—

(i) two or more made-wines, or

(ii) one or more made-wines and one or more wines,

so as to produce made-wine the rate of duty applicable to which is higher than the rate applicable to at least one of the constituent liquors. ”

(3) After subsection (5) there shall be inserted—

“(5A) For the purposes of subsection (5) above—

(a) the rate of duty applicable to any made-wine is that which is or would be chargeable under subsection (1) above on its importation into the United Kingdom; and

(b) the rate of duty applicable to any wine is that which is or would be chargeable under subsection (1) of section 54 above on its importation into the United Kingdom.”

(4) This section shall have effect in relation to the blending or other mixing of made-wines, or of made-wines and wines, on or after the day on which this Act is passed.

5 Description as beer. U.K.

Section 73 of the M4 Alcoholic Liquor Duties Act 1979(which prohibits anyone from describing as beer any substance on which beer duty has not been paid) shall cease to have effect.

Marginal Citations

M4 1979 c. 4.

Vehicles excise duty U.K.

6 Rates. U.K.

(1) The M5 Vehicles (Excise) Act 1971 (“the 1971 Act”)and the M6 Vehicles (Excise) Act (Northern Ireland)1972 (“the 1972 Act”) shall be amended as follows.

(2) For the words—

(a) “in the second column of” in paragraph 1 of Schedule 2 to the 1971Act (rates of duty on hackney carriages), and

(b) “in column 2 of” in paragraph 1 of Schedule 2 to the 1972 Act,

there shall be substituted the words “in relation to its seatingcapacity in the Table in”; and for the Table in Part II of each of thoseSchedules there shall be substituted the Table set out in Part I of Schedule1 to this Act.

(3), (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2

(5) In paragraph 2 of Schedule 4A to the 1971 Act and the 1972 Act (rates ofduty for vehicles carrying or drawing exceptional loads) for “£1,600” there shall be substituted “£3,100”.

(6) In—

(a) subsection (5) of section 16 of the 1971 Act (rates of duty for tradelicences), including that subsection as set out in paragraph 12 of Part I ofSchedule 7 to that Act, and

(b) subsection (6) of section 16 of the 1972 Act, including that subsectionas set out in paragraph 12 of Part I of Schedule 9 to that Act,

for “£85” and “£17” there shall be substituted “£100” and “£20” respectively.

(7) This section shall apply in relation to licences taken out after 14thMarch 1989.

Textual Amendments

F2 S. 6(3)(4), Sch. 1 Pt. II, Sch. 2 para. 3 repealed byFinance Act 1990 (c. 29, SIF 58), s. 132, Sch. 19 Pt. II Note 3

Marginal Citations

M5 1971 c. 10.

M6 1972 c. 10 (N.I.).

7 Community buses. U.K.

(1) Section 38(1) of the M7 Vehicles (Excise) Act 1971 shallbe amended as follows.

(2) Before the definition of “conditional sale agreement” there shall beinserted—

““community bus” means a vehicle used on public roads solelyin accordance with a community bus permit (within the meaning of section 22 of the Transport Act 1985), and not used for providing aservice under an agreement providing for service subsidies (within the meaningof section 63(10)(b) of that Act);”.

(3) In the definition of “hackney carriage”, there shall be added at theend the words “but does not include a community bus”.

Marginal Citations

M7 1971 c. 10.

8 Special machines. U.K.

(1) The amendments of the Vehicles (Excise) Act 1971 and the M8 Vehicles (Excise) Act (Northern Ireland) 1972 set out in Schedule2 to this Act shall have effect for the purpose of, or in connection with,replacing certain existing classes of vehicles chargeable with duty underSchedule 3 to each of those Acts with a single class of vehicles, namely thatof special machines; and shall so have effect in relation to licences takenout after 14th March 1989.

(2) As from 15th March 1989, paragraph 2 of Schedule 1 to the M9 Hydrocarbon Oil Duties Act 1979 (vehicles which are not road vehicleswithin the meaning of that Act) shall have effect with the substitution of thefollowing sub-paragraph for sub-paragraph (b)—

“(b) a special machine within the meaning of Schedule 3 to that Act;”.

Marginal Citations

M8 1972 c. 10(N.I.).

M9 1979 c.5.

9 Recovery vehicles. U.K.

In paragraph 8(2)(d) of Part I of Schedule 3 to each of the Vehicles(Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 thewords “any load other than” shall be omitted.

10 Powers of Secretary of State with respect to assignment of registrationmarks. U.K.

(1) Section 19 of each of the Vehicles (Excise) Act 1971 and the Vehicles(Excise) Act (Northern Ireland) 1972 (registration and registration marks)shall be amended as follows.

(2) After subsection (1) there shall be inserted—

“(1A) The Secretary of State may, in such circumstances as he maydetermine—

(a) assign a registration mark to a vehicle to which another registration markhas been previously assigned;

(b) assign to a vehicle (whether on its first registration or not) aregistration mark previously assigned to another vehicle;

(c) (whether in connection with an assignment falling within either of thepreceding paragraphs or not) withdraw any registration mark for the time beingassigned to a vehicle;

(d) re-assign to a vehicle a registration mark previously assigned to it butsubsequently withdrawn.”

(3) In subsection (2), after the words “registration mark” there shallbe inserted the words “for the time being”.

(4) Nothing in this section shall be construed as affecting the operationof—

(a) either of the Acts referred to in subsection (1) above, or

(b) any regulations made under either of those Acts,

in relation to any time before the day on which this Act is passed.

11 Retention of registration mark pending transfer to another vehicle. U.K.

(1) The Secretary of State may by regulations provide for a person in whose name a vehicle is registered to be granted a right, exercisable on a single occasion falling within a specified period, to have the registration mark for the time being assigned to the vehicle assigned to some other vehicle, being a vehicle registered—

(a) in that person’s name, or

(b) in the name of some other person nominated by him in accordance with the regulations.

(2) Regulations under this section may, in particular, make provision—

(a) for the manner in which an application for the grant of such a right (referred to in the following provisions of this section as a “right of retention”) is to be made to the Secretary of State;

(b) for the payment of a specified fee on the making of such an application and for the whole or part of the fee to be retained whether or not the application is granted;

(c) for requiring the vehicle to which the registration mark in question is for the time being assigned to be made available for inspection at a place designated by or under the regulations;

(d) for authorising the Secretary of State to refuse such an application on such grounds as he thinks fit;

(e) with respect to the manner in which rights of retention are to be exercisable;

(f) for enabling the period referred to in subsection (1) above to be extended by the Secretary of State if he thinks fit in the circumstances of any particular case;

(g) for rights of retention to be non-transferable (but without prejudice to the vesting of any such right in a person by operation of law);

(h) with respect to the conditions which must be satisfied before a registration mark may be assigned to a vehicle in pursuance of a right of retention;

(i) for authorising the Secretary of State to revoke a right of retention—

(i) if it appears to him that there are special reasons for doing so, or

(ii) in any other specified circumstances;

(j) for the payment, in connection with the assignment of a registration mark in pursuance of a right of retention, of such charge as is for the time being prescribed by virtue of section 12(1) of the M10 Finance Act1976;

(k) with respect to such incidental, consequential or supplemental matters as appear to the Secretary of State to be necessary or expedient for the purposes of the regulations.

(3) Regulations under this section may make different provision for different cases or circumstances.

(4) The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution ofeither House of Parliament.

(5) The assignment by the Secretary of State of any registration mark to a vehicle in pursuance of a right of retention shall be without prejudice to the subsequent exercise by him, in relation to the mark, of any of his powers under subsection (1A) of the principal section (as amended by section 10 above).

(6) In this section—

• “the principal section” means—

(a) section 19 of the M11 Vehicles (Excise) Act 1971, or

(b) in relation to Northern Ireland, section 19 of the M12 Vehicles (Excise) Act (Northern Ireland) 1972;

• “right of retention” means such a right as is mentioned in subsection (1) above; and

• “specified” means specified in regulations under this section.

(7) Expressions used in this section or in section 12 below which are also used in the principal section have the same meaning as in that section.

Marginal Citations

M10 1976 c. 40.

M11 1971 c. 10.

M12 1972 c. 10(N.I.).

12 Sale by Secretary of State of rights to particular registration marks. U.K.

(1) This section shall apply to such registration marks that either—

(a) have never been assigned to a vehicle, or

(b) have been so assigned but (as a result of having been subsequently withdrawn) are not for the time being so assigned,

as the Secretary of State may from time to time determine.

(2) The Secretary of State may by regulations make a scheme providing for registration marks to which this section applies to be assigned to vehicles registered in the names of, or of the nominees of, persons who have acquired rights under the scheme to have the marks in question so assigned.

(3) Regulations under this section may, in particular, make provision—

(a) for a person to acquire a right under the scheme to have a particular registration mark to which this section applies assigned to a vehicle registered—

(i) in his name, or

(ii) in the name of some other person nominated by him in accordance with the scheme,

on payment of such sum as is payable in accordance with the scheme in respect of the acquisition of that right;

(b) with respect to—

(i) the manner in which agreements for the sale of such rights (referred to in the following provisions of this section as “relevant rights”) may be effected,

(ii) the terms which may be contained in, or incorporated into, such agreements, and

(iii) rights and liabilities arising in connection with such agreements otherwise than under any such terms;

(c) for enabling the Secretary of State to determine as he thinks fit—

(i) the prices at which particular relevant rights are to be sold or (as the case may be) the reserve prices applicable to the sale of any such rights, or

(ii) the manner in which any such prices are to be determined;

(d) with respect to the manner in which relevant rights are to be exercisable;

(e) for relevant rights to be exercisable only on a single occasion falling within a specified period (subject to any provision made by virtue of paragraph (f) below);

(f) for enabling any such period to be extended by the Secretary of State if he thinks fit in the circumstances of any particular case;

(g) for relevant rights to be non-transferable (but without prejudice to the vesting of any such right in a person by operation of law);

(h) with respect to the conditions which must be satisfied before a registration mark may be assigned to a vehicle in pursuance of a relevant right;

(i) for authorising the Secretary of State to revoke a relevant right—

(i) if it appears to him that there are special reasons for doing so, or

(ii) in any other specified circumstances;

(j) for the payment, in connection with the assignment of a registration mark in pursuance of a relevant right, of such charge as is for the time being prescribed by virtue of section 12(1) of the M13 Finance Act 1976;

(k) with respect to such incidental, consequential or supplemental matters as appear to the Secretary of State to be necessary or expedient for the purposes of a scheme under this section.

(4) Without prejudice to the generality of subsection (3)(b) above, regulations under this section may make provision for authorising the Secretary of State to make arrangements with other persons whereby such persons—

(a) are given authority (whether irrevocable or otherwise) to act on his behalf in offering for sale, and entering into agreements for the sale of, relevant rights in the case of such registration marks, and during such periods, as he may determine;

(b) are required to account to him for sums due to him under such agreements whether they have received any amounts due from the purchasers under the agreements or not; and

(c) may become entitled or subject to such rights or liabilities of the Secretary of State in connection with such agreements as may be specified.

(5) Regulations under this section may make different provision for different cases or circumstances, and may, in particular, exempt assignments of any specified class or description from any charge payable by virtue of subsection (3)(j) above.

(6) The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(7) Any sums received by the Secretary of State in respect of the sale of relevant rights shall be paid into the Consolidated Fund.

(8) Section 11(5) above shall apply for the purposes of this section as if the reference to a right of retention were a reference to a relevant right.

(9) In this section—

“relevant right” means such a right as is mentioned in subsection (3)(a) above; and

“specified” means specified in regulations under this section.

Marginal Citations

M13 1976 c. 40.

13 Registration documents. U.K.

In section 23 of the M14 Vehicles Excise Act 1971 as setout in paragraph 20 of Part I of Schedule 7 to that Act, in subsection (1)(d)and (e) (regulations about registration books), for the word “books”, ineach place where it occurs, there shall be substituted the word “documents”.

Marginal Citations

M14 1971 c. 10.

14 Dishonoured cheques. U.K.

(1) After section 26 of the Vehicles (Excise) Act 1971 there shall beinserted—

“26A Dishonoured cheques: additional liability in certain cases.

(1) Where a person has been convicted of an offence under section 102 of the Customs and Excise Management Act 1979 (payment forlicence by dishonoured cheque) in relation to a licence issued under this Act,the court shall, in addition to any penalty which it may impose under thatsection, order him to pay an amount equal to one twelfth of the appropriateannual rate of duty for each month or part of a month in the relevant period.

(2) The relevant period for the purposes of this section is the periodwhich—

(a) begins with the first day of the period for which the licence was appliedfor or, if it is later, the day on which the licence first was to have effect,and

(b) ends with whichever is the earliest of the following, namely—

(i) the end of the month in which the order is made;

(ii) the date on which the licence was due to expire;

(iii) the end of the month during which the licence was delivered up; and

(iv) the end of the month preceding that in which a new licence for thelicensed vehicle first had effect.

(3) The appropriate annual rate of duty for the purposes of this section isthe annual rate of duty which, at the beginning of the relevant period, wasappropriate to a vehicle of the description specified in the application.

(4) Where an order has previously been made against a person under section 9of this Act to pay an amount for a month or part of a month in the case of avehicle, the amount which he is ordered to pay under this section in the caseof the vehicle shall be calculated as if no part of that month were comprisedin the relevant period.”

(2) After section 26 of the M15 Vehicles (Excise) Act(Northern Ireland) 1972 there shall be inserted the section set out insubsection (1) above, but with the substitution for the reference to section102 of the M16 Customs and Excise Management Act 1979 of areference to section 10 of the M17 MiscellaneousTransferred Excise Duties Act (Northern Ireland) 1972.

(3) In section 9 of the M18 Vehicles (Excise) Act 1971(additional liability for keeping unlicensed vehicle) after subsection (3)there shall be inserted—

“(3A) Where an order has previously been made against a person under section 26Aof this Act to pay an amount for a month or part of a month in the case of avehicle, the amount which he is ordered to pay under this section in the caseof the vehicle shall be calculated as if no part of that month were comprisedin the relevant period.”

(4) In section 9 of the Vehicles (Excise) Act (Northern Ireland) 1972(corresponding provision in Northern Ireland) after subsection (4) there shallbe inserted—

“(4A) Where an order has previously been made against a person under section 26Ato pay an amount for a month or part of a month in the case of a vehicle, theamount which he is ordered to pay under this section in the case of thevehicle shall be calculated as if no part of that month were comprised in therelevant period.”

(5) In section 34 of the Vehicles (Excise) Act 1971 (establishing amount ofpenalty on plea of guilty by absent accused)—

(a) after the words “section 8 of this Act” there shall be inserted thewords “, or under section 102 of the M19 Customs and ExciseManagement Act 1979 in relation to a licence issued under this Act,”, and

(b) after the words “section 9(1)” in each place where they occur thereshall be inserted the words “or, as the case may be, 26A(1)”.

(6) In section 32A of the M20 Vehicles (Excise) Act(Northern Ireland) 1972 (corresponding provision in Northern Ireland)—

(a) after the words “section 8” there shall be inserted the words “orunder section 10 of the Miscellaneous Transferred Excise Duties Act (NorthernIreland) 1972 in relation to a licence issued under this Act”, and

(b) after the words “section 9(1)” in each place where they occur thereshall be inserted the words “or, as the case may be, section 26A(1)”.

(7) This section shall apply in relation to licences taken out on or after theday on which this Act is passed.

Marginal Citations

M15 1972 c. 10 (N.I.).

M16 1979 c. 2.

M17 1972 c. 11 (N.I.).

M18 1971 c. 10.

M19 1979 c. 2.

M20 1972 c. 10. (N.I.).

General U.K.

15 Estimation of excise duty. U.K.

(1) Section 116A of the Customs and Excise Management Act 1979 (power toestimate excise duties) shall be amended as mentioned in subsections (2) and(3) below.

(2) In subsection (1)—

(a) after the words “excise duty” there shall be inserted “to whichthis section applies”, and

(b) for “the occupier of an excise warehouse or a distiller” there besubstituted “a revenue trader”.

(3) The following subsection shall be inserted after subsection (2)—

“(3) This section applies to any excise duty other than one in relation towhich provision for estimation is made by the Betting andGaming Duties Act 1981 (that is to say, general betting, gaming licence andbingo duties).”

16 Time limits for proceedings. U.K.

(1) After section 146 of the Customs and Excise Management Act 1979 there shall be inserted—

“146A Time limit for proceedings.

(1) Except as otherwise provided in the customs and excise Acts, and notwithstanding anything in any other enactment, the following provisions shall apply in relation to proceedings for an offence under those Acts.

(2) Proceedings for an indictable offence shall not be commenced after the end of the period of 20 years beginning with the day on which the offence was committed.

(3) Proceedings for a summary offence shall not be commenced after the end of the period of 3 years beginning with that day but, subject to that, may be commenced at any time within 6 months from the date on which sufficient evidence to warrant the proceedings came to the knowledge of the prosecuting authority.

(4) For the purposes of subsection (3) above, a certificate of the prosecuting authority as to the date on which such evidence as is there mentioned came to that authority’s knowledge shall be conclusive evidence of that fact.

(5) In the application of this section to Scotland—

(a) in subsection (3), “proceedings for an indictable offence” means proceedings on indictment;

(b) in subsection (3), “proceedings for a summary offence” means summary proceedings.

(6) In the application of this section to Northern Ireland—

(a) “indictable offence” means an offence which, if committed by an adult, is punishable on conviction on indictment (whether only on conviction on indictment, or either on conviction on indictment or on summary conviction);

(b) “summary offence” means an offence which, if committed by an adult, is punishable only on summary conviction.

(7) In this section, “prosecuting authority” means the Commissioners and includes, in Scotland, the procurator fiscal.”

(2) Section 147(1) of that Act shall cease to have effect.

(3) In section 28(5) of the M21 Vehicles (Excise) Act 1971,for the words “section 147(1)” there shall be substituted the words “section 146A”.

(4) This section shall have effect in relation to offences committed on or after the day on which this Act is passed.

Marginal Citations

M21 1971 c. 10.

17 Disbursements in Port of London. U.K.

In section 17 of the M22 Customs and Excise Management Act1979 (general rule that customs and excise receipts, after deduction of disbursements, are to be paid into the Commissioners’ General Account at the Bank of England) paragraph (a) of subsection (5) (special rule that disbursements in Port of London are to be paid out of that Account) shall cease to have effect.

Marginal Citations

M22 1979 c. 2.

CHAPTER II U.K. Value Added Tax

Zero-rating etc. U.K.

18 Buildings and land. U.K.

Schedule 3 to this Act (which makes provision about value added tax onsupplies relating to buildings and land) shall have effect.

19 Sewerage services and water. U.K.

(1) Group 2 (sewerage services and water) of Schedule 5 (zero-rating) to the M23 Value Added Tax Act 1983 shall be amended as follows.

(2) In item 1, there shall be substituted for paragraph (b)—

“(b) emptying of any cesspools, septic tanks or similar receptacles which areused otherwise than in connection with the carrying on in the course of abusiness of a relevant industrial activity.”

(3) In item 2, there shall be inserted at the beginning the words “Thesupply, for use otherwise than in connection with the carrying on in thecourse of a business of a relevant industrial activity, of”.

(4) The following shall be inserted at the end—

“Note: “Relevant industrial activity” means any activity describedin any of Divisions 1 to 5 of the 1980 edition of the publication prepared bythe Central Statistical Office and known as the Standard IndustrialClassification.”

(5) This section shall have effect in relation to supplies made on or after1st July 1990.

Marginal Citations

M23 1983 c. 55.

20 News services. U.K.

(1) In Schedule 5 to the Value Added Tax Act 1983 Group 6 (news services)shall be omitted.

(2) This section shall have effect in relation to supplies made on or after1st April 1989.

21 Fuel and power. U.K.

(1) For Group 7 (fuel and power) of Schedule 5 to the Value Added Tax Act 1983there shall be substituted—

“Group 7–Fuel and Power for Domestic or Charity Use

Item No.

1 Supplies for qualifying use of—

(a) coal, coke or other solid substances held out for sale solely as fuel;

(b) coal gas, water gas, producer gases or similar gases;

(c) petroleum gases, or other gaseous hydrocarbons, whether in a gaseous orliquid state;

(d) fuel oil, gas oil or kerosene; or

(e) electricity, heat or air-conditioning.

Notes:

(1) “Qualifying use” means—

(a) domestic use; or

(b) use by a charity otherwise than in the course or furtherance of abusiness.

(2) The following supplies are always for domestic use—

(a) a supply of not more than one tonne of coal or coke held out for sale asdomestic fuel;

(b) a supply of wood, peat or charcoal not intended for sale by the recipient;

(c) a supply to a person at any premises of piped gas (that is, gas withinparagraph (b) of item 1, or petroleum gas in a gaseous state, provided throughpipes) where the gas (together with any other piped gas provided to him at thepremises by the same supplier) was not provided at a rate exceeding 150 thermsa month;

(d) a supply of petroleum gas in a liquid state where the gas is supplied incylinders the net weight of each of which is less than 50 kilogrammes andeither the number of cylinders supplied is 20 or fewer or the gas is notintended for sale by the recipient;

(e) a supply of petroleum gas in a liquid state, otherwise than in cylinders,to a person at any premises at which he is not able to store more than twotonnes of such gas;

(f) a supply of not more than 2,300 litres of fuel oil, gas oil or kerosene;

(g) a supply of electricity to a person at any premises where the electricity(together with any other electricity provided to him at the premises by thesame supplier) was not provided at a rate exceeding 1000 kilowatt hours amonth.

(3) Supplies not within Note (2) are for domestic use if and only if the goodssupplied are for use in—

(a) a building, or part of a building, which consists of a dwelling or numberof dwellings;

(b) a building, or part of a building, used for a relevant residentialpurpose;

(c) self-catering holiday accommodation;

(d) a caravan; or

(e) a houseboat.

(4) Use for a relevant residential purpose means use as—

(a) a home or other institution providing residential accommodation forchildren;

(b) a home or other institution providing residential accommodation withpersonal care for persons in need of personal care by reason of old age,disablement, past or present dependence on alcohol or drugs or past or presentmental disorder;

(c) a hospice;

(d) residential accommodation for students or school pupils;

(e) residential accommodation for members of any of the armed forces;

(f) a monastery, nunnery or similar establishment; or

(g) an institution which is the sole or main residence of at least 90 percent. of its residents,

except use as a hospital, a prison or similar institution or an hotel orinn or similar establishment.

(5) Self-catering holiday accommodation includes any accommodation advertisedor held out as such.

(6) “Houseboat” means a boat or other floating decked structuredesigned or adapted for use solely as a place of permanent habitation and nothaving means of, or capable of being readily adapted for, self-propulsion.

(7) Where there is a supply of goods partly for qualifying use and partlynot—

(a) if at least 60 per cent. of the goods are supplied for qualifying use, thewhole supply shall be treated as a supply for qualifying use; and

(b) in any other case, an apportionment shall be made to determine the extentto which the supply is a supply for qualifying use.

(8) Paragraph (a) of item 1 shall be deemed to include combustible materialsput up for sale for kindling fires but shall not include matches upon whicha duty of customs or excise has been or is to be charged.

(9) Paragraphs (b) and (c) of item 1 do not include any road fuel gas (withinthe meaning of the Hydrocarbon Oil Duties Act 1979) onwhich a duty of excise has been charged or is chargeable.

(10) Paragraph (d) of item 1 does not include hydrocarbon oil on which a dutyof excise has been or is to be charged without relief from, or rebate of, suchduty by virtue of the provisions of the Hydrocarbon Oil Duties Act 1979.

(11) “Fuel oil” means heavy oil which contains in solution anamount of asphaltenes of not less than 0.5 per cent. or which contains lessthan 0.5 per cent. but not less than 0.1 per cent. of asphaltenes and has aclosed flash point not exceeding 150°C.

(12) “Gas oil” means heavy oil of which not more than 50 per cent.by volume distils at a temperature not exceeding 240°C and of which morethan 50 per cent. by volume distils at a temperature not exceeding 340°C.

(13) “Kerosene” means heavy oil of which more than 50 per cent.by volume distils at a temperature not exceeding 240°C.

(14) “Heavy oil” shall have the same meaning as in the HydrocarbonOil Duties Act 1979.”

(2) This section shall have effect in relation to supplies made on or afterlst July 1990.

22 Protective boots and helmets. U.K.

(1) In item 2 of Group 17 (protective boots and helmets) of Schedule 5 to the M24 Value Added Tax Act 1983 there shall be inserted at thebeginning the words “The supply to a person for use otherwise than byemployees of his of”.

(2) In Note (5) to that Group (supply of certain goods to include supply ofcertain services in respect of such goods) there shall be inserted at the endthe words “, but, in the case of goods comprised in item 2, only if thegoods are for use otherwise than by employees of the person to whom theservices are supplied.”

(3) This section shall have effect in relation to supplies made on or after1st April 1989.

Marginal Citations

M24 1983 c. 55.

23 Incorrect certificates. U.K.

(1) The following section shall be inserted in the M25 Finance Act 1985 after section 13—

“13A Incorrect certificates as to zero-rating etc.

(1) Subject to subsections (3) and (4) below, where—

(a) a person to whom one or more supplies are, or are to be, made gives to thesupplier—

(i) a certificate that the supply or supplies fall, or will fall, wholly orpartly within Group 7, 8 or 8A of Schedule 5, or Group 1 of Schedule 6, to theprincipal Act; or

(ii) a certificate such as is mentioned in paragraph 13(4)(f) of Schedule 3 tothe Finance Act 1989 relating to the supply or supplies; and

(b) the certificate is incorrect,

the person giving the certificate shall be liable to a penalty.

(2) The amount of the penalty shall be equal to the difference between theamount of the tax which would have been chargeable on the supply or suppliesif the certificate had been correct and the amount of tax actually sochargeable.

(3) The giving of a certificate shall not give rise to a penalty under thissection if the person who gave it satisfies the Commissioners or, on appeal,a value added tax tribunal that there is a reasonable excuse for his havinggiven it.

(4) Where by reason of giving a certificate a person is convicted of anoffence (whether under the principal Act or otherwise), the giving of thecertificate shall not also give rise to a penalty under this section.”

(2) This section shall have effect in relation to certificates given on orafter the day on which this Act is passed.

Marginal Citations

M25 1985 c. 54.

Other provisions U.K.

24 Recovery of overpaid VAT. U.K.

(1) Where a person has paid an amount to the Commissioners by way of valueadded tax which was not tax due to them, they shall be liable to repay theamount to him.

(2) The Commissioners shall only be liable to repay an amount under thissection on a claim being made for the purpose.

(3) It shall be a defence, in relation to a claim under this section, thatrepayment of an amount would unjustly enrich the claimant.

(4) No amount may be claimed under this section after the expiry of 6 yearsfrom the date on which it was paid, except where subsection (5) below applies.

(5) Where an amount has been paid to the Commissioners by reason of a mistake,a claim for the repayment of the amount under this section may be made at anytime before the expiry of 6 years from the date on which the claimantdiscovered the mistake or could with reasonable diligence have discovered it.

(6) A claim under this section shall be made in such form and manner and shallbe supported by such documentary evidence as the Commissioners prescribe byregulations; and regulations under this subsection may make differentprovision for different cases.

(7) Except as provided by this section, the Commissioners shall not be liableto repay an amount paid to them by way of value added tax by virtue of thefact that it was not tax due to them.

(8) The preceding provisions of this section apply to an amount paid before,as well as to an amount paid after, the day on which this section comes intoforce, except where the Commissioners have received a claim for repayment ofthe amount before that day.

(9) The following paragraph shall be inserted at the end of section 40(1) ofthe M26 Value Added Tax Act 1983 (appeals)—

“(s) a claim for the repayment of an amount under section 24 of the Finance Act1989 (recovery of overpaid tax).”

(10) This section shall come into force on such day as the Treasury may byorder made by statutory instrument appoint.

(11) Section 45 of the Value Added Tax Act 1983 (orders) shall not apply tosubsection (10) above.

Modifications etc. (not altering text)

C1 Power of appointment conferred by s. 24(10) fully exercised(1.1.1990): S.I. 1989/2271, art. 2

Marginal Citations

M26 1983 c. 55.

25 Administration etc. U.K.

(1) Schedule 7 to the Value Added Tax Act 1983 (administration, collection andenforcement) shall be amended as follows.

(2) In paragraph 2 (accounting for and payment of tax) for paragraphs (b) and(c) of sub-paragraph (4) there shall be substituted—

“(b) with respect to the making of entries in accounts for the purpose ofmaking adjustments, whether for the correction of errors or otherwise; and

(c) for the making of financial adjustments in connection with the making ofentries in accounts for the purpose mentioned in paragraph (b) above.”

(3) In paragraph 7(1) (power to require the keeping of records) after the word “may” there shall be inserted the words “by regulations”.

(4) After paragraph 7(1) there shall be inserted—

“(1A) Regulations under sub-paragraph (1) above may make different provision fordifferent cases and may be framed by reference to such records as may bespecified in any notice published by the Commissioners in pursuance of theregulations and not withdrawn by a further notice.”

(5) This section shall come into force on such day as the Treasury may byorder made by statutory instrument appoint.

(6) Section 45 of the Value Added Tax Act 1983 (orders) shall not apply tosubsection (5) above.

Modifications etc. (not altering text)

C2 Power of appointment conferred by s. 25(5) fully exercised(4.12.1989): S.I. 1989/2271, art. 3

26 Input tax on self-supplies. U.K.

At the end of subsection (3) of section 15 of the M27 Value Added Tax Act 1983 (input tax allowable under section 14) thereshall be added—

“(d) preventing input tax on a supply which, under or by virtue of anyprovision of this Act, a person makes to himself from being allowable asattributable to that supply.”

Marginal Citations

M27 1983 c.55.

Chapter III U.K. Miscellaneous

27 Relief from car tax where vehicle leased to the handicapped. U.K.

(1) After section 5 of the M28 Car Tax Act 1983 there shall be inserted the following section—

“5A Relief where vehicle leased to the handicapped.

(1) This section applies where on the date when, apart from subsection (2)(a)below, tax on a chargeable vehicle would become due from a person registered under this Act, there is held by him or on his behalf a certificate of a person to whom the vehicle is sold (“the lessor”) that the lessor intends to supply the vehicle to another in such circumstances that the supply will be a zero-rated supply by virtue of item 12 of Group 14 (letting on hire of motor vehicles to the handicapped) of Schedule 5 to the Value Added Tax Act 1983.

(2) Tax on the vehicle—

(a) shall not be payable by the registered person, but

(b) if, within the period of three years beginning with that date, the lessor supplies the vehicle in any circumstances other than those mentioned in subsection (1) above, shall be payable by the lessor and shall become due and payable at the time of the supply.

(3) In this section—

• “certificate” means a certificate in a form for the time being approved by the Commissioners, and

• “supply” has the same meaning as in the Value Added Tax Act1983.”

(2) In section 5 of the Car Tax Act 1983 (liability and payment), in subsection (1), at the end of paragraph (a), there shall be inserted the words “subject to section 5A below”.

(3) The powers conferred by Schedule 1 to that Act to require accounts and records to be preserved and produced shall be exercisable also in relation to any certificate which has been held by or on behalf of a registered person for the purposes of section 5A of that Act.

(4) In paragraph 13 of that Schedule (restriction on registration of chargeable vehicles), after sub-paragraph (c) there shall be inserted “or

(d) that, by virtue of section 5A of this Act, tax on it has not become due and payable.”

Marginal Citations

M28 1983 c. 53.

28 Reliefs from duties and taxes for persons enjoying certain immunities and privileges. U.K.

(1) After section 13 of the M29 Customs and Excise Duties(General Reliefs) Act 1979 there shall be inserted the following sections—

“13A Reliefs from duties and taxes for persons enjoying certain immunities and privileges.

(1) The Commissioners may by order make provision for conferring in respect of any persons to whom this section applies reliefs, by way of remission or repayment, from payment by them or others of duties of customs or excise, value added tax or car tax.

(2) An order under this section may make any relief for which it provides subject to such conditions binding the person in respect of whom the relief is conferred and, if different, the person liable apart from the relief for payment of the tax or duty (including conditions which are to be compiled with after the time when, apart from the relief, the duty or tax would become payable) as may be imposed by or under the order.

(3) An order under this section may include any of the provisions mentioned in subsection (4) below for cases where—

(a) relief from payment of any duty of customs or excise, value added tax or car tax chargeable on any goods, or on the supply of any goods or services or the importation of any goods has been conferred (whether by virtue of an order under this section or otherwise) in respect of any person to whom this section applies, and

(b) in the case of goods, provision for forfeiture of the goods.

(4) The provisions referred to in subsection (3) above are—

(a) provision for payment to the Commissioners of the tax or duty by—

(i) the person liable, apart from the relief, for its payment, or

(ii) any person bound by the condition, or

(iii) any person who is or has been in possession of the goods or has received the benefit of the services,

or for two or more of those persons to be jointly and severally liable for such payment, and

(5) An order under this section—

(a) may contain such incidental and supplementary provisions as the Commissioners think necessary or expedient, and

(b) may make different provision for different cases.

(6) In this section and section 13C of this Act—

“duty of customs” includes any agricultural levy within the meaning of section 6 of the European Communities Act 1972 chargeable on goods imported into the United Kingdom, and

“duty of excise” means any duty of excise chargeable on goods and includes any addition to excise duty by virtue of section 1 of the Excise Duties (Surcharges or Rebates) Act 1979.

(7) For the purposes of this section and section 13C of this Act, where in respect of any person to whom this section applies relief is conferred (whether by virtue of an order under this section or otherwise) in relation to the use of goods by any persons or for any purposes, the relief is to be treated as conferred subject to a condition binding on him that the goods will be used only by those persons or for those purposes.

(8) Nothing in any order under this section shall be construed as authorising a person to import any thing in contravention of any prohibition or restriction for the time being in force with respect to it under or by virtue of any enactment.

13B Persons to whom section 13A applies.

(1) The persons to whom section 13A of this act applies are—

(a) any person who, for the purposes of any provision of the Visiting Forces Act 1952 or the International Headquarters and Defence Organisations Act 1964 is—

(i) a member of a visiting force or of a civilian component of such a force or a dependant of such a member, or

(ii) a headquarters, a member of a headquarters or a dependant of such a member,

(b) any person enjoying any privileges or immunities under or by virtue of—

(i) the Diplomatic Privileges Act 1964,

(ii) the Commonwealth Secretariat Act 1966,

(iii) the Consular Relations Act 1968,

(iv) the International Organisations Act 1968, or

(v) the Overseas Development and Co-operation Act 1980,

(c) any person enjoying, under or by virtue of section 2 of the European Communities Act 1972, any privileges or immunities similiar to those enjoyedunder or by virtue of the enactments referred to in paragraph (b) above.

(2) The Secretary of State may by order amend subsection (1) above to include any persons enjoying any privileges or immunities similiar to those enjoyed under or by virtue of the enactments referred to in paragraph (b) of that subsection.

(3) No order shall be made under this section unless a draft of the order has been laid before and approved by resolution of each House of Parliament.

13C Offence where relieved goods used, etc., in breach of condition.

(1) Subsection (2) below applies where—

(a) any relief from payment of any duty of customs or excise, value added tax or car tax chargeable on, or on the supply or importation of, any goods has been conferred (whether by virtue of an order under section 13A of this Actor otherwise) in respect of any person to whom that section applies subject to any condition as to the persons by whom or the purposes for which the goods may be used, and

(b) if the tax or duty has subsequently become payable, it has not been paid.

(2) If any person—

(a) acquires the goods for his own use, where he is not permitted by the condition to use them, or for use for a purpose that is not permitted by the condition or uses them for such a purpose, or

(b) acquires the goods for use, or causes or permits them to be used, by a person not permitted by the condition to use them or by a person for a purpose that is not permitted by the condition or disposes of them to a person not permitted by the condition to use them,

with intent to evade payment of any tax or duty that has become payable or that, by reason of the disposal, acquisition or use, becomes or will become payable, he is guilty of an offence.

(3) For the purposes of this section—

(a) in the case of a condition as to the persons by whom goods may be used, a person is not permitted by the condition to use them unless he is a person referred to in the condition as permitted to use them, and

(b) in relation to a condition as to the purposes for which goods may be used, a purpose is not permitted by the condition unless it is a purpose referred to in the condition as a permitted purpose,

and in this section “dispose” includes “lend” and “let on hire”, and “acquire” shall be interpreted accordingly.

(4) A person guilty of an offence under this section may be detained and shall be liable—

(a) on summary conviction, to a penalty of the statutory maximum or of three times the value of the goods (whichever is the greater), or to imprisonment for a term not exceeding six months, or to both, or

(b) on conviction on indictment, to a penalty of any amount, or to imprisonment for a term not exceeding seven years, or to both.”

(2) Section 13C of the M30 Customs and Excise Duties (General Reliefs) Act 1979 inserted by subsection (1) above shall have effect where relief is conferred on or after the day on which this Act is passed.

(3) In section 17 of the Customs and Excise Duties (General Reliefs) Act 1979,in subsection (3), for “or 13” there shall be substituted “13 or13A” and, in subsection (4), for “or 13(1)” there shall be substituted “13(1) or 13A”.

Marginal Citations

M29 1979 c. 3.

M30 1979 c. 3.

29 Recovery of overpaid excise duty and car tax. U.K.

(1) This section applies to proceedings for restitution of an amount paid to the Commissioners of Customs and Excise by way of excise duty or car tax.

(2) Proceedings to which this section applies shall not be dismissed by reason only of the fact that the amount was paid by reason of a mistake of law.

(3) In any proceedings to which this section applies it shall be a defence that repayment of an amount would unjustly enrich the claimant.

(4) This section shall have effect in relation to proceedings commenced on orafter the day on which this Act is passed.