The Value Added Tax (Amendment) (No. 4) Regulations 1999

Explanatory Note

(This note is not part of the Regulations)

These Regulations, which come into force on 1st January 2000, further amend the Value Added Tax Regulations 1995 (S.I. 1995/2518) (“the principal Regulations”).

These Regulations implement record keeping and accounting requirements for traders making supplies involving investment gold, simplified record keeping arrangements for supplies involving investment gold traded on regulated bullion markets and the input tax deduction provisions of Council Directive 98/80/EC of 12th October 1998—Special scheme for investment gold—amending Directive 77/388/EEC.

Article 3 defines “investment gold” for the purposes of Part V of the principal Regulations, as having the same meaning as in Group 15 of Schedule 9 to the Value Added Tax Act 1994.

Article 4 inserts new regulations 31A, 31B and 31C. New regulation 31A sets out the special record keeping, accounting and notification requirements for traders in investment gold. It also allows for certain further detailed requirements to be specified in a notice. New regulation 31B provides for the records to be retained by purchasers of investment gold. New regulation 31C applies paragraph 10(2) of Schedule 11 to the Value Added Tax Act 1994 (entry and inspection of premises) to exempt supplies involving investment gold in the same way as that provision applies to taxable supplies.

Article 5 inserts new regulations 33A and 33B. New regulation 33A dispenses with the record keeping requirements of VAT for supplies between members of the London Bullion Market Association involving investment gold. New regulation 33B prevents taxable persons who are not required to notify their liability to be registered under the article 6 of the Value Added Tax (Terminal Markets) Order 1973 (S.I. 1973/173) from having to keep records or submit returns and EC sales lists. Therefore, although they are taxable persons for the purposes of section 55 of the Act (customers to account for tax on supplies of gold) they will be treated in other respects as not liable to be registered.

Article 6 makes consequential amendments to regulation 99(1) (interpretation of exempt input tax for the purposes of Part XIV of the principal Regulations).

Article 7 makes consequential amendments to regulation 103 as a result of an additional article being added during the consolidation of the Specified Supplies Order (S.I. 1999/ ).

Article 8 inserts a new regulation 103A which defines the extent to which input tax can be deducted when incurred in the course of making supplies involving investment gold.

Article 9 makes consequential amendments to regulation 110, to ensure that for the purposes of adjustment under regulations 108 and 109 and Part XV of the principal Regulations (The Capital Goods Scheme), the definitions of “exempt supplies” and “taxable supplies” include supplies of a description falling within regulation 103A. This article also ensures that the limited right to deduct available under regulation 103A is taken into consideration when making these adjustments.

Article 10 makes consequential amendments to regulation 112, to make it clear in Part XV of the principal Regulations (The Capital Goods Scheme) that any adjustment under that Part must take account of the additional meanings given to “exempt supplies” and “taxable supplies” in regulation 110.