The Value Added Tax (Amendment) (No. 2) Regulations 2000

Explanatory Note

(This note is not part of the Regulations)

1.  These Regulations amend, from 1 April 2000, the Value Added Tax Regulations S.I. 1995 No. 2518.

2.  The VAT charged on importations of goods from outside the member States is payable as if it were a duty of customs. Therefore relevant customs legislation applies to import VAT unless it is excepted or adapted by regulations (or there is a contrary intention).(1)

3.  From 1 April 2000 national customs legislation(2) will–

(a) enable Customs to recover interest on an unpaid customs debt, and

(b) require Customs to pay interest if they must repay a person an amount relating to customs duty.

These provisions will not apply to import VAT. Regulations 3, 4 and 5 add them (and their associated Community measures(3)) to the existing lists of customs legislation(4) which is excepted from applying to import VAT.

• Regulation 4 also provides continuity for an existing import VAT exception(5) that is currently found in regulation 119 (removal from warehouse).

4.  At the same time, new customs rules(6) will permit Customs to recover a repayment of customs duty issued to a person who was not entitled to it. Recovery will not be allowed more than 3 years after the amount was issued (unless Customs give written notice before then). Regulation 6 confirms that these rules will apply to relevant import VAT(7).

Regulation 6 also provides continuity for an existing import VAT adaptation(8) that is currently found in regulation 121 (valuation).

(1)

Sections 1(4) and 16(1) of the Value Added Tax Act 1994 (c. 23).

(2)

Sections 126, 127 and 130(3) of the Finance Act 1999 (c. 16). Section 130(3) inserts a new paragraph (f) to section 197(2) of the Finance Act 1996 (c. 8) (amended by the Finance Act 1997 (c. 16)). Also S.I. 2000/632.

(3)

Parts of Articles 232 and 241 of Council Regulation (EEC) No. 92/2913 (the Community Customs Code) (O.J. L. 302, 19.10.92, p.1).

(4)

S.I. 1995/2518 regulations 118, 119 and 120.

(5)

Regulation 119 of S.I. 1995/2518 excepts regulations 16(4) and (5) and 19(1)(b) of the Excise Warehousing (Etc) Regulations S.I. 1988/809. Regulation 4 incorporates this into a new regulation 119(a).

(6)

Section 129 of the Finance Act 1999 (c. 16).

(7)

It does this by substituting a new regulation 121 in S.I. 1995/2518. Paragraph (3) provides that section 129 of the Finance Act 1999 shall be regarded as applying to any relevant import VAT.

(8)

Regulation 121 of S.I. 1995/2518 adapts section 125(3) of the Customs and Excise Management Act 1979 (c. 2). Regulation 6 incorporates this into a new regulation 121(2).