The Value Added Tax (Amendment) Regulations 2017

Amendment of the Value Added Tax Regulations 1995

3.  In regulation 55A, after paragraph (3) insert—

“(4) For the purposes of this Part, “limited-cost trader” is a flat-rate trader whose expenditure on relevant goods in any prescribed accounting period, together with any VAT chargeable on that expenditure, is less than the specified amount, and—

(a) “relevant goods” are goods used or to be used by a flat-rate trader exclusively for the purposes of the trader’s business but excluding the following—

(i) vehicles, vehicle parts and fuel except where the category of business applicable to the flat-rate trader in the Table is, in that prescribed accounting period, “Transport or storage, including couriers, freight, removals and taxis” and the flat-rate trader owns or leases a vehicle for that business;

(ii) food or beverages for consumption by the flat-rate trader or employees of the flat-rate trader;

(iii) capital expenditure goods;

(iv) goods for the purpose of resale, leasing, letting or hiring out except where the main business activity of the flat-rate trader ordinarily consists of selling, leasing, letting or hiring out such goods;

(v) goods for disposal as promotional items, gifts or donations;

(b) “specified amount” is the higher of—

(i) 2 per cent of the trader’s relevant turnover in the prescribed accounting period; and

(ii) where the prescribed accounting period is one year, £1000, and, in any other case, such proportion of £1000 as the length of the accounting period bears to the period of one year.”.