The Value Added Tax (Amendment) (No.3) Regulations 1997

12.  Regulation 115 shall be amended as follows—

(a) in paragraph (3) between the words “and the owner shall” and “calculate for each” there shall be inserted “, except where paragraph (3A) below applies,”;

(b) after paragraph (3) there shall be inserted—

“(3A) This paragraph applies if the total amount of input tax deducted or deductible by the owner of a capital item as a result of the initial deduction, any adjustments made under paragraph (1) or (2) above and the adjustment which would apart from this paragraph fall to be made under paragraph (3) above would exceed the output tax chargeable by him on the supply of that capital item.

(3B) Save as the Commissioners may otherwise allow, where paragraph (3A) above applies the owner may deduct, or as the case may require, shall pay to the Commissioners such amount as results in the total amount of input tax deducted or deductible being equal to the output tax chargeable by him on the supply of the capital item.”;

(c) in pargraph (5)—

(i) in sub-paragraph (a) before the words “(if any)” there shall be inserted “(including charges reserved as rent) which is neither payable nor paid more than 12 months in advance nor invoiced for a period in excess of 12 months”; and

(ii) in sub-paragraph (c) for the words “(e) and (f)” in both places that they appear there shall be substituted “(e), (f), (g) or (h)”; and

(d) in paragraph (6)—

(i) after the words “to an end under” there shall be inserted “regulation 114(5A)”;

(ii) in sub-paragraph (a) the words “regulation 114(6)(b)” shall be omitted; and

(iii) in sub-paragraph (b) the words “regulation 114(7)” shall be omitted.