The Value Added Tax (Amendment) Regulations 2015

Amendment of the Value Added Tax Regulations 1995

6.  In regulation 103 (input tax and partial exemption: attribution of input tax to foreign and specified supplies)—

(a) renumber that regulation as regulation 103(1),

(b) after “directed by the Commissioners under regulation 102,” insert “subject to paragraph (1A)”,

(c) after paragraph (1) insert—

“(1A) In calculating the proportion of any input tax incurred on goods or services used or to be used by a taxable person in making both taxable and exempt supplies which is to be attributed or treated as attributed to taxable supplies, the calculation—

(a) may be based on sectors provided that the calculation reflects the use made of the goods and services in the business and each sector reflects—

(i) the use made of the goods and services in that sector,

(ii) the structure of the business, and

(ii) the type of activity undertaken by that sector; and

(b) must exclude the value of supplies made from an establishment situated outside the United Kingdom where the calculation is not based on sectors.”.