Finance Act 1981

14 Valuation: special cases

(1) In Schedule 3 to the Finance Act 1972, for paragraphs 1 to 3 there shall be substituted—

“1 (1) Where—

(a) the value of a supply made by a taxable person for a consideration in money is (apart from this paragraph) less than its open market value, and

(b) the person making the supply and the person to whom it is made are connected, and

(c) the person to whom the supply is made is not entitled under sections 3 and 4 of this Act to credit for all the tax on the supply,

the Commissioners may direct that the value of the supply shall be taken to be its open market value.

(2) A direction under this paragraph shall be given by notice in writing to the person making the supply, but no direction may be given more than three years after the time of the supply.

(3) A direction given to a person under this paragraph in respect of a supply made by him may include a direction that the value of any supply—

(a) which is made by him after the giving of the notice, or after such later date as may be specified in the notice, and

(b) as to which the conditions in paragraphs (a) to (c) of sub-paragraph (1) above are satisfied,

shall be taken to be its open market value.

(4) For the purposes of this paragraph any question whether a person is connected with another shall be determined in accordance with section 533 of the Income and Corporation Taxes Act 1970.

(5) This paragraph does not apply to a supply to which paragraph 9 A below applies.

2 (1) Where—

(a) goods are imported at a price in money which (together with all such taxes, duties, charges and costs as are specified in subsection (2)(a) and (b) of section 11 of this Act and not included in the price) is less than their value as determined in accordance with subsection (3) of that section, and

(b) the person importing the goods and the person entitled to the price are connected, and

(c) the person importing the goods is not entitled under sections 3 and 4 of this Act to credit for all the tax paid or payable by him on the importation,

the Commissioners may direct that the value of the goods shall be taken to be their value as determined in accordance with the said subsection (3).

(2) A direction under this paragraph shall be given by notice in writing to the person importing the goods, but no direction may be given more than three years after the time of importation.

(3) A direction given to a person under this paragraph in respect of goods imported by him may include a direction that the value of any goods—

(a) which are imported by him after the giving of the notice, or after such later date as may be specified in the notice, and

(b) as to which the conditions in paragraphs (a) to (c) of sub-paragraph (1) above are satisfied,

shall be taken to be their value as determined in accordance with section 11(3) of this Act.

(4) For the purposes of this paragraph any question whether a person is connected with another shall be determined in accordance with section 533 of the Income and Corporation Taxes Act 1970.

3 Where—

(a) the whole or part of a business carried on by a taxable person consists in supplying to a number of persons goods to be sold, whether by them or others, by retail, and

(b) those persons are not taxable persons,

the Commissioners may by notice in writing to the taxable person direct that the value of any such supply by him after the giving of the notice or after such later date as may be specified therein shall be taken to be its open market value on a sale by retail.”.

(2) In paragraphs 7 and 8 of that Schedule, at the end, there shall be added the words " except where paragraph 9A below applies ".

(3) After paragraph 9 of that Schedule there shall be inserted—

“9A(1) This paragraph applies to a supply of goods or services, whether or not for a consideration, which is made by an employer and consists of—

(a) the provision in the course of catering of food or beverages to his employees, or

(b) the provision of accommodation for his employees in a hotel, inn, boarding house or similar establishment.

(2) The value of a supply to which this paragraph applies shall be taken to be nil unless the supply is for a consideration consisting wholly or partly of money, and in that case its value shall be determined without regard to any consideration other than money.”