Finance Act 1987

12 Credit for input tax. U.K.

(1) In section 15 of the principal Act, for subsections (1) to (3) there shall be substituted—

“(1) The amount of input tax for which a taxable person is entitled to credit at the end of any period shall be so much of the input tax for the period (that is input tax on supplies and importatinos in the period) as is allowable by or under regulations as being attributable to supplies within subsection (2) below.

(2) The supplies within this subsection are the following supplies made or to be made by the taxable person in the course or futherance of his business—

(a) taxable supplies;

(b) supplies outside the United Kingdom which would be taxable supplies if made in the United Kingdom;

(c) supplies which section 35 below provides are to be disregarded for the purposes of this Act and which would otherwise be taxable supplies.

(3) The Commissioners shall make regulations for securing a fair and reasonable attribution of input tax to supplies within subsection (2) above, and any such regulations may provide for—

(a) determining a proportion by reference to which input tax for any prescribed accounting period is to be provisionally attributed to those supplies;

(b) adjusting, in accordance with a proportion determined in like manner for any longer period comprising two or more prescribed accounting periods or parts thereof, the provisional attribution for any of those periods; and

(c) the making of payments in respect of input tax, by the Commissioners to a taxable person (or a person who has been a taxable person) or by a taxable person (or a person who has been a taxable person) to the Commissioners, in cases where events prove inaccurate an estimate on the basis of which an attribution was made.”.

(2) In section 6(1) of that Act, for the words “the charge to tax” there shall be substituted the words “this Act”.

F1 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) This section shall have effect in relation to supplies and importations made on or after 1st April 1987, and shall be deemed to have come into force on 23rd March 1987.

Textual Amendments

F1 S. 12(3) repealed (1.1.1993) by Finance (No. 2) Act 1992 (c. 48), ss. 14(3), 82, Sch. 18 Pt.V; S.I. 1992/3261, art.3, Sch.