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SCHEDULES

SCHEDULE 9U.K. Exemptions

Part IIU.K. The Groups

Modifications etc. (not altering text)

C1Sch. 9 Pt. 2 applied by S.I. 1995/2518, reg. 84(5) (as substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by Value Added Tax (Amendment) (No.2) Regulations 2003 (S.I. 2003/1069), regs. 1(1), 9)

[F1GROUP 14—SUPPLIES OF GOODS WHERE INPUT TAX CANNOT BE RECOVEREDU.K.

Textual Amendments

F1Sch. 9 Pt. II Group 14 added (1.3.2000) by S.I. 1999/2833, art. 2(3)

Item No. U.K.

F2 1 A supply of goods in relation to which each of the following conditions is satisfied, that is to say—

(a)there is input tax of the person making the supply (“the relevant supplier”), or of any predecessor of his, that has arisen or will arise on the supply to, F3... or importation by, the relevant supplier or any such predecessor of goods used for the supply made by the relevant supplier;

(b)the only such input tax is non-deductible input tax; and

(c)the supply made by the relevant supplier is not a supply which would be exempt under Item 1 of Group 1 of Schedule 9 but for an [F4option to tax any land under Part 1 of Schedule 10].

Textual Amendments

F2Sch. 9 Pt. II Group 14 Item 1 added (1.3.2000) by S.I. 1999/2833, art. 2(3)

F4Words in Sch. 9 Pt. II Group 14 item 1 para (c) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Value Added Tax (Buildings and Land) Order 2008 (S.I. 2008/1146), art. 1(1), Sch. 1 para. 4 (with Sch. 2)

F5Notes:U.K.

(1)Subject to Note (2) below, in relation to any supply of goods by the relevant supplier, the goods used for that supply are—

(a)the goods supplied; and

(b)any goods used in the process of producing the supplied goods so as to be comprised in them.

(2)In relation to a supply by any person consisting in or arising from the grant of a major interest in land (“the relevant supply”)—

(a)any supply consisting in or arising from a previous grant of a major interest in the land is a supply of goods used for the relevant supply; and

(b)subject to paragraph (a) above, the goods used for the relevant supply are any goods used in the construction of a building or civil engineering work so as to become part of the land.

(3)Subject to Notes (7) to (10) below, non-deductible input tax is input tax to which Note (4) or (5) below applies.

(4) This Note applies to input tax which (disregarding this Group and regulation 106 of the Value Added Tax Regulations 1995 F6 (de minimis rule)) is not, and will not become, attributable to supplies to which section 26(2) applies.

(5)This Note applies to input tax if—

(a)disregarding this Group and the provisions mentioned in Note (6) below, the relevant supplier or a predecessor of his has or will become entitled to credit for the whole or a part of the amount of that input tax; and

(b)the effect (disregarding this Group) of one or more of those provisions is that neither the relevant supplier nor any predecessor of his has or will become entitled to credit for any part of that amount.

(6)The provisions mentioned in Note (5) above are—

(a) Article 5 of the Value Added Tax (Input Tax) Order 1992 F7 (no credit for input tax on goods or services used for business entertainment);

(b) Article 6 F8 of that Order (no credit for input tax on non-building materials incorporated in a building or site);

(c) Article 7 F9 of that Order (no credit for input tax on motor cars);

(d)any provision directly or indirectly re-enacted (with or without modification) in a provision mentioned in paragraphs (a) to (c) above.

(7) For the purposes of this Group the input tax of a person shall be deemed to include any VAT which—

(a)has arisen or will arise on a supply to, F10... or importation by, that person; and

(b)would fall to be treated as input tax of that person but for its arising when that person is not a taxable person.

(8) Subject to Note (9) below, the input tax that is taken to be non-deductible input tax shall include any VAT which—

(a)is deemed to be input tax of any person by virtue of Note (7) above; and

(b)would be input tax to which Note (4) or (5) above would apply if it were input tax of that person and, in the case of a person to whom section 39 applies, if his business were carried on in the United Kingdom.

(9) Non-deductible input tax does not include any VAT that has arisen or will arise on a supply to, F11... or importation by, any person of any goods used for a supply of goods (“the relevant supply”) if—

(a) that VAT ; or

(b) any other VAT arising on the supply to, F12... or importation by, that person or any predecessor of his of any goods used for the relevant supply,

has been or will be refunded under section 33, [F1333A,] [F1433B,] [F1533C,] 39 or 41.

(10) Input tax arising on a supplyF16... or importation of goods shall be disregarded for the purposes of determining whether the conditions in Item No. 1(a) and (b) are satisfied if, at a time after that supplyF16... or importation but before the supply by the relevant supplier, a supply of the goods or of anything in which they are comprised is treated under or by virtue of any provision of this Act as having been made by the relevant supplier or any predecessor of his to himself.

(11)In relation to any goods or anything comprised in any goods, a person is a predecessor of another (“the putative successor”) only if Note (12) or (13) below applies to him in relation to those goods or that thing; and references in this Group to a person’s predecessors include references to the predecessors of his predecessors through any number of transfers and events such as are mentioned in Notes (12) and (13).

(12)This Note applies to a person in relation to any goods or thing if—

(a)the putative successor is a person to whom he has transferred assets of his business by a transfer of that business, or a part of it, as a going concern;

(b)those assets consisted of or included those goods or that thing; and

(c)the transfer of the assets is one falling by virtue of an Order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services.

(13)This Note applies to a [F17person] in relation to any goods or thing if—

(a)those goods or that thing formed part of the assets of the business of that [F18person] at a time when it became a member of a group of which the putative successor was at that time the representative member;

(b)those goods or that thing formed part of the assets of the business of that [F19person, or of any other person who] was a member of the same group as that [F20person, at a time when that person] was succeeded as the representative member of the group by the putative successor; or

(c)those goods or that thing formed part of the assets of the putative successor at a time when it ceased to be a member of a group of which the [F21person] in question was at the time the representative member.

(14)References in Note (13) above to a [F22person's] being or becoming or ceasing to be a member of a group or the representative member of a group are references to its falling to be so treated for the purposes of section 43.

(15)In Notes (11) to (13) above the references to anything comprised in other goods shall be taken, in relation to any supply consisting in or arising from the grant of a major interest in land, to include anything the supplyF23... or importation of which is, by virtue of Note (2) above, taken to be a supplyF23... or importation of goods used for making the supply so consisting or arising.

(16)Notes (1) and (1A) to Group 1 shall apply for the purposes of this Group as they apply for the purposes of that Group.]

Textual Amendments

F5Sch. 9 Pt. II Group 14 Notes added (1.3.2000) by S.I. 1999/2833, art. 2(3)

F7S.I. 1992/3222; Article 5 was amended by S.I. 1995/281.

F8Article 6 was amended by S.I. 1995/281.

F9Article 7 was amended by S.I. 1995/281 and S.I. 1995/1666.

F13Word in Sch. 9 Group 14 Note (9) inserted (11.5.2001 for specified purposes otherwise 1.9.2001) by 2001 c. 9, s. 98(9)(10)(11)

F14Word in Sch. 9 Pt. II Group 14 Note (9) inserted (with effect in accordance with s. 76(5) of the amending Act) by Finance Act 2011 (c. 11), s. 76(4)

F15Word in Sch. 9 Pt. II Group 14 Note (9) inserted (with effect in accordance with s. 66(5) of the amending Act) by Finance Act 2015 (c. 11), s. 66(4)

F17Word in Sch. 9 Pt. II Group 14 Note (13) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 13(2)(a); S.I. 2019/1348, reg. 2

F18Word in Sch. 9 Pt. II Group 14 Note (13)(a) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 13(2)(b); S.I. 2019/1348, reg. 2

F19Words in Sch. 9 Pt. II Group 14 Note (13)(b) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 13(2)(c)(i); S.I. 2019/1348, reg. 2

F20Words in Sch. 9 Pt. II Group 14 Note (13)(b) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 13(2)(c)(ii); S.I. 2019/1348, reg. 2

F21Word in Sch. 9 Pt. II Group 14 Note (13)(c) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 13(2)(d); S.I. 2019/1348, reg. 2

F22Word in Sch. 9 Pt. II Group 14 Note (14) substituted (1.11.2019) by Finance Act 2019 (c. 1), s. 53(2), Sch. 18 para. 13(3); S.I. 2019/1348, reg. 2