Part IIIU.K. Application of Act in particular cases

[F141ASupply of goods or services by public bodiesU.K.

(1)This section applies where goods or services are supplied by a body mentioned in Article 13(1) of the VAT Directive (status of public bodies as taxable persons) in the course of activities or transactions in which it is engaged as a public authority.

(2)If the supply is in respect of an activity listed in Annex I to the VAT Directive (activities in respect of which public bodies are to be taxable persons), it is to be treated for the purposes of this Act as a supply in the course or furtherance of a business unless it is on such a small scale as to be negligible.

(3)If the supply is not in respect of such an activity, it is to be treated for the purposes of this Act as a supply in the course or furtherance of a business if (and only if) not charging VAT on the supply would lead to a significant distortion of competition.

(4)In this section “the VAT Directive” means Council Directive 2006/112/EC on the common system of value added tax.]

Textual Amendments

F1S. 41A inserted (17.7.2012) by Finance Act 2012 (c. 14), s. 198(3)