Section 26.
SCHEDULE 3U.K. Value added tax: Fiscal and other warehousing
Commencement Information
1U.K.In subsection (1) of section 6 of the M1Value Added Tax Act 1994, for the words “section 18” there shall be substituted the words “ sections 18, 18B and 18C ”.
Commencement Information
I2Sch. 3 (paras. 1-18) wholly in force at 1.6.1996; Sch. 3 (paras. 1-18) partly in force at Royal Assent see s. 26(3); Sch. 3 (paras. 1-18) in force insofar as not already in force at 1.6.1996 by S.I. 1996/1249, art. 2
Marginal Citations
2U.K.In subsection (1) of section 7 of the Value Added Tax Act 1994, for the words “sections 14 and 18” there shall be substituted the words “ sections 14, 18 and 18B ”.
Commencement Information
3U.K.In subsection (1) of section 12 of the Value Added Tax Act 1994, for the words “section 18” there shall be substituted “ sections 18 and 18B ”.
Commencement Information
4U.K.In subsection (1) of section 13 of the Value Added Tax Act 1994, for the words “section 18” there shall be substituted “ sections 18 and 18B ”.
Commencement Information
5U.K.The following sections shall be inserted in the Value Added Tax Act 1994 after section 18.
“18A Fiscal warehousing.
(1)The Commissioners may, if it appears to them proper, upon application approve any registered person as a fiscal warehousekeeper; and such approval shall be subject to such conditions as they shall impose.
(2)Subject to those conditions and to regulations made under section 18F such a person shall be entitled to keep a fiscal warehouse.
(3)“Fiscal warehouse” means such place in the United Kingdom in the occupation or under the control of the fiscal warehousekeeper, not being retail premises, as he shall notify to the Commissioners in writing; and such a place shall become a fiscal warehouse on receipt by the Commissioners of that notification or on the date stated in it as the date from which it is to have effect, whichever is the later, and, subject to subsection (6) below, shall remain a fiscal warehouse so long as it is in the occupation or under the control of the fiscal warehousekeeper or until he shall notify the Commissioners in writing that it is to cease to be a fiscal warehouse.
(4)The Commissioners may in considering an application by a person to be a fiscal warehousekeeper take into account any matter which they consider relevant, and may without prejudice to the generality of that provision take into account all or any one or more of the following—
(a)his record of compliance and ability to comply with the requirements of this Act and regulations made hereunder;
(b)his record of compliance and ability to comply with the requirements of the customs and excise Acts (as defined in the Management Act) and regulations made thereunder;
(c)his record of compliance and ability to comply with Community customs provisions;
(d)his record of compliance and ability to comply with the requirements of other member States relating to VAT and duties equivalent to duties of excise;
(e)if the applicant is a company the records of compliance and ability to comply with the matters set out at (a) to (d) above of its directors, persons connected with its directors, its managing officers, any shadow directors or any of those persons, and, if it is a close company, the records of compliance and ability to comply with the matters set out at (a) to (d) above of the beneficial owners of the shares of the company or any of them; and
(f)if the applicant is an individual the records of compliance and ability to comply with the matters set out at (a) to (d) above of any company of which he is or has been a director, managing officer or shadow director or, in the case of a close company, a shareholder or the beneficial owner of shares,
and for the purposes of paragraphs (e) and (f) “connected” shall have the meaning given by section 24(7), “managing officer” the meaning given by section 61(6), “shadow director” the meaning given by section 741(2) of the M2Companies Act 1985 and “close company” the meaning given by the Taxes Act.
(5)Subject to subsection (6) below, a person approved under subsection (1) shall remain a fiscal warehousekeeper until he ceases to be a registered person or until he shall notify the Commissioners in writing that he is to cease to be a fiscal warehousekeeper.
(6)The Commissioners may if they consider it appropriate from time to time—
(a)impose conditions on a fiscal warehousekeeper in addition to those conditions, if any, which they imposed under subsection (1), and vary or revoke any conditions previously imposed;
(b)withdraw approval of any person as a fiscal warehousekeeper, and
(c)withdraw fiscal warehouse status from any premises.
(7)Any application by or on behalf of a person to be a fiscal warehousekeeper shall be in writing in such form as the Commissioners may direct and shall be accompanied by such information as they shall require.
(8)Any approval by the Commissioners under subsection (1) above, and any withdrawal of approval or other act by them under subsection (6) above, shall be notified by them to the fiscal warehousekeeper in writing and shall take effect on such notification being made or on any later date specified for the purpose in the notification.
(9)Without prejudice to the provisions of section 43 concerning liability for VAT, in subsections (1) and (2) above “registered person” includes any body corporate which under that section is for the time being treated as a member of a group.
18B Fiscally warehoused goods: relief.
(1)Subsections (3) and (4) below apply where—
(a)there is an acquisition of goods from another member State;
(b)those goods are eligible goods;
(c)either—
(i)the acquisition takes place while the goods are subject to a fiscal warehousing regime; or
(ii)after the acquisition but before the supply, if any, of those goods which next occurs, the acquirer causes the goods to be placed in a fiscal warehousing regime; and
(d)the acquirer, not later than the time of the acquisition, prepares and keeps a certificate that the goods are subject to a fiscal warehousing regime, or (as the case may be) that he will cause paragraph (c)(ii) above to be satisfied; and the certificate shall be in such form and be kept for such period as the Commissioners may by regulations specify.
(2)Subsections (3) and (4) below also apply where—
(a)there is a supply of goods;
(b)those goods are eligible goods;
(c)either—
(i)that supply takes place while the goods are subject to a fiscal warehousing regime; or
(ii)after that supply but before the supply, if any, of those goods which next occurs, the person to whom the former supply is made causes the goods to be placed in a fiscal warehousing regime;
(d)in a case falling within paragraph (c)(ii) above, the person to whom the supply is made gives the supplier, not later than the time of the supply, a certificate in such form as the Commissioners may by regulations specify that he will cause paragraph (c)(ii) to be satisfied; and
(e)the supply is not a retail transaction.
(3)The acquisition or supply in question shall be treated for the purposes of this Act as taking place outside the United Kingdom if any subsequent supply of those goods is while they are subject to the fiscal warehousing regime.
(4)Where subsection (3) does not apply and the acquisition or supply in question falls, for the purposes of this Act, to be treated as taking place in the United Kingdom, that acquisition or supply shall be treated for the purposes of this Act as taking place when the goods are removed from the fiscal warehousing regime.
(5)Where—
(a)subsection (4) above applies to an acquisition or a supply,
(b)the acquisition or supply is taxable and not zero-rated, and
(c)the acquirer or supplier is not a taxable person but would be were it not for paragraph 1(9) of Schedule 1, paragraph 1(7) of Schedule 2 and paragraph 1(6) of Schedule 3, or any of those provisions,
VAT shall be chargeable on that acquisition or supply notwithstanding that the acquirer or the supplier is not a taxable person.
(6)In this section “eligible goods” means goods—
(a)of a description falling within Schedule 5A;
(b)upon which any import duties, as defined in article 4(10) of the Community Customs Code of 12th October 1992 (Council Regulation (EEC) No.2913/92), either have been paid or have been deferred under article 224 of that Code or regulations made under section 45 of the Management Act;
(c)(in the case of goods imported from a place outside the member States) upon which any VAT chargeable under section 1(1)(c) has been either paid or deferred in accordance with Community customs provisions, and
(d)(in the case of goods subject to a duty of excise) upon which that duty has been either paid or deferred under section 127A of the Management Act.
(7)For the purposes of this section, apart from subsection (4), an acquisition or supply shall be treated as taking place at the material time for the acquisition or supply.
(8)The Treasury may by order vary Schedule 5A by adding to or deleting from it any goods or varying any description of any goods.
18C Warehouses and fiscal warehouses: services.
(1)Where—
(a)a taxable person makes a supply of specified services;
(b)those services are wholly performed on or in relation to goods while those goods are subject to a warehousing or fiscal warehousing regime;
(c)(except where the services are the supply by an occupier of a warehouse or a fiscal warehousekeeper of warehousing or fiscally warehousing the goods) the person to whom the supply is made gives the supplier a certificate, in such a form as the Commissioners may by regulations specify, that the services are so performed;
(d)the supply of services would (apart from this section) be taxable and not zero-rated; and
(e)the supplier issues to the person to whom the supply is made an invoice of such a description as the Commissioners may by regulations prescribe,
his supply shall be zero-rated.
(2)If a supply of services is zero-rated under subsection (1) above (“the zero-rated supply of services”) then, unless there is a supply of the goods in question the material time for which is—
(a)while the goods are subject to a warehousing or fiscal warehousing regime, and
(b)after the material time for the zero-rated supply of services,
subsection (3) below shall apply.
(3)Where this subsection applies—
(a)a supply of services identical to the zero-rated supply of services shall be treated for the purposes of this Act as being, at the time the goods are removed from the warehousing or fiscal warehousing regime or (if earlier) at the duty point, both made (for the purposes of his business) to the person to whom the zero-rated supply of services was actually made and made by him in the course or furtherance of his business,
(b)that supply shall have the same value as the zero-rated supply of services,
(c)that supply shall be a taxable (and not a zero-rated) supply, and
(d)VAT shall be charged on that supply even if the person treated as making it is not a taxable person.
(4)In this section “specified services” means—
(a)services of an occupier of a warehouse or a fiscal warehousekeeper of keeping the goods in question in a warehousing or fiscal warehousing regime;
(b)in relation to goods subject to a warehousing regime, services of carrying out on the goods operations which are permitted to be carried out under Community customs provisions or warehousing regulations as the case may be; and
(c)in relation to goods subject to a fiscal warehousing regime, services of carrying out on the goods any physical operations (other than any prohibited by regulations made under section 18F), for example, and without prejudice to the generality of the foregoing words, preservation and repacking operations.
18D Removal from warehousing: accountability.
(1)This section applies to any supply to which section 18B(4) or section 18C(3) applies (supply treated as taking place on removal or duty point) and any acquisition to which section 18B(5) applies (acquisition treated as taking place on removal where acquirer not a taxable person).
(2)Any VAT payable on the supply or acquisition shall (subject to any regulations under subsection (3) below) be paid—
(a)at the time when the supply or acquisition is treated as taking place under the section in question; and
(b)by the person by whom the goods are removed or, as the case may be, together with the excise duty, by the person who is required to pay that duty.
(3)The Commissioners may by regulations make provision for enabling a taxable person to pay the VAT he is required to pay by virtue of subsection (2) above at a time later than that provided by that subsection; and they may make different provisions for different descriptions of taxable persons and for different descriptions of goods and services.
18E Deficiency in fiscally warehoused goods.
(1)This section applies where goods have been subject to a fiscal warehousing regime and, before being lawfully removed from the fiscal warehouse, they are found to be missing or deficient.
(2)In any case where this section applies, unless it is shown to the satisfaction of the Commissioners that the absence of or deficiency in the goods can be accounted for by natural waste or other legitimate cause, the Commissioners may require the fiscal warehousekeeper to pay immediately in respect of the missing goods or of the whole or any part of the deficiency, as they see fit, the VAT that would have been chargeable.
(3)In subsection (2) “VAT that would have been chargeable” means VAT that would have been chargeable on a supply of the missing goods, or the amount of goods by which the goods are deficient, taking place at the time immediately before the absence arose or the deficiency occurred, if the value of that supply were the open market value; but where that time cannot be ascertained to the Commissioners’ satisfaction, that VAT shall be the greater of the amounts of VAT which would have been chargeable on a supply of those goods—
(a)if the value of that supply were the highest open market value during the period (the relevant period) commencing when the goods were placed in the fiscal warehousing regime and ending when the absence or deficiency came to the notice of the Commissioners, or
(b)if the rate of VAT chargeable on that supply were the highest rate chargeable on a supply of such goods during the relevant period and the value of that supply were the highest open market value while that rate prevailed.
(4)This section has effect without prejudice to any penalty incurred under any other provision of this Act or regulations made under it.
18F Sections 18A to 18E: supplementary.
(1)In sections 18A to 18E and this section—
“duty point” has the meaning given by section 18(6);
“eligible goods” has the meaning given by section 18B(6);
“fiscal warehouse” means a place notified to the Commissioners under section 18A(3) and from which such status has not been withdrawn;
“fiscal warehousekeeper” means a person approved under section 18A(1);
“material time”—
(a)in relation to any acquisition or supply the time of which is determined in accordance with regulations under section 6(14) or 12(3), means such time as may be prescribed for the purpose of this section by those regulations;
(b)in relation to any other acquisition, means the time when the goods reach the destination to which they are despatched from the member State in question;
(c)in relation to any other supply of goods, means the time when the supply would be treated as taking place in accordance with subsection (2) of section 6 if paragraph (c) of that subsection were omitted; and
(d)in relation to any other supply of services, means the time when the services are performed;
“warehouse”, except in the expression “fiscal warehouse”, has the meaning given by section 18(6);
“warehousing regulations” has the same meaning as in the Management Act.
(2)Any reference in sections 18A to 18E or this section to goods being subject to a fiscal warehousing regime is, subject to any regulations made under subsection (8)(e) below, a reference to eligible goods being kept in a fiscal warehouse or being transferred between fiscal warehouses in accordance with such regulations; and any reference to the removal of goods from a fiscal warehousing regime shall be construed accordingly.
(3)Subject to subsection (2) above, any reference in sections 18C and 18D to goods being subject to a warehousing regime or to the removal of goods from a warehousing regime shall have the same meaning as in section 18(7).
(4)Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they change their nature but the resulting goods are also eligible goods, the provisions of sections 18B to 18E and this section shall apply as if the resulting goods were the original goods.
(5)Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they cease to be eligible goods, on their ceasing to be so sections 18B to 18E shall apply as if they had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them.
(6)Where—
(a)any person ceases to be a fiscal warehousekeeper; or
(b)any premises cease to have fiscal warehouse status,
sections 18B to 18E and this section shall apply as if the goods of which he is the fiscal warehousekeeper, or the goods in the fiscal warehouse, as the case may be, had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them.
(7)The Commissioners may make regulations governing the deposit, keeping, securing and treatment of goods in a fiscal warehouse, and the removal of goods from a fiscal warehouse.
(8)Regulations may, without prejudice to the generality of subsection (7) above, include provisions—
(a)in relation to—
(i)goods which are, have been or are to be subject to a fiscal warehousing regime,
(ii)other goods which are, have been or are to be kept in fiscal warehouses,
(iii)fiscal warehouse premises, and
(iv)fiscal warehousekeepers and their businesses,
as to the keeping, preservation and production of records and the furnishing of returns and information by fiscal warehousekeepers and any other persons;
(b)requiring goods deposited in a fiscal warehouse to be produced to or made available for inspection by an authorised person on request by him;
(c)prohibiting the carrying out on fiscally warehoused goods of such operations as they may prescribe;
(d)regulating the transfer of goods from one fiscal warehouse to another;
(e)concerning goods which, though kept in a fiscal warehouse, are not eligible goods or are not intended by a relevant person to be goods in respect of which reliefs are to be enjoyed under sections 18A to 18E and this section;
(f)prohibiting the fiscal warehousekeeper from allowing goods to be removed from the fiscal warehousing regime without payment of any VAT payable under section 18D on or by reference to that removal and, if in breach of that prohibition he allows goods to be so removed, making him liable for the VAT jointly and severally with the remover,
and may contain such incidental or supplementary provisions as the Commissioners think necessary or expedient.
(9)Regulations may make different provision for different cases, including different provision for different fiscal warehousekeepers or descriptions of fiscal warehousekeeper, for fiscal warehouses of different descriptions or for goods of different classes or descriptions or of the same class or description in different circumstances.”
Commencement Information
I6Sch. 3 (paras. 1-18) wholly in force at 1.6.1996; Sch. 3 (paras. 1-18) partly in force at Royal Assent see s. 26(3); Sch. 3 (paras. 1-18) in force insofar as not already in force at 1.6.1996 by S.I. 1996/1249, art. 2
Marginal Citations
F16U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F1Sch. 3 para. 6 omitted (1.9.2007) by virtue of Finance Act 2007 (c. 11), Sch. 25 paras. 21, 23(2); S.I. 2007/2532, art. 2
7U.K.In section 30 of the Value Added Tax Act 1994 the following subsection shall be added after subsection (8)—
“(8A)Regulations may provide for the zero-rating of supplies of goods, or of such goods as may be specified in regulations, in cases where—
(a)the Commissioners are satisfied that the supply in question involves both—
(i)the removal of the goods from a fiscal warehousing regime within the meaning of section 18F(2); and
(ii)their being placed in a warehousing regime in another member State, or in such member State or States as may be prescribed, where that regime is established by provisions of the law of that member State corresponding, in relation to that member State, to the provisions of sections 18A and 18B; and
(b)such other conditions, if any, as may be specified in the regulations or the Commissioners may impose are fulfilled.”,
and in subsection (10) for the words “subsection (8) or (9)” there shall be substituted the words “ subsection (8), (8A) or (9) ” and for the words “subsection (6), (8) or (9)”, there shall be substituted the words “ subsection (6), (8), (8A) or (9) ”.
Commencement Information
8(1)Section 62 of the Value Added Tax Act 1994 shall be amended as follows.U.K.
(2)In paragraph (a) of subsection (1), after the words “a person” there shall be inserted the words “ by whom one or more acquisitions or ”, the words “or” at the end of sub-paragraph (i) and “and” at the end of sub-paragraph (ii) shall be omitted and the following additional sub-paragraphs shall be inserted—
“(iii)prepares a certificate in accordance with section 18B(1)(d) or gives a supplier a certificate in accordance with section 18B(2)(d); or
(iv)gives the supplier a certificate in accordance with section 18C(1)(c); and”.
(3)In the passage following paragraph (b) of subsection (1) and in subsections (3) and (4), after the word “giving” wherever it appears there shall be inserted the words “ or preparing ”.
(4)In subsection (3) after the words “gave” and “given” there shall be inserted in each case the words “ or prepared ”.
Commencement Information
9U.K.In subsection (1) of section 69 of the M3Value Added Tax Act 1994 after paragraph (f) the following shall be added—
“; or
(g)section 18A in the form of a condition imposed by the Commissioners under subsection (1) or (6) of that section,”.
Commencement Information
I9Sch. 3 (paras. 1-18) wholly in force at 1.6.1996; Sch. 3 (paras. 1-18) partly in force at Royal Assent see s. 26(3); Sch. 3 (paras. 1-18) in force insofar as not already in force at 1.6.1996 by S.I. 1996/1249, art. 2
Marginal Citations
10U.K.In section 73 of the Value Added Tax Act 1994 the following subsections shall be added after subsection (7)—
“(7A)Where a fiscal warehousekeeper has failed to pay VAT required by the Commissioners under section 18E(2), the Commissioners may assess to the best of their judgment the amount of that VAT due from him and notify it to him.
(7B)Where it appears to the Commissioners that goods have been removed from a warehouse or fiscal warehouse without payment of the VAT payable under section 18(4) or section 18D on that removal, they may assess to the best of their judgment the amount of VAT due from the person removing the goods or other person liable and notify it to him.”
Commencement Information
11U.K.In sections 73(9) and 76(5) of the Value Added Tax Act 1994 for the words “or (7)” there shall be substituted “ , (7), (7A) or (7B) ”.
Commencement Information
12U.K.In section 83 of the Value Added Tax Act 1994 the following paragraph shall be added after paragraph (d)—
“(da)a decision of the Commissioners under section 18A—
(i)as to whether or not a person is to be approved as a fiscal warehousekeeper or the conditions from time to time subject to which he is so approved;
(ii)for the withdrawal of any such approval; or
(iii)for the withdrawal of fiscal warehouse status from any premises;”,
and in paragraph (p)(ii) for “subsection (7)” there shall be substituted “ subsections (7), (7A) or (7B) ”.
Commencement Information
13U.K.In paragraph 1 of Schedule 1 to the Value Added Tax Act 1994, the following sub-paragraph shall be added after sub-paragraph (8)—
“(9)In determining the value of a person’s supplies for the purposes of sub-paragraph (1) or (2) above, supplies to which section 18B(4) (last acquisition or supply of goods before removal from fiscal warehousing) applies and supplies treated as made by him under section 18C(3) (self-supply of services on removal of goods from warehousing) shall be disregarded.”.
Commencement Information
14U.K.In paragraph 1 of Schedule 2 to the Value Added Tax Act 1994, the following sub-paragraph shall be added after sub-paragraph (6)—
“(7)For the purposes of sub-paragraphs (1) and (2) above supplies to which section 18B(4) (last acquisition or supply of goods before removal from fiscal warehousing) applies shall be disregarded.”.
Commencement Information
15U.K.In paragraph 1 of Schedule 3 to the M4Value Added Tax Act 1994, the following sub-paragraph shall be added after sub-paragraph (5)—
“(6)In determining the value of a person’s acquisitions for the purposes of sub-paragraph (1) or (2) above, acquisitions to which section 18(B)(4) (last acquisition or supply of goods before removal from fiscal warehousing) applies shall be disregarded.”.
Commencement Information
I15Sch. 3 (paras. 1-18) wholly in force at 1.6.1996; Sch. 3 (paras. 1-18) partly in force at Royal Assent see s. 26(3); Sch. 3 (paras. 1-18) in force insofar as not already in force at 1.6.1996 by S.I. 1996/1249, art. 2
Marginal Citations
16U.K.In paragraph 8(1) of Schedule 11 to the Value Added Tax Act 1994 after the words “another member State” there shall be inserted the words “ , or in the possession of a fiscal warehousekeeper, ”.
Commencement Information
F217U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F2Sch. 3 para. 17 omitted (1.4.2009) by virtue of Finance Act 2008 (c. 9), s. 113(2), Sch. 36 para. 92(e) (with Sch. 36 para. 38); S.I. 2009/404, art. 2 (with art. 12)
18U.K.The following Schedule shall be added to the Value Added Tax Act 1994.
Section 18B.
“SCHEDULE 5AU.K. Goods Eligible to be Fiscally Warehoused
| Description of goods | Combined nomenclature code of the [F3European Union] |
|---|---|
| Tin | 8001 |
| Copper | 7402 |
| 7403 | |
| 7405 | |
| 7408 | |
| Zinc | 7901 |
| Nickel | 7502 |
| Aluminium | 7601 |
| Lead | 7801 |
| Indium | ex 811291 |
| ex 811299 | |
| Cereals | 1001 to 1005 |
| 1006: unprocessed rice only | |
| 1007 to 1008 | |
| Oil seeds and oleaginous fruit | 1201 to 1207 |
| Coconuts, Brazil nuts and cashew nuts | 0801 |
| Other nuts | 0502 |
| Olives | 071120 |
| Grains and seeds (including soya beans) | 1201 to 1207 |
| Coffee, not roasted | 0901 11 00 |
| 0901 12 00 | |
| Tea | 0902 |
| Cocoa beans, whole or broken, raw or roasted | 1801 |
| Raw sugar | 1701 11 |
| 1701 12 | |
| Rubber, in primary forms or in plates, sheets or strip | 4001 |
| 4002 | |
| Wool | 5101 |
| Chemicals in bulk | Chapters 28 and 29 |
| Mineral oils (including propane and butane; also including crude petroleum oils) | 2709 |
| 2710 | |
| 2711 12 | |
| 2711 13 | |
| Silver | 7106 |
| Platinum (palladium, rhodium) | 7110 11 00 |
| 7110 21 00 | |
| 7110 31 00 | |
| Potatoes | 0701 |
| Vegetable oils and fats and their fractions, whether or not refined, but not chemically modified | 1507 to 1515” |
Textual Amendments
F3Words in Act substituted (22.4.2011) by The Treaty of Lisbon (Changes in Terminology) Order 2011 (S.I. 2011/1043), arts. 2, 3, 4 (with arts. 3(2)(3), 4(2), 6(4)(5))
Commencement Information