Finance Act 2001

Part 2 Consequential amendments

Value Added Tax Act 1994 (c. 23)

2 In section 2 of the Value Added Tax Act 1994 (rate of VAT), in each of subsections (2) and (3) (power to vary rate by up to 25% for up to one year), after “for the time being in force” insert “under this section”.

3 In section 62(1)(a)(i) of the Value Added Tax Act 1994 (penalty for giving incorrect certificate as to entitlement to reduced rate etc.), for “paragraph 1 of Schedule A1,” substitute “any of the Groups of Schedule 7A,”.

4 (1) Section 88 of the Value Added Tax Act 1994 (supplies spanning change of rate etc.) is amended as follows.

(2) In subsection (1) (section applies where there is a change in the rate of VAT in force under section 2 or the descriptions of exempt or zero-rated supplies or acquisitions)—

(a) after “section 2” insert “or 29A”, and

(b) for “or zero-rated” (in both places) substitute “, zero-rated or reduced-rate”.

(3) In subsection (2) (election to disregard time of supply rules), after “any question whether it is zero-rated or exempt” insert “or a reduced-rate supply”.

(4) In subsection (4) (election to disregard time of acquisition rules), after “any question whether it is zero-rated or exempt” insert “or a reduced-rate acquisition”.

(5) After subsection (7) insert—

“(8) References in this section—

(a) to a supply being a reduced-rate supply, or

(b) to an acquisition being a reduced-rate acquisition,

are references to a supply, or (as the case may be) an acquisition, being one on which VAT is charged at the rate in force under section 29A.”.

5 In section 96(9) of the Value Added Tax Act 1994 (notes in Schedules 8 and 9 to be used for interpretation and capable of being varied), after “Schedules” insert “7A,”.

6 (1) Section 97(4) of the Value Added Tax Act 1994 (orders that cease to have effect if not approved by the House of Commons within 28 days of being made) is amended as follows.

(2) In paragraph (c)(i) (orders increasing rate of VAT in force), after “in force” insert “under section 2”.

(3) In paragraph (c), after sub-paragraph (ii) insert—

“(iia) for varying Schedule 7A so as to cause VAT to be charged on a supply at the rate in force under section 2 instead of that in force under section 29A;”.

(4) In paragraph (d)(i) (exception for orders under section 51 that are consequential on orders that vary Schedule 8 or 9 but do not fall within paragraph (c)), after “Schedule” insert “7A,”.

Finance Act 2000 (c. 17)

7 In paragraph 9 of Schedule 6 to the Finance Act 2000 (climate change levy: meaning of “for domestic use”), after sub-paragraph (4) (power under section 2(1C) of the Value Added Tax Act 1994 (c. 23) to amend Schedule A1 to that Act includes power to make corresponding amendments to paragraph 9) there is inserted—

“(5) The power to make provision under section 29A(3) of the Value Added Tax Act 1994 varying Schedule 7A to that Act (charge at reduced rate) includes power to make provision for any appropriate corresponding variation of this paragraph.”.