3(1)In paragraph 5 of Schedule 4 to VATA 1994 (matters to be treated as supply of goods or services), after sub-paragraph (4) (non-business use of business asset treated as supply of services) insert—U.K.
“(4A)Sub-paragraph (4) does not apply (despite paragraph 9(1)) to—
(a)any interest in land,
(b)any building or part of a building,
(c)any civil engineering work or part of such a work,
(d)any goods incorporated or to be incorporated in a building or civil engineering work (whether by being installed as fixtures or fittings or otherwise),
(e)any ship, boat or other vessel, or
(f)any aircraft.”
(2)This paragraph comes into force on 1 January 2011.
(3)This paragraph does not apply in relation to an asset in respect of which the person in question or any of that person's predecessors incurred VAT before 1 January 2011.
(4)But, where VAT is incurred by such a person before that date in respect of the asset, VAT incurred by such a person on or after that date in respect of the asset is not to be treated as referable to that person's business purposes by virtue of paragraph 5(4) and (6) of Schedule 4 to VATA 1994 if, and to the extent that, the asset is used or to be used for that person's private use or the private use of that person's staff, or more generally for purposes other than those of that person's business.
(5)For the purposes of this paragraph—
“asset” means anything falling within any of paragraphs (a) to (f) of paragraph 5(4A) of Schedule 4 to VATA 1994 (as inserted by sub-paragraph (1) above);
“the person in question” means the person carrying on the business referred to in paragraph 5(4) of that Schedule;
“predecessor” has the same meaning as in paragraph 5 of that Schedule;
and references to the VAT “incurred” by a person in respect of an asset are to be construed in accordance with paragraph 1(9).