The Value Added Tax (Payments on Account) Order 1993

Explanatory Note

(This note is not part of the Order)

This Order, which is made under section 38C of the Value Added Tax Act 1983, revokes and replaces the Value Added Tax (Payments on Account) (No. 2) Order 1992. It provides that certain taxable persons shall make payments on account of any tax they may become liable to pay in respect of their tax periods.

The Order applies to a taxable person whose VAT liability in the period of one year specified in article 5 (which will normally be a year ending in March to May 1993) exceeded £2,000,000 and provision is now made for the Order to apply also to a taxable person who did not exceed that amount in the period of the year specified in article 5 but who exceeds that amount in a subsequent period of a year (article 6).

Provision is now made for the duty to make payments to cease where a taxable person’s VAT liability in a period of a year ending after the period of one year specified in articles 5 or 6 is less than £1,600,000 (article 7).

Article 8 provides that the payments are to be made monthly but special provision is made in article 9 for taxable persons who have tax periods which do not start on the first, or end on the last, day of the month. Article 10 allows extra time for payments made by credit transfer.

Calculation of the payments is determined in accordance with articles 11 and 12 but provision is made in articles 13, 14 and 15 for reduction and increase of payments in circumstances described in those articles.

Special provision is made for the application of the Order in relation to a body corporate whose VAT registration is in the names of divisions under section 31 of the Value Added Tax Act 1983 (article 16) and to bodies corporate which are treated as members of a group under section 29 of that Act (article 17).