This Order, which comes into force on 1st January 2005, is part of the implementation of Council Directive 2003/92/EC (OJ L260, 11.10.03 p.8) It forms part of a package of new measures which apply to supplies of natural gas and electricity. A transposition in respect of this implementation is available at www.hmce.gov.uk .

The Order excludes from the scope of paragraph 6(1) of Schedule 4 to the Value Added Tax Act 1994 transfers between member States of gas through the natural gas distribution system and of electricity. As a result, they are no longer deemed to be supplies of goods as is otherwise normally necessary to ensure the correct application of VAT where a business transfers its own goods within the EC.

A full regulatory impact assessment on the effect that this instrument will have on the costs of businesses is available at www.hmce.gov.uk .