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(This note is not part of the Order)
The Order amends Part 2 of Schedule 4A to the Value Added Tax Act 1994 (c.23) (the “Act”) (exceptions relating to supplies made to relevant business person) and adds a new exception to the general rules on value added tax place of supply of services provisions in relation to repair services following insurance claims which meet the criteria laid out in article 2. It has effect in relation to supplies made on or after 1st October 2016.
Section 7A(2) of the Act specifies the general rules for determining the place of supply of services for the purposes of UK value added tax. The general rule where the supply is made to a relevant business person (defined in section 7A(4)) is that the place of supply is treated as the country where the recipient belongs. However, the rules in that subsection are subject to the exceptions in Schedule 4A of the Act.
Article 2 inserts paragraph 9D into Part 2 of Schedule 4A which sets out an exception to the general rule in the case of a supply of services consisting of the repair of tangible moveable property (such as cars or mobile telephones) where the supply is made in pursuance of a contract of insurance and is made, for example, to the insurer rather than to the insured person.
A Tax Information and Impact Note covering this instrument will be published on the government website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.
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