Finance Bill

Session 2012 - 13
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Finance Bill
Schedule 27 — Non-established taxable persons
580

Schedule 27
Section 201

Non-established taxable persons
New Schedule 1A
1
In VATA 1994, after Schedule 1 insert—
“Schedule 1A
5
Registration in respect of taxable supplies: non-uk establishment
Liability to be registered
1     (1)
A person becomes liable to be registered under this Schedule at
any time if conditions A to D are met.
      (2)
Condition A is that—
10
(a)
the person makes taxable supplies, or
(b)
there are reasonable grounds for believing that the person
will make taxable supplies in the period of 30 days then
beginning.
      (3)
Condition B is that those supplies (or any of them) are or will be
15
made in the course or furtherance of a business carried on by the
person.
      (4)
Condition C is that the person has no business establishment, or
other fixed establishment, in the United Kingdom in relation to
any business carried on by the person.
20
      (5)
Condition D is that the person is not registered under this Act.
2     (1)
A person does not become liable to be registered by virtue of
paragraph 1(2)(b) if the reason for believing that taxable supplies
will be made in the 30-day period mentioned there is that a
business, or part of a business, carried on by a taxable person is to
25
be transferred to the person as a going concern in that period.
      (2)
But if the transfer takes place, the transferee becomes liable to be
registered under this Schedule at the time of the transfer if
conditions A to D in paragraph 1 are met in relation to the
transferee at that time.
30
      (3)
In determining for the purposes of sub-paragraph (2) whether
condition B is met, the reference in paragraph 1(3) to a business is
to be read as a reference to the business, or part of the business,
that is transferred to the transferee.
3
A person is treated as having become liable to be registered under
35
this Schedule at any time when the person would have become so
liable under paragraph 1 or 2 but for any registration that is
subsequently cancelled under—
(a)
paragraph 11,
(b)
paragraph 13(3) of Schedule 1,
40
(c)
paragraph 6(2) of Schedule 2,
(d)
paragraph 6(3) of Schedule 3, or

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Schedule 27 — Non-established taxable persons
581

(e)
paragraph 6(2) of Schedule 3A.
4     (1)
A person does not cease to be liable to be registered under this
Schedule except in accordance with sub-paragraph (2).
      (2)
A person who has become liable to be registered under this
Schedule ceases to be so liable at any time if the Commissioners
5
are satisfied that—
(a)
the person has ceased to make taxable supplies in the
course or furtherance of a business carried on by the
person, or
(b)
the person is no longer a person in relation to whom
10
condition C in paragraph 1 is met.
Notification of liability and registration
5     (1)
A person who becomes liable to be registered by virtue of
paragraph 1(2)(a) or 2(2) must notify the Commissioners of the
liability before the end of the period of 30 days beginning with the
15
day on which the liability arises.
      (2)
The Commissioners must register any such person (whether or not
the person so notifies them) with effect from the beginning of the
day on which the liability arises.
6     (1)
A person who becomes liable to be registered by virtue of
20
paragraph 1(2)(b) must notify the Commissioners of the liability
before the end of the period by reference to which the liability
arises.
      (2)
The Commissioners must register any such person (whether or not
the person so notifies them) with effect from the beginning of the
25
period by reference to which the liability arises.
Notification of end of liability
7     (1)
A person registered under paragraph 5 or 6 who, on any day,
ceases to make or have the intention of making taxable supplies in
the course or furtherance of a business carried on by that person
30
must notify the Commissioners of that fact within 30 days
beginning with that day.
      (2)
But the person need not notify the Commissioners if on that day
the person would otherwise be liable or entitled to be registered
under this Act (disregarding for this purpose the person’s
35
registration under this Schedule and any enactment that prevents
a person from being liable to be registered under different
provisions at the same time).
Cancellation of registration
8     (1)
The Commissioners must cancel a person’s registration under this
40
Schedule if—
(a)
the person satisfies them that the person is not liable to be
registered under this Schedule, and
(b)
the person requests the cancellation.

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Schedule 27 — Non-established taxable persons
582

      (2)
The cancellation is to be made with effect from—
(a)
the day on which the request is made, or
(b)
such later day as may be agreed between the
Commissioners and the person.
      (3)
But the Commissioners must not cancel the registration with effect
5
from any time unless they are satisfied that it is not a time when
the person would be subject to a requirement to be registered
under this Act.
9     (1)
The Commissioners may cancel a person’s registration under this
Schedule if they are satisfied that the person has ceased to be liable
10
to be registered under this Schedule.
      (2)
The cancellation is to be made with effect from—
(a)
the day on which the person ceased to be so liable, or
(b)
such later day as may be agreed between the
Commissioners and the person.
15
      (3)
But the Commissioners must not cancel the registration with effect
from any time unless they are satisfied that it is not a time when
the person would be subject to a requirement, or entitled, to be
registered under this Act.
10
In determining for the purposes of paragraphs 8 and 9 whether a
20
time is a time when a person would be subject to a requirement, or
entitled, to be registered under this Act, so much of any provision
of this Act as prevents a person from becoming liable or entitled to
be registered when the person is already registered or when the
person is so liable under any other provision must be disregarded.
25
11    (1)
The Commissioners may cancel a person’s registration under this
Schedule if they are satisfied that the person was not liable to be
registered under this Schedule on the day on which the person
was registered.
      (2)
The cancellation is to be made with effect from the day on which
30
the person was registered.
12
Paragraphs 8 to 11 are subject to paragraph 18 of Schedule 3B
(cancellation of registration under this Schedule of persons
seeking to be registered under that Schedule etc).
Exemption from registration
35
13    (1)
The Commissioners may exempt a person from registration under
this Schedule if the person satisfies them that the taxable supplies
that the person makes or intends to make—
(a)
are all zero-rated, or
(b)
would all be zero-rated if the person were a taxable person.
40
      (2)
The power in sub-paragraph (1) is exercisable only if the person so
requests and the Commissioners think fit.
      (3)
If there is a material change in the nature of the supplies made by
a person exempted under this paragraph, the person must notify
the Commissioners of the change—
45

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Schedule 27 — Non-established taxable persons
583

(a)
within 30 days beginning with the day on which the
change occurred, or
(b)
if no particular day is identifiable as that day, within 30
days of the end of the quarter in which the change
occurred.
5
      (4)
If it appears to the Commissioners that a request under this
paragraph should no longer be acted upon on or after any day or
has been withdrawn on any day, they must register the person
who made the request with effect from that day.
      (5)
A reference in this paragraph to supplies is to supplies made in the
10
course or furtherance of a business carried on by the person.
Supplementary
14
Any notification required under this Schedule must be made in
such form and manner and must contain such particulars as may
be specified in regulations or by the Commissioners in accordance
15
with regulations.”
Other amendments of VATA 1994
2
VATA 1994 is amended as follows.
3
In section 7 (place of supply of goods), in subsection (4)(c)(ii), after
“Schedule 1” insert “or 1A”.
20
4
In section 54 (farmers etc), in subsection (2), after “Schedule 1” insert “or is,
has become or has ceased to be liable to be registered under Schedule 1A”.
5
In section 55 (customers to account for tax on supplies of gold etc), in
subsection (1)—
(a)
for “Schedule 1” substitute “Schedules 1 and 1A”, and
25
(b)
for “that Schedule” substitute “Schedule 1”.
6
In section 55A (customers to account for tax on supplies of goods or services
of a kind used in missing trader intra-community fraud), in subsection (3),
for “Schedule 1” substitute “Schedules 1 and 1A”.
7
In section 69 (breaches of regulatory provisions), in subsection (1)(a), after
30
“Schedule 1,” insert “paragraph 7 of Schedule 1A,”.
8
In section 73 (failure to make returns etc), in subsection (3)(b), after
“Schedule 1,” insert “paragraph 9 or 11 of Schedule 1A,”.
9
In section 74 (interest on VAT recovered or recoverable by assessment), in
subsection (1)(c), after “Schedule 1,” insert “under paragraph 13 of Schedule
35
1A,”.
10
In section 77 (assessments: time limits and supplementary assessments), in
subsection (4C), after paragraph (a) insert—
“(aa)
paragraph 5, 6 or 13(3) of Schedule 1A,”.
11    (1)
Paragraph 1 of Schedule 1 (registration in respect of taxable supplies) is
40
amended as follows.
      (2)
In sub-paragraph (1)—

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Schedule 27 — Non-established taxable persons
584

(a)
in paragraph (a), after “if” insert “the person is UK-established and”,
and
(b)
in paragraph (b), after “if” insert “the person is UK-established and”.
      (3)
In sub-paragraph (2), for “and the transferee is not registered under this Act
at the time of the transfer” substitute “, the transferee is UK-established at
5
the time of the transfer and the transferee is not registered under this Act at
that time”.
      (4)
After sub-paragraph (2) insert—
   “(2A)
In determining the value of a person’s supplies for the purposes of
sub-paragraph (1)(a) or (2)(a), supplies are to be taken into account
10
(subject to sub-paragraphs (3) to (7)) whether or not the person
was UK-established when they were made.”
      (5)
In sub-paragraph (4)(a), after “below,” insert “paragraph 11 of Schedule
1A,”.
      (6)
In sub-paragraph (5), after “below,” insert “paragraph 11 of Schedule 1A,”.
15
      (7)
At the end insert—
   “(10)
A person is “UK-established” if the person has a business
establishment, or some other fixed establishment, in the United
Kingdom in relation to a business carried on by the person.”
12
In paragraph 3 of that Schedule, at the end of paragraph (b) insert “; or
20
(c)
is not at that time UK-established (see paragraph 1(10)).”
13
Accordingly, in the heading of that Schedule, at the end insert “: uk
establishment”.
14
In paragraph 1 of Schedule 2 (registration in respect of supplies from other
member States)—
25
(a)
in sub-paragraph (1)(b), after “Schedule 1” insert “or 1A”, and
(b)
in sub-paragraph (4), after “Schedule 1,” insert “paragraph 11 of
Schedule 1A,”.
15
In paragraph 1 of Schedule 3 (registration in respect of acquisitions from
other member States)—
30
(a)
in sub-paragraph (1)(b), after “Schedule 1” insert “, 1A”, and
(b)
in sub-paragraph (3), after “Schedule 1,” insert “paragraph 11 of
Schedule 1A,”.
16
In paragraph 1 of Schedule 3A (registration in respect of disposals of assets
for which a VAT repayment is claimed)—
35
(a)
in sub-paragraph (1), after “Schedule 1,” insert “1A,”, and
(b)
in sub-paragraph (2), after “Schedule 1,” insert “paragraph 11 of
Schedule 1A,”.
17
In paragraph 18 of Schedule 3B (supply of electronic services in member
States: special accounting scheme)—
40
(a)
after “Schedule 1”, in the first place it occurs, insert “or 1A”, and
(b)
after “Schedule 1”, in the second place it occurs, insert “or, as the case
may be, 1A”.

Finance Bill
Schedule 28 — Administration of VAT
585

Amendments of other Acts
18
In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and
excise wrongdoing), in the Table in paragraph 1, after the entry for the
obligations under Schedule 1 to VATA 1994 insert the following entry—

“Value added tax
Obligations under paragraphs 5, 6 and

5

13(3) of Schedule 1A to VATA 1994

(obligations to notify liability to register

and notify material change in nature of

supplies made by person exempted from

registration).”

10
Application
19
The amendments made by this Schedule have effect in relation to supplies
made or to be made on or after 1 December 2012.
Schedule 28
Section 202

Administration of VAT
15
1
VATA 1994 is amended as follows.
2     (1)
Section 18B (fiscally warehoused goods: relief) is amended as follows.
      (2)
In subsection (1)(d) omit “be in such form and”.
      (3)
In subsection (2)(d) omit “in such form as the Commissioners may by
regulations specify”.
20
      (4)
After subsection (2) insert—
“(2A)
A certificate under subsection (1)(d) or (2)(d) must be in such form as
may be specified by regulations or by the Commissioners in
accordance with regulations.”
3     (1)
Section 18C (warehouses and fiscal warehouses: services) is amended as
25
follows.
      (2)
In subsection (1)(c) omit “, in such a form as the Commissioners may by
regulations specify,”.
      (3)
After subsection (1) insert—
“(1A)
A certificate under subsection (1)(c) must be in such form as may be
30
specified by regulations or by the Commissioners in accordance with
regulations.”
4
In section 35(2) (refund of VAT to persons constructing certain buildings),
for the words following paragraph (c) substitute—

“as may be specified by regulations or by the Commissioners in
35
accordance with regulations.”

Finance Bill
Schedule 28 — Administration of VAT
586

5     (1)
Section 39(3) (repayment of VAT to those in business overseas) is amended
as follows.
      (2)
Before paragraph (a) insert—
“(za)
for claims to be made in such form and manner as may be
specified in the scheme or by the Commissioners in
5
accordance with the scheme;”.
      (3)
For paragraph (c) substitute—
“(c)
for generally regulating—
(i)
the time by which claims must be made, and
(ii)
the methods by which the amount of any repayment
10
is to be determined and the repayment is to be made.”
6     (1)
Section 48 (VAT representatives) is amended as follows.
      (2)
For subsection (1B)(c) substitute—
“(c)
Council Regulation (EC) No 904/2010 of 7 October 2010 on
administrative cooperation and combating fraud in the field
15
of value added tax.”
      (3)
After subsection (4) insert—
“(4A)
Regulations under subsection (4) may require a notification under
that subsection to be made in such form and manner, and to contain
such particulars, as may be specified in the regulations or by the
20
Commissioners in accordance with the regulations.”
7
In section 54(6)(a) (farmers etc)—
(a)
omit “the form and manner in which”, and
(b)
for “is to be made” substitute “to be made in the form and manner
specified in the regulations or by the Commissioners in accordance
25
with the regulations”.
8
In Schedule 1 (registration in respect of taxable supplies), in paragraph 17
(notifications)—
(a)
after “form” insert “and manner”, and
(b)
for “as the Commissioners may by regulations prescribe” substitute
30
“as may be specified in regulations or by the Commissioners in
accordance with regulations.”
9
In Schedule 2 (registration in respect of supplies from other member States),
in paragraph 9 (notifications)—
(a)
after “form” insert “and manner”, and
35
(b)
for “as the Commissioners may by regulations prescribe” substitute
“as may be specified in regulations or by the Commissioners in
accordance with regulations.”
10
In Schedule 3 (registration in respect of acquisitions from other member
States), in paragraph 10 (notifications)—
40
(a)
after “form” insert “and manner”, and
(b)
for “as the Commissioners may by regulations prescribe” substitute
“as may be specified in regulations or by the Commissioners in
accordance with regulations.”
11
In Schedule 3A (registration in respect of disposals of assets for which a VAT
45
repayment is claimed), in paragraph 8 (notifications)—