House of Commons Amendments

Session 2012 - 13
Internet Publications
Other Bills before Parliament

209

House of Commons

Tuesday 3 July 2012

Consideration of Bill

Finance Bill, As Amended

Note

The Amendments have been arranged in accordance with the Order of the House

[2 July 2012].

NEW CLAUSES, AMENDMENTS TO CLAUSES, NEW SCHEDULES AND AMENDMENTS TO

SCHEDULES RELATING TO VALUE ADDED TAX

Face-value vouchers

Mr Chancellor of the Exchequer

NC4

To move the following Clause:—

‘(1)
In Schedule 10A to VATA 1994 (face-value vouchers), after paragraph 7 insert—

“Exclusion of single purpose vouchers

7A
Paragraphs 2 to 4, 6 and 7 do not apply in relation to the issue, or any

subsequent supply, of a face-value voucher that represents a right to

receive goods or services of one type which are subject to a single rate

of VAT.”

(2)
The amendment made by subsection (1) has effect in relation to supplies of face-

value vouchers issued on or after 10 May 2012.

(3)
Subsection (4) applies where—

(a)
a face-value voucher issued before 10 May 2012 is used on or after that

date to obtain goods or services,

(b)
paragraphs 2 to 4, 6 and 7 of Schedule 10A to VATA 1994 would not

have applied in relation to the issue, or any subsequent supply, of the

voucher because of paragraph 7A of that Schedule if the voucher had

been issued on or after 10 May 2012, and

(c)
VAT is not payable under the law of another member State on the supply

of the voucher to the user.

Consideration of Bill: 3 July 2012
210

Finance Bill, continued

(4)
The use of the voucher is to be treated for the purposes of VATA 1994 as a supply

of the goods or services by the person from whom they are obtained to the user of

the voucher.’.

Sixth form colleges (exemption from VAT)

Mr Frank Field

NC3

To move the following Clause:—

‘In Schedule 9 to the Value Added Tax Act 1994 (Exemptions), in Group 6

(Education), the following shall be added at the end of Note (1) (description of

eligible body)—

“(g)
a sixth form college”.’.

VAT: review

Ed Balls

Rachel Reeves

Catherine McKinnell

Chris Leslie

Cathy Jamieson

NC10

To move the following Clause:—

‘No new Order shall be made under section 30(4) or 31(2) of the Value Added

Tax Act 1994 unless the Chancellor of the Exchequer has fully reviewed the

impact of any such Order on jobs, living standards and businesses, making

reference to the HMRC Consultation “VAT: Addressing Borderline Anomalies”,

and placed a copy of the review in the Library of the House of Commons.’.

Rate of VAT

Ed Balls

Rachel Reeves

Catherine McKinnell

Chris Leslie

Cathy Jamieson

NC12

To move the following Clause:—

‘(1)
In section 2(1) of the Value Added Tax Act 1994 (Rate of VAT) for “20 per cent.”

substitute “17.5 per cent.”.

Consideration of Bill: 3 July 2012
211

Finance Bill, continued

(2)
Subsection (1) shall have effect from Royal Assent and shall expire at such time

as the Government presents to Parliament a report stating that the UK economy

has returned to strong growth.’.

Mr Chancellor of the Exchequer

17

Page  115,  line  3  [Clause  195],  at end insert—

‘(1)
Schedule (Categorisation of supplies) contains provision about the categorisation

of supplies for the purposes of value added tax.’.

Mr Chancellor of the Exchequer

NS1

To move the following Schedule:—

‘Categorisation of supplies

Part 1

Zero-rated supplies

Introductory

1
Part 2 of Schedule 8 of VATA 1994 (zero-rating) is amended as follows.

Food

2    (1)
Group 1 (food) is amended as follows.

      (2)
After excepted item 4 insert—

“4A
Sports drinks that are advertised or marketed as products designed

to enhance physical performance, accelerate recovery after exercise

or build bulk, and other similar drinks, including (in either case)

syrups, concentrates, essences, powders, crystals or other products

for the preparation of such drinks.”

      (3)
In Note (3), omit the words from “and for the purposes of paragraph (b) above”

to the end.

      (4)
After that Note insert—

“(3A)
For the purposes of Note (3), in the case of any supplier, the premises

on which food is supplied include any area set aside for the

consumption of food by that supplier’s customers, whether or not the

area may also be used by the customers of other suppliers.

(3B)
“Hot food” means food which (or any part of which) is hot at the time

it is provided to the customer and—

(a)
has been heated for the purposes of enabling it to be consumed

hot,

(b)
has been heated to order,

(c)
has been kept hot after being heated,

Consideration of Bill: 3 July 2012
212

Finance Bill, continued

(d)
is provided to a customer in packaging that retains heat

(whether or not the packaging was primarily designed for that

purpose) or in any other packaging that is specifically

designed for hot food, or

(e)
is advertised or marketed in a way that indicates that it is

supplied hot.

(3C)
For the purposes of Note (3B)—

(a)
something is “hot” if it is at a temperature above the ambient

air temperature, and

(b)
something is “kept hot” after being heated if the supplier

stores it in an environment which provides, applies or retains

heat, or takes other steps to ensure it remains hot or to slow

down the natural cooling process.

(3D)
In Notes (3B) and (3C), references to food being heated include

references to it being cooked or reheated.”

Protected buildings

3    (1)
Group 6 (protected buildings) is amended as follows.

      (2)
Omit items 2 and 3 (approved alterations and building materials).

      (3)
In Note (3), for “(12) to (14) and (22) to (24)” substitute “and (12) to (14)”.

      (4)
For Note (4) substitute—

“(4)
For the purposes of item 1, a protected building is not to be regarded

as substantially reconstructed unless, when the reconstruction is

completed, the reconstructed building incorporates no more of the

original building (that is to say, the building as it was before the

reconstruction began) than the external walls, together with other

external features of architectural or historic interest.”

      (5)
In Note (5), in paragraphs (a), (b) and (c) omit “or other supply”.

      (6)
Omit Notes (6) to (11).

Caravans

4    (1)
Group 9 (caravans and houseboats) is amended as follows.

      (2)
For item 1 substitute—


“1 Caravans which exceed the limits of size of a trailer for the time

being permitted to be towed on roads by a motor vehicle having a

maximum gross weight of 3,500 kilogrammes and which—

(a)
were manufactured to standard BS 3632:2005 approved by

the British Standards Institution, or

(b)
are second hand, were manufactured to a previous version of

standard BS 3632 approved by that Institution and were

occupied before 6 April 2013.”

      (3)
In item 3 for “5(3)” substitute “5(4)”.

      (4)
In the Note for “item 3” substitute “item 4”.

Consideration of Bill: 3 July 2012
213

Finance Bill, continued

Part 2

Exempt supplies

Land: self storage and facilities to supply hairdressing services

1    (1)
In Part 2 of Schedule 9 to VATA 1994 (exemptions), Group 1 (land) is

amended as follows.

      (2)
In item 1, after paragraph (k) insert—

“(ka)
the grant of facilities for the self storage of goods;”.

      (3)
In that item, omit “and” at the end of paragraph (m) and after that paragraph

insert—

“(ma)
the grant of facilities to a person who uses the facilities wholly

or mainly to supply hairdressing services; and”.

      (4)
In that item, in paragraph (n), for “(m)” substitute “(ma)”.

      (5)
After Note (15) insert—

“(15A)
In paragraph (ka)—

“facilities for the self storage of goods” means the use of a relevant

structure for the storage of goods by the person (or persons) to

whom the grant of facilities is made, and

“goods” does not include live animals.

  (15B)
For the purposes of Note (15A), use by a person with the permission

of the person (or any of the persons) to whom the grant of facilities

is made counts as use by the person (or persons) to whom that grant

is made.

  (15C)
A grant of facilities for the self storage of goods does not fall within

paragraph (ka) if—

(a)
the person making the grant (“P”)—

(i)
is doing so in circumstances where the relevant

structure used is, or forms part of, a relevant capital

item, and

(ii)
is connected with any person who uses that

relevant structure for the self storage of goods,

(b)
the grant is made to a charity which uses the relevant

structure solely otherwise than in the course of a business,

or

(c)
in a case where the relevant structure is part of a building,

its use for the storage of goods by the person (or persons)

to whom the grant is made is ancillary to other use of the

building by that person (or those persons).

  (15D)
In Notes (15A) and (15C) “relevant structure” means the whole or

part of—

(a)
a container or other structure that is fully enclosed, or

(b)
a unit or building.

  (15E)
In Note (15C)(a)(i) “relevant capital item” means a capital item

which—

(a)
is subject to adjustments of input tax deduction by P under

regulations made under section 26(3), and

(b)
has not yet reached the end of its prescribed period of

adjustment.”

Consideration of Bill: 3 July 2012
214

Finance Bill, continued

      (6)
After Note (16) insert—

“(17)
Paragraph (ma) does not apply to a grant of facilities which

provides for the exclusive use, by the person to whom the grant is

made, of a whole building, a whole floor, a separate room or a

clearly defined area, unless the person making the grant or a person

connected with that person provides or makes available (directly or

indirectly) services related to hairdressing for use by the person to

whom the grant is made.

    (18)
For the purposes of Note (17)—

(a)
“services related to hairdressing” means the services of a

hairdresser’s assistant or cashier, the booking of

appointments, the laundering of towels, the cleaning of the

facilities subject to the grant, the making of refreshments

and other similar services typically used in connection with

hairdressing, but does not include the provision of utilities

or the cleaning of shared areas in a building, and

(b)
it does not matter if the services related to hairdressing are

shared with other persons.

    (19)
For the purposes of Notes (15C) and (17) any question whether a

person is connected with any other person is to be determined in

accordance with section 1122 of the Corporation Tax Act 2010

(connected person).”

Part 3

Supplies chargeable at reduced rate

1    (1)
Schedule 7A to VATA 1994 (charged at reduced rate) is amended as follows.

      (2)
In Part 1 (index to reduced-rate supplies of goods and service), at the

appropriate place insert—

“Caravans
Group 12”

      (3)
In Part 2 (the groups), at the end insert—

“GROUP 12

CARAVANS


Item No

1
Supplies of caravans which exceed the limits of size of a trailer for

the time being permitted to be towed on roads by a motor vehicle

having a maximum gross weight of 3,500 kilogrammes.

2
The supply of such services as are described in paragraph 1(1) or

5(4) of Schedule 4 in respect of a caravan within item 1.


NOTE:


This Group does not include—

(a)
removable contents other than goods of a kind mentioned in item 4 of Group

5 of Schedule 8, or

(b)
the supply of accommodation in a caravan.”

Consideration of Bill: 3 July 2012
215

Finance Bill, continued

Part 4

Commencement and transitional provision

1    (1)
Subject to sub-paragraphs (2) and (3), the amendments made by this Schedule

come into force on 1 October 2012.

      (2)
Paragraphs 4 and 6 come into force on 6 April 2013.

      (3)
Paragraph 3(2) to (6) comes into force, in relation to relevant supplies, on 1

October 2015.

      (4)
A supply is “relevant” if it is—

(a)
a supply of any services, other than excluded services, which is

made—

(i)
in the course of an approved alteration of a protected building,

and

(ii)
pursuant to a written contract entered into, or a relevant

consent applied for, before 21 March 2012, or

(b)
a supply of building materials which is made—

(i)
to a person to whom the supplier is supplying services within

paragraph (a) which include the incorporation of the materials

into the building (or its site) in question, and

(ii)
pursuant to a written contract entered into, or a relevant

consent applied for, before 21 March 2012.

      (5)
In relation to supplies made on or after 1 October 2012 but before 1 October

2015, Group 6 has effect as if, for the purposes of item 1 of that Group, a

protected building were also regarded as substantially reconstructed if sub-

paragraph (6) or (7) applies.

      (6)
This sub-paragraph applies if at least three-fifths of the works carried out to

effect the reconstruction (measured by reference to cost) are of such a nature

that the supply of services (other than excluded services), materials and other

items to carry out the works would, if supplied by a taxable person, be relevant

supplies.

      (7)
This sub-paragraph applies if—

(a)
at least 10% (measured by reference to cost) of the reconstruction of

the protected building was completed before 21 March 2012, and

(b)
at least three-fifths of the works carried out to effect the reconstruction

(measured by reference to cost) are of such a nature that the supply of

services (other than excluded services), materials and other items to

carry out the works would, if supplied by a taxable person, be relevant

supplies but for the requirement for a written contract to have been

entered into or relevant consent to have been applied for before that

date.

      (8)
For the purposes of sub-paragraph (4), works carried out that are not within the

scope of the written contract entered into, or the relevant consent applied for,

as it stood immediately before 21 March 2012, are not a supply made pursuant

to that contract or relevant consent.

      (9)
In this paragraph—

“excluded services” means the services of an architect, surveyor or other

person acting as consultant or in a supervisory capacity;

“Group 6” means Group 6 of Part 2 of Schedule 8 to VATA 1994 (protected

buildings);

“relevant consent” means—

(a)
in the case of an ecclesiastical building to which section 60 of the

Planning (Listed Buildings and Conservation Areas) Act 1990



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