Session 2012 - 13
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59

 

SUPPLEMENT TO THE VOTES AND PROCEEDINGS

 
 

Tuesday 3 July 2012

 

Report Stage Proceedings

 

Finance Bill, As Amended


 

[Second Day]


 

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

 

SCHEDULES RELATING TO VALUE ADDED TAX

 

Face-value vouchers

 

Mr Chancellor of the Exchequer

 

Added  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.

 

(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.’.

 



 
 

Report Stage Proceedings: 3 July 2012                  

60

 

Finance Bill, continued

 
 

Sixth form colleges (exemption from VAT)

 

Mr Frank Field

 

Not called  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

 

Not called  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

 

Negatived on division  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.”.

 

(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.’.

 



 
 

Report Stage Proceedings: 3 July 2012                  

61

 

Finance Bill, continued

 
 

Mr Chancellor of the Exchequer

 

Agreed to  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

 

Added on division  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,

 

(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)—


 
 

Report Stage Proceedings: 3 July 2012                  

62

 

Finance Bill, continued

 
 

(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”.


 
 

Report Stage Proceedings: 3 July 2012                  

63

 

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.”


 
 

Report Stage Proceedings: 3 July 2012                  

64

 

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.”


 
 

Report Stage Proceedings: 3 July 2012                  

65

 

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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