House of Commons Hansard Debates for 20 Mar 1989

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"(6A) For the purposes of item 2 the construction of a building separate from, but in the curtilage of, a protected building does not constitute an alteration of the protected building."

(6) The following Note shall be substituted for Note (7) to that Group--

"(7) Item 2 does not include the supply of services described in paragraph 1(1) or 5(3) of Schedule 2 to this Act."

(7) In Group 11 of that Schedule, for paragraph (b) of the Note there shall be substituted--

" (b) the supply of accommodation in a caravan or houseboat." (8) For Group 1 of Schedule 6 to the Value Added Tax Act 1983 there shall be substituted- -

"GROUP 1--LAND Item No.

1. The grant of any interest in or right over land or of any licence to occupy land, other than--

(a) the grant of the fee simple in--

(i) a building which has not been completed and which is neither designed as a dwelling or number of dwellings nor intended for use solely for a relevant residential purpose or a relevant charitable purpose ;

(ii) a new building which is neither designed as a dwelling or number of dwellings nor intended for use solely for a relevant residential purpose or a relevant charitable purpose after the grant ;

(iii) a civil engineering work which has not been completed ; (

(iv) a new civil engineering work ;

(b) the grant of any interest, right or licence consisting of a right to take game or fish ;

(c) the provision in an hotel, inn, boarding house or similar establishment of sleeping accommodation or of accommodation in rooms which are provided in conjunction with sleeping accommodation or for the purpose of a supply of catering ;

(d) the provision of holiday accommodation in a house, flat, caravan, houseboat or tent ;

(e) the provision of seasonal pitches for caravans, and the grant of facilities at caravan parks to persons for whom such pitches are provided ;

(f) the provision of pitches for tents or of camping facilities ; (

(g) the grant of facilities for parking a vehicle ;

(h) the grant of any right to fell and remove standing timber ; (

(i) the grant of facilities for housing, or storage of, an aircraft or for mooring, or storage of, a ship, boat or other vessel ; (

(j) the grant of any right to occupy a box, seat or other accommodation at a sports ground, theatre, concert hall or other place of entertainment ; and

(k) the grant of facilities for playing any sport or participating in any physical recreation.

Notes :

(1) "Grant" includes an assignment, other than an assignment of an interest made to the person to whom a surrender of the interest could be made.

(2) A building shall be taken to be completed when an architect issues a certificate of practical completion in relation to it or it is first fully occupied, whichever happens first ; and a civil engineering work shall be taken to be completed when an engineer issues a certificate of completion in relation to it or it is first fully used, whichever happens first.

(3) Notes (2) to (6) to Group 8 of Schedule 5 to this Act apply in relation to this Group as they apply in relation to that Group. (4) A building or civil engineering work is new if it was completed less than three years before the grant.

(5) Subject to Note (6), the grant of the fee simple in a building or work completed before 1st April 1989 is not excluded from this Group by paragraph (a) (ii) or (iv).

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(6) Note (5) does not apply where the grant is the first grant of the fee simple made on or after 1st April 1989 and the building was not fully occupied, or the work not fully used, before that date. (7) Where a grant of an interest in, right over or licence to occupy land includes a valuable right to take game or fish, an apportionment shall be made to determine the supply falling outside this Group by virtue of paragraph (b) .

(8) "Similar establishment" includes premises in which there is provided furnished sleeping accommodation, whether with or without the provision of board or facilities for the preparation of food, which are used by or held out as being suitable for use by visitors or travellers.

(9) "Houseboat" includes a houseboat within the meaning of Group 11 of Schedule 5 to this Act.

(10) "Holiday accommodation" includes any accommodation advertised or held out as such.

(11) A seasonal pitch is a pitch--

(a) which is provided for a period less than a year ; or (

(b) which is provided for a year or a period longer than a year but which the person to whom it is provided is prevented by the terms of any covenant, statutory planning consent or similar permission from occupying by living in a caravan at all times throughout the period for which the pitch is provided.

(12) "Mooring" includes anchoring or berthing.

(13) Paragraph (k) shall not apply where the grant of the facilities is for --

(a) a continuous period of use exceeding twenty-four hours ; or (

(b) a series of ten or more periods, whether or not exceeding twenty-four hours in total, where the following conditions are satisfied--

(i) each period is in respect of the same activity carried on at the same place ;

(ii) the interval between each period is not less than one day and not more than fourteen days ;

(iii) consideration is payable by reference to the whole series and is evidenced by written agreement ;

(iv) the grantee has exclusive use of the facilities ; and (

(v) the grantee is a school, a club, an association or an organisation representing affiliated clubs or constituent associations."

(9) In consequence of the amendment made by paragraph (8) of this Resolution, in paragraph 9(1) of Schedule 4 to the Value Added Tax Act 1983 for "(a)" there shall be substituted "(c)".

(10) The following section shall be inserted in the Value Added Tax Act 1983 after section 35--

"Buildings and land.

35A. Schedule 6A to this Act shall have effect with respect to buildings and land."

(11) The following Schedule shall be inserted in the Value Added Tax Act 1983 after Schedule 6--

"SCHEDULE 6A BUILDINGS AND LAND 1.--(1) In this paragraph "relevant zero- rated supply" means a grant or other supply taking place on or after 1st April 1989 which--

(a) relates to a building intended for use solely for a relevant residential purpose or a relevant charitable purpose or part of such a building ; and

(b) is zero-rated, in whole or in part, by virtue of Group 8 of Schedule 5 to this Act.

(2) Sub-paragraph (3) below applies where--

(a) one or more relevant zero-rated supplies relating to a building (or part of a building) have been made to any person ;

(b) within the period of ten years beginning with the day on which the building is completed, the person grants an interest in, right over or licence to occupy the building or any part of it (or the

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building or any part of it including, consisting of or forming part of the part to which the relevant zero-rated supply or supplies related) ; and

(c) after the grant the whole or any part of the building, or of the part to which the grant relates, (or the whole of the building or of the part to which the grant relates, or any part of it including, consisting of or forming part of the part to which the relevant zero-rated supply or supplies related) is not intended for use solely for a relevant residential purpose or a relevant charitable purpose. (3) Where this sub-paragraph applies, to the extent that the grant relates to so much of the building as --

(a) by reason of its intended use gave rise to the relevant zero-rated supply or supplies ; and

(b) is not intended for use solely for a relevant residential purpose or a relevant charitable purpose after the grant, it shall be taken to be a taxable supply in the course or furtherance of a business which is not zero -rated by virtue of Group 8 of Schedule 5 to this Act (if it would not otherwise be such a supply).

(4) Sub-paragraph (5) below applies where--

(a) one or more relevant zero-rated supplies relating to a building (or part of a building) have been made to any person ; and (

(b) within the period of ten years beginning with the day on which the building is completed, the person uses the building or any part of it (or the building or any part of it including, consisting of or forming part of the part to which the relevant zero-rated supply or supplies related) for a purpose which is neither a relevant residential purpose nor a relevant charitable purpose.

(5) Where this sub-paragraph applies, his interestin, right over or licence to occupy so much of the building as

(a) by reason of its intended use gave rise to the relevant zero-rated supply or supplies ; and

(b) is used otherwise than for a relevant residential purpose or a relevant charitable purpose,

shall be treated for the purposes of this Act as supplied to him for the purpose of a business carried on by him and supplied by him in the course or furtherance of the business when he first uses it for a purpose which is neither a relevant residential purpose nor a relevant charitable purpose.

(6) Where sub-paragraph (5) above applies--

(a) the supply shall be taken to be a taxable supply which is not zero- rated by virtue of Group 8 of schedule 5 to this Act (if it would not otherwise be such a supply) ; and

(b) the value of the supply shall be such that the amount of tax chargeable on it is equal to the amount of the tax which would have been chargeable on the relevant zero-rated supply (or, where there was more than one such supply, the aggregate amount which would have been chargeable on them) had so much of the building as is mentioned in sub-paragraph (5) above not been intended for use solely for a relevant residential purpose or a relevant charitable purpose. 2. The Notes to Group 8 of Schedule 5 to this Act apply in relation to this Schedule as they apply in relation to that Group but subject to any appropriate modifications."

(12) In section 48 of the Value Added Tax Act 1983, after the definition of "Commissioners" there shall be inserted--

" "fee simple", in relation to Scotland, means--

(a) the estate or interest of the proprietor of the dominium utile, or

(b) in the case of land not held on feudal tenure, the estate or interest of the owner ;".

(13) In Schedule 1 to the Value Added Tax Act 1983--

(a) in paragraph 1 there shall be added at the end

"(6) Where, apart from this sub-paragraph, an interest in, right over or licence to occupy any land would under sub-paragraph (5) above be disregarded

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for the purposes of sub-paragraph (1) above, it shall not be if it is supplied on a taxable supply which is not zero- rated." and (

(b) in paragraph 2 there shall be added at the end

"(4) Where, apart from this sub-paragraph, an interest in, right over or licence to occupy any land would under sub-paragraph (3) above be disregarded for the purposes of sub-paragraph (1) above, it shall not be if it is supplied on a taxable supply which is not zero-rated."

(14) Subject to paragraphs (16) to (19) of this Resolution, the amendments made by paragraphs (1) to (9) of this Resolution shall have effect in relation to grants, assignments and other supplies made on or after 1st April 1989.

(15) The remainder of this Resolution shall come into force on 1st April 1989.

(16) Subject to paragraph (18) of this Resolution, the amendments made by paragraphs (1) to (6) of this Resolution shall not have effect in relation to a grant, assignment or other supply where-- (a) it is made in pursuance of a legally binding obligation to make it which was incurred before 21st June 1988, and

(b) if the Commissioners so require (whether before or after it is made), it is proved to their satisfaction by the production of documents made before that date that it is so made.

(17) Subject to paragraph (18) of this Resolution, the amendments made by paragraphs (1) to (6) of this Resolution shall not have effect in relation to a grant or assignment of an interest in, or in any part of, a building or its site where--

(a) the person making the grant or assignment was under a legally binding obligation incurred before 21st June 1988 to construct (or reconstruct) the building or to construct any development of which it forms part (other than an obligation to receive services or goods in the course of the construction or reconstruction),

(b) if the Commissioners so require (whether before or after the grant or assignment is made), it is proved to their satisfaction by the production of documents made before that date that he was under that obligation, and

(18) Where the grant or assignment is of a tenancy or lease (a) if a premium is payable, paragraph (16) or (17) of this Resolution shall apply only to the extent that it is made for consideration in the form of the premium ; and

(b) if a premium is not payable, paragraph (16) or (17) of this Resolution shall apply only to the extent that it is made for consideration in the form of the first payment of rent due under the tenancy or lease.

(19) The amendments made by paragraphs (1) to (6) of this Resolution shall not not have effect in relation to a supply relating to a building or civil engineering work where--

(a) the supply is made to the person constructing the building or work (or reconstructing the building),

(b) that person was under a legally binding obligation incurred before 21st June 1988 to construct the building or work (or to reconstruct the building) or to construct any development of which it forms part (other than an obligation to receive services or goods in the course of the construction or reconstruction),

(c) if the Commissioners so require (whether before or after the supply is made), it is proved to their satisfaction by the production of documents made before that date that he was under that obligation,

(d) planning permission for the construction of the building or work (or the reconstruction of the building) was granted before 21st June 1988, and

(e) before the supply takes place the person constructing the building or work (or reconstructing the building) has given to the person making the supply a certificate in such form as may be specified in a notice published by the Commissioners stating that

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the supply is zero-rated (in whole or to the extent specified in the certificate) by virtue of this paragraph.

(20) Where a grant, assignment or other supply is zero-rated by virtue of paragraph (16), (17) or (19) of this Resolution, it is not a relevant zero- rated supply for the purposes of paragraph 1 of Schedule 6A to the Value Added Tax Act 1983.

(21) This Resolution shall be construed as one with the Value Added Tax Act 1983.

This Resolution shall not authorise the making of amendments that would make value added tax chargeable at a rate other than either nil or the rate specified in section 9 of the Value Added Tax Act 1983. And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.-- [Mr. Lawson.]

9. Value added tax (zero-rating : sewerage services, water, fuel and power)

Resolved,

That provision may be made restricting Groups 2 and 7 of Schedule 5 to the Value Added Tax Act 1983.

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