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12. Vehicle excise duty (increase in general rate)

Resolved,

That--


(1) In Schedule 1 to the Vehicle Excise and Registration Act 1994, in paragraph 1(2), for "£140" there shall be substituted "£145".
(2) This Resolution applies in relation to licences taken out after 26th November 1996.
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.

13. Insurance premium tax

Resolved,

That provision may be made about insurance premium tax.

14. Value added tax (aggregation of businesses)

Resolved,

That provision may be made about the giving of directions under paragraph 2 of Schedule 1 to the Value Added Tax Act 1994 for two or more persons to be treated as a single taxable person.

3 Dec 1996 : Column 917

15. Value added tax (goods donated to charity)

Resolved,

That--


(1) In Group 15 of Schedule 8 to the Value Added Tax Act 1994, for Note (1) there shall be substituted the following Note--
"(1) Item 1 shall apply only if--
(a) the supply is a sale of goods donated to that charity or taxable person;
(b) the sale takes place as a result of the goods having been made available to the general public for purchase (whether in a shop or elsewhere); and
(c) the sale does not take place as a result of any arrangements (whether legally binding or not) which related to the goods and were entered into by each of the parties to the sale before the goods were made available to the general public."
(2) This Resolution has effect in relation to supplies made on or after 26th November 1996.
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.

16. Value added tax (charitable institutions)

Resolved,

That--


(1) In Group 15 of Schedule 8 to the Value Added Tax Act 1994, after Note (4) there shall be inserted the following Notes--
"(4A) Subject to Note (5B), a charitable institution shall not be regarded as providing care or medical or surgical treatment for handicapped persons unless--
(a) it provides care or medical or surgical treatment in a relevant establishment; and
(b) the majority of the persons who receive care or medical or surgical treatment in that establishment are handicapped persons.
(4B) ''Relevant establishment'' means--
(a) a day-centre, other than a day-centre which exists primarily as a place for activities that are social or recreational or both; or
(b) an institution which is--
(i) approved, licensed or registered in accordance with the provisions of any enactment or Northern Ireland legislation; or
(ii) exempted by or under the provisions of any enactment or Northern Ireland legislation from any requirement to be approved, licensed or registered;
and in paragraph (b) above the references to the provisions of any enactment or Northern Ireland legislation are references only to provisions which, so far as relating to England, Wales, Scotland or Northern Ireland, have the same effect in every locality within that part of the United Kingdom."
(2) After Note (5) to that Group there shall be inserted the following Notes--
"(5A) Subject to Note (5B), items 4 to 7 do not apply where the eligible body falls within Note (4)(f) unless the relevant goods are or are to be used in a relevant establishment in which that body provides care or medical or surgical treatment to persons the majority of whom are handicapped.
(5B) Nothing in Note (4A) or (5A) shall prevent a supply from falling within items 4 to 7 where--
(a) the eligible body provides medical care to handicapped persons in their own homes;
(b) the relevant goods fall within Note (3)(a) or are parts or accessories for use in or with goods described in Note (3)(a); and
(c) those goods are or are to be used in or in connection with the provision of that care."
(3) This Resolution has effect in relation to supplies made on or after 26th November 1996.

3 Dec 1996 : Column 918

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.

17. Value added tax (exemption of insurance services)

Resolved,

That provision may be made amending the provisions of Schedule 9 to the Value Added Tax Act 1994 by virtue of which supplies involving the provision of insurance or reinsurance, and related supplies, are exempt.

18. Value added tax (buildings and land etc.)

Resolved,

That provision (including provision having retrospective effect) may be made about--


(a) the construction for the purposes of Schedules 8 and 9 to the Value Added Tax Act 1994, or corresponding provisions of the Value Added Tax Act 1983, of references to the grant of any interest, right, licence or facilities; and
(b) the circumstances in which supplies are made taxable by an election under paragraph 2 of Schedule 10 to the Value Added Tax Act 1994, or under the corresponding provisions of the Value Added Tax Act 1983.

19. Value added tax (supplies to persons not fully taxable)

Resolved,

That paragraphs 2(3A) and 3(8A) of Schedule 10 to the Value Added Tax Act 1994 shall not have effect in relation to any supply made after 26th November 1996.

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.

20. Value added tax (bad debt relief)

Resolved,

That provision may be made repealing section 36(4)(b) of, and paragraph 9(1) of Schedule 13 to, the Value Added Tax Act 1994.

21. Value added tax (input tax and bad debts)

Resolved,

That--


(1) In section 36 of the Value Added Tax Act 1994, after subsection (4) there shall be inserted the following subsection--
"(4A) Where--
(a) a person is entitled under subsection (2) above to be refunded an amount of VAT, and
(b) that VAT has at any time been included in the input tax of another person,
that other person shall be taken, as from the time when the claim for the refund is made, not to have been entitled to any credit for input tax in respect of the VAT that has to be refunded on that claim."
(2) This Resolution has effect in relation to any entitlement under section 36 of that Act of 1994 to a refund of VAT charged on a supply made after 26th November 1996.
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.

22. Value added tax (description of group members)

Resolved,

That--


(1) In section 43 of the Value Added Tax Act 1994, after subsection (1) there shall be inserted the following subsections--
"(1AA) Where--

3 Dec 1996 : Column 919

(a) it is material, for the purposes of any provision made by or under this Act ("the relevant provision"), whether the person by or to whom a supply is made, or the person by whom goods are acquired or imported, is a person of a particular description,
(b) paragraph (b) or (c) of subsection (1) above applies to any supply, acquisition or importation, and
(c) there is a difference that would be material for the purposes of the relevant provision between--
(i) the description applicable to the representative member, and
(ii) the description applicable to the body which (apart from this section) would be regarded for the purposes of this Act as making the supply, acquisition or importation or, as the case may be, as being the person to whom the supply is made,
the relevant provision shall have effect in relation to that supply, acquisition or importation as if the only description applicable to the representative member were the description in fact applicable to that body.
(1AB) Subsection (1AA) above does not apply to the extent that what is material for the purposes of the relevant provision is whether a person is a taxable person."
(2) This Resolution has effect in relation to any supply made after 26th November 1996 and in relation to any acquisition or importation taking place after that date.
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.

23. Value added tax (deemed self-supplies within groups)

Resolved,

That provision may be made for allowing an order made by virtue of section 43(2) of the Value Added Tax Act 1994 to require the representative member of a group to be treated as a person of such description as may be determined under the order.

24. Value added tax (group supplies using an overseas member)

Resolved,

That--


(1) In section 43 of the Value Added Tax Act 1994, after subsection (2) there shall be inserted the following subsections--
"(2A) A supply made by a member of a group ("the supplier") to another member of the group ("the UK member") shall not be disregarded under subsection (1)(a) above if--
(a) it would (if there were no group) be a supply of services falling within Schedule 5 to a person belonging in the United Kingdom;
(b) those services are not within any of the descriptions specified in Schedule 9;
(c) the supplier has been supplied (whether or not by a person belonging in the United Kingdom) with services falling within any of paragraphs 1 to 8 of Schedule 5;
(d) the supplier belonged outside the United Kingdom when it was supplied with the services mentioned in paragraph (c) above; and
(e) the services so mentioned have been used by the supplier for making the supply to the UK member.
(2B) Subject to subsection (2C) below, where a supply is excluded by virtue of subsection (2A) above from the supplies that are disregarded in pursuance of subsection (1)(a) above, all the same consequences shall follow under this Act as if that supply--
(a) were a taxable supply in the United Kingdom by the representative member to itself, and
(b) without prejudice to that, were made by the representative member in the course or furtherance of its business.

3 Dec 1996 : Column 920

(2C) A supply which is deemed by virtue of subsection (2B) above to be a supply by the representative member to itself--
(a) shall not be taken into account as a supply made by the representative member when determining any allowance of input tax under section 26(1) in the case of the representative member;
(b) shall be deemed for the purposes of paragraph 1 of Schedule 6 to be a supply in the case of which the person making the supply and the person supplied are connected within the meaning of section 839 of the Taxes Act (connected persons); and
(c) subject to paragraph (b) above, shall be taken to be a supply the value and time of which are determined as if it were a supply of services which is treated by virtue of section 8 as made by the person by whom the services are received.
(2D) For the purposes of subsection (2A) above where--
(a) there has been a supply of the assets of a business of a person ("the transferor") to a person to whom the whole or any part of that business was transferred as a going concern ("the transferee"),
(b) that supply is either--
(i) a supply falling to be treated, in accordance with an order under section 5(3), as being neither a supply of goods nor a supply of services, or
(ii) a supply that would have fallen to be so treated if it had taken place in the United Kingdom,
and
(c) the transferor was supplied with services falling within paragraphs 1 to 8 of Schedule 5 at a time before the transfer when the transferor belonged outside the United Kingdom,
those services, so far as they are used by the transferee for making any supply falling within that Schedule, shall be deemed to have been supplied to the transferee at a time when the transferee belonged outside the United Kingdom.
(2E) Where, in the case of a supply of assets falling within paragraphs (a) and (b) of subsection (2D) above--
(a) the transferor himself acquired any of the assets in question by way of a previous supply of assets falling within those paragraphs, and
(b) there are services falling within paragraphs 1 to 8 of Schedule 5 which, if used by the transferor for making supplies falling within that Schedule, would be deemed by virtue of that subsection to have been supplied to the transferor at a time when he belonged outside the United Kingdom,
that subsection shall have effect, notwithstanding that the services have not been so used by the transferor, as if the transferor were a person to whom those services were supplied and as if he were a person belonging outside the United Kingdom at the time of their deemed supply to him; and this subsection shall apply accordingly through any number of successive supplies of assets falling within paragraphs (a) and (b) of that subsection."
(2) This Resolution has effect in relation to supplies made on or after 26th November 1996.
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.

25. Value added tax (services subject to the reverse charge)

Resolved,

That provision may be made authorising an order under section 8(5) of the Value Added Tax Act 1994 to make provision in connection with any addition to or variation of Schedule 5 to that Act.

3 Dec 1996 : Column 921

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