Explanatory note

This Order brings into force on 1st January 1993 those provisions of the Finance (No. 2) Act 1992 relating to value added tax and, with certain exceptions, those relating to excise duty, which have not been brought into force by previous commencement orders.

The transitional provisions of this Order implement Article 28n of the Sixth Council Directive 77/388/EEC (OJ No. L145, 13.6.77, p. 1), as amended. They specify the arrangements required in order to effect the transition to the changes to the value added tax system brought about by Council Directive 91/680/EEC (OJ No. L376, 31.12.91,p. 1), which amended the Sixth Council Directive so as to bring about the abolition of fiscal frontiers from 1st January 1993.

Article 4 applies to goods which at midnight on 31st December 1992 are either held in the United Kingdom under import arrangements involving relief from or suspension of value added tax, or are already en route to the United Kingdom under a transit arrangement.

The effect of article 5 is that if such goods are subsequently removed from the relevant arrangements while in the United Kingdom, they will be treated for value added tax purposes as having been imported from outside the Community and as subject to tax accordingly. It also specifies the circumstances in which no tax or a reduced amount will be chargeable on such an importation. Special provision is made in respect of importations of goods purchased tax free in another member State.

Article 6 provides that where an importation of goods is treated as having taken place under the provisions of this Order, and the goods have Community status, taxable persons shall, with certain specified exceptions, account for the tax due on the importation by including the tax in the return covering the date upon which the importation is treated as having taken place.