Explanatory note
(This note is not part of the Order)
This Order varies, witheffect from 1st May 1990, items 1, 2 and 8 of and Notes (1) and (4) to Group 16 of Schedule 5 to the Value Added Tax Act 1983 (c. 55).
Article 3 of the Order applies the zero rate in item 1 to the sale of donated goods by any taxable person (such as a trading company) covenanting all the profits of his business to a charity described in that item.
Article 4 of the Order applies the zero rate in item 2 to the donation of any goods for sale or export to a taxable person covenanting all profits to an eligible charity.
Article 5 of the Order extends the zero rate in item 8 for printed media advertising supplied to charities for raising money for their work or for making known their aimsand objectives. VAT relief will apply to any related preparatory work, as well as to the supply of publishing of an advertisement.
Article 6 of the Order amends Note (1) so that zero-rating applies only if the goods for sale have been donated to an eligible charity or a taxable person covenanting all profits to such a charity.
Article 7 of the Order amends Note (4)(a) to widen the definition of “relevant goods” so that:
it includes laboratory equipment bought out of charitable funds or from voluntary contributions;
it is not restricted to goods capable of being used only in a specific context;
it includes training among the uses to which the goods may be put.Article 8 of the Order amends Note (4)(c) to remove the requirement that parts and accessories must have specialist design features to be zero-rated with the relevant goods.