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The Value Added Tax (Section 55A) (Specified Goods and Excepted Supplies) Order 2014

S.I. 2014/1458 · Made 9 June 2014 · Extends to United Kingdom

Up to date with all changes known to legislation.gov.uk, revised to 31 December 2020.

Value Added Tax

Made 9th June 2014

Laid before the House of Commons 9th June 2014

Coming into force 1st July 2014

The Treasury, in exercise of the power conferred on them by section 55A(9), (10), (11) and (14) of the Value Added Tax Act 1994f1, make the following Order.

Annotations to the whole text

Footnotes

f1

1994 c.23. Section 55A was inserted by section 19(1) of the Finance Act 2006 (c.25) and was amended by section 50(1) of the Finance Act 2010 (c.13) and section 203 of, and paragraphs 2 and 6 of Schedule 28 to, the Finance Act 2012 (c.14).

Contents

  1. 1Citation, commencement and effect
  2. 2Interpretation
  3. 3Application of section 55A of the Act
  4. 4Specified goods
  5. 5Excepted supplies
  6. Signature
  7. Explanatory note

1Citation, commencement and effectI1

(1)

This Order may be cited as the Value Added Tax (Section 55A) (Specified Goods and Excepted Supplies) Order 2014.

(2)

This Order comes into force on 1st July 2014 and has effect in relation to supplies made on or after that date.

2InterpretationI1

In this Order—

  • “accredited FIT installation” has the meaning specified in article 2(1) of the Feed-in Tariffs Order 2012f1;

  • “the Act” means the Value Added Tax Act 1994;

  • “directed utility” means a person who is treated as a gas or electricity utility pursuant to a direction made under sub-paragraph 1, or regulations made under sub-paragraph 2, of paragraph 151 of Part 14 of Schedule 6 to the Finance Act 2000f2;

  • “specified goods” means the goods specified in article 4;

  • “supply licence” means —

    1. (a)

      a licence granted under section 7A(1) of the Gas Act 1986 (licensing of gas suppliers and gas shippers)f3;

    2. (b)

      a licence granted under section 6(1)(d) of the Electricity Act 1989 (licences authorising supply, etc.)f4;

    3. (c)

      a licence granted under article 8(1)(c) of the Gas (Northern Ireland) Order 1996 (licences authorising supply, etc.)f5; or

    4. (d)

      a licence granted under article 10(1)(c) of the Electricity (Northern Ireland) Order 1992 (licences authorising supply, etc.)f6;

  • “third party intermediary” means a person who purchases specified goods from a utility in order to make an onward supply of those goods to an end user for consumption, in circumstances where the goods are delivered directly to the end user by the utility;

  • “utility” has the meaning given by paragraph 150(1) of Part 14 of Schedule 6 to the Finance Act 2000.

3Application of section 55A of the ActI1

(1)

Section 55A of the Act (customers to account for tax on supplies of goods or services of a kind used in missing trader F1... fraud) applies to goods of a description specified in article 4.

(2)

The supplies specified in article 5 are excepted supplies for the purposes of section 55A of the Act.

4Specified goodsI1

The goods referred to in article 3(1) are—

F1(a)

gas supplied through a natural gas system situated in Great Britain or any network connected to a natural gas system in Great Britain;

(aa)

gas supplied through a natural gas system situated within Northern Ireland or the territory of a member State or any network connected to such a system; and

(b)

electricity.

5Excepted suppliesI1

The supplies referred to in article 3(2) are—

(a)

a supply of specified goods made by a person who holds a supply licence in relation to that supply;

(b)

a supply of specified goods by a directed utility to an end user for consumption;

(c)

a supply of specified goods deemed to have been made pursuant to a contract under—

(i)

paragraph 3(1) or (2) of Schedule 6 to the Electricity Act 1989 (the electricity code: deemed contracts in certain cases)f1;

(ii)

paragraph 8(1) or (2) of Schedule 2B to the Gas Act 1986 (the gas code: deemed contracts in certain cases)f2;

(iii)

paragraph 3(1) or (2) of Schedule 6 to the Electricity (Northern Ireland) Order 1992 (the electricity supply code: deemed contracts)f3; or

(iv)

section 12(1) or (2) of the Energy Act (Northern Ireland) 2011 (gas: deemed contracts for supply in certain cases)f4;

(d)

a supply of specified goods made to a directed utility for the purpose of —

(i)

consumption by the directed utility, or

(ii)

onward supply by the directed utility to an end user for consumption;

(e)

a supply of specified goods made by a person who, in relation to that supply, is exempted from the requirement to hold a supply licence under —

(i)

article 5 of the Gas Exemptions Order 2011 (supplier exemptions)f5;

(ii)

paragraph 1, 2, 4 or 5 of Schedule 2A to the Gas Act 1986 (exceptions to prohibition on unlicensed activities)f6;

(iii)

article 7(1) of the Gas (Northern Ireland) Order 1996 (exemptions)f7;

(iv)

article 3(1)(c) of, and Schedule 4 to, the Electricity (Class Exemptions from the Requirements for a Licence) Order 2001f8;

(v)

article 9(1) of the Electricity (Northern Ireland) Order 1992 (exemptions)f9; or

(vi)

article 3(1)(c) of, and Schedule 3 to, the Electricity (Class Exemptions from the Requirement for a Licence) Order (Northern Ireland) 2013f10;

(f)

a supply to which section 9A of the Act (reverse charge on gas, electricity, heat or cooling supplied by persons outside the United Kingdom)f11 applies;

(g)

a supply of electricity made by an accredited FIT installation;

(h)

a supply of specified goods—

(i)

to a third party intermediary; or

(ii)

by a third party intermediary;

(i)

any other supply of specified goods which is not a wholesale supply.

Signature

Mark Lancaster

Sam Gyimah

Two of the Lords Commissioners of Her Majesty’s Treasury

Explanatory note

(This note is not part of the Order)

This Order, which has effect in relation to supplies made on or after 1st July 2014, applies a reverse charge to specified goods of a kind used in missing trader intra-Community fraud.

Council Directive 2006/112/ECf1 (“the Principal VAT Directive”) establishes a common system of value added tax applicable throughout the European Union. As a general rule the Principal VAT Directive requires the person who makes supplies of goods or services to account for and pay the VAT on those supplies. However, in certain circumstances, the VAT may be required to be accounted for and paid by the recipient of those supplies. This charge is referred to as a “reverse charge”.

The Principal VAT Directive was amended by Council Directive 2010/23/EUf2 which inserted Article 199a. Article 199a permits Member States to apply a reverse charge in certain circumstances. Article 199a was itself amended by Council Directive 2013/43/EUf3 which extends the circumstances in which Member States may apply a reverse charge to combat missing trader intra-Community fraud. In particular, it permits Member States to apply a reverse charge until 31 December 2018 and for a minimum period of two years to supplies of gas and electricity to a taxable dealer as defined in Article 38(2) of the Principal VAT Directive.

Article 3 of the Order provides that goods of a description specified in article 4 of the Order are specified supplies for the purposes of section 55A of the VAT Act 1994 (c.23) (customers to account for tax on supplies of goods or services of a kind used in missing trader intra-Community fraud) (“the Act”) and that supplies which are specified in article 5 of the Order are excepted supplies for the purposes of section 55A of the Act.

Article 4 of the Order specifies the goods which are specified goods for the purposes of section 55A of the Act.

Article 5 of the Order specifies the supplies which are excepted supplies for the purposes of section 55A of the Act.

Supplies of gas and electricity are treated as supplies of goods by virtue of paragraph 3 of Schedule 4 to the Act.

A Tax Information and Impact Note covering this instrument was published at Budget 2014 and is available on the HMRC website at HM Revenue & Customs: Tax Information and Impact Notes (TIINs). It remains an accurate summary of the impacts that apply to this instrument.