Explanatory note

This Order revokes the Value Added Tax (Treatment of Transactions) Order 1992 (S.I. 1992/630; “the 1992 Order”). The 1992 Order provided for the treatment of salary sacrifice transactions in respect of employee vehicles made available for private use as neither supplies of goods nor supplies of services.

Article 1 provides that the Order will come into force on 21st October 2021. Article 2 provides that the Order will have effect from 21st October 2021 unless the supply is under a contract of less than three years in duration, entered into before 21st October 2021, where the employer has passed the benefit of the value added tax refund on to the employee, in which case the Order has effect in relation to supplies made under contracts entered into on or after 21st October 2021.

Once the 1992 Order is revoked, the Value Added Tax (Cars) Order 1992 (S.I. 1992/3122) will apply and exclude from the scope of value added tax disposals without consideration of any motor car in relation to which deduction of input tax has been disallowed.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.