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Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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                      (b)                     registration requests made before that date are to be

treated as if they were made on that date.

Registration number

          6                 On registering a person under this Schedule, the Commissioners

must—

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                      (a)                     allocate a registration number to him, and

                      (b)                     notify him electronically of the number.

Obligation to notify changes

          7                (1)               A person who has made a registration request must notify the

Commissioners if subsequently—

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                      (a)                     there is a change in any of the particulars contained in his

request in accordance with paragraph 4(3) above,

                      (b)                     he ceases to make, or to have the intention of making,

qualifying supplies, or

                      (c)                     he ceases to satisfy the conditions in any of sub-paragraphs

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(3) to (6) of paragraph 2 above.

                           (2)               A notification under this paragraph must be given within the

period of 30 days beginning with the date of the change of

particulars or of the cessation.

                           (3)               A notification under this paragraph must be given by such

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electronic means, and in such manner, as the Commissioners may

direct or may by regulations prescribe.

Cancellation of registration

          8                (1)               The Commissioners must cancel a person’s registration under this

Schedule if—

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                      (a)                     he notifies them that he has ceased to make, or to have the

intention of making, qualifying supplies,

                      (b)                     they otherwise determine that he has ceased to make, or to

have the intention of making, qualifying supplies,

                      (c)                     he notifies them that he has ceased to satisfy the conditions

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in any of sub-paragraphs (3) to (6) of paragraph 2 above,

                      (d)                     they otherwise determine that he has ceased to satisfy any

of those conditions, or

                      (e)                     they determine that he has persistently failed to comply

with his obligations under this Schedule.

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                           (2)               In a case falling within sub-paragraph (1)(a) or (c) above,

cancellation of a person’s registration under this paragraph takes

effect—

                      (a)                     on the date on which the notification is received, or

                      (b)                     on such earlier or later date as may be agreed between him

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and the Commissioners.

                           (3)               In a case falling within sub-paragraph (1)(b), (d) or (e) above,

cancellation of a person’s registration under this paragraph takes

effect—

 

 

Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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                      (a)                     on the date on which the determination is made, or

                      (b)                     on such earlier or later date as the Commissioners may in

his particular case direct.

Registration after cancellation for persistent default

          9                (1)               The Commissioners—

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                      (a)                     are not required by paragraph 4(1) above to register a

person under this Schedule if he is a persistent defaulter,

but

                      (b)                     shall have the power to do so.

                           (2)               In this paragraph, “persistent defaulter” means a person—

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                      (a)                     whose previous registration under this Schedule has been

cancelled under paragraph 8(1)(e) above (persistent failure

to comply with obligations under this Schedule), or

                      (b)                     who has been excluded from the identification register

under any provision of the law of another member State

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which implements Article 26c(B)(4)(d) of the 1977 VAT

Directive (persistent failure to comply with rules

concerning the special scheme).

Part 2

Obligations following registration, etc

20

Liability for VAT

          10               (1)               A person is liable to pay VAT under and in accordance with this

Schedule if—

                      (a)                     he makes a qualifying supply, and

                      (b)                     he is registered under this Schedule when he makes the

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supply.

                           (2)               The amount of VAT which a person is liable to pay by virtue of this

Schedule on any qualifying supply is to be determined in

accordance with sub-paragraphs (3) and (4) below.

                           (3)               If the qualifying supply is treated as made in the United Kingdom,

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the amount is the amount of VAT that would have been charged

on the supply under this Act if the person had been registered

under this Act when he made the supply.

                           (4)               If the qualifying supply is treated as made in another member

State, the amount is the amount of VAT that would have been

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charged on the supply in accordance with the law of that member

State if the person had been identified for the purposes of VAT in

that member State when he made the supply.

                           (5)               Where a person is liable to pay VAT by virtue of this Schedule—

                      (a)                     any amount falling to be determined in accordance with

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sub-paragraph (3) above is to be regarded for the purposes

of this Act as VAT charged in accordance with this Act,

and

                      (b)                     any amount falling to be determined in accordance with

sub-paragraph (4) above in relation to another member

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Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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State is to be regarded for those purposes as VAT charged

in accordance with the law of that member State.

Obligation to submit special accounting returns

          11               (1)               A person who is, or has been, registered under this Schedule must

submit a return (a “special accounting return”) to the Controller

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for each reporting period.

                           (2)               Each quarter for the whole or any part of which a person is

registered under this Schedule is a “reporting period” in the case

of that person.

                           (3)               The special accounting return must state the person’s registration

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number.

                           (4)               For each member State in which the person is treated as having

made qualifying supplies for the reporting period, the special

accounting return must specify—

                      (a)                     the total value of his qualifying supplies treated as made in

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that member State in that period, apart from the VAT

which he is liable to pay by virtue of this Schedule in

respect of those supplies,

                      (b)                     the rate of VAT applicable to those supplies by virtue of

sub-paragraph (3) or (4) (as the case may be) of paragraph

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10 above, and

                      (c)                     the total amount of VAT payable by him by virtue of this

Schedule in respect of those supplies in that period.

                           (5)               The special accounting return must state the total amount of VAT

which the person is liable to pay by virtue of this Schedule in

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respect of all qualifying supplies treated as made by him in all

member States in the reporting period.

                           (6)               If a person is registered under this Schedule for part only of a

reporting period, references in this paragraph to his qualifying

supplies in that period are references to his qualifying supplies in

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that part of that period.

                           (7)               In this Schedule, “the Controller” means the Controller, Customs

and Excise Value Added Tax Central Unit.

Further obligations with respect to special accounting returns

          12               (1)               A special accounting return must set out in sterling the amounts

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referred to in paragraph 11 above.

                           (2)               Any conversion from one currency into another for the purposes

of sub-paragraph (1) above shall be made by using the exchange

rates published by the European Central Bank—

                      (a)                     for the last day of the reporting period to which the special

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accounting return relates, or

                      (b)                     if no such rate is published for that day, for the next day for

which such a rate is published.

                           (3)               A special accounting return must be submitted to the Controller

within the period of 20 days after the last day of the reporting

45

period to which it relates.

 

 

Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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                           (4)               A special accounting return must be submitted by such electronic

means, and in such manner, as the Commissioners may direct or

may by regulations prescribe.

Payment of VAT

          13               (1)               A person who is required to submit a special accounting return

5

must, at the same time as he submits the return, pay to the

Controller in sterling the amount referred to in paragraph 11(5)

above in respect of the reporting period to which the return

relates.

                           (2)               A payment under this paragraph must be made in such manner as

10

the Commissioners may direct or may by regulations prescribe.

Obligations to keep and produce records

          14               (1)               A person must keep records of the transactions which he enters

into for the purposes of, or in connection with, qualifying supplies

made by him at any time when he is registered under this

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Schedule.

                           (2)               The records to be kept must be such as will enable the tax

authorities for the member State in which a qualifying supply is

treated as made to determine whether any special accounting

return which is submitted in respect of that supply is correct.

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                           (3)               Any records required to be kept must be made available—

                      (a)                     to the tax authorities for the member State in which the

qualifying supply to which the records relate was treated

as made, if they so request, or

                      (b)                     to the Commissioners, if they so request.

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                           (4)               Records must be made available electronically under sub-

paragraph (3) above.

                           (5)               The records relating to a transaction must be maintained for a

period of ten years beginning with the 1st January following the

date on which the transaction was entered into.

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Commissioners’ power to request production of records

          15               (1)               The Commissioners may request a person to make available to

them electronically records of the transactions entered into by him

for the purposes of, or in connection with, qualifying supplies to

which this paragraph applies.

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                           (2)               This paragraph applies to qualifying supplies which—

                      (a)                     are treated as made in the United Kingdom, and

                      (b)                     are made by the person while he is identified under any

provision of the law of another member State which

implements Article 26c.

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Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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Part 3

Understatements and overstatements of UK VAT

Understatement or overstatement of UK VAT in special scheme return

          16               (1)               If the Commissioners consider that a person who is or has been a

participant in the special scheme has submitted a special scheme

5

return which understates his liability to UK VAT, they may give

him a notice—

                      (a)                     identifying the return in which they consider that the

understatement was made,

                      (b)                     specifying the amount by which they consider that the

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person’s liability to UK VAT has been understated, and

                      (c)                     requesting him to pay that amount to the Controller within

the period of 30 days beginning with the date on which the

notice is given.

                           (2)               If the Commissioners consider that a person who is or has been a

15

participant in the special scheme has submitted a special scheme

return which overstates his liability to UK VAT, they may give

him a notice—

                      (a)                     identifying the return in which they consider that the

overstatement was made, and

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                      (b)                     specifying the amount by which they consider that the

person’s liability to UK VAT has been overstated.

                           (3)               Where the Commissioners give a person a notice under sub-

paragraph (2) above, they are liable to pay him the amount

specified in the notice.

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                           (4)               No notice under this paragraph may be given more than 3 years

after the end of the period for which the special scheme return in

question was made.

                           (5)               In this Schedule, “participant in the special scheme” means a

person who—

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                      (a)                     is registered under this Schedule, or

                      (b)                     is identified under any provision of the law of another

member State which implements Article 26c.

                           (6)               In this paragraph—

                       “special scheme return” means—

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                              (a)                             a special accounting return; or

                              (b)                             a value added tax return submitted to the tax

authorities of another member State;

                       “UK VAT” means VAT which a person is liable to pay

(whether in the United Kingdom or another member

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State) in respect of qualifying supplies treated as made in

the United Kingdom at a time when he is or was a

participant in the special scheme;

                       “value added tax return”, in relation to another member

State, means any value added tax return required to be

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submitted under any provision of the law of that member

 

 

Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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State which implements Article 26c(B)(5) of the 1977 VAT

Directive.

Part 4

Application of provisions relating to VAT

Registration under this Act

5

          17                Notwithstanding any provision in this Act to the contrary, a

participant in the special scheme is not required to be registered

under this Act by virtue of making qualifying supplies.

De-registration

          18                Where a person who is registered under Schedule 1 satisfies the

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Commissioners that he intends to apply for—

                      (a)                     registration under this Schedule, or

                      (b)                     identification under any provision of the law of another

member State which implements Article 26c,

                            they may, if he so requests, cancel his registration under Schedule

15

1 with effect from the day on which the request is made or from

such later date as may be agreed between him and the

Commissioners.

VAT representatives

          19                Section 48(1) (VAT representatives) does not permit the

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Commissioners to direct a participant in the special scheme to

appoint a VAT representative.

Appeals

          20               (1)               An appeal shall lie to a tribunal with respect to any of the

following—

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                      (a)                     the registration or cancellation of the registration of any

person under this Schedule;

                      (b)                     a decision of the Commissioners to give a notice under

sub-paragraph (1) of paragraph 16 above;

                      (c)                     the amount specified in any such notice or in a notice

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under sub-paragraph (2) of that paragraph.

                           (2)               Part 5 (appeals), and any orders or regulations under that Part,

have effect in relation to an appeal under this paragraph as if it

were an appeal under section 83 (but not under any particular

paragraph of that section).

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Payments on account of non-UK VAT to other member States

          21               (1)               Neither—

                      (a)                     paragraph 1(2) of Schedule 11, nor

                      (b)                     section 10 of the Exchequer and Audit Departments Act

1866,

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Finance Bill
Schedule 2 — Supply of electronic services in member States: VAT special accounting scheme

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                                             applies to money or securities for money collected or received for

or on account of VAT if required to be paid to another member

State by virtue of the VAT Co-operation Regulation.

                           (2)               In sub-paragraph (1) above, “the VAT Co-operation Regulation”

means the Council Regulation of 27 January 1992 on

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administrative co-operation in the field of indirect taxation (VAT)

(218/92/EEC), as amended by the Council Regulation of 7 May

2002 (792/2002/EC) (which temporarily amends the VAT Co-

operation Regulation as regards additional measures regarding

electronic commerce).

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Refund of UK VAT

          22               (1)               The provisions which give effect to the 1986 VAT Refund Directive

in the United Kingdom have effect in relation to a participant in

the special scheme, but with the following modifications.

                           (2)               The provision which gives effect to Article 2(1) of the 1986 VAT

15

Refund Directive (as at 9th April 2003, see regulation 186 of the

Value Added Tax Regulations 1995) shall apply in relation to a

participant in the special scheme, but only so as to entitle him to a

refund of VAT charged on—

                      (a)                     goods imported by him into the United Kingdom, and

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                      (b)                     supplies made to him in the United Kingdom,

                                             in connection with the making by him of qualifying supplies while

he is a participant in the special scheme.

                           (3)               The following provisions shall be omitted.

                           (4)               The first provision is that which gives effect to Article 1(1) of the

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1986 VAT Refund Directive, so far as it requires a member State to

prevent a person who is deemed to have supplied services in that

member State during a period from being granted a refund of VAT

for that period (as at 9th April 2003, see regulation 188(2)(b) of the

Value Added Tax Regulations 1995).

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                           (5)               The second provision is that which gives effect to Article 2(2) of

the 1986 VAT Refund Directive (which permits member States to

make refunds conditional upon the granting by third States of

comparable advantages regarding turnover taxes: as at 9th April

2003, see regulation 188(1) of the Value Added Tax Regulations

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1995).

                           (6)               The third provision is that which gives effect to Article 2(3) of the

1986 VAT Refund Directive (which permits member States to

require the appointment of a tax representative: as at 9th April

2003, see regulation 187 of the Value Added Tax Regulations

40

1995).

                           (7)               The fourth provision is that which gives effect to Article 4(2) of the

1986 VAT Refund Directive (which permits member States to

provide for the exclusion of certain expenditure and to make

refunds subject to additional conditions).

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                           (8)               In this paragraph “the 1986 VAT Refund Directive” means the

Thirteenth Council Directive of 17th November 1986 on the

harmonisation of the laws of the member States relating to

 

 

 
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