Commentary

V16.958 VAT—changes to the operation of the option to tax on supplies of land and buildings

Part V16 Forms and other HMRC material

V16.958 VAT—changes to the operation of the option to tax on supplies of land and buildings

V16.958 VAT—changes to the operation of the option to tax on supplies of land and buildings

Information Sheet 2/10, March 2010

1 Introduction

1.1 This Information Sheet introduces and explains the minor amendments to Sch 10 of VATA 1994 and the associated tertiary legislation (which has the force of law) that take effect on 1 April 2010.

1.2 As announced in R & C Brief 08/10 (RCB/8/10, Division V16.3), there are two amendments being made to Sch 10 of VATA 1994 together with linked new and amended tertiary legislation which require further explanation. These amendments, which address specific concerns raised from on-going consultation with business, are as follows:

  1.  

    —     changes to the option to tax anti-avoidance provision whereby an option will not be disapplied if there is occupation of minor parts of buildings by development financiers;

  2.  

    —     easing of the conditions under which an option to tax can be revoked during the “cooling-off period”.

1.3 The new and amended tertiary legislation is published in Annex A and Annex B to this Information Sheet and will be published in a revised edition of Notice 742A “Opting to tax land and buildings” later in 2010.

2 Changes to Sch 10 to VATA 1994 and tertiary legislation in Notice 742A “Option to tax land and buildings” (legislation governing the option to tax)

The following legislation has been amended:

  1.  

    —     Schedule 10 Paragraph 15: Changes to the anti-avoidance provision (“occupation” rules) – introduction of new sub-paragraph 15(3A). Introduction of new tertiary legislation (see Annex A below).

  2.  

    —     Schedule 10 Paragraph

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