Commentary

V16.974 Place of supply of natural gas and electricity (also heat and cooling)

Part V16 Forms and other HMRC material

V16.974 Place of supply of natural gas and electricity (also heat and cooling)

V16.974 Place of supply of natural gas and electricity (also heat and cooling)

Information Sheet 21/10, January 2011

This Information Sheet replaces Information Sheet 10/04 (Changes to the place of supply of natural gas and electricity). It reflects minor changes to existing rules and an extension of the arrangements to cover heat and cooling, both effective from 1 January 2011.

1 Introduction

1.1 Content

This Information Sheet explains the special VAT treatment of supplies of natural gas and electricity. It also applies to heat and cooling. The main focus is on the place of supply, but there are other related provisions (see paragraph 2.2).

1.2 Changes from 1 January 2011

As a result of the changes effective from 1 January 2011

  1.  

    —     the arrangements also apply to heat and cooling (see paragraph 2.4)

  2.  

    —     for natural gas the rules extend to all types of pipeline (including storage facilities), but only where the pipeline is located within the EU or is linked to a system within the EU (see paragraph 2.2), and

  3.  

    —     the relief from VAT at importation extends to all imports of natural gas via the UK natural gas system (including wet gas and liquid natural gas imported by tanker) (see paragraph 6.1).

1.3 Those affected

The content of this Information Sheet will be of interest to suppliers, importers and VAT-registered recipients of natural gas, electricity, heat and cooling.

1.4 Background

These arrangements simplify the VAT rules for cross-border supplies of natural gas, electricity, heat and cooling. Under the normal rules goods are taxed at the place where dispatch

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