Commentary

V2.189 Liability to register for VAT for persons disposing of assets (anti-avoidance)

Part V2 Registration – deregistration

V2.189 Liability to register for VAT for persons disposing of assets (anti-avoidance)

VAT registration—disposals of assets

V2.189 Liability to register for VAT for persons disposing of assets (anti-avoidance)

The provisions of VATA 1994, Sch 3A, described below, are designed to counter a perceived VAT avoidance scheme. Briefly, the scheme took advantage of the fact that the disposal of the business assets is disregarded when calculating the level of taxable supplies when determining whether there is a liability to register for VAT under VATA 1994, Sch 11. As a result a person not established in the UK could purchase assets in the UK, obtain a refund of VAT under the (former) Eighth or Thirteenth Directive schemes (see V5.152), and dispose of the assets in the UK without incurring a VAT liability on their disposal.

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