V3.212 Goods used partly for non-business purposes
The charge to tax
A deemed supply of services takes place where goods held or used for the purposes of the business are, without consideration:
• put to any private use
• used for any purpose other than a purpose of the business, or
• made available to any person for use for any purpose other than a purpose of the business1
This provision is derived from art 26(1) of Directive 2006/112/EC2.
A supply of services is treated as taking place under these provisions if, in the case of a business carried on by an individual, goods or land are used or made available for use by himself personally3.
It is unnecessary for the goods to remain in existence following their use4.
The evolution of the deeming provisions
The purpose of the deemed supply provisions, as referred to in V3.201, is (inter alia) to prevent the final customer from benefiting from goods which have not borne VAT. It might be thought, therefore, that the deemed supply charge would only arise when the non-business use arose at some time subsequent to the initial purchase, since if non-business use were envisaged from the outset, the VAT could be 'captured' by disallowing the input tax (or part of it) on the purchase. Indeed, prior to 1 January 2011, UK legislation provided that where goods or services were obtained for both for business and non-business purposes, the input tax on the initial purchase should be apportioned, with only that proportion
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