Commentary

701/9/11 Commodities and terminal markets

Part V8 HMRC Notices
Part V8 HMRC Notices | Commentary

701/9/11 Commodities and terminal markets

Part V8 HMRC Notices | Commentary

701/9/11
Commodities and terminal markets

October 2011

This notice cancels and replaces Notice 701/9/02 (March 2002).

1 Introduction

1.1 What is this notice about?

This notice tells you about the VAT treatment of transactions—

  1.  

    —     in commodities and commodity derivatives; and

  2.  

    —     on terminal markets.

Section 2 explains the VAT treatment of contracts based on underlying commodities.

Section 3 explains what supplies of goods and services, made in the course of dealings on certain commodity (or “terminal”) markets, are zero-rated.

Section 4 lists these markets and market members.

Main narrative treatment—V4.208.

1.2 Who should read this notice?

You should read this notice if you are—

  1.  

    —     a bank or other financial institution;

  2.  

    —     a commodity trade house;

  3.  

    —     a brokerage house;

  4.  

    —     an exchange;

  5.  

    —     another specialist firm;

  6.  

    —     VAT registered and dealing on commodity markets or in options or other derivatives (for example, if you are a commodity trader or market-marker; merchant or agent; intermediary involved in commodity derivatives).

Main narrative treatment—V4.208.

1.3 Financial services

If you are involved in any of the supplies listed below, you should read Notice 701/49 “Finance” before deciding on the VAT treatment of your supply—

  1.  

    —     money and dealing with money;

  2.  

    —     securities for money;

  3.  

    —     debt assignment and factoring;

  4.  

    —     credit and credit/debit cards;

  5.  

    —     financial derivatives;

  6.  

    —     brokers and intermediaries involved in any of the above supplies.

Main narrative treatment—V4.136–V4.136J.

1.4 What law does this notice cover?

This notice reflects the law at—

  1.  

    —     VATA 1994 s 50; and

  2.  

    —     VAT (Terminal Markets) Order 1973 (as amended).

2 Commodities

2.1 Commodity futures, options and other derivatives

A commodity is a raw

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial