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13 Value Added Tax (Requirement Of Evidence Or Security)

Volume 403: debated on Monday 14 April 2003

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(1) The Value Added Tax Act 1994 shall be amended in accordance with paragraphs (2) to (7) below.

(2) In section 24(6)(a), after "documents" there shall be inserted "or other information".

(3) In paragraph 4 of Schedule 11, for sub-paragraph (1) there shall be substituted—

"(1) The Commissioners may, as a condition of allowing or repaying input tax to any person, require the production of such evidence relating to VAT as they may specify.

(1A) If they think it necessary for the protection of the revenue, the Commissioners may require, as a condition of making any VAT credit, the giving of such security for the amount of the payment as appears to them appropriate.".

(4) For sub-paragraph (2) of that paragraph there shall be substituted—

(2)"If they think it necessary for the protection of the revenue, the Commissioners may require a taxable person, as a condition of his supplying or being supplied with goods or services under a taxable supply, to give security, or further security, for the payment of any VAT that is or may become due from—

  • (a) the taxable person, or
  • (b) any person by or to whom relevant goods or services are supplied.
  • (3) In sub-paragraph (2) above "relevant goods or services" means goods or services supplied by or to the taxable person.

    (4) Security under sub-paragraph (2) above shall be of such amount, and shall be given in such manner, as the Commissioners may determine.

    (5) The powers conferred on the Commissioners by sub-paragraph (2) above are without prejudice to their powers under section 48(7).".

    (5)In section 72(11) after "supplies" there shall be inserted "or is supplied with".

    (6) In section 83(1) for "paragraph 4(2)" there shall be substituted "paragraph 4(1A), (2) or (3)".

    (7) In section 84, after subsection (4D) there shall be inserted—

    "(4E) Where an appeal is brought against a requirement imposed under paragraph 4(2)(b) of Schedule 11 that a person give security, the tribunal shall allow the appeal unless the Commissioners satisfy the tribunal that—

  • (a) there has been an evasion of, or an attempt to evade, VAT in relation to goods or services supplied to or by that person, or
  • (b) it is likely, or without the requirement for security it is likely, that VAT in relation to such goods or services will be evaded.
  • (4F) A reference in subsection (4E) above to evading VAT includes a reference to obtaining a VAT credit that is not due or a VAT credit in excess of what is due.".

    (8) This Resolution shall come into force on 10th April 2003.

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.