Finance Act 1972

JurisdictionUK Non-devolved
Citation1972 c. 41


Finance Act 1972

1972 CHAPTER 41

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.

[27th July 1972]

Most Gracious Sovereign,

W e , Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

I Value added tax

Part I

Value added tax

Imposition and extent of tax

Imposition and extent of tax

S-1 Value added tax.

1 Value added tax.

(1) A tax, to be known as value added tax, shall be charged in accordance with the provisions of this Part of this Act on the supply of goods and services in the United Kingdom (including anything treated as such a supply) and on the importation of goods into the United Kingdom.

(2) The tax shall be under the care and management of the Commissioners.

(3) All money and securities for money collected or received for or on account of the tax shall—

( a ) if collected or received in Great Britain, be placed to the general account of the Commissioners kept at the Bank of England under section 11 of the Customs and Excise Act 1952 ;

( b ) if collected or received in Northern Ireland, be paid into the Consolidated Fund of the United Kingdom in such manner as the Treasury may direct.

(4) The Government of Ireland Act 1920 shall have effect as if the tax were one of the taxes mentioned in section 22(1) of that Act (reserved taxes).

(5) The Provisional Collection of Taxes Act 1968 shall be amended by inserting in subsection (1) of section 1, after the words ‘income tax’, the words ‘value added tax’; and the Act as so amended shall apply in relation to a resolution of the House of Commons passed before 1st April 1974 and providing for any variation of that tax as it applies in relation to such a resolution as is mentioned in subsection (2)( a ) of that section.

S-2 Scope of tax.

2 Scope of tax.

(1) Except as otherwise provided by this Part of this Act the tax shall be charged and payable as follows.

(2) Tax on the supply of goods or services shall be charged only where—

( a ) the supply is a taxable supply; and

( b ) the goods or services are supplied by a taxable person in the course of a business carried on by him;

and shall be payable by the person supplying the goods or services.

(3) Tax on the importation of goods shall be charged and payable as if it were a duty of customs.

(4) Any reference in the following provisions of this Part of this Act to the supply by any person of goods or services is a reference to such a supply in the United Kingdom in the course of a business carried on by him.

S-3 Deduction of input tax.

3 Deduction of input tax.

(1) The following tax (in this Part of this Act referred to as ‘input tax’), that is to say—

( a ) tax on the supply to a taxable person of any goods or services for the purpose of a business carried on or to be carried on by him; and

( b ) tax paid or payable by a taxable person on the importation of any goods used or to be used for the purpose of a business carried on or to be carried on by him;

may, at the end of any prescribed accounting period, be deducted by him, so far as not previously deducted and to the extent and subject to the exceptions provided for by or under this section, from the tax chargeable on supplies by him (in this section referred to as ‘output tax’).

(2) Where the amount of input tax that may be so deducted by any person exceeds the amount of the output tax due from him, the amount of the excess shall be paid to him by the Commissioners.

(3) Subject to subsection (6) of this section, the input tax that may be deducted by a taxable person shall be—

( a ) the whole of that tax, if all his supplies of goods or services are taxable supplies; and

( b ) such part of that tax as, in accordance with regulations under this section, is attributable to taxable supplies, if some but not all of his supplies of goods or services are taxable supplies;

and any such regulations may provide for treating all supplies of goods or services by any person as taxable supplies where the tax attributable to exempt supplies would be less than such amount or less than such part of the whole of the tax as may be specified in the regulations or in such other circumstances as may be so specified.

(4) The Commissioners shall make regulations for securing a fair and reasonable attribution of input tax to taxable supplies, and any such regulations may provide for—

( a ) determining a proportion of supplies in any prescribed accounting period which is to be taken as consisting of taxable supplies; and

( b ) provisionally attributing input tax in accordance with the proportion so determined and adjusting the attribution for periods comprising two or more prescribed accounting periods or parts thereof;

and may make different provision for different circumstances and, in particular (but without prejudice to the generality of this provision) for different descriptions of goods or services and may contain such incidental and supplementary provisions as appear to the Commissioners necessary or expedient.

(5) Regulations under this section may include provision for enabling a taxable person to deduct as input tax, in such circumstances, to such extent and subject to such conditions as may be specified in the regulations, tax on the supply to him, or paid by him on the importation, of goods notwithstanding that he was not a taxable person at the time of the supply or payment.

(6) The Treasury may by order make provision for excepting from the preceding provisions of this section input tax chargeable on such supplies and importations as may be specified in the order, and any such provision may be framed by reference to the description of goods or services supplied or goods imported, the persons by whom they are supplied or imported or to whom they are supplied, the purposes for which they are supplied or imported, or any circumstances whatsoever; and any such order may contain provision for consequential relief from output tax.

S-4 Taxable persons.

4 Taxable persons.

(1) A person who makes or intends to make taxable supplies is a taxable person while he is or is required to be registered under this Part of this Act.

(2) Schedule 1 to this Act shall have effect with respect to the registration of persons under this Part of this Act.

Supply

Supply

S-5 Supply of goods and services.

5 Supply of goods and services.

(1) The following provisions apply for determining for the purposes of this Part of this Act what is a supply of goods or services.

(2) Supply of goods includes all forms of supply and, in particular, the letting of goods on hire and the making of a gift or loan of goods; but supply of services does not include anything done otherwise than for a consideration.

(3) Where a person produces goods by applying to another person's goods a treatment or process he is treated as supplying goods and not as supplying services.

(4) The supply of any form of power, heat, refrigeration or ventilation is a supply of goods and not of services.

(5) Schedule 2 to this Act shall have effect with respect to matters to be treated as a supply of goods.

(6) The granting, assignment or surrender of a major interest in land shall be treated as a supply of goods.

In this subsection ‘major interest’ means the fee simple or a tenancy for a term certain exceeding twenty-one years, and, in relation to Scotland, means the estate or interest of the proprietor of the dominium utile , or in the case of land not held on feudal tenure, the estate or interest of the owner, or the lessee's interest under a lease for a period exceeding twenty-one years.

(7) Subject to the preceding provisions of this section, the Treasury may by order provide with respect to any description of transaction—

( a ) that it is to be treated as a supply of goods and not as a supply of services; or

( b ) that it is to be treated as a supply of services and not as a supply of goods; or

( c ) that it is to be treated as neither a supply of goods nor a supply of services.

(8) Subject to the preceding provisions of this section, anything which is not a supply of goods but is done for a consideration (including, if so done, the granting, assignment or surrender of the whole or part of any right) is a supply of services.

S-6 Self-supply.

6 Self-supply.

(1) The Treasury may by order make provision for securing, subject to any exceptions provided for by or under the order, that, where in such circumstances as may be specified in the order goods of a description so specified are acquired or produced by a person in the course of a business carried on by him and—

( a ) are neither supplied to another person nor incorporated in other goods produced in the course of that business; but

( b ) are used by him...

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