Citation and commencement

1. These Regulations may be cited as the Value Added Tax (Amendment) Regulations 2009 and come into force on 1st April 2009.

2. The Value Added Tax Regulations 1995( 3 ) are amended as follows.

Claims for input tax

3. In regulation 29 (claims for input tax)—

(a) in paragraph (1) for “Subject to paragraphs (1A) and (2) below” substitute “Subject to paragraph (1A) below”,

(b) at the end of paragraph (1), after “chargeable” insert “save that, where he does not at that time hold the document or invoice required by paragraph (2) below, he shall make his claim on the return for the first prescribed accounting period in which he holds that document or invoice”,

(c) in paragraph (1A)—

(i) at the beginning insert “Subject to paragraph (1B)”,

(ii) for “3 years” substitute “4 years”,

(iii) for “the prescribed accounting period in which the VAT became chargeable” substitute “the first prescribed accounting period in which he was entitled to claim that input tax in accordance with paragraph (1) above”,

(d) after paragraph (1A) insert—

“ (1B) The Commissioners shall not allow or direct a person to make any claim for deduction of input tax where the return for the first prescribed accounting period in which the person was entitled to claim that input tax in accordance with paragraph (1) above was required to be made on or before 31st March 2006. ” , and

(e) after paragraph (3) insert—

“ (4) Nothing in this regulation shall entitle a taxable person to deduct more than once input tax incurred on goods imported or acquired by him or on goods or services supplied to him. ” .

Correction of errors

4. In regulation 34 (correction of errors)—

(a) in paragraph (1A) after “Subject to paragraph (1B)” insert “and (1C)”,

(b) in paragraph (1A)(a) for “3 years” substitute “4 years”,

(c) in paragraph (1A)(b) for “3 years” substitute “4 years”,

(d) after paragraph (1B) insert—

“ (1C) Where paragraph (1B) above does not apply, any overstatement or understatement in a return shall be disregarded for the purposes of this regulation where the prescribed accounting period for which the return was made or required to be made ended on or before 31st March 2006. ” , and

(e) in paragraph (3) for “unless the difference is less than £10,000” substitute “unless the difference is £10,000 or less”.

Adjustments in the course of business

5. In regulation 38 (adjustments in the course of business)—

(a) in paragraph (1) omit “Subject to paragraph (1A) below,”,

(b) omit paragraph (1A),

(c) omit paragraph (1B),

(d) for paragraph (2) substitute “Where this regulation applies, both the taxable person who makes the supply and a taxable person who receives the supply shall adjust their respective VAT accounts in accordance with the provisions of this regulation.”, and

(e) in paragraph (5) insert “relevant” before “taxable person”.

Flat-rate scheme for small businesses

6. In regulation 55L (admission to scheme)—

(a) omit paragraph (1)(a)(ii),

(b) in paragraph (2) omit “or income”.

7. In regulation 55M (withdrawal from the scheme) after paragraph (3) insert—

“ (4) For the purposes of this regulation, “income” shall be calculated in accordance with the method specified in regulation 55G(1) (determining relevant turnover) used by the business to determine the value of its turnover whilst accounting for VAT under the scheme.

(5) Where a business has used more than one method to determine the value of its turnover whilst accounting for VAT under the scheme, the method referred to in paragraph (4) above shall be the most recent method used. ” .

Input tax: exceptional claims for VAT relief

8. In regulation 111 (exceptional claims for VAT relief)—

(a) in paragraph (2)(b)—

(i) after “Subject to paragraph (2A)” insert “, (2C) and (2D)”,

(ii) for “3 years” substitute “4 years”,

(b) after paragraph (2B) insert—

“ (2C) Where the relevant person was, or was required to be, registered on or before 1st April 2009, no VAT may be treated as if it were input tax under paragraph (1) above in respect of goods which were supplied to, or imported or acquired by the relevant person more than 3 years before the date with effect from which that person was, or was required to be, registered.

(2D) Where the relevant person was or was required to be registered on or before 31st March 2010 and paragraph (2C) above does not apply, no VAT may be treated as if it were input tax under paragraph (1) above in respect of goods which were supplied to, or imported or acquired by, the relevant person on or before 31st March 2006. ” ,

(c) in paragraph (3B)—

(i) at the beginning insert “Subject to paragraph (3C)”,

(ii) for “3 years” substitute “4 years”,

(d) after paragraph (3B) insert—

“ (3C) The Commissioners shall not allow a person to make any claim under paragraph (3) above in the circumstances where the first return the taxable person was required to make was required to be made on or before 31st March 2006. ” ,

(e) in paragraph (6)—

(i) after “Subject to paragraph 7” insert “and (8)”,

(ii) for “3 years” substitute “4 years”, and

(f) after paragraph (7) insert—

“ (8) No claim may be made under paragraph (5) above in relation to a supply of services which was made on or before 31st March 2006. ” .

Input tax adjustments: capital items

9. In regulation 115 (method of adjustment) for paragraph (8) substitute—

“ (8) For the purposes of paragraphs (9) and (10) below, a “specified return” means a return specified —

(a) in paragraph (6) above,

(b) in subparagraph (a) or (b) of that paragraph, or

(c) in paragraph (7) above.

(9) Subject to paragraph (10) below, the Commissioners shall not allow the taxable person to use a return other than a specified return unless it is the return for a prescribed accounting period commencing within 4 years of the end of the prescribed accounting period to which the specified return relates.

(10) The Commissioners shall not allow the taxable person to use a return other than a specified return where the specified return is the return for a prescribed accounting period finishing on or before 31st March 2006. ” .

Bad debt relief

10. In regulation 165A (time within which a claim must be made)—

(a) in paragraph 1—

(i) after “Subject to paragraph (3)” insert “and (4)”,

(ii) for “3 years and 6 months” substitute “4 years and 6 months”, and

(b) after paragraph (3) insert—

“ (4) A person shall be regarded for the purposes of this Part as having ceased to be entitled to a refund where the date mentioned at subparagraph (a) or (b) of paragraph (1) above, whichever is the later, is on or before 30th September 2005. ” .