22. Special rules in relation to supplies of goods

Summary

This section contains 3 special rules in relation to supplies of goods by agents, finance houses and liquidators. First, it provides that supplies by agents (such as auctioneers) on a commission basis are treated as simultaneous sales to and by the agent. Second, it provides that disposals of repossessed goods are treated as supplies for VAT purposes. Third, it provides that disposals by liquidators – for example, during a winding up of a company – are deemed to be supplied by the accountable person.

Details

(1) Subsection (1) deals with supplies of goods on a commission basis through an auctioneer or agent (see also section 19(1)(b)). It provides that although auctioneers or agents sell goods on behalf of others, sales of movable goods by them on a commission basis are treated for VAT purposes as a simultaneous sale of the goods to, and by, them. This subsection also provides for the time of supply of the deemed sale of the goods to the auctioneer/agent. It treats the supply of movable goods to an auctioneer or agent as taking place at the time the auctioneer or agent sells those goods. This avoids having two separate times of supply in such sales.

(2) Subsection (2) provides that the disposal by a finance house of all goods repossessed from customers who default on their hire purchase agreements is a supply for VAT purposes and paragraph 12 of Schedule 1 (i.e. exemption for supplies of goods that were used in business where tax was not claimed or passed on) does not apply.

(3)(a) Subsection (3) deals with sales of an accountable person’s assets by liquidators, receivers or other persons who might dispose of goods forming part of the assets of an accountable person in settlement of a debt, or in the course of a winding-up of a company. Under this provision, the accountable person’s business assets that are being disposed of by the liquidator, etc. are deemed to be supplied by the accountable person in the course or furtherance of his/her business.

This subsection should be read in conjunction with sections 76(2) and 76(3), which provide that the liquidator/receiver etc. is responsible for paying the VAT and sending in the return and that the owner of the goods disposed of does not include details of the supplies in his/her own VAT return.

(3)(b) Paragraph (b) extends the application of subsection (3)(a) to include disposals of interests in immovable goods.

Relevant Date: Finance Act 2020