Value Added Tax Act 1994 Schedule 9A paragraph 1

Power to give directions

Schedule 9A paragraph 1 sets out the circumstances in which HMRC may issue a direction to counteract a tax advantage arising where VAT has been charged on a supply at less than its full value, typically in connection with VAT group membership changes or certain transactions.

• HMRC may issue a direction where a "relevant event" (joining or leaving a VAT group, or entering into a transaction) leads to VAT being charged on a supply at less than its full value, creating a tax advantage
• A tax advantage arises where someone has claimed input tax credit or an overseas business repayment in respect of a supply on which VAT was not charged by reference to its full value
• Where business assets are transferred as a going concern, the transferor and transferee are treated as the same person when determining whether input tax credits are attributable to an undercharged supply, and this look-through treatment extends back through any chain of successive going concern transfers
• Where a right to receive goods or services is supplied, followed by actual supplies under that right, all such supplies are treated as different parts of a single supply for the purpose of determining input tax credit or repayment entitlements