Value Added Tax Act 1994 Schedule 9A paragraph 2

Restrictions on giving directions

Schedule 9A paragraph 2 sets out the circumstances in which HMRC are prevented from issuing a direction under the anti-avoidance provisions of Schedule 9A, and the exception to that protection.

• HMRC cannot issue a direction under Schedule 9A where they are satisfied that the change in VAT treatment or the transaction in question was driven by a genuine commercial purpose.
• The genuine commercial purpose must be unconnected with triggering the conditions for a direction set out in paragraph 1(3) of Schedule 9A.
• The protection applies whether the change or transaction had a single main purpose or multiple main purposes, provided each of those main purposes was genuinely commercial.
• This protection does not apply where the relevant event is the compulsory termination of a person's VAT group membership by HMRC under section 43C(1) or (3).