Value Added Tax Act 1994 section 20

Value of supplies to connected persons

Section 20 extends the existing rules on valuing supplies made to connected persons at less than market value so that they also apply to scheme supplies made by participants in non-UK schemes.

• The existing Schedule 6 rules require supplies to connected persons to be valued at market value where the supply is made at less than that amount.
• These connected person valuation rules normally apply to supplies made by taxable persons.
• Section 20 extends this so that scheme supplies made by participants in non-UK schemes are also caught, provided those supplies are treated as made in the United Kingdom.
• This prevents participants in non-UK schemes from undervaluing supplies to connected persons to reduce the VAT due.