Value Added Tax Act 1994 section 17

Free zone regulations

Section 17 gives HMRC the power to make regulations governing the VAT treatment of goods held in, moved into, or removed from designated free zones.

• HMRC may make "free zone regulations" covering the movement, storage, security and treatment of goods within a free zone, and goods located in a free zone are referred to as "free zone goods"
• Regulations may allow goods to leave a free zone or be destroyed without payment of VAT, subject to conditions HMRC determines, and may set the VAT rate and timing when goods lose their free zone status
• Where a person voluntarily chooses to pay VAT on goods that will remain in the free zone, regulations may determine the applicable VAT rate
• HMRC may also grant full or partial relief from import VAT, set rules for when a supply of free zone goods is treated as taking place, and specify how goods manufactured or assembled within a free zone are treated for VAT purposes