Value Added Tax Act 1994 section 5

Meaning of supply: alteration by Treasury order

Section 5 defines what constitutes a "supply" for VAT purposes, distinguishes between supplies of goods and supplies of services, and gives the Treasury power to alter these classifications by order.

• A supply for VAT purposes includes all forms of supply, but only where something is done for a consideration — if there is no consideration (whether monetary or non-monetary), there is generally no supply unless a deemed supply applies
• Anything that is not a supply of goods but is done for a consideration — including granting, assigning or surrendering a right — is treated as a supply of services
• The Treasury can make orders reclassifying any type of transaction as a supply of goods, a supply of services, or neither, and can also create deemed supplies where a business uses its own goods or performs services for its own purposes
• Where goods are manufactured or produced from other goods, the raw materials or components are treated as incorporated into the finished goods