VAT: non-business use etc of business goods

Question proposed, That the clause stand part of the Bill.

The purpose of the clause is to restrict adjustments for input VAT when an asset is used partly for business purposes. HMRC has explained that the plan is to restrict adjustments to a 10-year period, according to Budget notice 56. However, the regulations do not limit the power in that way. Is there a particular reason why? Is it still the Government’s intention that the power should be restricted to adjustments over a 10-year period?

It is the Government’s intention simply that the clause brings the Lennartz accounting period into line with the capital goods scheme. At the same time, it implements the European Court of Justice’s judgment in the Wollny case. We intend the regulations to come into effect on 1 September. We have welcomed and discussed all interested parties’ comments on the matter, and particularly on transitional rules and retrospection, and we have been able to assure them about both points. I hope that the Committee will allow the clause to stand part of the Bill.

Question put and agreed to.

Clause 98 ordered to stand part of the Bill.