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Amendment of section 12B (special scheme for means of transport supplied by taxable dealers) of Principal Act.
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122.— Section 12B of the Principal Act is amended with effect from 1 January 2010—
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(a) in subsection (4)—
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(i) in paragraph (b) by substituting “the taxable dealer.” for “the taxable dealer:”, and
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(ii) by deleting the proviso to subsection (4),
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(b) in subsection (11) by inserting the following after paragraph (c):
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“(d) This subsection, other than paragraph (e), does not apply on or after the date of the passing of the Finance Act 2010.
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(e) Where on the date of the passing of the Finance Act 2010 a taxable dealer has a means of transport in respect of which prior to that date the taxable dealer had not claimed deductibility in the circumstances referred to in paragraph (c), then, when that taxable dealer supplies that means of transport to another person, that supply shall be treated as a supply of margin scheme goods for the purposes of section 10A and section 10A(14)(b) shall apply for the purpose of the calculation of the profit margin (within the meaning of section 10A) in relation to that supply.”,
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and
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(c) by inserting the following after subsection (11):
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“(12) (a) Subject to paragraph (b), where a taxable dealer purchases or acquires a means of transport referred to in subsection (2) in the period from 1 January 2010 to 30 June 2010 (in this subsection referred to as the ‘transitional period’) the amount of residual tax referred to in subsection (4) which that taxable dealer is entitled to deduct shall be restricted to—
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(i) 40 per cent of the residual tax in the case of a means of transport purchased or acquired in the taxable period beginning on 1 January 2010,
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(ii) 30 per cent of the residual tax in the case of a means of transport purchased or acquired in the taxable period beginning on 1 March 2010, and
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(iii) 20 per cent of the residual tax in the case of a means of transport purchased or acquired in the taxable period beginning on 1 May 2010.
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(b) The entitlement to restricted residual tax as provided for in paragraph (a) applies only on the occasion of the first purchase or acquisition by a taxable dealer of a means of transport referred to in subsection (2) which occurs on or after 1 January 2010, and does not apply to any subsequent purchase or acquisition of that means of transport by that or any other taxable dealer.
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(c) Where a taxable dealer purchased or acquired a means of transport referred to in subsection (2) prior to 1 January 2010 and during the transitional period supplies that means of transport to another taxable dealer, the supplier shall indicate on the invoice in respect of that supply that the special scheme as provided for by this section has been applied and that restricted residual tax only is applicable.
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(d) Where a taxable dealer purchased or acquired a means of transport referred to in subsection (2) prior to 1 January 2010 and during the transitional period supplies that means of transport to a taxable person other than another taxable dealer, the supplier shall indicate on the invoice in respect of that supply that the special scheme as provided for by this section has been applied and that the invoice does not give the right to deduct the tax chargeable on that supply.
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(e) Where a taxable dealer opts to apply the margin scheme or applies the auction scheme to the supply of a means of transport referred to in subsection (2) which that dealer purchased or acquired on or after 1 January 2010, the supplier shall indicate on the invoice in respect of that supply that the margin scheme or the auction scheme, as appropriate, has been applied and no residual tax is applicable.
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(f) Where during the transitional period a taxable dealer purchases or acquires a means of transport referred to in subsection (2) from a person other than another taxable dealer—
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(i) the taxable dealer shall take all reasonable steps to establish whether or not the means of transport was acquired during the transitional period by that person from another taxable dealer (in this paragraph referred to as a ‘motor trader’), and
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(ii) if that person acquired the means of transport from a motor trader during the transitional period, the taxable dealer shall take all reasonable steps to establish whether or not restricted residual tax as provided for in paragraph (a) was deductible by that motor trader or any other taxable dealer in relation to the means of transport.
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(13) This section does not apply to a means of transport purchased or acquired on or after 1 July 2010.”.
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