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HMRC internal manual

VAT Civil Penalties

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HM Revenue & Customs
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New Means of Transport: Definitions: Definition of date of first entry into service

Please note: the Section 67 VATA 1994 penalty has been replaced by the Failure to Notify penalty introduced by Schedule 41 Finance Act 2008. The Failure to Notify penalty applies to obligations to notify the acquisition of a new means of transport on or after 01/04/2010. The penalty under Section 67 VATA 1994 continues to apply where the obligation to notify the acquisition of a new means of transport occurs before 01/04/2010.

Please see the Compliance Handbook CH70000 for more information about the Failure to Notify penalty.

The definition of the “date of first entry into service” is set out in the VAT Regulations 1995 regulation 147.

A means of transport is to be treated as having first entered into service in the following circumstances

“(a) In the case of a ship or aircraft -

(i) When it is delivered from its manufacturer to its first purchaser or owner, or its first being made available to its first purchaser or owner, whichever is the earlier.

or

(ii) If its manufacturer takes it into use for demonstration purposes, its being first taken into such use.

and

(b) In the case of a motorised land vehicle-

(i) Its first registration for road use by the competent authority in the Member State of its manufacture or when a liability to register for road use is first incurred in the member State of its manufacture, whichever is the earlier.

or

(ii) If it is not liable to be registered for road use in the Member State of its manufacture, its removal by its first purchaser or owner, or its first delivery or its being made available to its first purchaser, whichever is earlier.

or

(iii) If its manufacturer takes it into use for demonstration purposes, its first being taken into such use.

(2) Where the times specified in paragraph (1) of this regulation cannot be established to the Commissioners’ satisfaction, a means of transport is to be treated as having first entered into service on the issue of an invoice relating to the first supply of the means of transport.”