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HMRC internal manual

VAT Single Market

Supply and acquisition: acquisition: basic rules

The basic rules that apply to taxable acquisitions of goods are set out in section 10(3) of the VAT Act 1993 (see VATSM3315). Taxable acquisitions occur where goods are received from another Member State

  • in the course or furtherance of a business, or
  • as a result of an activity (not necessarily by way of business) undertaken by a body corporate or any other body or association, and
  • where the supplier is taxable in the Member State of origin of the goods.

This means that private individuals are not subject to acquisition VAT on goods bought for non-business use. In that case the supply is normally subject to VAT in the Member State of dispatch (but see VATSM3700 for information about distance selling).

Goods acquired in respect of all activities carried by any other entity for whatever purpose (not necessarily by way of business) are potentially subject to acquisition VAT in the UK. Depending on the values involved, this can result in a UK purchaser being required to register for VAT in the UK on the strength of its acquisitions alone. For further information about this see the manual covering registration (see also VATSM3600).

Special rules apply in the case of excise goods (see VATSM6400) and new means of transport (see the manual covering new means of transport (VATNMT)).