The Treasury advises that minor VAT amendments to the Value Added Tax Act 1996 which has been implemented by the Value Added Tax Act 1996 (Amendment) Order 2024 have come into operation.
This Order is required under the terms of the Customs and Excise Agreement 1979 to keep the rules and procedures in relation to customs and excise duties in line with those in place in the United Kingdom.
The aforementioned amendments are as follows:
DIY Housebuilders Scheme
This Order inserts a new power into section 35 of the Value Added Tax Act 1996, that gives Treasury a clear power to request further evidence from a person who has submitted a DIY housebuilder’s claim on or after 24 May 2024. This is to assist the Treasury with validating claims and carrying out compliance checks. In cases where the documents are not produced as required, Treasury may refuse to refund the amount of VAT (or any part of it) in respect of which the claim was made.
To make a claim for buildings and conversions you must do this no more than 6 months after it is completed. The 6 months start from the date of the completion certification or other evidence that you provide to support completion of the property. You can only make a single claim under the scheme.
Following the digitisation of the Do-It-Yourself ('DIY') housebuilders’ scheme, providing claimants with the option of submitting claims electronically, the updated claim forms which can be completed digitally and submitted to Customs via email are available for download with supporting guidance from our website. You are strongly encouraged to read the DIY Housebuilders Scheme webpage and guidance before making a claim.
Repayment Interest
The amendments deliver two minor changes to the legislation which governs the interaction between late payment interest and repayment interest for VAT. The changes ensure that provisions concerning the recovery of repayment interest and the 'common period rules' operate as intended.
The amendments have effect from 1 January 2023 so as to ensure that it is as if it had been in its amended form for the entire duration of it having been in operation.
Caravan zero-rating
This Order allows supplies of caravans manufactured to meet the requirements of the 2023 version of British Standard 3632 to benefit from the zero rate of VAT in the same way as caravans that meet the requirements of previous versions of British Standard 3632.
Residential caravans are zero rated, so as to apply a similar VAT treatment to different types of living accommodation. For the zero rate to apply, caravans must meet the relevant size criteria and be manufactured to British Standard 3632, so that they are suitable for year-round occupation. The Order applies the zero rate of VAT to supplies of caravans manufactured to all versions of the standard published by the BSI coming into effect on or after 17 June 2005. This includes BS3632:2023 which was published in September 2023. It also applies the zero rate to supplies of caravans which are manufactured to meet any new version of BS3632 which may be issued by the BSI in the future.
Contact Details
For general enquiries please email customs@gov.im or call +44 1624 648100 (Monday to Friday 8.30am to 4.30pm).
