VATAFRS0115 | Introduction to the scheme: Law and regulations

The United Kingdom was entitled to introduce the scheme under the terms of the EC 6th VAT Directive (77/388/EEC), Article 25 (now the Principal Directive Dir. 2006/112 Article 295 – 305).

The scheme is governed in the UK by the following laws and regulations:

• VAT Act 1994 Section 54 introduces the UK flat rate scheme for farmers as an alternative to VAT registration;

• SI 1995/2518 the Value Added Tax Regulations 1995 Regulations 202 to 211 provide for admission to the scheme, certification and cancellation of certificates, and the requirement to keep and produce records;

• SI 1992/3220 the VAT (Flat Rate Scheme for Farmers) (Designated Activities) Order 1992 defines the farming activities which are included in the scheme;

• VAT Act 1994, Schedule 4 Paragraph 8(3) provides for relief from tax due on stocks and assets at deregistration when joining the scheme;

• VAT Act 1994 Section 69 provides for penalties for breach of regulatory requirements;

• VAT Act 1994, Section 83(m) allows for an appeal to Tribunal against any refusal to allow certification, any compulsorily cancellation of a certificate, or any refusal to cancel a certificate.