Section 81 | Insurance premium tax relief limited to adapted vehicles

(1)In Schedule 7A to FA 1994 (insurance premium tax: contracts that are not taxable), for paragraph 3 (and the italic heading before it) substitute—

3Contracts relating to motor vehicles let on relevant benefit terms

(1)A contract falls within this paragraph if it relates only to a motor vehicle and—

(a)the vehicle is let on hire on relevant benefit terms to a person, and

(b)the supply of the vehicle to that person is zero-rated for the purposes of the Value Added Tax Act 1994 as a result of it being a supply falling within—

(i)paragraph (f) in item 2 in Group 12 in Schedule 8 to that Act, or

(ii)item 2A in that Group.

(2)“Relevant benefit terms” is to be construed in accordance with paragraph (2) of item 15 in Group 12 in Schedule 8 to the Value Added Tax Act 1994 (zero-rating).

(2)The amendment made by this section has effect in relation to contracts relating to leases of motor vehicles where the lease commences on or after—

(a)1 July 2026, or

(b)such later date as may be appointed in regulations made (before 1 July 2026) by statutory instrument by the Treasury.