I move amendment No. 5.
In page 5, to delete lines 21 to 41 and to substitute the following:
" (3) Any of the following shall, if so provided by regulations, and in accordance therewith, be deemed, for the purposes of this Act, to be a supply of services by a person for consideration in the course or furtherance of his business—
(a) the use of goods forming part of the assets of his business for purposes other than those of his business,
(b) the supply by him of services for his own private or personal use and the supply by him of services free of charge for the private or personal use of his staff or for any purposes other than those of his business,
(c) the supply of goods for his own private or personal use or that of his staff, for the supply of which he provides materials or facilities or towards the cost of which he contributes in whole or in part,
(d) the supply by him of services, other than those referred to in the preceding paragraphs of this subsection, for the purposes of his business except where tax on such services, if it were chargeable, would be wholly deductible under section 12.".
This amendment redrafts paragraph 3 of the revised section 5 of the VAT Act which is being inserted by section 5 of this Bill. The amendment contains two substantive changes. First, it makes clear that implementing regulations under the proposed paragraph are not obligatory and, secondly, it widens the scope of the paragraph by enabling regulations to be made, if necessary, not only in relation to self-services rendered by taxable persons but by any person engaged in business.
In relation to the treatment of services supplied within a business or supplied free of charge or at a reduced charge to others it is important that any right of action should not be confined to taxable persons. The purpose of the provision is to prevent competitive distortion. This could arise from the actions of a non-taxable person such as a banker or an insurance company as much as from the actions of a taxable person. We are trying to keep them on the same basis of treatment.