Schedule 10, Part 2, paragraph 37

Where this paragraph applies, P’s interest, right or licence in the relevant premises held immediately prior to the time when the increase referred to in paragraph 36(1) occurs is treated for the purposes of this Part of this Schedule as— immediately prior to the time of that increase. supplied to P for the purposes of a business which P carries on, and supplied by P in the course or furtherance of that business The supply is taken to be a taxable supply which is not zero-rated as a result of Group 5 of Schedule 8. The value of the supply is taken to be— in the case of the first deemed supply under this paragraph, the amount obtained by the formula— R2×Y×(120−Z120), and in the case of any subsequent deemed supply under this paragraph, the amount obtained by the formula— (R2−R1)×Y×(120−Z120) For the purpose of sub-paragraph (3)— had the relevant premises not been intended for use solely for a relevant residential purpose or a relevant charitable purpose, and R1 and R2 have the meaning given by paragraph 36(1)(b), Y is the amount that yields an amount of VAT chargeable on it equal to— the VAT which would have been chargeable on the relevant zero-rated supply, or if there was more than one supply, the aggregate amount of the VAT which would have been chargeable on the supplies, Z is the number of whole months since the day on which the relevant premises were completed.

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Source: legislation.gov.uk · retrieved 2026-07-28