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Introduction

VATA 1994, s 26A¹ introduced, from 1 January 2003, a provision that a person ceases to be entitled to input tax credit at the end of a six-month period² beginning with the 'relevant date' if, at the end of that period, the consideration (or any part of it) for the supply in question remains unpaid. The 'relevant date' means the date of the supply or, if later, the date on which the sum became payable. HMRC may, by regulations, make supplementary, incidental, consequential or transitional provisions as they consider necessary. In particular, such regulations may provide³:

1. Ìý

   •ÌýÌýÌýÌý for the restoration of entitlement to input tax credit where payment is subsequently made

2. Ìý

   •ÌýÌýÌýÌý for ascertaining whether anything paid is to be taken as paid by way of consideration, and

3. Ìý

   •ÌýÌýÌýÌý for particular cases, such as part payments and mutual debts

Regulations⁴ were introduced with effect from 1 January 2003. These regulations set out, inter alia,