value added tax 1 These Regulations may be cited as the Value Added Tax (Amendment) Regulations 2007 and come into force on 1st March 2007. 2 The Value Added Tax Regulations 1995 are amended as follows. 3 For regulation 170A substitute— 170A 1 This regulation applies where— a the claimant made a supply of goods and, in connection with that supply, a supply of credit; b those supplies were made under a hire purchase, conditional sale or credit sale agreement; and c a payment is received in relation to those supplies (other than a payment of an amount upon which interest is not charged). 2 Where the supply of goods was made before 1st September 2006 the payment shall be attributed in accordance with the rule set out in paragraph (5). 3 Where the supply of goods was made on or after 1st September 2006 and before 1st September 2007 the payment may be attributed in accordance with the rule set out in paragraph (5) or (6). 4 Where the supply of goods was made on or after 1st September 2007 the payment shall be attributed in accordance with the rule set out in paragraph (6). 5 Where this paragraph applies, the payment shall be attributed — a as to the amount obtained by multiplying it by the fraction A B , to the supply of credit; and b as to the balance, to the supply of goods, where— A is the total of the interest on the credit provided under the agreement under which the supplies are made (determined as at the date of the making of the agreement); and B is the total amount payable under the agreement, less any amount upon which interest is not charged. 6 Where this paragraph applies, the payment shall be attributed — a in respect of payments made on or before termination of the agreement, i as to the amount obtained by multiplying it by the fraction A B , to the supply of credit; and ii as to the balance, to the supply of goods, where— A is the total of the interest on the credit provided under the agreement, less any rebate of interest granted, less any interest attributable to any unpaid instalments prior to the termination; and B is the total amount payable under the agreement being the total of A plus the total for the goods. “Total for the goods” means the amount due for the goods under the agreement, less any reduction as a consequence of termination, less any amount upon which interest is not charged, less any part of the total due for the goods which is unpaid at the time of termination. b in respect of payments made after termination of the agreement, between the supply of goods and the supply of credit according to the proportion of the balances due at the time the payment is made. 7 Where an agreement provides for a variation of the rate of interest after the date of the making of the agreement then, for the purposes of the calculation in paragraph (5), it shall be assumed that the rate is not varied. . 4 For regulation 171(1) substitute— 171—Where a claimant— a has received a refund upon a claim, and b either— i a payment for the relevant supply is subsequently received, or ii a payment is, by virtue of regulation 170 or 170A, treated as attributed to the relevant supply, or iii the consideration for any relevant supply upon which the claim to refund is based is reduced after the claim is made, he shall repay to the Commissioners such an amount as equals the amount of the refund, or the balance thereof, multiplied by a fraction of which the numerator is the amount so received or attributed, and the denominator is the amount of the outstanding consideration, or such an amount as is equal to the negative entry made in the VAT allowable portion of his VAT account as provided for in regulation 38. . 5 In regulation 172J for “170A” substitute “170A(5)”. Paul Gray Mike Eland Two of the Commissioners for Her Majesty’s Revenue and Customs 7th February 2007