How and When
Page 45
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PURCHASE TAX
Must be Paid
Official Statement Confirms that Road Haulage Tractors and Trailers are Exempt, but Tax Must be Paid on Articulated Vehicles. Rigid Vehicles Not Taxable until Body is Fitted
CONFIRMATION of the report, published exclusively in "The Commercial Motor" last week, that road haulage tractors and separate trailers were not liable to purchase tax, is cpntained in a notice (No. 78PA) published this week by the Commissioners of Customs• and Excise.
Articulated vehicles are, however, subject to tax. The tractor chassis is not chargeable until .the turntable or a similar coupling is fitted. The semitrailer chassis also is not chargeable, whether with or without turntable attachment or coupling, until the body is fitted. The person who fits the turntable to the tractor, or the body to the semi-trailer, is producing a chargeable article and is liable to the full tax on it.
The full list of exemptions is as follows:—
(A) Vehicles of the following descriptions constructed or adapted solely or mainly for the carriage of passengers: Ambulances and invalid carriages; trams, trolleybuses and other vehicles constructed to carry not fewer than 12 passengers; passenger vehicles of not loss than 3 tons unladen weight; prison vans and fire tenders.
Special Vehicles () Vehicles of the following descriptions designed and permanently fitted solely or mainly for a function other than the carriage of passengers or goods: Mobile cinemas, sound-film production vehicles, television production vehicles and recording vans; mobile canteens and shops, mobile clinics and travelling libraries (for the purpose of exemption, mobile canteens are vehicles which make provision for serving both food and drink for consumption in or st the vehicle. Mobile shops are ehicles which the customer enters to buy goods displayed on them. A similar criterion applies to travelling libraries); mobile printing presses and other mobile workshops; hearses but not hearsettes; gully emptiers, roadcleansing, road-watering and refusecollecting vehicles (including cesspoolemptiers and gas-main emptiers); travelling lavatories and wash places; breakdown vehicles fitted with jib cranes; and engineering plant (including air compressors, asphalt and tarmacadam plant, concrete mixers, dumpers, excavators, earth augers, mechanical shovels and grabs, mobile cranes, per-• cussion and rotary drilling rigs, road gritters, road rollers, sand spreaders, scrapers and graders, stone crushers, tar and bitumen sprayers, tower wagons, trench diggers and ditching machines. Tippers are regarded as chargeable).
(C) Tractors and locomotives, except tractors or locomotives designed for use as components of a composite (articulated) vehicle.
(D) Trailers, except those designed for use as components of a composite (articulated) vehicle.
(E) Industrial and works trucks designed primarily for use in factories, docks, yards, railway stations or warehouses, or other places that are not public highways.
(F) Caravans.
Also exempt are machines, such as fire-engines and fire-escapes, the sole burden of which is built in or necessary to the vehicle. Most trackilayers are also free from tax.
Body Determines Tax The chassis of a rigid vehicle is not taxable as such, whether or not it is fitted with a driver's cab. It becomes chargeable only when the be..ly is installed.
Detachable containers and detachable tanks are not regarded as part of the vehicle and are not included. in the value on which tax is charged. Permanently fitted boxes and tanks are, however, part of the vehicle.
Battery-electric vehicles arc taxed in the same way • as others. Batteries are regarded as standard accessories, and when a chargeable battery-electric is sold complete with battery or batteries, their value has to be included in the total value of the vehicle for purchase tax.
Where a motor manufacturer sells a complete vehicle (apart from painting. it), or where a coachbuilder builds a body on a chassis provided by the customer, the tax is paid on the wholesale value, including the chassis.
Double Liability
If, however, the customer or a dealer buys a chargeable vehicle from one manufacturer and sends it to a second one, such as a bodybuilder, for a further process, the first manufacturer is liable for tax on the wholesale value of the vehicle which he supplied. The second manufacturer (or bodybuilder) is also liable for tax on the full wholesale value of the vehicle after he has completed it.
To avoid double taxation, tax will be accepted from the second manufacturer on the difference between the value of the vehicle he receives and that of the vehicle he turns out. This will normally be his charge for the work done, converted, as necessary, to a wholesale level.
The first manufacturer must supply -a signed certificate describing the vehicle, with chassis and engine number, indicating briefly the stage of manufacture reached and undertaking to account for tax on the vehicle in that state. The second manufacturer must retain this certificate as a voucher for having charged only the differential tax.
A similar procedure may be adopted if, for example, the first manufacturer delivers a non-chargeable chassis, the second manufacturer puts a chargeable body on it, and a third completes the vehicle by a further process.
In that event, the second manufacturer is liable for tax on the wholesale value of the vehicle as it leaves him, including the value of the chassis. The third manufacturer is liable for tax on the full wholesale value of the finished vehicle, but if the second manufacturer gives a certificate for his share of the tax, the third manufacturer may charge tax only on the differential value.
If a maker converts a chargeable vehicle into a non-chargeable type, such as by converting an ordinary van into a tractor, he can certify what has been done by a short statement on the second manufacturer's tax certificate. If the owner certifies that the vehicle has not been put to any use while in a chargeable state, the second manufacturer can then take credit in his purchase-tax account for the tax he had previously debited to that account Ifthe first manufacturer had charged any tax, he can similarly take credit for it on a certificate from the third manefaeturer and from the owner.
If User Builds Body
If a user builds a body on a chassis bought from a motor manufacturer 116 becomes liable for tax, If the vehicle be supplied in primer, tax is payable on the vehicle in that condition. if delivered already painted, tax must be paid on its value as finally painted. For the present, however, painting or the fitting of minor accessories, when performed by a separate processor, will not be regarded as involving taxation.
For the time being, no tax will be payable when a new body is built on a chassis previously forming part of a vehicle of a type now chargeable. This includes Government surplus stores sold in the United .Kingdom, hut not such vehicles if purchased abroad and imported.
Tax is not payable on vehicles supplied to the Admiralty. Air Ministry, G.P.O., Ministry of Supply, Ministry of Works, Stationery Office, or War Office.
The address of the Commissioners of Customs and Excise-is City Gate House, 39-45, Finsbury Squarer London, E.C.2.