Sch 10 para 37 Charge to VAT
(1) 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— (a) supplied to P for the purposes of a business which P carries on, and (b) supplied by P in the course or furtherance of that business immediately prior to the time of that increase. (2) The supply is taken to be a taxable supply which is not zero-rated as a result of Group 5 of Schedule 8. (3) The value of the supply is taken to be— (a) in the case of the first deemed supply under this paragraph, the amount obtained by the formula— R 2 × Y × ( 120 − Z 120 ) , and (b) in the case of any subsequent deemed supply under this paragraph, the amount obtained by the formula— ( R 2 − R 1 ) × Y × ( 120 − Z 120 ) (4) For the purpose of sub-paragraph (3)— (a) R1 and R2 have the meaning given by paragraph 36(1)(b), (b) Y is the amount that yields an amount of VAT chargeable on it equal to— (i) the VAT which would have been chargeable on the relevant zero-rated supply, or (ii) if there was more than one supply, the aggregate amount of the VAT which would have been chargeable on the supplies, had the relevant premises not been intended for use solely for a relevant residential purpose or a relevant charitable purpose, and (c) Z is the number of whole months since the day on which the relevant premises were completed.