- The Terminal Markets Order (TMO) provides for the VAT zero-rating of certain wholesale commodity transactions made by members of certain commodity exchanges.
- In July 2023, HM Treasury published a consultation on proposed modernisation of the legislation setting out the VAT treatment of transactions within the scope of the TMO.
- The amendments are intended to reflect how the markets now operate and provide greater certainty, without amending the policy or scope of the TMO.
- The consultation also included proposals to include the UK Emissions Trading Scheme in the scope of the TMO.
- At Spring Budget 2024, the government announced that it will introduce legislation for the TMO to allow for further reform, including bringing trade in carbon credits within the scope of the TMO.
- Timing: legislation to enable the amendment of the TMO (by way of statutory instrument) was introduced in the Spring Finance Bill 2024, and will take effect from the date of Royal Assent.
Resources (click to open)
- Terminal Markets Order (Deloitte TaxScape, March 2024)
- Legislative reform of the Terminal Markets Order: Consultation (HM Treasury, consultation, July 2023)
