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Amendment of section 12C (special scheme for agricultural machinery) of Principal Act.
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123.— Section 12C of the Principal Act is amended with effect from 1 January 2010—
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(a) by deleting subsection (4), and
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(b) by inserting the following after subsection (5):
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“(6) (a) Subject to paragraph (b), where a taxable dealer purchases or acquires from a flat-rate farmer or a person referred to in subsection (1A) agricultural machinery in the period from 1 January 2010 to 31 August 2010 (in this subsection referred to as the ‘transitional period’) the amount of residual tax referred to in subsection (3) which that taxable dealer is entitled to deduct shall be restricted to—
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(i) 40 per cent of the residual tax in the case of agricultural machinery purchased or acquired in a taxable period beginning on 1 January 2010, 1 March 2010 or 1 May 2010, as the case may be, and
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(ii) 30 per cent of the residual tax in the case of agricultural machinery purchased or acquired in the taxable period beginning on 1 July 2010.
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(b) The entitlement to restricted residual tax as provided for in paragraph (a) applies only on the occasion of the first purchase or acquisition by a taxable dealer of agricultural machinery which occurs on or after 1 January 2010, and does not apply to any subsequent purchase or acquisition of that agricultural machinery by that or any other taxable dealer.
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(c) Where during the transitional period a taxable dealer purchases or acquires agricultural machinery from a flat-rate farmer or a person referred to in subsection (1A)—
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(i) the taxable dealer shall take all reasonable steps to establish whether or not the agricultural machinery was acquired in the transitional period by that flat-rate farmer or that person from another taxable dealer (in this paragraph referred to as an ‘agricultural machinery trader’), and
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(ii) if that flat-rate farmer or that person acquired the means of transport from an agricultural machinery trader during the transitional period, the taxable dealer shall take all reasonable steps to establish whether or not restricted residual tax as provided for in paragraph (a) was deductible by that agricultural machinery trader or any other taxable dealer in relation to the agricultural machinery.
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(7) This section does not apply to agricultural machinery purchased or acquired on or after 1 September 2010.”.
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