A deemed supply arises if input tax was reclaimed on services which were received and later used for private purposes for no consideration (Value Added Tax (Supply of Services) Order 1993 (SI 1993/1507)). However, the deemed supply does not apply if:

(1)any part of the VAT on the original supply of the services was disallowed as not being input tax (e.g. if it was apportioned as not being used for business purposes); or

(2)the supply concerned services used for the provision of catering or accommodation for employees within VATA 1994, Sch. 6, para. 10 (¶14-700); or

(3)the supplied service involves the hire of a motor car where 50% of the input tax has been excluded from credit.

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