Legislative reform of the Terminal Markets Order: Consultation
A consultation on legislative reforms to modernise the legislation that underpins the VAT treatment of certain wholesale commodity transactions.
This consultation sets out how the Government proposes to modernise the legislation that underpins the VAT treatment of transactions that are in scope of the Terminal Markets Order (TMO), whilst maintaining the overall policy approach.
The TMO is a revenue neutral tax simplification measure for certain wholesale commodity transactions made by members on named commodity exchanges or market associations, called “Terminal Markets”.
While the UK was a member of the European Union, the TMO could not be updated to keep pace with the changing commodity market. Following EU exit, the Government is taking the opportunity to update the legislation to clarify the VAT treatment of exchange traded commodity transactions. This will ensure that the legislation reflects how the markets operate today and provides greater certainty in relation to the VAT treatment.
The Government is also consulting on proposals to amend the TMO legislation to fulfil its commitment to bring the UK Emissions Trading Scheme fully into the scope of the TMO.