Finance Act 1980

Section 43.

SCHEDULE 8 Sub-Contractors in the Construction Industry

1 In section 69 of the [1975 c. 45.] Finance (No. 2) Act 1975 (deductions on account of tax etc. from payments to certain sub-contractors in construction industry) after subsection (3) there shall be inserted—

“(3A) Paragraph (b) of subsection (1) above also applies to a person carrying on a business at any time if—

(a) his average annual expenditure on construction operations in the period of three years ending with the end of the last period of account before that time exceeds £250,000, or

(b) where he was not carrying on the business at the beginning of that period of three years, one-third of his total expenditure on construction operations for the part of that period during which he has been carrying on the business exceeds £250,000 ;

and in this section " period of account" means a period for which an account is made up in relation to the business in question.

(3B) Where paragraph (b) of subsection (1) above begins to apply to any person in any period of account by virtue of his falling within subsection (3A) above, it shall continue to apply to him until he satisfies the Board that his expenditure on construction operations has been less than £250,000 in each of three successive years beginning in or after that period of account.

(3C) Where the whole or part of a trade is transferred by a company (" the transferor ") to another company (" the transferee ") and section 252 of the Taxes Act (company reconstructions) has effect in relation to the transfer, then in determining for the purposes of this section the amount of expenditure incurred by the transferee, the whole or, as the case may be, a proportionate part of any expenditure incurred by the transferor at a time before the transfer shall be treated as if it had been incurred at that time by the transferee and where only a part of the trade is transferred the expenditure shall be apportioned in such manner as appears to the Board, or on appeal to the Commissioners, to be just and reasonable.”.

2 In subsection (6) of section 70 of the said Act of 1975 (issue of certificates excepting persons from section 69 of that Act) the words from " other than " onwards (which exclude certain matters from the right of appeal conferred by that subsection) shall be omitted.

3 In subsection (8) of that section (regulations) after the words "subsection (7) above" there shall be inserted the words " or Schedule 12 to this Act ".

4 (1) Paragraph 2 of Part I of Schedule 12 to the said Act of 1975 (condition that for three years ending with his application for a certificate under section 70 the applicant must have been employed in the United Kingdom as the holder of an office or employment or as a person carrying on a trade profession or vocation) shall be amended in accordance with sub-paragraphs (2) and (3) below.

(2) The existing provisions of that paragraph shall become subparagraph (1) and the words in parenthesis shall be omitted.

(3) At the end of that sub-paragraph there shall be inserted tho following—

“(2) An applicant who has not fulfilled the condition in sub-paragraph (1) above shall nevertheless be treated as satisfying this condition if—

(a) he satisfies the Board that he has been employed as mentioned in that sub-paragraph throughout a period of three years beginning not more than six years before the date of his application and ending on a date before that date ;

(b) he satisfies the Board either—

(i) that he has not been so employed throughout the whole of the period between those dates, or

(ii) that he has not been so employed during any part of that period other than a part for which he specifies he has been so employed; and

(c) where the applicant states that he has been outside the United Kingdom for the whole or part of the period mentioned in paragraph (b) above, he satisfies the Board of that fact by such evidence as may be prescribed in regulations made by the Board.

(3) The Board may for the purposes of this paragraph treat a person as having been employed as mentioned in sub-paragraph (1) above throughout a period of three years if during a period of three years he has been so employed except for a period or periods not exceeding six months or six months in aggregate.

(4) In this Part of this Schedule " the qualifying period " means—

(a) in relation to a person who is within sub-paragraph (2) above, the period starting at the beginning of the last period of three years before his application throughout which he has been employed as mentioned in subparagraph (1) above (or is by virtue of sub-paragraph (3) above treated as having been so employed) and ending on the date of his application, and

(b) in the case of any other person, the period of three years ending with the date of his application.”

5 Sub-paragraphs (2) and (3) of paragraph 4 above shall apply to paragraph 1 of Part II of that Schedule as they apply to paragraph 2 of Part I substituting in the words inserted by sub-paragraph (3) the word " partner " for the word " applicant" wherever it occurs.

6 (1) At the end of paragraph 3 of Part I of that Schedule there shall be inserted the following—

“(3) An applicant who must satisfy the Board under paragraph 2(2) above that he has been outside the United Kingdom for the whole or part of the period mentioned in paragraph 2(2)(b) must also satisfy them by such evidence as may be prescribed in regulations made by the Board that he has complied with any obligations imposed under the tax laws of any country in which he was living during that period which are comparable to the obligations mentioned in sub-paragraph (1) above.”.

(2) The same words shall be inserted at the end of paragraph 2 of Part II of that Schedule substituting " paragraph 1(2) " for " paragraph 2(2)" and " partner " for " applicant".

7 In paragraph 3(2) of Part I of that Schedule (power of Board to disregard failure to comply with tax obligations if of opinion that the failure ought to be disregarded for the purposes of an application for a certificate) for the words from " of the opinion that" onwards there shall be substituted the words " of the opinion that the failure is minor and technical and does not give reason to doubt that the conditions mentioned in paragraph 7 below will be satisfied "; and the same amendment shall be made in paragraph 2(2) of Parts II, III and IV of that Schedule, substituting for " paragraph 7 " in the words to be inserted in Part II and Part III, the words " paragraph 4 " and " paragraph 5 " respectively.

8 Paragraph 6 of Part I, paragraph 4 of Part III and paragraph 5 of Part IV of that Schedule (insurance cover as a condition of obtaining a certificate) shall be omitted.