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Finance Act 1994

1994 CHAPTER 9

An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.

[3rd May 1994]

Most Gracious Sovereign,

WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Annotations:

Modifications etc. (not altering text)

C1Act restricted (1.5.1995) by 1995 c. 4, s. 86(11)(14) (with Sch. 8 paras. 55(2), 57(1))

Part IE+W+S+N.I. Customs and Excise

Chapter IE+W+S+N.I. General

Rates of dutyE+W+S+N.I.

1 Wine, made-wine and cider.E+W+S+N.I.

(1)For the Table of rates of duty in Schedule 1 to the M1Alcoholic Liquor Duties Act 1979 (wine and made-wine) there shall be substituted the Table in Schedule 1 to this Act.

(2)In section 62(1) of that Act (cider) for “£22.39” there shall be substituted “ £22.82 ”.

(3)This section shall be deemed to have come into force on 1st January 1994.

Annotations:

Marginal Citations

2 Tobacco products.E+W+S+N.I.

(1)For the Table in Schedule 1 to the M2Tobacco Products Duty Act 1979 there shall be substituted—

TABLEE+W+S+N.I.
1. CigarettesAn amount equal to 20 per cent. of the retail price plus £52.33 per thousand cigarettes.
2. Cigars£77.58 per kilogram.
3. Hand-rolling tobacco£81.86 per kilogram.
4. Other smoking tobacco and chewing tobacco£34.26 per kilogram.

(2)This section shall be deemed to have come into force at 6 o’clock in the evening of 30th November 1993.

Annotations:

Marginal Citations

3 Hydrocarbon oil.E+W+S+N.I.

(1)In section 6(1) of the M3Hydrocarbon Oil Duties Act 1979 for “£0.3058” (duty on light oil) and “£0.2514” (duty on heavy oil) there shall be substituted “ £0.3314 ” and “ £0.2770 ” respectively.

(2)In section 11(1) of that Act (rebate on heavy oil) for “£0.0105” (fuel oil) and “£0.0149” (gas oil) there shall be substituted “ £0.0116 ” and “ £0.0164 ” respectively.

(3)In section 14(1) of that Act (rebate on light oil for use as furnace fuel) for “£0.0105” there shall be substituted “ £0.0116 ”.

(4)This section shall be deemed to have come into force at 6 o’clock in the evening of 30th November 1993.

Annotations:

Marginal Citations

F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F1S. 4 repealed (1.9.1994) by 1994 c. 22, s. 65, Sch. 5 Pt. I (with s. 57(4))

Other provisionsE+W+S+N.I.

5 Vehicles excise duty: miscellaneous provisions.E+W+S+N.I.

Schedule 2 to this Act (which contains miscellaneous provisions relating to vehicles excise duty) shall have effect.

6 Gaming machine licence duty.E+W+S+N.I.

Schedule 3 to this Act (which makes amendments to the M4Betting and Gaming Duties Act 1981 about gaming machine licence duty) shall have effect.

Annotations:

Marginal Citations

Chapter IIE+W+S+N.I. Appeals and Penalties

Annotations:

Modifications etc. (not altering text)

C2Pt. I Chapter II (ss. 7-19) applied (17.3.2000) by S.I. 2000/426, art. 5

VAT and duties tribunalsE+W+S+N.I.

7 VAT and duties tribunals.E+W+S+N.I.

F2(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In the following provisions of this Chapter references to an appeal tribunal are references to a VAT and duties tribunal.

(4)Sections [F385 and 87 of the Value Added Tax Act 1994] (settling of appeals by agreement and enforcement of decisions of tribunal) shall have effect as if—

(a)the references to section [F483 of that Act] included references to this Chapter; and

(b)references to value added tax included references to any relevant duty.

(5)Without prejudice to the generality of the power conferred by paragraph 9 of Schedule [F512 to the Value Added Tax Act 1994] (rules of procedure for tribunals), rules under that paragraph may provide for costs awarded against an appellant on an appeal by virtue of this Chapter to be recoverable, and for any directly applicable Community legislation relating to any relevant duty or any enactment so relating to apply, as if the amount awarded were an amount of duty which the appellant is required to pay.

(6)In Part I of Schedule 1 to the M5Tribunals and Inquiries Act 1992 (tribunals under direct supervision of Council on Tribunals), for the entry beginning “Value added tax” there shall be substituted the following entry—

VAT and duties44. VAT and duties tribunals for England and Wales and for Northern Ireland, constituted in accordance with Schedule 8 to the Value Added Tax Act 1983 (c. 55).

(7)In Part II of Schedule 1 to that Act of 1992 (tribunals under supervision of Scottish Committee of the Council), for the entry beginning “Value added tax” there shall be substituted the following entry—

VAT and duties63. VAT and duties tribunals for Scotland constituted in accordance with Schedule 8 to the Value Added Tax Act 1983 (c. 55).
Annotations:

Amendments (Textual)

F2S. 7(1)(2) repealed (1.9.1994 with effect as mentioned in s. 101(1) of the amending Act) by 1994 c. 23, s. 100(2), Sch. 15

F3S. 7(4): Words substituted for “25 and 29 of the Finance Act 1985” (1.9.1994 with effect as mentioned in s. 101(1) of the amending Act) by virtue of 1994 c. 23, s. 100(1), Sch. 14 para. 13(a)

F4Words in s. 7(4)(a) substituted (1.9.1994 with effect as mentioned in s. 101(1) of the amending Act) by 1994 c. 23, s. 100(1), Sch. 14 para. 13(a) (asretrospectively amended by 1995 c. 4, s. 33(5))

F5Words in s. 7(5) substituted (1.9.1994 with effect as mentioned in s. 101(1) of the amending Act) by 1994 c. 23, s. 100(1), Sch. 14 para. 13(b)

Commencement Information

I1S. 7 wholly in force at 31.8.1994; s. 7 not in force at Royal Assent see s. 19(1); s. 7 (except s. 7(1)(b)) in force at 1.7.1994 by S.I. 1994/1690, art. 2; s. 7(1)(b) in force at 31.8.1994 by S.I. 1994/2143, art. 2

Marginal Citations

Civil penaltiesE+W+S+N.I.

8 Penalty for evasion of excise duty.E+W+S+N.I.

(1)Subject to the following provisions of this section, in any case where—

(a)any person engages in any conduct for the purpose of evading any duty of excise, and

(b)his conduct involves dishonesty (whether or not such as to give rise to any criminal liability),

that person shall be liable to a penalty of an amount equal to the amount of duty evaded or, as the case may be, sought to be evaded.

(2)References in this section to a person’s evading a duty of excise shall include references to his obtaining or securing, without his being entitled to it—

(a)any repayment, rebate or drawback of duty;

(b)any relief or exemption from or any allowance against duty; or

(c)any deferral or other postponement of his liability to pay any duty or of the discharge by payment of any such liability,

and shall also include references to his evading the cancellation of any entitlement to, or the withdrawal of, any such repayment, rebate, drawback, relief, exemption or allowance.

(3)In relation to any such evasion of duty as is mentioned in subsection (2) above, the reference in subsection (1) above to the amount of duty evaded or sought to be evaded shall be construed as a reference to the amount of the repayment, rebate, drawback, relief, exemption or allowance or, as the case may be, the amount of the payment which, or the liability to make which, is deferred or otherwise postponed.

(4)Where a person is liable to a penalty under this section—

(a)the Commissioners or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and

(b)an appeal tribunal, on an appeal relating to a penalty reduced by the Commissioners under this subsection, may cancel the whole or any part of the reduction made by the Commissioners.

(5)Neither of the following matters shall be a matter which the Commissioners or any appeal tribunal shall be entitled to take into account in exercising their powers under subsection (4) above, that is to say—

(a)the insufficiency of the funds available to any person for paying any duty of excise or for paying the amount of the penalty;

(b)the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of duty.

(6)Statements made or documents produced by or on behalf of a person shall not be inadmissible in—

(a)any criminal proceedings against that person in respect of any offence in connection with or in relation to any duty of excise, or

(b)any proceedings against that person for the recovery of any sum due from him in connection with or in relation to any duty of excise,

by reason only that any of the matters specified in subsection (7) below has been drawn to his attention and that he was, or may have been, induced by that matter having been brought to his attention to make the statements or produce the documents.

(7)The matters mentioned in subsection (6) above are—

(a)that the Commissioners have power, in relation to any duty of excise, to assess an amount due by way of a civil penalty, instead of instituting criminal proceedings;

(b)that it is the Commissioners’ practice, without being able to give an undertaking as to whether they will make such an assessment in any case, to be influenced in determining whether to make such an assessment by the fact (where it is the case) that a person has made a full confession of any dishonest conduct to which he has been a party and has given full facilities for an investigation;

(c)that the Commissioners or, on appeal, an appeal tribunal have power to reduce a penalty under this section, as provided in subsection (4) above; and

(d)that, in determining the extent of such a reduction in the case of any person, the Commissioners or tribunal will have regard to the extent of the co-operation which he has given to the Commissioners in their investigation.

(8)Where, by reason of conduct falling within subsection (1) above, a person is convicted of an offence, that conduct shall not also give rise to liability to a penalty under this section.

Annotations:

Commencement Information

I2S. 8 wholly in force at 1.1.1995; s. 8 not in force at Royal Assent see s. 19(1); s. 8 in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 8 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

9 Penalties for contraventions of statutory requirements.E+W+S+N.I.

(1)This section applies, subject to section 10 below, to any conduct in relation to which any enactment (including an enactment contained in this Act or in any Act passed after this Act) provides for the conduct to attract a penalty under this section.

(2)Any person to whose conduct this section applies shall be liable—

(a)in the case of conduct in relation to which provision is made by subsection (4) below [F6, or by or under any other enactment,] for the penalty attracted to be calculated by reference to an amount of, or an amount payable on account of, any duty of excise, to a penalty of whichever is the greater of 5 per cent. of that amount and £250; and

(b)in any other case, to a penalty of £250.

(3)Subject to section 13(3) and (4) below, in the case of any conduct to which this section applies which is conduct in relation to which provision is made by subsection (4) or (5) below or any other enactment for that conduct to attract daily penalties, the person whose conduct it is—

(a)shall be liable, in addition to an initial penalty under subsection (2) above, to a penalty of £20 for every day, after the first, on which the conduct continues, but

(b)shall not, in respect of the continuation of that conduct, be liable to further penalties under subsection (2) above.

(4)Where any conduct to which this section applies consists in a failure, in contravention of any subordinate legislation, to pay any amount of any duty of excise or an amount payable on account of any such duty, then, in so far as that would not otherwise be the case—

(a)the penalty attracted to that contravention shall be calculated by reference to the amount unpaid; and

(b)the contravention shall also attract daily penalties.

(5)Where—

(a)a contravention of any provision made by or under any enactment consists in or involves a failure, before such time as may be specified in or determined in accordance with that provision, to send a return to the Commissioners showing the amount which any person is or may become required to pay by way of, or on account of, any duty of excise, and

(b)that contravention attracts a penalty under this section,

that contravention shall also attract daily penalties.

(6)Where, by reason of any conduct to which this section applies, a person is convicted of an offence, that conduct shall not also give rise to liability to a penalty under this section.

(7)If it appears to the Treasury that there has been a change in the value of money since the passing of this Act or, as the case may be, the last occasion when the power conferred by this subsection was exercised, they may by order substitute for any sum for the time being specified in subsection (2) or (3) above such other sum as appears to them to be justified by the change.

(8)The power to make an order under subsection (7) above—

(a)shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons; but

(b)shall not be exercisable so as to vary the penalty for any conduct occurring before the coming into force of the order.

(9)Schedule 4 to this Act (which provides for the conduct to which this section applies, repeals the summary offences superseded by this section and makes related provision with respect to forfeiture) shall have effect.

Annotations:

Amendments (Textual)

F6Words in s. 9(2)(a) substituted (28.7.2000) by 2000 c. 17, s. 28

Modifications etc. (not altering text)

C3S. 9 applied (1.1.1995) by 1979 c. 2, ss. 92(6)(8), 93(6), 100J, 101(4), 107(2)(3), 108(4), 111(1), 114(2), 115(4), 116(3), 118G, 170A(1)(2) (all as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 2(1)(2), 3, 4, 5(b), 6(1)(2), 7, 8(1), 9, 10(1)(b), 11, 12, 13(1)(2)); S.I. 1994/2679, art. 3

S. 9 applied (1.1.1995) by 1979 c. 4, ss. 8(2), 10(2), 13(3)(5), 15(4)(5)(7), 16(2)(3), 18(6), 19(2), 20(1)(2), 21(3), 22(9), 24(4), 33(1)(5), 34(2), 35(3), 41A(8), 44(2), 46(2), 47(4)(5), 49(3), 54(5), 55(6), 55A(3), 56(2), 59(2), 61(2), 62(4)(6), 64(2), 67(2), 69(3)(4), 71(1)(3), 75(5), 77(3)(4), 78(4), 82(2) (all as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 15, 16, 17(1)(a)(3), 18(1)(2)(3), 19(1)(2), 20, 21(1), 22, 23(1), 24, 25, 26(1)(2), 27, 28, 29, 30, 31, 32(1)(2), 33, 34, 35, 36(b), 37, 38, 39, 40(1)(2), 41, 42, 43(1)(2), 44(1)(2), 45(b), 46(1)(2), 47, 48); S.I. 1994/2679, art. 3

S. 9 applied (1.1.1995) by 1979 c. 5, ss. 10(3)(4), 13(1)(2), 14(4)(5), 18(5), 20AA(4)(a), 21(3), 22(1), 23(1), 24(4) (all as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 50(1)(b)(2)(c), 51(1)(b)(2)(c), 52(1)(b)(2)(c), 53, 54, 55(b), 56(1)(b), 57(1)(b), 58(b)); S.I. 1994/2679, art. 3

S. 9 applied (1.1.1995) by 1979 c. 7, s. 7(2) (as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 para. 59); S.I. 1994/2679, art. 3

S. 9 applied (1.1.1995) by 1981 c. 63, s. 24(5), Sch. 1 paras. 13(1), 14(3), Sch. 2 para. 7(1), Sch. 3 para. 16(3)(b), Sch. 4 para. 16(1) (all as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 61(a), 62(1)(2)(b), 63(1), 64(1), 65(1)); S.I. 1994/2679, art. 3

S. 9 applied (1.1.1995) by 1993 c. 34, ss. 27(4), 28(3), 29(8) (all as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 67(b), 68(b)); S.I. 1994/2679, art. 3

S. 9 applied (19.3.1997) by 1997 c. 16, ss. 12(5)(a), 13(1), 15, 50(1), Sch. 1 paras. 5(3), 7, 10(3), Sch. 5 para. 4(1)

S. 9 applied (28.7.2000) by 1979 c. 7, s. 8J(2) (as inserted (28.7.2000) by 2000 c. 17, s. 14)

C4S. 9 applied (29.4.1996 with effect as mentioned in 1996 c. 8, s. 6(5)) by 1979 c. 5, s. 20AAB(8) (as inserted by 1996 c. 8, s. 6(3)(5)); S.I. 1996/2751, art. 2

S. 9 applied (24.9.1996 with effect as mentioned in 1996 c. 8, s. 5(6)) by 1979 c. 5, s. 13AB(1)(b)(2)(b)(5) (as inserted by 1996 c. 8, s. 5(4)(6)); S.I. 1996/2314, art. 2

C6S. 9 applied (1.8.2002) by S.I. 2002/1773, reg. 15(2)

Commencement Information

I3S. 9 wholly in force at 1.1.1995; s. 9 not in force at Royal Assent see s. 19(1); s. 9(1)-(8) in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 9 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

10 Exceptions to liability under section 9.E+W+S+N.I.

(1)Subject to subsection (2) below and to any express provision to the contrary made in relation to any conduct to which section 9 above applies, such conduct shall not give rise to any liability to a penalty under that section if the person whose conduct it is satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for the conduct.

(2)Where it appears to the Commissioners or, on appeal, an appeal tribunal that there is no reasonable excuse for a continuation of conduct for which there was at first a reasonable excuse, liability for a penalty under section 9 above shall be determined as if the conduct began at the time when there ceased to be a reasonable excuse for its continuation.

(3)For the purposes of this section—

(a)an insufficiency of funds available for paying any duty or penalty due shall not be a reasonable excuse; and

(b)where reliance is placed by any person on another to perform any task, then neither the fact of that reliance nor the fact that any conduct to which section 9 above applies was attributable to the conduct of that other person shall be a reasonable excuse.

Annotations:

Modifications etc. (not altering text)

C7S. 10 excluded (1.1.1995) by 1979 c. 2, ss. 114(2), 170A(2) (both as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 9, 13(2) (with s. 19(3)); S.I. 1994/2679, art. 3

S. 10 excluded (1.1.1995) by 1979 c. 5, ss. 22(1A), 23(1A) (both as amended (1.1.1995) by 1994 c. 9, s. 9, Sch. 4 paras. 56(2), 57(2) (with s. 19(3)); S.I. 1994/2679, art. 3

Commencement Information

I4S. 10 wholly in force at 1.1.1995; s. 10 not in force at Royal Assent see s. 19(1); s. 10 in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 10 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

11 Breaches of walking possession agreements.E+W+N.I.

(1)This section applies where—

(a)[F7in accordance with regulations under section 51 of the Finance Act 1997 (enforcement by distress)], a person (“the person levying the distress”) is empowered or authorised to distrain any property of another person (“the person in default”) [F8who has refused or neglected to pay any amount of relevant duty or any amount recoverable as if it were an amount of relevant duty due from him]; and

(b)the person levying the distress and the person in default have entered into a walking possession agreement.

(2)In this section a “walking possession agreement” means an agreement under which, in consideration of the property distrained upon being allowed to remain in the custody of the person in default and of the delaying of its sale, the person in default—

(a)acknowledges that the property specified in the agreement is under distraint and held in walking possession; and

(b)undertakes that, except with the consent of the Commissioners and subject to such conditions as they may impose, he will not remove or allow the removal of any of the specified property from the premises named in the agreement.

(3)Subject to subsection (4) below, if the person in default is in breach of the undertaking contained in a walking possession agreement, he shall be liable to a penalty equal to one-half of the unpaid duty or penalty which gives rise to the distraint.

(4)The person in default shall not be liable to a penalty under subsection (3) above if he satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for the breach in question.

(5)This section does not extend to Scotland.

Annotations:

Amendments (Textual)

F7Words in s. 11(1)(a) substituted (1.7.1997) by 1997 c. 16, s. 53(2)(a)(9); S.I. 1997/1432, art. 2

F8Words in s. 11(1)(a) inserted (1.7.1997) by 1997 c. 16, s. 53(2)(b)(9); S.I. 1997/1432, art. 2

Commencement Information

I5S. 11 wholly in force at 1.1.1995; s. 11 not in force at Royal Assent see s. 19(1); s. 11 in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 11 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Assessments to excise duty or to penaltiesE+W+S+N.I.

12 Assessments to excise duty.E+W+S+N.I.

(1)Subject to subsection (4) below, where it appears to the Commissioners—

(a)that any person is a person from whom any amount has become due in respect of any duty of excise; and

(b)that there has been a default falling within subsection (2) below,

the Commissioners may assess the amount of duty due from that person to the best of their judgement and notify that amount to that person or his representative.

[F9(1A)Subject to subsection (4) below, where it appears to the Commissioners—

(a)that any person is a person from whom any amount has become due in respect of any duty of excise; and

(b)that the amount due can be ascertained by the Commissioners,

the Commissioners may assess the amount of duty due from that person and notify that amount to that person or his representative.]

(2)The defaults falling within this subsection are—

(a)any failure by any person to make, keep, preserve or produce as required or directed by or under any enactment any returns, accounts, books, records or other documents;

(b)any omission from or inaccuracy in any returns, accounts, books, records or other documents which any person is required or directed by or under any enactment to make, keep, preserve or produce;

(c)any failure by any person to take or permit to be taken any step which he is required under Schedule 1 or 3 to the M6Betting and Gaming Duties Act 1981 [F10or Schedule 1 to the Finance Act 1997] to take or to permit to be taken;

(d)any unreasonable delay in performing any obligation the failure to perform which would be a default falling within this subsection.

[F11(2A)In subsection (2)(a) and (b) above “enactment” includes directly applicable Community provision.]

(3)Where an amount has been assessed as due from any person and notified in accordance with this section, it shall, subject to any appeal under section 16 below, be deemed to be an amount of the duty in question due from that person and may be recovered accordingly, unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.

(4)An assessment of the amount of any duty of excise due from any person shall not be made under this section at any time after whichever is the earlier of the following times, that is to say—

(a)subject to subsection (5) below, the end of the period of [F12three years] beginning with the time when his liability to the duty arose; and

(b)the end of the period of one year beginning with the day on which evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge;

but this subsection shall be without prejudice, where further evidence comes to the knowledge of the Commissioners at any time after the making of an assessment under this section, to the making of a further assessment within the period applicable by virtue of this subsection in relation to that further assessment.

(5)Subsection (4) above shall have effect as if the reference in paragraph (a) to [F12three years] were a reference to twenty years in the case of any assessment to any amount of duty the assessment or payment of any of which has been postponed or otherwise affected by—

(a)conduct in respect of which any person (whether or not the person assessed)—

(i)has become liable to a penalty under section 8 above, or

(ii)has been convicted of an offence of fraud or dishonesty; or

(b)any conduct in respect of which proceedings for an offence of fraud or dishonesty would have been commenced or continued against any person (whether or not the person assessed), but for their having been compounded under section 152(a) of the Management Act.

(6)The reference in subsection (4) above to the time when a person’s liability to a duty of excise arose are references—

(a)in the case of a duty of excise on goods, to the excise duty point; and

(b)in any other case, to the time when the duty was charged.

(7)In this section references to an offence of fraud or dishonesty include references to an offence under any of the following provisions, that is to say-

(a)sections 100(3), 136(1), 159(6), 167(1), 168(1), 170(1) and (2) and 170B(1) of the Management Act,

(b)section 24(6) of the M7Betting and Gaming Duties Act 1981 and paragraph 13(3) of Schedule 1, F13. . . and paragraph 16(1) of Schedule 3 to that Act,

(c)section 31(1) and (3) of the M8Finance Act 1993, and

(d)section 41(1) and (3) below,

and also include references to attempting or conspiring to commit an offence of fraud or dishonesty and to inciting the commission of such an offence.

(8)In this section “representative”, in relation to a person appearing to the Commissioners to be a person from whom any amount has become due in respect of any duty of excise, means his personal representative [F14, trustee in bankruptcy or interim or permanent trustee,] any receiver or liquidator appointed in relation to that person or any of his property or any other person acting in a representative capacity in relation to that person.

Annotations:

Amendments (Textual)

F10Words in s. 12(2)(c) inserted (19.3.1997) by 1997 c. 16, ss. 13, 15, Sch. 2 para. 7

F11S. 12(2A) inserted (28.9.2001) by S.I. 2001/3022, reg. 9

F12Words in s. 12(4)(a)(5) substituted (19.3.1997) by 1997 c. 16, s. 50(1), Sch. 5 para. 6(2)(a)

F13Words in s. 12(7)(b) repealed (19.3.1997 with effect as mentioned in Sch. 18 Pt. II Note 2 of the repealing Act) by 1997 c. 16, s. 113, Sch. 18 Pt. II Note 2

F14Words in s. 12(8) substituted (1.6.1997) by 1997 c. 16, s. 50(2), Sch. 6 paras. 1(3), 7; S.I. 1997/1305, art. 2

Modifications etc. (not altering text)

C8S. 12 modified (19.3.1997) by 1997 c. 16, ss. 12(6)(a), 15

C9S. 12(1) extended (29.4.1996 with effect as mentioned in 1996 c. 8, s. 6(5)) by 1979 c. 5, s. 20AAB(5) (as inserted by 1996 c. 8, s. 6(3)(5)); S.I. 1996/2751, art. 2

Commencement Information

I6S. 12 wholly in force at 1.1.1995; s. 12 not in force at Royal Assent see s. 19(1); s. 12 (except s. 12(7)(b)(c) and specified references in s. 12(7)(a)) in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 12 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Marginal Citations

[F1512A Other assessments relating to excise duty matters.E+W+S+N.I.

(1)This subsection applies where any relevant excise duty relief other than an excepted relief—

(a)has been given but ought not to have been given, or

(b)would not have been given had the facts been known or been as they later turn out to be.

(2)Where subsection (1) above applies, the Commissioners may assess the amount of the relief given as being excise duty due from the liable person and notify him or his representative accordingly.

(3)Where an amount has been assessed as due from any person under—

(a)subsection (2) above,

(b)section 94 or 96 of the Management Act, F16. . .

[F17(bb)section 8, 10 [F18, 11 or 36G] of the Alcoholic Liquor Duties Act 1979,]

(c)section 10, 13, [F1913AB,] 14, 23 or 24 of the M9Hydrocarbon Oil Duties Act 1979,

[F20(d)section 8 of the Tobacco Products Duty Act 1979, or

(e)section 2 of the Finance (No. 2) Act 1992,]

and notice has been given accordingly, that amount shall, subject to any appeal under section 16 below, be deemed to be an amount of excise duty due from that person and may be recovered accordingly, unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.

(4)No assessment under any of the provisions referred to in subsection (3) above, or under section 61 or 167 of the Management Act, shall be made at any time after whichever is the earlier of the following times, that is to say—

(a)subject to subsection (6) below, the end of the period of three years beginning with the relevant time; and

(b)the end of the period of one year beginning with the day on which evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge.

(5)Subsection (4) above shall be without prejudice, where further evidence comes to the knowledge of the Commissioners at any time after the making the assessment concerned, to the making of a further assessment within the period applicable by virtue of that subsection in relation to that further assessment.

(6)Subsection (4) above shall have effect as if the reference in paragraph (a) to three years were a reference to twenty years in any case where the assessment has been postponed or otherwise affected by, or the power to make the assessment arises out of, conduct falling within subsection (5)(a) or (b) of section 12 above (construed in accordance with subsection (7) of that section).]

Annotations:

Amendments (Textual)

F16Word at the end of s. 12A(3)(b) repealed (1.10.1998) by 1998 c. 36, ss. 20, 165, Sch. 2 paras. 8(2), 12, Sch. 27 Pt. I(5), Note; S.I. 1998/2243, art. 2

F18Words in s. 12A(3)(bb) substituted (retrospective to 1.6.2002) by Finance Act 2002 (c. 23), s. 4(1)(2), Sch. 1 para. 4(2)

F20S. 12A(3)(d)(e) inserted (1.10.1998 for certain purposes otherwiseprosp.) by 1998 c. 36, s. 20, Sch. 2 paras. 8(3), 12; S.I. 1998/2243, art. 2

Marginal Citations

F2112B Section 12A: supplementary provisions.E+W+S+N.I.

(1)For the purposes of section 12A above and this section, relevant excise duty relief has been given if (and only if)—

(a)an amount of excise duty which a person is liable to pay has been remitted or payment of an amount of excise duty which a person is liable to pay has been waived;

(b)an amount of excise duty has been repaid to a person;

(c)an amount by way of drawback of excise duty has been paid to a person;

(d)an allowance of excise duty in any amount has been made to a person;

(e)an amount by way of rebate has been allowed to a person;

(f)the liability of a person to repay an amount paid by way of drawback of excise duty has been waived;

(g)an amount has been paid to a person under section 20(3) of the Hydrocarbon Oil Duties Act 1979 (payments in respect of contaminated or accidentally mixed oil); or

(h)an amount of relief has been allowed to a person by virtue of section 20AA [F22or 20AB] of that Act (power to allow reliefs), or in accordance with paragraph 10 of Schedule 3 to that Act (power to make regulations for the purpose of relieving from excise duty oil intended for exportation or shipment as stores);

and the amount of the relief is the amount mentioned in relation to the relief in this subsection.

(2)For the purposes of section 12A above the relevant time is—

(a)in the case of an assessment under section 61 of the Management Act, the time when the ship or aircraft in question returned to a place within the United Kingdom;

(b)in the case of an assessment under section 94 of that Act, the time at which the goods in question were warehoused;

(c)in the case of an assessment under that section as it has effect by virtue of section 95 of that Act, the time when the goods in question were lawfully taken from the warehouse;

(d)in the case of an assessment under section 96 of that Act, the time when the goods in question were moved by pipe-line or notified as goods to be moved by pipe-line;

(e)in the case of an assessment under section 167 of that Act—

(i)if the assessment relates to unpaid duty, the time when the duty became payable or, if later, the time when the document in question was delivered or the statement in question was made; and

(ii)if the assessment relates to an overpayment, the time when the overpayment was made;

[F23(ea)in the case of an assessment under section 8 or 10 of the Alcoholic Liquor Duties Act 1979, the time of delivery from warehouse;

(eb)in the case of an assessment under section 11 of that Act, the time when the direction was made;]

[F24(ec)in the case of an assessment under section 36G of that Act, the the time at which the requirement to pay the duty took effect (which time, in a case where there was an excise duty point for the beer fixed under section 1 of the Finance (No. 2) Act 1992, is that excise duty point);]

(f)in the case of an assessment under section 10, 13, [F2513AB,] 14 or 23 of the M10Hydrocarbon Oil Duties Act 1979, the time of the action which gave rise to the power to assess;

(g)in the case of an assessment under section 24(4A) or (4B) of that Act, the time when the rebate was allowed or the oil was delivered without payment of duty (as the case may be);

[F26(ga)in the case of an assessment under section 8 of the Tobacco Products Duty Act 1979, the time when the Commissioners are satisfied of a failure to prove as mentioned in subsection (2)(a) or (b) of that section;

(gb)in the case of an assessment under section 2 of the Finance (No. 2) Act 1992, the time when the sums were paid or credited in respect of the drawback;]

(h)in the case of an assessment under section 12A(2) above, the time when the relevant excise duty relief in question was given.

(3)In section 12A above “the liable person” means—

(a)in the case of excise duty which has been remitted or repaid under section 130 of the Management Act on the basis that goods were lost or destroyed while in a warehouse, the proprietor of the goods or the occupier of the warehouse;

(b)in the case of a rebate which has been allowed on any oil under section 11 of the Hydrocarbon Oil Duties Act 1979, the person to whom the rebate was allowed or the occupier of any warehouse from which the oil was delivered for home use;

(c)in the case of a rebate allowed on any petrol under section 13A of that Act, the person to whom the rebate was allowed or the occupier of any warehouse from which the petrol was delivered for home use;

(d)in any other case, the person mentioned in subsection (1) above to whom the relief in question was given.

(4)In section 12A above—

  • excepted relief” means any relief which is given by the making of a repayment on a claim made under section 137A of the Management Act;

  • representative”, in relation to any person from whom the Commissioners assess an amount as being excise duty due, means his personal representative, trustee in bankruptcy or interim or permanent trustee, any receiver or liquidator appointed in relation to him or any of his property or any other person acting in a representative capacity in relation to him.

Annotations:

Amendments (Textual)

F22Words in s. 12B(1)(h) inserted (11.5.2001) by 2001 c. 9, s. 3(4)

F24S. 12B(2)(ec) inserted (retrospective to 1.6.2002) by Finance Act 2002 (c. 23), s. 4(1)(2), Sch. 1 para. 4(3)

F26S. 12B(2)(ga)(gb) inserted (1.10.1998 for certain purposes otherwiseprosp.) by 1998 c. 36, s. 20, Sch. 2 paras. 9(4), 12; S.I. 1998/2243, art. 2

Marginal Citations

13 Assessments to penalties.E+W+S+N.I.

(1)Where any person is liable to a penalty under this Chapter, the Commissioners may assess the amount due by way of penalty and notify that person, or his representative, accordingly.

(2)An assessment under this section may be combined with an assessment under section 12 above, but any notification for the purposes of any such combined assessment shall separately identify any amount assessed by way of a penalty.

(3)In the case of any amount due from any person by way of a penalty under section 9 above for conduct consisting in a contravention which attracts daily penalties—

(a)a notification of an assessment under this section shall specify a date, being a date no later than the date of the notification, to which the penalty as assessed is to be calculated; and

(b)if the contravention continues after that date, a further assessment, or (subject to this subsection) further assessments, may be made under this section in respect of any continuation of the contravention after that date.

(4)If—

(a)a person is assessed to a penalty in accordance with paragraph (a) of subsection (3) above, and

(b)the contravention to which that penalty relates is remedied within such period after the date specified for the purposes of that subsection in the notification of assessment as may for the purposes of this subsection be notified to that person by the Commissioners,

that contravention shall be treated for the purposes of this Chapter as having been remedied, and accordingly the conduct shall be deemed to have ceased, immediately before that date.

(5)If an amount has been assessed as due from any person and notified in accordance with this section, then unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced, that amount shall, subject to any appeal under section 16 below, be recoverable as if it were an amount due from that person as an amount of the appropriate duty.

(6)In subsection (5) above “the appropriate duty” means—

(a)the [F27relevant duty] (if any) by reference to an amount of which the penalty in question is calculated; or

(b)where there is no such duty, the [F27relevant duty] the provisions relating to which are contravened by the conduct giving rise to the penalty or, if those provisions relate to more than one duty, such of the duties as appear to the Commissioners and are certified by them to be relevant in the case in question.

(7)In this section “representative”, in relation to a person liable to a penalty under this Chapter, means his personal representative [F28, trustee in bankruptcy or interim or permanent trustee,] any receiver or liquidator appointed in relation to that person or any of his property or any other person acting in a representative capacity in relation to that person.

Annotations:

Amendments (Textual)

F27Words in s. 13(6)(a)(b) substituted (1.7.1997) by 1997 c. 16, s. 53(3)(9); S.I. 1997/1432, art. 2

F28Words in s. 13(7) substituted (1.6.1997) by 1997 c. 16, s. 50(2), Sch. 6 paras. 1(3), 7; S.I. 1997/1305, art. 2

Commencement Information

I7S. 13 wholly in force at 1.1.1995; s. 13 not in force at Royal Assent see s. 19(1); s. 13 in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 13 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Customs and excise reviews and appealsE+W+S+N.I.

14 Requirement for review of a decision.E+W+S+N.I.

(1)This section applies to the following decisions, not being decisions under this section or section 15 below, that is to say—

(a)any decision by the Commissioners, in relation to any customs duty or to any agricultural levy of the European Community, as to—

(i)whether or not, and at what time, anything is charged in any case with any such duty or levy;

(ii)the rate at which any such duty or levy is charged in any case, or the amount charged;

(iii)the person liable in any case to pay any amount charged, or the amount of his liability; or

(iv)whether or not any person is entitled in any case to relief or to any repayment, remission or drawback of any such duty or levy, or the amount of the relief, repayment, remission or drawback to which any person is entitled;

(b)so much of any decision by the Commissioners that a person is liable to any duty of excise, or as to the amount of his liability, as is contained in any assessment under section 12 above;

[F29(ba)any decision by the Commissioners to assess any person to excise duty under section 12A(2) above, section 61, 94, 96 or 167 of the Management Act [F30, section 8, 10 [F31, 11 or 36G] of the Alcoholic Liquor Duties Act 1979,] section 10, 13, [F3213AB,] 14, 23 or 24 of the M11Hydrocarbon Oil Duties Act 1979, [F33section 8 of the Tobacco Products Duty Act 1979, section 2 of the Finance (No. 2) Act 1992,] or as to the amount of duty to which a person is to be assessed under any of those provisions;]

[F34(bb)any decision of the Commissioners on a claim under section 137A of the Customs and Excise Management Act 1979 for repayment of excise duty;

[F35(bc)any decision by the Commissioners as to whether or not any person is entitled to any drawback of excise duty by virtue of regulations under section 2 of the Finance (No. 2) Act 1992, or the amount of the drawback to which any person is so entitled;]]

(c)so much of any decision by the Commissioners that a person is liable to any penalty under any of the provisions of this Chapter, or as to the amount of his liability, as is contained in any assessment under section 13 above;

[F36(ca)any decision as to whether or not—

(i)an amount due in respect of customs duty or agricultural levy, or

(ii)any repayment by the Commissioners of an amount paid by way of customs duty or agricultural levy,

is to carry interest, or as to the rate at which, or period for which, any such amount is to carry interest;]

(d)any decision by the Commissioners or any officer which is of a description specified in Schedule 5 to this Act.

(2)Any person who is—

(a)a person whose liability to pay any relevant duty or penalty is determined by, results from or is or will be affected by any decision to which this section applies,

(b)a person in relation to whom, or on whose application, such a decision has been made, or

(c)a person on or to whom the conditions, limitations, restrictions, prohibitions or other requirements to which such a decision relates are or are to be imposed or applied,

may by notice in writing to the Commissioners require them to review that decision.

(3)The Commissioners shall not be required under this section to review any decision unless the notice requiring the review is given before the end of the period of forty-five days beginning with the day on which written notification of the decision, or of the assessment containing the decision, was first given to the person requiring the review.

(4)For the purposes of subsection (3) above it shall be the duty of the Commissioners to give written notification of any decision to which this section applies to any person who—

(a)requests such a notification;

(b)has not previously been given written notification of that decision; and

(c)if given such a notification, will be entitled to require a review of the decision under this section.

(5)A person shall be entitled to give a notice under this section requiring a decision to be reviewed for a second or subsequent time only if—

(a)the grounds on which he requires the further review are that the Commissioners did not, on any previous review, have the opportunity to consider certain facts or other matters; and

(b)he does not, on the further review, require the Commissioners to consider any facts or matters which were considered on a previous review except in so far as they are relevant to any issue to which the facts or matters not previously considered relate.

(6)If it appears to the Commissioners that there is any description of decisions falling to be made for the purposes of any provision of—

(a)the Community Customs Code,

(b)any Community legislation made for the purpose of implementing that Code, or

(c)any enactment or subordinate legislation so made,

which are not decisions to which this section otherwise applies, the Commissioners may by regulations provide for this section to apply to decisions of that description as it applies to the decisions mentioned in subsection (1) above.

(7)The power to make regulations under subsection (6) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament and shall include power—

(a)to provide, in relation to any description of decisions to which this section is applied by any such regulations, that section 16(4) below shall have effect as if those decisions were of a description specified in Schedule 5 to this Act; and

(b)to make such other incidental, supplemental, consequential and transitional provision as the Commissioners think fit.

Annotations:

Amendments (Textual)

F31Words in s. 14(1)(ba) substituted (retrospective to 1.6.2002) by Finance Act 2002 (c. 23), s. 4(1)(2), Sch. 1 para. 4(4)

F33Words in s. 14(1)(ba) inserted (1.10.1998 for certain purposes otherwiseprosp.) by 1998 c. 36, s. 20, Sch. 2 paras. 10(c), 12; S.I. 1998/2243, art. 2

F34S. 14(1)(bb) inserted (1.5.1995 with effect as mentioned in s. 20(5) of the amending Act) by 1995 c. 4, s. 20(4)(5); S.I. 1995/2892, art. 2

F36S. 14(1)(ca) substituted for word “and” at the end of s. 14(1)(c) (27.7.1999 with effect as mentioned in s. 130(4) of the amending Act) by 1999 c. 16, s. 130(1)(4)

Modifications etc. (not altering text)

C10S. 14 applied (1.6.1995) by S.I. 1995/1046, reg. 7(3)

S. 14 applied (1.5.1995 with effect as mentioned in 1995 c. 4, s. 14(2)) by 1981 c. 63, Sch. 4 para. 7A(5) (as inserted by 1995 c. 4, s. 14, Sch. 3 para. 11(5))

S. 14 applied (1.10.1995) by S.I. 1995/2351, reg. 2

S. 14 applied (prosp.) by 1995 c. 4, s. 5(4)(6)

S. 14 applied (19.3.1997) by 1997 c. 16, ss. 11(7), 13(1), 15, 50(1), Sch. 1 paras. 8(11), 9(5), Sch. 5 para. 19(1)

S. 14 applied (24.3.1997) by S.I. 1997/534, regs. 3(1), 5(1)

S. 14 applied (28.7.2000 with effect as mentioned in 2000 c. 17, Sch. 2 para. 10(2)) by 1981 c. 63, Sch. 4A para. 6(1) (as inserted by 2000 c. 17, s. 17, Sch. 2 para. 10)

Commencement Information

I8S. 14 wholly in force at 1.1.1995; s. 14 not in force at Royal Assent see s. 19(1); s. 14(1)(2)-(5) (except s. 14(1)(a)) in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 14 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Marginal Citations

15 Review procedure.E+W+S+N.I.

(1)Where the Commissioners are required in accordance with this Chapter to review any decision, it shall be their duty to do so and they may, on that review, either—

(a)confirm the decision; or

(b)withdraw or vary the decision and take such further steps (if any) in consequence of the withdrawal or variation as they may consider appropriate.

(2)Where—

(a)it is the duty of the Commissioners in pursuance of a requirement by any person under section 14 above to review any decision; and

(b)they do not, within the period of forty-five days beginning with the day on which the review was required, give notice to that person of their determination on the review,

they shall be assumed for the purposes of this Chapter to have confirmed the decision.

(3)The Commissioners shall not by virtue of any requirement under this Chapter to review a decision have any power, apart from their power in pursuance of section 8(4) above, to mitigate the amount of any penalty imposed under this Chapter.

Annotations:

Modifications etc. (not altering text)

C11S. 15 applied (1.6.1995) by S.I. 1995/1046, reg. 7(3)

S. 15 applied (1.5.1995 with effect as mentioned in 1995 c. 4, s. 14(2)) by 1981 c. 63, Sch. 4 para. 7A(5) (as inserted by 1995 c. 4, s. 14, Sch. 3 para. 11(5))

S. 15 applied (prosp.) by 1995 c. 4, s. 5(4)(6)

S. 15 applied (19.3.1997) by 1997 c. 16, ss. 11(7), 13(1), 15, 50(1), Sch. 1 paras. 8(11), 9(5), Sch. 5 para. 19(1)

Commencement Information

I9S. 15 wholly in force at 1.1.1995; s. 15 not in force at Royal Assent see s. 19(1); s. 15 in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 15 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

16 Appeals to a tribunal.E+W+S+N.I.

(1)Subject to the following provisions of this section, an appeal shall lie to an appeal tribunal with respect to any of the following decisions, that is to say—

(a)any decision by the Commissioners on a review under section 15 above (including a deemed confirmation under subsection (2) of that section); and

(b)any decision by the Commissioners on such review of a decision to which section 14 above applies as the Commissioners have agreed to undertake in consequence of a request made after the end of the period mentioned in section 14(3) above.

(2)An appeal under this section shall not be entertained unless the appellant is the person who required the review in question.

(3)An appeal which relates to, or to any decision on a review of, any decision falling within any of paragraphs (a) to (c) of section 14(1) above shall not be entertained if any amount is outstanding from the appellant in respect of any liability of the appellant to pay any relevant duty to the Commissioners (including an amount of any such duty which would be so outstanding if the appeal had already been decided in favour of the Commissioners) unless—

(a)the Commissioners have, on the application of the appellant, issued a certificate stating either—

(i)that such security as appears to them to be adequate has been given to them for the payment of that amount; or

(ii)that, on the grounds of the hardship that would otherwise be suffered by the appellant, they either do not require the giving of security for the payment of that amount or have accepted such lesser security as they consider appropriate;

or

(b)the tribunal to which the appeal is made decide that the Commissioners should not have refused to issue a certificate under paragraph (a) above and are satisfied that such security (if any) as it would have been reasonable for the Commissioners to accept in the circumstances has been given to the Commissioners.

[F37(3A)Subsection (3) above shall not apply if the appeal arises out of an assessment under section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979.]

(4)In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say—

(a)to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b)to require the Commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c)in the case of a decision which has already been acted on or taken effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future.

(5)In relation to other decisions, the powers of an appeal tribunal on an appeal under this section shall also include power to quash or vary any decision and power to substitute their own decision for any decision quashed on appeal.

(6)On an appeal under this section the burden of proof as to—

(a)the matters mentioned in subsection (1)(a) and (b) of section 8 above,

(b)the question whether any person has acted knowingly in using any substance or liquor in contravention of section 114(2) of the Management Act, and

(c)the question whether any person had such knowledge or reasonable cause for belief as is required for liability to a penalty to arise under section 22(1) or 23(1) of the M12Hydrocarbon Oil Duties Act 1979 (use of fuel substitute or road fuel gas on which duty not paid),

shall lie upon the Commissioners; but it shall otherwise be for the appellant to show that the grounds on which any such appeal is brought have been established.

(7)An appeal tribunal shall not, by virtue of anything contained in this section, have any power, apart from their power in pursuance of section 8(4) above, to mitigate the amount of any penalty imposed under this Chapter.

(8)[F38Subject to subsection (9) below] references in this section to a decision as to an ancillary matter are references to any decision of a description specified in Schedule 5 to this Act which is not comprised in a decision falling within section 14(1)(a) to (c) above.

[F39(9)References in this section to a decision as to an ancillary matter do not include a reference to a decision of a description specified in [F40the following paragraphs of Schedule 5—

(a)paragraph 3(4);

(b)paragraph 4(3);

(c)paragraph 9(e);

(d)paragraph 9A.]

(10)Nothing in this section shall be taken to confer on an appeal tribunal any power to vary an amount of interest specified in an assessment under paragraph 11A of Schedule 6 to this Act except in so far as it is necessary to reduce it to the amount which is appropriate under paragraph 7 of that Schedule.]

Annotations:

Amendments (Textual)

F38Words in s. 16(8) inserted (1.5.1995) by 1995 c. 4, s. 16(3)(4)

F39S. 16(9)(10) inserted (1.5.1995) by 1995 c. 4, s. 16(3)(4)

F40S. 16(9)(a)-(d) and the preceding words substituted for words in s. 16(9) (1.11.2001) by 2001 c. 9, s. 15, Sch. 3 para. 16; S.I. 2001/3300, art. 3

Modifications etc. (not altering text)

C12S. 16 applied (1.6.1995) by S.I. 1995/1046, reg. 7(3)

S. 16 applied (1.5.1995 with effect as mentioned in 1995 c. 4, s. 14(2)) by 1981 c. 63, Sch. 4 para. 7A(5) (as inserted by 1995 c. 4, s. 14, Sch. 3 para. 11(5))

S. 16 applied (prosp.) by 1995 c. 4, s. 5(4)(6)

S. 16 applied (19.3.1997) by 1997 c. 16, ss. 11(7), 13(1), 15, 50(1), Sch. 1 paras. 8(11), 9(5), Sch. 5 para. 19(1)

C13S. 16(4) modified (1.10.1995) by S.I. 1995/2351, reg. 3

S. 16(4) modified (24.3.1997) by S.I. 1997/534, regs. 4, 6

Commencement Information

I10S. 16 wholly in force at 1.1.1995; s. 16 not in force at Royal Assent see s. 19(1); s. 16 (except s. 16(6)(a)(b)) in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 16 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Marginal Citations

Supplemental provisionsE+W+S+N.I.

17 Interpretation.E+W+S+N.I.

(1)Subject to the following provisions of this section, expressions used in this Chapter and in the Management Act have the same meanings in this Chapter as in that Act.

(2)In this Chapter—

  • appeal tribunal” shall be construed in accordance with section 7(3) above;

  • conduct” includes any act, omission or statement;

  • contravention” includes a failure to comply, and cognate expressions shall be construed accordingly;

  • the Community Customs Code” means the Regulation of the Council of the European Communities dated 12 October 1992 (EEC) No. 2913/92 for establishing the Community Customs Code;

  • the Management Act” means the M13Customs and Excise Management Act 1979;

  • relevant duty” means any Community customs duty or agricultural levy of the European Community or any duty of excise; and

  • subordinate legislation” has the same meaning as in the M14Interpretation Act 1978.

(3)For the purposes of this Chapter a contravention consisting in a failure to do something at or before a particular time shall be taken to continue after that time until the thing is done, and references in this Chapter to the remedying of such a contravention shall be construed accordingly.

(4)References in this Chapter to a duty of excise do not include references to [F41vehicle] excise duty.

Annotations:

Amendments (Textual)

F41Word in s. 17(4) substituted (1.9.1994 subject to transitional provisions in Sch. 4 of the amending Act) by 1994 c. 22, ss. 63, 66(1), Sch. 3 para. 32 (with s. 57(4))

Commencement Information

I11S. 17 wholly in force at 1.1.1995; s. 17 not in force at Royal Assent see s. 19(1); s. 17 in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 17 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Marginal Citations

18 Consequential modifications of enactments.E+W+S+N.I.

(1)Subject to subsection (2) below, references in the Management Act to a penalty shall not include references to a penalty under this Chapter.

(2)Section 117 of the Management Act (execution and distress against revenue traders) shall have effect—

(a)as if any amount assessed as due from any person by way of a penalty under this Chapter F42. . . were an amount of excise duty payable by that person; F43. . .

F43(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Section 127 of the Management Act (determination of disputes as to duties on imported goods) shall cease to have effect; F44. . .

F45(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)In section 29A(1)(d) of that Act of 1981 (certificate to be evidence of certain matters), for the words “or estimate made in pursuance of this Act” there shall be substituted “ made in pursuance of this Act or in any assessment made under section 12 of the Finance Act 1994 ”.

(6)In section 35(1)(c) of the M15Finance Act 1993 (certificate to be evidence of certain matters), for the words “in an estimate made under section 116A of the Customs and Excise Management Act 1979” there shall be substituted “ in any assessment made under section 12 of the Finance Act 1994 ”.

(7)In section 827 of the Taxes Act 1988 (VAT penalties etc.), after subsection (1) there shall be inserted the following subsection—

(1A)Where a person is liable to make a payment by way of a penalty under any of sections 8 to 11 of the Finance Act 1994 (penalties relating to excise), that payment shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.

(8)Subsections (1) [F46and (2)] above shall be without prejudice to section 13(5) above; and subsection (7) above shall have effect in relation to any chargeable period ending after the coming into force of the provision which provides for the imposition of the penalty in question.

Annotations:

Amendments (Textual)

F42Words in s. 18(2)(a) repealed (1.7.1997) by 1997 c. 16, s. 113, Sch. 18 Pt. V(2), Note; S.I. 1997/1433, art. 2

F43S. 18(2)(b) and the preceding word “and” repealed (1.7.1997) by 1997 c. 16, s. 113, Sch. 18 Pt. V(2), Note; S.I. 1997/1433, art. 2

F44Words in s. 18(3) repealed (1.9.1994 with effect as mentioned in s. 101(1) of the amending Act) by 1994 c. 23, s. 100(2), Sch. 15

F46Words in s. 18(8) substituted (1.7.1997) by 1997 c. 16, s. 53(4)(9); S.I. 1997/1432, art. 2

Commencement Information

I12S. 18 wholly in force at 1.1.1995; s. 18 not in force at Royal Assent see s. 19(1); s. 18(1)(2)(7)(8) in force for certain purposes at 1.11.1994 by S.I. 1994/2679, art. 2, Sch.; s. 18 in force at 1.1.1995 insofar as not already in force by S.I. 1994/2679, art. 3

Marginal Citations

19 Commencement of Chapter.E+W+S+N.I.

(1)Subject to section 18(8) above, this Chapter shall come into force on such day as the Commissioners may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different provisions and for different purposes.

(2)An order under this section may make such transitional provision and savings as appear to the Commissioners to be appropriate in connection with the bringing into force by such an order of any provision of this Chapter.

(3)Nothing in any provision of this Chapter shall, in respect of conduct occurring before the coming into force of that provision, impose or affect any liability to any civil or criminal penalty or any liability of goods to forfeiture.

Annotations:

Subordinate Legislation Made

P1S. 19 power partly exercised: 1.7.1994 appointed for specified provisions by S.I. 1994/1690, art. 2

S. 19 power partly exercised: 31.8.1994 appointed for specified provision by S.I. 1994/2143, art. 2

S. 19 power partly exercised: different dates appointed for specified provisions by S.I. 1994/2679, arts. 2, 3

Commencement Information

I13S. 19 wholly in force at 1.1.1995; s. 19 not in force at Royal Assent see s. 19(1); s. 19 in force at 1.1.1995 by S.I. 1994/2679, art. 3

Chapter IIIE+W+S+N.I. Customs: Enforcement Powers

20 Interpretation, etc.E+W+S+N.I.

(1)This Chapter applies to any person carrying on a trade or business which consists of or includes any of the following activities—

(a)importing or exporting any goods of a class or description subject to a duty of customs (whether or not in fact chargeable with that duty);

(b)producing, manufacturing or applying a process to them;

(c)buying, selling or dealing in them;

(d)handling or storing them;

(e)financing or facilitating any activity mentioned in paragraphs (a) to (d) above.

(2)In subsection (1) above “duty of customs” includes any agricultural levy of the European Community.

(3)In this Chapter—

(a)customs goods” means any goods mentioned in paragraph (a) of subsection (1) above; and

(b)any reference to the business of a person to whom this Chapter applies is a reference to the trade or business carried on by him as mentioned in that subsection.

(4)This Chapter shall have effect and be construed as if it were contained in the M16Customs and Excise Management Act 1979.

(5)In consequence of the provision made by sections 21 to 27 below, any power under—

(a)section 75A, 75B or 75C of the Customs and Excise Management Act 1979 to require a person importing or exporting goods to keep or preserve records, or

(b)section 77A, 77B or 77C of that Act to require a person to furnish information or produce documents relating to imported or exported goods,

shall cease to be exercisable in relation to a person to the extent that the goods in question are customs goods.

Annotations:

Marginal Citations

21 Requirements about keeping records.E+W+S+N.I.

(1)The Commissioners may by regulations require any person to whom this Chapter applies—

(a)to keep such records as may be prescribed in the regulations; and

(b)to preserve those records—

(i)for such period not exceeding four years as may be prescribed in the regulations, or

(ii)for such lesser period as the Commissioners may require.

(2)The Commissioners may also require any person mentioned in subsection (3) below—

(a)to keep such records as they may specify; and

(b)to preserve those records for such period not exceeding four years as they may require.

(3)The person referred to is any person who—

(a)is not carrying on a trade or business which consists of or includes the importation or exportation of customs goods, but

(b)is concerned in some other capacity in such importation or exportation.

(4)A duty imposed under subsection (1)(b) or (2)(b) above to preserve records may be discharged by the preservation of the information contained in them by such means as the Commissioners may approve.

(5)On giving approval under subsection (4) above, the Commissioners may impose such reasonable requirements as appear to them necessary for securing that the information will be as readily available to them as if the records themselves had been preserved.

(6)Regulations under this section may—

(a)make different provision for different cases; and

(b)be framed by reference to such records as may be specified in any notice published by the Commissioners in pursuance of the regulations and not withdrawn by a further notice.

(7)Any person who fails to comply with a requirement imposed by virtue of this section shall be liable on summary conviction to a penalty not exceeding level 3 on the standard scale.

22 Records and rules of evidence.E+W+S+N.I.

(1)Where any information is preserved by approved means as mentioned in section 21(4) above, a copy of any document in which it is contained shall, subject to subsection (2) below, be admissible in evidence in any proceedings, whether civil or criminal, to the same extent as the records themselves.

(2)A statement contained in a document produced by a computer shall not by virtue of subsection (1) above be admissible in evidence—

F47(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)in criminal proceedings in England and Wales, except in accordance with [F48sections 69 and 70 of the M17Police and Criminal Evidence Act 1984 and] Part II of the M18Criminal Justice Act 1988;

(c)in civil proceedings in Scotland, except in accordance with sections 5 and 6 of the M19Civil Evidence (Scotland) Act 1988;

(d)in criminal proceedings in Scotland, except in accordance with [F49Schedule 8 to the Criminal Procedure (Scotland) Act 1995];

F50(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)in criminal proceedings in Northern Ireland, except in accordance with Article 68 of the M20Police and Criminal Evidence (Northern Ireland) Order 1989 and Part II of the M21Criminal Justice (Evidence, Etc.) (Northern Ireland) Order 1988.

23 Furnishing of information and production of documents.E+W+S+N.I.

(1)Every person to whom this Chapter applies shall furnish the Commissioners, within such time and in such form as they may reasonably require, with such information relating to his business as they may reasonably specify.

(2)Every person to whom this Chapter applies shall, if required to do so by an officer, produce or cause to be produced for inspection by the officer—

(a)at that person’s principal place of business or at such other place as the officer may reasonably require, and

(b)at such time as the officer may reasonably require,

any documents which relate to his business.

(3)Where it appears to an officer that any documents which relate to a business of a person to whom this Chapter applies are in the possession of another person, the officer may require that other person, at such time and place as the officer may reasonably require, to produce those documents or cause them to be produced.

(4)For the purposes of this section, the documents which relate to a business of a person to whom this Chapter applies shall be taken to include—

(a)any profit and loss account and balance sheet, and

(b)any documents required to be kept by virtue of section 21(1) above.

(5)Every person mentioned in section 21(3) above shall furnish the Commissioners, within such time and in such form as they may reasonably require, with such information relating to the importation or exportation of customs goods in which he is concerned as they may reasonably specify.

(6)Every person mentioned in section 21(3) above shall, if required to do so by an officer, produce or cause to be produced for inspection by the officer at such time and place as the officer may reasonably require, any documents which relate to the importation or exportation of customs goods in which he is concerned.

(7)An officer may take copies of, or make extracts from, any document produced under this section.

(8)If it appears to an officer to be necessary to do so, he may, at a reasonable time and for a reasonable period, remove any document produced under this section.

(9)Where a document is removed under subsection (8) above—

(a)if the person from whom the document is removed so requests, he shall be given a record of what was removed;

(b)if the document is reasonably required for the proper conduct of any business, the person by whom the document was produced or caused to be produced shall be provided as soon as practicable with a copy of the document free of charge;

(c)if the document is lost or damaged, the Commissioners shall be liable to compensate the owner of it for any expenses reasonably incurred by him in replacing or repairing it.

(10)If a person claims a lien on any document produced by him under subsection (3) or (6) above—

(a)the production of the document shall be without prejudice to the lien; and

(b)the removal of the document under subsection (8) above shall not be regarded as breaking the lien.

(11)Any person who fails to comply with a requirement imposed under this section shall be liable on summary conviction to a penalty not exceeding level 3 on the standard scale.

24 Power of entry.E+W+S+N.I.

Where an officer has reasonable cause to believe that—

(a)any premises are used in connection with a business of a person to whom this Chapter applies, and

(b)any customs goods are on those premises,

he may at any reasonable time enter and inspect those premises and inspect any goods found on them.

25 Order for production of documents.E+W+S+N.I.

(1)Where, on an application by an officer, a justice is satisfied that there are reasonable grounds for believing—

(a)that an offence in connection with a duty of customs is being, has been or is about to be committed, and

(b)that any information or documents which may be required as evidence for the purpose of any proceedings in respect of such an offence is in the possession of any person,

he may make an order under this section.

(2)An order under this section is an order that the person who appears to the justice to be in possession of the information or documents to which the application relates shall—

(a)furnish an officer with the information or produce the document,

(b)permit an officer to take copies of or make extracts of any document produced, and

(c)permit an officer to remove any document which he reasonably considers necessary,

not later than the end of the period of seven days beginning with the date of the order or the end of such longer period as the order may specify.

(3)In this section “justice” means a justice of the peace or, in relation to Scotland, a justice within the meaning of [F51section 308 of the Criminal Procedure (Scotland) Act 1995].

Annotations:

Amendments (Textual)

F51Words in s. 25(3) substituted (1.4.1996) by 1995 c. 40, s. 5, Sch. 4 para. 89(3)

26 Procedure when documents are removed.E+W+S+N.I.

(1)An officer who removes any document in the exercise of a power conferred under section 25 above shall, if so requested by a person showing himself—

(a)to be the occupier of premises from which it was removed, or

(b)to have had custody or control of it immediately before the removal,

provide that person with a record of what he removed.

(2)The officer shall provide the record within a reasonable time from the making of the request for it.

(3)Subject to subsection (7) below, if a request for permission to be granted access to any document which—

(a)has been removed by an officer, and

(b)is retained by the Commissioners for the purposes of investigating an offence,

is made to the officer in charge of the investigation by a person who had custody or control of the document immediately before it was so removed or by someone acting on behalf of such a person, the officer shall allow the person who made the request access to it under the supervision of an officer.

(4)Subject to subsection (7) below, if a request for a photograph or copy of any such document is made to the officer in charge of the investigation by a person who had custody or control of the document immediately before it was so removed, or by someone acting on behalf of such a person, the officer shall—

(a)allow the person who made the request access to it under the supervision of an officer for the purpose of photographing it or copying it, or

(b)photograph or copy it, or cause it to be photographed or copied.

(5)Where any document is photographed or copied under subsection (4)(b) above, the photograph or copy shall be supplied to the person who made the request.

(6)The photograph or copy shall be supplied within a reasonable time from the making of the request.

(7)There is no duty under this section to grant access to, or to supply a photograph or copy of, any document if the officer in charge of the investigation for the purposes of which it was removed has reasonable grounds for believing that to do so would prejudice—

(a)that investigation;

(b)the investigation of an offence other than the offence for the purposes of the investigation of which the document was removed; or

(c)any criminal proceedings which may be brought as a result of—

(i)the investigation of which he is in charge; or

(ii)any such investigation as is mentioned in paragraph (b) above.

(8)Any reference in this section to the officer in charge of the investigation is a reference to the person whose name and address are endorsed on the order concerned as being the officer in charge of it.

27 Failure of officer to comply with requirements under section 26.E+W+S+N.I.

(1)Where, on an application made as mentioned in subsection (2) below, the appropriate judicial authority is satisfied that a person has failed to comply with a requirement imposed by section 26 above, the authority may order that person to comply with the requirement within such time and in such manner as may be specified in the order.

(2)An application under subsection (1) above shall be made—

(a)in the case of a failure to comply with any of the requirements imposed by subsections (1) and (2) of section 26 above, by the occupier of the premises from which the document in question was removed or by the person who had custody or control of it immediately before it was so removed, and

(b)in any other case, by the person who has such custody or control.

(3)In this section “the appropriate judicial authority” means—

(a)in England and Wales, a magistrates’ court;

(b)in Scotland, the sheriff; and

(c)in Northern Ireland, a court of summary jurisdiction, as defined in Article 2(2)(a) of the M22Magistrates’ Courts (Northern Ireland) Order 1981.

(4)Any application for an order under this section—

(a)in England and Wales, shall be made by way of complaint; or

(b)in Northern Ireland, shall be made by way of civil proceedings upon complaint.

(5)Sections 21 and 42(2) of the M23Interpretation Act (Northern Ireland) 1954 (rules and orders regulating procedure of courts etc and assignment of business to particular courts) shall apply as if any reference in those provisions to any enactment included a reference to this section.

Annotations:

Marginal Citations

Chapter IVE+W+S+N.I. Air Passenger Duty

The dutyE+W+S+N.I.

28 Air passenger duty.E+W+S+N.I.

(1)A duty to be known as air passenger duty shall be charged in accordance with this Chapter on the carriage on a chargeable aircraft of any chargeable passenger.

(2)Subject to the provisions of this Chapter about accounting and payment, the duty in respect of any carriage on an aircraft of a chargeable passenger—

(a)becomes due when the aircraft first takes off on the passenger’s flight, and

(b)shall be paid by the operator of the aircraft.

(3)Subject to section 29 below, every aircraft designed or adapted to carry persons in addition to the flight crew is a chargeable aircraft for the purposes of this Chapter.

(4)Subject to sections 31 and 32 below, every passenger on an aircraft is a chargeable passenger for the purposes of this Chapter if his flight begins at an airport in the United Kingdom.

(5)In this Chapter, “flight”, in relation to any person, means his carriage on an aircraft; and for the purposes of this Chapter, a person’s flight is to be treated as beginning when he first boards the aircraft and ending when he finally disembarks from the aircraft.

29 Chargeable aircraft.E+W+S+N.I.

(1)Where—

(a)the authorised take-off weight in respect of an aircraft is less than ten tonnes, or

(b)an aircraft is not authorised to seat twenty or more persons (excluding members of the flight crew and cabin attendants),

the aircraft is not a chargeable aircraft for the purposes of this Chapter.

(2)In this section “take-off weight”, in relation to an aircraft, means the total weight of the aircraft and its contents when taking off; and for the purposes of this section the authorised take-off weight of an aircraft is less than ten tonnes if—

(a)there is a certificate of airworthiness in force in respect of the aircraft showing that the maximum authorised take-off weight (assuming the most favourable circumstances for take-off) is less than ten tonnes, or

(b)the Commissioners are satisfied that the aircraft is not designed or adapted to take off when its take-off weight is ten tonnes or more (assuming the most favourable circumstances for take-off) or the aircraft belongs to a class or description of aircraft in respect of which the Commissioners are so satisfied.

(3)For the purposes of this section an aircraft is not authorised as mentioned in subsection (1)(b) above if—

(a)there is a certificate of airworthiness in force in respect of the aircraft showing that the maximum number of persons who may be seated on the aircraft (excluding members of the flight crew and cabin attendants) is less than twenty, or

(b)the Commissioners are satisfied that the aircraft is not designed or adapted to seat twenty or more persons (excluding members of the flight crew and cabin attendants) or the aircraft belongs to a class or description of aircraft in respect of which the Commissioners are so satisfied.

(4)In this section “certificate of airworthiness” has the same meaning as in the Air Navigation Order.

30 The rate of duty.E+W+S+N.I.

(1)Air passenger duty shall be charged on the carriage of each chargeable passenger at the rate [F52determined in accordance with subsections (2) to (4) below.]

[F53(2)[F54If the place where the passenger’s journey ends] is in the area specified in subsection (3) below and in—

(a)the United Kingdom or another EEA State, F55. . .

(b)any territory for whose external relations the United Kingdom or another member State is responsible

[F56or

(c)any qualifying territory (so long as not falling within paragraph (a) above),]]

[F57the rate shall be determined in accordance with subsection (3A) below.]

(3)The area referred to in subsection (2) above is the area bounded by the meridians of longitude 32° W and [F5845 degrees E] and the parallels of latitude 26° N and 81° N.

[F59(3A)In a case falling within subsection (2) above—

(a)if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on his journey, the rate is £5;

(b)in any other case, the rate is £10.]

[F60(4)In a case not falling within subsection (2) above—

(a)if the passenger’s agreement for carriage provides for standard class travel in relation to every flight on his journey, the rate is £20;

(b)in any other case, the rate is £40.]

(5)Subject to subsection (6) below, the journey of a passenger whose agreement for carriage is evidenced by a ticket ends for the purposes of this section at his final place of destination.

(6)Where in the case of such a passenger—

(a)his journey includes two or more flights, and

(b)any of those flights is not followed by a connected flight,

his journey ends for those purposes where the first flight not followed by a connected flight ends.

(7)The journey of any passenger whose agreement for carriage is not evidenced by a ticket ends for those purposes where his flight ends.

(8)For the purposes of this Chapter, successive flights are connected if (and only if) they are treated under an order as connected.

[F61(9)In this section “EEA State” means a State which is a Contracting Party to the EEA Agreement but until the EEA Agreement comes into force in relation to Liechtenstein does not include the State of Liechtenstein; and “EEA Agreement” here means the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as adjusted by the Protocol signed at Brussels on 17th March 1993.]

[F62(9A)In this section “qualifying territory” means each of the following territories—

BulgariaLatviaSlovak Republic
CyprusLithuaniaSlovenia
Czech RepublicMaltaSwitzerland
EstoniaPolandTurkey.
HungaryRomania

(9B)The Treasury may by order amend the definition of “qualifying territory” in subsection (9A) above by adding, removing, or varying the description of, any territory.]

[F63(10)In this section “standard class travel”, in relation to carriage on an aircraft, means—

(a)in the case of an aircraft on which only one class of travel is available, that class of travel;

(b)in any other case, the lowest class of travel available on the aircraft.]

Annotations:

Amendments (Textual)

F52Words in s. 30(1) substituted (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(2)

F53S. 30(2) substituted (retrospectively) by 1995 c. 4, s. 15(1)(2)

F54Words in s. 30(2) substituted (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(3)(a)

F55Word in s. 30(2) repealed (with application as mentioned in s. 121(5) of the amending Act) by Finance Act 2002 (c. 23), ss. {121(2)}, 141, {Sch. 40 Pt. 4(1)}

F56S. 30(2)(c) and word inserted (with application as mentioned in s. 121(5) of the amending Act) by Finance Act 2002 (c. 23), s. 121(2)

F57Words in s. 30(2) added (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(3)(b)

F58Words in s. 30(3) substituted (with application as mentioned in s. 121(5) of the amending Act) by Finance Act 2002 (c. 23), s. 121(3)

F59S. 30(3A) inserted (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(4)

F60S. 30(4) substituted (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(5)

F61S. 30(9) inserted (retrospectively) by 1995 c. 4, s. 15(1)(3)

F62S. 30(9A)(9B) inserted (with application as mentioned in s. 121(5) of the amending Act) by Finance Act 2002 (c. 23), s. 121(4)

F63S. 30(10) added (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(6)

31 Passengers: exceptions.E+W+S+N.I.

F64(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F64(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)A passenger whose agreement for carriage is evidenced by a ticket is not a chargeable passenger in relation to a flight which is the second or a subsequent flight on his journey if—

(a)the prescribed particulars of the flight are shown on the ticket, and

(b)that flight and the previous flight are connected.

(4)A child who—

(a)has not attained the age of two years, and

(b)is not allocated a separate seat before he first boards the aircraft,

is not a chargeable passenger.

[F65(4A)A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket)—

(a)the flight is to depart from and return to the same airport, and

(b)the duration of the flight (excluding any period during which the aircraft’s doors are open for boarding or disembarkation) is not to exceed 60 minutes.]

[F66(4B)A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket) the flight is to depart from an airport which is in a region of the United Kingdom designated by order.

(4C)An order may be made for the purposes of subsection (4B) above in respect of any region which has a population density of not more than 12.5 persons per square kilometre.

(4D)In subsections (4B) and (4C) above, references to a region are references to an area which is determined by the Treasury to constitute a region for the purposes of those subsections.]

(5)A passenger not carried for reward is not a chargeable passenger if he is carried—

(a)in pursuance of any requirement imposed under any enactment, or

(b)for the purpose only of inspecting matters relating to the aircraft or the flight crew.

F64(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F64S. 31(1)(2)(6) repealed (28.7.2000 with application as mentioned in s. 19(6) of the repealing Act) by 2000 c. 17, ss. 19(2)(4), 156, Sch. 40 Pt. I(4)

F65S. 31(4A) inserted (29.4.1996) by 1996 c. 8, s. 13(1)

F66S. 31(4B)-(4D) inserted (28.7.2000 with application as mentioned in s. 19(6) of the amending Act) by 2000 c. 17, s. 19(3)

32 Change of circumstances after ticket issued etc.E+W+S+N.I.

(1)[F67Subsections (2) and (3) below apply] in the case of a person whose agreement for carriage is evidenced by a ticket.

(2)Where—

(a)at the time the ticket is issued or, if it is altered, at the time it is last altered, he would not (assuming there is no change of circumstances) be a chargeable passenger in relation to any flight in the course of his journey, and

(b)by reason only of a change of circumstances not attributable to any act or default of his, he arrives at or departs from an airport in the course of that journey on a flight the prescribed particulars of which were not shown on his ticket at that time,

he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight.

(3)Where—

(a)at the time the ticket is issued or, if it is altered, at the time it is last altered, he would (assuming there is no change of circumstances) be a chargeable passenger in relation to one or more flights (“the proposed chargeable flights”) in the course of his journey,

(b)by reason only of a change of circumstances not attributable to any act or default of his, he arrives at or departs from an airport in the course of that journey on a flight the prescribed particulars of which were not shown on his ticket at that time, and

(c)but for this subsection he would by reason of the change be a chargeable passenger in relation to a number of flights exceeding the number of the proposed chargeable flights,

he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight.

[F68(4)Where—

(a)at the time a passenger’s flight begins, by virtue of section 31(4A) above he would not (assuming there is no change of circumstances) be a chargeable passenger in relation to the flight, and

(b)by reason only of a change of circumstances not attributable to any act or default of his, the flight does not return to the airport from which it departed or exceeds 60 minutes in duration (excluding any period during which the aircraft’s doors are open for boarding or disembarkation),

he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight.]

Annotations:

Amendments (Textual)

F67Words in s. 32(1) substituted (29.4.1996) by 1996 c. 8, s. 13(2)(a)

F68S. 32(4) added (29.4.1996) by 1996 c. 8, s. 13(2)(b)

Persons liable for the dutyE+W+S+N.I.

33 Registration of aircraft operators.E+W+S+N.I.

(1)The Commissioners shall under this section keep a register of aircraft operators.

(2)The operator of a chargeable aircraft becomes liable to be registered under this section if the aircraft is used for the carriage of any chargeable passengers.

(3)A person who has become liable to be registered under this section ceases to be so liable if the Commissioners are satisfied at any time—

(a)that he no longer operates any chargeable aircraft, or

(b)that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers.

(4)A person who is not registered and has not given notice under this subsection shall, if he becomes liable to be registered at any time, give written notice of that fact to the Commissioners not later than the end of the prescribed period beginning with that time.

(5)Notice under subsection (4) above shall be in such form, be given in such manner and contain such information as the Commissioners may direct.

(6)If a person who is required to give notice under subsection (4) above fails to do so, his failure shall attract a penalty under section 9 above which, if any amount of duty is then due from him and unpaid, shall be calculated by reference to that amount.

(7)Regulations may make provision as to the information to be included in, and the correction of, the register kept under this section.

(8)In particular, the regulations may provide—

(a)for the inclusion in the register of persons who have not given notice under this section but appear to the Commissioners to be liable to be registered,

(b)for persons who are liable to be registered—

(i)not to be included in, or

(ii)to be removed from,

the register in prescribed circumstances,

(c)for the removal from the register of persons who have ceased to be so liable, and

(d)for the time from which an entry in the register is to be effective (which may be earlier than the time when the entry is first made in the register).

34 Fiscal representatives.E+W+S+N.I.

(1)An aircraft operator who—

(a)is or is liable to be registered, and

(b)does not meet the requirements of subsection (3) below,

is required to have a fiscal representative.

(2)In this Chapter “fiscal representative”, in relation to an aircraft operator, means a person who meets those requirements and stands appointed by the operator for the purposes of this section.

(3)A person meets the requirements of this subsection if—

(a)he has any business establishment or other fixed establishment in the United Kingdom, or

(b)if he is an individual, he has his usual place of residence in the United Kingdom.

(4)Where any person is appointed under this section to be the fiscal representative of any aircraft operator (in this section referred to as his “principal”), then, subject to subsection (5) below [F69and section 34A], the fiscal representative—

(a)shall be entitled to act on his principal’s behalf for any of the purposes of the enactments relating to duty,

(b)shall, subject to such provisions as may be made by regulations, secure (where appropriate by acting on his principal’s behalf) his principal’s compliance with and discharge of the obligations and liabilities to which his principal is subject by virtue of those enactments, and

(c)shall be personally liable in respect of any failure of his principal to comply with or discharge any such obligation or liability as if the obligations and liabilities imposed on his principal were imposed jointly and severally on the fiscal representative and his principal.

(5)A fiscal representative shall not be liable by virtue of subsection (4) above himself to be registered under section 33 above, but regulations may—

(a)require the names of fiscal representatives to be shown in such manner as may be prescribed against the names of their principals in the register kept under that section, and

(b)make it the duty of a fiscal representative, for the purposes of registration, to notify the Commissioners, within such period as may be prescribed, that his appointment has taken effect or has ceased to have effect.

Annotations:

Amendments (Textual)

F69Words in s. 34(4) inserted (31.7.1998) by 1998 c. 36, s. 15(2)

[F7034A Administrative representatives.E+W+S+N.I.

(1)Subject to the following provisions of this section, where—

(a)the appointment of any person to be the fiscal representative of an aircraft operator contains a statement that the appointment is made for administrative purposes only,

(b)the operator has complied with any obligations for the provision of security imposed, in relation to appointments containing such statements, by any general directions given by the Commissioners, and

(c)the operator is not for the time being in contravention of any requirement to provide any security that he is required to provide under section 36 below,

that appointment shall have effect in accordance with subsection (2) below.

(2)Where the appointment of any person as a fiscal representative has effect in accordance with this subsection section 34(4)(b) and (c) above shall be taken, in the case of that person—

(a)not to impose any requirement on the representative to secure the payment of amounts of duty which are or may become due from his principal, and

(b)not to make him personally liable either to pay any such amounts or in respect of any failure by his principal to pay them.

(3)The security that may be required by general directions given by the Commissioners for the purposes of this section is any such security for the payment of amounts of duty which are or may become due from the person providing the security as may be determined in accordance with the directions.

(4)The power of the Commissioners under section 36 below to require the provision of security shall not include any power to require a fiscal representative of an aircraft operator whose appointment has effect in accordance with subsection (2) above to provide any security for the payment of amounts of duty which are or may become due from his principal.

(5)In this section references to an amount of duty include references to any penalty or interest that is recoverable as if it were an amount of duty, but only in so far as the penalty or interest is in respect of a failure by an aircraft operator to pay an amount of duty, or to pay such an amount before a certain time.]

Annotations:

Amendments (Textual)

F70S. 34A inserted (31.7.1998) by 1998 c. 36, s. 15(1)

35 Fiscal representatives: supplementary.E+W+S+N.I.

(1)Regulations may make provision about—

(a)the manner in which a person is to be appointed as a fiscal representative, and

(b)the circumstances in which a person is to be treated as having ceased to be a fiscal representative.

(2)If any aircraft operator who is required to have a fiscal representative fails to appoint such a representative before the prescribed time, his failure shall attract a penalty under section 9 above.

(3)Any failure of a fiscal representative to give any notice which he is required to give by regulations under section 34(5)(b) above shall attract a penalty under section 9 above.

36 Security for payment of duty.E+W+S+N.I.

(1)The Commissioners may require—

(a)any operator of an aircraft who is or is liable to be registered, or

(b)any fiscal representative,

to provide such security, or further security, as they may think appropriate for the payment of any duty which is or may become due from the operator.

(2)Any failure by a person to provide any security which he is required by the Commissioners to provide under subsection (1) above shall attract a penalty under section 9 above.

(3)For the purposes of this section, a person shall not be treated as having been required to provide security under subsection (1) above unless the Commissioners have either—

(a)served notice of the requirement on him, or

(b)taken all such other steps as appear to them to be reasonable for bringing the requirement to his attention.

37 Handling agents.E+W+S+N.I.

(1)Where any amount of duty becomes payable at any time by the operator of an aircraft and, within the period of ninety days beginning with that time, that amount, or any other amount which becomes payable by him within the period, is not paid, the Commissioners may give notice under this section to any handling agent of his.

(2)If any operator of an aircraft who is required to have a fiscal representative fails to appoint such a representative before the prescribed time, the Commissioners may give notice under this section to any handling agent of his.

(3)In this Chapter “handling agent”, in relation to the operator of an aircraft (“the principal”), means any person (other than an individual) who, under an agreement with the principal, makes arrangements for—

(a)the allocation of seats to passengers on aircraft operated by the principal, or

(b)the supervision of the boarding of such aircraft by passengers.

(4)A notice under this section—

(a)may be given on the ground referred to in subsection (1) above only if the Commissioners consider it necessary to do so for the protection of the revenue, and

(b)may at any time be withdrawn by the Commissioners.

(5)A notice under this section shall become effective on the date stated in it or, if later, the time when the notice is received by the handling agent and shall continue to be effective until withdrawn.

(6)If, where a notice given to a handling agent under this section is effective—

(a)the allocation of seats to passengers on aircraft operated by his principal, or the supervision of the boarding of such aircraft by passengers, is carried out in pursuance of arrangements made by him under any agreement with his principal, and

(b)any duty payable in respect of those passengers is not paid,

the handling agent shall be liable jointly and severally with his principal for the payment of the duty.

38 Accounting for and payment of duty.E+W+S+N.I.

(1)Regulations shall require aircraft operators who are registered or liable to be registered—

(a)to keep accounts for the purposes of duty in such form and manner as may be prescribed, and

(b)to make returns in respect of duty—

(i)by reference to such periods as may be prescribed or as may be allowed by the Commissioners, in relation to a particular operator, in accordance with regulations, and

(ii)at such time and in such manner as may be prescribed or specified.

(2)Any person from whom any duty is due shall pay the duty at such time and in such manner as may be prescribed or specified.

(3)In this section “specified” means specified in a notice published, and not withdrawn, by the Commissioners.

(4)Any failure by any person to comply with regulations under this section shall, unless he is complying with the corresponding provisions of such a notice, attract a penalty under section 9 above and, in the case of any failure to keep accounts, daily penalties.

39 Schemes for simplifying operation of reliefs etc.E+W+S+N.I.

(1)If in the opinion of the Commissioners it is expedient to do so in the light of difficulties encountered or expected to be encountered by any registered operator in obtaining and recording information about passengers and their journeys, they may in accordance with the provisions of this section prepare a scheme for the registered operator.

(2)Any scheme so prepared shall specify the period for which it is to have effect.

[F71(2A)A scheme may be either a standard scheme or an extended scheme.]

(3)[F72A standard scheme] for a registered operator shall relate only to passengers—

(a)who are carried on chargeable aircraft operated by that operator,

(b)whose flights begin in the United Kingdom, and

(c)who are not passengers of a description mentioned in section 31(4) or (5) above;

and in this section any reference to the relevant passengers of a registered operator is a reference to passengers who fall within this subsection in relation to him.

(4)[F72A standard scheme] for a registered operator shall provide, in relation to passengers who are relevant passengers of his in the period specified in the scheme, for methods of calculating—

(a)how many of those relevant passengers may be treated as passengers who are not chargeable passengers, and

(b)how many of them may be treated as passengers on the carriage of whom duty shall be charged

[F73(i)at the rate mentioned in paragraph (a) of section 30(3A) above, and

(ii)at the rate mentioned in paragraph (b) of that provision]

[F74(4A)An extended scheme for a registered operator shall relate to all persons who are carried—

(a)on chargeable aircraft operated by that operator, and

(b)in circumstances where the aircraft take off in the United Kingdom;

and in this section any reference to persons travelling with a registered operator is a reference to persons who fall within this subsection in relation to him.

(4B)An extended scheme for a registered operator shall provide, in relation to persons travelling with him in the period specified in the scheme, for methods of calculating—

(a)how many of them may be treated as persons who are not passengers,

(b)how many of them may be treated as passengers who are not chargeable passengers, and

(c)how many of them may be treated as passengers on the carriage of whom duty shall be charged—

[F75(i)at the rate mentioned in paragraph (a) of section 30(3A) above, and

(ii)at the rate mentioned in paragraph (b) of that provision]]

(5)A calculation provided for by the scheme may be provided by reference to such factors as appear to the Commissioners to be expedient in the circumstances, including in particular information—

(a)derived from surveys of [F76persons] carried on chargeable aircraft operated by the operator for whom the scheme is prepared, or

(b)relating to airports and routes used by that operator,

whether obtained before or during the specified period.

(6)No scheme prepared in accordance with this section shall be of any effect unless the registered operator for whom it is prepared elects in writing to be bound by it for the specified period.

(7)If the registered operator makes such an election the scheme shall have effect for the specified period F77. . ..

(8)[F78Where a standard scheme has effect for the specified period, this Chapter shall have effect for that period] as if, except in accordance with provision made to the contrary by the scheme (by virtue of subsection (4) above)—

(a)each of the passengers who are relevant passengers of the registered operator were chargeable passengers, and

(b)duty were charged—

[F79(i)on the carriage of each of those falling within paragraph (a) of section 30(4) above at the rate mentioned in that paragraph, and

(ii)on the carriage of each of those falling within paragraph (b) of section 30(4) above at the rate mentioned in that paragraph]

[F80(8A)Where an extended scheme has effect for the specified period, this Chapter shall have effect for that period as if, except in accordance with provision made to the contrary by the scheme (by virtue of subsection (4B) above)—

(a)each of the persons travelling with the registered operator were passengers of his,

(b)each of those passengers were chargeable passengers, and

(c)duty were charged—

[F81(i)on the carriage of each of those falling within paragraph (a) of section 30(4) above at the rate mentioned in that paragraph, and

(ii)on the carriage of each of those falling within paragraph (b) of section 30(4) above at the rate mentioned in that paragraph]]

(9)Regulations may make further provision with respect to schemes under this section, including in particular provision amending this section.

Annotations:

Amendments (Textual)

F71S. 39(2A) inserted (1.6.1995) by S.I. 1995/1216, reg. 2(2)

F72Words in s. 39(3)(4) substituted (1.6.1995) by S.I. 1995/1216, reg. 2(3)(4)

F73S. 39(4)(b)(i)(ii) substituted for words in s. 39(4)(b) (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(7)(a)

F74S. 39(4A)(4B) inserted (1.6.1995) by S.I. 1995/1216, reg. 2(5)

F75S. 39(4B)(c)(i)(ii) substituted for words in s. 39(4B)(c) (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(7)(b)

F76Word in s. 39(5)(a) substituted (1.6.1995) by S.I. 1995/1216, reg. 2(6)

F77Words in s. 39(7) omitted (1.6.1995) by virtue of S.I. 1995/1216, reg. 2(7)

F78Words in s. 39(8) substituted (1.6.1995) by S.I. 1995/1216, reg. 2(8)

F79S. 39(8)(b)(i)(ii) substituted for words in s. 39(8)(b) (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(7)(c)

F80S. 39(8A) inserted (1.6.1995) by S.I. 1995/1216, reg. 2(9)

F81S. 39(8A)(c)(i)(ii) substituted for words in s. 39(8A)(c) (28.7.2000 with application as mentioned in s. 18(8) of the amending Act) by 2000 c. 17, s. 18(7)(d)

Administration and enforcementE+W+S+N.I.

40 Administration and enforcement.E+W+S+N.I.

(1)Air passenger duty shall be a duty of excise and, accordingly, shall be under the care and management of the Commissioners.

(2)Schedule 6 to this Act (administration and enforcement) shall have effect.

41 Offences.E+W+S+N.I.

(1)A person who is knowingly concerned—

(a)in the fraudulent evasion (by him or another person) of duty, or

(b)in taking steps with a view to such fraudulent evasion,

is guilty of an offence.

(2)A person guilty of an offence under subsection (1) above is liable—

(a)on summary conviction, to a penalty of—

(i)the statutory maximum, or

(ii)if greater, treble the amount of the duty evaded or sought to be evaded,

or to imprisonment for a term not exceeding six months, or to both, or

(b)on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years, or to both.

(3)A person who in connection with duty—

(a)makes a statement that he knows to be false in a material particular or recklessly makes a statement that is false in a material particular, or

(b)with intent to deceive, produces or makes use of a book, account, return or other document that is false in a material particular,

is guilty of an offence.

(4)A person guilty of an offence under subsection (3) above is liable—

(a)on summary conviction, to a penalty of the statutory maximum or to imprisonment for a term not exceeding six months, or to both, or

(b)on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years, or to both.

SupplementaryE+W+S+N.I.

42 Regulations and orders.E+W+S+N.I.

(1)In this Chapter “regulations” means regulations made by the Commissioners and “order” means an order made by the Treasury.

(2)Regulations and orders may make different provision for different cases or circumstances and make incidental, supplemental, saving or transitional provision.

(3)Any power to make regulations or an order is exercisable by statutory instrument.

(4)No order which appears to the Treasury to extend the circumstances in which passengers are to be treated as chargeable passengers shall be made unless a draft of the order has been laid before and approved by the House of Commons.

(5)Any other order, and any regulations, shall be subject to annulment in pursuance of a resolution of the House of Commons.

43 Interpretation.E+W+S+N.I.

(1)In this Chapter—

  • accounting period” means any period prescribed or allowed for the purposes of section 38 above,

  • agreement for carriage”, in relation to the carriage of any person, means the agreement or arrangement under which he is carried, whether the carriage is by a single carrier or successive carriers,

  • Air Navigation Order” has the same meaning as in the M24Civil Aviation Act 1982,

  • airport” means any aerodrome (within the meaning of that Act),

  • carriage” means carriage wholly or partly by air, and “carried” is to be read accordingly,

  • connected”, in relation to any flights, has the meaning given by section 30(8) above,

  • document” includes information recorded in any form,

  • duty” means air passenger duty,

  • fiscal representative” has the meaning given by section 34(2) above,

  • flight” has the meaning given by section 28(5) above,

  • operator”, in relation to any aircraft, means the person having the management of the aircraft for the time being,

  • passenger”, in relation to any aircraft, means—

    (a)

    where the operator is an air transport undertaking (within the meaning of the Air Navigation Order), any person carried on the aircraft other than—

    (i)

    a member of the flight crew,

    (ii)

    a cabin attendant, or

    (iii)

    a person who is not carried for reward, who is an employee of any aircraft operator and who satisfies such other requirements as may be prescribed, and

    (b)

    in any other case, any person carried on the aircraft for reward,

  • prescribed” means prescribed by regulations,

  • reward”, in relation to the carriage of any person, includes any form of consideration received or to be received wholly or partly in connection with the carriage, irrespective of the person by whom or to whom the consideration has been or is to be given, and

  • ticket” means a document or documents evidencing an agreement (wherever made) for the carriage of any person.

(2)F82. . ., in this Chapter, in relation to a passenger whose agreement for carriage is evidenced by a ticket—

  • journey” means the journey from his original place of departure to his final place of destination, and

  • original place of departure” and “final place of destination” mean the original place of departure and the final place of destination indicated on his ticket.

F83(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Subject to the preceding provisions of this section, expressions used in this Chapter and in the M25Customs and Excise Management Act 1979 have the same meaning as in that Act.

Annotations:

Amendments (Textual)

F82Words in s. 43(2) repealed (28.7.2000 with effect as mentioned in s. 19(6) of the repealing Act) by 2000 c. 17, ss. 19(5)(a), 156, Sch. 40 Pt. I(4)

F83S. 43(3) repealed (28.7.2000 with effect as mentioned in s. 19(6) of the repealing Act) by 2000 c. 17, ss. 19(5)(b), 156, Sch. 40 Pt. I(4)

Marginal Citations

44 Commencement.E+W+S+N.I.

(1)This Chapter applies to any carriage of a passenger on an aircraft which begins after 31st October 1994.

(2)For the purpose of determining whether or not a person is a chargeable passenger in relation to any carriage on an aircraft beginning after that date, the provisions of section 31 above and any order made by virtue of that section shall be treated as having applied to any such carriage of that person which began on or before that date as they would apply to any such carriage of that person beginning after that date.

Part IIE+W+S+N.I. Value Added Tax

F8445

  • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F84S. 45 repealed (1.9.1994) by 1994 c. 23, ss. 100(2), 101(1), Sch. 15

46 Repayment supplement.E+W+S+N.I.

(1)Section 20 of the Finance Act 1985 (repayment supplement) shall be amended as follows.

(2)In subsection (1) (supplement of 5 per cent. or £30, whichever is greater) for “£30” there shall be substituted “ £50 ”.

(3)In subsection (2)(a) (return or claim must be received not later than one month after last day on which it is required) the words “one month after” shall be omitted.

(4)This section shall apply where the requisite return or claim is received after the expiry of the period of one month beginning with the day after that on which this Act is passed.

F8547

  • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F85S. 47 repealed (1.9.1994) by 1994 c. 23, ss. 100(2), 101(1), Sch. 15

Part IIIE+W+S+N.I. Insurance Premium Tax

The basic provisionsE+W+S+N.I.

48 Insurance premium tax.E+W+S+N.I.

(1)A tax, to be known as insurance premium tax, shall be charged in accordance with this Part.

(2)The tax shall be under the care and management of the Commissioners of Customs and Excise.

49 Charge to tax.E+W+S+N.I.

Tax shall be charged on the receipt of a premium by an insurer if the premium is received—

(a)under a taxable insurance contract, and

(b)on or after 1st October 1994.

50 Chargeable amount.E+W+S+N.I.

(1)Tax shall be charged by reference to the chargeable amount.

(2)For the purposes of this Part, the chargeable amount is such amount as, with the addition of the tax chargeable, is equal to the amount of the premium.

(3)[F86Subsections (1) and (2)] above shall have effect subject to section 69 below.

Annotations:

Amendments (Textual)

F86Words in s. 23(3) substituted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 23(2)

[F8751 Rate of tax.E+W+S+N.I.

(1)Tax shall be charged—

(a)at the higher rate, in the case of a premium which is liable to tax at that rate; and

(b)at the standard rate, in any other case.

(2)For the purposes of this Part—

(a)the higher rate is 17.5 per cent.; and

(b)the standard rate is [F885 per cent.].]

Annotations:

Amendments (Textual)

F87S. 51 substituted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 21(1)

F88Words in s. 51(2)(b) substituted (27.7.1999 with effect as mentioned in s. 125(2) of the amending Act) by 1999 c. 16, s. 125(1)

[F8951A Premiums liable to tax at the higher rate.E+W+S+N.I.

(1)A premium received under a taxable insurance contract by an insurer is liable to tax at the higher rate if it falls within one or more of the paragraphs of Part II of Schedule 6A to this Act.

(2)Part I of Schedule 6A to this Act shall have effect with respect to the interpretation of that Schedule.

(3)Provision may be made by order amending Schedule 6A as it has effect for the time being.

(4)This section is subject to section 69 below.]

Annotations:

Amendments (Textual)

F89S. 51A inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 22(1)

52 Liability to pay tax.E+W+S+N.I.

(1)Tax shall be payable by the person who is the insurer in relation to the contract under which the premium is received.

(2)Subsection (1) above shall have effect subject to any regulations made under section 65 below.

[F9052A Certain fees to be treated as premiums under higher rate contracts.E+W+S+N.I.

(1)This section applies where—

(a)at or about the time when a higher rate contract is effected, and

(b)in connection with that contract,

a fee in respect of an insurance-related service is charged by a taxable intermediary to a person who is or becomes the insured (or one of the insured) under the contract or to a person who acts for or on behalf of such a person.

(2)Where this section applies—

(a)a payment in respect of the fee shall be treated for the purposes of this Part as a premium received under a taxable insurance contract by an insurer, and

(b)that premium—

(i)shall be treated for the purposes of this Part as so received at the time when the payment is made, and

(ii)shall be chargeable to tax at the higher rate.

(3)Tax charged by virtue of subsection (2) above shall be payable by the taxable intermediary as if he were the insurer under the contract mentioned in paragraph (a) of that subsection.

(4)For the purposes of this section, a contract of insurance is a “higher rate contract” if—

(a)it is a taxable insurance contract; and

(b)the whole or any part of a premium received under the contract by the insurer is (apart from this section) liable to tax at the higher rate.

(5)For the purposes of this Part a “taxable intermediary” is a person falling within subsection (6) [F91or (6A)] below who—

(a)at or about the time when a higher rate contract is effected, and

(b)in connection with that contract,

charges a fee in respect of an insurance-related service to a person who is or becomes the insured (or one of the insured) under the contract or to a person who acts for or on behalf of such a person.

[F92(6)A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 2 or 3 of Schedule 6A to this Act (motor cars or motor cycles, or relevant goods) and the person is—

(a)within the meaning of the paragraph in question, a supplier of motor cars or motor cycles or, as the case may be, of relevant goods; or

(b)a person connected with a person falling within paragraph (a) above; or

(c)a person who in the course of his business pays—

(i)the whole or any part of the premium received under that contract, or

(ii)a fee connected with the arranging of that contract,

to a person falling within paragraph (a) or (b) above.

(6A)A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 4 of Schedule 6A to this Act (travel insurance) and the person is—

(a)the insurer under that contract; or

(b)a person through whom that contract is arranged in the course of his business; or

(c)a person connected with the insurer under that contract; or

(d)a person connected with a person falling within paragraph (b) above; or

(e)a person who in the course of his business pays—

(i)the whole or any part of the premium received under that contract, or

(ii)a fee connected with the arranging of that contract,

to a person falling within any of paragraphs (a) to (d) above.]

(8)For the purposes of this section, any question whether a person is connected with another shall be determined in accordance with section 839 of the Taxes Act 1988.

(9)In this section—

  • insurance-related service” means any service which is related to, or connected with, insurance;

  • F93. . .]

Annotations:

Amendments (Textual)

F90s. 52A inserted (19.3.1997 with effect as mentioned in s. 25(2) of the amending Act) by 1997 c. 16, s. 25(1)(2)

F91Words in s. 52A(5) inserted (31.7.1998 with effect as mentioned in s. 147(5) of the amending Act) by 1998 c. 36, s. 147(2) (with Sch. 18 para. 6(3))

F92S. 52A(6)(6A) substituted for s. 52A(6)(7) (31.7.1998 with effect as mentioned in s. 147(5) of the amending Act) by 1998 c. 36, s. 147(3) (with Sch. 18 para. 6(3))

F93Definition in s. 52A(9) repealed (31.7.1998 with effect as mentioned in s. 147(5) of the repealing Act) by 1998 c. 36, ss. 147(4), 165, Sch. 27 Pt. V(1), Note (with Sch. 18 para. 6(3))

AdministrationE+W+S+N.I.

53 Registration of insurers.E+W+S+N.I.

(1)A person who—

(a)receives, as insurer, premiums in the course of a taxable business, and

(b)is not registered,

is liable to be registered.

[F94(1A)The register kept under this section may contain such information as the Commissioners think is required for the purposes of the care and management of the tax.]

(2)A person who—

(a)at any time forms the intention of receiving, as insurer, premiums in the course of a taxable business, and

(b)is not already receiving, as insurer, premiums in the course of another taxable business,

shall notify the Commissioners of those facts.

(3)A person who at any time—

(a)ceases to have the intention of receiving, as insurer, premiums in the course of a taxable business, and

(b)has no intention of receiving, as insurer, premiums in the course of another taxable business,

shall notify the Commissioners of those facts.

(4)Where a person is liable to be registered by virtue of subsection (1) above the Commissioners shall register him with effect from the time when he begins to receive premiums in the course of the business concerned; and it is immaterial whether or not he notifies the Commissioners under subsection (2) above.

(5)Where a person—

(a)notifies the Commissioners under subsection (3) above, [F95and]

(b)satisfies them of the facts there mentioned, F96. . .

F96(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the Commissioners shall cancel his registration with effect from the earliest practicable time after he ceases to receive, as insurer, premiums in the course of any taxable business.

[F97(5A)In a case where—

(a)the Commissioners are satisfied that a person has ceased to receive, as insurer, premiums in the course of any taxable business, but

(b)he has not notified them under subsection (3) above,

they may cancel his registration with effect from the earliest practicable time after he so ceased.]

(6)For the purposes of this section regulations may make provision—

(a)as to the time within which a notification is to be made;

(b)as to the circumstances in which premiums are to be taken to be received in the course of a taxable business;

(c)as to the form and manner in which any notification is to be made and as to the information to be contained in or provided with it;

(d)requiring a person who has made a notification to notify the Commissioners if any information contained in or provided in connection with it is or becomes inaccurate;

(e)as to the correction of entries in the register.

(7)References in this section to receiving premiums are to receiving premiums on or after 1st October 1994.

Annotations:

Amendments (Textual)

F94S. 53(1A) inserted (1.5.1995) by 1995 c. 4, s. 34, Sch. 5 para. 3

F95Word after s. 53(5)(a) inserted (1.5.1995 with application as mentioned in Sch. 5 para. 2(4) of the amending Act) by 1995 c. 4, s. 34, Sch. 5 para. 2(2)(a)

F96S. 53(5)(c) and the word immediately preceding it repealed (1.5.1995 with application as mentioned in Sch. 5 para. 2(4) of the repealing Act) by 1995 c. 4, ss. 34, 162, Sch. 5 para. 2(2)(b), Sch. 29 Pt. VII, Note

[F9853AA Registration of taxable intermediaries.E+W+S+N.I.

(1)A person who—

(a)is a taxable intermediary, and

(b)is not registered,

is liable to be registered.

(2)The register kept under this section may contain such information as the Commissioners think is required for the purposes of the care and management of the tax.

(3)A person who—

(a)at any time forms the intention of charging taxable intermediary’s fees, and

(b)is not already charging such fees in the course of another business,

shall notify the Commissioners of those facts.

(4)A person who at any time—

(a)ceases to have the intention of charging taxable intermediary’s fees in the course of his business, and

(b)has no intention of charging such fees in the course of another business of his,

shall notify the Commissioners of those facts.

(5)Where a person is liable to be registered by virtue of subsection (1) above, the Commissioners shall register him with effect from the time when he begins to charge taxable intermediary’s fees in the course of the business concerned; and it is immaterial whether or not he notifies the Commissioners under subsection (3) above.

(6)Where a person—

(a)notifies the Commissioners under subsection (4) above, and

(b)satisfies them of the facts there mentioned,

the Commissioners shall cancel his registration with effect from the earliest practicable time after he ceases to charge taxable intermediary’s fees in the course of any business of his.

(7)In a case where—

(a)the Commissioners are satisfied that a person has ceased to charge taxable intermediary’s fees in the course of any business of his, but

(b)he has not notified them under subsection (4) above,

they may cancel his registration with effect from the earliest practicable time after he so ceased.

(8)For the purposes of this section regulations may make provision—

(a)as to the time within which a notification is to be made;

(b)as to the form and manner in which any notification is to be made and as to the information to be contained in or provided with it;

(c)requiring a person who has made a notification to notify the Commissioners if any information contained in or provided in connection with it is or becomes inaccurate;

(d)as to the correction of entries in the register.

(9)In this Part “taxable intermediary’s fees” means fees which, to the extent of any payment in respect of them, are chargeable to tax by virtue of section 52A above.]

Annotations:

Amendments (Textual)

F98S. 53AA inserted after s. 53 (19.3.1997) by 1997 c. 16, s. 26

[F9953A Information required to keep register up to date.E+W+S+N.I.

(1)Regulations may make provision requiring a registrable person to notify the Commissioners of particulars which—

(a)are of changes in circumstances relating to the registrable person or any business carried on by him,

(b)appear to the Commissioners to be required for the purpose of keeping the register kept under section 53 [F100or 53AA] above up to date, and

(c)are of a prescribed description.

(2)Regulations may make provision—

(a)as to the time within which a notification is to be made;

(b)as to the form and manner in which a notification is to be made;

(c)requiring a person who has made a notification to notify the Commissioners if any information contained in it is inaccurate.]

Annotations:

Amendments (Textual)

F99S. 53A inserted (1.5.1995) by 1995 c. 4, s. 34, Sch. 5, para. 4

F100Words in s. 53A inserted (19.3.1997) by 1997 c. 16, s. 27(2)

54 Accounting for tax and time for payment.E+W+S+N.I.

Regulations may provide that a registrable person shall—

(a)account for tax by reference to such periods (accounting periods) as may be determined by or under the regulations;

(b)make, in relation to accounting periods, returns in such form as may be prescribed and at such times as may be so determined;

(c)pay tax at such times and in such manner as may be so determined.

55 Credit.E+W+S+N.I.

(1)Regulations may provide that where an insurer [F101or taxable intermediary] has paid tax and all or part of the premium [F102or taxable intermediary’s fee (as the case may be)] is repaid, the insurer [F101or taxable intermediary] shall be entitled to credit of such an amount as is found in accordance with prescribed rules.

(2)Regulations may provide that where—

(a)by virtue of regulations made under section 68 below tax is charged in relation to a premium which is shown in the accounts of an insurer as due to him,

(b)that tax is paid, and

(c)it is shown to the satisfaction of the Commissioners that the premium, or part of it, will never actually be received by or on behalf of the insurer,

the insurer shall be entitled to credit of such an amount as is found in accordance with prescribed rules.

(3)Regulations may make provision as to the manner in which an insurer [F101or taxable intermediary] is to benefit from credit, and in particular may make provision—

(a)that an insurer [F101or taxable intermediary] shall be entitled to credit by reference to accounting periods;

(b)that an insurer [F101or taxable intermediary] shall be entitled to deduct an amount equal to his total credit for an accounting period from the total amount of tax due from him for the period;

(c)that if no tax is due from an insurer [F101or taxable intermediary] for an accounting period but he is entitled to credit for the period, the amount of the credit shall be paid to him by the Commissioners;

(d)that if the amount of credit to which an insurer [F101or taxable intermediary] is entitled for an accounting period exceeds the amount of tax due from him for the period, an amount equal to the excess shall be paid to him by the Commissioners;

(e)for the whole or part of any credit to be held over to be credited for a subsequent accounting period;

(f)as to the manner in which a person who has ceased to be registrable [F103(whether under section 53 or section 53AA)] is to benefit from credit.

(4)Regulations under subsection (3)(c) or (d) above may provide that where at the end of an accounting period an amount is due to an insurer [F101or taxable intermediary] who has failed to submit returns for an earlier period as required by this Part, the Commissioners may withhold payment of the amount until he has complied with that requirement.

(5)Regulations under subsection (3)(e) above may provide for credit to be held over either on the insurer’s [F104or taxable intermediary’s] application or in accordance with general or special directions given by the Commissioners from time to time.

(6)Regulations may provide that—

(a)no deduction or payment shall be made in respect of credit except on a claim made in such manner and at such time as may be determined by or under regulations;

(b)payment in respect of credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to repayment in specified circumstances;

(c)deduction in respect of credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to the payment to the Commissioners, in specified circumstances, of an amount representing the whole or part of the amount deducted.

(7)Regulations may require a claim by an insurer [F101or taxable intermediary] to be made in a return required by provision made under section 54 above.

(8)Regulations may provide that where—

(a)all or any of the tax payable in respect of a premium [F105or taxable intermediary’s fee] has not been paid, and

(b)the circumstances are such that a person would be entitled to credit if the tax had been paid,

prescribed adjustments shall be made as regards any amount of tax due from any person.

Annotations:

Amendments (Textual)

F101Words in s. 55 inserted (19.3.1997) by 1997 c. 16, s. 27(3)(a)

F102Words in s. 55(1) inserted (19.3.1997) by 1997 c. 16, s. 27(3)(b)

F103Words in s. 55(3)(f) inserted (19.3.1997) by 1997 c. 16, s. 27(3)(c)

F104Words in s. 55(5) inserted (19.3.1997) by 1997 c. 16, s. 27(3)(d)

F105Words in s. 55(8)(a) inserted (19.3.1997) by 1997 c. 16, s. 27(3)(e)

56 Power to assess.E+W+S+N.I.

(1)In a case where—

(a)a person has failed to make any returns required to be made under this Part,

(b)a person has failed to keep any documents necessary to verify returns required to be made under this Part,

(c)a person has failed to afford the facilities necessary to verify returns required to be made under this Part, or

(d)it appears to the Commissioners that returns required to be made by a person under this Part are incomplete or incorrect,

the Commissioners may assess the amount of tax due from the person concerned to the best of their judgment and notify it to him.

(2)Where a person has for an accounting period been paid an amount to which he purports to be entitled under regulations made under section 55 above, then, to the extent that the amount ought not to have been paid or would not have been paid had the facts been known or been as they later turn out to be, the Commissioners may assess the amount as being tax due from him for that period and notify it to him accordingly.

(3)Where a person is assessed under subsections (1) and (2) above in respect of the same accounting period the assessments may be combined and notified to him as one assessment.

(4)Where the person failing to make a return, or making a return which appears to the Commissioners to be incomplete or incorrect, was required to make the return as a personal representative, trustee in bankruptcy, trustee in sequestration, receiver, liquidator or person otherwise acting in a representative capacity in relation to another person, subsection (1) above shall apply as if the reference to tax due from him included a reference to tax due from that other person.

(5)An assessment under subsection (1) or (2) above of an amount of tax due for an accounting period shall not be made after the later of the following—

(a)two years after the end of the accounting period;

(b)one year after evidence of facts, sufficient in the Commissioners’ opinion to justify the making of the assessment, comes to their knowledge;

but where further such evidence comes to their knowledge after the making of an assessment under subsection (1) or (2) above another assessment may be made under the subsection concerned in addition to any earlier assessment.

(6)In a case where—

(a)as a result of a person’s failure to make a return for an accounting period the Commissioners have made an assessment under subsection (1) above for that period,

(b)the tax assessed has been paid but no proper return has been made for the period to which the assessment related, and

(c)as a result of a failure to make a return for a later accounting period, being a failure by the person referred to in paragraph (a) above or a person acting in a representative capacity in relation to him, as mentioned in subsection (4) above, the Commissioners find it necessary to make another assessment under subsection (1) above,

then, if the Commissioners think fit, having regard to the failure referred to in paragraph (a) above, they may specify in the assessment referred to in paragraph (c) above an amount of tax greater than that which they would otherwise have considered to be appropriate.

(7)Where an amount has been assessed and notified to any person under subsection (1) or (2) above it shall be deemed to be an amount of tax due from him and may be recovered accordingly unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.

(8)For the purposes of this section notification to—

(a)a personal representative, trustee in bankruptcy, trustee in sequestration, receiver or liquidator, or

(b)a person otherwise acting in a representative capacity in relation to another person,

shall be treated as notification to the person in relation to whom the person mentioned in paragraph (a) above, or the first person mentioned in paragraph (b) above, acts.

Tax representativesE+W+S+N.I.

57 Tax representatives.E+W+S+N.I.

(1)Where at any time (a relevant time) a person who is an insurer [F106or taxable intermediary]

(a)is registered, or liable to be registered, under section 53 [F107or, as the case may be, section 53AA]above, and

(b)does not have any business establishment or other fixed establishment in the United Kingdom,

this section shall have effect with a view to securing that another person is the insurer’s [F108or taxable intermediary’s] tax representative at that time.

(2)If, at the time the insurer [F106or taxable intermediary] first falls within subsection (1) above, the insurer [F106or taxable intermediary] has [F109a general representative]

(a)the Commissioners shall be taken to approve that person at that time as the insurer’s [F108or taxable intermediary’s] tax representative, and

(b)that person shall be the insurer’s [F108or taxable intermediary’s] tax representative at any relevant time falling after the time mentioned in paragraph (a) above and before the Commissioners’ approval is withdrawn.

(3)If, at the time the insurer [F106or taxable intermediary] first falls within subsection (1) above, the insurer [F106or taxable intermediary] does not have [F109a general representative], the insurer [F106or taxable intermediary] shall take action as mentioned in subsection (4) below.

(4)The insurer [F106or taxable intermediary] takes action as mentioned in this subsection if—

(a)he requests the Commissioners to approve a particular person as his tax representative, and

(b)the request is made with a view to securing that a person approved by the Commissioners becomes the insurer’s [F108or taxable intermediary’s] tax representative within the relevant period.

(5)If the Commissioners approve a person as the insurer’s [F108or taxable intermediary’s] tax representative in a case where action has been taken as mentioned in subsection (4) above, that person shall be the insurer’s [F108or taxable intermediary’s] tax representative at any relevant time falling after the Commissioners’ approval is given and before their approval is withdrawn.

(6)Subsection (7) below applies where the Commissioners believe that the revenue would not be sufficiently protected if—

(a)a person were to become the insurer’s [F108or taxable intermediary’s] tax representative by virtue of subsection (2) above, or

(b)a person who by virtue of any of the provisions of this section is the insurer’s [F108or taxable intermediary’s] tax representative were to continue to be so.

(7)If the Commissioners require the insurer [F106or taxable intermediary] to take action as mentioned in subsection (4) above the insurer [F106or taxable intermediary] shall comply with that requirement.

(8)In a case where—

(a)a person is the insurer’s [F108or taxable intermediary’s] tax representative,

(b)the insurer [F106or taxable intermediary] withdraws his agreement that that person should act as his tax representative, or that person withdraws his agreement to act as the insurer’s [F108or taxable intermediary’s] tax representative, or the insurer [F106or taxable intermediary] and that person agree that that person should no longer be the insurer’s [F108or taxable intermediary’s] tax representative, and

(c)that person notifies the Commissioners accordingly,

the Commissioners shall be taken to have withdrawn their approval of that person at the time they inform the insurer [F106or taxable intermediary] that they have received the notification, and that person shall cease at that time to be the insurer’s [F108or taxable intermediary’s] tax representative.

(9)Where subsection (8) above applies the insurer [F106or taxable intermediary] shall take action as mentioned in subsection (4) above.

(10)If at any time after the insurer [F106or taxable intermediary] first falls within subsection (1) above—

(a)the insurer [F106or taxable intermediary] (otherwise than in pursuance of a duty under subsection (3), (7) or (9) above) requests the Commissioners to approve a particular person as his tax representative, and

(b)the Commissioners approve that person,

that person shall be the insurer’s [F108or taxable intermediary’s] tax representative at any relevant time falling after the Commissioners’ approval is given and before their approval is withdrawn.

(11)The Commissioners may at any time direct that a person who is an agent of the insurer [F106or taxable intermediary] and is specified in the direction shall be the insurer’s [F108or taxable intermediary’s] tax representative; and—

(a)the direction shall be taken to signify the Commissioners’ approval of that person as the insurer’s [F108or taxable intermediary’s] tax representative;

(b)that person shall be the insurer’s [F108or taxable intermediary’s] tax representative at any relevant time falling after the Commissioners’ direction is made and before their approval is withdrawn;

(c)the direction shall not prejudice any duty of the insurer [F106or taxable intermediary] under subsection (3), (7) or (9) above;

(d)subsection (8) above shall not apply in the case of the person specified in the direction.

(12)Where the Commissioners approve a person under this section as the insurer’s [F108or taxable intermediary’s] tax representative—

(a)at the time the approval is given they shall be taken to withdraw their approval of any person who was the insurer’s [F108or taxable intermediary’s] tax representative immediately before the approval was given, and

(b)that person shall cease at that time to be the insurer’s [F108or taxable intermediary’s] tax representative.

(13)The fact that a person ceases to be an insurer’s [F108or taxable intermediary’s] tax representative shall not prevent his subsequent approval under this section.

(14)The Commissioners may not withdraw their approval of a person as a tax representative except by virtue of subsection (8) or (12) above.

(15)Regulations may make provision as to the time at which—

(a)the Commissioners’ approval is to be treated as given in a case where action has been taken as mentioned in subsection (4) above or a request has been made as mentioned in subsection (10) above;

(b)the Commissioners are to be taken to inform the insurer [F106or taxable intermediary] under subsection (8) above;

(c)a direction of the Commissioners is to be treated as made under subsection (11) above.

(16)The relevant period for the purposes of subsection (4) above is—

(a)where subsection (4) above applies by virtue of subsection (3) above, the period of 30 days beginning with the day on which the insurer [F106or taxable intermediary] first falls within subsection (1) above;

(b)where subsection (4) above applies by virtue of subsection (7) above, the period of 30 days beginning with the day on which the requirement mentioned in subsection (7) above is made;

(c)where subsection (4) above applies by virtue of subsection (9) above, the period of 30 days beginning with the day on which the person mentioned in subsection (8) above ceases to be the insurer’s [F108or taxable intermediary’s] tax representative;

but if in any case the Commissioners allow a longer period than that found under paragraphs (a) to (c) above, the relevant period is that longer period.

[F110(16A)For the purposes of subsections (2) and (3), “general representative” means a person resident in the United Kingdom who—

(a)has been designated as the representative of the insurer or taxable intermediary,

(b)is authorised to act generally, and to accept service of any document, on behalf of the insurer or taxable intermediary, and

(c)fulfils the requirements of rules made under Part 10 of the Financial Services and Markets Act 2000.]

Annotations:

Amendments (Textual)

F106Words in s. 57 inserted (19.3.1997) by 1997 c. 16, s. 27(4)(a)

F107Words in s. 57(1)(a) inserted (19.3.1997) by 1997 c. 16, s. 27(4)(c)

F108Words in s. 57 inserted (19.3.1997) by 1997 c. 16, s. 27(4)(b)

F109Words in s. 57(2)(3) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 345(2)

F110S. 57(16A) inserted (1.12.2001) by S.I. 2001/3649, arts. 1, 345(3)

58 Rights and duties of tax representatives.E+W+S+N.I.

(1)Where a person is an insurer’s [F111or taxable intermediary’s] tax representative at any time, the tax representative—

(a)shall be entitled to act on the insurer’s [F111or taxable intermediary’s] behalf for the purposes of legislation relating to insurance premium tax,

(b)shall secure (where appropriate by acting on the insurer’s [F111or taxable intermediary’s] behalf) the insurer’s [F111or taxable intermediary’s] compliance with and discharge of the obligations and liabilities to which the insurer [F112or taxable intermediary] is subject by virtue of legislation relating to insurance premium tax (including obligations and liabilities arising before the person became the insurer’s [F111or taxable intermediary’s] tax representative), and

(c)shall be personally liable in respect of any failure to secure the insurer’s [F111or taxable intermediary’s] compliance with or discharge of any such obligation or liability, and in respect of anything done for purposes connected with acting on the insurer’s [F111or taxable intermediary’s] behalf,

as if the obligations and liabilities imposed on the insurer [F112or taxable intermediary] were imposed jointly and severally on the tax representative and the insurer [F112or taxable intermediary].

(2)A tax representative shall not be liable by virtue of subsection (1) above himself to be registered under this Part, but regulations may—

(a)require the registration of the names of tax representatives against the names of the insurers in any register kept under this Part;

(b)make provision for the deletion of the names of persons who cease to be tax representatives.

(3)A tax representative shall not by virtue of subsection (1) above be guilty of any offence except in so far as—

(a)the tax representative has consented to, or connived in, the commission of the offence by the insurer [F112or taxable intermediary],

(b)the commission of the offence by the insurer [F112or taxable intermediary] is attributable to any neglect on the part of the tax representative, or

(c)the offence consists in a contravention by the tax representative of an obligation which, by virtue of that subsection, is imposed both on the tax representative and on the insurer [F112or taxable intermediary].

(4)Subsection (1)(b) above shall have effect subject to such provisions as may be made by regulations.

Annotations:

Amendments (Textual)

F111Words in s. 58 inserted (19.3.1997) by 1997 c. 16, s. 27(5)(b)

F112Words in s. 58 inserted (19.3.1997) by 1997 c. 16, s. 27(5)(a)

Review and appealE+W+S+N.I.

59 Review of Commissioners’ decisions.E+W+S+N.I.

(1)This section applies to any decision of the Commissioners with respect to any of the following matters—

(a)the registration or cancellation of registration of any person under this Part;

(b)whether tax is chargeable in respect of a premium or how much tax is chargeable;

[F113(bb)whether a payment falls to be treated under section 52A(2) above as a premium received under a taxable insurance contract by an insurer and chargeable to tax at the higher rate;]

(c)whether a person is entitled to credit by virtue of regulations under section 55 above or how much credit a person is entitled to or the manner in which he is to benefit from credit;

(d)an assessment [F114falling within subsection (1A) below] or the amount of such an assessment;

(e)any refusal of an application under section 63 below;

(f)whether a notice may be served on a person by virtue of regulations made under section 65 below;

(g)an assessment under regulations made under section 65 below or the amount of such an assessment;

(h)whether a scheme established by regulations under section 68 below applies to an insurer as regards an accounting period;

(i)the requirement of any security under paragraph 24 of Schedule 7 to this Act or its amount;

(j)any liability to a penalty under paragraphs 12 to 19 of Schedule 7 to this Act;

(k)the amount of any penalty or interest specified in an assessment under paragraph 25 of Schedule 7 to this Act;

(l)a claim for the repayment of an amount under paragraph 8 of Schedule 7 to this Act;

(m)any liability of the Commissioners to pay interest under paragraph 22 of Schedule 7 to this Act or the amount of the interest payable.

[F115(1A)An assessment falls within this subsection if it is an assessment under section 56 above in respect of an accounting period in relation to which a return required to be made by virtue of regulations under section 54 above has been made.]

(2)Any person who is or will be affected by any decision to which this section applies may by notice in writing to the Commissioners require them to review the decision.

(3)The Commissioners shall not be required under this section to review any decision unless the notice requiring the review is given before the end of the period of 45 days beginning with the day on which written notification of the decision, or of the assessment containing the decision, was first given to the person requiring the review.

(4)For the purposes of subsection (3) above it shall be the duty of the Commissioners to give written notification of any decision to which this section applies to any person who—

(a)requests such a notification,

(b)has not previously been given written notification of that decision, and

(c)if given such a notification, will be entitled to require a review of the decision under this section.

(5)A person shall be entitled to give a notice under this section requiring a decision to be reviewed for a second or subsequent time only if—

(a)the grounds on which he requires the further review are that the Commissioners did not, on any previous review, have the opportunity to consider certain facts or other matters, and

(b)he does not, on the further review, require the Commissioners to consider any facts or matters which were considered on a previous review except in so far as they are relevant to any issue not previously considered.

(6)Where the Commissioners are required in accordance with this section to review any decision, it shall be their duty to do so; and on the review they may withdraw, vary or confirm the decision.

(7)In a case where—

(a)it is the duty under this section of the Commissioners to review any decision, and

(b)they do not, within the period of 45 days beginning with the day on which the review was required, give notice to the person requiring it of their determination on the review,

they shall be assumed for the purposes of this Part to have confirmed the decision.

(8)The Commissioners shall not by virtue of any requirement under this section to review a decision have any power, apart from their power in pursuance of paragraph 13 of Schedule 7 to this Act, to mitigate the amount of any penalty imposed under this Part.

Annotations:

Amendments (Textual)

F113S. 59(1)(bb) inserted (19.3.1997) by 1997 c. 16, s. 27(6)

F114Words in s. 59(1)(d) substituted (1.5.1995 with application as mentioned in Sch. 5 para. 5(4) of the amending Act) by 1995 c. 4, s. 34, Sch. 5 para. 5(2)

F115S. 59(1A) inserted (1.5.1995 with application as mentioned in Sch. 5 para. 5(4) of the amending Act) by 1995 c. 4, s. 34, Sch. 5 para. 5(3)

Modifications etc. (not altering text)

C14S. 59 extended (19.3.1997) by 1997 c. 16, s. 50(1), Sch. 5 para. 19(2)

Commencement Information

I14S. 59 wholly in force at 1.10.1994 by S.I. 1994/1773, art. 2

60 Appeals.E+W+S+N.I.

(1)Subject to the following provisions of this section, an appeal shall lie to an appeal tribunal with respect to any of the following decisions—

(a)any decision by the Commissioners on a review under section 59 above (including a deemed confirmation under subsection (7) of that section);

(b)any decision by the Commissioners on such review of a decision referred to in section 59(1) above as the Commissioners have agreed to undertake in consequence of a request made after the end of the period mentioned in section 59(3) above.

(2)Without prejudice to paragraph 13 of Schedule 7 to this Act, nothing in subsection (1) above shall be taken to confer on a tribunal any power to vary an amount assessed by way of penalty or interest except in so far as it is necessary to reduce it to the amount which is appropriate under paragraphs 12 to 21 of that Schedule.

(3)Where an appeal is made under this section by a person who is required to make returns by virtue of regulations under section 54 above, the appeal shall not be entertained unless the appellant—

(a)has made all the returns which he is required to make by virtue of those regulations, and

(b)has paid the amounts shown in those returns as payable by him;

but the restriction in paragraph (b) above shall not apply in the case of an appeal against a decision with respect to the matter mentioned in section 59(1)(i) above.

(4)Where the appeal is against a decision with respect to any of the matters mentioned in paragraphs (b) and (d) of section 59(1) above it shall not be entertained unless—

(a)the amount which the Commissioners have determined to be payable as tax has been paid or deposited with them, or

(b)on being satisfied that the appellant would otherwise suffer hardship the Commissioners agree or the tribunal decides that it should be entertained notwithstanding that that amount has not been so paid or deposited.

(5)Where on an appeal against a decision with respect to any of the matters mentioned in section 59(1)(d) above—

(a)it is found that the amount specified in the assessment is less than it ought to have been, and

(b)the tribunal gives a direction specifying the correct amount,

the assessment shall have effect as an assessment of the amount specified in the direction and that amount shall be deemed to have been notified to the appellant.

(6)Where on an appeal under this section it is found that the whole or part of any amount paid or deposited in pursuance of subsection (4) above is not due, so much of that amount as is found not to be due shall be repaid with interest at such rate as the tribunal may determine.

(7)Where on an appeal under this section it is found that the whole or part of any amount due to the appellant by virtue of regulations under section 55(3)(c) or (d) or (f) above has not been paid, so much of that amount as is found not to have been paid shall be paid with interest at such rate as the tribunal may determine.

(8)Where an appeal under this section has been entertained notwithstanding that an amount determined by the Commissioners to be payable as tax has not been paid or deposited and it is found on the appeal that that amount is due the tribunal may, if it thinks fit, direct that that amount shall be paid with interest at such rate as may be specified in the direction.

(9)On an appeal against an assessment to a penalty under paragraph 12 of Schedule 7 to this Act, the burden of proof as to the matters specified in paragraphs (a) and (b) of sub-paragraph (1) of paragraph 12 shall lie upon the Commissioners.

(10)Sections 25 and 29 of the M26Finance Act 1985 (settling of appeals by agreement and enforcement of certain decisions of tribunal) shall have effect as if—

(a)the references to section 40 of the M27Value Added Tax Act 1983 included references to this section, and

(b)the references to value added tax included references to insurance premium tax.

Annotations:

Modifications etc. (not altering text)

C15S. 60 extended (19.3.1997) by 1997 c. 16, s. 50(1), Sch. 5 para. 19(2)

Commencement Information

I15S. 60 wholly in force at 1.10.1994 by S.I. 1994/1773, art. 2

Marginal Citations

61 Review and appeal: commencement.E+W+S+N.I.

Sections 59 and 60 above shall come into force on such day as may be appointed by order.

Annotations:

Subordinate Legislation Made

P2S. 61 power exercised: 1.10.1994 appointed by S.I. 1994/1773, art. 2

MiscellaneousE+W+S+N.I.

62 Partnership, bankruptcy, transfer of business, etc.E+W+S+N.I.

(1)Regulations may make provision for determining by what persons anything required by this Part to be done by an insurer [F116or taxable intermediary] is to be done where the business concerned is carried on in partnership or by another unincorporated body.

(2)The registration under this Part of an unincorporated body other than a partnership may be in the name of the body concerned; and in determining whether premiums are received by such a body no account shall be taken of any change in its members.

(3)Regulations may make provision for determining by what person anything required by this Part to be done by an insurer is to be done in a case where insurance business is carried on by persons who are underwriting members of Lloyd’s and are members of a syndicate of such underwriting members.

(4)Regulations may—

(a)make provision for the registration for the purposes of this Part of a syndicate of underwriting members of Lloyd’s;

(b)provide that for purposes prescribed by the regulations no account shall be taken of any change in the members of such a syndicate;

and regulations under paragraph (a) above may modify section 53 above.

(5)As regards any case where a person carries on a business of an insurer [F116or taxable intermediary] who has died or become bankrupt or incapacitated or been sequestrated, or of an insurer [F116or taxable intermediary] which is in liquidation or receivership or in relation to which an administration order is in force, regulations may—

(a)require the person to inform the Commissioners of the fact that he is carrying on the business and of the event that has led to his carrying it on;

(b)make provision allowing the person to be treated for a limited time as if he were the insurer [F116or taxable intermediary];

(c)make provision for securing continuity in the application of this Part where a person is so treated.

(6)Regulations may make provision for securing continuity in the application of this Part in cases where a business carried on by a person is transferred to another person as a going concern.

(7)Regulations under subsection (6) above may in particular provide—

(a)for liabilities and duties under this Part of the transferor to become, to such extent as may be provided by the regulations, liabilities and duties of the transferee;

(b)for any right of either of them to repayment or credit in respect of tax to be satisfied by making a repayment or allowing a credit to the other;

but the regulations may provide that no such provision as is mentioned in paragraph (a) or (b) of this subsection shall have effect in relation to any transferor and transferee unless an application in that behalf has been made by them under the regulations.

Annotations:

Amendments (Textual)

F116Words in s. 62(1)(5) inserted (19.3.1997) by 1997 c. 16, s. 27(7)

63 Groups of companies.E+W+S+N.I.

(1)Where under the following provisions of this section any bodies corporate are treated as members of a group, for the purposes of this Part—

(a)any taxable business carried on by a member of the group shall be treated as carried on by the representative member,

[F117(aa)any business carried on by a member of the group who is a taxable intermediary shall be treated as carried on by the representative member,]

(b)the representative member shall be taken to be the insurer in relation to any taxable insurance contract as regards which a member of the group is the actual insurer,

[F118(bb)the representative member shall be taken to be the taxable intermediary in relation to any taxable intermediary’s fees as regards which a member of the group is the actual taxable intermediary,]

(c)any receipt by a member of the group of a premium under a taxable insurance contract shall be taken to be a receipt by the representative member, and

(d)all members of the group shall be jointly and severally liable for any tax due from the representative member.

(2)Two or more bodies corporate are eligible to be treated as members of a group if each of them falls within subsection (3) below and—

(a)one of them controls each of the others,

(b)one person (whether a body corporate or an individual) controls all of them, or

(c)two or more individuals carrying on a business in partnership control all of them.

(3)A body falls within this subsection if it is resident in the United Kingdom or it has an established place of business in the United Kingdom.

(4)Where an application to that effect is made to the Commissioners with respect to two or more bodies corporate eligible to be treated as members of a group, then—

(a)from the beginning of an accounting period they shall be so treated, and

(b)one of them shall be the representative member,

unless the Commissioners refuse the application; and the Commissioners shall not refuse the application unless it appears to them necessary to do so for the protection of the revenue.

(5)Where any bodies corporate are treated as members of a group and an application to that effect is made to the Commissioners, then, from the beginning of an accounting period—

(a)a further body eligible to be so treated shall be included among the bodies so treated,

(b)a body corporate shall be excluded from the bodies so treated,

(c)another member of the group shall be substituted as the representative member, or

(d)the bodies corporate shall no longer be treated as members of a group,

unless the application is to the effect mentioned in paragraph (a) or (c) above and the Commissioners refuse the application.

(6)The Commissioners may refuse an application under subsection (5)(a) or (c) above only if it appears to them necessary to do so for the protection of the revenue.

(7)Where a body corporate is treated as a member of a group as being controlled by any person and it appears to the Commissioners that it has ceased to be so controlled, they shall, by notice given to that person, terminate that treatment from such date as may be specified in the notice.

(8)An application under this section with respect to any bodies corporate must be made by one of those bodies or by the person controlling them and must be made not less than 90 days before the date from which it is to take effect, or at such later time as the Commissioners may allow.

(9)For the purposes of this section a body corporate shall be taken to control another body corporate if it is empowered by statute to control that body’s activities or if it is that body’s holding company within the meaning of section 736 of the M28Companies Act 1985; and an individual or individuals shall be taken to control a body corporate if he or they, were he or they a company, would be that body’s holding company within the meaning of that section.

Annotations:

Amendments (Textual)

F117S. 63(1)(aa) inserted (19.3.1997) by 1997 c. 16, s. 27(8)(a)

F118S. 63(1)(bb) inserted (19.3.1997) by 1997 c. 16, s. 27(8)(b)

Marginal Citations

64 Information, powers, penalties, etc.E+W+S+N.I.

Schedule 7 to this Act (which contains provisions relating to information, powers, penalties and other matters) shall have effect.

65 Liability of insured in certain cases.E+W+S+N.I.

(1)Regulations may make provision under this section with regard to any case where at any time—

(a)an insurer does not have any business establishment or other fixed establishment in the United Kingdom, and

(b)no person is the insurer’s tax representative by virtue of section 57 above.

(2)Regulations may make provision allowing notice to be served in accordance with the regulations on—

(a)the person who is insured under a taxable insurance contract, if there is one insured person, or

(b)one or more of the persons who are insured under a taxable insurance contract, if there are two or more insured persons;

and a notice so served is referred to in this section as a liability notice.

(3)Regulations may provide that if a liability notice has been served in accordance with the regulations—

(a)the Commissioners may assess to the best of their judgment the amount of any tax due in respect of premiums received by the insurer under the contract concerned after the material date and before the date of the assessment, and

(b)that amount shall be deemed to be the amount of tax so due.

(4)The material date is—

(a)where there is one person on whom a liability notice has been served in respect of the contract, the date when the notice was served or such later date as may be specified in the notice;

(b)where there are two or more persons on whom liability notices have been served in respect of the contract, the date when the last of the notices was served or such later date as may be specified in the notices.

(5)Regulations may provide that where—

(a)an assessment is made in respect of a contract under provision included in the regulations by virtue of subsection (3) above, and

(b)the assessment is notified to the person, or each of the persons, on whom a liability notice in respect of the contract has been served,

the persons mentioned in subsection (6) below shall be jointly and severally liable to pay the tax assessed, and that tax shall be recoverable accordingly.

(6)The persons are—

(a)the person or persons mentioned in subsection (5)(b) above, and

(b)the insurer.

(7)Where regulations make provision under subsection (5) above they must also provide that any provision made under that subsection shall not apply if, or to the extent that, the assessment has subsequently been withdrawn or reduced.

(8)Regulations may make provision as to the time within which, and the manner in which, tax which has been assessed is to be paid.

(9)Where any amount is recovered from an insured person by virtue of regulations made under this section, the insurer shall be liable to pay to the insured person an amount equal to the amount recovered; and regulations may make provision requiring an insurer to pay interest where this subsection applies.

(10)Regulations may make provision for adjustments to be made of a person’s liability in any case where—

(a)an assessment is made under section 56 above in relation to the insurer, and

(b)an assessment made by virtue of regulations under this section relates to premiums received (or assumed for the purposes of the assessment to be received) within a period which corresponds to any extent with the accounting period to which the assessment under section 56 relates.

(11)Regulations may make provision as regards a case where—

(a)an assessment made in respect of a contract by virtue of regulations under this section relates to premiums received (or assumed for the purposes of the assessment to be received) within a given period, and

(b)an amount of tax is paid by the insurer in respect of an accounting period which corresponds to any extent with that period;

and the regulations may include provision for determining whether, or how much of, any of the tax paid as mentioned in paragraph (b) above is attributable to premiums received under the contract in the period mentioned in paragraph (a) above.

(12)Regulations may—

(a)make provision requiring the Commissioners, in prescribed circumstances, to furnish prescribed information to an insured person;

(b)make provision requiring any person on whom a liability notice has been served to keep records, to furnish information, or to produce documents for inspection or cause documents to be produced for inspection;

(c)make such provision as the Commissioners think is reasonable for the purpose of facilitating the recovery of tax from the persons having joint and several liability (rather than from the insurer alone);

(d)modify the effect of any provision of this Part.

(13)Regulations may provide for an insured person to be liable to pay tax assessed by virtue of the regulations notwithstanding that he has already paid an amount representing tax as part of a premium.

66 Directions as to amounts of premiums.E+W+S+N.I.

(1)This section applies where—

(a)anything is received by way of premium under a taxable insurance contract, and

(b)the amount of the premium is less than it would be if it were received under the contract in open market conditions.

(2)The Commissioners may direct that the amount of the premium shall be taken for the purposes of this Part to be such amount as it would be if it were received under the contract in open market conditions.

(3)A direction under subsection (2) above shall be given by notice in writing to the insurer, and no direction may be given more than three years after the time of the receipt.

(4)Where the Commissioners make a direction under subsection (2) above in the case of a contract they may also direct that if—

(a)anything is received by way of premium under the contract after the giving of the notice or after such later date as may be specified in the notice, and

(b)the amount of the premium is less than it would be if it were received under the contract in open market conditions,

the amount of the premium shall be taken for the purposes of this Part to be such amount as it would be if it were received under the contract in open market conditions.

(5)For the purposes of this section a premium is received in open market conditions if it is received—

(a)by an insurer standing in no such relationship with the insured person as would affect the premium, and

(b)in circumstances where there is no other contract or arrangement affecting the parties.

(6)For the purposes of this section it is immaterial whether what is received by way of premium is money or something other than money or both.

67 Deemed date of receipt of certain premiums.E+W+S+N.I.

(1)In a case where—

(a)a premium under a contract of insurance is received by the insurer after 30th November 1993 and before 1st October 1994, and

(b)the period of cover for the risk begins on or after 1st October 1994,

for the purposes of this Part the premium shall be taken to be received on 1st October 1994.

(2)Subsection (3) below applies where—

(a)a premium under a contract of insurance is received by the insurer after 30th November 1993 and before 1st October 1994,

(b)the period of cover for the risk begins before 1st October 1994 and ends after 30th September 1995, and

(c)the premium, or any part of it, is attributable to such of the period of cover as falls after 30th September 1995.

(3)For the purposes of this Part—

(a)so much of the premium as is attributable to such of the period of cover as falls after 30th September 1995 shall be taken to be received on 1st October 1994;

(b)so much as is so attributable shall be taken to be a separate premium.

(4)If a contract relates to more than one risk subsection (1) above shall have effect as if the reference in paragraph (b) to the risk were to any given risk.

(5)If a contract relates to more than one risk, subsections (2) and (3) above shall apply as follows—

(a)so much of the premium as is attributable to any given risk shall be deemed for the purposes of those subsections to be a separate premium relating to that risk;

(b)those subsections shall then apply separately in the case of each given risk and the separate premium relating to it;

and any further attribution required by those subsections shall be made accordingly.

(6)Subsections (1) and (4) above do not apply in relation to a contract if the contract belongs to a class of contract as regards which the normal practice is for a premium to be received by or on behalf of the insurer before the date when cover begins.

(7)Subsections (2), (3) and (5) above do not apply in relation to a contract if the contract belongs to a class of contract as regards which the normal practice is for cover to be provided for a period exceeding twelve months.

(8)Any attribution under this section shall be made on such basis as is just and reasonable.

[F11967A Announced increase in rate of tax: certain premiums treated as received on date of increase.E+W+S+N.I.

(1)This section applies in any case where a proposed increase is announced by a Minister of the Crown in the rate at which tax is to be charged on a premium if it is received by the insurer on or after a date specified in the announcement (“the date of the change”).

(2)In a case where—

(a)a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the date of the change, and

(b)the period of cover for the risk begins on or after the date of the change,

for the purposes of this Part the premium shall be taken to be received on the date of the change.

(3)Subsection (4) below applies where—

(a)a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the date of the change;

(b)the period of cover for the risk begins before the date of the change and ends on or after the first anniversary of the date of the change; and

(c)the premium, or any part of it, is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change.

(4)For the purposes of this Part—

(a)so much of the premium as is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change shall be taken to be received on the date of the change; and

(b)so much as is so attributable shall be taken to be a separate premium.

(5)In determining whether the condition in subsection (2)(a) or (3)(a) above is satisfied, the provisions of regulations made by virtue of subsection (3) or (7) of section 68 below apply as they would apart from this section; but, subject to that, where subsection (2) or (4) above applies—

(a)that subsection shall have effect notwithstanding anything in section 68 below or regulations made under that section; and

(b)any regulations made under that section shall have effect as if the entry made in the accounts of the insurer showing the premium as due to him had been made as at the date of the change.

(6)Any attribution under this section shall be made on such basis as is just and reasonable.

(7)In this section—

  • increase”, in relation to the rate of tax, includes the imposition of a charge to tax by adding to the descriptions of contract which are taxable insurance contracts;

  • Minister of the Crown” has the same meaning as in the Ministers of the M29Crown Act 1975.]

Annotations:

Amendments (Textual)

F119Ss. 67A-67C inserted (with effectretrospectively to 26.11.1996) by 1997 c. 16, s. 29(1)(3)

Modifications etc. (not altering text)

C16Ss. 67A-67C modified (19.3.1997) by 1997 c. 16, s. 29(2)

Ss. 67A-67C modified (31.7.1998) by 1998 c. 36, s. 146(5)

Ss. 67A-67C modified (27.7.1999) by 1999 c. 16, s. 125(5)

Marginal Citations

[F12067B Announced increase in rate of tax: certain contracts treated as made on date of increase.E+W+S+N.I.

(1)This section applies in any case where—

(a)an announcement falling within section 67A(1) above is made; but

(b)a proposed exception from the increase in question is also announced by a Minister of the Crown; and

(c)the proposed exception is to apply in relation to a premium only if the conditions described in subsection (2) below are satisfied in respect of the premium.

(2)Those conditions are—

(a)that the premium is in respect of a contract made before the date of the change;

(b)that the premium falls, by virtue of regulations under section 68 below, to be regarded for the purposes of this Part as received under the contract by the insurer before such date (“the concessionary date”) as is specified for the purpose in the announcement.

(3)In a case where—

(a)a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the concessionary date, and

(b)the period of cover for the risk begins on or after the date of the change,

the rate of tax applicable in relation to the premium shall be determined as if the contract had been made on the date of the change.

(4)Subsection (5) below applies where—

(a)a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the concessionary date;

(b)the period of cover for the risk begins before the date of the change and ends on or after the first anniversary of the date of the change; and

(c)the premium, or any part of it, is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change.

(5)Where this subsection applies—

(a)the rate of tax applicable in relation to so much of the premium as is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change shall be determined as if the contract had been made on the date of the change; and

(b)so much of the premium as is so attributable shall be taken to be a separate premium.

(6)Any attribution under this section shall be made on such basis as is just and reasonable.

(7)In this section—

  • the date of the change” has the same meaning as in section 67A above;

  • Minister of the Crown” has the same meaning as in section 67A above.]

Annotations:

Amendments (Textual)

F120Ss. 67A-67C inserted (with effectretrospectively to 26.11.1996) by 1997 c. 16, s. 29(1)(3)

Modifications etc. (not altering text)

C17Ss. 67A-67C modified (19.3.1997) by 1997 c. 16, s. 29(2)

Ss. 67A-67C modified (31.7.1998) by 1998 c. 36, s. 146(5)

Ss. 67A-67C modified (27.7.1999) by 1999 c. 16, s. 125(5)

[F12167C Announced increase in rate of tax: exceptions and apportionments.E+W+S+N.I.

(1)Sections 67A(2) and 67B(3) above do not apply in relation to a premium if the risk to which that premium relates belongs to a class of risk as regards which the normal practice is for a premium to be received by or on behalf of the insurer before the date when cover begins.

(2)Sections 67A(3) and (4) and 67B(4) and (5) above do not apply in relation to a premium if the risk to which that premium relates belongs to a class of risk as regards which the normal practice is for cover to be provided for a period exceeding twelve months.

(3)If a contract relates to more than one risk, then, in the application of section 67A(2), 67A(3) and (4), 67B(3) or 67B(4) and (5) above—

(a)the reference in section 67A(2)(b) or (3)(b) or 67B(3)(b) or (4)(b), as the case may be, to the risk shall be taken as a reference to any given risk,

(b)so much of the premium as is attributable to any given risk shall be taken for the purposes of section 67A(2), 67A(3) and (4), 67B(3) or 67B(4) and (5) above, as the case may be, to be a separate premium relating to that risk,

(c)those provisions shall then apply separately in the case of each given risk and the separate premium relating to it, and

(d)any further attribution required by section 67A(3) and (4) or 67B(4) and (5) above shall be made accordingly,

and subsections (1) and (2) above shall apply accordingly.

(4)Any attribution under this section shall be made on such basis as is just and reasonable.]

Annotations:

Amendments (Textual)

F121Ss. 67A-67C inserted (with effectretrospectively to 26.11.1996) by 1997 c. 16, s. 29(1)(3)

Modifications etc. (not altering text)

C18Ss. 67A-67C modified (19.3.1997) by 1997 c. 16, s. 29(2)

Ss. 67A-67C modified (31.7.1998) by 1998 c. 36, s. 146(5)

Ss. 67A-67C modified (27.7.1999) by 1999 c. 16, s. 125(5)

68 Special accounting schemes.E+W+S+N.I.

(1)Regulations may make provision establishing a scheme in accordance with the following provisions of this section; and in this section “a relevant accounting period”, in relation to an insurer, means an accounting period as regards which the scheme applies to the insurer.

(2)Regulations may provide that if an insurer notifies the Commissioners that the scheme should apply to him as regards accounting periods beginning on or after a date specified in the notification and prescribed conditions are fulfilled, then, subject to any provision made under subsection (9) below, the scheme shall apply to the insurer as regards accounting periods beginning on or after that date.

(3)Regulations may provide that where—

(a)an entry is made in the accounts of an insurer showing a premium under a taxable insurance contract as due to him, and

(b)the entry is made as at a particular date which falls within a relevant accounting period,

then (whether or not that date is one on which the premium is actually received by the insurer or on which the premium would otherwise be treated for the purposes of this Part as received by him) the premium shall for the purposes of this Part be taken to be received by the insurer on that date or, in prescribed circumstances, to be received by him on a different date determined in accordance with the regulations.

(4)Where regulations make provision under subsection (3) above they may also provide that, for the purposes of this Part, the amount of the premium shall be taken to be the amount which the entry in the accounts treats as its amount.

(5)Regulations may provide that provision made under subsections (3) and (4) above shall apply even if the premium, or part of it, is never actually received by the insurer or on his behalf; and the regulations may include provision that, where the premium is never actually received because the contract under which it would have been received is never entered into or is terminated, the premium is nonetheless to be taken for the purposes of this Part to be received under a taxable insurance contract.

(6)Regulations may provide that any provision made under subsection (4) above shall be subject to any directions made under section 66 above.

(7)Regulations may provide that where a premium is treated as received on a particular date by virtue of provision made under subsection (3) above and there is another date on which the premium—

(a)is actually received by the insurer, or

(b)would, apart from the regulations, be treated for the purposes of this Part as received by him,

the premium shall be taken for the purposes of this Part not to be received by him on that other date.

(8)Regulations may provide that provision made under subsection (7) above shall apply only to the extent that there is no excess of the actual amount of the premium over the amount which, by virtue of regulations under this section or of a direction under section 66 above, is to be taken for the purposes of this Part to be its amount; and the regulations may include provision that where there is such an excess, the excess amount shall be taken for the purposes of this Part to be a separate premium and to be received by the insurer on a date determined in accordance with the regulations.

(9)Regulations may provide that if a notification has been given in accordance with provision made under subsection (2) above and subsequently—

(a)the insurer gives notice to the Commissioners that the scheme should not apply to him as regards accounting periods beginning on or after a date specified in the notice, or

(b)the Commissioners give notice to the insurer that the scheme is not to apply to him as regards accounting periods beginning on or after a date specified in the notice,

then, if prescribed conditions are fulfilled, the scheme shall not apply to the insurer as regards an accounting period beginning on or after the date specified in the notice mentioned in paragraph (a) or (b) above unless the circumstances are such as may be prescribed.

(10)Regulations may include provision—

(a)enabling an insurer to whom the scheme applies as regards an accounting period to account for tax due in respect of that period on the assumption that the scheme will apply to him as regards subsequent accounting periods;

(b)designed to secure that, where the scheme ceases to apply to an insurer, any tax which by virtue of provision made under paragraph (a) above has not been accounted for is accounted for and paid.

(11)Regulations may provide that where—

(a)an entry in the accounts of an insurer shows a premium as due to him,

(b)the entry is made as at a date falling before 1st October 1994,

(c)tax in respect of the receipt of the premium would, apart from the regulations, be charged by reference to a date (whether or not the date on which the premium is actually received by the insurer) falling on or after 1st October 1994,

(d)the date by reference to which tax would be charged falls within a relevant accounting period, and

(e)prescribed conditions are fulfilled,

the premium, or such part of it as may be found in accordance with prescribed rules, shall be taken for the purposes of this Part to have been received by the insurer before 1st October 1994.

(12)Without prejudice to subsection (13) below, regulations may include provision modifying any provision made under this section so as to secure the effective operation of the provision in a case where a premium consists wholly or partly of anything other than money.

(13)Regulations may modify the effect of any provision of this Part.

(14)The reference in subsection (3)(a) above to a premium under a taxable insurance contract includes a reference to anything that, although not actually received by or on behalf of the insurer, would be such a premium if it were so received.

[F12269 Charge to tax where different rates of tax apply.E+W+S+N.I.

(1)This section applies for the purpose of determining the chargeable amount in a case where a contract provides cover falling within any one of the following paragraphs, that is to say—

(a)cover for one or more exempt matters,

(b)cover for one or more standard rate matters, or

(c)cover for one or more higher rate matters,

and also provides cover falling within another of those paragraphs.

(2)In the following provisions of this section “the non-exempt premium” means the difference between—

(a)the amount of the premium; and

(b)such part of the premium as is attributable to any exempt matter or matters or, if no part is so attributable, nil.

(3)If the contract provides cover for one or more exempt matters and also provides cover for either—

(a)one or more standard rate matters, or

(b)one or more higher rate matters,

the chargeable amount is such amount as, with the addition of the tax chargeable at the standard rate or (as the case may be) the higher rate, is equal to the non-exempt premium.

(4)If the contract provides cover for both—

(a)one or more standard rate matters, and

(b)one or more higher rate matters,

the higher rate element and the standard rate element shall be found in accordance with the following provisions of this section.

(5)For the purposes of this section—

(a)the higher rate element” is such portion of the non-exempt premium as is attributable to the higher rate matters (including tax at the higher rate); and

(b)the standard rate element” is the difference between—

(i)the non-exempt premium; and

(ii)the higher rate element.

(6)In a case falling within subsection (4) above, tax shall be charged separately—

(a)at the standard rate, by reference to the standard rate chargeable amount, and

(b)at the higher rate, by reference to the higher rate chargeable amount,

and the tax chargeable in respect of the premium is the aggregate of those amounts of tax.

(7)For the purposes of this section—

  • the higher rate chargeable amount” is such amount as, with the addition of the tax chargeable at the higher rate, is equal to the higher rate element;

  • the standard rate chargeable amount” is such amount as, with the addition of the tax chargeable at the standard rate, is equal to the standard rate element.

(8)References in this Part to the chargeable amount shall, in a case falling within subsection (4) above, be taken as referring separately to the standard rate chargeable amount and the higher rate chargeable amount.

(9)In applying subsection (2)(b) above, any amount that is included in the premium as being referable to tax (whether or not the amount corresponds to the actual amount of tax payable in respect of the premium) shall be taken to be wholly attributable to the non-exempt matter or matters.

(10)In applying subsection (5)(a) above, any amount that is included in the premium as being referable to tax at the higher rate (whether or not the amount corresponds to the actual amount of tax payable at that rate in respect of the premium) shall be taken to be wholly attributable to the higher rate element.

(11)Subject to subsections (9) and (10) above, any attribution under subsection (2)(b) or (5)(a) above shall be made on such basis as is just and reasonable.

(12)For the purposes of this section—

(a)an “exempt matter” is any matter such that, if it were the only matter for which the contract provided cover, the contract would not be a taxable insurance contract;

(b)a “non-exempt matter” is a matter which is not an exempt matter;

(c)a “standard rate matter” is any matter such that, if it were the only matter for which the contract provided cover, tax at the standard rate would be chargeable on the chargeable amount;

(d)a “higher rate matter” is any matter such that, if it were the only matter for which the contract provided cover, tax at the higher rate would be chargeable on the chargeable amount.

(13)If the contract relates to a lifeboat and lifeboat equipment, the lifeboat and the equipment shall be taken together in applying this section.

(14)For the purposes of this section “lifeboat” and “lifeboat equipment” have the same meaning as in paragraph 6 of Schedule 7A to this Act.]

Annotations:

Amendments (Textual)

F122S. 69 substituted (19.3.1997) by 1997 c. 16, s. 23(1)

SupplementaryE+W+S+N.I.

70 Interpretation: taxable insurance contracts.E+W+S+N.I.

(1)Subject to [F123subsection (1A) below], any contract of insurance is a taxable insurance contract.

[F124(1A)A contract is not a taxable insurance contract if it falls within one or more of the paragraphs of Part I of Schedule 7A to this Act.

(1B)Part II of Schedule 7A to this Act (interpretation of certain provisions of Part I) shall have effect.]

F125(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F125(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11)This section has effect subject to section 71 below.

(12)This section and section 71 below have effect for the purposes of this Part.

Annotations:

Amendments (Textual)

F123Words in s. 70(1) substituted (1.10.1994) by S.I. 1994/1698, art. 4(a)

F124S. 70(1A)(1B) inserted (1.10.1994) by S.I. 1994/1698, art. 4(b)

71 Taxable insurance contracts: power to change definition.E+W+S+N.I.

(1)Provision may be made by order that—

(a)a contract of insurance that would otherwise not be a taxable insurance contract shall be a taxable insurance contract if it falls within a particular description;

(b)a contract of insurance that would otherwise be a taxable insurance contract shall not be a taxable insurance contract if it falls within a particular description.

(2)A description referred to in subsection (1) above may be by reference to the nature of the insured or by reference to such other factors as the Treasury think fit.

(3)Provision under this section may be made in such way as the Treasury think fit, and in particular may be made by amending this Part.

(4)An order under this section may amend or modify the effect of section 69 above in such way as the Treasury think fit.

72 Interpretation: premium.E+W+S+N.I.

(1)In relation to a taxable insurance contract, a premium is any payment received under the contract by the insurer, and in particular includes any payment wholly or partly referable to—

(a)any risk,

(b)costs of administration,

(c)commission,

(d)any facility for paying in instalments or making deferred payment (whether or not payment for the facility is called interest), or

(e)tax.

[F126(1A)Where an amount is charged to the insured by any person in connection with a taxable insurance contract, any payment in respect of that amount is to be regarded as a payment received under that contract by the insurer unless—

(a)the payment is chargeable to tax at the higher rate by virtue of section 52A above; or

(b)the amount is charged under a separate contract and is identified in writing to the insured as a separate amount so charged.]

(2)A premium may consist wholly or partly of anything other than money, and references to payment in subsection (1) above shall be construed accordingly.

(3)Where a premium is to any extent received in a form other than money, its amount shall be taken to be—

(a)an amount equal to the value of whatever is received in a form other than money, or

(b)if money is also received, the aggregate of the amount found under paragraph (a) above and the amount received in the form of money.

(4)The value to be taken for the purposes of subsection (3) above is open market value at the time of the receipt by the insurer.

(5)The open market value of anything at any time shall be taken to be an amount equal to such consideration in money as would be payable on a sale of it at that time to a person standing in no such relationship with any person as would affect that consideration.

(6)Where (apart from this subsection) anything received under a contract by the insurer would be taken to be an instalment of a premium, it shall be taken to be a separate premium.

(7)Where anything is received by any person on behalf of the insurer—

(a)it shall be treated as received by the insurer when it is received by the other person, and

(b)the later receipt of the whole or any part of it by the insurer shall be disregarded.

[F127(7A)Where any person is authorised by or on behalf of an employee to deduct from anything due to the employee under his contract of employment an amount in respect of a payment due under a taxable insurance contract, subsection (7) above shall not apply to the receipt on behalf of the insurer by the person so authorised of the amount deducted.]

(8)In a case where—

(a)a payment under a taxable insurance contract is made to a person (the intermediary) by or on behalf of the insured, and

(b)the whole or part of the payment is referable to commission to which the intermediary is entitled,

in determining for the purposes of subsection (7) above whether, or how much of, the payment is received by the intermediary on behalf of the insurer any of the payment that is referable to that commission shall be regarded as received by the intermediary on behalf of the insurer notwithstanding the intermediary’s entitlement.

[F128(8A)Where, by virtue of subsection (7A) above, subsection (7) above does not apply to the receipt of an amount by a person and the whole or part of the amount is referable to commission to which he is entitled—

(a)if the whole of the amount is so referable, the amount shall be treated as received by the insurer when it is deducted by that person; and

(b)otherwise, the part of the amount that is so referable shall be treated as received by the insurer when the remainder of the payment concerned is or is treated as received by him.]

(9)References in subsection (8) above to a payment include references to a payment in a form other than money.

(10)This section has effect for the purposes of this Part.

Annotations:

Amendments (Textual)

F126S. 72(1A) inserted (19.3.1997 with effect as mentioned in s. 28(2) of the amending Act) by 1997 c. 16, s. 28(1)

F127S. 72(7A) inserted (19.3.1997 with effect as mentioned in s. 30(3) of the amending Act) by 1997 c. 16, s. 30(1)

F128S. 72(8A) inserted (19.3.1997 with effect as mentioned in s. 30(3) of the amending Act) by 1997 c. 16, s. 30(2)

73 Interpretation: other provisions.E+W+S+N.I.

(1)Unless the context otherwise requires—

  • accounting period” shall be construed in accordance with section 54 above;

  • appeal tribunal” means a VAT and duties tribunal;

  • authorised person” means any person acting under the authority of the Commissioners;

  • the Commissioners” means the Commissioners of Customs and Excise;

  • conduct” includes any act, omission or statement;

  • [F129the higher rate” shall be construed in accordance with section 51 above;]

  • [F130insurance business” means a business which consists of or includes the provision of insurance;]

  • insurer” means a person or body of persons (whether incorporated or not) carrying on insurance business;

  • legislation relating to insurance premium tax” means this Part (as defined by subsection (9) below), any other enactment (whenever passed) relating to insurance premium tax, and any subordinate legislation made under any such enactment;

  • prescribed” means prescribed by an order or regulations under this Part;

  • [F129the standard rate” shall be construed in accordance with section 51 above;]

  • tax” means insurance premium tax;

  • tax representative” shall be construed in accordance with section 57 above;

  • taxable business” means a business which consists of or includes the provision of insurance under taxable insurance contracts;

  • taxable insurance contract” shall be construed in accordance with section 70 above.

  • [F131taxable intermediary” shall be construed in accordance with section 52A above;]

  • [F131taxable intermediary’s fees” has the meaning given by section 53AA(9) above.]

(2)A risk is situated in the United Kingdom if, by virtue of section 96A(3) of the M30Insurance Companies Act 1982, it is situated in the United Kingdom for the purposes of that Act.

(3)[F132Subject to subsection (3A) below,] a registrable person is a person who—

(a)is registered under section 53 above, or

(b)is liable to be registered under that section.

[F133(3A)References in sections 53A and 54 above and paragraphs 1, 9 and 12 of Schedule 7 to this Act to a registrable person include a reference to a person who—

(a)is registered under section 53AA above; or

(b)is liable to be registered under that section.]

(4)A commercial ship is a ship which is—

(a)of a gross tonnage of 15 tons or more, and

(b)not designed or adapted for use for recreation or pleasure.

(5)A commercial aircraft is an aircraft which is—

(a)of a weight of 8,000 kilogrammes or more, and

(b)not designed or adapted for use for recreation or pleasure.

(6)A lifeboat is a vessel used or to be used solely for rescue or assistance at sea; and lifeboat equipment is anything used or to be used solely in connection with a lifeboat.

(7)Foreign or international railway rolling stock is railway rolling stock used principally for journeys taking place wholly or partly outside the United Kingdom.

(8)Goods in foreign or international transit are goods in transit where their carriage—

(a)begins and ends outside the United Kingdom,

(b)begins outside but ends in the United Kingdom, or

(c)ends outside but begins in the United Kingdom.

(9)A reference to this Part includes a reference to any order or regulations made under it and a reference to a provision of this Part includes a reference to any order or regulations made under the provision, unless otherwise required by the context or any order or regulations.

(10)This section has effect for the purposes of this Part.

Annotations:

Amendments (Textual)

F129Definitions in s. 73(1) inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 21(2)

F130Definition in s. 73(1) inserted (1.5.1995) by 1995 c. 4, s. 34, Sch. 5 para. 6

F131Definitions in s. 73(1) inserted (19.3.1997) by 1997 c. 16, s. 27(9)

F132Words in s. 73(3) inserted (19.3.1997) by 1997 c. 16, s. 27(10)

F133S. 73(3A) inserted (19.3.1997) by 1997 c. 16, s. 27(10)

Marginal Citations

74 Orders and regulations.E+W+S+N.I.

(1)The power to make an order under section 61 above shall be exercisable by the Commissioners, and the power to make an order under any other provision of this Part shall be exercisable by the Treasury.

(2)Any power to make regulations under this Part shall be exercisable by the Commissioners.

(3)Any power to make an order or regulations under this Part shall be exercisable by statutory instrument.

(4)An order under section [F13451A or] 71 above shall be laid before the House of Commons; and unless it is approved by that House before the expiration of a period of 28 days beginning with the date on which it was made it shall cease to have effect on the expiration of that period, but without prejudice to anything previously done under the order or to the making of a new order.

(5)In reckoning any such period as is mentioned in subsection (4) above no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days.

(6)A statutory instrument containing an order or regulations under this Part (other than an order under section [F13551A or] 71 above) shall be subject to annulment in pursuance of a resolution of the House of Commons.

(7)Any power to make an order or regulations under this Part—

(a)may be exercised as regards prescribed cases or descriptions of case;

(b)may be exercised differently in relation to different cases or descriptions of case.

(8)An order or regulations under this Part may include such supplementary, incidental, consequential or transitional provisions as appear to the Treasury or the Commissioners (as the case may be) to be necessary or expedient.

(9)No specific provision of this Part about an order or regulations shall prejudice the generality of subsections (7) and (8) above.

Annotations:

Amendments (Textual)

F134Words in s. 74(4) inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 22(2)(a)

F135Words in s. 74(6) inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 22(2)(b)

Part IVE+W+S+N.I. Income Tax, Corporation Tax and Capital Gains Tax

Chapter IE+W+S+N.I. General

Income tax: charge, rates and reliefsE+W+S+N.I.

75 Charge and rates of income tax for 1994-95.E+W+S+N.I.

(1)Income tax shall be charged for the year 1994-95, and for that year—

(a)the lower rate shall be 20 per cent.,

(b)the basic rate shall be 25 per cent., and

(c)the higher rate shall be 40 per cent.

(2)For the year 1994-95 section 1(2) of the Taxes Act 1988 shall apply as if—

(a)the amount specified in paragraph (aa) were £3,000 (the lower rate limit), and

(b)the amount specified in paragraph (b) were £23,700 (the basic rate limit);

and accordingly section 1(4) of that Act (indexation) shall not apply for the year 1994-95.

76 Personal allowance.E+W+S+N.I.

Section 257 of the Taxes Act 1988 (personal allowance) shall apply for the year 1994-95 as if the amounts specified in it were the same as the amounts specified in it as it applies for the year 1993-94, and accordingly section 257C(1) of that Act (indexation) so far as relating to section 257 shall not apply for the year 1994-95.

77 Rate of relief to married couples etc.E+W+S+N.I.

(1)“ The provisions of section 256 of the Taxes Act 1988 (general provision as to personal reliefs) shall become subsection (1) of that section and after that subsection there shall be inserted the following subsections— ”

(2)Where under any provision of this Chapter the relief to which a person is entitled for any year of assessment consists in an income tax reduction calculated by reference to a specified amount, the effect of that relief shall be that the amount of that person’s liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from that provision less whichever is the smaller of—

(a)the amount equal to 20 per cent. of the specified amount; and

(b)the amount which reduces his liability to nil.

(3)In determining for the purposes of subsection (2) above the amount of income tax to which a person would be liable apart from any provision providing for an income tax reduction, no account shall be taken—

(a)where that provision is section 259 or 261A, of any income tax reduction under any of the other provisions of this Chapter;

(b)where that provision is section 262(1), of any income tax reduction under any of the other provisions of this Chapter except section 259 or 261A; or

(c)whatever that provision—

(i)of any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or

(ii)of any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment;

but paragraph (a) above, so far as it relates to any income tax reduction under section 261A, is without prejudice to the provisions of subsection (2) of that section.

(2)In section 257A of that Act (married couple’s allowance)—

F136(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)in subsection (2), for the words from “to a deduction” to “the deduction” there shall be substituted “ for that year to an income tax reduction calculated by reference to £2,665 (instead of to the reduction ”; and

(c)in subsection (3), for the words from “to a deduction” to “the deduction” there shall be substituted “ for that year to an income tax reduction calculated by reference to £2,705 (instead of to the reduction ”.

F137(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F137(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F138(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)The Taxes Act 1988 and the M31Taxes Management Act 1970 shall have effect with the amendments specified in Schedule 8 to this Act (which supplements the provisions of this section).

(7)This section and Schedule 8 to this Act shall have effect for the year 1994-95 and, subject to the following provisions of this section, for subsequent years of assessment.

(8)For the year 1995-96 and subsequent years of assessment section 256(2)(a) of the Taxes Act 1988 shall have effect with the substitution of “ 15 per cent ” for the words “20 per cent.”

(9)For the year 1995-96, section 257A of the Taxes Act 1988 shall have effect—

(a)as if the same amount (namely £1,720) were specified in subsection (1) as is specified in that subsection as it applies for the year 1994-95;

(b)as if the amount specified in subsection (2) were “£2,995”; and

(c)as if the amount specified in subsection (3) were “£3,035”.

(10)Section 257C(1) of the Taxes Act 1988 (indexation), so far as relating to section 257A (1) to (3) of that Act, shall not apply for the year 1994-95 or for the year 1995-96 but shall not be prevented by anything in this section from applying for the year 1996-97 or any subsequent year of assessment.

Annotations:

Amendments (Textual)

F136S. 77(2)(a) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. III(3), Note 2 in the repealing Act) by 1999 c. 16, s. 139, Sch. 20 Pt. III(3), Note 2

F137S. 77(3)(4) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. III(4), Note in the repealing Act) by 1999 c. 16, s. 139, Sch. 20 Pt. III(4), Note

F138S. 77(5) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. III(5), Note 2 in the repealing Act) by 1999 c. 16, s. 139, Sch. 20 Pt. III(5), Note 2

Marginal Citations

78 Amount by reference to which MCA is reduced.E+W+S+N.I.

Section 257A(5) of the Taxes Act 1988 (reduction of married couple’s allowance if claimant’s total income exceeds a certain amount) shall apply for the year 1994-95 as if the amount specified in it were the same as the amount specified in it as it applies for the year 1993-94, and accordingly section 257C(1) of that Act (indexation) so far as relating to section 257A(5) shall not apply for the year 1994-95.

79 Relief for maintenance payments.E+W+S+N.I.

(1)Sections 347A and 347B of the M32Taxes Act 1988 F139. . . (which contain provision with respect to the deductions from income allowed on account of maintenance payments) shall have effect in relation to payments becoming due on or after 6th April 1994 with the following modifications.

F140(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In subsection (2) of section 347B (relief for qualifying maintenance payments)—

(a)the words “Notwithstanding section 347A(1)(a) but” shall be omitted; and

(b)for the words from “in computing” to “to deduct” there shall be substituted “ for a year of assessment to an income tax reduction calculated by reference to ”.

(4)In subsection (3) of section 347B (restriction of relief to amount of married couple’s allowance), for the words from the beginning to “exceed” there shall be substituted “ The amount by reference to which any income tax reduction is to be calculated under this section shall be limited to ”.

F140(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)After subsection (5) of section 347B there shall be inserted the following subsections—

(5A)Where any person is entitled under this section for any year of assessment to an income tax reduction calculated by reference to the amount determined in accordance with subsections (2) to (5) above (“the relevant amount”), the amount of that person’s liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from this section less whichever is the smaller of—

(a)the amount equal to the appropriate percentage of the relevant amount; and

(b)the amount which reduces his liability to nil;

and in this subsection “the appropriate percentage” means 20 per cent. for the year 1994-95 and 15 per cent. for the year 1995-96 and subsequent years of assessment.

(5B)In determining for the purposes of subsection (5A) above the amount of income tax to which a person would be liable apart from any income tax reduction under this section, no account shall be taken of—

(a)any income tax reduction under Chapter I of Part VII;

(b)any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or

(c)any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.

F140(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F140(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F139Words in s. 79(1) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. III(6), Note in the repealing Act) by 1999 c. 16, s. 139, Sch. 20 Pt. III(6), Note

F140S. 79(2)(5)(7)(8) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. III(6), Note in the repealing Act) by 1999 c. 16, s. 139, Sch. 20 Pt. III(6), Note

Marginal Citations

80 Limit on relief for interest.E+W+S+N.I.

For each of the years 1994-95 and 1995-96 the qualifying maximum defined in section 367(5) of the Taxes Act 1988 (limit on relief for interest on certain loans) shall be £30,000.

81 Mortgage interest relief etc.E+W+S+N.I.

(1)For subsection (1) of section 353 of the Taxes Act 1988 (general provision for relief for interest payments) there shall be substituted the following subsection—

(1)Where a person pays interest in any year of assessment, that person, if he makes a claim to the relief, shall for that year of assessment be entitled (subject to sections 354 to 368) to relief in accordance with this section in respect of so much (if any) of the amount of that interest as is eligible for relief under this section by virtue of sections 354 to 365.

(2)After that subsection there shall be inserted the following subsections—

(1A)Where a person is entitled for any year of assessment to relief under this section in respect of any amount of interest which—

(a)is eligible for that relief by virtue of section 354 or 365, and

(b)so far as eligible by virtue of section 354, is so eligible in a case which falls, or is treated as falling, within section 355(1)(a), 356 or 358,

that relief shall consist in an income tax reduction for that year calculated by reference to that amount.

(1B)Where a person is entitled for any year of assessment to relief under this section in respect of any amount of interest which—

(a)is eligible for that relief otherwise than by virtue of section 354 or 365, or

(b)is eligible for that relief by virtue of section 354 in a case falling within section 355(1)(b),

that relief shall consist (subject to sections 237(5)(b) and 355(4)) in a deduction or set-off of that amount from or against that person’s income for that year.

(1C)Without prejudice to subsection (1E) below, where the whole or any part of an amount of interest is eligible for relief under this section by virtue of section 354 in a case which (apart from this subsection) would fall, or be treated as falling, within both section 355(1)(a) or 356 and section 355(1)(b), then that case shall be treated for the purposes of this section and the following provisions of this Act—

(a)except in relation to payments to which an election made for the purposes of this subsection by the person entitled to the relief applies, as falling within section 355(1)(b) and not within section 355(1)(a) or 356; and

(b)in relation to payments to which such an election does apply, as falling within section 355(1)(a) or, as the case may be, 356, and not within section 355(1)(b).

(1D)An election for the purposes of subsection (1C)—

(a)shall be made, and may be withdrawn, by the giving of written notice to an officer of the Board;

(b)shall apply to every payment of interest which—

(i)is made after the time specified in the notice of that election as the time as from which it takes effect; and

(ii)is not made after a time specified in a notice of the withdrawal of that election as the time as from which that election is withdrawn;

(c)shall not be made so as to take effect as from any time except the beginning of a year of assessment or a time as from which the conditions for the case to fall, or be treated as falling, within both section 355(1)(a) or 356 and section 355(1)(b) have begun to be satisfied in relation to payments of interest on the loan in question;

(d)shall not be withdrawn except as from the beginning of a year of assessment; and

(e)shall not be made so as to take effect, and shall not be withdrawn, as from any time before the beginning of the year of assessment immediately before that in which the notice of the election or, as the case may be, of the withdrawal is given to an officer of the Board.

(1E)Where any person is entitled for any year of assessment to relief under this section in respect of any amount of interest as is eligible for that relief partly as mentioned in subsection (1A) above and partly as mentioned in subsection (1B) above, that amount of interest shall be apportioned between the cases to which each of those subsections applies without regard to what parts of the total amount borrowed remain outstanding but according to the following factors, that is to say—

(a)the proportions of the total amount borrowed which were applied for different purposes; and

(b)in the case of so much of any amount of interest which is, or in pursuance of an apportionment under paragraph (a) above is treated as, eligible for relief by virtue of section 354, the different uses to which the land or other property in question is put from time to time;

and subsection (1A) or (1B) above shall apply accordingly in relation to the interest apportioned to the case to which that subsection applies.

(1F)Where any person is entitled under this section for any year of assessment to an income tax reduction calculated by reference to an amount of interest, the amount of that person’s liability for that year to income tax on his total income shall be the amount to which he would have been liable apart from this section less whichever is the smaller of—

(a)the amount equal to the applicable percentage of that amount of interest; and

(b)the amount which reduces his liability to nil.

(1G)In subsection (1F) above “the applicable percentage”—

(a)in relation to so much of any interest as is eligible for relief under this section by virtue of section 354, means 20 per cent.; and

(b)in relation to so much of any interest as is eligible for relief under this section by virtue of section 365, means the percentage which is the basic rate for the year of assessment in question;

but, in relation to any payment of interest which (whenever falling due) is made in the year 1995-96 or any subsequent year of assessment, paragraph (a) above shall have effect with the substitution of “15 per cent.” for “20 per cent.”

(1H)In determining for the purposes of subsection (1F) above the amount of income tax to which a person would be liable apart from any income tax reduction under this section, no account shall be taken of—

(a)any income tax reduction under Chapter I of Part VII or section 347B;

(b)any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 or by way of a credit under section 790(1); or

(c)any tax at the basic rate on so much of that person’s income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment.

F141(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)For subsections (3) to (5B) of section 369 of that Act (provisions balancing deduction of relevant loan interest from income against charge to tax) there shall be substituted the following subsection—

(3)The following payments, that is to say—

(a)payments of relevant loan interest to which this section applies, and

(b)payments which would be such payments but for section 373(5),

shall not be allowable as deductions for any purpose of the Income Tax Acts except in so far as they fall to be treated as such payments by virtue only of section 375(2) and would be allowable apart from this subsection.

(5)Schedule 9 to this Act (which for the purposes of or in connection with the provisions of this section makes further modifications of certain enactments in relation to tax relief on interest payments) shall have effect.

(6)The preceding provisions of this section and that Schedule—

(a)shall have effect in relation to payments of interest made on or after 6th April 1994 (whenever falling due); and

(b)shall also have effect, so far as they relate to relevant loan interest, in relation to any payments of interest becoming due on or after 6th April 1994 which have been made at any time before that date but on or after 30th November 1993.

(7)Any provision made before the passing of this Act by reference to the basic rate of income tax and contained in any instrument or agreement under or in accordance with which payments of relevant loan interest have been or are to be made shall be taken, in relation to any such payment as is mentioned in subsection (6)(a) or (b) above, to have been made, instead, by reference to a rate which, in the case of that payment, is the applicable percentage for the purposes of subsection (1) of section 369 of the Taxes Act 1988.

F141(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9)In this section “relevant loan interest” has the same meaning as in Part IX of the Taxes Act 1988.

Annotations:

Amendments (Textual)

F141S. 81(3)(8) repealed (27.7.1999 with effect as mentioned in Sch. 20 Pt. III(7), Note 4 in the repealing Act) by 1999 c. 16, s. 139, Sch. 20 Pt. III(7), Note 4

82 Relief for blind persons.E+W+S+N.I.

(1)In section 265(1) of the Taxes Act 1988 (blind person’s allowance) for “£1,080” there shall be substituted “ £1,200 ”.

(2)This section shall apply for the year 1994-95 and subsequent years of assessment.

F14283. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F142S. 83 repealed (31.7.1997 with effect as mentioned in Sch. 8 Pt. II(2), Note in the repealing Act) by 1997 c. 58, s. 52, Sch. 8 Pt. II(2), Note

F14384. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F143S. 84 repealed (27.7.1999 with effect as mentioned in s. 59(3)(b), Sch. 20 Pt. III(15), Note in the repealing Act) by 1999 c. 16, ss. 59(3)(b), 139, Sch. 20 Pt. III(15), Note; S.I. 2000/2004, art. 2

Corporation tax charge and rateE+W+S+N.I.

85 Charge and rate of corporation tax for 1994.E+W+S+N.I.

Corporation tax shall be charged for the financial year 1994 at the rate of 33 per cent.

86 Small companies.E+W+S+N.I.

(1)For the financial year 1994—

(a)the small companies’ rate shall be 25 per cent., and

(b)the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be one fiftieth.

(2)In section 13(3) of that Act (limits of marginal relief) in paragraphs (a) and (b)—

(a)for “£250,000” there shall be substituted “ £300,000 ”, and

(b)for “£1,250,000” there shall be substituted “ £1,500,000 ”.

(3)Subsection (2) above shall have effect for the financial year 1994 and subsequent financial years; and where by virtue of that subsection section 13 of the Taxes Act 1988 has effect with different relevant maximum amounts in relation to different parts of a company’s accounting period, then for the purposes of that section those parts shall be treated as if they were separate accounting periods and the profits and basic profits of the company for that period shall be apportioned between those parts.

Benefits in kindE+W+S+N.I.

87 Car fuel.E+W+S+N.I.

(1)In section 158 of the Taxes Act 1988 (car fuel) for the Tables in subsection (2) (tables of cash equivalents) there shall be substituted—

TABLE A
Cylinder capacity of car in cubic centimetresCash equivalent
1,400 or less£640
More than 1,400 but not more than 2,000£810
More than 2,000£1,200
TABLE AB
Cylinder capacity of car in cubic centimetresCash equivalent
2,000 or less£580
More than 2,000£750
TABLE B
Description of carCash equivalent
Any car£1,200

(2)This section shall have effect for the year 1994-95 and subsequent years of assessment.

88 Beneficial loan arrangements.E+W+S+N.I.

(1)In section 160(1) of the Taxes Act 1988 (charge to tax of benefit of loan obtained by reason of employment) for the words following paragraph (b) there shall be substituted— an amount equal to whatever is the cash equivalent of the benefit of the loan for that year shall, subject to the provisions of this Chapter, be treated as emoluments of the employment, and accordingly chargeable to tax under Schedule E; and where that amount is so treated, the employee is to be treated as having paid interest on the loan in that year of the same amount.

(1A)Interest treated as paid by virtue of subsection (1) above—

(a)shall be treated as paid for all the purposes of the Tax Acts (other than this Chapter, including Schedule 7), but shall not be treated for any purpose as income of the person making the loan or be treated as relevant loan interest to which section 369 applies, and

(b)shall be treated as accruing during, and paid by the employee at the end of, the year or, if different, the period in the year during which he is employed in employment to which this Chapter applies and the loan is outstanding.

(1B)All the loans between the same lender and borrower which—

(a)are outstanding at any time, as to any amount, in any year,

(b)are not qualifying loans, and

(c)are made in the same currency,

are, if a cash equivalent for them falls to be ascertained, to be treated for the purposes of subsections (1) and (1A) above and Part II of Schedule 7 as a single loan.

(1C)In this section and section 161 “qualifying loan” means any loan made to any person where, assuming interest is being paid on the loan (whether or not it is in fact being paid), the whole or any part of the interest—

(a)is eligible for relief under section 353 or would be so eligible but for subsection (2) of that section or section 357(1)(b), or

(b)is deductible in computing the amount of the profits or gains to be charged under Case I or II of Schedule D in respect of a trade, profession or vocation carried on by him.

(2)At the end of section 160(5) of that Act (interpretation, including “official rate of interest”) there shall be added— and, without prejudice to the generality of section 178 of the Finance Act 1989, regulations under that section may make different provision in relation to a loan outstanding for the whole or part of a year if—

(i)it was made in the currency of a country or territory outside the United Kingdom,

(ii)the benefit of the loan is obtained by reason of the employment of a person who normally lives in that country or territory, and

(iii)that person has lived in that country or territory at some time in the period of six years ending with that year.

(3)For section 161(1) of that Act (exemption for loans the cash equivalent of which does not exceed £300) there shall be substituted—

(1)The cash equivalent of the benefit of any such loan as is referred to in section 160(1) is not to be treated as emoluments of the employment if—

(a)at no time in the year does the amount outstanding on the loan (or, if two or more such loans as are referred to in section 160(1) are outstanding in the year, the aggregate of the amounts outstanding on them) exceed £5000, or

(b)where paragraph (a) above does not apply, the loan is not a qualifying loan and at no time in the year does the amount outstanding on the loan (or, if two or more such loans as are referred to in section 160(1) and are not qualifying loans are outstanding in the year, the aggregate of the amounts outstanding on them) exceed £5000.

(1A)Section 160(1) does not in any year apply to a loan made at any time in that or an earlier year by a person in the ordinary course of a business carried on by him which includes the lending of money if—

(a)comparable loans were available, at the time the loan in question was made, to all those who might be expected to avail themselves of the services which he provides in the course of that business,

(b)of the total number of the loan in question and comparable loans made by him at or about the time the loan in question was made, a substantial proportion were made to members of the public at large with whom he was dealing at arm’s length, and

(c)the loan in question, and comparable loans in general made by him at or about that time to members of the public at large with whom he was dealing at arm’s length, are held on the same terms and, if those terms differ from the terms applicable immediately after the loan was first made, they were imposed in the ordinary course of his business.

(1B)For the purposes of subsection (1A) above, a loan is comparable to the loan in question if it is made for the same or similar purposes, and on the same terms and conditions, as that loan.

(4)In Schedule 7 to that Act (beneficial loan arrangements)—

(a)in paragraph 1(5) for “Sub-paragraph (2) above does” there shall be substituted “ Sub-paragraphs (2) and (4) above do ” and the words “his employer, being” shall cease to have effect, and

(b)Parts III to V shall cease to have effect.

F144(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)This section shall have effect for the year 1994-95 and subsequent years of assessment.

Annotations:

Amendments (Textual)

F144S. 88(5) repealed (28.7.2000 with effect as mentioned in s. 57(2), Sch. 40 Pt. II(2), Note in the repealing Act) by 2000 c. 17, ss. 57(2), 156, Sch. 40 Pt. II(2) Note

89 Vouchers and credit-tokens.E+W+S+N.I.

(1)Section 141 of the Taxes Act 1988 (non-cash vouchers) shall be amended as follows.

(2)In subsection (1)—

(a)in paragraph (a), for the words from “the expense incurred” to “exchanged;” there shall be substituted the expense incurred (“the chargeable expense”)—

(i)by the person at whose cost the voucher and the money, goods or services for which it is capable of being exchanged are provided,

(ii)in or in connection with that provision; and

(b)the words following paragraph (b) shall be omitted.

(3)In subsection (6B), in paragraph (a) for the words “the person providing the non-cash voucher” there shall be substituted “ the person at whose cost the voucher and the entertainment are provided ”.

(4)Section 142 of the Taxes Act 1988 (credit-tokens) shall be amended as follows.

(5)In subsection (1)(a), for the words from “the expense incurred” to “obtained;” there shall be substituted the expense incurred—

(i)by the person at whose cost the money, goods or services are provided,

(ii)in or in connection with that provision;.

(6)In subsection (3) for the words “providing the credit-token as mentioned in subsection (1)(a) above” there shall be substituted “ mentioned in subsection (1)(a)(i) above ”.

(7)In subsection (3B), in paragraph (a) for the words “providing the credit-token” there shall be substituted “ mentioned in subsection (1)(a)(i) above ”.

(8)Section 143 of the Taxes Act 1988 (cash vouchers) shall be amended as follows.

(9)In subsection (1) for the words from “(and in particular section 203)” to “paid by his employer” there shall be substituted

(a)he shall be treated as having received.

(10)In subsection (3) for the words “in providing the voucher by the person who provides it” there shall be substituted “ by the person at whose cost the voucher is provided ”.

(11)In subsection (4)—

(a)in paragraph (a) for the words “in providing the voucher by the person who provides it” there shall be substituted “ by the person at whose cost the voucher, stamp or similar document is provided ”; and

(b)in the words following paragraph (b) for the words from “the expense incurred” to the end there shall be substituted “ the expense incurred by the person mentioned in paragraph (a) above shall be treated as reduced by the difference or part of the difference mentioned in paragraph (b) above. ”

(12)Section 144 of the Taxes Act 1988 (supplementary provisions relating to sections 141 to 143) shall be amended as follows.

(13)In subsection (1)—

(a)for the words “or credit-tokens” there shall be substituted “ , credit-tokens or cash vouchers ”; and

(b)for the words “141 or 142” there shall be substituted “ 141, 142 or 143 ”.

(14)In subsection (3)—

(a)for the words “141 and 142” there shall be substituted “ 141, 142 and 143 ”; and

(b)for the words “by him of non-cash” there shall be substituted “ of ”.

Chargeable gainsE+W+S+N.I.

90 Annual exempt amount for 1994-95.E+W+S+N.I.

For the year 1994-95 section 3 of the M33Taxation of Chargeable Gains Act 1992 (annual exempt amount) shall have effect as if the amount specified in subsection (2) were £5,800, and accordingly subsection (3) of that section (indexation) shall not apply for that year.

Annotations:

Marginal Citations

91 Relief on re-investment.E+W+S+N.I.

(1)Schedule 11 to this Act (which extends the relief on re-investment for individuals and trustees provided by Chapter IA of Part V of the Taxation of Chargeable Gains Act 1992) shall have effect.

(2)That Schedule shall have effect in relation to disposals made on or after 30th November 1993.

(3)In section 164H(1) of that Act—

(a)for “is greater than” there shall be substituted “ exceeds ”, and

(b)at the end there shall be added “ or half the value of the company’s assets as a whole (whichever is the greater); and section 294(3) and (4) of the Taxes Act (meaning of value of company’s assets as a whole) applies for the purposes of this subsection as it applies for the purposes of section 294 of that Act ”.

(4)Subsection (3) above shall apply to determine whether a company is a qualifying company on or after 30th November 1993.

F14592. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F145S. 92 repealed (31.7.1998 with effect as mentioned in Sch. 27 Pt. III(31), Note in the repealing Act) by 1998 c. 36, s. 165, Sch. 27 Pt. III(31) Note

93 Indexation losses.E+W+S+N.I.

(1)In section 53 of the Taxation of Chargeable Gains Act 1992 (indexation allowance), in subsection (1), for the words following “contrary” to the end of paragraph (c) there shall be substituted if on the disposal of an asset there is an unindexed gain, an allowance (“the indexation allowance”) shall be allowed against the unindexed gain—

(a)so as to give the gain for the purposes of this Act, or

(b)if the indexation allowance equals or exceeds the unindexed gain, so as to extinguish it (in which case the disposal shall be one on which, after taking account of the indexation allowance, neither a gain nor a loss accrues).

(2)In subsection (2) of that section—

(a)for “subsection (1) above” there shall be substituted “ this Chapter ”,

(b)for paragraph (a) there shall be substituted—

(a)unindexed gain” means the amount of the gain on the disposal computed in accordance with this Part, and

(c)in paragraph (b), for “gain or loss” there shall be substituted “ gain ”.

(3)After that subsection there shall be inserted—

(2A)Notwithstanding anything in section 16 of this Act, this section shall not apply to a disposal on which a loss accrues.

(4)In section 55 of that Act (assets acquired on a no gain/no loss disposal), after subsection (6) there shall be inserted—

(7)The rules in subsection (8) below apply (after the application of section 53 but before the application of section 35(3) or (4)) to give the gain or loss for the purposes of this Act where—

(a)subsection (6) above applies to the disposal (the “disposal in question”) of an asset by any person (the “transferor”), and

(b)but for paragraph (b) of that subsection, the consideration the transferor would be treated as having given for the asset would include an amount or amounts of indexation allowance brought into account by virtue of section 56(2) on any disposal made before 30th November 1993.

(8)The rules are as follows—

(a)where (apart from this subsection) there would be a loss, an amount equal to the rolled-up indexation shall be added to it so as to increase it,

(b)where (apart from this subsection) the unindexed gain or loss would be nil, there shall be a loss of an amount equal to the rolled-up indexation, and

(c)where (apart from this subsection)—

(i)there would be an unindexed gain, and

(ii)the gain or loss would be nil but the amount of the indexation allowance used to extinguish the gain would be less than the rolled-up indexation,

the difference shall constitute a loss.

(9)In this section the “rolled-up indexation” means, subject to subsections (10) and (11) below, the amount or, as the case may be, the aggregate of the amounts referred to in subsection (7)(b) above; and subsections (10) and (11) below shall, as well as applying on the disposal in question, be treated as having applied on any previous part disposal by the transferor.

(10)Where, for the purposes of any disposal of the asset by the transferor, any amount falling within any, or any combination of, paragraphs (a) to (c) of section 38(1) is required by any enactment to be excluded, reduced or written down, the amount or aggregate referred to in subsection (9) above (or so much of it as remains after the application of this subsection and subsection (11) below on a previous part disposal) shall be reduced in proportion to any reduction made in the amount falling within the paragraph, or the combination of paragraphs, in question.

(11)Where the transferor makes a part disposal of the asset at any time, then, for the purposes of that and any subsequent disposal, the amount or aggregate referred to in subsection (9) above (or so much of it as remains after the application of this subsection and subsection (10) above on a previous part disposal by him or after the application of subsection (10) above on the part disposal) shall be apportioned between the property disposed of and the property which remains in the same proportions as the sums falling within section 38(1)(a) and (b).

(5)In section 56 of that Act (amount of consideration on no gain/no loss disposals)—

(a)in subsection (2) for the words preceding paragraph (a) there shall be substituted “ On a no gain/no loss disposal by any person (“the transferor”) ”, and

(b)after that subsection there shall be added—

(3)Where apart from this subsection—

(a)a loss would accrue on the disposal of an asset, and

(b)the sums allowable as a deduction in computing that loss would include an amount attributable to the application of the assumption in subsection (2) above on any no gain/no loss disposal made on or after 30th November 1993,

those sums shall be determined as if that subsection had not applied on any such disposal made on or after that date and the loss shall be reduced accordingly or, if those sums are then equal to or less than the consideration for the disposal, the disposal shall be one on which neither a gain nor a loss accrues.

(4)For the purposes of this section a no gain/no loss disposal is one which, by virtue of any enactment other than section 35(4), 53(1) or this section, is treated as a disposal on which neither a gain nor a loss accrues to the person making the disposal.

(6)In section 110 of that Act (indexation allowance for share pools), after subsection (6) there shall be inserted—

(6A)Where a disposal to a person acquiring or adding to a new holding is treated by virtue of any enactment as one on which neither a gain nor a loss accrues to the person making the disposal—

(a)section 56(2) shall not apply to the disposal (and, accordingly, the amount of the consideration shall not be calculated on the assumption that a gain of an amount equal to the indexation allowance accrues to the person making the disposal), but

(b)an amount equal to the indexation allowance on the disposal shall be added to the indexed pool of expenditure for the holding acquired or, as the case may be, held by the person to whom the disposal is made (and, where it is added to the indexed pool of expenditure for a holding so held, it shall be added after any increase required by subsection (8)(a) below).

(7)Sections 103 (collective investment schemes, etc.), 111 (building society etc. shares), 182 to 184 (groups and associated companies) and 200 (oil industry assets) of that Act (all of which relate to indexation allowance) shall cease to have effect.

(8)In Schedule 7A to that Act (restriction on set-off of pre-entry losses), in paragraph 2—

(a)in sub-paragraph (2), for the definitions of “B” and “C” there shall be substituted—

B is the amount of the item of relevant allowable expenditure for which an amount falls to be determined under this paragraph;

C is the total amount of all the relevant allowable expenditure,

(b)in sub-paragraph (4), “except in relation to the calculation of any indexed rise” shall cease to have effect,

(c)after sub-paragraph (8) there shall be inserted—

(8A)Where by virtue of section 55(8) the allowable loss accruing on the disposal of a pre-entry asset, or any part of the loss, is attributable to an amount (“the rolled-up amount”) of rolled-up indexation (as defined in section 55(9) to (11)), then, for the purposes of this paragraph—

(a)the total amount of all the relevant allowable expenditure shall be treated as increased by the rolled-up amount, and

(b)the amount of each item of relevant allowable expenditure shall be treated as increased by so much (if any) of the rolled-up amount as is attributable to that item.

(8B)Where—

(a)section 56(3) applies on the disposal of a pre-entry asset on which an allowable loss accrues, and

(b)in accordance with that subsection, the total amount of all the relevant allowable expenditure is reduced by any amount (“the global reduction”),

the amount of each item of relevant allowable expenditure shall be treated for the purposes of this paragraph as reduced by so much (if any) of the global reduction as is attributable to that item, and

(d)in sub-paragraph (9), the definition of “indexed rise” shall cease to have effect.

(9)In paragraph 4 of that Schedule—

(a)in sub-paragraph (12) the words from “together” to the end, and

(b)sub-paragraph (13),

shall cease to have effect.

(10)In paragraph 5 of that Schedule, after sub-paragraph (2) there shall be inserted—

(2A)In determining for the purposes of sub-paragraph (2)(a) above the amount of any loss which would have accrued if the asset had been disposed of at the relevant time at its market value at that time—

(a)it shall be assumed that the amendments of this Act made by section 93(1) to (5) of the Finance Act 1994 (indexation losses) had effect in relation to that disposal and, accordingly,

(b)references in those amendments and in subsection (11) of that section to 30th November 1993 shall be read as references to the day on which the relevant time falls.

(11)This section shall have effect in relation to disposals made on or after 30th November 1993 and Schedule 12 to this Act (which gives transitional relief) shall have effect for the years 1993–94 and 1994–95.

94 Set-off of pre-entry losses.E+W+S+N.I.

(1)Schedule 7A to the M34Taxation of Chargeable Gains Act 1992 (set off of pre-entry losses) shall be amended as follows.

(2)In sub-paragraph (3)(a) of paragraph 2 (calculation of pre-entry proportion of loss), for “assumption applying by virtue of sub-paragraphs (4) and (5)” there shall be substituted “ assumptions applying by virtue of sub-paragraphs (4) to (6B) ”, and for sub-paragraph (7) of that paragraph there shall be substituted the following sub-paragraphs—

(6A)Notwithstanding anything in section 56(2), where in the case of the disposal of any pre-entry asset—

(a)any company has at any time between the relevant time and the time of the disposal acquired that asset or the equivalent asset, and

(b)the acquisition was either an acquisition in pursuance of a disposal on which there is treated by virtue of section 171 as having been neither a gain nor a loss accruing or an acquisition by virtue of which an asset is treated as the equivalent asset,

the items of relevant allowable expenditure and the times when those items shall be treated as having been incurred shall be determined for the purposes of this paragraph on the assumptions specified in sub-paragraph (6B) below.

(6B)Those assumptions are that—

(a)the company by reference to which the asset in question is a pre-entry asset, and

(b)the company mentioned in sub-paragraph (6A) above and every other company which has made an acquisition which, in relation to the disposal of that asset, falls within that sub-paragraph,

were the same person and, accordingly, that the pre-entry asset had been acquired by the company disposing of it at the time when it or the equivalent asset would have been treated for the purposes of this paragraph as acquired by the company mentioned in paragraph (a) above.

(7)In sub-paragraphs (5) to (6B) above the references to the equivalent asset, in relation to another asset acquired or disposed of by any company, are references to any asset which falls in relation to that company to be treated (whether by virtue of paragraph 1(8) above or otherwise) as the same as the other asset or which would fall to be so treated after applying, as respects other assets, the assumptions for which those sub-paragraphs provide.

(3)In paragraph 9(2)(c) (cases where a group is relevant if a company was a member of it in the accounting period in which it joined another relevant group), after “paragraph (a)” there shall be inserted “ or (b) ”.

(4)This section shall apply in relation to the making in respect of any loss of any deduction from a chargeable gain where either the gain or the loss is one accruing on or after 11th March 1994.

Annotations:

Marginal Citations

95 Commodity and financial futures.E+W+S+N.I.

(1)In section 143 of the M35Taxation of Chargeable Gains Act 1992 (commodity and financial futures and qualifying options), subsection (4) shall cease to have effect and for subsection (6) there shall be substituted the following subsections—

(6)In any case where, in the course of dealing in commodity or financial futures, a person has entered into a futures contract and—

(a)he has not closed out the contract (as mentioned in subsection (5) above), and

(b)he becomes entitled to receive or liable to make a payment, whether under the contract or otherwise, in full or partial settlement of any obligations under the contract,

then, for the purposes of this Act, he shall be treated as having disposed of an asset (namely, that entitlement or liability) and the payment received or made by him shall be treated as consideration for the disposal or, as the case may be, as incidental costs to him of making the disposal.

(7)Section 46 shall not apply to obligations under—

(a)a commodity or financial futures contract which is entered into by a person in the course of dealing in such futures on a recognised futures exchange; or

(b)a commodity or financial futures contract to which an authorised person or listed institution is a party.

(8)In this section—

  • authorised person” has the same meaning as in the Financial Services Act 1986, and

  • listed institution” has the same meaning as in section 43 of that Act.

(2)This section shall apply in relation to contracts entered into on or after 30th November 1993.

Annotations:

Marginal Citations

96 Cash-settled options.E+W+S+N.I.

(1)After section 144 of the M36Taxation of Chargeable Gains Act 1992 (options and forfeited deposits) there shall be inserted the following section—

144A Cash-settled options.

(1)In any case where—

(a)an option is exercised; and

(b)the nature of the option (or its exercise) is such that the grantor of the option is liable to make, and the person exercising it is entitled to receive, a payment in full settlement of all obligations under the option,

subsections (2) and (3) below shall apply in place of subsections (2) and (3) of section 144.

(2)As regards the grantor of the option—

(a)he shall be treated as having disposed of an asset (namely, his liability to make the payment) and the payment made by him shall be treated as incidental costs to him of making the disposal; and

(b)the grant of the option and the disposal shall be treated as a single transaction and the consideration for the option shall be treated as the consideration for the disposal.

(3)As regards the person exercising the option—

(a)he shall be treated as having disposed of an asset (namely, his entitlement to receive the payment) and the payment received by him shall be treated as the consideration for the disposal;

(b)the acquisition of the option (whether directly from the grantor or not) and the disposal shall be treated as a single transaction and the cost of acquiring the option shall be treated as expenditure allowable as a deduction under section 38(1)(a) from the consideration for the disposal; and

(c)for the purpose of computing the indexation allowance (if any) on the disposal, the cost of the option shall be treated (notwithstanding paragraph (b) above) as incurred when the option was acquired.

(4)In any case where subsections (2) and (3) above would apply as mentioned in subsection (1) above if the reference in that subsection to full settlement included a reference to partial settlement, those subsections and subsections (2) and (3) of section 144 shall both apply but with the following modifications—

(a)for any reference to the grant or acquisition of the option there shall be substituted a reference to the grant or acquisition of so much of the option as relates to the making and receipt of the payment or, as the case may be, the sale or purchase by the grantor; and

(b)for any reference to the consideration for, or the cost of or of acquiring, the option there shall be substituted a reference to the appropriate proportion of that consideration or cost.

(5)In this section “appropriate proportion” means such proportion as may be just and reasonable in all the circumstances.

(2)This section shall apply in relation to options granted on or after 30th November 1993.

Annotations:

Marginal Citations

97 Settlements with foreign element: information.E+W+S+N.I.

(1)The M37Taxation of Chargeable Gains Act 1992 shall be amended as mentioned in subsections (2) to (4) below.

(2)In Chapter II of Part III (settlements) the following section shall be inserted after section 98—

98A Settlements with foreign element: information.

Schedule 5A to this Act (which contains general provisions about information relating to settlements with a foreign element) shall have effect.

(3)The following Schedule shall be inserted after Schedule 5—

Section 98A.

SCHEDULE 5AE+W+S+N.I. Settlements with Foreign Element: Information

1In this Schedule “the commencement day” means the day on which the Finance Act 1994 was passed.

2(1)This paragraph applies if—

(a)a settlement was created before 19th March 1991,

(b)on or after the commencement day a person transfers property to the trustees otherwise than under a transaction entered into at arm’s length and otherwise than in pursuance of a liability incurred by any person before that day,

(c)the trustees are not resident or ordinarily resident in the United Kingdom at the time the property is transferred, and

(d)the transferor knows, or has reason to believe, that the trustees are not so resident or ordinarily resident.

(2)Before the expiry of the period of twelve months beginning with the relevant day, the transferor shall deliver to the Board a return which—

(a)identifies the settlement, and

(b)specifies the property transferred, the day on which the transfer was made, and the consideration (if any) for the transfer.

(3)For the purposes of sub-paragraph (2) above the relevant day is the day on which the transfer is made.

3(1)This paragraph applies if a settlement is created on or after the commencement day, and at the time it is created—

(a)the trustees are not resident or ordinarily resident in the United Kingdom, or

(b)the trustees are resident or ordinarily resident in the United Kingdom but fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.

(2)Any person who—

(a)is a settlor in relation to the settlement at the time it is created, and

(b)at that time fulfils the condition mentioned in sub-paragraph (3) below,

shall, before the expiry of the period of three months beginning with the relevant day, deliver to the Board a return specifying the particulars mentioned in sub-paragraph (4) below.

(3)The condition is that the person concerned is domiciled in the United Kingdom and is either resident or ordinarily resident in the United Kingdom.

(4)The particulars are—

(a)the day on which the settlement was created;

(b)the name and address of the person delivering the return;

(c)the names and addresses of the persons who are the trustees immediately before the delivery of the return.

(5)For the purposes of sub-paragraph (2) above the relevant day is the day on which the settlement is created.

4(1)This paragraph applies if a settlement is created on or after 19th March 1991, and at the time it is created—

(a)the trustees are not resident or ordinarily resident in the United Kingdom, or

(b)the trustees are resident or ordinarily resident in the United Kingdom but fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.

(2)Any person who—

(a)is a settlor in relation to the settlement at the time it is created,

(b)at that time does not fulfil the condition mentioned in sub-paragraph (3) below, and

(c)first fulfils that condition at a time falling on or after the commencement day,

shall, before the expiry of the period of twelve months beginning with the relevant day, deliver to the Board a return specifying the particulars mentioned in sub-paragraph (4) below.

(3)The condition is that the person concerned is domiciled in the United Kingdom and is either resident or ordinarily resident in the United Kingdom.

(4)The particulars are—

(a)the day on which the settlement was created;

(b)the name and address of the person delivering the return;

(c)the names and addresses of the persons who are the trustees immediately before the delivery of the return.

(5)For the purposes of sub-paragraph (2) above the relevant day is the day on which the person first fulfils the condition as mentioned in paragraph (c) of that sub-paragraph.

5(1)This paragraph applies if—

(a)the trustees of a settlement become at any time (the relevant time) on or after the commencement day neither resident nor ordinarily resident in the United Kingdom, or

(b)the trustees of a settlement, while continuing to be resident and ordinarily resident in the United Kingdom, become at any time (the relevant time) on or after the commencement day trustees who fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.

(2)Any person who was a trustee of the settlement immediately before the relevant time shall, before the expiry of the period of twelve months beginning with the relevant day, deliver to the Board a return specifying—

(a)the day on which the settlement was created,

(b)the name and address of each person who is a settlor in relation to the settlement immediately before the delivery of the return, and

(c)the names and addresses of the persons who are the trustees immediately before the delivery of the return.

(3)For the purposes of sub-paragraph (2) above the relevant day is the day when the relevant time falls.

6(1)Nothing in paragraph 2, 3, 4 or 5 above shall require information to be contained in the return concerned to the extent that—

(a)before the expiry of the period concerned the information has been provided to the Board by any person in pursuance of the paragraph concerned or of any other provision, or

(b)after the expiry of the period concerned the information falls to be provided to the Board by any person in pursuance of any provision other than the paragraph concerned.

(2)Nothing in paragraph 2, 3, 4 or 5 above shall require a return to be delivered if—

(a)before the expiry of the period concerned all the information concerned has been provided to the Board by any person in pursuance of the paragraph concerned or of any other provision, or

(b)after the expiry of the period concerned all the information concerned falls to be provided to the Board by any person in pursuance of any provision other than the paragraph concerned.

(4)In Schedule 5, paragraphs 11 to 14 (information) shall be omitted.

(5)Subsection (4) above shall have effect where the relevant day falls on or after the day on which this Act is passed.

(6)In the Table in section 98 of the M38Taxes Management Act 1970 (penalties) at the end of the second column there shall be inserted—

“ Paragraphs 2 to 6 of Schedule 5A to the 1992 Act. ”

Annotations:

Marginal Citations

Profit-related payE+W+S+N.I.

F14698. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F146S. 98 repealed (19.3.1997 with effect as mentioned in s. 61(2)(3), Sch. 18 Pt. VI(3), Notes 1, 2 in the repealing Act) by 1997 c. 16, ss. 61(2)(3), 113, Sch. 18 Pt. VI(3), Notes 1, 2

F14799. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F147S. 99 repealed (19.3.1997 with effect as mentioned in s. 61(2)(3), Sch. 18 Pt. VI(3), Notes 1, 2 in the repealing Act) by 1997 c. 16, ss. 61(2)(3), 113, Sch. 18 Pt. VI(3), Notes 1, 2

Profit sharing schemesE+W+S+N.I.

100 Relevant age for purpose of appropriate percentage.E+W+S+N.I.

(1)Schedule 10 to the Taxes Act 1988 (profit sharing schemes) shall be amended as follows.

(2)In paragraph 3 (the appropriate percentage for purposes of tax charge) the words from “In this paragraph” to the end of the paragraph shall be omitted.

(3)The following paragraph shall be inserted after paragraph 3—

3A(1)In paragraph 3 above the reference to the relevant age shall be construed as follows.

(2)Where the scheme is approved before 25th July 1991 and the event occurs before 30th November 1993, the relevant age is pensionable age.

(3)Where—

(a)the scheme is approved before 25th July 1991,

(b)the event occurs on or after 30th November 1993,

(c)the scheme defines the period of retention by reference to the age of 60 for both men and women, and

(d)the reference to that age is incorporated in the definition by virtue of an alteration approved by the Board under paragraph 4 of Schedule 9 before the event occurs,

the relevant age is 60.

(4)Where—

(a)the scheme is approved before 25th July 1991,

(b)the event occurs on or after 30th November 1993, and

(c)sub-paragraph (3) above does not apply,

the relevant age is pensionable age.

(5)Where the scheme is approved on or after 25th July 1991, the relevant age is the specified age.

101 Acceptance of qualifying corporate bonds for shares.E+W+S+N.I.

(1)Schedule 10 to the Taxes Act 1988 (profit sharing schemes) shall be amended as mentioned in subsections (2) to (4) below.

(2)In paragraph 1 (limitations on contractual obligations of participants) in sub-paragraph (1) the following paragraph shall be inserted after paragraph (c)—

(cc)directing the trustees to accept an offer of a qualifying corporate bond, whether alone or with cash or other assets or both, for his shares if the offer forms part of a general offer which is made as mentioned in paragraph (c) above; or.

(3)In paragraph 1 the following sub-paragraph shall be inserted after sub-paragraph (3)—

(4)In sub-paragraph (1)(cc) above “qualifying corporate bond” shall be construed in accordance with section 117 of the 1992 Act.

(4)The following paragraph shall be inserted after paragraph 5 (company reconstructions)—

5A(1)Paragraph 5(2) to (6) above apply where there occurs in relation to any of a participant’s shares (“the original holding”) a relevant transaction which would result in a new holding being equated with the original holding for the purposes of capital gains tax, were it not for the fact that what would be the new holding consists of or includes a qualifying corporate bond; and “relevant transaction” here means a transaction mentioned in Chapter II of Part IV of the 1992 Act.

(2)In paragraph 5(2) to (6) above as applied by this paragraph—

(a)references to a company reconstruction are to the transaction referred to in sub-paragraph (1) above;

(b)references to the new holding are to what would be the new holding were it not for the fact mentioned in sub-paragraph (1) above;

(c)references to the original holding shall be construed in accordance with sub-paragraph (1) above (and not paragraph 5(1));

(d)references to shares, in the context of the new holding, include securities and rights of any description which form part of the new holding.

(3)In sub-paragraph (1) above “qualifying corporate bond” shall be construed in accordance with section 117 of the 1992 Act.

(5)In paragraph 32(1) of Schedule 9 to the Taxes Act 1988 (requirements applicable to profit sharing schemes) for “or (c)” there shall be substituted “ , (c) or (cc) ”.

(6)In paragraph 33(a) of Schedule 9 to the Taxes Act 1988 (which provides that the trust instrument must contain certain provision by reference to new shares within the meaning of paragraph 5 of Schedule 10) the reference to paragraph 5 of Schedule 10 shall be construed as including a reference to that paragraph as applied by paragraph 5A.

(7)Subsections (2) and (3) above shall have effect where a direction is made on or after the day on which this Act is passed.

(8)Subsection (4) above shall have effect where what would be the new holding comes into being on or after the day on which this Act is passed; but this is subject to subsection (13) below.

(9)Subsection (5) above shall have effect in relation to any scheme not approved before the day on which this Act is passed.

(10)In a case where—

(a)a scheme is approved before the day on which this Act is passed, and

(b)on or after that day the trust instrument is altered in such a way that paragraph 32(1) of Schedule 9 to the Taxes Act 1988 would be fulfilled if subsection (5) above applied in relation to the scheme,

subsection (5) above shall apply in relation to the scheme with effect from the time the alteration is made.

(11)Subsection (6) above shall have effect in relation to any scheme not approved before the day on which this Act is passed.

(12)In a case where—

(a)a scheme is approved before the day on which this Act is passed, and

(b)on or after that day the trust instrument is altered in such a way that paragraph 33(a) of Schedule 9 to the Taxes Act 1988 would be fulfilled if subsection (6) above applied in relation to the scheme,

subsection (6) above shall apply in relation to the scheme with effect from the time the alteration is made.

(13)In a case where—

(a)a scheme is approved before the day on which this Act is passed,

(b)subsection (4) above would apply in relation to the scheme by virtue of subsection (8) above and apart from this subsection, and

(c)the trust instrument is not altered as mentioned in subsection (12)(b) above before what would be the new holding comes into being,

subsection (4) above shall not apply in relation to the scheme.

(14)Subsection (6) above shall not imply a contrary intention for the purposes of section 20(2) of the M39Interpretation Act 1978 in its application to other references to paragraph 5 of Schedule 10 to the Taxes Act 1988.

Annotations:

Marginal Citations

Employee share ownership trustsE+W+S+N.I.

102 Employee share ownership trusts.E+W+S+N.I.

Schedule 13 to this Act (which contains provisions about employee share ownership trusts) shall have effect.

Retirement benefits schemesE+W+S+N.I.

103 The administrator.E+W+S+N.I.

(1)The following section shall be inserted after section 611 of the Taxes Act 1988—

611AA Definition of the administrator.

(1)In this Chapter references to the administrator, in relation to a retirement benefits scheme, are to the person who is, or the persons who are, for the time being the administrator of the scheme by virtue of the following provisions of this section.

(2)Subject to subsection (7) below, where—

(a)the scheme is a trust scheme, and

(b)at any time the trustee, or any of the trustees, is or are resident in the United Kingdom,

the administrator of the scheme at that time shall be the trustee or trustees of the scheme.

(3)Subject to subsection (7) below, where—

(a)the scheme is a non-trust scheme, and

(b)at any time the scheme sponsor, or any of the scheme sponsors, is or are resident in the United Kingdom,

the administrator of the scheme at that time shall be the scheme sponsor or scheme sponsors.

(4)At any time when the trustee of a trust scheme is not resident in the United Kingdom or (if there is more than one trustee) none of the trustees is so resident, the trustee or trustees shall ensure that there is a person, or there are persons—

(a)resident in the United Kingdom, and

(b)appointed by the trustee or trustees to be responsible for the discharge of all duties relating to the scheme which are imposed on the administrator under this Chapter.

(5)At any time when the scheme sponsor of a non-trust scheme is not resident in the United Kingdom or (if there is more than one scheme sponsor) none of the scheme sponsors is so resident, the scheme sponsor or scheme sponsors shall ensure that there is a person, or there are persons—

(a)resident in the United Kingdom, and

(b)appointed by the scheme sponsor or scheme sponsors to be responsible for the discharge of all duties relating to the scheme which are imposed on the administrator under this Chapter.

(6)Without prejudice to subsections (4) and (5) above—

(a)the trustee or trustees of a trust scheme, or

(b)the scheme sponsor or scheme sponsors of a non-trust scheme,

may at any time appoint a person who is, or persons who are, resident in the United Kingdom to be responsible for the discharge of all duties relating to the scheme which are imposed on the administrator under this Chapter.

(7)Where at any time there is or are a person or persons—

(a)for the time being appointed under subsection (4), (5) or (6) above as regards a scheme, and

(b)resident in the United Kingdom,

the administrator of the scheme at that time shall be that person or those persons (and no other person).

(8)Any appointment under subsection (4), (5) or (6) above—

(a)must be in writing, and

(b)if made after the time when the scheme is established, shall constitute an alteration of the scheme for the purposes of section 591B(2).

(9)In this section—

(a)references to a trust scheme are to a retirement benefits scheme established under a trust or trusts;

(b)references to the trustee or trustees, in relation to a trust scheme and to a particular time, are to the person who is the trustee, or the persons who are the trustees, of the scheme at that time;

(c)references to a non-trust scheme are to a retirement benefits scheme not established under a trust or trusts, and

(d)references to the scheme sponsor or scheme sponsors, in relation to a retirement benefits scheme and to a particular time, are references to any person who established the scheme and is in existence at that time or, if more than one, all such persons.

(2)In consequence of subsection (1) above, in section 612(1) of the Taxes Act 1988 (interpretation of Chapter I of Part XIV) the definition of “administrator” shall cease to have effect.

(3)This section—

(a)so far as it relates to section 591B(1) of the Taxes Act 1988, shall apply in relation to notices given on or after the day on which this Act is passed;

(b)so far as it relates to section 593(3) of that Act, shall apply in relation to contributions paid on or after that day;

(c)so far as it relates to section 596A(3) of that Act, shall apply in relation to benefits received on or after that day;

(d)so far as it relates to sections 598(2) and (4), 599(3) and 599A(2) of that Act, shall apply in relation to payments made on or after that day;

(e)so far as it relates to section 602(1) and (2) of that Act and regulations made under section 602, shall apply in relation to amounts becoming recoverable on or after that day;

(f)so far as it relates to section 604(1) of that Act, shall apply in relation to applications made on or after that day;

(g)so far as it relates to section 605(1) and (4) of that Act, shall apply in relation to notices given on or after that day.

104 Default of administrator etc.E+W+S+N.I.

(1)The following section shall be substituted for section 606 of the Taxes Act 1988—

606 Default of administrator etc.

(1)This section applies in relation to a retirement benefits scheme if at any time—

(a)there is no administrator of the scheme, or

(b)the person who is, or all of the persons who are, the administrator of the scheme cannot be traced, or

(c)the person who is, or all of the persons who are, the administrator of the scheme is or are in default for the purposes of this section.

(2)If the scheme is a trust scheme, then—

(a)if subsection (1)(b) or (c) above applies and at the time in question the condition mentioned in subsection (3) below is fulfilled, the trustee or trustees shall at that time be responsible for the discharge of all duties imposed on the administrator under this Chapter (whenever arising) and liable for any tax due from the administrator in the administrator’s capacity as such (whenever falling due);

(b)if subsection (1)(a) above applies, or subsection (1)(b) or (c) above applies and at the time in question the condition mentioned in subsection (3) below is not fulfilled, the employer shall at that time be so responsible and liable;

and paragraph (b) above shall apply to a person in his capacity as the employer even if he is also the administrator, or a trustee, of the scheme.

(3)The condition is that there is at least one trustee of the scheme who—

(a)can be traced,

(b)is resident in the United Kingdom, and

(c)is not in default for the purposes of this section.

(4)If the scheme is a non-trust scheme, then—

(a)if subsection (1)(b) or (c) above applies and at the time in question the condition mentioned in subsection (5) below is fulfilled, the scheme sponsor or scheme sponsors shall at that time be responsible for the discharge of all duties imposed on the administrator under this Chapter (whenever arising) and liable for any tax due from the administrator in the administrator’s capacity as such (whenever falling due);

(b)if subsection (1)(a) above applies, or subsection (1)(b) or (c) above applies and at the time in question the condition mentioned in subsection (5) below is not fulfilled, the employer shall at that time be so responsible and liable;

and paragraph (b) above shall apply to a person in his capacity as the employer even if he is also the administrator of the scheme, or a scheme sponsor.

(5)The condition is that there is at least one scheme sponsor who—

(a)can be traced,

(b)is resident in the United Kingdom, and

(c)is not in default for the purposes of this section.

(6)Where at any time—

(a)paragraph (b) or (c) of subsection (1) above applies in relation to a scheme, and

(b)a person is by virtue of this section responsible for the discharge of any duties, or liable for any tax, in relation to the scheme,

then at that time the person or persons mentioned in paragraph (b) or (as the case may be) paragraph (c) of subsection (1) above shall not, by reason only of being the administrator of the scheme, be responsible for the discharge of those duties or liable for that tax.

(7)Where the scheme is a trust scheme and the employer is not a contributor to the scheme, subsection (2) above shall have effect as if—

(a)for “the employer”, in the first place where those words occur, there were substituted “the scheme sponsor or scheme sponsors”, and

(b)for “the employer”, in the second place where those words occur, there were substituted “scheme sponsor”.

(8)Where the scheme is a non-trust scheme and the employer is not a contributor to the scheme, subsection (4) above shall have effect as if paragraph (b) and the words after that paragraph were omitted.

(9)No liability incurred under this Chapter—

(a)by the administrator of a scheme, or

(b)by a person by virtue of this section,

shall be affected by the termination of a scheme or by its ceasing to be an approved scheme or to be an exempt approved scheme.

(10)Where by virtue of this section a person becomes responsible for the discharge of any duties, or liable for any tax, the Board shall, as soon as is reasonably practicable, notify him of that fact; but any failure to give such notification shall not affect that person’s being responsible or liable by virtue of this section.

(11)A person is in default for the purposes of this section if—

(a)he has failed to discharge any duty imposed on him under this Chapter, or

(b)he has failed to pay any tax due from him by virtue of this Chapter,

and (in either case) the Board consider the failure to be of a serious nature.

(12)References in this section to a trust scheme, a non-trust scheme, trustees and scheme sponsors shall be construed in accordance with section 611AA.

(13)References in this section to the employer include, where the employer is resident outside the United Kingdom, references to any branch or agent of the employer in the United Kingdom, and in this subsection “branch or agent” has the meaning given by section 118(1) of the Management Act.

(14)This section does not apply for the purposes of sections 602 and 603 and Schedule 22.

(2)In consequence of subsection (1) above, in section 607(3)(b)(iii) of the Taxes Act 1988 for the words “section 606(1) and (3)” there shall be substituted “ section 606(2)(b), (4)(b), (7), (8) and (13) ”.

(3)This section shall apply where the time in question falls on or after the day on which this Act is passed.

105 Information.E+W+S+N.I.

(1)The Taxes Act 1988 shall be amended in accordance with subsections (2) and (3) below.

(2)In section 605 (information) at the beginning there shall be inserted the following subsections—

(1A)The Board may by regulations make any of the following provisions—

(a)provision requiring prescribed persons to furnish to the Board at prescribed times information relating to any of the matters mentioned in subsection (1B) below;

(b)provision enabling the Board to serve a notice requiring prescribed persons to furnish to the Board, within a prescribed time, particulars relating to any of those matters;

(c)provision enabling the Board to serve a notice requiring prescribed persons to produce to the Board, within a prescribed time, documents relating to any of those matters;

(d)provision enabling the Board to serve a notice requiring prescribed persons to make available for inspection on behalf of the Board books, documents and other records, being books, documents and records which relate to any of those matters;

(e)provision requiring prescribed persons to preserve for a prescribed time books, documents and other records, being books, documents and records which relate to any of those matters.

(1B)The matters referred to in subsection (1A) above are—

(a)an approved scheme;

(b)a relevant statutory scheme;

(c)an annuity contract by means of which benefits provided under an approved scheme or a relevant statutory scheme have been secured;

(d)a retirement benefits scheme which is not an approved scheme but in relation to which an application for approval for the purposes of this Chapter has been made.

(1C)A person who fails to comply with regulations made under subsection (1A)(e) above shall be liable to a penalty not exceeding £3,000.

(1D)Regulations under subsection (1A) above may make different provision for different descriptions of case.

(1E)In subsection (1A) above “prescribed” means prescribed by regulations made under that subsection.

(3)Subsections (1) and (2) of section 605 shall cease to have effect.

(4)In section 98 of the M40Taxes Management Act 1970 (penalties for failure to provide information etc.)—

(a)in the first column of the Table after the entry “regulations under section 602;” there shall be inserted the entry “ regulations under section 605(1A)(b) to (d); ”;

(b)in the first column of the Table for the entry “section 605(1), (2), (3)(b) and (4);” there shall be substituted the entry “ section 605(3)(b) and (4); ”;

(c)in the second column of the Table after the entry “regulations under section 602;” there shall be inserted the entry “ regulations under section 605(1A)(a); ”.

(5)Subsections (3) and (4)(b) above shall come into force on such day as the Treasury may by order appoint.

Annotations:

Subordinate Legislation Made

P3S. 105(5) power exercised: 1.1.1996 appointed by S.I. 1995/3125, art. 2

Commencement Information

I16S 105 wholly in force at 1.1.1996; s. 105 in force at Royal Assent except for s. 105(3)(4)(b) see s. 105(5); s. 105(3)(4)(b) in force at 1.1.1996 by S.I. 1995/3125, art. 2

Marginal Citations

106 False statements etc.E+W+S+N.I.

(1)The following section shall be inserted after section 605 of the Taxes Act 1988—

605A False statements etc.

(1)A person who fraudulently or negligently makes a false statement or false representation on making an application for the approval for the purposes of this Chapter of—

(a)a retirement benefits scheme, or

(b)an alteration in such a scheme,

shall be liable to a penalty not exceeding £3,000.

(2)In a case where—

(a)a person fraudulently or negligently makes a false statement or false representation, and

(b)in consequence that person, or any other person, obtains relief from or repayment of tax under this Chapter,

the person mentioned in paragraph (a) above shall be liable to a penalty not exceeding £3,000.

(2)This section shall apply in relation to things done or omitted after the day on which this Act is passed.

107 Discretionary approval.E+W+S+N.I.

(1)Section 591 of the Taxes Act 1988 (discretionary approval of retirement benefits schemes) shall be amended as follows.

(2)In subsection (2)(g) (annuity contracts)—

(a)after “relevant benefits” there shall be inserted “ falling within subsection (2A) below ”;

(b)the words “approved by the Board and” shall be omitted.

(3)The following subsection shall be inserted after subsection (2)—

(2A)Relevant benefits fall within this subsection if they correspond with benefits that could be provided by an approved scheme, and for this purpose—

(a)a hypothetical scheme (rather than any particular scheme) is to be taken, and

(b)benefits provided by a scheme directly (rather than by means of an annuity contract) are to be taken.

(4)This section shall apply in relation to a scheme not approved by virtue of section 591 of the Taxes Act 1988 before 1st July 1994.

108 Taxation of benefits of non-approved schemes.E+W+S+N.I.

(1)Section 596A of the Taxes Act 1988 (taxation of benefits under non-approved schemes) shall be amended as follows.

(2)In subsection (4), at the beginning there shall be inserted “ Subject to subsection (9) below ”.

(3)For subsection (6) there shall be substituted—

(6)Tax shall not be charged under this section in the case of—

(a)any pension or annuity which is chargeable to tax under Schedule E by virtue of section 19(1); or

(b)any pension or other benefit chargeable to tax under section 58.

(4)In subsection (7)—

(a)for the words “by virtue of section 19(1)1”, in the first place where they occur, there shall be substituted “ as mentioned in subsection (6)(a) above ”;

(b)in paragraph (a), for the words “subsection (6) above” there shall be substituted “ subsection (6)(a) above ”; and

(c)in paragraph (b) for the words “section 19(1)1” there shall be substituted “ section 19(1) ”.

(5)For subsections (8) and (9) there shall be substituted—

(8)Subject to subsection (9) below, tax shall not be charged under this section (or section 19(1) or 148) in the case of a lump sum where—

(a)the employer has paid any sum or sums with a view to the provision of any relevant benefits under a retirement benefits scheme;

(b)an employee has been assessed to tax in respect of the sum or sums by virtue of section 595(1); and

(c)the lump sum is provided under the scheme to the employee, any person falling within section 595(5) in relation to the employee or any other individual designated by the employee.

(9)Where any of the income or gains accruing to the scheme under which the lump sum is provided is not brought into charge to tax, tax shall be charged under this section on the amount of the lump sum received less any deduction applicable under subsection (10) or (11) below.

(10)Subject to subsection (11) below, the deduction applicable is the aggregate of—

(a)any sum or sums in respect of which the employee has been assessed as mentioned in subsection (8)(b) above, and

(b)any sum or sums paid by the employee,

which in either case were paid by way of contribution to the provision of the lump sum.

(11)Where—

(a)the lump sum is provided under the scheme on the disposal of a part of any asset or the surrender of any part of or share in any rights in any asset, and

(b)the employee, any person falling within section 595(5) in relation to the employee or any person connected with the employee has any right to receive or any expectation of receiving a further lump sum (or further lump sums) under the scheme on a further disposal of any part of the asset or a further surrender of any part of or share in any rights in the asset,

the deduction applicable shall be determined in accordance with the formula in subsection (12) below.

(12)The formula is—

(13)For the purposes of the formula in subsection (12) above—

D is the deduction applicable;

S is the aggregate amount of any sum or sums of a description mentioned in paragraphs (a) and (b) of subsection (10) above;

A is the amount of the lump sum received in relation to which the deduction applicable falls to be determined;

B is the market value of the asset in relation to which the disposal or surrender occurred, on the assumption that the valuation is made immediately before the disposal or surrender.

(14)An individual may not claim that a deduction is applicable in relation to a lump sum more than once.

(15)For the purposes of subsections (8) and (9) above, it shall be assumed unless the contrary is shown—

(a)that no sums have been paid, and the employee has not been assessed in respect of any sums paid, with a view to the provision of relevant benefits;

(b)that the income or gains accruing to a scheme under which the benefit is provided are not brought into charge to tax; and

(c)that no deduction is applicable under subsection (10) or (11) above.

(16)Section 839 shall apply for the purposes of subsection (11) above.

(17)In subsection (13) above “market value” shall be construed in accordance with section 272 of the 1992 Act.

(6)The amendments of section 596A made by this section shall have effect in relation to retirement benefit schemes—

(a)entered into on or after 1st December 1993, or

(b)entered into before that day if the scheme is varied on or after that day with a view to the provision of the benefit.

(7)Subject to subsection (8) below, in the Taxes Act 1988—

(a)in section 188(1), paragraph (c), and

(b)in section 189, paragraph (b),

(exemption from tax where recipient of benefit or lump sum chargeable to tax in respect of sums paid or treated as paid with a view to the provision of the benefit or lump sum) shall cease to have effect in relation to any benefit provided or lump sum paid on or after 1st December 1993.

(8)The repeals made by subsection (7) above shall not have effect in relation to any benefit provided or lump sum paid on or after 1st December 1993 in pursuance of a scheme or arrangement entered into before that day unless the scheme or arrangement is varied on or after that day with a view to the provision of the benefit or lump sum.

AnnuitiesE+W+S+N.I.

109 Annuities derived from personal pension schemes.E+W+S+N.I.

(1)In Chapter IV of Part XIV of the Taxes Act 1988 (personal pension schemes) the following shall be inserted after section 648—

Annuities: charge to taxE+W+S+N.I.
648A Annuities: charge under Schedule E.

(1)Subject to subsection (2) below, where funds held for the purposes of an approved personal pension scheme are used to acquire an annuity—

(a)the annuity shall be charged to tax under Schedule E and section 203 shall apply accordingly;

(b)the annuity shall not be charged to tax under Case III of Schedule D.

(2)As respects any approved personal pension scheme the Board may direct that, until such date as the Board may specify, annuities acquired with funds held for the purposes of the scheme shall be charged to tax as annual payments under Case III of Schedule D, and tax shall be deductible under sections 348 and 349 accordingly.

(2)This section shall apply in relation to payments which are made under annuities on or after 6th April 1995.

110 Annuities derived from retirement benefits schemes.E+W+S+N.I.

(1)In section 597 of the Taxes Act 1988 (pensions paid under retirement benefits schemes generally charged under Schedule E) the following subsection shall be inserted after subsection (2)—

(3)Without prejudice to subsection (1) above, where funds held for the purposes of any scheme which is approved or is being considered for approval under this Chapter are used to acquire an annuity—

(a)the annuity shall be charged to tax under Schedule E and section 203 shall apply accordingly;

(b)the annuity shall not be charged to tax under Case III of Schedule D.

(2)This section shall apply in relation to payments which are made under annuities on or after the day on which this Act is passed.

Authorised unit trustsE+W+S+N.I.

F148111. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F148S. 111 repealed (29.4.1996 with effect as mentioned in Sch. 41 Pt. V(1) Note 1 of the amending Act) by 1996 c. 8, ss. 73, 205, Sch. 6 para. 28, Sch. 41 Pt. V(1) Note 1

112 Distributions of authorised unit trusts.E+W+S+N.I.

Schedule 14 to this Act (distributions of authorised unit trusts) shall have effect.

113 Umbrella schemes.E+W+S+N.I.

(1)In section 468 of the Taxes Act 1988 (authorised unit trusts), in subsection (6) (definitions) at the beginning there shall be inserted “ Subject to subsections (7) to (9) below ”.

(2)After that subsection there shall be added—

(7)Each of the parts of an umbrella scheme shall be regarded for the purposes of this Chapter as an authorised unit trust and the scheme as a whole shall not be so regarded.

(8)In this section, “umbrella scheme” means a unit trust scheme—

(a)which provides arrangements for separate pooling of the contributions of the participants and the profits or income out of which payments are to be made to them;

(b)under which the participants are entitled to exchange rights in one pool for rights in another; and

(c)in the case of which an order under section 78 of the Financial Services Act 1986 is in force;

and any reference to a part of an umbrella scheme is a reference to such of the arrangements as relate to a separate pool.

(9)In relation to a part of an umbrella scheme, any reference—

(a)to investments subject to the trusts of an authorised unit trust, shall have effect as a reference to such of the investments as under the arrangements form part of the separate pool to which the part of the umbrella scheme relates; and

(b)to a unit holder, shall have effect as a reference to a person for the time being having rights in that separate pool.

(3)In section 469 of the Taxes Act 1988 (other unit trusts)—

(a)in subsection (1)(a) (application of section) for the words “that is not an authorised unit trust” there shall be substituted “ that is neither an authorised unit trust nor an umbrella scheme ”; and

(b)after subsection (6) there shall be inserted—

(6A)In this section “umbrella scheme” has the same meaning as in section 468.

(4)Subject to what follows, the amendments made by subsections (1) to (3) above shall have effect on and after 1st April 1994 in relation to unit trust schemes and their participants.

(5)Nothing in those amendments shall have effect before the relevant date in relation to a unit trust scheme which immediately before 1st April 1994 falls within the definition of an umbrella scheme contained in those amendments.

(6)In this section “the relevant date”, means, in relation to a unit trust scheme, the day after the end of the last distribution period of the scheme which commences before 1st April 1994.

(7)On and after the relevant date, the amendments made by subsections (1) to (3) above shall have effect in relation to a scheme—

(a)to which subsection (5) above applies, and

(b)which immediately before the relevant date falls within the definition of an umbrella scheme contained in those amendments,

subject to subsections (8) to (10) below.

(8)The amendments made by subsections (1) to (3) above shall not prevent the trustees of the scheme on and after the relevant date—

(a)making a claim under section 239(3) of the Taxes Act 1988 (carry back of surplus advance corporation tax) in respect of accounting periods of the scheme ending before the relevant date; or

(b)continuing anything which immediately before that date was in the process of being done for the purposes of tax in relation to such accounting periods.

(9)Where immediately before the relevant date the trustees of the scheme are entitled to carry forward an excess under—

(a)section 75(3) of the Taxes Act 1988 (carry forward of management expenses and sums treated as management expenses), or

(b)section 241 of that Act (carry forward of franked investment income),

then, on the relevant date, that right shall be translated into a right in each successor company to carry forward a proportionate part of that excess.

(10)Where immediately before the relevant date the trustees of the scheme have an amount of surplus advance corporation tax which—

(a)has not been dealt with under subsection (3) of section 239 of the Taxes Act 1988, and

(b)is due to be treated under subsection (4) of that section as if it were advance corporation tax paid by them in their next accounting period,

then, on and after the relevant date, a proportionate part of that amount shall be treated as paid under subsection (4) of that section by each successor company in its first accounting period.

(11)In subsections (9) and (10) above “successor company” means, in relation to a scheme, each part of the scheme which on the relevant date becomes an authorised unit trust.

Exchange gains and lossesE+W+S+N.I.

114 Assets and liabilities.E+W+S+N.I.

F149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F149S. 114 repealed (with effect as mentioned in s. 79(3) and Sch. 23 of the amending Act) by Finance Act 2002 (c. 23), s. 141, Sch. 40 Pt. 3(10)

115 Currency contracts: net payments.E+W+S+N.I.

F150. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F150S. 115 repealed (with effect as mentioned in s. 79(3) and Sch. 23 of the amending Act) by Finance Act 2002 (c. 23), s. 141, Sch. 40 Pt. 3(10)

116 Currency contracts: matching.E+W+S+N.I.

F151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F151S. 116 repealed (with effect as mentioned in s. 79(3) and Sch. 23 of the amending Act) by Finance Act 2002 (c. 23), s. 141, Sch. 40 Pt. 3(10)

Capital allowancesE+W+S+N.I.

F152117. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F152S. 117 repealed (22.3.2001 with effect as mentioned in s. 579(1) of the repealing Act) by 2001 c. 2, s. 580, Sch. 4

118 Expenditure on machinery or plant: notification.E+W+S+N.I.

F153(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)For the purposes of—

[F154F155(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) section 44(4) of the Finance Act 1971 (provision corresponding to section 25(1) applicable to earlier chargeable periods),]

expenditure which has not formed part of a person’s qualifying expenditure for a previous chargeable period may not form part of his qualifying expenditure for a subsequent chargeable period unless the machinery or plant on which the expenditure was incurred belongs to that person at some time in that subsequent period F156. . .

F153(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F153(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F153S. 118(1)-(5)(7)-(9) repealed (28.7.2000 with effect as mentioned in s. 73(2) of the repealing Act) by 2000 c. 17, ss. 73(1)(a), 156, Sch. 40 Pt. II(8), Note 3

F154S. 118(6)(a)(b) substituted for words in s. 118(6) (28.7.2000 with effect as mentioned in s. 73(2) of the amending Act) by 2000 c. 17, s. 73(1)(b)

F155S. 118(6)(a) repealed (22.3.2001 with effect as mentioned in s. 579(1) of the repealing Act) by 2001 c. 2, s. 580, Sch. 4

F156Words in s. 118(6) repealed (3.5.1994 with effect as mentioned in ss. 211(2), 218(1)(b) of the amending Act) by 1994 c. 9, s. 258, Sch. 26 Pt. V(24), Note 5

119 Transactions between connected persons.E+W+S+N.I.

F157(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Paragraph 4(2) of Schedule 7 to the M41Capital Allowances Act 1968 (provision corresponding to section 158(2)) shall be assumed always to have had effect subject to amendments corresponding to those made to section 158(2) of the 1990 Act by section 117(2) and (3) of the Finance Act 1993.

Annotations:

Amendments (Textual)

F157S. 119(1) repealed (22.3.2001 with effect as mentioned in s. 579(1) of the repealing Act) by 2001 c. 2, s. 580, Sch. 4

Marginal Citations

F158120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F158S. 120 repealed (22.3.2001 with effect as mentioned in s. 579(1) of the repealing Act) by 2001 c. 2, s. 580, Sch. 4

F159121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W+S+N.I.
Annotations:

Amendments (Textual)

F159S. 121 repealed (22.3.2001 with effect as mentioned in s. 579(1) of the repealing Act) by 2001 c. 2, s. 580, Sch. 4

SecuritiesE+W+S+N.I.

122 Sale and repurchase of securities: deemed manufactured payments.E+W+S+N.I.

After section 737 of the Taxes Act 1988 there shall be inserted the following sections—

737A Sale and repurchase of securities: deemed manufactured payments.

(1)This section applies where on or after the appointed day a person (the transferor) agrees to sell any securities, and under the same or any related agreement the transferor or another person connected with him—

(a)is required to buy back the securities, or

(b)acquires an option, which he subsequently exercises, to buy back the securities;

but this section does not apply unless the conditions set out in subsection (2) below are fulfilled.