Background
43.The changes introduced in this Section and Schedule implement recent decisions of the Court of Justice of the European Union in cases where the compatibility of Member State exit charges with Article 49 of the Treaty on the Functioning of the European Union was considered. Article 49 is concerned with ensuring the Freedom of Establishment of EU nationals and is extended by Article 54 to companies or firms formed in accordance with the law of a Member State having their registered office, central administration or principal place of business within the EU or EEA. Consequently, these changes apply only to companies that are nationals of the EU or EEA and who are seeking to exercise their rights of establishment within the EU/EEA.
44.This Section and Schedule were published in draft on 11 December 2012, and its provisions apply to allow applications for exit charge payment plans from that date. A consultation document, including details of the legislation was published on the same date. Consultation on the draft legislation was limited to consideration of matters such as the administrative impacts of the reporting requirements imposed by certain options available under the legislation.
45.Following consultation, the draft legislation has been amended primarily to:
restructure the provisions into a new Schedule 3ZB to the TMA 1970;
provide for exit charge payment plans to be available to non-resident companies of other EU or EEA states that trade in the UK through a PE;
include charges relating to the revaluation of trading stock when a company ceases to be UK resident, or a non-resident company ceases to trade in the UK though a PE.
