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PART 1Income tax, corporation tax and capital gains tax

CHAPTER 1Charge, rates etc

Income tax

1Charge, rates, basic rate limit and personal allowance for 2014-15

(1)Income tax is charged for the tax year 2014-15.

(2)For that tax year—

(a)the basic rate is 20%,

(b)the higher rate is 40%, and

(c)the additional rate is 45%.

(3)For that tax year—

(a)the amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced with “£31,865”, and

(b)the amount specified in section 35(1) of that Act (personal allowance for those born after 5 April 1948) is replaced with “£10,000”.

(4)Accordingly for that tax year—

(a)section 21 of that Act (indexation of limits), so far as relating to the basic rate limit, does not apply, and

(b)section 57 of that Act (indexation of allowances), so far as relating to the amount specified in section 35(1) of that Act, does not apply.

2Basic rate limit for 2015-16 and personal allowances from 2015

(1)For the tax year 2015-16—

(a)the amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced with “£31,785”, and

(b)the amount specified in section 35(1) (personal allowance) is replaced with “£10,500”.

(2)Accordingly, for that tax year—

(a)section 21 of that Act (indexation of limits), so far as relating to the basic rate limit, does not apply, and

(b)section 57 (indexation of allowances), so far as relating to the amount specified in section 35(1), does not apply.

(3)In section 34(1)(a) of that Act (introduction), omit “, 36”.

(4)In section 35 of that Act (personal allowance for those born after 5 April 1948)—

(a)in subsection (1)(a), for “1948” substitute “1938”, and

(b)in the heading, for “1948” substitute “1938”.

(5)Omit section 36 of that Act (personal allowance for those born after 5 April 1938 but before 6 April 1948).

(6)In section 45(4)(b) of that Act (marriages before 5 December 2005), omit “36(2) or”.

(7)In section 46(4)(b) of that Act (marriages and civil partnerships on or after 5 December 2005), omit “36(2) or”.

(8)In section 57 of that Act (indexation of allowances)—

(a)in subsection (1)(a), for “1948” substitute “1938”, and

(b)in subsection (4) omit “36(2),”.

(9)The amendments made by subsections (3) to (8) have effect for the tax year 2015-16 and subsequent tax years.

3The starting rate for savings and the savings rate limit

(1)In section 7 of ITA 2007 (the starting rate for savings) for “10%” substitute “0%”.

(2)For the tax year 2015-16 the amount specified in section 12(3) of that Act (starting rate limit for savings) is replaced with “£5,000”.

(3)Accordingly section 21 of that Act (indexation of limits), so far as relating to the starting rate limit for savings, does not apply for that tax year.

(4)In section 852 of that Act (power to make regulations disapplying duty to deduct sums representing income tax), in subsection (2)(a), after “made” insert “or is unlikely to be liable to pay any income tax on that person’s savings income for that tax year”.

(5)The amendments made by subsections (1) and (4) have effect for the tax year 2015-16 and subsequent tax years.

4Indexation of limits and allowances under ITA 2007

(1)ITA 2007 is amended as follows.

(2)In section 21 (indexation of the basic rate limit and starting rate limit for savings)—

(a)in each of subsections (1), (3) and (3A), for “retail prices index” substitute “consumer prices index”, and

(b)after subsection (5) insert—

(6)In this section “consumer prices index” means the all items consumer prices index published by the Statistics Board.

(3)In section 57 (indexation of allowances)—

(a)in each of subsections (2), (3) and (4), for “retail prices index” substitute “consumer prices index”, and

(b)after subsection (6) insert—

(7)In this section “consumer prices index” means the all items consumer prices index published by the Statistics Board.

(4)The amendments made by subsections (2) and (3) have effect for the tax year 2015-16 and subsequent tax years.

Corporation tax

5Charge for financial year 2015

Corporation tax is charged for the financial year 2015.

6Small profits rate and fractions for financial year 2014

(1)For the financial year 2014 the small profits rate is—

(a)20% on profits of companies other than ring fence profits, and

(b)19% on ring fence profits of companies.

(2)For the purposes of Part 3 of CTA 2010, for that year—

(a)the standard fraction is 1/400th, and

(b)the ring fence fraction is 11/400ths.

(3)In subsection (1) “ring fence profits” has the same meaning as in Part 8 of that Act (see section 276 of that Act).

7Rates for ring fence profits and abolition of small profits rate for non-ring fence profits

Schedule 1—

(a)sets the corporation tax rates for ring fence profits for the financial year 2015 and future years, and

(b)contains provision about the abolition of the small profits rate for profits other than ring fence profits.

Capital gains tax

8Annual exempt amount for 2014-15

(1)For the tax year 2014-15 the amount specified in section 3(2) of TCGA 1992 (annual exempt amount) is replaced with “£11,000”.

(2)Accordingly section 3(3) of that Act (indexation of annual exempt amount) does not apply for that tax year.

9Annual exempt amount for 2015-16 onwards

(1)For the tax year 2015-16 and subsequent tax years the amount specified in section 3(2) of TCGA 1992 (annual exempt amount) is replaced with “£11,100”.

(2)Section 3(3) of that Act (indexation of annual exempt amount) does not apply in relation to the tax year 2015-16 (but subsection (1) does not override section 3(3) of that Act for subsequent tax years).

Capital allowances

10Temporary increase in annual investment allowance

(1)In relation to expenditure incurred during the period beginning with the start date and ending with 31 December 2015, section 51A of CAA 2001 (entitlement to annual investment allowance) has effect as if in subsection (5) the amount specified as the maximum allowance (which in the absence of this section would be £250,000 in relation to expenditure incurred before 1 January 2015 and £25,000 in relation to expenditure incurred on or after that date) were £500,000.

(2)Schedule 2 contains—

(a)provision about chargeable periods which straddle the start date or 1 January 2016, and

(b)amendments of FA 2013.

(3)In this section and that Schedule “the start date” means—

(a)for corporation tax purposes, 1 April 2014, and

(b)for income tax purposes, 6 April 2014.

CHAPTER 2Income tax: general

Exemptions and reliefs

11Tax relief for married couples and civil partners

(1)ITA 2007 is amended as set out in subsections (2) to (8).

(2)After section 55 insert—

CHAPTER 3ATransferable tax allowance for married couples and civil partners
Introduction
55ATax reduction under Chapter

(1)This Chapter contains provisions about the entitlement of a spouse or civil partner to a tax reduction in a case where the other party to the marriage or civil partnership has elected for a reduced personal allowance.

(2)A tax reduction under this Chapter is given effect at Step 6 of the calculation in section 23.

(3)For the effect of section 809B (claim for remittance basis to apply) applying to an individual for a tax year, see section 809G (no entitlement to tax reduction).

Tax reduction
55BTax reduction: entitlement

(1)An individual is entitled to a tax reduction for a tax year of the appropriate percentage of the transferable amount if the conditions in subsection (2) are met.

(2)The conditions are that—

(a)the individual is married to, or in a civil partnership with, a person who makes an election under section 55C for the purposes of this section which is in force for the tax year (“the individual’s spouse or civil partner”),

(b)the individual is not, for the tax year, liable to tax at a rate other than the basic rate, the dividend ordinary rate or the starting rate for savings,

(c)the individual meets the requirements of section 56 (residence) for the tax year, and

(d)neither the individual nor the individual’s spouse or civil partner makes a claim for the tax year under section 45 (married couple’s allowance: marriages before 5 December 2005) or section 46 (married couple’s allowance: marriages and civil partnerships on or after 5 December 2005).

(3)“The appropriate percentage” is the basic rate at which the individual would be charged to income tax for the tax year to which the reduction relates.

(4)“The transferable amount”—

(a)for the tax year 2015-16, is £1,050, and

(b)for the tax year 2016-17 and subsequent tax years, is 10% of the amount of personal allowance specified in section 35(1) for the tax year to which the reduction relates.

(5)If the transferable amount calculated in accordance with subsection (4)(b) would otherwise not be a multiple of £10, it is to be rounded up to the nearest amount which is a multiple of £10.

(6)If an individual is entitled to a tax reduction under subsection (1), the personal allowance to which the individual’s spouse or civil partner is entitled under section 35 or 37 is reduced for the tax year by the transferable amount.

(7)If an individual who is entitled to a tax reduction for a tax year under subsection (1) dies during that tax year, subsection (6) is to be ignored (but this does not affect the individual’s entitlement to the tax reduction).

Election to reduce personal allowance
55CElection to reduce personal allowance

(1)An individual may make an election for the purposes of section 55B if—

(a)the individual is married to, or in a civil partnership with, the same person—

(i)for the whole or part of the tax year concerned, and

(ii)when the election is made,

(b)the individual is entitled to a personal allowance under section 35 or 37 for that tax year,

(c)assuming the individual’s personal allowance was reduced as set out in section 55B(6), the individual would not for that year be liable to tax at a rate other than the basic rate, the dividend ordinary rate or the starting rate for savings, and

(d)where the individual meets the requirements of section 56 (residence) for the tax year by reason of meeting the condition in subsection (3) of that section, the individual meets the condition in subsection (2) of this section.

(2)The condition is that the individual’s hypothetical net income for the tax year concerned is less than the amount of the personal allowance to which the individual is entitled for that tax year under section 35 or 37.

(3)For the purposes of subsection (2), an individual’s “hypothetical net income” is the amount that would be that individual’s net income calculated at Step 2 of section 23 if that individual’s income tax liability were calculated on the basis that the individual—

(a)was UK resident for the tax year concerned (and the year was not a split year),

(b)was domiciled in the United Kingdom for that tax year,

(c)in that tax year, did not fall to be regarded as resident in a country outside the United Kingdom for the purposes of double taxation arrangements having effect at the time, and

(d)for that tax year, had made a claim for any available relief under section 6 of TIOPA 2010 (as required by subsection (6) of that section).

(4)An individual’s hypothetical net income for a tax year is, to the extent that it is not sterling, to be calculated by reference to the average exchange rate for the year ending on 31 March in the tax year concerned.

55DProcedure for elections under section 55C

(1)An election under section 55C is to be made not more than 4 years after the end of the tax year to which it relates.

(2)If the conditions in paragraphs (a) to (d) of section 55C(1) continue to be met, an election continues in force in each subsequent tax year unless—

(a)subsection (3) applies,

(b)the election is withdrawn, or

(c)it ceases to have effect under subsection (5).

(3)Where an election is made after the end of the tax year to which it relates, the election has effect for the tax year to which it relates only (and accordingly does not continue in force for subsequent tax years under subsection (2)).

(4)An election may be withdrawn only by a notice given by the individual by whom the election was made.

(5)If an individual’s spouse or civil partner does not obtain a tax reduction under section 55B in respect of a tax year in which an election is in force the election ceases to have effect for subsequent tax years; but this does not prevent an individual making a further election for the purposes of section 55B(2)(a) (whether or not in relation to the same marriage or civil partnership).

(6)The withdrawal of an election under subsection (4) does not, except in the cases dealt with by subsection (7), have effect until the tax year after the one in which the notice is given.

(7)The withdrawal of an election under subsection (4) has effect for the tax year in which the notice is given if—

(a)in a case where the individual concerned met the condition in section 55C(1)(a) by reason of being married, the marriage has come to an end in that tax year, or

(b)in a case where the individual concerned met the condition in section 55C(1)(a) by reason of being in a civil partnership, the civil partnership has come to an end in that tax year.

(8)For the purposes of subsection (7)(a), a marriage comes to an end if any of the following is made in respect of it—

(a)a decree absolute of divorce, a decree of nullity of marriage or a decree of judicial separation, or

(b)in Scotland, a decree of divorce, a declarator of nullity or a decree of separation.

(9)For the purposes of subsection (7)(b), a civil partnership comes to an end if any of the following is made in respect of it—

(a)a dissolution order or nullity order, which has been made final,

(b)a separation order, or

(c)in Scotland, a decree of dissolution, a declarator of nullity or a decree of separation.

(10)A notice under subsection (4) must—

(a)be given to an officer of Revenue and Customs, and

(b)must be in the form specified by the Commissioners for Her Majesty’s Revenue and Customs.

(11)Paragraph 3(1)(b) of Schedule 1A to TMA 1970 (amendment of claims and elections) does not apply to an election under section 55C.

Supplementary
55ELimitation on number of tax reductions and elections

(1)An individual is not entitled to more than one tax reduction under section 55B for a tax year (regardless of whether the individual is a party to more than one marriage or civil partnership in the tax year).

(2)An individual is not entitled to have more than one election for the purposes of section 55B which operates for a tax year (regardless of whether the individual is a party to more than one marriage or civil partnership in the tax year).

(3)In section 26 (tax reductions), in subsection (1)(a), after the entry relating to Chapter 3 of Part 3 insert—

(4)In section 31 (total income: supplementary), in subsection (2), after “basic” insert “rate”.

(5)In section 33 (overview of Part)—

(a)in subsection (3), after “partners” insert “where a party to the marriage or civil partnership is born before 6 April 1935”,

(b)after that subsection insert—

(3A)Chapter 3A provides for a transferable tax allowance for married couples and civil partners.,

(c)in subsection (4), in the opening words, for “and 3” substitute “, 3 and 3A”,

(d)in subsection (4)(a), after “Chapter 3” insert “or 3A”, and

(e)in subsection (4)(b), for “those allowances and tax reductions” substitute “the allowances under Chapter 2 and tax reductions under Chapter 3”.

(6)In the heading for Chapter 3 of Part 3 after “partners” insert “: persons born before 6 April 1935”.

(7)In section 56 (residence), in subsection (1)(b), after “Chapter 3” insert “or 3A”.

(8)In section 809G (claim for remittance basis: effect on allowances), in subsection (2)—

(a)omit the “or” following paragraph (b), and

(b)after paragraph (b) insert—

(ba)any tax reduction under Chapter 3A of that Part (transferable tax allowance for married couples and civil partners), or.

(9)TMA 1970 is amended as set out in subsections (10) and (11).

(10)In section 42 (procedure for making claims)—

(a)in subsection (10), after “above” insert “and subject to subsection (10A) below”, and

(b)after subsection (10) insert—

(10A)Subsection (2) above does not apply in relation to an election under section 55C of ITA 2007 (election to transfer allowance to spouse or civil partner).

(11)In section 43A (further assessments: claims etc), in subsection (2A) after paragraph (a) insert—

(aa)section 55C of ITA 2007 (election to transfer allowance to spouse or civil partner),.

(12)The amendments made by this section have effect for the tax year 2015-16 and subsequent tax years.

12Recommended medical treatment

(1)Part 4 of ITEPA 2003 (exemptions) is amended as follows.

(2)In Chapter 11 (miscellaneous exemptions), after section 320B insert—

Recommended medical treatment
320CRecommended medical treatment

(1)No liability to income tax arises in respect of—

(a)the provision to an employee of recommended medical treatment, or

(b)the payment or reimbursement, to or in respect of an employee, of the cost of such treatment,

if that provision, payment or reimbursement is not pursuant to relevant salary sacrifice arrangements or relevant flexible remuneration arrangements.

(2)But subsection (1) does not apply in a tax year if, and to the extent that, the value of the exemption in that year exceeds £500.

(3)Medical treatment is “recommended” if it is provided to the employee in accordance with a recommendation which—

(a)is made to the employee as part of occupational health services provided to the employee by a service provided—

(i)under section 2 of the Employment and Training Act 1973 (arrangements for the purpose of assisting persons to retain employment etc), or

(ii)by, or in accordance with arrangements made by, the employer,

(b)is made for the purpose of assisting the employee to return to work after a period of absence due to injury or ill health, and

(c)meets any other requirements specified in regulations made by the Treasury.

(4)Regulations under subsection (3)(c) may, in particular, specify that the recommendation must be one given after the employee has been assessed as unfit for work—

(a)for at least the specified number of consecutive days, and

(b)in the specified manner by a person of a specified description.

(5)The Treasury may by order amend subsection (3)(a) so as to add, amend or remove a reference to any enactment.

(6)“The value of the exemption”, in a tax year, is an amount equal to the sum of—

(a)all earnings within section 62 (earnings), and

(b)all earnings which are treated as such under the benefits code,

in respect of which subsection (1) would prevent liability to income tax from arising in the tax year disregarding subsection (2).

(7)In this section—

(3)In section 266 (exemption of non-cash vouchers for exempt benefits), in subsection (1), omit the “or” at the end of paragraph (d) and after paragraph (e) insert , or

(f)section 320C (recommended medical treatment);.

(4)The amendments made by this section have effect in accordance with provision contained in an order made by the Treasury.

(5)Section 1014(4) of ITA 2007 (orders etc subject to annulment) does not apply in relation to an order under subsection (4).

13Relief for loan interest: loan to buy interest in close company

(1)Chapter 1 of Part 8 of ITA 2007 (relief for interest payments) is amended as follows.

(2)In section 392 (loan to buy interest in close company), in subsection (4)—

(a)after “section 393—” insert—

(b)in the definition of “close investment-holding company”, for “section 34 of CTA 2010” substitute “section 393A”.

(3)After section 393 insert—

393AClose investment-holding companies

(1)For the purposes of sections 392 and 393, a close company (“the candidate company”) is a close investment-holding company in an accounting period unless throughout the period it exists wholly or mainly for one or more of the permitted purposes set out in subsection (2).

There is an exception to this rule in subsection (5).

(2)The candidate company exists for a permitted purpose so far as it exists—

(a)for the purpose of carrying on a trade or trades on a commercial basis,

(b)for the purpose of making investments in land, or estates or interests in land, in cases where the land is, or is intended to be, let commercially (see subsection (3)),

(c)for the purpose of holding shares in and securities of, or making loans to, one or more companies each of which—

(i)is a qualifying company, or

(ii)falls within subsection (4),

(d)for the purpose of co-ordinating the administration of two or more qualifying companies,

(e)for the purpose of the making of investments as mentioned in paragraph (b)—

(i)by one or more qualifying companies, or

(ii)by a company which has control of the candidate company, or

(f)for the purpose of a trade or trades carried on on a commercial basis—

(i)by one or more qualifying companies, or

(ii)by a company which has control of the candidate company.

(3)For the purposes of subsection (2)(b), any letting of land is taken to be commercial unless the land is let to—

(a)a person connected with the candidate company (“a connected person”), or

(b)a person who is—

(i)the spouse or civil partner of a connected person,

(ii)a relative of a connected person, or the spouse or civil partner of a relative of a connected person,

(iii)the relative of the spouse or civil partner of a connected person, or

(iv)the spouse or civil partner of a relative of a spouse or civil partner of the connected person.

(4)A company falls within this subsection (see subsection (2)(c)(ii)) if—

(a)it is under the control of the candidate company or of a company which has control of the candidate company, and

(b)it exists wholly or mainly for the purpose of holding shares in or securities of, or of making loans to, one or more qualifying companies.

(5)If a company is wound up and was not a close investment-holding company in the accounting period that ends (by virtue of section 12(2) of CTA 2009) immediately before the winding up starts, the company is not treated for the purposes of sections 392 and 393 as being a close investment-holding company in the subsequent accounting period.

(6)In this section “qualifying company” means a company which—

(a)is under the control of the candidate company or of a company which has control of the candidate company, and

(b)exists wholly or mainly for either or both of the purposes mentioned in subsection (2)(a) and (b).

(7)In this section—

(4)Accordingly—

(a)in section 383(2)(c), after “close company” insert “etc”,

(b)in the italic heading before section 392, after “close company” insert “etc”;

(c)in the heading of section 392, after “close company” insert “etc”.

(5)The amendments made by this section have effect in relation to interest paid in the tax year 2014-15 or any subsequent tax year.

14Relief for loan interest: loan to buy interest in employee-controlled company

(1)In section 397 of ITA 2007 (eligibility requirements for interest on loans within section 396), for subsection (2)(a) substitute—

(a)an unquoted company that is resident in the United Kingdom or another EEA state and is not resident outside the European Economic Area, and.

(2)The amendment made by this section has effect in relation to interest paid in the tax year 2014-15 or any subsequent tax year.

Other provisions

15Restrictions on remittance basis

Schedule 3 makes provision in relation to the remittance basis.

16Treatment of agency workers

(1)Chapter 7 of Part 2 of ITEPA 2003 (income tax treatment of agency workers) is amended as follows.

(2)For section 44 (treatment of workers supplied by agencies) substitute—

44Treatment of workers supplied by agencies

(1)This section applies if—

(a)an individual (“the worker”) personally provides services (which are not excluded services) to another person (“the client”),

(b)there is a contract between—

(i)the client or a person connected with the client, and

(ii)a person other than the worker, the client or a person connected with the client (“the agency”), and

(c)under or in consequence of that contract—

(i)the services are provided, or

(ii)the client or any person connected with the client pays, or otherwise provides consideration, for the services.

(2)But this section does not apply if—

(a)it is shown that the manner in which the worker provides the services is not subject to (or to the right of) supervision, direction or control by any person, or

(b)remuneration receivable by the worker in consequence of providing the services constitutes employment income of the worker apart from this Chapter.

(3)If this section applies—

(a)the worker is to be treated for income tax purposes as holding an employment with the agency, the duties of which consist of the services the worker provides to the client, and

(b)all remuneration receivable by the worker (from any person) in consequence of providing the services is to be treated for income tax purposes as earnings from that employment,

but this is subject to subsections (4) to (6).

(4)Subsection (5) applies if (whether before or after the worker begins to provide the services)—

(a)the client provides the agency with a fraudulent document which is intended to constitute evidence that, by virtue of subsection (2)(a), this section does not or will not apply, or

(b)a relevant person provides the agency with a fraudulent document which is intended to constitute evidence that, by virtue of subsection (2)(b), this section does not or will not apply.

(5)In relation to services the worker provides to the client after the fraudulent document is provided—

(a)subsection (3) does not apply,

(b)the worker is to be treated for income tax purposes as holding an employment with the client or (as the case may be) with the relevant person, the duties of which consist of the services, and

(c)all remuneration receivable by the worker (from any person) in consequence of providing the services is to be treated for income tax purposes as earnings from that employment.

(6)In subsections (4) and (5) “relevant person” means a person, other than the client, the worker or a person connected with the client or with the agency, who—

(a)is resident, or has a place of business, in the United Kingdom, and

(b)is party to a contract with the agency or a person connected with the agency, under or in consequence of which—

(i)the services are provided, or

(ii)the agency, or a person connected with the agency, makes payments in respect of the services.

(3)In section 45 (arrangements with agencies)—

(a)in paragraph (a), omit “(“the agency”)”, and

(b)in paragraph (b), omit “with the agency”.

(4)In section 46 (cases involving unincorporated bodies etc)—

(a)in subsection (1)(a), omit “, or is under an obligation to personally provide,”, and

(b)in subsection (2), for the words from “under” to “contract” substitute “in consequence of the worker providing the services”.

(5)After section 46 insert—

Anti-avoidance
46AAnti-avoidance

(1)This section applies if—

(a)an individual (“W”) personally provides services (which are not excluded services) to another person (“C”),

(b)a third person (“A”) enters into arrangements the main purpose, or one of the main purposes, of which is to secure that the services are not treated for income tax purposes under section 44 as duties of an employment held by W with A, and

(c)but for this section, section 44 would not apply in relation to the services.

(2)In subsection (1)(b) “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(3)Subject to subsection (2) of section 44, that section applies in relation to the services.

(4)For the purposes of subsection (3)

(a)W is to be treated as being the worker,

(b)C is to be treated as being the client,

(c)A is to be treated as being the agency, and

(d)section 44 has effect as if subsections (4) to (6) of that section were omitted.

(6)In section 47 (interpretation of Chapter 7), omit subsection (1).

(7)In Chapter 3 of Part 11 of that Act (PAYE: special types of payer or payee), section 688 (agency workers) is amended as follows.

(8)For subsection (1) substitute—

(1)This section applies if the remuneration receivable by an individual in consequence of providing services falls to be treated under section 44 (agency workers) as earnings from an employment.

(1A)The relevant provisions have effect as if the individual held the employment with or under the deemed employer, subject to subsection (2).

(1B)For the purposes of sections 687, 689 and 689A, if—

(a)a person other than the deemed employer or an intermediary of the deemed employer makes a payment of, or on account of, PAYE income of the individual, and

(b)the payment is not within subsection (2),

the person is to be treated as making the payment as an intermediary of the deemed employer.

(9)In subsection (2)—

(a)for paragraph (a) (and the “and” at the end of that paragraph) substitute—

(a)the client is not the deemed employer, and, and

(b)for “agency” substitute “deemed employer”.

(10)In subsection (3), for the words from “subsections” to “44;” substitute this section—

(11)The amendments made by this section are treated as having come into force on 6 April 2014.

17Recovery under PAYE regulations from certain company officers

(1)In Part 4 of the Income Tax (Pay As You Earn) Regulations 2003 (S.I. 2003/2682) (payments, returns and information), after Chapter 3 (PAYE records) insert—

CHAPTER 3ACertain debts of companies under Chapter 7 of Part 2 of ITEPA (agencies)
97ZAInterpretation of Chapter 3A

In this Chapter—

97ZBLiability of directors for relevant PAYE debts

(1)This regulation applies in relation to an amount of relevant PAYE debt of a company if the company does not deduct, account for or (as the case may be) pay that amount by the time by which the company is required to do so.

(2)HMRC may serve a notice (a “personal liability notice”) on any person who was, on the relevant date, a director of the company—

(a)specifying the amount of relevant PAYE debt in relation to which this regulation applies (“the specified amount”), and

(b)requiring the director to pay to HMRC—

(i)the specified amount, and

(ii)specified interest on that amount.

(3)The interest specified in the personal liability notice—

(a)is to be at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 86 of TMA, and

(b)is to run from the date the notice is served.

(4)A director who is served with a personal liability notice is liable to pay to HMRC the specified amount and the interest specified in the notice within 30 days beginning with the day the notice is served.

(5)If HMRC serve personal liability notices on more than one director of the company in respect of the same amount of relevant PAYE debt, the directors are jointly and severally liable to pay to HMRC the specified amount and the interest specified in the notices.

97ZCAppeals in relation to personal liability notices

(1)A person who is served with a personal liability notice in relation to an amount of relevant PAYE debt of a company may appeal against the notice.

(2)A notice of appeal must—

(a)be given to HMRC within 30 days beginning with the day the personal liability notice is served, and

(b)specify the grounds of the appeal.

(3)The grounds of appeal are —

(a)that all or part of the specified amount does not represent an amount of relevant PAYE debt, of the company, to which regulation 97ZB applies, or

(b)that the person was not a director of the company on the relevant date.

(4)But a person may not appeal on the ground mentioned in paragraph (3)(a) if it has already been determined, on an appeal by the company, that—

(a)the specified amount is a relevant PAYE debt of the company, and

(b)the company did not deduct, account for, or (as the case may be) pay the debt by the time by which the company was required to do so.

(5)Subject to paragraph (6), on an appeal that is notified to the tribunal, the tribunal is to uphold or quash the personal liability notice.

(6)In a case in which the ground of appeal mentioned in paragraph (3)(a) is raised, the tribunal may also reduce or increase the specified amount so that it does represent an amount of relevant PAYE debt, of the company, to which regulation 97ZB applies.

97ZDWithdrawal of personal liability notices

(1)A personal liability notice is withdrawn if the tribunal quashes it.

(2)An officer of Revenue and Customs may withdraw a personal liability notice if the officer considers it appropriate to do so.

(3)If a personal liability notice is withdrawn, HMRC must give notice of that fact to the person upon whom the notice was served.

97ZERecovery of sums due under personal liability notice: application of Part 6 of TMA

(1)For the purposes of this Chapter, Part 6 of TMA (collection and recovery) applies as if—

(a)the personal liability notice were an assessment, and

(b)the specified amount, and any interest on that amount under regulation 97ZB(2)(b)(ii), were income tax charged on the director upon whom the notice is served,

and that Part of that Act applies with the modification in paragraph (2) and any other necessary modifications.

(2)Summary proceedings for the recovery of the specified amount, and any interest on that amount under regulation 97ZB(2)(b)(ii), may be brought in England and Wales or Northern Ireland at any time before the end of the period of 12 months beginning with the day after the day on which personal liability notice is served.

97ZFRepayment of surplus amounts

(1)This regulation applies if—

(a)one or more personal liability notices are served in respect of an amount of relevant PAYE debt of a company, and

(b)the amounts paid to HMRC (whether by directors upon whom notices are served or the company) exceed the aggregate of the specified amount and any interest on it under regulation 97ZB(2)(b)(ii).

(2)HMRC is to repay the difference on a just and equitable basis and without unreasonable delay.

(3)HMRC is to pay interest on any sum repaid.

(4)The interest—

(a)is to be at the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 824 of ICTA, and

(b)is to run from the date the amounts paid to HMRC come to exceed the aggregate mentioned in subsection (1)(b).

(2)In Chapter 3 of Part 11 of ITEPA 2003 (PAYE: special types of payer or payee), section 688 (agency workers) (as amended by section 16) is amended as follows.

(3)After subsection (2) insert—

(2A)PAYE regulations may make provision for, or in connection with, the recovery from a director or officer of a company, in such circumstances as may be specified in the regulations, of—

(a)any amount the company is, by virtue of section 44(4) to (6) or 46A, to deduct, or account for, in accordance with PAYE regulations, and

(b)any interest or penalty, in respect of an amount within paragraph (a), for which the company is liable.

(4)In subsection (3)—

(a)after the definition of “the client” insert—

(b)after the definition of “the deemed employer” insert—

(5)The amendment made by subsection (1) is to be treated as having been made by the Commissioners for Her Majesty’s Revenue and Customs in exercise of the power conferred by subsection (2A) of section 688 of ITEPA 2003 (inserted by subsection (3)).

(6)Chapter 3A of Part 4 of the Income Tax (Pay As You Earn) Regulations 2003 (inserted by subsection (1)) has effect in relation to relevant PAYE debts that are to be deducted, accounted for or paid on or after 6 April 2014.

18Employment intermediaries: information powers and related penalties

(1)After section 716A of ITEPA 2003 insert—

Employment intermediaries: information powers
716BEmployment intermediaries to keep, preserve and provide information etc

(1)For purposes connected with Chapter 7 of Part 2 (treatment of workers supplied by agencies) or Part 11 (PAYE), the Commissioners for Her Majesty’s Revenue and Customs may by regulations make provision for, or in connection with, requiring a specified employment intermediary—

(a)to keep and preserve specified information, records or documents for a specified period;

(b)to provide Her Majesty’s Revenue and Customs with specified information, records or documents within a specified period or at specified times.

(2)An “employment intermediary” is a person who makes arrangements under or in consequence of which—

(a)an individual works, or is to work, for a third person, or

(b)an individual is, or is to be, remunerated for work done for a third person.

(3)For the purposes of subsection (2), an individual works for a person if—

(a)the individual performs any duties of an employment for that person (whether or not the individual is employed by that person), or

(b)the individual provides, or is involved in the provision of, a service to that person.

(4)In subsection (1) “specified” means specified or described in regulations made under this section.

(5)Regulations under this section may—

(a)make different provision for different cases or different purposes, and

(b)make incidental, consequential, supplementary or transitional provision or savings.

(2)Section 98 of TMA 1970 (penalties: special returns etc) is amended as follows.

(3)After subsection (4E) insert—

(4F)If a person fails to furnish any information or produce any document or record in accordance with regulations under section 716B of ITEPA 2003, subsection (1) has effect as if—

(a)for “£300” there were substituted “£3,000”, and

(b)for “£60” there were substituted “£600”.

(4)In the second column of the Table, at the appropriate place insert “Regulations under section 716B of ITEPA 2003.”.

(5)The amendments made subsections (2) to (4) have effect from such day as the Treasury may appoint by order made by statutory instrument.

19Payments by employer on account of tax where deduction not possible

(1)In section 222 of ITEPA 2003 (payments by employer on account of tax where deduction not possible), in subsection (1)(c), for “beginning with the relevant date” substitute “after the end of the tax year in which the relevant date falls”.

(2)The amendment made by this section has effect in relation to payments of income treated as made on or after 6 April 2014.

20PAYE obligations of UK intermediary in cases involving non-UK employer

(1)Section 689 of ITEPA 2003 (PAYE: employee of non-UK employer) is amended as follows.

(2)After subsection (1A) insert—

(1B)Subsection (1C) applies if—

(a)the employee worked for the relevant person during the period under or in consequence of arrangements made between the relevant person and a third person,

(b)the third person did not make the payment of, or on account of, PAYE income of the employee, and

(c)PAYE regulations would apply to the third person if the third person were to make a payment of, or on account of, PAYE income of the employee.

(1C)The third person is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount given by subsection (3).

(3)In subsection (2), for “The” substitute “If subsection (1C) does not apply, the”.

(4)The amendments made by this section are treated as having come into force on 6 April 2014.

21Oil and gas workers on the continental shelf: operation of PAYE

(1)ITEPA 2003 is amended as follows.

(2)In section 222 (payments by employer on account of tax where deduction not possible)—

(a)in subsection (1)(a), after “689” insert “, 689A”, and

(b)in subsection (3), after “employer)” insert “or section 689A(3) (deemed payments of PAYE income of continental shelf workers by person other than employer)”.

(3)In section 421L (persons to whom certain duties to provide information and returns apply)—

(a)in subsection (3), after paragraph (b) insert—

(ba)if the employee in question is a continental shelf worker and PAYE regulations do not apply to the employer in question, any person who is a relevant person in relation to the employee in question,, and

(b)after subsection (5) insert—

(5A)In subsection (3)(ba) “continental shelf worker” and “relevant person” have the meaning given by section 689A(11) (PAYE: oil and gas workers on the continental shelf).

(4)In section 689 (provision about PAYE for employees of non-UK employers), after subsection (1) insert—

(1ZA)But this section does not apply if section 689A applies or would apply but for a certificate issued under regulations made under subsection (7) of that section.

(5)After that section insert—

689AOil and gas workers on the continental shelf

(1)This section applies if—

(a)any payment of, or on account of, PAYE income of a continental shelf worker in respect of a period is made by a person who is the employer or an intermediary of the employer or of the relevant person,

(b)PAYE regulations do not apply to the person making the payment or, if that person makes the payment as an intermediary of the employer or of the relevant person, to the employer, and

(c)income tax and any relevant debts are not deducted, or not accounted for, in accordance with PAYE regulations by the person making the payment or, if that person makes the payment as an intermediary of the employer or of the relevant person, by the employer.

(2)Subject to subsection (5), subsection (1)(a) does not apply in relation to a payment so far as the sum paid is employment income under Chapter 2 of Part 7A.

(3)The relevant person is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the continental shelf worker of an amount equal to the amount given by subsection (4).

(4)The amount referred to is—

(a)if the amount of the payment actually made is an amount to which the recipient is entitled after deduction of income tax and any relevant debts under PAYE regulations, the aggregate of the amount of the payment and the amount of any income tax due and any relevant debts deductible, and

(b)in any other case, the amount of the payment.

(5)If, by virtue of any of sections 687A and 693 to 700, an employer would be treated for the purposes of PAYE regulations (if they applied to the employer) as making a payment of any amount to a continental shelf worker, this section has effect as if—

(a)the employer were also to be treated for the purposes of this section as making an actual payment of that amount, and

(b)paragraph (a) of subsection (4) were omitted.

(6)For the purposes of this section a payment of, or on account of, PAYE income of a continental shelf worker is made by an intermediary of the employer or of the relevant person if it is made—

(a)by a person acting on behalf of the employer or the relevant person and at the expense of the employer or the relevant person or a person connected with the employer or the relevant person, or

(b)by trustees holding property for any persons who include, or a class of persons which includes, the continental shelf worker.

(7)PAYE regulations may make provision for, or in connection with, the issue by Her Majesty’s Revenue and Customs of a certificate to a relevant person in respect of one or more continental shelf workers—

(a)confirming that, in respect of payments of, or on account of, PAYE income of the continental shelf workers specified or described in the certificate, income tax and any relevant debts are being deducted, or accounted for, as mentioned in subsection (1)(c), and

(b)disapplying this section in relation to payments of, or on account of, PAYE income of those workers while the certificate is in force.

(8)Regulations under subsection (7) may, in particular, make provision about—

(a)applying for a certificate;

(b)the circumstances in which a certificate may, or must, be issued or cancelled;

(c)the form and content of a certificate;

(d)the effect of a certificate (including provision modifying the effect mentioned in subsection (7)(b) or specifying further effects);

(e)the effect of cancelling a certificate.

(9)Subsection (10) applies if—

(a)there is more than one relevant person in relation to a continental shelf worker, and

(b)in consequence of the same payment within subsection (1)(a), each of them is treated under subsection (3) as making a payment of PAYE income of the worker.

(10)If one of the relevant persons complies with section 710 (notional payments: accounting for tax) in respect of the payment that person is treated as making, the other relevant persons do not have to comply with that section in respect of the payments they are treated as making.

(11)In this section—

(6)In section 690 (employee non-resident etc), in subsection (10)—

(a)after “689”, in the first place it appears, insert “or 689A”, and

(b)after “689”, in the second place it appears, insert “or (as the case may be) 689A”.

(7)In section 710 (notional payments: accounting for tax), in subsection (2)—

(a)in paragraph (a)—

(i)after “689” insert “, 689A”, and

(ii)for “or 689(3)(a)” substitute “, 689(3)(a) or 689A(4)(a)”, and

(b)in paragraph (b), after “689(2)” insert “or 689A(3)”.

(8)In section 689A (inserted by subsection (5)), at the end insert—

(12)The Treasury may by regulations modify the definitions of “continental shelf worker” and “relevant person”, as the Treasury thinks appropriate.

(13)Regulations under subsection (12) may—

(a)make different provision for different cases or different purposes,

(b)make incidental, consequential, supplementary or transitional provision or savings, and

(c)amend this section.

(9)The amendment made by subsection (5) is treated as having come into force—

(a)on 26 March 2014 for the purposes of making regulations under section 689A(7) of ITEPA 2003, and

(b)on 6 April 2014 for remaining purposes.

(10)The amendments made by subsections (2), (4), (6) and (7) are treated as having come into force on 6 April 2014.

22Threshold for benefit of loan to be treated as earnings

(1)In section 180 of ITEPA 2003 (threshold for benefit of a loan to be treated as earnings), in subsections (1)(a) and (b), (2) and (3), for “£5,000” (wherever occurring) substitute “£10,000”.

(2)The amendments made by this section have effect for the tax year 2014-15 and subsequent tax years (and apply to loans made at any time).

23Taxable benefits: cars, vans and related benefits

(1)In section 114 of ITEPA 2003 (cars, vans and related benefits), omit subsection (3) (which prevents a charge by virtue of Chapter 6 of Part 3 of that Act where an amount constitutes earnings by virtue of any other provision).

(2)The amendment made by this section has effect for the tax year 2014-15 and subsequent tax years.

24Cars: the appropriate percentage

(1)Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans and related benefits) is amended as follows.

(2)In section 133 (how to determine the appropriate percentage), in subsection (2)—

(a)at the end of paragraph (a) insert “or”,

(b)omit paragraph (c) and the “or” before it, and

(c)for “to 141” substitute “and 140”.

(3)Section 139 (cars with a CO2 figure: the appropriate percentage) is amended in accordance with subsections (4) to (6).

(4)In subsection (2) —

(a)in paragraph (a) for “5%” substitute “7%”,

(b)in paragraph (aa) for “9%” substitute “11%”, and

(c)in paragraph (b) for “13%” substitute “15%”.

(5)In subsection (3), for “14%” substitute “16%”.

(6)In subsection (7), omit paragraph (a) and the “and” after it.

(7)Section 140 (cars without a CO2 figure: the appropriate percentage) is amended in accordance with subsections (8) to (10).

(8)In subsection (2), in the Table —

(a)for “15%” substitute “16%”, and

(b)for “25%” substitute “27%”.

(9)In subsection (3)(a), for “5%” substitute “7%”.

(10)In subsection (5), omit paragraph (a) and the “and” after it.

(11)Omit section 141 (diesel cars: the appropriate percentage).

(12)Section 142 (car first registered before 1st January 1998: the appropriate percentage) is amended in accordance with subsections (13) and (14).

(13)In subsection (2), in the Table —

(a)for “15%” substitute “16%”,

(b)for “22%” substitute “27%”, and

(c)for “32%” substitute “37%”.

(14)In subsection (3), for “32%” substitute “37%”.

(15)In section 170(4) (power to reduce value of appropriate percentage by regulations), for the words “to 141” substitute “and 140”.

(16)In consequence, section 23(4) and (5)(b) of FA 2013 is omitted.

(17)The amendments made by this section have effect for the tax year 2016-17 and subsequent tax years.

25Cars and vans: payments for private use

(1)In section 144 of ITEPA 2003 (deduction for payments for private use: cars), for subsection (1)(b) substitute—

(b)pays that amount in that year.

(2)In section 158 of that Act (reduction for payments for private use: vans), for subsection (1)(b) substitute—

(b)pays that amount in that year.

(3)The amendments made by this section have effect for the tax year 2014-15 and subsequent tax years.

CHAPTER 3Corporation tax: general

26Release of debts: stabilisation powers under Banking Act 2009

(1)Section 322 of CTA 2009 (release of debts: cases where credits not required to be brought into account) is amended as follows.

(2)In subsection (2), for “condition A, B or C” substitute “any of conditions A to D”.

(3)After subsection (5) insert—

(5A)Condition D is that the liability is released in consequence of the exercise of a stabilisation power under Part 1 of the Banking Act 2009.

(4)The amendments made by this section have effect in relation to releases of liabilities on or after 26 November 2013.

27Holdings treated as rights under loan relationships

(1)CTA 2009 is amended as follows.

(2)In section 465(3) (list of provisions under which certain distributions are not excluded from Part 5) before paragraph (a) insert—

(za)section 490(2) (holdings in OEICs, unit trusts and offshore funds treated as rights under creditor relationships),.

(3)In section 490 (holding in an OEIC, unit trust or offshore fund treated as rights under a creditor relationship) for subsection (2) substitute—

(2)The Corporation Tax Acts have effect for the accounting period in accordance with subsection (3) as if—

(a)the relevant holding were rights under a creditor relationship of the company, and

(b)any distribution in respect of the relevant holding were not a distribution (and accordingly is within Part 5).

(4)Omit section 490(4) and (5) (which are superseded by the new section 490(2)(b)).

(5)For section 492 (rules about tax calculations in avoidance cases where holding comes within section 490) substitute—

492Holding coming within section 490: calculation to undo avoidance

(1)Subsection (2) applies if—

(a)section 490 applies for an accounting period of a company to a relevant holding held by the company,

(b)a relevant fund enters into any arrangements, or arrangements are entered into that in whole or part relate to a relevant fund, and

(c)the main purpose or one of the main purposes of the arrangements is to obtain a tax advantage for a person.

(2)The company must make adjustments to counteract any tax advantage connected in any way with the relevant holding that would (ignoring this section) be obtained by the company, or any other person, directly or indirectly in consequence of the arrangements or their being entered into.

(3)The arrangements may be ones entered into at a time when the company does not hold the relevant holding; and any person referred to in subsection (1)(c) need not be identified when the arrangements are entered into.

(4)The adjustments required by subsection (2) are such as are just and reasonable.

(5)In this section—

(6)In section 495 (meaning of “qualifying holdings”)—

(a)in subsection (1)—

(i)for “would itself fail” substitute “itself fails”, and

(ii)omit “, even on the assumption in subsection (2)”, and

(b)omit subsection (2).

(7)The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2014.

(8)For the purposes of subsection (7), an accounting period beginning before, and ending on or after, 1 April 2014 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.

(9)An apportionment for the purposes of subsection (8) must be made in accordance with section 1172 of CTA 2010 (time basis) or, if that method produces a result that is unjust or unreasonable, on a just and reasonable basis.

28De-grouping charges (loan relationships etc)

(1)CTA 2009 is amended as follows.

(2)In each of sections 345 and 346 (loan relationships: transferee leaving group)—

(a)in subsection (2), omit “If condition A or B is met,”, and

(b)omit subsections (3) to (5).

(3)In each of sections 631 and 632 (derivative contracts: transferee leaving group)—

(a)in subsection (2), omit “If condition A or B is met,”, and

(b)omit subsections (3) and (4).

(4)An amendment made by this section has effect where the cessation of membership of the relevant group occurs on or after 1 April 2014.

29Disguised distribution arrangements involving derivative contracts

(1)In Chapter 11 of Part 7 of CTA 2009 (derivative contracts: tax avoidance), after section 695 (but before the following italic heading) insert—

695ADisguised distribution arrangements involving derivative contracts

(1)This section applies if—

(a)a company (“A”) is a party to arrangements involving one or more derivative contracts (each of which is referred to in this section as a “specified contract”),

(b)another company (“B”) is also a party to the arrangements (whether or not at the same time as A),

(c)A and B are members of the same group,

(d)the arrangements result in what is, in substance, a payment (directly or indirectly) from A to B of all or a significant part of the profits of the business of A or of a company which is a member of the same group as A or B (or both) (“the profit transfer”), and

(e)the arrangements are not arrangements of a kind which companies carrying on the same kind of business as A would enter into in the ordinary course of that business.

(2)No debits in respect of a specified contract, which—

(a)relate to the profit transfer, and

(b)apart from this section, would be brought into account by A or B for the purposes of this Part,

are to be so brought into account.

(3)Where one or more debits in respect of a specified contract are not brought into account by virtue of subsection (2), credits arising from the same contract which—

(a)relate to the same profit transfer, and

(b)apart from this section, would be brought into account by A or B for the purposes of this Part,

are not to be so brought into account to the extent that the total of those credits does not exceed the total of those debits.

(4)Subsection (3) does not apply to any credit which arises directly or indirectly in consequence of, or otherwise in connection with, arrangements the main purpose of which, or one of the main purposes of which, is the securing of a tax advantage for any person.

(5)For the purposes of this section a company is a member of the same group as another company if it is (or has been) a member of the same group at a time when the arrangements mentioned in subsection (1) have effect.

(6)In this section—

(2)The amendment made by this section has effect in relation to accounting periods beginning on or after 5 December 2013.

This is subject to subsections (3) to (6).

(3)In the case of a company which has an accounting period beginning before 5 December 2013 and ending on or after that date (“the straddling period”), for the purposes of subsections (2) and (4) so much of the straddling period as falls before that date, and so much of that period as falls on or after that date, are treated as separate accounting periods.

(4)The amendment does not have effect in relation to debits, arising from a specified contract, which relate to the profit transfer and are or would be brought into account for an accounting period beginning on or after 5 December 2013 to the extent that the total of those debits does not exceed the amount (if any) by which—

(a)the total amount of credits arising from that contract which—

(i)relate to the profit transfer, and

(ii)are or would be brought into account for the purposes of Part 7 of CTA 2009 for any accounting period ending before 5 December 2013, exceeds

(b)the total amount of debits arising from that contract which relate to the profit transfer and are or would be brought into account as mentioned in paragraph (a)(ii).

(5)In the case of credits to which subsection (6) applies, section 695A of CTA 2009 has effect as if—

(a)subsection (2) of that section applied to credits in respect of a specified contract as it applies to debits in respect of a specified contract,

(b)subsection (3) of that section were omitted, and

(c)in subsection (4) the reference to subsection (3) were to subsection (2).

(6)This subsection applies to credits which, had A or B had an accounting period beginning with 5 December 2013 and ending with 22 January 2014, would have been brought into account for that period by A or (as the case may be) B for the purposes of Part 7 of that Act (ignoring section 695A of CTA 2009).

30Avoidance schemes involving the transfer of corporate profits

(1)In Chapter 1 of Part 20 of CTA 2009 (general calculation rules: restriction on deductions), after section 1305 insert—

1305AAvoidance schemes involving the transfer of corporate profits

(1)This section applies if—

(a)two companies (“A” and “B”) are party to any arrangements (whether or not at the same time),

(b)A and B are members of the same group,

(c)the arrangements result in what is, in substance, a payment (directly or indirectly) from A to B of all or a significant part of the profits of the business of A or of a company which is a member of the same group as A or B (or both) (“the profit transfer”), and

(d)the main purpose or one of the main purposes of the arrangements is to secure a tax advantage for any person involving the profit transfer (whether by circumventing section 695A (disguised distribution arrangements: derivative contracts) or otherwise).

(2)A’s profits are to be calculated for corporation tax purposes as if the profit transfer had not occurred.

(3)Accordingly—

(a)if (apart from this section) an amount relating to the profit transfer would be brought into account by A as a deduction in that calculation, no deduction is allowed in respect of that amount, and

(b)A’s profits are to be increased by so much of the amount of the profit transfer as is not an amount to which paragraph (a) applies (whether or not the profits transferred would be A’s profits apart from the arrangements).

(4)For the purposes of this section a company is a member of the same group as another company if it is (or has been) a member of the same group at a time when the arrangements mentioned in subsection (1) have effect.

(5)Where in relation to arrangements involving one or more derivative contracts the requirements of section 695A(1)(a) to (e) are met, nothing in this section applies in relation to any debit in respect of any of those contracts.

(6)In this section—

(2)The amendment made by this section has effect in relation to payments made on or after 19 March 2014.

31R&D tax credits for small or medium-sized enterprises

(1)In section 1058 of CTA 2009 (amount of tax credit), in subsection (1)(a), for “11%” substitute “14.5%”.

(2)The amendment made by this section has effect in relation to expenditure incurred on or after 1 April 2014.

32Film tax relief

(1)Chapter 3 of Part 15 of CTA 2009 (film tax relief) is amended as follows.

(2)In section 1198 (UK expenditure), in subsection (1), for “25%” substitute “10%”.

(3)In section 1202 (surrendering of loss and amount of film tax credit), for subsections (2) and (3) substitute—

(2)If the company surrenders the whole or part of that loss, the amount of the film tax credit to which it is entitled for the accounting period is the sum of—

(a)25% of so much of the loss surrendered as does not exceed the unused 25% band, and

(b)20% of the remainder of that loss (if any).

(3)“The unused 25% band” means £20 million reduced (but not below zero) by the total amount previously surrendered under subsection (1) (if any).

(4)The amendments made by subsections (2) and (3) have effect in relation to films the principal photography of which is not completed before such day as the Treasury may specify by order.

(5)A different day may be specified in relation to the amendments made by each subsection.

(6)A specified day may be before the day on which the order is made, but may not be before 1 April 2014.

(7)The Treasury may by order amend sections 1198(1) and 1202(2) and (3) of CTA 2009 (as amended and inserted by this section) in connection with an application for State aid approval.

(8)In this section “State aid approval” means approval that the provision made by this section, to the extent that it constitutes the granting of aid to which any of the provisions of Article 107 or 108 of the Treaty on the Functioning of the European Union applies, is, or would be, compatible with the internal market, within the meaning of Article 107 of that Treaty.

(9)An order under subsection (7) may—

(a)make incidental, supplemental, consequential, transitional or saving provision;

(b)contain provision having effect in relation to films mentioned in subsection (4).

33Television tax relief: activities to be treated as separate trade

(1)Part 15A of CTA 2009 (television production) is amended as follows.

(2)In section 1216A (overview), in subsection (3)(a), for “its” substitute “each qualifying”.

(3)In section 1216B (activities of television production company treated as a separate trade)—

(a)in subsection (1), after the second “a” insert “qualifying”;

(b)in subsection (2), for “television” substitute “qualifying relevant”;

(c)at the end insert—

(5)In this section “qualifying relevant programme” means a relevant programme in relation to which the conditions for television tax relief are met (see section 1216C(2)).

34Video games development

(1)Part 15B of CTA 2009 (video games development) is amended as follows.

(2)In section 1217A (overview), in subsection (3)(a), for “its” substitute “each qualifying”.

(3)In section 1217AE—

(a)in the heading, for “UK” substitute “EEA”;

(b)for subsection (1) substitute—

(1)In this Part, “EEA expenditure”, in relation to a video game, means expenditure on goods or services that are provided from within the European Economic Area.;

(c)in subsection (2), for “UK expenditure and non-UK expenditure” substitute “EEA expenditure and non-EEA expenditure”.

(4)In section 1217B (activities of video games development company treated as a separate trade)—

(a)in subsection (1), after the second “a” insert “qualifying”;

(b)in subsection (2), after the second “other” insert “qualifying”;

(c)at the end insert—

(5)In this section “qualifying video game” means a video game in relation to which the conditions for video games tax relief are met (see section 1217C(2)).

(5)In section 1217CF (additional deduction for qualifying expenditure)—

(a)after subsection (3) insert—

(3A)But if the core expenditure on the video game includes sub-contractor payments which (in total) exceed £1 million, the excess is not “qualifying expenditure”.;

(b)in subsection (4)(a), for “subsection (3)” substitute “subsections (3) and (3A)”;

(c)at the end insert—

(5)In this section, “sub-contractor payment” means a payment made by the company to another person in respect of work on design, production or testing of the video game that is contracted out by the company to the person.

(6)In the following provisions, for “UK expenditure” substitute “EEA expenditure”—

(a)section 1217C(2)(c);

(b)the heading above section 1217CE;

(c)the heading of section 1217CE;

(d)section 1217CE(1);

(e)section 1217CG(1)(a) and (2)(a);

(f)the heading of section 1217EB;

(g)section 1217EB(1)(a) and (b) and (3).

(7)In Schedule 4 to CTA 2009 (index of defined expressions)—

(a)omit the entry for “UK expenditure (in Part 15B)”;

(b)at the appropriate place insert—

EEA expenditure (in Part 15B)section 1217AE.

(8)The amendments made by this section have effect in relation to accounting periods beginning on or after the day specified in an order made by the Treasury under paragraph 3 of Schedule 17 to FA 2013 (and sub-paragraphs (3) and (4) of that paragraph apply accordingly).

35Community amateur sports clubs

(1)Part 6 of CTA 2010 (charitable donations relief: payments to charity) is amended in accordance with subsections (2) to (7).

(2)In section 189 (relief for charitable donations), in subsection (5), after “subject to” insert “Chapter 2A of this Part,”.

(3)In section 192 (condition as to repayment), in subsection (6), omit the “and” at the end of paragraph (a) and after that paragraph insert—

(aa)the repayment is not non-qualifying expenditure for the purposes of Chapter 9 of Part 13 (see section 661(5)), and.

(4)In section 200 (company wholly owned by a charity), after subsection (4) insert—

(4A)In the case of a charity which is a registered club, ordinary share capital of a company is treated as owned by a charity if the charity beneficially owns that share capital.

(5)In section 202 (meaning of “charity”), before paragraph (b) insert—

(aa)a registered club,.

(6)After that section insert—

202A“Registered club”

In this Chapter “registered club” has the meaning given by section 658(6) (clubs registered as community amateur sports clubs).

(7)After Chapter 2 insert—

CHAPTER 2APayments to community amateur sports clubs: anti-abuse
202BRestriction on relief for payments to community amateur sports clubs

(1)Subsection (2) applies if—

(a)one or more qualifying payments are made by a company to a registered club (“the club”) in an accounting period (“the current period”),

(b)the company is wholly owned, or controlled, by the club or by a number of charities which include the club, for all or part of that period, and

(c)inflated member-related expenditure is incurred by the company in that period.

(2)For the purposes of section 189 (relief for qualifying charitable donations), the total amount of those qualifying payments is treated as reduced (but not below nil) by the total amount of that inflated member-related expenditure.

(3)Subsection (4) applies if—

(a)the total amount of that expenditure exceeds the total amount of those payments, and

(b)the company made one or more qualifying payments to the club in an earlier accounting period ending not more than 6 years before the end of the current period.

(4)For the purposes of section 189, the total amount of the qualifying payments made in the earlier accounting period is treated as reduced (but not below nil) by the amount of the excess.

(5)If subsection (3)(b) applies in relation to more than one earlier accounting period—

(a)subsection (4) applies to treat amounts paid in later accounting periods as reduced in priority to amounts paid in earlier ones (until the excess is exhausted or all amounts have been reduced to nil), and

(b)in applying subsection (4) in relation to an accounting period, the reference to the excess is to be read as a reference to so much of it as exceeds the total amount of qualifying payments which, under that subsection, have previously been reduced to nil by the excess.

(6)For the purposes of subsections (3) and (4), a reference to the total amount of qualifying payments made in an earlier accounting period is to the total amount of those payments after—

(a)any reduction under subsection (2), and

(b)any previous reduction under subsection (4).

(7)Such adjustments must be made (whether by way of the making of assessments or otherwise) as may be required in consequence of subsections (4) to (6).

(8)Section 200 (company wholly owned by a charity) applies for the purposes of this section.

(9)For the purposes of this section, the club controls the company if it has the power to secure—

(a)by means of the holding of shares or the possession of voting power in relation to the company or any other company, or

(b)as a result of any powers conferred by the articles of association or other document regulating the company or any other company,

that the affairs of the company are conducted in accordance with the club’s wishes.

(10)For the purposes of this section two or more charities (including the club) control the company if, acting together, they have the power to secure, as mentioned in paragraph (a) or (b) of subsection (9), that the affairs of the company are conducted in accordance with the wishes of those charities.

(11)In this section—

and any reference to a member of the club includes a reference to a person connected with a member of the club.

202C“Inflated member-related expenditure”

(1)This section applies for the purposes of section 202B.

(2)“Inflated member-related expenditure” means—

(a)employment expenditure incurred in respect of the employment of a member of the club, by the company, where that employment is otherwise than on an arm’s length basis, or

(b)expenditure incurred on a supply of goods and services to the club by—

(i)a member of the club, or

(ii)a member-controlled body,

otherwise than on an arm’s length basis.

(3)But if the features of an employment or supply which cause it to be otherwise than on an arm’s length basis, when taken together, are more advantageous to the company than if the employment or supply had been on an arm’s length basis, any expenditure incurred in respect of the employment or on the supply is not inflated member-related expenditure.

(4)A company is “member-controlled” if a member of the club has (or two or more members acting together have) the power to secure—

(a)by means of the holding of shares or the possession of voting power in relation to that or any other body corporate, or

(b)as a result of any powers conferred by the articles of association or other document regulating that or any other body corporate,

that the affairs of the company are conducted in accordance with the wishes of the member (or, as the case may be, members).

(5)A partnership is “member-controlled” if a member of the club has (or two or more members acting together have) the right to a share of more than half the assets, or of more than half the income, of the partnership.

(6)In this section any reference to a member of the club includes a reference to a person connected with a member of the club.

(7)For the purposes of subsection (2)(a), the Treasury may by regulations specify—

(a)descriptions of expenditure which is to be treated as employment expenditure incurred in respect of the employment of a member of a club;

(b)descriptions of expenditure which is not to be so treated.

(8)Section 1171(4) (orders and regulations subject to negative resolution procedure) does not apply to any regulations made under subsection (7) if a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, the House of Commons.

(8)Chapter 9 of Part 13 of that Act (other special types of company: community amateur sports clubs) is amended in accordance with subsections (9) to (12).

(9)After section 661D (but before the italic heading) insert—

661ETax treatment of gifts of money from companies

If a registered club receives a gift of a sum of money from a company which is not a charity, the gift is treated as an amount in respect of which the registered club is chargeable to corporation tax, under the charge to corporation tax on income.

(10)In section 664 (exemption for interest and gift aid income)—

(a)in subsection (1), omit the “and” after paragraph (a) and after paragraph (b) insert , and

(c)its company gift income for that period,,

(b)in that subsection, for “and gift aid income” substitute “, gift aid income and company gift income”, and

(c)in subsection (3), after “this section—” insert—

(11)In section 665A (claims in relation to interest and gift aid income), in subsection (1)(b) for “and gift aid” substitute “, gift aid and company gift”.

(12)Accordingly—

(a)in the italic heading before section 661D, omit “qualifying for gift aid relief”,

(b)in the heading for section 664, for “and gift aid” substitute “, gift aid and company gift

(c)in the heading for section 665A, for “and gift aid” substitute “, gift aid and company gift”.

(13)The amendments made by this section have effect in relation to payments made on or after 1 April 2014.

(14)But the amendments made by subsections (1) to (7) are to be ignored for the purposes of section 199 of CTA 2010 (payment attributed to earlier accounting period) if the claim mentioned in subsection (1)(c) of that section is in respect of an accounting period ending before 1 April 2014.

(15)The earlier accounting periods mentioned in section 202B(3) of CTA 2010 (see subsection (7) of this section) do not include any accounting period ending before 1 April 2014.

36Tax relief for theatrical production

Schedule 4 contains provision about relief in respect of theatrical productions.

37Changes in company ownership

(1)Part 14 of CTA 2010 (change in company ownership) is amended as follows.

(2)In section 688 (meaning of “significant increase in the amount of a company’s capital”), in subsection (2), for paragraph (b) and the “or” before it substitute , and

(b)is at least 125% of amount A.

(3)In section 723 (changes in indirect ownership), in subsection (1), after “section 724” insert “or 724A”.

(4)After section 724 insert—

724ADisregard of change in parent company

(1)Where a new company (“N”) acquires all the issued share capital of another company (“C”), the resulting ownership change is disregarded for the purposes of Chapters 2 to 6 if, immediately after that acquisition (“the acquisition”), N—

(a)possesses all of the voting power in C,

(b)is beneficially entitled to 100% of any profits available for distribution to equity holders of C,

(c)would be beneficially entitled to 100% of any assets of C available for distribution to its equity holders in the event of a winding up of C or in any other circumstances, and

(d)meets the continuity requirements.

(2)“The resulting ownership change” means the change in the ownership of C by reason of Condition A in section 719 being met in relation to the acquisition.

(3)A company is “new” if, before the acquisition, it has neither—

(a)issued any shares other than subscriber shares, nor

(b)begun to carry on any trade or business.

(4)N meets the continuity requirements if, and only if—

(a)the consideration for the acquisition consists only of the issue of shares in N to the shareholders of C,

(b)immediately after the acquisition, each person who immediately before the acquisition was a shareholder of C is a shareholder of N,

(c)immediately after the acquisition, the shares in N are of the same classes as were the shares in C immediately before the acquisition,

(d)immediately after the acquisition, the number of shares of any particular class in N bears to all the shares in N the same proportion, or as nearly as may be the same proportion, as the number of shares of that class in C bore to all the shares in C immediately before the acquisition, and

(e)immediately after the acquisition, the proportion of shares of any particular class in N held by any particular shareholder is the same, or as nearly as may be the same, as the proportion of shares of that class in C held by that shareholder immediately before the acquisition.

(5)For the purposes of this section, N is treated as acquiring all the issued share capital of C for consideration consisting only of the issue of shares in N to the shareholders of C if, as a result of a scheme of reconstruction involving the cancellation of all shares in C and the issue of shares in N—

(a)N holds all the issued share capital of C by reason of that share capital being issued to N by C, and

(b)only shares in N are issued to the persons who were shareholders of C immediately before the shares in C were cancelled.

(6)In a case within subsection (5), subsection (4) applies as if any reference to immediately before the acquisition were a reference to immediately before the shares in C were cancelled.

(7)“Scheme of reconstruction” means a scheme carried out in pursuance of a compromise or arrangement—

(a)to which Part 26 of the Companies Act 2006 (arrangements and reconstructions) applies, or

(b)under any corresponding provision of the law of a country or territory outside the United Kingdom.

(8)Chapter 6 of Part 5 (equity holders and profits or assets available for distribution) applies for the purposes of subsection (1)(b) and (c) as it applies for the purposes of section 151(4).

(5)In section 726 (interpretation of Chapter), after “acquisition” insert “and shareholder”.

(6)The amendments made by this section have effect in relation to any change of ownership which occurs on or after 1 April 2014.

38Transfer of deductions: research and development allowances

(1)In section 730B(1) of CTA 2010 (interpretation of transfer of deductions provisions), in paragraph (a) of the definition of “deductible amount” after “trade,” insert “other than an amount treated as such an expense by section 450(a) of CAA 2001 (research and development allowances treated as expenses in calculating profits of a trade),”.

(2)The amendment made by this section has effect in relation to a qualifying change if the relevant day is on or after 1 April 2014.

39Tax treatment of financing costs and income

(1)Chapter 10 of Part 7 of TIOPA 2010 (tax treatment of financing costs and income: interpretation) is amended as follows.

(2)In section 345 (meaning of “UK group company” and “relevant group company”), for subsection (7) substitute—

(7)Chapter 6 of Part 5 of CTA 2010 (equity holders and profits or assets available for distribution) and Chapter 3 of Part 24 of that Act (subsidiaries) apply for the purposes of subsection (6), subject to subsections (8) and (9).

(8)Sections 169 to 182 of CTA 2010 do not apply.

(9)In applying the remaining provisions of those Chapters for the purposes of subsection (6), they are to be read with all modifications necessary to ensure that—

(a)they apply to a company or other body corporate which does not have share capital, and to holders of corresponding ordinary holdings in such a company or body, in a way which corresponds to the way they apply to companies with ordinary share capital and holders of ordinary shares in such companies,

(b)they apply in relation to ownership through an entity (other than a body corporate), or any trust or other arrangement, in a way which corresponds to the way they apply to ownership through a company or other body corporate, and

(c)for the purposes of achieving paragraphs (a) and (b), profits or assets are attributed to holders of corresponding ordinary holdings in entities, trusts or other arrangements in a manner which corresponds to the way profits or assets are attributed to holders of ordinary shares in a company.

(10)In this section “corresponding ordinary holding” in an entity, trust or other arrangement means a holding or interest which provides the holder with economic rights corresponding to those provided by a holding of ordinary shares in a company.

(3)In section 353A (effect of Part 7 on parties to capital market arrangements), in subsection (4), before paragraph (a) insert—

(za)the conditions that must be met for an election to be made;.

(4)The amendment made by subsection (2) has effect in relation to periods of account of the worldwide group starting on or after 5 December 2013.

40Determination of beneficial entitlement for purposes of group relief

(1)CTA 2010 is amended as follows.

(2)In section 169 (interpretation of provisions to determine proportion of beneficial entitlement)—

(a)in subsection (2), for the definition of “arrangements” substitute—

(b)after that subsection insert—

(3)In subsection (2) “statutory body” means a body (other than a company as defined by section 1(1) of the Companies Act 2006) established by or under a statutory provision for the purpose of carrying out functions conferred on it by or under a statutory provision, except that the Treasury may, by order, specify that a body is or is not to be a statutory body for this purpose.

(3)In section 188 (other definitions for Part 5), in subsection (1), in the definition of “company” for “section 156(2A)” substitute “sections 156(2A) and 169(3)”.

(4)The amendments made by this section have effect in relation to accounting periods ending on or after 1 January 2015.

CHAPTER 4Other provisions

Pensions

41Pension flexibility: drawdown

(1)In section 165(1) of FA 2004 (rules about payment of pension by registered scheme to member) in pension rule 5 (payments of drawdown pension in a year not to exceed 120% of basis amount for year) for “120%” substitute “150%”.

(2)In section 167(1) of FA 2004 (rules about payment of pension death benefits by registered scheme in respect of member) in pension death benefit rule 4 (payments of dependants’ drawdown pension not to exceed 120% of basis amount for year) for “120%” substitute “150%”.

(3)In paragraph 14A(2) of Schedule 28 to FA 2004 (amount of minimum income requirement for flexible drawdown by member) for “£20,000” substitute “£12,000”.

(4)In paragraph 24C(2) of Schedule 28 to FA 2004 (amount of minimum income requirement for flexible drawdown by dependant) for “£20,000” substitute “£12,000”.

(5)In consequence of subsections (1) and (2), in FA 2013 omit section 50(1) and (2).

(6)The amendments made by subsections (1), (2) and (5) have effect in relation to pension drawdown years beginning on or after 27 March 2014.

(7)The amendment made by subsection (3) has effect in relation to declarations made under section 165(3A) of FA 2004 on or after 27 March 2014.

(8)The amendment made by subsection (4) has effect in relation to declarations made under section 167(2A) of FA 2004 on or after 27 March 2014.

42Pension flexibility: taking low-value pension rights as lump sum

(1)In paragraph 7(4) of Schedule 29 to FA 2004 (amount of commutation limit for purposes of trivial commutation lump sum) for “£18,000” substitute “£30,000”.

(2)In paragraph 8 of Schedule 29 to FA 2004 (value of crystallised pension rights for trivial commutation purposes)—

(a)in sub-paragraph (1)(a) omit “, as adjusted under sub-paragraph (2)”,

(b)in sub-paragraph (1)(b) omit “, as adjusted under sub-paragraph (3)”, and

(c)omit sub-paragraphs (2) and (3), as originally enacted and as substituted by FA 2013.

(3)In consequence of subsection (1), in FA 2011 omit paragraph 4(2) of Schedule 18.

(4)In consequence of subsection (2)(c), in FA 2013 omit paragraph 8(4) of Schedule 22.

(5)In article 23C(4) of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572) (modifications of Schedule 29 to FA 2004) in the inserted paragraph 7A(1)(a) (limit at or below which additional sums can be trivial commutation lump sums) for “£2,000” substitute “£10,000”.

(6)In the Registered Pension Schemes (Authorised Payments) Regulations 2009 (S.I. 2009/1171)—

(a)in each of regulations 6(1)(b), 8(1)(a), 11(1)(c), 11A(1)(b) and 12(1)(e) (limit at or below which certain payments by registered pension scheme can be authorised payments) for “£2,000” substitute “£10,000”,

(b)in regulation 10(3)(b) (certain payments by registered pension scheme which can be authorised payments if value of member’s pension rights is not more than £18,000) for “£18,000” substitute “£30,000”,

(c)in regulation 11(1)(d) (upper limit on total value of member’s benefits under the scheme which would make the payment and all related schemes) for “£2,000” substitute “£10,000”,

(d)in regulation 11A(2) (may not be more than one previous payment under regulation 11A) for “one payment” substitute “two payments”, and

(e)in regulation 12(4) (certain payments by registered pension scheme can be authorised payments only if property held in respect of at least 20 members exceeds £2,000) for “£2,000” substitute “£10,000”.

(7)In consequence of subsection (6)(b), in the Registered Pension Schemes (Miscellaneous Amendments) Regulations 2011 (S.I. 2011/1751) omit regulation 8(4).

(8)The amendments made by subsections (1) to (4) have effect for commutation periods beginning on or after 27 March 2014 and do so irrespective of whether the nominated date is before, on or after 27 March 2014.

(9)The amendment made by subsection (5)—

(a)has effect for lump sums paid on or after 27 March 2014, and

(b)is to be treated as having been made by the Treasury under the powers to make orders conferred by section 283(2) of FA 2004.

(10)The amendments made by subsections (6) and (7) have effect for payments made on or after 27 March 2014.

(11)The amendments made by subsection (6) are to be treated as having been made by the Commissioners for Her Majesty’s Revenue and Customs under the powers to make regulations conferred by section 164(1)(f) and (2) of FA 2004.

43Pension flexibility: further amendments

Schedule 5 makes further provision in connection with pension flexibility.

44Transitional provision for new standard lifetime allowance for 2014-15 etc

Schedule 6 contains transitional provision in relation to the new standard lifetime allowance for the tax year 2014-15 etc.

45Taxable specific income: effect on pension input amount for non-UK schemes

(1)Schedule 34 to FA 2004 (application of certain charges to non-UK pension schemes) is amended as follows.

(2)In paragraph 10 (pension input amount for cash balance and defined benefits arrangements), for sub-paragraph (2) substitute—

(2)The appropriate fraction is—

where—

  • EI is the total amount of employment income of the individual from any relevant employment or employments for the tax year, excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003),

  • TE is so much of EI as constitutes taxable earnings from any such employment (within the meaning of section 10(2) of that Act), and

  • TSI is so much of EI as constitutes taxable specific income from any such employment (within the meaning of section 10(3) to (5) of that Act).

(3)In paragraph 11 (pension input amount for other money purchase arrangements), for sub-paragraph (2) substitute—

(2)The appropriate fraction is—

where—

  • EI is the total amount of employment income of the individual from any employment or employments with the employer for the tax year, excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003),

  • TE is so much of EI as constitutes taxable earnings from any such employment (within the meaning of section 10(2) of that Act), and

  • TSI is so much of EI as constitutes taxable specific income from any such employment (within the meaning of section 10(3) to (5) of that Act).

(4)The amendments made by this section have effect for the tax year 2014-15 and subsequent tax years.

46Pension schemes

Schedule 7 makes provision in relation to pension schemes.

Sporting events

47Glasgow Grand Prix

(1)An accredited competitor who performs a Grand Prix activity is not liable to income tax in respect of any income arising from the activity if the non-residence condition is met.

(2)The following are Grand Prix activities—

(a)competing at the Glasgow Grand Prix, and

(b)any activity that is performed during the games period the main purpose of which is to support or promote the Glasgow Grand Prix.

(3)The non-residence condition is that—

(a)the accredited competitor is non-UK resident for the tax year 2014-15, or

(b)the accredited competitor is UK resident for the tax year 2014-15 but the year is a split year as respects the competitor and the activity is performed in the overseas part of the year.

(4)Section 966 of ITA 2007 (deduction of sums representing income tax) does not apply to any payment or transfer which gives rise to income benefiting from the exemption under subsection (1).

(5)In this section—

(6)This section is treated as having come into force on 6 April 2014.

48Major sporting events: power to provide for tax exemptions

(1)Where a major sporting event is to be held in the United Kingdom, the Treasury may make regulations providing for exemption from income tax and corporation tax in relation to the event.

(2)The regulations may, in particular—

(a)exempt specified classes of person, income or activity from income tax;

(b)exempt specified classes of person, profit, income or activity from corporation tax;

(c)provide for specified classes of activity to be disregarded in determining for fiscal purposes whether a person has a permanent establishment in the United Kingdom;

(d)disapply a duty on a person to deduct a sum representing income tax before making a payment.

(3)The regulations may specify classes of person wholly or partly by reference to—

(a)residence outside the United Kingdom, determined in accordance with the regulations;

(b)documents issued or authority given by persons exercising functions in connection with the sporting event.

(4)Regulations under this section—

(a)may apply (with or without modifications) or disapply any enactment,

(b)may modify, amend, repeal or revoke any enactment,

(c)may make different provision for different purposes, and

(d)may include incidental, consequential, supplementary or transitional provision.

(5)Regulations under this section may not be made unless a draft of the instrument containing them has been laid before, and approved by a resolution of, the House of Commons.

(6)In this section, “enactment” includes an enactment contained in subordinate legislation (within the meaning of the Interpretation Act 1978), and includes an enactment whenever passed or made.

Employee share schemes

49Share incentive plans: increases in maximum annual awards etc

(1)Schedule 2 to ITEPA 2003 (share incentive plans) is amended as follows.

(2)In paragraph 35(1) (free shares: maximum annual award) for “£3,000” substitute “£3,600”.

(3)In paragraph 46(1) (partnership shares: maximum amount of deductions from employee’s salary) for “£1,500” substitute “£1,800”.

(4)The amendments made by this section are treated as having come into force on 6 April 2014.

50Share incentive plans: power to adjust maximum annual awards etc

(1)Schedule 2 to ITEPA 2003 (share incentive plans) is amended as follows.

(2)In paragraph 35 (free shares: maximum annual award) after sub-paragraph (2) insert—

(2A)The Treasury may by order amend sub-paragraph (1) by substituting for any amount for the time being specified there an amount specified in the order.

(3)In paragraph 46 (partnership shares: maximum amount of deductions from employee’s salary) after sub-paragraph (5) insert—

(6)The Treasury may by order amend sub-paragraph (1) by substituting for any amount for the time being specified there an amount specified in the order.

(4)In paragraph 60 (matching shares: maximum ratio of matching shares to partnership shares) after sub-paragraph (3) insert—

(4)The Treasury may by order amend sub-paragraph (2) by substituting for any ratio for the time being specified there a ratio specified in the order.

51Employee share schemes

Schedule 8 makes provision in relation to employee share schemes.

52Employment-related securities etc

Schedule 9 contains provision relating to employment-related securities.

Investment reliefs

53Venture capital trusts

Schedule 10 contains provision about venture capital trusts.

54Removing time limit on seed enterprise investment scheme relief

(1)Section 257A of ITA 2007 (meaning of “SEIS relief” and commencement) is amended as follows.

(2)For subsection (3) (which limits SEIS relief to shares issued on or after 6 April 2012 but before 6 April 2017) substitute—

(3)This Part has effect in relation to shares issued on or after 6 April 2012 only.

(3)Omit subsection (4) (which allows the Treasury to extend SEIS relief by order).

55Removing time limit on CGT relief in respect of re-investment under SEIS

(1)In Schedule 5BB to TCGA 1992 (seed enterprise investment scheme: re-investment), in paragraph 1 (SEIS re-investment relief)—

(a)in sub-paragraph (2)(a), for “or the tax year 2013-14” substitute “or any subsequent tax year”, and

(b)in sub-paragraph (5A), in the definition of “the relevant percentage”, in paragraph (b), for “the tax year 2013-14” substitute “any subsequent tax year”.

(2)Accordingly, in section 150G of TCGA 1992 (which introduces Schedule 5BB), omit “in the tax years 2012-13 and 2013-14”.

56Exclusion of incentivised electricity or heat generation activities

(1)ITA 2007 is amended as follows.

(2)In section 192 (EIS: meaning of “excluded activities”)—

(a)in subsection (1), omit the “and” at the end of paragraph (ka) and after that paragraph insert—

(kb)the subsidised generation of heat or subsidised production of gas or fuel, and, and

(b)in subsection (2), omit the “and” at the end of paragraph (f) and after paragraph (g) insert , and

(h)section 198B (subsidised generation of heat and subsidised production of gas or fuel).

(3)In section 198A (excluded activities: subsidised generation or export of electricity)—

(a)for subsection (3) substitute—

(3)The generation of electricity is “subsidised” if—

(a)a person receives a FIT subsidy in respect of the electricity generated,

(b)a renewables obligation certificate is issued in connection with the generation of the electricity, or

(c)a scheme established in a territory outside the United Kingdom, and corresponding to that set out in a renewables obligation order under section 32 of the Electricity Act 1989, operates to incentivise the generation of the electricity.,

(b)in subsection (6), omit the “or” after paragraph (c) and after paragraph (d) insert , or

(e)an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society., and

(c)in subsection (9), at the end insert—

(4)After that section insert—

198BExcluded activities: subsidised generation of heat and subsidised production of gas or fuel

(1)This section supplements section 192(1)(kb).

(2)The generation of heat, or production of gas or fuel, is “subsidised” if a payment is made, or another incentive is given, under—

(a)a scheme established by regulations under section 100 of the Energy Act 2008 or section 113 of the Energy Act 2011 (renewable heat incentives), or

(b)a similar scheme established in a territory outside the United Kingdom,

in respect of the heat generated, or gas or fuel produced.

(3)But the generation of heat, or production of gas or fuel, is not to be taken to fall within section 192(1)(kb) if Condition A or B is met.

(4)Condition A is that the generation or production is carried on by—

(a)a community interest company,

(b)a co-operative society,

(c)a community benefit society,

(d)a NI industrial and provident society, or

(e)an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.

(5)Condition B is that the plant used for the generation of the heat, or production of the gas or fuel, relies wholly or mainly on anaerobic digestion.

(6)Section 198A(9) (definitions) applies for the purposes of this section as for the purposes of section 198A.

(5)In section 303 (VCTs: meaning of “excluded activities”)—

(a)in subsection (1), omit the “and” at the end of paragraph (ka) and after that paragraph insert—

(kb)the subsidised generation of heat or subsidised production of gas or fuel, and, and

(b)in subsection (2), omit the “and” at the end of paragraph (f) and after paragraph (g) insert , and

(h)section 309B (subsidised generation of heat and subsidised production of gas and fuel).

(6)In section 309A (excluded activities: subsidised generation or export of electricity)—

(a)for subsection (3) substitute—

(3)The generation of electricity is “subsidised” if—

(a)a person receives a FIT subsidy in respect of the electricity generated,

(b)a renewables obligation certificate is issued in connection with the generation of the electricity, or

(c)a scheme established in a territory outside the United Kingdom, and corresponding to that set out in a renewables obligation order under section 32 of the Electricity Act 1989, operates to incentivise the generation of the electricity.,

(b)in subsection (6), omit the “or” after paragraph (c) and after paragraph (d) insert , or

(e)an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society., and

(c)in subsection (9), at the end insert—

(7)After that section insert—

309BExcluded activities: subsidised generation of heat and subsidised production of gas or fuel

(1)This section supplements section 303(1)(kb).

(2)The generation of heat, or production of gas or fuel, is “subsidised” if a payment is made, or another incentive is given, under—

(a)a scheme established by regulations under section 100 of the Energy Act 2008 or section 113 of the Energy Act 2011 (renewable heat incentives), or

(b)a similar scheme established in a territory outside the United Kingdom,

in respect of the heat generated or gas or fuel produced.

(3)But the generation of heat, or production of gas or fuel, is not to be taken to fall within section 303(1)(kb) if Condition A or B is met.

(4)Condition A is that the generation or production is carried on by—

(a)a community interest company,

(b)a co-operative society,

(c)a community benefit society,

(d)a NI industrial and provident society, or

(e)an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.

(5)Condition B is that the plant used for the generation of the heat, or production of the gas or fuel, relies wholly or mainly on anaerobic digestion.

(6)Section 309A(9) (definitions) applies for the purposes of this section as for the purposes of section 309A.

(8)The amendments made by subsections (2) to (4) have effect in relation to shares issued on or after the day on which this Act is passed.

(9)The amendments made by subsections (5) to (7) have effect in relation to a relevant holding issued on or after the day on which this Act is passed.

Social investment relief

57Relief for investments in social enterprises

(1)Schedule 11 makes provision for and in connection with social investment tax relief.

(2)Schedule 12 makes provision for relief under TCGA 1992 in connection with investments in social enterprises.

Capital gains

58Relief on disposal of private residence

(1)TCGA 1992 is amended as follows.

(2)In section 223 (relief on disposal of private residence: amount of relief)—

(a)in subsections (1) and (2)(a), for “36 months” substitute “18 months”;

(b)omit subsections (5) and (6);

(c)in subsection (8), omit the “and” after paragraph (aa) and after that paragraph insert—

(ab)section 225E (disposals by disabled persons or persons in care homes etc), and.

(3)After section 225D insert—

225EDisposals by disabled persons or persons in care homes etc

(1)This section applies where a gain to which section 222 applies accrues to an individual and—

(a)the conditions in subsection (2) are met, or

(b)the conditions in subsection (3) are met.

(2)The conditions mentioned in subsection (1)(a) are that at the time of the disposal—

(a)the individual is a disabled person or a long-term resident in a care home, and

(b)the individual does not have any other relevant right in relation to a private residence.

(3)The conditions mentioned in subsection (1)(b) are that at the time of the disposal—

(a)the individual’s spouse or civil partner is a disabled person or a long-term resident in a care home, and

(b)neither the individual nor the individual’s spouse or civil partner has any other relevant right in relation to a private residence.

(4)Where this section applies, the references in section 223(1) and (2)(a) to 18 months are treated as references to 36 months.

(5)An individual is a “long-term resident” in a care home at the time of the disposal if at that time the individual —

(a)is resident there, and

(b)has been resident there, or can reasonably be expected to be resident there, for at least three months.

(6)An individual has “any other relevant right in relation to a private residence” at the time of the disposal if—

(a)at that time—

(i)the individual owns or holds an interest in a dwelling-house or part of a dwelling-house other than that in relation to which the gain accrued, or

(ii)the trustees of a settlement own or hold an interest in a dwelling-house or part of a dwelling-house other than that in relation to which the gain accrued, and the individual is entitled to occupy that dwelling-house or part under the terms of the settlement, and

(b)section 222 would have applied to any gain accruing to the individual or trustees on the disposal at that time of, or of that interest in, that dwelling house or part (or would have applied if a notice under subsection (5) of that section had been given).

(7)In the application of this section in relation to a gain to which section 222 applies by virtue of section 225 (private residence occupied under terms of settlement)—

(a)the reference in subsection (1) of this section to an individual is to the trustees of the settlement;

(b)the references in subsections (2) to (6) of this section to the individual are to the person entitled under the terms of the settlement, as mentioned in section 225.

(8)In this section—

(4)The amendments made by this section have effect in relation to disposals made on or after 6 April 2014.

59Remittance basis and split year treatment

(1)Section 12 of TCGA 1992 (non-UK domiciled individuals to whom remittance basis applies) is amended as follows.

(2)After subsection (1) insert—

(1A)But it does not apply to foreign chargeable gains accruing to an individual in the overseas part of a split year as respects that individual, regardless of the part of the year (the overseas part or the UK part) in which the foreign chargeable gains are remitted.

(3)The amendment made by this section has effect in relation to gains accruing on or after 6 April 2013.

60Termination of life interest and death of life tenant: disabled persons

(1)TCGA 1992 is amended as follows.

(2)In section 72 (termination of life interest on death of person entitled)—

(a)in subsection (1B)(a)(iii), for “within section 89B(1)(c) or (d)” substitute “, within the meaning given by section 89B”, and

(b)at the end insert—

(6)An interest which is a disabled person’s interest by virtue of section 89B(1)(a) or (b) of the Inheritance Tax Act 1984 is to be treated as an interest in possession for the purposes of this section.

(3)In section 73(3) (death of life tenant: exclusion of chargeable gain), for “to (5)” substitute “to (6)”.

(4)The amendments made by this section have effect in relation to deaths occurring on or after 5 December 2013.

61Capital gains roll-over relief: relevant classes of assets

(1)Section 155 of TCGA 1992 (relevant classes of assets) is amended as follows.

(2)After the heading “CLASS 7A” insert—

(3)Before the heading “CLASS 8” insert—

(4)The amendments made by this section have effect where the disposal of the old assets (or an interest in them) or the acquisition of the new assets (or an interest in them) is on or after 20 December 2013.

62Capital gains roll-over relief: intangible fixed assets

(1)In section 156ZB of TCGA 1992 (intangible fixed assets: interaction with relief under Chapter 7 of Part 8 of CTA 2009), in subsection (1), for “This section” substitute “Subsection (2)”.

(2)In Chapter 14 of Part 8 of CTA 2009 (intangible fixed assets: miscellaneous provisions), after section 870 insert—

Roll-over relief under TCGA 1992
870AClaims for relief made under sections 152 and 153 of TCGA 1992

(1)Subsection (2) applies where—

(a)a company has made a claim for relief under section 152 or 153 of TCGA 1992 (roll-over relief) during the period beginning with 1 April 2009 and ending with 19 March 2014, and

(b)the relief claimed relates to disposal proceeds that are applied in acquiring an intangible fixed asset within the meaning of this Part.

(2)The company is treated for the purposes of this Part as if the cost of the asset recognised for tax purposes were reduced on 19 March 2014 by the amount in respect of which the relief under section 152 or 153 of TCGA 1992 is given.

(3)But the effect of subsection (2) must not be to reduce the tax written-down value of the asset to below nil.

(4)The references to adjustments in sections 742(3) and 743(3) (assets written down) include any adjustment required by subsection (2).

(3)The amendment made by subsection (1) has effect in relation to claims for relief under section 152 or 153 of TCGA 1992 made on or after 19 March 2014.

(4)The amendment made by subsection (2) has effect in relation to accounting periods beginning on or after 19 March 2014.

(5)For the purposes of subsection (4), an accounting period beginning before, and ending on or after, 19 March 2014 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate accounting periods.

63Avoidance involving losses

(1)In section 184G of TCGA 1992 (avoidance involving losses: schemes converting income to capital)—

(a)for subsections (2) and (3) substitute—

(2)Condition A is that a receipt or other amount arises to a company directly or indirectly in consequence of, or otherwise in connection with, any arrangements.

(3)Condition B is that—

(a)that amount falls to be taken into account in calculating a chargeable gain (the “relevant gain”) which accrues to a company (“the relevant company”), and

(b)losses accrue (or have accrued) to the relevant company (whether before or after or as part of the arrangements)., and

(b)in subsection (4), for “the receipt” substitute “the amount mentioned in subsection (2)”.

(2)In section 184H of that Act (avoidance involving losses: schemes securing deductions)—

(a)in subsection (2)(b), omit “on any disposal of any asset”,

(b)for subsection (3) substitute—

(3)Condition B is that the relevant company, or a company connected with the relevant company, becomes entitled to an income deduction directly or indirectly in consequence of, or otherwise in connection with, the arrangements.,

(c)in subsection (4), for paragraph (a) substitute—

(a)that income deduction, and, and

(d)in subsection (10), after the definition of “arrangements” insert—

(3)The amendments made by this section have effect—

(a)in relation to arrangements entered into on or after 30 January 2014, and

(b)in relation to arrangements entered into before that date but only to the extent that any chargeable gain accrues on a disposal which occurs on or after that date.

Capital allowances

64Extension of capital allowances

(1)Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2)In section 45D (expenditure on cars with low carbon dioxide emissions), after subsection (1) insert—

(1A)The Treasury may by order amend subsection (1)(a) so as to extend the period specified.

(3)In section 45DA (expenditure on zero-emission goods vehicles), after subsection (1) insert—

(1A)The Treasury may by order amend subsection (1)(a) so as to extend the period specified.

(4)In section 45E (expenditure on plant or machinery for gas refuelling station), after subsection (1) insert—

(1A)The Treasury may by order amend subsection (1)(a) so as to extend the period specified.

(5)In section 45K (expenditure on plant and machinery for used in designated assisted areas)—

(a)in subsection (1), in paragraph (b) for “5 years” substitute “8 years”, and

(b)after that subsection insert—

(1A)The Treasury may by order amend subsection (1)(b) so as to extend the period specified.

65General Block Exemption Regulation

Schedule 13 makes provision in relation to Commission Regulation (EU) No 651/2014 (General block exemption Regulation).

66Business premises renovation allowances

(1)Section 360B of CAA 2001 (business premises renovation allowances: meaning of “qualifying expenditure”) is amended in accordance with subsections (2) to (6).

(2)For subsection (1) substitute—

(1)In this Part “qualifying expenditure” means capital expenditure incurred before the expiry date—

(a)in respect of which Conditions A and B are met, and

(b)which is not excluded by subsection (3), (3B) or (3D).

(3)After subsection (2) insert—

(2A)Condition A is that the expenditure is incurred on—

(a)the conversion of a qualifying building into qualifying business premises,

(b)the renovation of a qualifying building if it is or will be qualifying business premises, or

(c)repairs to a qualifying building or, where the building is part of a building, to the building of which the qualifying building forms part, to the extent that the repairs are incidental to expenditure within paragraph (a) or (b).

(2B)Condition B is that the expenditure is incurred on—

(a)building works,

(b)architectural or design services,

(c)surveying or engineering services,

(d)planning applications, or

(e)statutory fees or statutory permissions.

(2C)But Condition B is treated as met in respect of expenditure incurred on matters not mentioned in that Condition to the extent that that expenditure (in total) does not exceed 5% of the qualifying expenditure incurred on the matters mentioned in subsection (2B)(a) to (c).

(4)In subsection (3)—

(a)for “not qualifying expenditure” substitute “excluded”, and

(b)in paragraph (d), for “as defined by section 173(1)” substitute “(as defined by section 173(1)) and falls within subsection (3A)”.

(5)After that subsection insert—

(3A)The fixtures which fall within this subsection are—

(a)integral features within the meaning of section 33A (taking account of section 33A(6) and any provision for the time being made under section 33A(7)) or part of such a feature;

(b)automatic control systems for opening and closing doors, windows and vents;

(c)window cleaning installations;

(d)fitted cupboards and blinds;

(e)protective installations such as lightning protection, sprinkler and other equipment for containing or fighting fires, fire alarm systems and fire escapes;

(f)building management systems;

(g)cabling in connection with telephone, audio-visual data installations and computer networking facilities, which are incidental to the occupation of the building;

(h)sanitary appliances, and bathroom fittings which are hand driers, counters, partitions, mirrors or shower facilities;

(i)kitchen and catering facilities for producing and storing food and drink for the occupants of the building;

(j)signs;

(k)public address systems;

(l)intruder alarm systems.

(3B)Expenditure is excluded if, and to the extent that, it exceeds the market value amount for the works, services or other matters to which it relates.

(3C)“The market value amount” means the amount of expenditure which it would have been normal and reasonable to incur on the works, services or other matters—

(a)in the market conditions prevailing when the expenditure was incurred, and

(b)assuming the transaction as a result of which the expenditure was incurred was between persons dealing with each other at arm’s length in the open market.

(3D)Expenditure is excluded if the qualifying building was used at any time during the period of 12 months ending with the day on which the expenditure is incurred.

(6)In subsection (5), after “regulations” insert

(a)amend this section so as to add a description of fixture to the list in subsection (3A), or vary or remove a description of fixture in that list;

(b)

(7)After that section insert—

360BAExpenditure not treated as qualifying expenditure if delay in carrying out works etc

(1)This section applies where—

(a)(ignoring this section) qualifying expenditure is incurred on works, services or other matters in a chargeable period, and

(b)those works, services or other matters are not completed or provided before the end of the period of 36 months beginning with the date the expenditure was incurred.

(2)To the extent that it relates to so much of those works, services or other matters as are not completed or provided before the end of that period, the expenditure is to be treated for the purposes of this Part as never having been incurred (unless and until subsection (6) applies).

(3)All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (2).

(4)If a person who has made a tax return becomes aware that, after making it, anything in it has become incorrect because of the operation of this section, the person must give notice to an officer of Revenue and Customs specifying how the return needs to be amended.

(5)The notice must be given within 3 months beginning with the day on which the person first became aware that anything in the return had become incorrect because of the operation of this section.

(6)If, at any time after the end of the period mentioned in subsection (1)(b), those works, services or other matters are completed or provided, the expenditure to which subsection (2) applies is to be treated for the purposes of this Part as incurred at that time.

(8)For section 360L of that Act (grants affecting entitlement to allowances) substitute—

360LGrants affecting entitlement to allowances

(1)No initial allowance or writing-down allowance under this Part is to be made in respect of qualifying expenditure in respect of a qualifying building if a relevant grant or relevant payment is made towards—

(a)that expenditure, or

(b)any other expenditure which is incurred by any person in respect of the same building, and on the same single investment project as that expenditure.

(2)An initial allowance or writing-down allowance made in respect of qualifying expenditure is to be withdrawn if—

(a)after it is made, a relevant grant or relevant payment is made towards that expenditure, or

(b)within the period of 3 years beginning when that expenditure was incurred, a relevant grant or relevant payment is made towards any other expenditure which is incurred by any person in respect of the same building, and on the same single investment project, as that expenditure.

(3)All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (2).

(4)If a person who has made a return becomes aware that, after making it, anything in it has become incorrect because of the operation of this section, that person must give notice to an officer of Revenue and Customs specifying how the return needs to be amended.

(5)The notice must be given within 3 months beginning with the day on which the person first became aware that anything in the return had become incorrect because of the operation of this section.

(6)In this section—

(7)Nothing in this section limits references to “State aid” to State aid which is required to be notified to and approved by the European Commission.

(8)The Treasury may by order amend this section to make provision consequential upon the General Block Exemption Regulation being replaced by another instrument.

(9)In section 360M of that Act (when balancing adjustments are made), in subsection (4) for “7” substitute “5”.

(10)Subject to subsection (11), the amendments made by this section have effect for expenditure incurred on or after the specified day.

(11)Section 360L of CAA 2001 (inserted by subsection (8)) has effect—

(a)in relation to a relevant grant or relevant payment made at any time (whether before or on or after the specified day) towards expenditure incurred on or after that day, and

(b)in relation to a relevant grant or relevant payment made on or after the specified day towards expenditure incurred before that day.

(12)“The specified day” means—

(a)for income tax purposes, 6 April 2014, and

(b)for corporation tax purposes, 1 April 2014.

(13)In the application of section 360L of CAA 2001 in relation to expenditure incurred before the day on which this Act is passed, the definition of “General Block Exemption Regulation” in subsection (6) of that section is to be treated as referring to Commission Regulation (EC) No 800/2008.

67Mineral extraction allowances: activities not within charge to tax

(1)CAA 2001 is amended as follows.

(2)In section 394(2) (meaning of mineral extraction trade), after “deposits” insert “but to the extent only that the profits or gains from that trade are, or (if there were any) would be, chargeable to tax”.

(3)In section 399 (expenditure excluded from being qualifying expenditure), after subsection (1) insert—

(1A)Expenditure incurred by a person for the purposes of a mineral extraction trade is not qualifying expenditure if—

(a)when the expenditure is incurred, the person is carrying on the trade but the trade is not at that time a mineral extraction trade, or

(b)the person has not begun to carry on the trade when the expenditure is incurred and, when the person begins to carry on the trade, the trade is not a mineral extraction trade.

(1B)Section 577(2) (references to commencement etc of a trade) does not apply to subsection (1A).

(4)In section 160 (expenditure treated as incurred for purposes of mineral extraction trade)—

(a)the existing text becomes subsection (1), and

(b)after that subsection insert—

(2)Subsection (1) does not apply to expenditure if—

(a)when it is incurred, the person is carrying on the trade but the trade is not at that time a mineral extraction trade, or

(b)when it is incurred, the person has not begun to carry on the trade and, when the person begins to carry on the trade, the trade is not a mineral extraction trade.

(3)Section 577(2) (references to commencement etc of a trade) does not apply to subsection (2).

(5)For section 161(4)(a) (pre-trading expenditure on plant or machinery for mineral exploration and access), substitute—

(a)pre-trading expenditure” means capital expenditure incurred before the day on which a person begins to carry on a trade that is a mineral extraction trade, but only if there is no prior time when the person carried on that trade and the trade was not a mineral extraction trade,.

(6)After section 161(4) insert—

(4A)Section 577(2) (references to commencement etc of a trade) does not apply to subsection (4)(a).

(7)After section 431 (discontinuance of trade) insert—

431AForeign permanent establishment exemption

(1)Subsection (2) applies if—

(a)an election under section 18A of CTA 2009 has effect in relation to a company, and

(b)the company carries on any trade which consists of, or includes, the working of a source of mineral deposits.

(2)That trade so far as carried on through one or more permanent establishments outside the United Kingdom is treated for the purposes of this Part as a trade—

(a)separate from any other trade of the company, and

(b)all the profits and gains from which are not, or (if there were any) would not be, chargeable to tax.

431BDisposal value: no allowance/no charge cases

(1)If—

(a)an election under section 18A of CTA 2009 has effect in relation to a company, and

(b)the operation of sections 431A and 421(1)(b)(ii) and (2) requires the company to bring the disposal value of an asset into account,

the disposal value is such an amount as gives rise to neither a balancing allowance nor a balancing charge.

(2)Subsection (1) does not apply if—

(a)the company’s qualifying expenditure in respect of the asset exceeds £5 million,

(b)the company has claimed any capital allowance in respect of any of that expenditure, and

(c)the company has, at any time in a relevant accounting period, used the asset otherwise than for the purposes of a permanent establishment outside the United Kingdom.

(3)In subsection (2)(c) “relevant accounting period” means an accounting period ending before, but ending not more than 6 years before, “the relevant day” as defined by section 18F of CTA 2009.

431CNotional allowances

(1)Subsection (2) applies if—

(a)an election under section 18A of CTA 2009 has effect in relation to a company, and

(b)but for section 18A of CTA 2009 and section 431A(2)(b), an allowance under this Part (“the notional allowance”) could be claimed under section 3(1) in respect of assets provided for the purposes of a permanent establishment outside the United Kingdom through which business is or has been carried on by the company.

(2)The notional allowance (and any charge in connection with it which would have arisen if the allowance had been claimed) is to be made automatically and reflected in any calculation, for any relevant accounting period of the company, of the profits or losses attributable to business carried on by the company through such a permanent establishment.

(3)Subsection (4) applies if, at the time an election under section 18A of CTA 2009 takes effect in relation to a company, the company is, by reason of sections 431A and 421(1)(b)(ii) and (2), required to bring into account the disposal value of any asset provided for the purposes of a foreign permanent establishment through which business is or has been carried on by the company.

(4)For the purposes of subsections (1) and (2), the company is treated as having incurred at that time, for the purposes of the trade mentioned in section 431A(2), qualifying expenditure of an amount equal to that disposal value.

(5)In subsection (2) “relevant accounting period”, in relation to a company by which an election under section 18A of CTA 2009 is made, means an accounting period of the company to which the election applies (as to which see section 18F of that Act).

(8)The amendments made by subsections (1) to (6) of this section have effect—

(a)for the purposes of corporation tax, in relation to claims made on or after 1 April 2014, and

(b)for the purposes of income tax, in relation to claims made on or after 6 April 2014,

and in relation to those claims the amendments are treated as always having had effect.

(9)The amendment made by subsection (7) has effect in relation to elections under section 18A of CTA 2009 which start to have effect on or after 1 April 2014.

68Mineral extraction allowances: expenditure on planning permission

(1)Part 5 of CAA 2001 (mineral extraction allowances) is amended as follows.

(2)In section 396 (meaning of “mineral exploration and access”), in subsection (2) for “if planning permission is not granted” substitute “and not as expenditure on acquiring a mineral asset”.

(3)In section 398 (relationship between main types of qualifying expenditure), after “Subject to” insert “section 396(2) and”.

(4)The amendments made by this section have effect in relation to expenditure incurred on or after the day on which this Act is passed.

Oil and gas

69Extended ring fence expenditure supplement for onshore activities

Schedule 14 contains provision about an extended ring fence expenditure supplement in connection with onshore oil-related activities.

70Supplementary charge: onshore allowance

Schedule 15 contains provision about the reduction of adjusted ring fence profits by means of an onshore allowance.

71Oil and gas: reinvestment after pre-trading disposal

(1)In Chapter 2 of Part 6 of TCGA 1992 (oil and mineral industries), after section 198I insert—

198JOil and gas: reinvestment after pre-trading disposal

(1)This section applies if a company which is an E&A company makes a disposal of, or of the company’s interest in, relevant E&A assets and that disposal is—

(a)a disposal of, or of an interest in, a UK licence which relates to an undeveloped area, or

(b)a disposal of an asset used in an area covered by a licence under Part 1 of the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964 which authorises the company to undertake E&A activities.

(2)If—

(a)the consideration which the company obtains for the disposal is applied by the company, within the permitted reinvestment period—

(i)on E&A expenditure at a time when the company is an E&A company, or

(ii)on oil assets taken into use, and used only, for the purposes of a ring fence trade carried on by it, and

(b)the company makes a claim under this subsection in relation to the disposal,

any gain accruing to the company on the disposal is not a chargeable gain.

(3)If part only of the amount or value of the consideration for the disposal is applied as described in subsection (2)(a)—

(a)subsection (2) does not apply, but

(b)subsection (4) applies if all of the amount or value of the consideration is so applied except for a part which is less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal.

(4)If the company makes a claim under this subsection in relation to the disposal, the company is to be treated for the purposes of this Act as if the amount of the gain accruing on the disposal were reduced to the amount of the part mentioned in subsection (3)(b) (and, if not all chargeable gain, with a proportionate reduction in the amount of the chargeable gain).

(5)The incurring of expenditure is within “the permitted reinvestment period” if the expenditure is incurred in the period beginning 12 months before and ending 3 years after the disposal, or at such earlier or later time as the Commissioners for Her Majesty’s Revenue and Customs may by notice allow.

(6)Subsections (6), (7), (10) and (11) of section 152 apply for the purposes of this section as they apply for the purposes of section 152, except that—

(a)in subsection (6) the reference to a trade is to be read as a reference to E&A activities or a ring fence trade,

(b)in subsection (7), the reference to the old assets is to be read as a reference to the assets disposed of as mentioned in subsection (1) of this section, and

(c)in subsection (7), the references to the trade are to be read as references to the E&A activities.

(7)In this section—

and a reference to a UK licence which relates to an undeveloped area has the same meaning as in section 194 (see section 196).

198KProvisional application of section 198J

(1)This section applies where a company for a consideration disposes of, or of an interest in, any assets at a time when it is an E&A company and declares, in the company’s return for the chargeable period in which the disposal takes place—

(a)that the whole or any specified part of the consideration will be applied, within the permitted reinvestment period—

(i)on E&A expenditure at a time when the company is an E&A company, or

(ii)on expenditure on oil assets which are taken into use, and used only, for the purposes of the company’s ring fence trade, and

(b)that the company intends to make a claim under section 198J(2) or (4) in relation to the disposal.

(2)Until the declaration ceases to have effect, section 198J applies as if the expenditure had been incurred and the person had made such a claim.

(3)The declaration ceases to have effect as follows—

(a)if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim under section 198J, on the day on which it is so withdrawn or superseded, and

(b)if and to the extent that it is not so withdrawn or superseded, on the relevant day.

(4)On the declaration ceasing to have effect in whole or in part, all necessary adjustments—

(a)are to be made by making or amending assessments or by repayment or discharge of tax, and

(b)are to be so made despite any limitation on the time within which assessments or amendments may be made.

(5)In this section “the relevant day” means the fourth anniversary of the last day of the accounting period in which the disposal took place.

(6)For the purposes of this section—

(a)sections (6), (10) and (11) of section 152 apply as they apply for the purposes of that section, except that in subsection (6) the reference to a trade is to be read as a reference to E&A activities or a ring fence trade, and

(b)terms used in this section which are defined in section 198J have the meaning given by that section.

198LExpenditure by member of same group

(1)Section 198J applies where—

(a)the disposal is by a company which, at the time of the disposal, is a member of a group of companies (within the meaning of section 170),

(b)the E&A expenditure or expenditure on oil assets is by another company which, at the time the expenditure is incurred, is a member of the same group, and

(c)the claim under section 198J is made by both companies,

as if both companies were the same person.

(2)“E&A company”, “E&A expenditure” and “oil assets” have the meaning given by section 198J.

(2)The amendment made by this section has effect in relation to disposals made on or after 1 April 2014.

72Substantial shareholder exemption: oil and gas

(1)In Schedule 7AC to TCGA 1992 (exemption for disposals by companies with substantial shareholding), in paragraph 15A (effect of transfer of trading assets within a group), after sub-paragraph (2) insert—

(2A)For the purposes of sub-paragraph (2)(b) and (d), “trade” includes oil and gas exploration and appraisal.

(2)The amendment made by this section has effect in relation to disposals made on or after 1 April 2014.

73Oil contractor activities: ring-fence trade etc

Schedule 16 contains provision about the corporation tax treatment of oil contractor activities.

Partnerships

74Partnerships

Schedule 17 makes provision in relation to partnerships.

Transfer pricing

75Transfer pricing: restriction on claims for compensation adjustments

(1)Chapter 4 of Part 4 of TIOPA 2010 (transfer pricing: position of disadvantaged person) is amended as follows.

(2)In section 174 (claim by the affected person who is potentially advantaged), in subsection (3), before the entry for section 175 insert—

(3)After that section insert—

174AClaims under section 174 where disadvantaged person within charge to income tax

A claim under section 174 may not be made if—

(a)the disadvantaged person is a person (other than a company) within the charge to income tax in respect of profits arising from the relevant activities, and

(b)the advantaged person is a company.

(4)After section 187 insert—

Treatment of interest where claim prevented by section 174A
187AExcess interest treated as a qualifying distribution

(1)Subsection (2) applies if Conditions A to C in section 187 are met in circumstances where section 174A prevents a claim under section 174.

(2)The interest paid under the actual provision, so far as it exceeds ALINT, is treated for the purposes of the Income Tax Acts as a dividend paid by the company which paid the interest (and, accordingly, as a qualifying distribution).

(5)The amendments made by this section have effect in relation to any amount arising on or after 25 October 2013, except pre-commencement interest.

(6)“Pre-commencement interest” means an amount of interest to the extent that it is, in accordance with generally accepted accounting practice, referable to a period before 25 October 2013.

PART 2Excise duties and other taxes

Alcohol

76Rates of alcoholic liquor duties

(1)ALDA 1979 is amended as follows.

(2)In section 36(1AA) (rates of general beer duty)—

(a)in paragraph (za) (rate of duty on lower strength beer), for “£9.17” substitute “£8.62”, and

(b)in paragraph (a), (standard rate of duty on beer), for “£19.12” substitute “£18.74”.

(3)In section 37(4) (rate of high strength beer duty), for “£5.09” substitute “£5.29”.

(4)In section 62(1A) (rates of duty on cider), in paragraph (a) (rate of duty per hectolitre on sparkling cider of a strength exceeding 5.5%), for “£258.23” substitute “£264.61”.

(5)For Part 1 of the table in Schedule 1 substitute—

PART 1Wine or made-wine of a strength not exceeding 22%
Description of wine or made-wineRates of duty per hectolitre £
Wine or made-wine of a strength not exceeding 4%84.21
Wine or made-wine of a strength exceeding 4% but not exceeding 5.5%115.80
Wine or made-wine of a strength exceeding 5.5% but not exceeding 15% and not being sparkling273.31
Sparkling wine or sparkling made-wine of a strength exceeding 5.5% but less than 8.5%264.61
Sparkling wine or sparkling made-wine of a strength of at least 8.5% but not exceeding 15%350.07
Wine or made-wine of a strength exceeding 15% but not exceeding 22%364.37.

(6)The amendments made by this section are treated as having come into force on 24 March 2014.

Tobacco

77Rates of tobacco products duty

(1)For the table in Schedule 1 to TPDA 1979 substitute—

TABLE
1. CigarettesAn amount equal to 16.5% of the retail price plus £184.10 per thousand cigarettes
2. Cigars£229.65 per kilogram
3. Hand-rolling tobacco£180.46 per kilogram
4. Other smoking tobacco and chewing tobacco£100.96 per kilogram.

(2)The amendment made by this section is treated as having come into force at 6 pm on 19 March 2014.

Air passenger duty

78Air passenger duty: rates of duty from 1 April 2014

(1)Section 30 of FA 1994 (air passenger duty: rates of duty) is amended as follows.

(2)In subsection (3)—

(a)in paragraph (a), for “£67” substitute “£69”, and

(b)in paragraph (b), for “£134” substitute “£138”.

(3)In subsection (4)—

(a)in paragraph (a), for “£83” substitute “£85”, and

(b)in paragraph (b), for “£166” substitute “£170”.

(4)In subsection (4A)—

(a)in paragraph (a), for “£94” substitute “£97”, and

(b)in paragraph (b), for “£188” substitute “£194”.

(5)The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2014.

79Air passenger duty: rates of duty from 1 April 2015

(1)Chapter 4 of Part 1 of FA 1994 (air passenger duty) is amended in accordance with subsections (2) to (10).

(2)Section 30 (rates of duty), as amended by section 78 of this Act, is amended as follows.

(3)Omit subsections (3) and (4).

(4)In subsection (4A)—

(a)in paragraph (a) for “£97” substitute “£71”, and

(b)in paragraph (b) for “£194” substitute “£142”.

(5)In subsection (4E)—

(a)in paragraph (a) for “twice the rate in subsection (2)(b)” substitute “six times the rate in subsection (2)(a)”,

(b)after paragraph (a) insert “and”,

(c)omit paragraph (b),

(d)omit paragraph (c) and the “and” after it, and

(e)in paragraph (d) for “twice the rate in subsection (4A)(b)” substitute “six times the rate in subsection (4A)(a)”.

(6)Section 30A (Northern Ireland long haul rates of duty) is amended as follows.

(7)Omit subsections (2) to (4).

(8)In subsection (5) for “If the passenger’s journey ends at any other place” substitute “Air passenger duty is chargeable on the carriage of the chargeable passenger at the rate determined as follows”.

(9)In subsection (5A)—

(a)omit paragraph (a),

(b)omit paragraph (b) and the “and” after it, and

(c)in paragraph (c)—

(i)omit the words from the beginning to “(5)(a) or (b),”,

(ii)after “instead” insert “of the rate set for the purposes of subsection (5)(a) or (b)”, and

(iii)in sub-paragraph (ii) for “twice the rate set for the purposes of subsection (5)(b)” substitute “six times the rate set for the purposes of subsection (5)(a)”.

(10)In Schedule 5A (territories) omit Parts 2 and 3.

(11)Accordingly, in section 1 of the Air Passenger Duty (Setting of Rate) Act (Northern Ireland) 2012 (setting of rate of air passenger duty)—

(a)in subsection (1)—

(i)omit “(3)(a) and (b), (4)(a) and (b),”, and

(ii)for “(5A)(a), (b) and (c)” substitute “(5A)(c)”, and

(b)omit subsections (2) to (5), (8) and (9).

(12)The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2015.

80Air passenger duty: adjustments to Part 3 of Schedule 5A to FA 1994

(1)In Part 3 of Schedule 5A to FA 1994 (air passenger duty: territories)—

(a)omit “Ascension Island”, “Netherlands Antilles” and “Saint Helena”, and

(b)at the appropriate places insert—

(2)The amendments made by this section have effect in relation to the carriage of passengers beginning on or after the day on which this Act is passed.

Vehicle excise duty

81VED rates for light passenger vehicles, light goods vehicles, motorcycles etc

(1)Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2)In paragraph 1 (general)—

(a)in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder capacity not exceeding 1,549cc), for “£225” substitute “£230”, and

(b)in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£140” substitute “£145”.

(3)In paragraph 1B (graduated rates of duty for light passenger vehicles)—

(a)for the tables substitute—

Table 1
Rates payable on first vehicle licence for vehicle
CO2 emissions figureRate
(1)(2)(3)(4)
ExceedingNot exceedingReduced rateStandard rate
g/kmg/km££
130140120 130
140150135 145
150165170 180
165175280 290
175185335 345
185200475 485
200225625 635
225255850 860
2551080 1090
Table 2
Rates payable on any other vehicle licence for vehicle
CO2 emissions figureRate
(1)(2)(3)(4)
ExceedingNot exceedingReduced rateStandard rate
g/kmg/km££
100110 10 20
110120 20 30
120130 100 110
130140120 130
140150135 145
150165170 180
165175195 205
175185215 225
185200255 265
200225275 285
225255475 485
255490 500;

(b)in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—

(a)in column (3), in the last two rows, “275” were substituted for “475” and “490”, and

(b)in column (4), in the last two rows, “285” were substituted for “485” and “500”.

(4)In paragraph 1J (VED rates for light goods vehicles), in paragraph (a), for “£220” substitute “£225”.

(5)In paragraph 2(1) (VED rates for motorcycles)—

(a)in paragraph (b), for “£37” substitute “£38”,

(b)in paragraph (c), for “£57” substitute “£58”, and

(c)in paragraph (d), for “£78” substitute “£80”.

(6)The amendments made by this section have effect in relation to licences taken out on or after 1 April 2014.

82VED rates: rigid goods vehicle with trailers

(1)For paragraph 10 of Schedule 1 to VERA 1994 (supplement to annual rate of duty for rigid goods vehicle with trailer), substitute—

10(1)This paragraph applies to relevant rigid goods vehicles.

(2)A “relevant rigid goods vehicle” is a rigid goods vehicle which—

(a)has a revenue weight exceeding 11,999 kgs,

(b)is not a vehicle falling within paragraph 9(2), and

(c)is used for drawing a trailer which has a plated gross weight exceeding 4,000 kgs and when so drawn is used for the conveyance of goods or burden.

(3)The annual rate of vehicle excise duty applicable to a relevant rigid goods vehicle is to be determined in accordance with the following tables by reference to—

(a)whether or not the vehicle has road-friendly suspension,

(b)the number of axles on the vehicle,

(c)the appropriate HGV road user levy band for the vehicle (see column (1) in the tables),

(d)the plated gross weight of the trailer (see columns (2) and (3) in the tables), and

(e)the total of the revenue weight for the vehicle and the plated gross weight of the trailer (the “total weight”) (see columns (4) and (5) in the tables).

(4)For the purposes of this paragraph a vehicle does not have road-friendly suspension if any driving axle of the vehicle has neither —

(a)an air suspension (that is, a suspension system in which at least 75% of the spring effect is caused by an air spring), nor

(b)a suspension which is regarded as being equivalent to an air suspension for the purposes under Annex II of Council Directive 96/53/EC.

(5)The “appropriate HGV road user levy band” in relation to a vehicle means the band into which the vehicle falls for the purposes of calculating the rate of HGV road user levy that is charged in respect of the vehicle (see Schedule 1 to the HGV Road User Levy Act 2013).

(6)The tables are arranged as follows—

(a)table 1 applies to relevant rigid goods vehicles with road-friendly suspension on which there are 2 axles;

(b)table 2 applies to relevant rigid goods vehicles with road-friendly suspension on which there are 3 axles;

(c)table 3 applies to relevant rigid goods vehicles with road-friendly suspension on which there are 4 or more axles;

(d)table 4 applies to relevant rigid goods vehicles which do not have road-friendly suspension and on which there are 2 axles;

(e)table 5 applies to relevant rigid goods vehicles which do not have road-friendly suspension and on which there are 3 axles;

(f)table 6 applies to relevant rigid goods vehicles which do not have road-friendly suspension and on which there are 4 or more axles.

Table 1
Vehicles with road-friendly suspension and 2 axles
Appropriate HGV road user levy bandPlated gross weight of trailerTotal weightRate
(1)(2)(3)(4)(5)(6)
Exceeding (kgs)Not exceeding (kgs)Exceeding (kgs)Not exceeding (kgs)£
B(T)4,00012,000-27,000230
B(T)12,000--33,000295
B(T)12,000-33,00036,000401
B(T)12,000-36,00038,000319
B(T)12,000-38,000-444
D(T)4,00012,000-30,000365
D(T)12,000--38,000430
D(T)12,000-38,000-444
Table 2
Vehicles with road-friendly suspension and 3 axles
Appropriate HGV road user levy bandPlated gross weight of trailerTotal weightRate
(1)(2)(3)(4)(5)(6)
Exceeding (kgs)Not exceeding (kgs)Exceeding (kgs)Not exceeding (kgs)£
B(T)4,00012,000-33,000230
B(T)12,000--38,000295
B(T)12,000-38,00040,000392
B(T)12,000-40,000-295
C(T)4,00012,000-35,000305
C(T)12,000--38,000370
C(T)12,000-38,00040,000392
C(T)12,000-40,000-370
D(T)4,00010,000-33,000365
D(T)4,00010,00033,00036,000401
D(T)10,00012,000-38,000365
D(T)12,000---430
Table 3
Vehicles with road-friendly suspension and 4 or more axles
Appropriate HGV road user levy bandPlated gross weight of trailerTotal weightRate
(1)(2)(3)(4)(5)(6)
Exceeding (kgs)Not exceeding (kgs)Exceeding (kgs)Not exceeding (kgs)£
B(T)4,00012,000-35,000230
B(T)12,000---295
C(T)4,00012,000-37,000305
C(T)12,000---370
D(T)4,00012,000-39,000365
D(T)12,000---430
E(T)4,00012,000--535
E(T)12,000---600
Table 4
Vehicles without road-friendly suspension with 2 axles
Appropriate HGV road user levy bandPlated gross weight of trailerTotal weightRate
(1)(2)(3)(4)(5)(6)
Exceeding (kgs)Not exceeding (kgs)Exceeding (kgs)Not exceeding (kgs)£
B(T)4,00012,000-27,000230
B(T)12,000--31,000295
B(T)12,000-31,00033,000401
B(T)12,000-33,00036,000609
B(T)12,000-36,00038,000444
B(T)12,000-38,000-604
D(T)4,00012,000-30,000365
D(T)12,000--33,000430
D(T)12,000-33,00036,000609
D(T)12,000-36,00038,000444
D(T)12,000-38,000-604
Table 5
Vehicles without road-friendly suspension with 3 axles
Appropriate HGV road user levy bandPlated gross weight of trailerTotal weightRate
(1)(2)(3)(4)(5)(6)
Exceeding (kgs)Not exceeding (kgs)Exceeding (kgs)Not exceeding (kgs)£
B(T)4,00010,000-29,000230
B(T)4,00010,00029,00031,000289
B(T)10,00012,000-33,000230
B(T)12,000--36,000295
B(T)12,000-36,00038,000392
B(T)12,000-38,000-542
C(T)4,00010,000-31,000305
C(T)4,00010,00031,00033,000401
C(T)10,00012,000-35,000305
C(T)12,000--36,000370
C(T)12,000-36,00038,000392
C(T)12,000-38,000-542
D(T)4,00010,000-31,000365
D(T)4,00010,00031,00033,000401
D(T)4,00010,00033,00035,000609
D(T)10,00012,000-36,000365
D(T)10,00012,00036,00037,000392
D(T)12,000--38,000430
D(T)12,000-38,000-542
Table 6
Vehicles without road-friendly suspension with 4 or more axles
Appropriate HGV road user levy bandPlated gross weight of trailerTotal weightRate
(1)(2)(3)(4)(5)(6)
Exceeding (kgs)Not exceeding (kgs)Exceeding (kgs)Not exceeding (kgs)£
B(T)4,00012,000-35,000230
B(T)12,000---295
C(T)4,00012,000-37,000305
C(T)12,000---370
D(T)4,00010,000-36,000365
D(T)4,00010,00036,00037,000444
D(T)10,00012,000-39,000365
D(T)12,000---430
E(T)4,00010,000-38,000535
E(T)4,00010,00038,000-604
E(T)10,00012,000--535

(7)The annual rate of vehicle excise duty for a relevant rigid goods vehicle which does not fall within any of tables 1 to 6 is £609.

(2)In paragraph 2(2) of Schedule 1 to the HGV Road User Levy Act 2013, for “within paragraph 10” substitute “which is a relevant rigid goods vehicle within the meaning of paragraph 10”.

(3)The amendment made by subsection (1) has effect in relation to licences taken out on or after 1 April 2014.

(4)The amendment made by subsection (2) is treated as having come into force on 1 April 2014.

83VED rates: use for exceptional loads, rigid goods vehicles and tractive units

(1)Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2)In paragraph 6(2A)(a) (vehicles used for exceptional loads which do not satisfy reduced pollution requirements), for “£2,585” substitute “£1,585”.

(3)In paragraph 9 (rigid goods vehicles which do not satisfy reduced pollution requirements), for the table in sub-paragraph (1) substitute—

Revenue weight of vehicleRate
(1)(2)(3)(4)(5)
ExceedingNot exceedingTwo axle vehicleThree axle vehicleFour or more axle vehicle
kgskgs£££
3,5007,500165165165
7,50011,999200200200
11,99914,000959595
14,00015,0001059595
15,00019,0003009595
19,00021,00030012595
21,00023,00030021095
23,00025,000300300210
25,00027,000300300300
27,00044,000300300560

(4)In paragraph 9(3) (rigid goods vehicles over 44,000 kgs which do not satisfy the reduced pollution requirements), for “£2,585” substitute “£1,585”.

(5)For the italic heading immediately before paragraph 9 substitute “Rigid goods vehicles exceeding 3,500 kgs revenue weight”.

(6)In paragraph 11(1) (tractive units which do not satisfy reduced pollution requirements)—

(a)for “table” substitute “tables”, and

(b)for the table substitute—

Table 1
Tractive unit with two axles
Revenue weight of vehicleRate
(1)(2)(3)(4)(5)
ExceedingNot exceedingAny no of semi-trailer axles2 or more semi-trailer axles3 or more semi-trailer axles
kgskgs£££
3,50011,999165165165
11,99922,000808080
22,00023,000848080
23,00025,0001518080
25,00026,00026510080
26,00028,00026514680
28,00031,00030030080
31,00033,000560560210
33,00034,000560609210
34,00038,000690690560
38,00044,000850850850
Table 2
Tractive unit with three or more axles
Revenue weight of vehicleRate
(1)(2)(3)(4)(5)
ExceedingNot exceedingAny no of semi-trailer axles2 or more semi-trailer axles3 or more semi-trailer axles
kgskgs£££
3,50011,999165165165
11,99925,000808080
25,00026,0001008080
26,00028,0001468080
28,00029,0002108080
29,00031,0002898080
31,00033,00056021080
33,00034,00060930080
34,00036,000609300210
36,00038,000690560300
38,00044,000850850560

(7)In paragraph 11(3) (tractive units above 44,000 kgs which do not satisfy reduced pollution requirements), for “£2,585” substitute “£1,585”.

(8)In paragraph 11C(2) (tractive units: special cases)—

(a)omit “Subject to paragraph 11D,”, and

(b)in paragraph (a), for “£650” substitute “£10”.

(9)Omit paragraph 11D (vehicles without road friendly suspension) and the italic heading before it.

(10)The amendments made by this section have effect in relation to licences taken out on or after 1 April 2014.

84VED: extension of old vehicles exemption from 1 April 2014

(1)In Schedule 2 to VERA 1994 (exempt vehicles) in paragraph 1A(1) (exemption for old vehicles) for “1973” substitute “1974”.

(2)The amendment made by subsection (1) is treated as having come into force on 1 April 2014.

(3)While a vehicle licence is in force in respect of a vehicle which is an exempt vehicle by virtue of subsection (1)—

(a)nothing in that subsection has the effect that a nil licence is required to be in force in respect of the vehicle, but

(b)for the purposes of section 33 of VERA 1994 the vehicle is to be treated as one in respect of which vehicle excise duty is chargeable.

85VED: extension of old vehicles exemption from 1 April 2015

(1)In Schedule 2 to VERA 1994 (exempt vehicles) in paragraph 1A(1) (exemption for old vehicles) for “1974” (as substituted by section 84) substitute “1975”.

(2)The amendment made by subsection (1) comes into force on 1 April 2015; but nothing in that subsection has the effect that a nil licence is required to be in force in respect of a vehicle while a vehicle licence is in force in respect of it.

86Abolition of reduced VED rates for meeting reduced pollution requirements

Schedule 18 contains provision abolishing the reduced rates of vehicle excise duty for vehicles satisfying reduced pollution requirements.

87Six month licence: tractive units

(1)In section 3 of VERA 1994 (duration of licences), for subsection (2) substitute—

(2)A vehicle licence may be taken out for a vehicle for a period of six months running from the beginning of the month in which the licence first has effect if—

(a)the annual rate of vehicle excise duty in respect of the vehicle exceeds £50, or

(b)the vehicle is one to which the annual rate of vehicle excise duty specified in paragraph 11C(2)(a) of Schedule 1 applies (tractive units: special cases).

(2)The amendment made by this section has effect in relation to licences taken out on or after 1 April 2014.

88Vehicles subject to HGV road user levy: amount of 6 month licence

(1)Section 4 of VERA 1994 (amount of duty) is amended as follows.

(2)In subsection (2), for “Where” substitute “Subject to subsection (2A), where”.

(3)After subsection (2) insert—

(2A)In the case of a vehicle which is charged to HGV road user levy, the reference in subsection (2) to fifty-five per cent is to be read as a reference to fifty per cent.

(4)The amendments made by this section have effect in relation to licences taken out on or after 1 April 2014.

89Payment of vehicle excise duty by direct debit

(1)VERA 1994 is amended as follows.

(2)In section 4 (amount of duty) for subsections (1) to (2A) substitute—

(1)Where a vehicle licence for a vehicle of any description is taken out for a period of 12 months, vehicle excise duty is to be paid on the licence—

(a)at the annual rate of duty applicable to vehicles of that description, or

(b)if the duty is to be paid by more than one instalment pursuant to an agreement under section 19B, at a rate equal to 105% of that annual rate.

(2)Subject to subsection (2A), where a vehicle licence for a vehicle of any description is taken out for a period of 6 months, vehicle excise duty is to be paid on the licence—

(a)at a rate equal to 55% of the annual rate of duty applicable to vehicles of that description, or

(b)if the duty is to be paid by direct debit pursuant to an agreement under section 19B, at a rate equal to 52.5% of that annual rate.

(2A)In the case of a vehicle which is charged to HGV road user levy, the reference in subsection (2)(a) to 55% is to be read as a reference to 50%.

(3)In section 13 (trade licences: duration and amount of duty)—

(a)in subsection (3), after “calendar year” insert “(“the applicable annual rate”)”,

(b)after subsection (3) insert—

(3A)Where a trade licence is taken out for a calendar year and the duty is to be paid by more than one instalment pursuant to an agreement under section 19B, the rate of duty is 105% of the applicable annual rate.,

(c)for subsection (4) substitute—

(4)The rate of duty applicable to a trade licence taken out for a period of 6 months is—

(a)55% of the applicable annual rate for a corresponding trade licence taken out for a calendar year, or

(b)if the duty is to be paid by direct debit pursuant to an agreement under section 19B, 52.5% of that applicable annual rate.,

(d)in subsection (5)(a), for “rate applicable to the” substitute “applicable annual rate for a”, and

(e)in subsection (6), for “subsection (4)” substitute “subsection (3A), (4)”.

(4)In section 13 (trade licences: duration and amount of duty) as set out in paragraph 8(1) of Schedule 4 to VERA 1994 to have effect on and after a day appointed by order—

(a)in subsection (4), after “twelve months” insert “(“the applicable annual rate”)”,

(b)after subsection (4) insert—

(4A)Where a trade licence is taken out for a period of 12 months and the duty is to be paid by more than one instalment pursuant to an agreement under section 19B, the rate of duty is 105% of the applicable annual rate.,

(c)for subsection (5) substitute—

(5)The rate of duty applicable to a trade licence taken out for a period of 6 months is—

(a)55% of the applicable annual rate for a corresponding trade licence taken out for 12 months, or

(b)if the duty is to be paid by direct debit pursuant to an agreement under section 19B, 52.5% of that applicable annual rate., and

(d)in subsection (6), for “subsection (5)” substitute “subsection (4A) or (5)”.

(5)In section 19A (payment by cheque)—

(a)in subsection (2)(b) omit “by post”, and

(b)in subsection (3)(b) and (d) omit “by post”.

(6)In section 19B (issue of licences before payment of duty)—

(a)after subsection (1) insert—

(1A)An agreement to pay the duty payable on a vehicle licence or a trade licence may provide—

(a)for the duty to be paid by instalments,

(b)that if any of the rebate conditions in section 19(3) is satisfied in relation to the vehicle for which the licence was issued, the licence is to cease to be in force from the time specified in the agreement and any instalments falling due after that time are no longer to be due, and

(c)for any instalments falling due after a request under section 14(2) is received by the Secretary of State no longer to be due.,

(b)in subsection (2)(c) omit “by post”,

(c)in subsection (3)(b) and (d) omit “by post”, and

(d)after subsection (3) insert—

(4)But subsections (2) and (3) do not apply in a case where the agreement under subsection (1) provides for the duty payable to be paid by more than one instalment (and for this case see subsection (5)).

(5)In a case where—

(a)a vehicle licence or a trade licence is issued to a person in accordance with subsection (1),

(b)the duty payable on the licence is not received by the Secretary of State in accordance with the agreement,

(c)the agreement provides for the duty payable to be paid by more than one instalment,

(d)the Secretary of State sends a notice to the person requiring the person to secure that the duty payable on the licence (both in respect of instalments which have fallen due and in respect of future instalments) is paid within the period specified in the notice,

(e)the requirement in the notice is not complied with, and

(f)the Secretary of State sends a further notice to the person informing that person that the licence is void from the time specified in the notice,

the licence is to be void from the time specified.

(7)In section 35A (dishonoured cheques)—

(a)in subsection (1)(a), for “or 19B(3)(d)” substitute “, 19B(3)(d) or 19B(5)(f)”,

(b)after subsection (7) insert—

(8)In a case where a notice is sent as mentioned in section 19B(5)(f) the amounts specified in subsections (2)(b) and (4) are to be calculated on the basis of the rate described in section 4(1)(b) or 13(3A) (whichever is relevant)., and

(c)in the heading, for “Dishonoured cheques” substitute “Failed payments”.

(8)In section 36 (dishonoured cheques: additional liability)—

(a)after subsection (6) insert—

(7)In a case where a notice is sent as mentioned in section 19B(5)(f) the amount specified in subsection (2) is to be calculated on the basis of the rate described in section 4(1)(b) or 13(3A) (whichever is relevant)., and

(b)in the heading, for “Dishonoured cheques” substitute “Failed payments”.

(9)In Schedule 4 (transitionals etc), after paragraph 8(3) insert—

(4)In cases in which the provisions set out in sub-paragraph (1) have effect, sections 35A(8) and 36(7) are to be read as referring to section 13(4A) instead of section 13(3A).

(10)The amendments made by this section come into force on 1 October 2014.

90Definition of “revenue weight”

(1)VERA 1994 is amended as follows.

(2)In section 60A (revenue weight), in subsection (9)(b)—

(a)for “at which” substitute “which must not be equalled or exceeded in order for”, and

(b)for “may lawfully” substitute “to lawfully”.

(3)In section 61 (vehicle weights)—

(a)in subsection (1)(b), after “not be” insert “equalled or”, and

(b)in subsection (2), after “not be” insert “equalled or”.

(4)The amendments made by this section have effect in relation to licences taken out on or after 1 April 2014.

91Vehicle excise and registration: other provisions

Schedule 19 contains other provisions relating to vehicle excise and registration.

HGV road user levy

92HGV road user levy: rates tables

(1)Schedule 1 to the HGV Road User Levy Act 2013 (rates of HGV road user levy) is amended as follows.

(2)In paragraph 4, for “is Band G” substitute is—

(a)Band E(T), in the case of a rigid goods vehicle which is a relevant rigid goods vehicle within the meaning of paragraph 10 of Schedule 1 to the 1994 Act (rigid goods vehicles used for drawing trailers of more than 4,000 kilograms), and

(b)Band G, in all other cases.

(3)For Tables 2 to 5 substitute—

Table 2: rigid goods vehicle
Revenue weight of vehicle2 axle vehicle3 axle vehicle4 or more axle vehicle
More thanNot more than
kgskgsBandBandBand
11,99915,000BBB
15,00021,000DBB
21,00023,000DCB
23,00025,000DDC
25,00027,000DDD
27,00044,000DDE
Table 3: rigid goods vehicle with trailer over 4,000 kgs
Revenue weight of vehicle2 axle vehicle3 axle vehicle4 or more axle vehicle
More thanNot more than
kgskgsBandBandBand
11,99915,000B(T)B(T)B(T)
15,00021,000D(T)B(T)B(T)
21,00023,000E(T)C(T)B(T)
23,00025,000E(T)D(T)C(T)
25,00027,000E(T)D(T)D(T)
27,00044,000E(T)E(T)E(T)
Table 4: tractive units with two axles
Revenue weight of tractive vehicleAny no of semi-trailer axles2 or more semi-trailer axles3 or more semi-trailer axles
More thanNot more than
kgskgsBandBandBand
11,99925,000AAA
25,00028,000CAA
28,00031,000DDA
31,00034,000EEC
34,00038,000FFE
38,00044,000GGG
Table 5: tractive unit with three or more axles
Revenue weight of tractive vehicleAny no of semi-trailer axles2 or more semi-trailer axles3 or more semi-trailer axles
More thanNot more than
kgskgsBandBandBand
11,99928,000AAA
28,00031,000CAA
31,00033,000ECA
33,00034,000EDA
34,00036,000EDC
36,00038,000FED
38,00044,000GGE

(4)The amendments made by this section are treated as having come into force on 1 April 2014.

93HGV road user levy: disclosure of information by HMRC

(1)After section 14 of the HGV Road User Levy Act 2013 insert—

14ADisclosure of information by Revenue and Customs

(1)Information which is held as mentioned in section 18(1) of the Commissioners for Revenue and Customs Act 2005 (confidentiality) may be disclosed by or with the authority of the Commissioners for Her Majesty’s Revenue and Customs to—

(a)the Secretary of State, or

(b)a person providing services to the Secretary of State,

for the purpose of enabling or assisting the exercise of any of the Secretary of State’s functions under or by virtue of this Act.

(2)Information disclosed in accordance with subsection (1) may not be further disclosed except—

(a)to any other person to whom it could have been disclosed in accordance with that subsection, or

(b)with the consent of the Commissioners for Her Majesty’s Revenue and Customs (which may be general or specific).

(3)If, in contravention of subsection (2), any revenue and customs information relating to a person is disclosed and the identity of the person—

(a)is specified in the disclosure, or

(b)can be deduced from it,

section 19 of the Commissioners for Revenue and Customs Act 2005 (offence of wrongful disclosure) applies as it applies in relation to a disclosure of such information in contravention of section 20(9) of that Act.

(4)In subsection (3) “revenue and customs information relating to a person” has the meaning given by section 19(2) of the Commissioners for Revenue and Customs Act 2005.

(5)Nothing in this section authorises the making of a disclosure which contravenes the Data Protection Act 1998.

(2)In regulation 2 of the HGV Road User Levy (HMRC Information Gateway) Regulations 2013 (S.I. 2013/3186), omit paragraphs (1) and (2).

Aggregates levy

94Aggregates levy: removal of certain exemptions

(1)FA 2001 is amended as follows.

(2)Section 17 (meaning of “aggregate” and “taxable aggregate”) is amended as follows.

(3)In subsection (3)—

(a)after paragraph (da) insert—

(db)it consists wholly of the spoil or waste from, or other by-products of—

(i)any industrial combustion process, or

(ii)the smelting or refining of metal;, and

(b)omit paragraphs (e) and (f).

(4)In subsection (4), omit—

(a)paragraphs (a) and (c), and

(b)in paragraph (f), “clay”.

(5)Section 18 (exempt processes) is amended as follows.

(6)In subsection (1)—

(a)in paragraph (a), for the words from “references” to “but” substitute “references to—

(i)the spoil, waste, off-cuts and other by-products resulting from the application of any exempt process to any aggregate, and

(ii)any relevant substance extracted or otherwise separated as a result of the application of any exempt process within subsection (2)(b) to any aggregate; but”, and

(b)in paragraph (b), for “such” substitute “exempt”.

(7)In subsection (2), after paragraph (c) insert—

(d)the use of clay or shale in the production of ceramic construction products;

(e)the use of gypsum or anhydrite in the production of plaster, plasterboard or related products.

(8)Section 19 (commercial exploitation) is amended as follows.

(9)In subsection (1), after “aggregate” insert “not falling within subsection (1B)”.

(10)After that subsection insert—

(1A)For the purposes of this Part a quantity of aggregate falling within subsection (1B) is subjected to exploitation if, and only if—

(a)it is removed from a site falling within subsection (2) in a case where the person removing it intends that it should be used (by any person) for construction purposes;

(b)it becomes subject to an agreement to supply it to a person who intends that it should be used (by any person) for construction purposes;

(c)it is used for construction purposes; or

(d)it is mixed, otherwise than in permitted circumstances, with any material other than water for the purpose of its use for construction purposes.

(1B)A quantity of aggregate falls within this subsection if—

(a)it consists wholly of a relevant substance listed in section 18(3) which results from the application to any aggregate of an exempt process within section 18(2)(b);

(b)it consists mainly of the spoil or waste from, or other by-products of—

(i)any industrial combustion process, or

(ii)the smelting or refining of metal; or

(c)it consists wholly or mainly of clay, coal, lignite, slate or shale.

(11)In section 22 (responsibility for exploitation of aggregate), in subsection (1) for paragraphs (c) and (d) substitute—

(c)in the case of the exploitation of a quantity of aggregate not falling within section 19(1B) by its being subjected, at a time when it is not on its originating site or a connected site, to any agreement, the person agreeing to supply it;

(ca)in the case of the exploitation of a quantity of aggregate falling within section 19(1B) by its being subjected, at a time when it is not on its originating site or a connected site, to any agreement, the person agreeing to supply it and the person to whom it is agreed to be supplied;

(cb)in the case of the exploitation of a quantity of aggregate by its being used, at a time when it is not on its originating site or a connected site, for construction purposes, the person using it for construction purposes;

(cc)in the case of the exploitation of a quantity of aggregate not falling within section 19(1B) by its being subjected, at a time when it is on its originating site or a connected site, to any agreement, the person mentioned in paragraph (c) and (if different) the operator of that site;

(cd)in the case of the exploitation of a quantity of aggregate falling within section 19(1B) by its being subjected, at a time when it is on its originating site or a connected site, to any agreement, the persons mentioned in paragraph (ca) and (if different) the operator of that site;

(ce)in the case of the exploitation of a quantity of aggregate by its being used, at a time when it is on its originating site or a connected site, for construction purposes, the person mentioned in paragraph (cb) and (if different) the operator of that site;.

(12)The amendments made by subsections (1) to (11) are treated as having come into force on 1 April 2014.

95Aggregates levy: power to restore exemptions

(1)The Treasury may by order provide that Part 2 of FA 2001 (the aggregates levy) is to have effect subject to such amendments as the Treasury consider necessary to secure that any of the exemptions that are removed as a result of the amendments made by section 94 is to any extent restored.

(2)An order under this section—

(a)may provide for the restoration of an exemption to have effect in relation to commercial exploitation to which a quantity of aggregate is subjected on or after a day which is earlier than the day on which the order is made;

(b)may make such supplementary, incidental, consequential or transitional provision as the Treasury think fit.

(3)An order under this section is to be made by statutory instrument.

(4)A statutory instrument containing an order under this section is subject to annulment in pursuance of a resolution of the House of Commons.

Climate change levy

96Climate change levy: main rates for 2015-16

(1)In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) for the table substitute—

TABLE
Taxable commodity suppliedRate at which levy payable if supply is not a reduced-rate supply
Electricity£0.00554 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility£0.00193 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state£0.01240 per kilogram
Any other taxable commodity£0.01512 per kilogram

(2)The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2015.

97Climate change levy: carbon price support rates for 2014-15 and 2015-16

(1)Paragraph 42A of Schedule 6 to FA 2000 (climate change levy: carbon price support rates) is amended as follows.

(2)In the table in sub-paragraph (3), as substituted by paragraph 23 of Schedule 42 to FA 2013, for “£0.85489 per gigajoule” substitute “£0.81906 per gigajoule”.

(3)The amendment made by subsection (2) has effect in relation to supplies treated as taking place on or after 1 April 2014.

(4)In the table in sub-paragraph (3), as substituted by paragraph 24 of Schedule 42 to FA 2013, for “£1.62534 per gigajoule” substitute “£1.56860 per gigajoule”.

(5)The amendment made by subsection (4) has effect in relation to supplies treated as taking place on or after 1 April 2015.

98Climate change levy: carbon price support rates for 2016-17

(1)In paragraph 42A of Schedule 6 to FA 2000 (climate change levy: carbon price support rates) for sub-paragraph (3) substitute—

(3)The carbon price support rates are as follows.

Carbon price support rate commodityCarbon price support rate
Any gas in a gaseous state that is of a kind supplied by a gas utility£0.00331 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, in a liquid state£0.05280 per kilogram
Any commodity falling within paragraph 3(1)(d) to (f)£1.54790 per gigajoule

(2)The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2016.

99Climate change levy: exemptions: mineralogical & metallurgical processes etc

Schedule 20 makes provision in relation to climate change levy.

Landfill tax

100Rates of landfill tax

(1)Section 42 of FA 1996 (amount of landfill tax) is amended as follows.

(2)In subsection (1)(a) (standard rate), for “£80” substitute “£82.60”.

(3)In subsection (2) (reduced rate for disposal of qualifying material)—

(a)for “£80” substitute “£82.60”, and

(b)for “£2.50” substitute “£2.60”.

(4)The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2015.

Excise and customs duties: general

101Goods carried as stores

Schedule 21 contains provision about goods shipped or carried as stores on ships or aircraft.

102Penalties under section 26 of FA 2003: extension to excise duty

(1)In this section—

(2)Sections 26 and 27 and 29 to 41 of FA 2003 (taxes and duties on importation and exportation: penalties) apply in relation to excise duty as they apply in relation to a relevant tax or duty (as defined by section 24(2) of that Act) except that, for this purpose, “relevant rule” in sections 26 and 33 means a relevant excise rule.

Value added tax

103VAT: special schemes

Schedule 22 contains provision about the supply of electronic services, broadcasting services and telecommunication services.

104VAT: place of belonging

(1)Section 9 of VATA 1994 (place where supplier or recipient of services belongs) is amended as follows.

(2)In subsection (3)(c), after “usual place of residence” insert “or permanent address”.

(3)In subsection (5), for the words from “belonging” to the end substitute belonging—

(a)in the country in which the person’s usual place of residence or permanent address is (except in the case of a body corporate or other legal person);

(b)in the case of a body corporate or other legal person, in the country in which the place where it is established is.

(4)For subsection (6) substitute—

(6)The reference in subsection (5)(b) to the place where a body corporate or other legal person “is established” is to be read in accordance with Article 13a of Implementing Regulation (EU) No 282/2011 (which is inserted by Council Implementing Regulation (EU) No 1042/2013).

(5)The amendments made by this section have effect in relation to supplies made on or after 1 January 2015.

105VAT: place of supply orders: disapplication of transitional provision

(1)Section 97A of VATA 1994 (place of supply orders: transitional provision) is to be ignored for the purpose of giving effect to any new order under section 7A(6) of that Act which—

(a)is expressed as having effect in relation to supplies made on or after 1 January 2015, and

(b)makes provision about the place of supply of electronically supplied services, telecommunication services and radio and television broadcasting services.

(2)In subsection (1) “new order” means an order made on or after the day on which this Act is passed.

(3)Subsection (1) applies only so far as the order makes provision about supplies to which Article 2 of Council Implementing Regulation (EU) No 1042/2013 (transitional provision for changes in the law affecting electronically supplied, telecommunication and radio and television broadcasting services) applies.

106VAT: supply of services through agents

(1)Section 47 of VATA 1994 (agents) is amended as follows.

(2)In subsection (3), after “services” insert “, other than electronically supplied services and telecommunication services,”.

(3)After subsection (3) insert—

(4)Where electronically supplied services or telecommunication services are supplied through an agent, the supply is to be treated both as a supply to the agent and as a supply by the agent.

(5)For the purposes of subsection (4) “agent” means a person (“A”) who acts in A’s own name but on behalf of another person within the meaning of Article 28 of Council Directive 2006/112/EC on the common system of value added tax.

(6)In this section “electronically supplied services” and “telecommunication services” have the same meaning as in Schedule 4A (see paragraph 9(3) and (4) and paragraph 8(2) of that Schedule).

(4)The amendments made by this section have effect in relation to supplies made on or after 1 January 2015.

107VAT: refunds to health service bodies

(1)In section 41(7) of VATA 1994 (application to the Crown: list of bodies regarded as Government departments) after “Excellence” insert “, Health Education England (established by the Care Act 2014), and the Health Research Authority (also established by that Act),”.

(2)In section 41(7) of VATA 1994 as amended by subsection (1)—

(a)for “above,” substitute

(a)”,

(b),

(c)after “1978” insert ,

(c)”,

(d)for the “and” after “foundation trust” substitute ,

(d)”,

(e)for the “and” after “Care Trust” substitute ,

(e)”,

(f)for the “and” after “Health Board” substitute ,

(f)”,

(g)after “group,” insert—

(g)”,

(h)after “Centre,” insert—

(h)”,

(i)for the “and” after “Commissioning Board” substitute ,

(i)”,

(j)before “Health Education England” insert—

(j)”,

(k)before “the Health Research Authority” insert—

(k)”,

(l)the words from “shall be regarded” to the end are to follow, rather than form part of, the paragraph (k) so formed, and

(m)in those words, for “shall” substitute “are each to”.

108VAT: prompt payment discounts

(1)In Part 2 of Schedule 6 to VATA 1994 (valuation: special cases), for paragraph 4 (prompt payment discounts), substitute—

4(1)Sub-paragraph (2) applies where—

(a)goods or services are supplied for a consideration which is a price in money,

(b)the terms on which those goods or services are so supplied allow a discount for prompt payment of that price,

(c)payment of that price is not made by instalments, and

(d)payment of that price is made in accordance with those terms so that the discount is realised in relation to that payment.

(2)For the purposes of section 19 (value of supply of goods or services) the consideration is the discounted price paid.

(2)The amendment made by this section has effect in relation to relevant supplies made on or after 1 May 2014.

(3)The Treasury may by order made by statutory instrument provide that the amendment has effect in relation to supplies of a description specified in the order made on or after a date so specified (being a date before 1 April 2015).

(4)Subject to that, the amendment has effect in relation to supplies made on or after 1 April 2015.

(5)In this section—

Stamp duty land tax and annual tax on enveloped dwellings

109ATED: reduction in threshold from 1 April 2015

(1)Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2)In section 94(2)(a) (charge to tax), for “£2 million” substitute “£1 million”.

(3)In section 99 (amount of tax chargeable), in the table in subsection (4), before the first entry insert—

£7,000More than £1 million but not more than £2 million.

(4)The amendments made by subsections (1) to (3) have effect for chargeable periods beginning on or after 1 April 2015.

(5)In a case where tax is charged for the chargeable period beginning with 1 April 2015 with respect to a single-dwelling interest the taxable value of which on the relevant day (see section 99(5) of FA 2013) is not more than £2 million, sections 159 and 163 of FA 2013 have effect with the following modifications.

(6)Section 159 (annual tax on enveloped dwellings return) has effect as if for subsections (2) and (3) there were substituted—

(2)A return under subsection (1) must be delivered by the end of 1 October 2015 if the days on which the person is within the charge with respect to the interest include 1 April 2015.

(3)If the days on which the person is within the charge with respect to the interest do not include 1 April 2015, the return must be delivered—

(a)by the end of 1 October 2015, or

(b)by the end of the period of 30 days beginning with the first day in the chargeable period on which the person is within the charge with respect to the interest,

whichever is the later.

(7)Section 163 (payment of tax) has effect as if for subsection (1) there were substituted—

(1)Tax charged on a person under section 99 with respect to a single-dwelling interest must be paid—

(a)by the end of 31 October 2015, or

(b)if later, by the end of the filing date for the return.

110ATED: further reduction in threshold from 1 April 2016

(1)Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2)In section 94(2)(a) (charge to tax), for “£1 million” substitute “£500,000”.

(3)In section 99 (amount of tax chargeable), in the table in subsection (4), before the first entry insert—

£3,500More than £500,000 but not more than £1 million.

(4)The amendments made by this section have effect for chargeable periods beginning on or after 1 April 2016.

111SDLT: threshold for higher rate applying to certain transactions

(1)Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended as follows.

(2)In paragraph 1(2) (meaning of “higher threshold interest”) for “£2,000,000” substitute “£500,000”.

(3)In consequence of the amendment made by subsection (2), in the following provisions, for “£2,000,000” substitute “£500,000”—

(a)paragraph 4(1)(c);

(b)paragraph 6(2);

(c)paragraph 6(3)(b).

(4)The amendments made by this section have effect in relation to any chargeable transaction of which the effective date is on or after 20 March 2014.

(5)But the amendments do not have effect in relation to a transaction—

(a)effected in pursuance of a contract entered into and substantially performed before 20 March 2014,

(b)effected in pursuance of a contract entered into before that date and not excluded by subsection (6), or

(c)excepted by subsection (7).

(6)A transaction effected in pursuance of a contract entered into before 20 March 2014 is excluded by this subsection if—

(a)there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 20 March 2014,

(b)the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

(c)on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

(7)A transaction treated as occurring under paragraph 17(2) or 17A(4) of Schedule 15 to FA 2003 (partnerships) is excepted by this subsection if the effective date of the land transfer referred to in sub-paragraph (1)(a) of the paragraph concerned is before 20 March 2014.

112SDLT: exercise of collective rights by tenants of flats

(1)In section 74 of FA 2003 (exercise of collective rights by tenants of flats), in subsection (1A) for “£2,000,000”, in each place it occurs, substitute “£500,000”.

(2)The amendments made by this section have effect in relation to any chargeable transaction of which the effective date is on or after 1 July 2014.

(3)But the amendments do not have effect in relation to a transaction—

(a)effected in pursuance of a contract entered into and substantially performed before 20 March 2014, or

(b)effected in pursuance of a contract entered into before that date and not excluded by subsection (4).

(4)A transaction effected in pursuance of a contract entered into before 20 March 2014 is excluded by this subsection if—

(a)there is any variation of the contract, or assignment (or assignation) of rights under the contract, on or after 20 March 2014,

(b)the transaction is effected in consequence of the exercise on or after that date of any option, right of pre-emption or similar right, or

(c)on or after that date there is an assignment (or assignation), subsale or other transaction relating to the whole or part of the subject-matter of the contract as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance.

113SDLT: charities relief

Schedule 23 amends Schedule 8 to FA 2003 (stamp duty land tax: charities relief).

Stamp duty reserve tax and stamp duty

114Abolition of SDRT on certain dealings in collective investment schemes

(1)Part 2 of Schedule 19 to FA 1999 (which provides for a charge to stamp duty reserve tax on certain dealings with units in unit trusts) is omitted.

(2)In section 90(1B) of FA 1986 (exception to charge to stamp duty reserve tax on certain agreements to transfer property from a unit trust)—

(a)after “unit trust scheme” insert “if the unit holder is to receive only such part of each description of asset in the trust property as is proportionate to, or as nearly as practicable proportionate to, the unit holder’s share.”, and

(b)for the second sentence substitute “For these purposes there is a surrender of a unit where—

(a)a person (“P”) authorises or requires the trustees or managers of a unit trust scheme to treat P as no longer interested in a unit under the scheme, or

(b)a unit under the unit trust scheme is transferred to the managers of the scheme,

and the unit is a chargeable security.

(3)Accordingly—

(a)in FA 1999, in section 123(3), for “Parts I to III” substitute “Parts I and III”,

(b)in FA 2001, omit sections 93 and 94,

(c)in FA 2004, in Schedule 35, omit paragraph 46 and the italic heading before that paragraph,

(d)in FA 2005, omit section 97(3), (4) and (6), and

(e)in FA 2010, in Schedule 6, omit paragraph 15(2).

(4)The amendments made by this section have effect in relation to surrenders made or effected on or after 30 March 2014.

(5)Provision made by regulations under section 98 of FA 1986, section 152 of FA 1995 or section 17 of F(No.2)A 2005 in connection with the coming into force of this section may be made so as to have effect in relation to surrenders made or effected on or after 30 March 2014 (even if the regulations are made after that date).

(6)In subsections (4) and (5) a reference to surrenders is to be read in accordance with paragraph 2 of Schedule 19 to FA 1999.

115Abolition of stamp duty and SDRT: securities on recognised growth markets

Schedule 24 contains provision abolishing stamp duty and stamp duty reserve tax on instruments and transfers of securities traded on recognised growth markets.

116Temporary statutory effect of House of Commons resolution

(1)Section 50 of FA 1973 (temporary statutory effect of House of Commons resolution affecting stamp duties) is amended as follows.

(2)In subsection (2), for paragraph (c) (and the “and” after it) substitute—

(c)the dissolution of Parliament;

(ca)the prorogation of Parliament in a case where subsection (2B) does not apply; and.

(3)In that subsection, in paragraph (d), for “six” substitute “seven”.

(4)After that subsection insert—

(2A)Subsection (2B) applies where Parliament is prorogued at the end of a session if—

(a)during the session a Bill containing provisions to the same effect as the resolution is read a second time by the House or a Bill is amended (whether by the House or a Committee of the House or a Public Bill Committee) so as to include such provisions,

(b)the Standing Orders or Sessional Orders of the House provide, or during the session the House orders, that proceedings on the Bill not completed before the end of the session shall be resumed in the next session, and

(c)proceedings on the Bill are not completed during the session.

(2B)A resolution shall cease to have statutory effect under this section if, during the period of thirty sitting days beginning with the first sitting day of the next session, no Bill containing provisions to the same effect as the resolution is presented to the House.

(2C)In subsection (2B) “sitting day” means a day on which the House sits.

(2D)Where a Bill is amended as mentioned in subsection (2A)(a), it does not matter for the purposes of subsection (2A)(b) if the House orders as mentioned in subsection (2A)(b) before the amendment to the Bill is made.

Inheritance tax

117Inheritance tax

Schedule 25 contains provision about inheritance tax.

Estate duty

118Gifts to the nation: estate duty

(1)In Schedule 14 to FA 2012 (gifts to the nation), before paragraph 33 insert—

32A(1)This paragraph applies where a person (“the donor”) makes a qualifying gift of an object in circumstances where, had the donor instead sold the object to an individual at market value, a charge to estate duty would have arisen under section 40 of FA 1930 on the proceeds of sale.

(2)At the time when the gift is made, estate duty becomes chargeable under that section as if the gift were such a sale (subject to any limitation imposed by paragraph 33(2)).

(3)In the application of this paragraph to Northern Ireland, the references to section 40 of FA 1930 are to be read as references to section 2 of the Finance Act (Northern Ireland) 1931.

(2)Subsection (3) applies where a person (“the donor”) has, before the day on which this Act is passed, made a qualifying gift of an object in circumstances where, had the donor instead sold the object to an individual at market value, a charge to estate duty would have arisen under section 40 of FA 1930 on the proceeds of sale.

(3)No liability to estate duty under section 40 of FA 1930 arises in respect of the object on or after the day on which this Act is passed.

(4)In subsection (2) “qualifying gift” has the same meaning as in Schedule 14 to FA 2012.

(5)In the application of subsections (2) and (3) to Northern Ireland, the references to section 40 of FA 1930 are to be read as references to section 2 of the Finance Act (Northern Ireland) 1931.

Bank levy

119Bank levy: rates from 1 January 2014

(1)Schedule 19 to FA 2011 (bank levy) is amended as follows.

(2)In paragraph 6 (steps for determining the amount of the bank levy), in sub-paragraph (2)—

(a)for “0.065%” substitute “0.078%”, and

(b)for “0.130%” substitute “0.156%”.

(3)In paragraph 7 (special provision for chargeable periods falling wholly or partly before 1 January 2013)—

(a)in sub-paragraph (1) for “2013” substitute “2014”,

(b)in sub-paragraph (2), in the first column of the table in the substituted Step 7, for “Any time on or after 1 January 2013” substitute “1 January 2013 to 31 December 2013”, and

(c)at the end of that table add—

Any time on or after 1 January 20140.078%0.156%;

and in the italic heading immediately before paragraph 7, for “2013” substitute “2014”.

(4)Section 203 of FA 2013 (bank levy rates from 1 January 2014) is repealed.

(5)The amendments made by subsections (2) to (4) are treated as having come into force on 1 January 2014 (and accordingly the section repealed by subsection (4) is treated as never having come into force).

(6)Subsections (7) to (13) apply where—

(a)an amount of the bank levy is treated as if it were an amount of corporation tax chargeable on an entity (“E”) for an accounting period of E,

(b)the chargeable period in respect of which the amount of the bank levy is charged falls (or partly falls) on or after 1 January 2014, and

(c)under the Instalment Payment Regulations, one or more instalment payments, in respect of the total liability of E for the accounting period, were treated as becoming due and payable before the commencement date (“pre-commencement instalment payments”).

(7)Subsections (1) to (5) are to be ignored for the purpose of determining the amount of any pre-commencement instalment payment.

(8)If there is at least one instalment payment, in respect of the total liability of E for the accounting period, which under the Instalment Payment Regulations is treated as becoming due and payable on or after the commencement date (“post-commencement instalment payments”), the amount of that instalment payment, or the first of them, is to be increased by the adjustment amount.

(9)If there are no post-commencement instalment payments, a further instalment payment, in respect of the total liability of E for the accounting period, of an amount equal to the adjustment amount is to be treated as becoming due and payable at the end of the period of 30 days beginning with the commencement date.

(10)“The adjustment amount” is the difference between—

(a)the aggregate amount of the pre-commencement instalments determined in accordance with subsection (7), and

(b)the aggregate amount of those instalment payments determined ignoring subsection (7) (and so taking account of subsections (1) to (5)).

(11)In the Instalment Payment Regulations—

(a)in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13, references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations are to be read as including a reference to subsections (6) to (10) (and in regulation 7(2) “the regulation in question”, and in regulation 8(2) “that regulation”, are to be read accordingly), and

(b)in regulation 9(3), the reference to those Regulations is to be read as including a reference to subsections (6) to (10).

(12)In section 59D of TMA 1970 (general rule as to when corporation tax is due and payable), in subsection (5), the reference to section 59E is to be read as including a reference to subsections (6) to (11).

(13)In this section—

and references to the total liability of E for an accounting period are to be construed in accordance with regulation 2(3) of the Instalment Payment Regulations.

120Bank levy: miscellaneous changes

Schedule 26 contains miscellaneous changes to the bank levy.

Gaming duty

121Rates of gaming duty

(1)In section 11(2) of FA 1997 (rates of gaming duty) for the table substitute—

TABLE
Part of gross gaming yieldRate
The first £2,302,00015 per cent
The next £1,587,00020 per cent
The next £2,779,00030 per cent
The next £5,865,50040 per cent
The remainder50 per cent

(2)The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2014.

Bingo duty

122Rate of bingo duty

(1)In section 17(1)(b) of BGDA 1981 (bingo duty chargeable at 20 per cent of bingo promotion profits), for “20” substitute “10”.

(2)The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 30 June 2014.

123Exemption from bingo duty: small-scale amusements provided commercially

(1)In paragraph 5(1) of Schedule 3 to BGDA 1981 (exemptions from bingo duty for small-scale amusements provided commercially), for paragraph (b) substitute—

(b)on any premises if, for the time being—

(i)a machine in respect of which a person is liable for machine games duty is located on the premises, and

(ii)an adult gaming centre premises licence issued under Part 8 of the Gambling Act 2005 (see section 150(1)(c)) is in force in respect of the premises; or.

(2)The amendment made by this section has effect in relation to games of bingo which begin to be played on or after the day on which this Act is passed.

Machine games duty

124Rates of machine games duty

(1)Schedule 24 to FA 2012 is amended as follows.

(2)For paragraph 5 substitute—

Types of machine

5(1)Machines are divided into three types for the purposes of machine games duty.

(2)A machine is a “type 1 machine” if it can be demonstrated that—

(a)the highest charge payable for playing a dutiable machine game on the machine does not exceed 20p, and

(b)the maximum amount of cash that can be won from playing a dutiable machine game on the machine does not exceed £10.

(3)A machine is a “type 2 machine” if—

(a)it is not a type 1 machine, and

(b)it can be demonstrated that the highest charge payable for playing a dutiable machine game on the machine does not exceed £5.

(4)Any other machine is a “type 3 machine”.

(5)The Treasury may by order substitute for a sum for the time being specified in sub-paragraph (2)(a) or (b) or (3)(b) such higher sum as may be specified in the order.

(3)For paragraph 6(2) substitute—

(2)The amount of the duty is found by—

(a)applying the lower rate to the person’s total net takings in the accounting period for type 1 machines,

(b)applying the standard rate to the person’s total net takings in the accounting period for type 2 machines,

(c)applying the higher rate to the person’s total net takings in the accounting period for type 3 machines, and

(d)aggregating the results.

(4)For paragraph 9 substitute—

The rates

9(1)The lower rate is 5%.

(2)The standard rate is 20%.

(3)The higher rate is 25%.

(4)If a rate changes during an accounting period—

(a)the old rate is to be applied to the person’s total net takings in the part of the period before the change, and

(b)the new rate is to be applied to the person’s total net takings in the part of the period after the change.

(5)If it is not possible to identify for the purposes of sub-paragraph (4) the part of the period to which an amount relates, it is to be apportioned on a just and reasonable basis.

(5)The Machine Games Duty (Types of Machine) Order 2014 (S.I. 2014/47) is revoked.

(6)The amendments and revocation made by this section have effect in relation to the playing of machine games on or after 1 March 2015.

PART 3General betting duty, pool betting duty and remote gaming duty

CHAPTER 1General betting duty

The duty

125General betting duty

A duty of excise, to be known as general betting duty, is charged in accordance with this Chapter.

General and spread bets

126General bets

(1)A bet is a general bet for the purposes of this Part if—

(a)it is not an on-course bet,

(b)it is not a spread bet,

(c)it is not made by way of pool betting, and

(d)one or more of conditions A to C is met in relation to it.

(2)Condition A is that the person who makes the bet (whether as principal or agent) does so while present at a place in the United Kingdom where betting facilities are provided in the course of a business and the bet is made using those facilities.

(3)Condition B is that—

(a)the person who makes the bet as principal is a UK person, and

(b)the bet is not an excluded bet.

(4)Condition C is that—

(a)the person who makes the bet as principal is a body corporate not legally constituted in the United Kingdom,

(b)the bookmaker with whom the bet is made knows or has reasonable cause to believe that at least one potential beneficiary of any winnings from the bet is a UK person, and

(c)the bet is not an excluded bet.

127General betting duty charge on general bets

(1)General betting duty is charged on a general bet made with a bookmaker.

(2)It is charged at the rate of 15% of the bookmaker’s profits on general bets for an accounting period.

(3)The bookmaker’s profits on general bets for an accounting period are the aggregate of—

(a)the amount of the bookmaker’s ordinary profits for the period in respect of general bets (calculated in accordance with section 131), and

(b)the amount of the bookmaker’s retained winnings profits for the period in respect of general bets (calculated in accordance with section 132).

(4)Where the calculation for an accounting period under subsection (3) produces a negative amount—

(a)the bookmaker’s profits on general bets for the accounting period are treated as nil, and

(b)the amount produced by the calculation may be carried forward in reduction of the bookmaker’s profits on general bets for one or more later accounting periods.

128Spread bets

(1)A bet is a spread bet for the purposes of this Part if it constitutes a contract the making or accepting of which is a regulated activity within the meaning of section 22 of the Financial Services and Markets Act 2000.

(2)In this Part—

(3)The Commissioners may by regulations provide that a specified matter—

(a)is to be treated as a financial matter for the purposes of subsection (2), or

(b)is not to be treated as a financial matter for those purposes.

129General betting duty charge on financial spread bets

(1)General betting duty is charged on a financial spread bet made with a bookmaker who is in the United Kingdom.

(2)It is charged at the rate of 3% of the bookmaker’s profits on financial spread bets for an accounting period.

(3)The bookmaker’s profits on financial spread bets for an accounting period are the aggregate of—

(a)the amount of the bookmaker’s ordinary profits for the period in respect of financial spread bets (calculated in accordance with section 131), and

(b)the amount of the bookmaker’s retained winnings profits for the period in respect of financial spread bets (calculated in accordance with section 132).

(4)Where the calculation for an accounting period under subsection (3) produces a negative amount—

(a)the bookmaker’s profits on financial spread bets for the accounting period are treated as nil, and

(b)the amount produced by the calculation may be carried forward in reduction of the bookmaker’s profits on financial spread bets for one or more later accounting periods.

130General betting duty charge on non-financial spread bets

(1)General betting duty is charged on a non-financial spread bet made with a bookmaker who is in the United Kingdom.

(2)It is charged at the rate of 10% of the bookmaker’s profits on non-financial spread bets for an accounting period.

(3)The bookmaker’s profits on non-financial spread bets for an accounting period are the aggregate of—

(a)the amount of the bookmaker’s ordinary profits for the period in respect of non-financial spread bets (calculated in accordance with section 131), and

(b)the amount of the bookmaker’s retained winnings profits for the period in respect of non-financial spread bets (calculated in accordance with section 132).

(4)Where the calculation for an accounting period under subsection (3) produces a negative amount—

(a)the bookmaker’s profits on non-financial spread bets for the accounting period are treated as nil, and

(b)the amount produced by the calculation may be carried forward in reduction of the bookmaker’s profits on non-financial spread bets for one or more later accounting periods.

131Ordinary profits

Take the following steps to calculate the amount of a bookmaker’s ordinary profits in respect of a class of bets for an accounting period.

132Retained winnings profits

(1)The amount of a bookmaker’s retained winnings profits in respect of a class of bets for an accounting period is the aggregate of amounts which cease to be qualifying amounts in the accounting period.

(2)An amount is a qualifying amount for the purposes of this section if, as a result of a person (“P”) being notified as mentioned in section 140(2)(b), it has been taken into account in calculating the bookmaker’s ordinary profits for bets of that class in any accounting period.

(3)An amount ceases to be a qualifying amount for the purposes of this section if, otherwise than by virtue of being withdrawn by P as mentioned in section 140(2)(b), P ceases to be entitled to withdraw it.

(4)The Commissioners may by notice published by them direct that subsection (3) is not to apply in a specified case or class of cases.

133Bet-brokers

(1)This section applies where—

(a)one person (the “bettor”) makes a bet with another person (the “bet-taker”) using facilities provided in the course of a business, other than a betting exchange business, by a third person (the “bet-broker”), or

(b)one person (the “bet-broker”) in the course of a business makes a bet with another person (the “bet-taker”) as the agent of a third person (the “bettor”) (whether the bettor is a disclosed principal or an undisclosed principal).

(2)For the purposes of sections 126 to 132—

(a)the bet is to be treated as if it were made separately by the bettor with the bet-broker and by the bet-broker with the bet-taker,

(b)the bet-broker is to be treated as a bookmaker in respect of the bet,

(c)the aggregate of amounts due to be paid by the bettor in respect of the bet is to be treated as being due separately to the bet-broker and to the bet-taker (and any amount due to be paid by the bet-broker to the bet-taker is to be disregarded), and

(d)a sum paid by the bet-taker by way of winnings in respect of the bet is to be treated as having been paid separately by the bet-taker and by the bet-broker at that time and for that purpose (and any sum paid by the bet-broker is to be disregarded).

(3)Where there is any doubt as to which of two persons is the bettor and which the bet-taker for the purposes of subsection (1)(a), whichever of the two was the first to use the facilities of the bet-broker to offer the bet is to be treated as the bet-taker.

(4)In this section “betting exchange business” means a business such as is mentioned in section 141(1).

Pool betting on horse and dog races

134Chapter 1 pool bets

(1)A bet is a “Chapter 1 pool bet” for the purposes of this Part if—

(a)it relates only to horse racing or dog racing,

(b)it is not an on-course bet,

(c)it is made by way of pool betting, and

(d)one or more of conditions A to C is met in relation to it.

(2)Condition A is that the person who makes the bet (whether as principal or agent) does so while present at a place in the United Kingdom where betting facilities are provided in the course of a business and the bet is made using those facilities.

(3)Condition B is that—

(a)the person who makes the bet as principal is a UK person, and

(b)the bet is not an excluded bet.

(4)Condition C is that—

(a)the person who makes the bet as principal is a body corporate not legally constituted in the United Kingdom,

(b)the bookmaker with whom the bet is made knows or has reasonable cause to believe that at least one potential beneficiary of any winnings from the bet is a UK person, and

(c)the bet is not an excluded bet.

(5)A Chapter 1 pool bet is a “pooled stake Chapter 1 pool bet” for the purposes of this Part if all or any part of the stake money on the bet is assigned by or on behalf of the bookmaker with whom it is made to a fund (referred to in this Part as a “Chapter 1 stake fund”) from which winnings are to be paid in respect of pool betting.

(6)A Chapter 1 pool bet is an “ordinary Chapter 1 pool bet” for the purposes of this Part if it is not a pooled stake Chapter 1 pool bet.

135General betting duty charge on Chapter 1 pool bets

(1)General betting duty is charged on a Chapter 1 pool bet made with a bookmaker.

(2)It is charged at the rate of 15% of the bookmaker’s profits on Chapter 1 pool bets for an accounting period.

(3)The bookmaker’s profits on Chapter 1 pool bets for an accounting period are the aggregate of—

(a)the amount of the bookmaker’s profits for the period in respect of pooled stake Chapter 1 pool bets (calculated in accordance with section 136), and

(b)the amount of the bookmaker’s profits for the period in respect of ordinary Chapter 1 pool bets (calculated in accordance with section 137), and

(c)the amount of the bookmaker’s profits for the period in respect of retained winnings on Chapter 1 pool bets (calculated in accordance with section 138).

(4)Where the calculation for an accounting period under subsection (3) produces a negative amount—

(a)the bookmaker’s profits on Chapter 1 pool bets for the accounting period are treated as nil, and

(b)the amount produced by the calculation may be carried forward in reduction of the bookmaker’s profits on Chapter 1 pool bets for one or more later accounting periods.

136Profits on pooled stake Chapter 1 pool bets

(1)Take the following steps to calculate the amount of a bookmaker’s profits for an accounting period in respect of pooled stake Chapter 1 pool bets.

(2)For the purposes of Step 2 the relevant proportion, in relation to any amount which is used otherwise than to provide winnings, is—

(a)if the amount relates to bets on a specific event, the proportion of that amount that consists of relevant stake money that fell due to the bookmaker in respect of the bets,

(b)if the amount does not relate to bets on a specific event but relates to amounts assigned to the fund during a specific period, the proportion of that amount that consists of relevant stake money assigned to the fund by or on behalf of the bookmaker during that period, and

(c)in any other case, the proportion of the total amount contained in the fund immediately before the amount is so used which consists of relevant stake money assigned to the fund by or on behalf of the bookmaker.

(3)For the purposes of Step 4—

(a)a top-up payment is assigned to a Chapter 1 stake fund if the bookmaker assigns an amount (other than stake money on a bet) to the fund to satisfy a guarantee given by the bookmaker that a specified minimum amount of winnings will be available in respect of bets made with the bookmaker, and

(b)the appropriate proportion, in relation to such a payment, is the proportion determined in accordance with a notice published by the Commissioners.

(4)A notice under subsection (3)(b) may provide for top-up payments to be ignored for the purposes of Step 4 in a specified case or class of cases.

(5)In this section “relevant stake money” means stake money in respect of a pooled stake Chapter 1 pool bet.

137Profits on ordinary Chapter 1 pool bets

To calculate the amount of a bookmaker’s profits for an accounting period in respect of ordinary Chapter 1 pool bets—

(a)take the aggregate of the stake money falling due to the bookmaker in the accounting period in respect of such bets, and

(b)subtract the aggregate of the expenditure by or on behalf of the bookmaker for the period on winnings in respect of such bets.

138Profits on retained winnings on Chapter 1 pool bets

(1)The amount of a bookmaker’s profits for an accounting period in respect of retained winnings on Chapter 1 pool bets is the aggregate of the amounts which cease to be qualifying amounts in the accounting period.

(2)An amount is a qualifying amount for the purposes of this section if, as a result of a person (“P”) being notified as mentioned in section 140(2)(b), it has been taken into account in calculating the bookmaker’s profits for any accounting period under section 136 or 137.

(3)An amount ceases to be a qualifying amount for the purposes of this section if, otherwise than by virtue of being withdrawn from the account by P as mentioned in section 140(2)(b), P ceases to be entitled to withdraw it.

(4)The Commissioners may by notice published by them direct that subsection (3) is not to apply in a specified case or class of cases.

Stake money and winnings

139Chapter 1: stake money

(1)For the purposes of this Chapter the stake money on a bet is the aggregate of the amounts which fall due in respect of the bet.

(2)If the stake money falls due to a person other than the bookmaker with whom the bet is made, it is to be treated as falling due to the bookmaker.

(3)Where the bet is not a spread bet and the sum which the person who makes the bet will lose if unsuccessful is known when the bet is made, that sum is to be treated as falling due when the bet is made (irrespective of when it is actually paid or required to be paid).

(4)Where the person who makes the bet does so in pursuance of an offer which permits the person to pay nothing or less than the amount which the person would have been required to pay without the offer, the person is to be treated as being due to pay that amount—

(a)to the bookmaker with whom the bet is made, and

(b)at the time when the bet is made.

(5)All payments made—

(a)for or on account of or in connection with the bet,

(b)in addition to amounts falling due in respect of the bet, and

(c)by the person making the bet,

are to be treated as amounts due in respect of the bet except so far as the contrary is proved by the bookmaker whose profits on the bet are being calculated.

(6)In calculating any amount falling due in respect of the bet, no deduction is to be made in respect of—

(a)any other benefit secured by the person who makes the bet as a result of paying the money,

(b)a person’s expenses, whether in paying duty or otherwise, or

(c)any other matter.

140Chapter 1: winnings

(1)Only winnings in the form of money are to be taken into account when determining for the purposes of this Chapter what are winnings on a bet.

(2)For those purposes, winnings on a bet include—

(a)the return of a stake on the bet, and

(b)any winnings on the bet held in an account for a person (“P”) if P is notified that the amount is being held in the account and may be withdrawn by P on demand.

(3)The Commissioners may by regulations make provision as to when, for the purposes of any calculation under this Chapter—

(a)winnings are to be treated as paid or provided, and

(b)expenditure on winnings is to be treated as incurred.

Exchanges

141General betting duty charge on betting exchanges

(1)This section applies where—

(a)one person makes a bet with another person using facilities provided by a third person in the course of a business, and

(b)that business is one that does not involve the provision of premises for use by persons making or taking bets.

(2)General betting duty is charged on the amounts (“commission charges”) that any party to the bet who is a UK person is charged, whether by deduction from winnings or otherwise, for using those facilities.

(3)No deductions are allowed from commission charges.

(4)The amount of duty charged under this section in respect of bets determined in an accounting period is 15% of the commission charges relating to those bets.

(5)Where a person arranges for facilities relating to a bet to be provided by another person, the facilities are to be treated for the purposes of this section and section 142(4) as provided by the person who makes the arrangements instead of by the person who provides the facilities.

(6)For the purposes of this section it does not matter—

(a)whether the bet is made in the United Kingdom or elsewhere;

(b)whether the facilities are in the United Kingdom or elsewhere.

Payment

142Liability to pay

(1)All general betting duty chargeable in respect of—

(a)bets made in an accounting period, or

(b)in the case of duty chargeable under section 141, bets determined in an accounting period,

becomes due at the end of that period.

(2)In the case of bets made with a bookmaker in an accounting period the general betting duty is to be paid—

(a)when it becomes due, and

(b)by the bookmaker.

(3)But general betting duty which is due to be paid by a bookmaker in respect of bets may be recovered from the following persons as if they and the bookmaker were jointly and severally liable to pay the duty—

(a)the holder of any licence which authorises—

(i)the provision of facilities for betting by the business in the course of which the bets were made, or

(ii)betting at the place where the bets were made;

(b)a person responsible for the management of the business mentioned in paragraph (a)(i);

(c)where the bookmaker is a company, a director.

(4)In the case of bets made in an accounting period by means of facilities provided by a person as described in section 141 the general betting duty is to be paid—

(a)when it becomes due, and

(b)by the person who provides the facilities.

CHAPTER 2Pool betting duty

143Chapter 2 pool bets

(1)A bet is a Chapter 2 pool bet for the purposes of this Part if—

(a)it is not made wholly in relation to horse racing or dog racing,

(b)it is not made for community benefit,

(c)it does not constitute the taking of a ticket or chance in a lottery,

(d)it is made by way of pool betting, and

(e)one or more of conditions A to C is met in relation to it.

(2)Condition A is that the person who makes the bet (whether as principal or agent) does so while present at a place in the United Kingdom where betting facilities are provided in the course of a business and the bet is made using those facilities.

(3)Condition B is that—

(a)the person who makes the bet as principal is a UK person, and

(b)the bet is not an excluded bet.

(4)Condition C is that—

(a)the person who makes the bet as principal is a body corporate not legally constituted in the United Kingdom,

(b)the bookmaker with whom the bet is made knows or has reasonable cause to believe that at least one potential beneficiary of any winnings from the bet is a UK person, and

(c)the bet is not an excluded bet.

(5)A Chapter 2 pool bet is a “pooled stake Chapter 2 pool bet” for the purposes of this Part if all or any part of the stake money on the bet is assigned by or on behalf of the bookmaker with whom the bet is made to a fund (referred to in this Part as a “Chapter 2 stake fund”) from which winnings are to be paid in respect of pool betting.

(6)A Chapter 2 pool bet is an “ordinary Chapter 2 pool bet” for the purposes of this Part if it is not a pooled stake Chapter 2 pool bet.

144Pool betting duty charge on Chapter 2 pool bets

(1)A duty of excise, to be known as pool betting duty, is charged on a Chapter 2 pool bet made with a bookmaker.

(2)It is charged at the rate of 15% of the bookmaker’s profits on Chapter 2 pool bets for an accounting period.

(3)The bookmaker’s profits on Chapter 2 pool bets for an accounting period are the aggregate of—

(a)the amount of the bookmaker’s profits for the period in respect of pooled stake Chapter 2 pool bets (calculated in accordance with section 145),

(b)the amount of the bookmaker’s profits for the period in respect of ordinary Chapter 2 pool bets (calculated in accordance with section 146), and

(c)the amount of the bookmaker’s profits for the period in respect of retained winnings on Chapter 2 pool bets (calculated in accordance with section 147).

(4)Where the calculation for an accounting period under subsection (3) produces a negative amount—

(a)the bookmaker’s profits on Chapter 2 pool bets for the accounting period are treated as nil, and

(b)the amount produced by the calculation may be carried forward in reduction of the bookmaker’s profits on Chapter 2 pool bets for one or more later accounting periods.

145Profits on pooled stake Chapter 2 pool bets

(1)Take the following steps to calculate the amount of a bookmaker’s profits for an accounting period in respect of pooled stake Chapter 2 pool bets.

(2)For the purposes of Step 2 the relevant proportion, in relation to any amount which is used otherwise than to provide winnings, is—

(a)if the amount relates to bets on a specific event, the proportion of that amount that consists of relevant stake money that fell due to the bookmaker in respect of the bets,

(b)if the amount does not relate to bets on a specific event but relates to amounts assigned to the fund during a specific period, the proportion of that amount that consists of relevant stake money assigned to the fund by or on behalf of the bookmaker during that period, and

(c)in any other case, the proportion of the total amount contained in the fund immediately before the amount is so used which consists of relevant stake money assigned to the fund by or on behalf of the bookmaker.

(3)For the purposes of Step 4—

(a)a top-up payment is assigned to a Chapter 2 stake fund if the bookmaker assigns an amount (other than stake money on a bet) to the fund to satisfy a guarantee given by the bookmaker that a specified minimum amount of winnings will be available in respect of bets made with the bookmaker, and

(b)the appropriate proportion, in relation to such a payment, is the proportion determined in accordance with a notice published by the Commissioners.

(4)A notice under subsection (3)(b) may provide for top-up payments to be ignored for the purposes of Step 4 in a specified case or class of cases.

(5)In this section “relevant stake money” means stake money in respect of a pooled stake Chapter 2 pool bet.

146Profits on ordinary Chapter 2 pool bets

To calculate the amount of a bookmaker’s profits for an accounting period in respect of ordinary Chapter 2 pool bets—

(a)take the aggregate of the stake money falling due to the bookmaker in the accounting period in respect of such bets, and

(b)subtract the aggregate of the expenditure by or on behalf of the bookmaker for the period on winnings in respect of such bets.

147Profits on retained winnings on Chapter 2 pool bets

(1)The amount of a bookmaker’s profits for an accounting period in respect of retained winnings on Chapter 2 pool bets is the aggregate of the amounts which cease to be qualifying amounts during the accounting period.

(2)An amount is a qualifying amount for the purposes of this section if, as a result of a person (“P”) being notified as mentioned in section 149(2)(b), it has been taken into account in calculating the bookmaker’s profits for any accounting period under section 145 or 146.

(3)An amount ceases to be a qualifying amount for the purposes of this section if, otherwise than by virtue of being withdrawn by P as mentioned in section 149(2)(b), P ceases to be entitled to withdraw it.

(4)The Commissioners may by notice published by them direct that subsection (3) is not to apply in a specified case or class of cases.

148Chapter 2: stake money

(1)For the purposes of this Chapter the stake money on a bet is the aggregate of the amounts which fall due in respect of the bet.

(2)If the stake money falls due to a person other than the bookmaker with whom the bet is made, it is to be treated as falling due to the bookmaker.

(3)Any payment that entitles a person to make the bet is, if the person makes the bet, to be treated as an amount falling due in respect of the bet.

(4)All payments made—

(a)for or on account of or in connection with the bet,

(b)in addition to amounts falling due in respect of the bet, and

(c)by the person making the bet,

are to be treated as amounts due in respect of the bet except so far as the contrary is proved by the bookmaker whose profits on the bet are being calculated.

(5)Subsections (6) and (7) apply for the purposes of subsection (1) but have effect subject to any regulations under subsection (8).

(6)Where—

(a)a person makes a bet, and

(b)the bet relates to a single event, or to two or more events taking place on the same day,

any sum due to the bookmaker in respect of the bet is treated as falling due on the day on which the event or events take place.

(7)Where—

(a)a person makes a bet, and

(b)subsection (6) does not apply,

any sum due to the bookmaker in respect of the bet is treated as falling due when the bet is made.

(8)The Commissioners may by regulations make provision as to when any sum due to the bookmaker in respect of a bet is to be treated as falling due.

(9)Provision made by regulations under subsection (8) may not provide for a sum due to the bookmaker in respect of a bet to be treated as falling due—

(a)earlier than when the bet is made, or

(b)later than when the bet is determined.

149Chapter 2: winnings

(1)Only winnings in the form of money are to be taken into account when determining for the purposes of this Chapter what are winnings on a bet.

(2)For those purposes, winnings on a bet include—

(a)the return of a stake on the bet, and

(b)any winnings on the bet held in an account for a person (“P”) if P is notified that the amount is being held in the account and may be withdrawn by P on demand.

(3)Winnings on a bet for which no stake money fell due are to be ignored for the purposes of any calculation under this Chapter.

(4)The Commissioners may by regulations make provision as to when, for the purposes of any calculation under this Chapter—

(a)winnings are to be treated as paid or provided, and

(b)expenditure on winnings is to be treated as incurred.

150Payments treated as bets

(1)Where payments are made for the chance of winning any money or money’s worth on terms under which the persons making the payments have a power of selection that may (directly or indirectly) determine the winner, those payments are (subject to section 183) to be treated as bets for the purposes of this Chapter even if the power is not exercised.

(2)Where any payment entitles a person to take part in a transaction that is, on the person’s part only, not a bet made by way of pool betting by reason of the person not in fact making any stake as if the transaction were such a bet, the transaction is to be treated as such a bet for the purposes of this Chapter (and section 148(4) applies to any such payment).

151Payment and recovery

(1)Pool betting duty charged on a bookmaker’s profits on Chapter 2 pool bets for an accounting period—

(a)becomes due at the end of the period,

(b)is to be paid by the bookmaker, and

(c)is to be paid when it becomes due.

(2)Pool betting duty that is due to be paid may be recovered from the following persons as if they were jointly and severally liable to pay the duty—

(a)the bookmaker;

(b)a person responsible for the management of any business in the course of which any bets have been made that are Chapter 2 pool bets for the purposes of the calculation of the amount of the bookmaker’s profits on Chapter 2 pool bets for any accounting period;

(c)a person responsible for the management of any totalisator used for the purposes of any such business;

(d)where a person within any of paragraphs (a) to (c) is a company, a director.

152Notification of reliance on community benefit exemption

(1)Where a bookmaker relies for the purposes of pool betting duty on the fact that a bet is not a Chapter 2 pool bet by virtue of being made for community benefit, the bookmaker must inform the Commissioners of that fact.

(2)The Commissioners may by notice published by them—

(a)specify the manner in which, and the time at which, the Commissioners are to be informed as mentioned in subsection (1), and

(b)direct that subsection (1) is not to apply in a specified case or class of cases.

153Bets made for community benefit

(1)For the purposes of this Part (but subject to any direction under subsection (3)), a bet is made “for community benefit” if—

(a)the promoter of the betting concerned is a community society or is bound to pay all benefits accruing from the betting to such a society, and

(b)the person making the bet knows, when making it, that the purpose of the betting is to benefit such a society.

(2)In the case of a bet made by means of a totalisator, the reference in subsection (1) to the promoter of the betting concerned is a reference to the operator.

(3)The Commissioners may direct that any bet specified by the direction, or of a description so specified, is not a bet made for community benefit.

(4)The power conferred by subsection (3) may not be exercised unless the Commissioners consider that an unreasonably large part of the amounts paid in respect of the bets concerned will, or may, be applied otherwise than—

(a)in the payment of winnings, or

(b)for the benefit of a community society.

(5)In this section “community society” means—

(a)a society established and conducted for charitable purposes only, or

(b)a society established and conducted wholly or mainly for the support of athletic sports or athletic games and not established or conducted for purposes of private or commercial gain.

(6)In this section “society” includes any club, institution, organisation or association of persons, by whatever name called.

CHAPTER 3Remote gaming duty

154Remote gaming

(1)For the purposes of this Part “remote gaming” is gaming in which persons participate by the use of—

(a)the internet,

(b)telephone,

(c)television,

(d)radio, or

(e)any other kind of electronic or other technology for facilitating communication.

(2)Remote gaming is “pooled prize gaming” for the purposes of this Part if all or any part of the gaming payment is assigned by or on behalf of the gaming provider to a fund (referred to in this Part as a “gaming prize fund”) from which prizes are to be provided to participants in the gaming.

(3)Remote gaming is “ordinary gaming” for the purposes of this Part if it is not pooled prize gaming.

(4)The Treasury may by regulations—

(a)amend the definition of “remote gaming” in subsection (1), and

(b)make such consequential amendments of section 17(2A) of BGDA 1981 (cases in which bingo duty is not charged on bingo played by means of remote communication) as appear to the Treasury to be necessary.

(5)Nothing in subsection (4)(b) affects the generality of section 194(1).

155Remote gaming duty

(1)A duty of excise, to be known as remote gaming duty, is charged on a chargeable person’s participation in remote gaming under arrangements (whether or not enforceable) between the chargeable person and another person (referred to in this Part as a “gaming provider”).

(2)In this Part “chargeable person” means—

(a)any UK person, and

(b)any body corporate not legally constituted in the United Kingdom if the person with whom the arrangements mentioned in subsection (1) are made knows, or has reasonable cause to believe, that at least one potential beneficiary of any prizes from remote gaming under the arrangements is a UK person.

(3)Remote gaming duty is chargeable at the rate of 15% of the gaming provider’s profits on remote gaming for an accounting period.

(4)The gaming provider’s profits on remote gaming for an accounting period are the aggregate of—

(a)the amount of the provider’s profits for the period in respect of pooled prize gaming (calculated in accordance with section 156),

(b)the amount of the provider’s profits for the period in respect of ordinary gaming (calculated in accordance with section 157), and

(c)the amount of the provider’s profits for the period in respect of retained prizes (calculated in accordance with section 158).

(5)Where the calculation for an accounting period under subsection (4) produces a negative amount—

(a)the gaming provider’s profits on remote gaming for the accounting period are treated as nil, and

(b)the amount produced by the calculation may be carried forward in reduction of the gaming provider’s profits on remote gaming for one or more later accounting periods.

156Profits on pooled prize gaming

(1)Take the following steps to calculate the amount of a gaming provider’s profits for an accounting period in respect of pooled prize gaming.

(2)For the purposes of Step 2 the relevant proportion, in relation to any amount which is used otherwise than to provide prizes, is—

(a)if the amount relates to a specific game of chance, the proportion of that amount that consists of relevant gaming payments made to the provider in respect of that game,

(b)if the amount does not relate to a specific game of chance but relates to amounts assigned to the fund during a specific period, the proportion of that amount that consists of relevant gaming payments assigned to the fund by or on behalf of the provider during that period, and

(c)in any other case, the proportion of the total amount contained in the fund immediately before the amount is so used which consists of relevant gaming payments assigned to the fund by or on behalf of the provider.

(3)For the purposes of Step 4—

(a)a top-up payment is assigned to a gaming prize fund if the gaming provider assigns an amount (other than a gaming payment) to the fund to satisfy a guarantee given by the gaming provider that prizes of a specified minimum amount will be available in respect of gaming under arrangements made with the provider, and

(b)the appropriate proportion, in relation to such a top-up payment, is the proportion determined in accordance with a notice published by the Commissioners.

(4)A notice under subsection (3)(b) may provide for top-up payments to be ignored for the purposes of Step 4 in a specified case or class of cases.

(5)In this section “relevant gaming payment” means a gaming payment in respect of pooled prize gaming.

157Profits on ordinary gaming

(1)To calculate the amount of a gaming provider’s profits for an accounting period in respect of ordinary gaming—

(a)take the aggregate of the gaming payments made to the provider in the accounting period in respect of ordinary gaming, and

(b)subtract the amount of the provider’s expenditure for the period on prizes in respect of such gaming.

(2)The amount of the gaming provider’s expenditure on prizes for an accounting period in respect of ordinary gaming is the aggregate of the value of prizes provided by or on behalf of the provider in that period which have been won (at any time) by chargeable persons participating in ordinary gaming.

158Profits on retained prizes

(1)The amount of a gaming provider’s profits for an accounting period in respect of retained prizes is the aggregate of the amounts which cease to be qualifying amounts during the accounting period.

(2)An amount is a qualifying amount for the purposes of this section if, as a result of a person (“P”) being notified as mentioned in section 160(1), it has been taken into account in calculating the provider’s profits for any accounting period under section 156 or 157.

(3)An amount ceases to be a qualifying amount for the purposes of this section if, otherwise than by virtue of being withdrawn by P as mentioned in section 160(1), P ceases to be entitled to withdraw it.

(4)The Commissioners may by notice published by them direct that subsection (3) is not to apply in a specified case or class of cases.

159Gaming payments

(1)Where a chargeable person participates in remote gaming, the “gaming payment” for the purposes of this Chapter is the aggregate of—

(a)any amount that entitles the person to participate in the gaming, and

(b)any other amount payable for or on account of or in connection with the person’s participation in the gaming.

(2)If the gaming payment is made to a person other than the gaming provider, it is to be treated for the purposes of this Chapter as made to the gaming provider.

(3)If the gaming payment has not been made at the time when the chargeable person begins to participate in the remote gaming to which it relates, it is to be treated for the purposes of this Chapter as being made at that time.

(4)The Treasury may by regulations provide that where a person relies on an offer which waives a gaming payment or permits payment of less than the amount which would have been required to be paid without the offer, the person is to be treated for the purposes of this Chapter as having paid that amount.

160Prizes

(1)A reference in section 156 or 157 to providing a prize to a person includes a reference to crediting money to an account if the person is notified that—

(a)the money is being held in the account, and

(b)the person is entitled to withdraw it on demand.

(2)Where the account of a person participating in gaming is credited otherwise than as described in subsection (1), the credit is to be treated for the purposes of sections 156 and 157 as the provision of a prize; but the Commissioners may direct that this subsection is not to apply in a specified case or class of cases.

(3)The return of all or part of a gaming payment is to be treated for the purposes of sections 156 and 157 as the provision of a prize.

(4)Where a prize is obtained by or on behalf of a gaming provider from a person not connected with the person who obtains the prize, the cost to the person who obtains the prize is to be treated as the expenditure on the prize for the purposes of sections 156 and 157.

(5)Where a prize is a voucher which—

(a)may be used in place of money as whole or partial payment for benefits of a specified kind obtained from a specified person,

(b)specifies an amount as the sum or maximum sum in place of which the voucher may be used, and

(c)does not fall within subsection (4),

the specified amount is the value of the voucher for the purposes of sections 156 and 157.

(6)Where a prize is a voucher (whether or not it falls within subsection (4)) no expenditure is to be treated as having been incurred on the prize for the purposes of sections 156 and 157 if—

(a)it does not satisfy subsection (5)(a) and (b), or

(b)its use as described in subsection (5)(a) is subject to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount mentioned in subsection (5)(b).

(7)In the case of a prize which is neither money nor a voucher and which does not fall within subsection (4), the expenditure on the prize for the purposes of sections 156 and 157 is—

(a)the amount which the prize would cost if obtained from a person not connected with the person who provides it, or

(b)where no amount can reasonably be determined in accordance with paragraph (a), nil.

(8)For the purposes of this section—

(a)a reference to connection between two persons is to be construed in accordance with section 1122 of CTA 2010 (connected persons), and

(b)an amount paid by way of value added tax on the acquisition of a thing is to be treated as part of its cost (irrespective of whether or not the amount is taken into account for the purpose of a credit or refund).

161Exemptions

(1)Remote gaming duty is not charged on participation by a chargeable person in remote gaming if—

(a)the arrangements between the chargeable person and the gaming provider are not entered into in or from the United Kingdom, and

(b)the facilities used to participate in the gaming are not capable of being used in or from the United Kingdom.

(2)Remote gaming duty is not charged on participation by a chargeable person in remote gaming so far as the remote gaming—

(a)is charged with another gambling tax, or

(b)would be charged with another gambling tax but for an express exception.

(3)Subsection (2)(b)—

(a)does not prevent remote gaming duty being charged where the remote gaming in question is the playing of bingo which is not licensed bingo (as to the meaning of which terms see section 20C of BGDA 1981), and

(b)does not apply in cases where the other gambling tax is machine games duty.

(4)In this section “gambling tax” means—

(a)machine games duty,

(b)bingo duty,

(c)gaming duty,

(d)general betting duty,

(e)lottery duty, and

(f)pool betting duty.

(5)The Treasury may by regulations—

(a)confer an exemption from remote gaming duty, or

(b)remove or vary (whether or not by textual amendment) an exemption under this section.

(6)In calculating a gaming provider’s profits on remote gaming for an accounting period, no account is to be taken of gaming payments, assignments of amounts to a pool or expenditure on prizes so far as they relate to remote gaming to which an exemption applies as a result of this section or regulations under it.

162Liability to pay

(1)A gaming provider is liable for any remote gaming duty charged on the provider’s profits on remote gaming for an accounting period.

(2)If the gaming provider is a body corporate, the provider and the provider’s directors are jointly and severally liable for any remote gaming duty charged on the provider’s profits on remote gaming for an accounting period.

(3)Remote gaming duty which is charged on the gaming provider’s profits on remote gaming for an accounting period may be recovered from the holder of a remote operating licence for the business in the course of which the gaming took place as if the holder of the licence and the provider were jointly and severally liable to pay the duty.

CHAPTER 4General

Administration

163Administration

(1)The Commissioners are responsible for the collection and management of general betting duty, pool betting duty and remote gaming duty.

(2)General betting duty, pool betting duty and remote gaming duty are to be accounted for by such persons, and accounted for and paid at such times and in such manner, as may be required by or under regulations made by the Commissioners.

(3)The Commissioners may make regulations providing for any matter for which provision appears to them to be necessary for the administration or enforcement of, or for the protection of the revenue from, general betting duty, pool betting duty and remote gaming duty.

(4)Nothing in sections 164 to 169 affects the generality of the powers conferred by this section.

164Registration

(1)The Commissioners must maintain the following registers—

(a)a register of persons who, by virtue of being bookmakers, being treated by section 133 as bookmakers or providing facilities for making bets, are (or may become) liable to pay general betting duty,

(b)a register of persons who, by virtue of being bookmakers, are (or may become) liable to pay pool betting duty, and

(c)a register of persons who, by virtue of entering into arrangements for chargeable persons to participate in remote gaming, are (or may become) liable to pay remote gaming duty.

(2)A person falling within any paragraph of subsection (1) may not carry on an activity by virtue of which the person falls within that paragraph without being registered in the register maintained under that paragraph.

(3)The Commissioners may make regulations about registration; in particular, the regulations may include provision about—

(a)the procedure for applying for registration (including provision requiring applications to be made electronically);

(b)the timing of applications (including provision for applications to be made and determined before 1 December 2014);

(c)the information to be provided;

(d)notification of changes;

(e)de-registration;

(f)re-registration after a person ceases to be registered.

(4)The regulations may require a person registered under this section to give notice to the Commissioners before applying for a remote operating licence.

(5)The regulations may permit the Commissioners to impose conditions or requirements on persons registered under this section.

(6)The regulations may include provision for the registration of groups of persons; and may provide for the modification of provisions of this Part in their application to groups.

(7)The modifications may, for example, include a modification ensuring that each member of a group will be jointly and severally liable for the duty payable by any member of the group.

165Accounting period

(1)For the purposes of this Part—

(a)a period of 3 consecutive months is an accounting period, but

(b)the Commissioners may by regulations provide for some other period specified in, or determined in accordance with, the regulations to be an accounting period.

(2)The first day of an accounting period is such day as the Commissioners may direct.

(3)The Commissioners may agree with a person to make either or both of the following changes for the purposes of that person’s liability to general betting duty, pool betting duty or remote gaming duty—

(a)to treat specified periods (whether longer or shorter than 3 months) as accounting periods;

(b)to begin accounting periods on days other than those applying by virtue of subsection (2).

(4)The Commissioners may by direction make transitional arrangements for periods (whether of 3 months or otherwise) to be treated as accounting periods where—

(a)a person becomes or ceases to be registered, or

(b)an agreement under subsection (3) begins or ends.

(5)A direction under this section—

(a)may apply generally or only to a particular case or class of case, and

(b)must be published unless it applies only to a particular case.

166Returns

(1)The Commissioners may make regulations requiring returns to be made to the Commissioners in respect of general betting duty, pool betting duty and remote gaming duty.

(2)The regulations may, in particular, make provision about—

(a)liability to make a return,

(b)timing,

(c)form,

(d)content,

(e)method of making (including provision requiring returns to be made electronically),

(f)declarations,

(g)authentication, and

(h)when a return is to be treated as made.

167Payment

(1)The Commissioners may by regulations make provision about payment of general betting duty, pool betting duty and remote gaming duty.

(2)The regulations may, in particular, make provision about—

(a)timing (including provision requiring payments to be made on account),

(b)instalments,

(c)methods of payment (including provision requiring payments to be made electronically),

(d)when payment is to be treated as made, and

(e)the process and effect of assessments by the Commissioners of amounts due.

(3)Subject to regulations under section 163 and this section, section 12 of FA 1994 (assessment) applies in relation to liability to pay general betting duty, pool betting duty and remote gaming duty.

168Information and records

The Commissioners may by regulations require the provision to such persons, or display in such manner, of such information or records as the regulations may specify—

(a)by persons engaging or proposing to engage in any activity by reason of which they are, or may be or become, liable for general betting duty, pool betting duty or remote gaming duty (or would be or might be or become liable to general betting duty if on-course bets were not excluded), and

(b)by persons providing facilities for another to engage in such an activity or entering into any transaction in the course of any such activity.

169Stake funds and gaming prize funds

(1)The Treasury may by regulations make provision as to the circumstances in which—

(a)the stake money on a bet is, or is not, to be treated for the purposes of this Part as assigned to a Chapter 1 stake fund or a Chapter 2 stake fund,

(b)gaming payments are, or are not, to be treated for the purposes of this Part as assigned to a gaming prize fund,

(c)an amount contained in a Chapter 1 stake fund or a Chapter 2 stake fund is, or is not, to be treated for the purposes of this Part as being used otherwise than to provide winnings, and

(d)an amount contained in a gaming prize fund is, or is not, to be treated for the purposes of this Part as being used otherwise than to provide prizes.

(2)The Commissioners may by notice published by them make provision about Chapter 1 stake funds, Chapter 2 stake funds and gaming prize funds, and such a notice may (in particular) make provision as to how such funds are to be held.

Security and enforcement

170Security for payment

(1)The Commissioners may by notice given to a registrable person require the person to give security, or further security, for the payment of any general betting duty, pool betting duty or remote gaming duty for which the person is or may become liable.

(2)The Commissioners may give such a notice only if they consider—

(a)that there is a serious risk that the duty will not be paid, or

(b)that the person usually lives in or, if a body corporate, is legally constituted in a country or territory with which the United Kingdom does not have satisfactory arrangements for the enforcement of liabilities.

(3)The notice must specify—

(a)the amount of security or further security to be given, and

(b)the manner in which, and the date by which, the security or further security is to be given.

(4)That date must not be less than 30 days after the date when the notice is given (and must not be before 1 December 2014).

(5)Any requirement imposed by the notice has no effect at any time when—

(a)the registrable person is entitled under Chapter 2 of Part 1 of FA 1994 to require a review of, or to bring an appeal against, the decision to give the notice,

(b)an appeal may ordinarily be brought against a decision on such a review or appeal, or

(c)proceedings on such a review, appeal or further appeal are in progress.

(6)A person is a “registrable person” for the purposes of this Part if the person—

(a)is, or is required to be, registered under section 164, or

(b)has applied for registration under that section.

171Appointment of UK representative

(1)The Commissioners may by notice given to a registrable person require the person to appoint a United Kingdom representative.

(2)The representative must be a person approved by the Commissioners for the purposes of this section.

(3)The Commissioners may give such a notice only if they consider that the registrable person usually lives in or, if a body corporate, is legally constituted in a country or territory with which the United Kingdom does not have satisfactory arrangements for the enforcement of liabilities.

(4)The notice must specify the date by which the representative must be appointed.

(5)That date must not be less than 30 days after the date when the notice was given (and must not be before 1 December 2014).

(6)It is for the registrable person to decide whether the representative is to have responsibility—

(a)for making returns in respect of general betting duty, pool betting duty or remote gaming duty on behalf of the registrable person, or

(b)for making such returns and for discharging the registrable person’s liability to general betting duty, pool betting duty or remote gaming duty.

(7)The notice may be combined with a notice under section 170, and in such a case any requirement contained in the notice under that section ceases to have effect if the registrable person appoints a representative with the responsibilities mentioned in subsection (6)(b).

(8)Any requirement imposed by the notice has no effect at any time when—

(a)the registrable person is entitled under Chapter 2 of Part 1 of FA 1994 to require a review of, or to bring an appeal against, the decision to give the notice,