Finance Act 2014

PART 1 U.K. Meeting the threshold conditions: general

Meaning of “threshold condition” U.K.

1 U.K. Each of the conditions described in paragraphs 2 to 12 is a “threshold condition”.

Deliberate tax defaulters U.K.

2 U.K. A person meets this condition if the Commissioners publish information about the person in reliance on section 94 of FA 2009 (publishing details of deliberate tax defaulters).

Breach of the Banking Code of Practice U.K.

3 U.K. A person meets this condition if the person is named in a report under section 285 as a result of the Commissioners determining that the person breached the Code of Practice on Taxation for Banks by reason of promoting arrangements which the person cannot have reasonably believed achieved a tax result which was intended by Parliament.

Dishonest tax agents U.K.

4 U.K. A person meets this condition if the person is given a conduct notice under paragraph 4 of Schedule 38 to FA 2012 (tax agents: dishonest conduct) and either—

(a) the time period during which a notice of appeal may be given in relation to the notice has expired, or

(b) an appeal against the notice has been made and the tribunal has confirmed the determination referred to in sub-paragraph (1) of paragraph 4 of that Schedule.

Non-compliance with [F1 avoidance disclosure requirements] U.K.

Textual Amendments

F1 Words in Sch. 34 para. 5 cross-heading substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(2)

5 [F2 (A1) A person meets this condition if the person fails to comply with any of the following provisions of— U.K.

(a) Part 7 of FA 2004 (disclosure of tax avoidance schemes);

(b) Schedule 17 to F(No. 2)A 2017 (disclosure of tax avoidance schemes: VAT and other indirect taxes).]

(1) [F3 The provisions of Part 7 of FA 2004 are—]

(a) section 308(1) and (3) (duty of promoter in relation to notifiable proposals and notifiable arrangements);

(b) section 309(1) (duty of person dealing with promoter outside the United Kingdom);

(c) section 310 (duty of parties to notifiable arrangements not involving promoter);

[F4 (ca) section 310C (duty of promoter to provide updated information);

(cb) section 312(2) (duty of promoter to notify client of reference number);]

(d) section 313ZA (duty of promoter to provide details of clients).

[F5 (e) section 316A (duty to provide additional information).]

[F6 (1A) The provisions of Schedule 17 to F(No.2)A 2017 are—

(a) paragraph 11(1) (duty of promoter in relation to notifiable proposals);

(b) paragraph 21(3) (duty of promoter to provide updated information);

(c) paragraph 23(2) (duty of promoter to notify client of reference number);

(d) paragraph 27(3) (duty of promoter to provide details of clients);

(e) paragraph 33 (duty to provide additional information).]

[F7 (2) For the purposes of [F8 sub-paragraphs (1) and (1A)], a person (“P”) fails to comply with a provision mentioned in [F9 any of those sub-paragraphs] if and only if any of conditions A to C are met.

(3) Condition A is met if—

(a) the tribunal has determined that P has failed to comply with the provision concerned,

(b) the appeal period has ended, and

(c) the determination has not been overturned on appeal.

(4) Condition B is met if—

(a) the tribunal has determined for the purposes of section 118(2) of TMA 1970 [F10 or paragraph 48 of Schedule 17 to F(No.2)A 2017] that P is to be deemed not to have failed to comply with the provision concerned as P had a reasonable excuse for not doing the thing required to be done,

(b) the appeal period has ended, and

(c) the determination has not been overturned on appeal.

(5) Condition C is met if P has admitted in writing to HMRC that P has failed to comply with the provision concerned.

(6) The “appeal period” means—

(a) the period during which an appeal could be brought against the determination of the tribunal, or

(b) where an appeal mentioned in paragraph (a) has been brought, the period during which that appeal has not been finally determined, withdrawn or otherwise disposed of.]

Textual Amendments

F2 Sch. 34 para. 5(A1) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(3)

F3 Words in Sch. 34 para. 5(1) substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(4)(a)

F4 Sch. 34 para. 5(1)(ca)(cb) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(4)(b)

F5 Sch. 34 para. 5(1)(e) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(4)(c)

F6 Sch. 34 para. 5(1A) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(5)

F7 Sch. 34 para. 5(2)-(6) substituted for Sch. 34 para. 5(2) (with effect in accordance with Sch. 19 para. 9 of the amending Act) by Finance Act 2015 (c. 11), Sch. 19 para. 6

F8 Words in Sch. 34 para. 5(2) substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(6)(a)

F9 Words in Sch. 34 para. 5(2) substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(6)(b)

F10 Words in Sch. 34 para. 5(4) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 29(7)

Criminal offences U.K.

6 (1) A person meets this condition if the person is charged with a relevant offence. U.K.

(2) The fact that a person has been charged with an offence is disregarded for the purposes of this paragraph if—

(a) the person has been acquitted of the offence, or

(b) the charge has been dismissed or the proceedings have been discontinued.

(3) An acquittal is not taken into account for the purposes of sub-paragraph (2) if an appeal has been brought against the acquittal and has not yet been disposed of.

(4) “Relevant offence” means any of the following—

(a) an offence at common law of cheating in relation to the public revenue;

(b) in Scotland, an offence at common law of—

(i) fraud;

(ii) uttering;

(c) an offence under section 17(1) of the Theft Act 1968 or section 17 of the Theft Act (Northern Ireland) 1969 (c. 16 (N.I.)) (false accounting);

(d) an offence under section 106A of TMA 1970 (fraudulent evasion of income tax);

(e) an offence under section 107 of TMA 1970 (false statements: Scotland);

(f) an offence under any of the following provisions of CEMA 1979—

(i) section 50(2) (improper importation of goods with intent to defraud or evade duty);

(ii) section 167 (untrue declarations etc);

(iii) section 168 (counterfeiting documents etc);

(iv) section 170 (fraudulent evasion of duty);

(v) section 170B (taking steps for the fraudulent evasion of duty);

(g) an offence under any of the following provisions of VATA 1994—

(i) section 72(1) (being knowingly concerned in the evasion of VAT);

(ii) section 72(3) (false statement etc);

(iii) section 72(8) (conduct involving commission of other offence under section 72);

(h) an offence under section 1 of the Fraud Act 2006 (fraud);

(i) an offence under any of the following provisions of CRCA 2005—

(i) section 30 (impersonating a Commissioner or officer of Revenue and Customs);

(ii) section 31 (obstruction of officer of Revenue and Customs etc);

(iii) section 32 (assault of officer of Revenue and Customs);

(j) an offence under [F11 regulation 86(1) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017];

(k) an offence under section 49(1) of the Criminal Justice and Licensing (Scotland) Act 2010 (asp 13) (possession of articles for use in fraud).

Textual Amendments

F11 Words in Sch. 34 para. 6(4)(j) substituted (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), reg. 1(2), Sch. 7 para. 10 (with regs. 8, 15)

Opinion notice of GAAR Advisory Panel U.K.

7 [F12 (1) A person meets this condition if one or more of sub-paragraphs (2) to (4) apply in respect of the person.] U.K.

[F13 (2)] [F14 This sub-paragraph applies in respect of a person if] —

(a) arrangements in relation to which the person is a promoter [F15 —

(i) have been referred to the GAAR Advisory Panel under Schedule 43 to FA 2013 (referrals of single schemes),

(ii) are in a pool in respect of which a referral has been made to that Panel under Schedule 43B to that Act (generic referrals), or

(iii) have been referred to that Panel under paragraph 26 of Schedule 16 to F(No. 2)A 2017 (referrals in relation to penalties for enablers of defeated tax avoidance),]

(b) one or more opinion notices are given [F16 in respect of the referral] [F17 under (as the case may be)—

(i) paragraph 11(3)(b) of Schedule 43 to FA 2013,

(ii) paragraph 6(4)(b) of Schedule 43B to that Act, or

(iii) paragraph 34(3)(b) of Schedule 16 to F(No. 2)A 2017,

(opinion of sub-panel of GAAR Advisory Panel that arrangements are not reasonable), and ]

(c) the notice, or the notices taken together, either—

(i) state the joint opinion of all the members of the sub-panel arranged under F18 ... that Schedule, or

(ii) state the opinion of two or more members of that sub-panel.

[F19 (3) This sub-paragraph applies in respect of a person (“P”) if—

(a) another person has been given, in respect of arrangements in relation to which P is a promoter (“the promoted arrangements”)—

(i) a pooled arrangements opinion notice, under paragraph 6(2) of Schedule 43A to FA 2013, or

(ii) a bound arrangements opinion notice under paragraph 6(4) of that Schedule,

(b) the notice in question sets out a report prepared by HMRC of an opinion of the GAAR Advisory Panel in relation to the promoted arrangements that is contained in one or more opinion notices given under paragraph 11(3)(b) of Schedule 43 to FA 2013 or paragraph 6(4)(b) of Schedule 43B to FA 2013, and

(c) the opinion notice, or the opinion notices taken together, either—

(i) state the joint opinion of all the members of the sub-panel arranged under Schedule 43 or 43B, as the case may be, or

(ii) state the opinion of two or more members of the sub-panel.

(4) This sub-paragraph applies in respect of a person if—

(a) arrangements in relation to which the person is a promoter (“the promoted arrangements”) are equivalent within the meaning of paragraph 24(3) of Schedule 16 to F(No. 2)A 2017 to arrangements that have been referred to the GAAR Advisory Panel under paragraph 26 of that Schedule,

(b) one or more opinion notices are given under paragraph 34(3)(b) of Schedule 16 to F(No.2)A 2017 that apply to the promoted arrangements for the purposes of Part 7 of that Schedule, and

(c) the notice, or the notices taken together, either—

(i) state the joint opinion of all the members of the sub-panel arranged under that Schedule, or

(ii) state the opinion of two or more members of that sub-panel.]

Textual Amendments

F12 Sch. 34 para. 7(1) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 30(a)

F13 Sch. 34 para. 7 renumbered as Sch. 34 para. 7(2) (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 30(b)

F14 Words in Sch. 34 para. 7(2) substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 30(c)

F15 Words in Sch. 34 para. 7(a) substituted (with effect in accordance with Sch. 16 para. 62 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 16 para. 61(a)

F16 Words in Sch. 34 para. 7(b) substituted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(29)(b)(i)

F17 Words in Sch. 34 para. 7(b) substituted (with effect in accordance with Sch. 16 para. 62 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 16 para. 61(b)

F18 Words in Sch. 34 para. 7(c)(i) omitted (with effect in accordance with s. 157(30) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 157(29)(c)

F19 Sch. 34 para. 7(3) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 30(d)

Disciplinary action [F20 against a member of a trade or profession] U.K.

Textual Amendments

F20 Words in Sch. 34 para. 8 cross-heading substituted (with effect in accordance with Sch. 19 para. 9 of the amending Act) by Finance Act 2015 (c. 11), Sch. 19 para. 7(3)

8 [F21 (1) A person who carries on a trade or profession that is regulated by a professional body meets this condition if all of the following conditions are met— U.K.

(a) the person is found guilty of misconduct of a prescribed kind,

(b) action of a prescribed kind is taken against the person in relation to that misconduct, and

(c) a penalty of a prescribed kind is imposed on the person as a result of that misconduct.]

(2) Misconduct may only be prescribed for the purposes of sub-paragraph (1)(a) if it is misconduct other than misconduct in matters (such as the payment of fees) that relate solely or mainly to the person's relationship with the professional body.

(3) A “professional body” means—

(a) the Institute of Chartered Accountants in England and Wales;

(b) the Institute of Chartered Accountants of Scotland;

(c) the General Council of the Bar;

(d) the Faculty of Advocates;

(e) the General Council of the Bar of Northern Ireland;

(f) the Law Society;

(g) the Law Society of Scotland;

(h) the Law Society [F22 of] Northern Ireland;

(i) the Association of Accounting Technicians;

(j) the Association of Chartered Certified Accountants;

(k) the Association of Taxation Technicians;

(l) any other prescribed body with functions relating to the regulation of a trade or profession.

Textual Amendments

F21 Sch. 34 para. 8(1) substituted (with effect in accordance with Sch. 19 para. 9 of the amending Act) by Finance Act 2015 (c. 11), Sch. 19 para. 7(2)

F22 Word in Sch. 34 para. 8(3)(h) substituted (with effect in accordance with Sch. 19 para. 9 of the amending Act) by Finance Act 2015 (c. 11), Sch. 19 para. 7(4)

Disciplinary action by a regulatory authority U.K.

9 (1) A person meets this condition if a regulatory authority imposes a relevant sanction on the person. U.K.

(2) A “relevant sanction” is a sanction which is—

(a) imposed in relation to misconduct other than misconduct in matters (such as the payment of fees) that relate solely or mainly to the person's relationship with the regulatory authority, and

(b) prescribed.

(3) The following are regulatory authorities for the purposes of this paragraph—

(a) the Financial Conduct Authority;

(b) the Financial Services Authority;

(c) any other authority that may be prescribed.

(4) Only authorities that have functions relating to the regulation of financial institutions may be prescribed under sub-paragraph (3)(c).

Exercise of information powers U.K.

10 (1) A person meets this condition if the person fails to comply with [F23 a requirement imposed by a notice or order given under any of the following provisions— U.K.

(a) section 308A, 310A, 313ZB, 313A and 313B of FA 2004;

(b) paragraphs 1, 2, 5 and 5A of Schedule 36 to FA 2008;

(c) paragraphs 16, 19, 28, 29 and 30 of Schedule 17 to F(No.2)A 2017.]

(2) For the purposes of section 237, the failure to comply is taken to occur when the period within which the person is required to comply with the notice [F24 or order] expires (without the person having complied with it).

Textual Amendments

F23 Words in Sch. 34 para. 10(1) substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 31(a)

F24 Words in Sch. 34 para. 10(2) inserted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 31(b)

Restrictive contractual terms U.K.

11 (1) A person (“P”) meets this condition if P enters into an agreement with another person (“C”) which relates to a relevant proposal or relevant arrangements in relation to which P is a promoter, on terms which— U.K.

(a) impose a contractual obligation on C which falls within sub-paragraph (2) or (3), or

(b) impose on C both obligations within sub-paragraph (4) and obligations within sub-paragraph (5).

(2) A contractual obligation falls within this sub-paragraph if it prevents or restricts the disclosure by C to HMRC of information relating to the proposals or arrangements, whether or not by referring to a wider class of persons.

(3) A contractual obligation falls within this sub-paragraph if it requires C to impose on any tax adviser to whom C discloses information relating to the proposals or arrangements a contractual obligation which prevents or restricts the disclosure of that information to HMRC by the adviser.

(4) A contractual obligation falls within this sub-paragraph if it requires C to—

(a) meet (in whole or in part) the costs of, or contribute to a fund to be used to meet the costs of, any proceedings relating to arrangements in relation to which P is a promoter (whether or not implemented by C), or

(b) take out an insurance policy which insures against the risk of having to meet the costs connected with proceedings relating to arrangements which C has implemented and in relation to which P is a promoter.

(5) A contractual obligation falls within this paragraph if it requires C to obtain the consent of P before—

(a) entering into any agreement with HMRC regarding arrangements which C has implemented and in relation to which P is a promoter, or

(b) withdrawing or discontinuing any appeal against any decision regarding such arrangements.

(6) In sub-paragraph (5)(b), the reference to withdrawing or discontinuing an appeal includes any action or inaction which results in an appeal being discontinued.

(7) In this paragraph—

• “proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in court), whether commenced or contemplated;

• “tax adviser” means a person appointed to give advice about the tax affairs of another person (whether appointed directly by that person or by another tax adviser of that person).

[F25 Stop notices] U.K.

Textual Amendments

F25 Sch. 34 para. 12 cross-heading substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 7(a)

[F26 12 U.K. A person meets this condition if the person is subject to a stop notice and fails to comply with—

(a) section 236B(1) (promotion of arrangements or proposal of a description specified in a stop notice),

(b) section 236C(1) (duty to make return to HMRC), or

(c) any obligations of the person under Schedule 36 to FA 2008 as it has effect as a result of section 272A (information and inspection powers).]

Textual Amendments

F26 Sch. 34 para. 12 substituted (with effect in accordance with s. 121(6) of the amending Act) by Finance Act 2021 (c. 26), Sch. 30 para. 7(b)