Finance Act 2021

PART 1 Secondary liability and assessment notices

Effect of secondary liability and assessment notice

1 A secondary liability and assessment notice given to a person (“R”) makes that person liable to pay an amount which is equal to or less than an amount of plastic packaging tax which another person (“P”) is liable to pay in relation to an accounting period of P (the “relevant time”) but which P has failed to pay on or before the date on which the amount became due and payable.

Test for giving a secondary liability and assessment notice

2 (1) The Commissioners may give a secondary liability and assessment notice to R if they consider that—

(a) R is acting in the course of a related business, and

(b) sub-paragraph (2) or (3) applies to R.

(2) This sub-paragraph applies to R if—

(a) R is or has been concerned in, or in the taking of steps with a view to, P failing to pay plastic packaging tax, and

(b) R knows or ought to know that R is or was so concerned.

(3) This sub-paragraph applies to R if—

(a) R is or has been involved in transporting, storing or otherwise dealing with a chargeable plastic packaging component, and

(b) R knows or ought to know that P has failed to pay plastic packaging tax which P is liable to pay in respect of the component.

(4) The Commissioners may—

(a) by regulations make provision about the factors which they may take into account in considering whether they may give a secondary liability and assessment notice to R;

(b) issue directions about those factors.

(5) The Commissioners may—

(a) give R more than one secondary liability and assessment notice in relation to the same relevant time;

(b) give R a secondary liability and assessment notice whether or not P has asked HMRC to review, or has appealed against, a decision that P is liable to pay some or all of the amount of plastic packaging tax which P has failed to pay as mentioned in paragraph 1.

Content of secondary liability and assessment notice

3 (1) A secondary liability and assessment notice must—

(a) set out why the Commissioners consider that it is appropriate to give a secondary liability and assessment notice to R under paragraph 2(1);

(b) specify the amount which the Commissioners have assessed that P has failed to pay as mentioned in paragraph 1;

(c) specify the amount which the Commissioners have assessed that R is liable to pay;

(d) specify how and when R must pay;

(e) specify how late payment interest will accrue if R does not make the payment by the date on which it is due and payable;

(f) set out how the Commissioners assessed the amount which R is required to pay.

(2) The amount must be an amount which the Commissioners consider just and reasonable, having regard in particular to their reasons for considering that paragraph 2(2) or (3) applies to R.

(3) The Commissioners must publish guidance on the matters which they will take into account when determining whether an amount is just and reasonable.

(4) A secondary liability and assessment notice may not require R to pay an amount before the end of the period of 30 days beginning with the day on which the notice is given to R.

(5) An amount assessed and notified to R in a secondary liability and assessment notice is recoverable on the basis that it is an amount of plastic packaging tax due from R.

(6) But sub-paragraph (5) does not apply if, or to the extent that, the assessment has been withdrawn or reduced.

Copy of notice to be given to P

4 When the Commissioners give a secondary liability and assessment notice to R, they must, as soon as practicable, give a copy of that notice to P.

Application to revoke or reduce amount

5 (1) R may apply to the Commissioners to—

(a) revoke a secondary liability and assessment notice, on the grounds that R took all reasonable steps to establish that P had paid or intended to pay all the plastic packaging tax which P was liable to pay in relation to the relevant time, or

(b) reduce the amount which R is required to pay by a secondary liability and assessment notice, on the grounds that the amount is not just and reasonable.

(2) The Commissioners may by regulations make provision about—

(a) the steps which are to be regarded as reasonable for the purposes of sub-paragraph (1)(a);

(b) applications for the purposes of sub-paragraph (1).

(3) The regulations may (among other things) make provision about information that must be supplied as part of an application.

(4) The Commissioners must notify R of their decision in response to an application under sub-paragraph (1) within the period of 30 days beginning with the day on which they receive the application.

(5) If the Commissioners decide to reduce the amount which R is required to pay, the notification of their decision must specify—

(a) the new amount which R is liable to pay, and

(b) how and when R must pay.

(6) R may not be required to pay the new amount before the end of the period of 30 days beginning with the day on which the notification is given to R.

(7) The Commissioners must repay any amount which R has paid in excess of the new amount.

Limitation on secondary liability

6 (1) The Commissioners may not give a secondary liability and assessment notice to R in respect of an amount of plastic packaging tax after the end of the period of 2 years beginning with—

(a) the day after the last day of the accounting period by reference to which P was liable to pay the amount, or, if later,

(b) the day on which a court or tribunal finally determines that P is liable to pay the amount.

(2) But in a case involving a loss of tax brought about deliberately by R or P (whether acting alone or with another person) sub-paragraph (1) has effect as if the reference to 2 years were to 20 years.

Reduction of amount where P’s liability is reduced

7 (1) Where the amount which P is liable to pay in relation to the relevant time is reduced for any reason the Commissioners must consider whether to reduce the amount which R is liable to pay.

(2) If the Commissioners decide to reduce or cancel the amount which R is liable to pay, they must, within the period of 30 days beginning with the day on which they make their decision—

(a) inform R of the new amount which R is liable to pay (if any), and

(b) repay any amount which R has paid in excess of the new amount.

(3) The new amount must be such amount as the Commissioners consider just and reasonable, having regard in particular to their reasons for considering that paragraph 2(2) or (3) applies to R.

(4) Where P’s liability to pay in relation to the relevant time is cancelled, the Commissioners must, within the period of 30 days beginning with the day on which that happens—

(a) notify R that the secondary liability and assessment notice is revoked, and

(b) repay any amount which R has paid.

No double payment

8 (1) R may not be required to pay any amount by a secondary liability and assessment notice if or to the extent that P has paid the amount mentioned in paragraph 1.

(2) P may not be required to pay the amount mentioned in paragraph 1 if or to the extent that R has paid an amount referable to that amount.