Finance (No. 2) Act 2017

PART 12 General

Meaning of “tax”

54 (1) In this Schedule “tax” includes any of the following taxes—

(a) income tax,

(b) corporation tax, including any amount chargeable as if it were corporation tax or treated as if it were corporation tax,

(c) capital gains tax,

(d) petroleum revenue tax,

(e) diverted profits tax,

(f) apprenticeship levy,

(g) inheritance tax,

(h) stamp duty land tax, and

(i) annual tax on enveloped dwellings,

and also includes national insurance contributions.

(2) The Treasury may by regulations amend sub-paragraph (1) so as to—

(a) add a tax to the list of taxes for the time being set out in that sub-paragraph;

(b) remove a tax for the time being set out in that sub-paragraph;

(c) remove the reference to national insurance contributions;

(d) substitute for that reference a reference to national insurance contributions of a particular class or classes;

(e) where provision has been made under paragraph (d)—

(i) add a class or classes of national insurance contributions to those for the time being specified in that sub-paragraph;

(ii) remove a class or classes of national insurance contributions for the time being so specified.

(3) Regulations under this paragraph may—

(a) make supplementary, incidental, and consequential provision, including provision amending or repealing any provision of this Schedule;

(b) make transitional provision.

Meaning of “tax advantage”

55 In this Schedule “tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(c) receipt, or advancement of a receipt, of a tax credit,

(d) avoidance or reduction of a charge to tax, an assessment of tax or a liability to pay tax,

(e) avoidance of a possible assessment to tax or liability to pay tax,

(f) deferral of a payment of tax or advancement of a repayment of tax, and

(g) avoidance of an obligation to deduct or account for tax.

Other definitions

56 (1) In this Schedule—

• “abusive tax arrangements” has the meaning given by paragraph 3;

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

• “business” includes any trade or profession;

• “the Commissioners” means the Commissioners for Her Majesty‘s Revenue and Customs;

• “company” has the same meaning as in the Corporation Tax Acts (see section 1121 of CTA 2010);

• “contract settlement” (except in paragraph 46(6)) means an agreement in connection with a person’s liability to make a payment to the Commissioners under or by virtue of an enactment;

• “a defeat”, in relation to arrangements, is to be read in accordance with paragraph 4;

• a “designated HMRC officer” means an officer of Revenue and Customs who has been designated by the Commissioners for the purposes of this Schedule;

• “the GAAR Advisory Panel” has the meaning given by paragraph 1 of Schedule 43 to FA 2013;

• “group” is to be read in accordance with sub-paragraph (2);

• “HMRC” means Her Majesty’s Revenue and Customs;

• “national insurance contributions” means contributions under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992;

• a “NICs decision” means a decision under section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 or Article 7 of the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (SI 1999/671) relating to a person‘s liability for relevant contributions;

• “relevant contributions” means any of the following contributions under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992—

  (a)

  Class 1 contributions;

  (b)

  Class 1A contributions;

  (c)

  Class 1B contributions;

  (d)

  Class 2 contributions which must be paid but in relation to which section 11A of the Act in question (application of certain provisions of the Income Tax Acts) does not apply;

• “tax” is to be read in accordance with paragraph 54;

• “tax advantage” is to be read in accordance with paragraph 55.

(2) For the purposes of this Schedule two companies are members of the same group if—

(a) one is a 75% subsidiary of the other, or

(b) both are 75% subsidiaries of a third company;

and in this paragraph “75% subsidiary” has, subject to sub-paragraph (3), the meaning given by section 1154 of CTA 2010.

(3) So far as relating to 75% subsidiaries, section 151(4) of CTA 2010 (requirements relating to beneficial ownership) applies for the purposes of this Schedule as it applies for the purposes of Part 5 of that Act.

(4) In this Schedule references to an assessment to tax, however expressed—

(a) in relation to inheritance tax and petroleum revenue tax, include a determination;

(b) in relation to relevant contributions, include a NICs decision.

Regulations

57 (1) Any regulations under this Schedule must be made by statutory instrument.

(2) A statutory instrument which contains (alone or with other provision) any regulations within sub-paragraph (3) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

(3) Regulations within this sub-paragraph are—

(a) regulations under paragraph 12;

(b) regulations under paragraph 14(1);

(c) regulations under paragraph 14(2) which amend or repeal any provision of this Schedule;

(d) regulations under paragraph 51;

(e) regulations under paragraph 54.

(4) A statutory instrument containing only—

(a) regulations under paragraph 14(2) which do not amend or repeal any provision of this Schedule, or

(b) regulations under paragraph 44,

is subject to annulment in pursuance of a resolution of the House of Commons.

Consequential amendments

58 In section 103ZA of TMA 1970 (disapplication of sections 100 to 103 of that Act in the case of certain penalties)—

(a) omit “or” at the end of paragraph (i), and

(b) after paragraph (j) insert “or

(k) paragraph 1 or 45 of Schedule 16 to the Finance (No. 2) Act 2017 (enablers of defeated tax avoidance etc).”

59 In section 54 of ITTOIA 2005 (no deduction allowed for certain penalties etc) at the end of the table in subsection (2) insert—

“Penalty under Schedule 16 to F(No. 2)A 2017

Various taxes”

60 In section 1303 of CTA 2009 (no deduction allowed for certain penalties etc) at the end of the table in subsection (2) insert—

“Penalty under Schedule 16 to F(No. 2)A 2017

Various taxes”

61 In Schedule 34 to FA 2014 (promoters of tax avoidance schemes: threshold conditions), in paragraph 7—

(a) in paragraph (a), for the words after “promoter” substitute “—

(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) in paragraph (b), for the words after “referral” substitute “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”.

Commencement

62 (1) Subject to sub-paragraphs (2) and (3), paragraphs 1 to 61 of this Schedule have effect in relation to arrangements entered into on or after the day on which this Act is passed.

(2) In determining in relation to any particular arrangements whether a person is a person who enabled the arrangements, any action of the person carried out before the day on which this Act is passed is to be disregarded.

(3) The amendments made by paragraph 61 do not apply in relation to a person who is a promoter in relation to arrangements if by virtue of sub-paragraph (2) above that person is not a person who enabled the arrangements.