Finance Act 1971

Part I — Customs and Excise

Relief from import duty for goods of developing countries

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Temporary relief from import duty for certain Commonwealth textiles

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Excise duty on gas for use as fuel for road vehicles

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Remission of purchase tax on exported vehicles

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• (1) In section 23 of the Purchase Tax Act 1963 (remission of purchase tax on exported vehicles) after subsection (1) insert the following subsection—

(2) This subsection has effect as respects a mechanically propelled vehicle manufactured outside the United Kingdom, and sold in the United Kingdom by a person who is appointed by the manufacturer to be the sole selling agent in the United Kingdom for vehicles manufactured by that manufacturer, and who is registered. Where it is shown to the satisfaction of the Commissioners that a person who acquires such a mechanically propelled vehicle from the said sole selling agent is resident in the United Kingdom, but is about to become resident outside the United Kingdom, the Commissioners may, subject to such conditions as they may think necessary for the protection of the revenue, remit any tax which would otherwise be payable in respect of the vehicle by the said sole selling agent.

• (2) Where tax is remitted under the said section 23(2), section 9 of the Finance Act 1967 (enforcement of conditions attached to remission of tax) shall have effect in relation to that subsection as it has effect in relation to section 23(1) of the Purchase Tax Act 1963, but with the substitution for any reference to the manufacturer of a reference to the said sole selling agent.

• (3) Nothing in section 6 of the Vehicles (Excise) Act 1971 (exemption of vehicles excise duty) shall apply in relation to purchase tax remitted under the subsection added by this section to the said section 23.

• (4) Nothing in this section shall apply in relation to a vehicle acquired from the said sole selling agent before the passing of this Act.

Purchase tax-exercise of functions of Commissioners with respect to registration, etc.

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The functions conferred on the Commissioners of Customs and Excise by section 6 of the Purchase Tax Act 1963 (registration, etc., of wholesalers, manufacturers and others) shall be exercisable, and, together with the corresponding functions conferred on the Commissioners by the enactments repealed by that Act, treated as having always been exercisable, by any officer of customs and excise.

Agricultural machines-vehicles excise duty and customs and excise duty

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• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) As from the said 1st September, in Schedule 1 to the Hydrocarbon Oil (Customs & Excise) Act 1971 (vehicles in which heavy oil may be used without repayment of rebate)—

• (a) the reference in paragraph 2(b) to the said Schedule 3 shall be construed as a reference to that Schedule as amended by subsection (1) above, and

• (b) the reference to an agricultural machine in paragraph 3(b) shall not include any vehicle which does not satisfy the conditions specified in paragraphs (a) and (b) of section 6(1) of the Finance Act (Northern Ireland) 1971 (which makes provision corresponding to that made by subsection (1) above).

Disabled passengers-vehicles excise duty

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Bingo duty amendments

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• (1) Section 3 of the Finance Act 1969 (which imposes a duty of excise on the playing of bingo) shall be amended by omitting from the definition of “bingo ” in subsection (10) (under which the term covers all versions of bingo except one whose rules permit a player to withdraw any part of his initial stake after the game has begun) all the words from “except” onwards.

This subsection has effect as from 13th April 1971.

• (2) The following paragraphs shall be inserted in Schedule 9 to the said Act of 1969 after paragraph 4 (which exempts bingo from duty if played at an entertainment promoted otherwise than for private gain and in compliance with conditions which include a limit of 50p on a player's payment at the entertainment and one of £50 on the prizes thereat, and which treats two or more entertainments as one in certain circumstances)—

(4A) Where a series of entertainments is held otherwise than as mentioned at the end of paragraph 4 above— (a) sub-paragraphs (a) to (d) of that paragraph shall have effect separately in relation to each entertainment in the series, whether some or all of the persons taking part in any one of those entertainments are thereby qualified to take part in any other of them or not, and (b) if each of the persons taking part in the bingo played at the final entertainment of the series is qualified to do so by reason of having taken part in the bingo played at another entertainment of the series held on a previous day, sub-paragraph (b) of that paragraph shall have effect in relation to that final entertainment as if for the words “fifty pounds ” there were substituted the words “one hundred pounds ”. (4B) The Commissioners may by order made by statutory instrument provide that, in relation to entertainments held on or after the date on which the order comes into operation, paragraphs 4 and 4A above shall have effect as if, for such one or more of the following sums as may be specified in the order, that is to say— (a) the sum of fifty new pence referred to in paragraph 4(a), (b) the sum of fifty pounds referred to in paragraph 4(b) and paragraph 4A(b), and (c) the sum of one hundred pounds referred to in paragraph 4A(b), there were substituted such larger sum as is specified in the order. Any statutory instrument containing an order under this paragraph shall be subject to annulment in pursuance of a resolution of the House of Commons.

Pool betting duty

9

In the proviso to section 7(2) of the Finance Act 1964 (exemption from pool betting duty of voluntary contributions to charities and certain other bodies)—

• (a) after the words “by virtue of this subsection ” there shall be inserted the words “or of section 1(5) of that Act ”, and

• (b) for the words from “which are made ” to “cannot be made ” there shall be substituted the words “made by persons making bets and those persons know, when making the payments, that their purpose is to provide the benefit ”.

Gaming licence duty in Scotland

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• (1) For the purpose of determining the amount of the duty chargeable under section 2 of the Finance Act 1970 on a gaming licence in respect of premises in Scotland for a period beginning after 30th September 1971 but before 1st April 1973 the rateable value of any lands and heritages shall be ascertained in accordance with the following provisions of this section in any case where a rateable value is shown for them in the valuation roll for the time being in force and either a lower value or no value was shown for them in the valuation roll for the year 1970-71.

• (2) Where the rateable value of any lands and heritages falls to be ascertained in accordance with this section, then,—

• (a) if a rateable value was shown for them in the valuation roll for the year 1970-71, their rateable value shall be taken to be the value so shown, but subject to paragraph (b) of this subsection ;

• (b) if, since the valuation roll for the year 1970-71 was made up, there has been a material change of circumstances affecting the value of the lands and heritages, their rateable value shall be taken to be the value determined under this section as the rateable value that would have been shown for them in that valuation roll if the change had been given effect to in making up that roll;

• (c) if no value was shown for the lands and heritages in the valuation roll for the year 1970-71, their rateable value shall be taken to be the value determined under this section as the value that would have been so shown if, at the time of the valuation for the purposes of that roll, the premises in respect of which the licence is to be granted had been in existence and all relevant circumstances had been the same as at the time the value of the lands and heritages is determined under this section.

• (3) Any determination under this section shall be made by the Commissioners after consultation with the assessor appointed under the Valuation and Rating (Scotland) Act 1956 for the valuation area concerned ; but the person to whom the licence is to be or has been granted may, by notice in writing given to the Commissioners not later than four weeks after the date on which the determination is notified to him, require the determination to be referred to the arbitration of a referee appointed by the Lord President of the Court of Session, whose decision shall be final and conclusive.

• (4) A person appointed under the preceding subsection shall not be an officer of any Government department.

• (5) If the amount of duty chargeable is reduced in consequence of a decision of a referee appointed under this section, any amount overpaid shall be repaid.

• (6) In this section “the year 1970-71” shall be construed in accordance with section 26 of the Local Government (Financial Provisions) (Scotland) Act 1963 and “material change of circumstances” has the meaning assigned to it by section 9(7) of the Valuation and Rating (Scotland) Act 1956.

Customs procedures, etc.

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Continuation of powers under section 9 of Finance Act 1961

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PART II — INCOME TAX AND CORPORATION TAX

CHAPTER I — General

Surtax rates for 1970-71

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• (1) Subject to subsection (2) below, income tax for the year 1970-71 shall be charged, in the case of an individual whose total income exceeded £2,500, at the same higher rates in respect of the excess of that income over £2,000 as were charged for the year 1969-70.

• (2) An individual whose total income for the year 1970-71 did not exceed £2,681 shall be entitled to have the surtax chargeable by virtue of subsection (1) above reduced to an amount equal to 40 per cent. of the difference between his total income and £2,500.

Charge of corporation tax for financial year 1970

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Corporation tax shall be charged for the financial year 1970 at the rate of 40 per cent.

Alterations of personal reliefs

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• (1) Chapter II of Part I of the Taxes Act shall be amended in accordance with the following provisions of this section.

• (2) In section 7 (relief for persons over sixty-five with small incomes)—

• (a) for the references to £475 and £740 (income limits for exemption) there shall be substituted—

• (i) for the year 1971-72 references to £504 and £786; and

• (ii) for subsequent years of assessment references to £530 and £825;

• (b) for the reference to £255 (the excess over those limits beyond which relief by reduction of tax is excluded) there shall be substituted—

• (i) for the year 1971-72 a reference to £330; and

• (ii) for subsequent years of assessment a reference to £345;

• (c) for the reference to 47.5 per cent. (the percentage governing relief by reduction of tax) there shall be substituted, for the year 1972-73 and subsequent years of assessment, a reference to 50 per cent.

• (3) In section 9 (earned income and old age reliefs)—

• (a) in subsection (1) the following shall be substituted for paragraph (b):—

(b) 15 per cent. of the amount of any excess of his earned income over £4,005

;

• (b) in subsection (2) for the words from the beginning to “living with him ” there shall be substituted the words “If the claimant proves that at any time within the year of assessment he ” and for the words “shall be entitled” there shall be substituted the words “he shall be entitled ”;

• (c) after subsection (3) there shall be inserted the following subsection—

(3A) If the claimant proves that, at any time within the year of assessment,— (a) he had his wife living with him ; and (b) either he or his wife living with him was of the age of sixty-five years or upwards ; subsections (2) and (3) above shall have effect as if for the references to £1,000 there were substituted references to £1,200.

• (4) In section 10(3) (appropriate amount for child)—

• (a) for “£165” (child over sixteen) there shall be substituted “£205 ”;

• (b) for “£140” (child over eleven but not over sixteen) there shall be substituted “£180 ”, and

• (c) for “£115” (child not over eleven) there shall be substituted “£155 ”.

• (5) In section 12(1) (widower's or widow's housekeeper) the following shall be added at the end of the proviso:—

and (iv) no relief shall be allowed under this section to a person entitled to relief under section 14 below

.

• (6) In section 16 (relief for dependent relatives)—

• (a) for the reference in subsection (1) to £260 (lower income limit of dependent relative) there shall be substituted—

• (i) for the year 1971-72 a reference to £289; and

• (ii) for subsequent years of assessment a reference to £312;

• (b) for the references in subsections (1) and (2) to £335 (normal higher income limit) there shall be substituted—

• (i) for the year 1971-72 references to £364 ; and

• (ii) for subsequent years of assessment references to £387 ; and

• (c) for the reference in subsection (2) to £370 (higher income limit where the claimant is a woman other than a married woman living with her husband) there shall be substituted—

• (i) for the year 1971-72 a reference to £399; and

• (ii) for subsequent years of assessment a reference to £422.

• (7) Section 24(1) (reduction in reliefs on account of family allowances) shall have effect, and be deemed always to have had effect, as if—

• (a) the words “or allowances ” and the words “for each allowance if more than one ” were omitted; and

• (b) at the end there were added the following paragraph—

Where for any year of assessment an individual is assessable to income tax in respect of payments on account of two or more allowances within the preceding provision of this subsection, the appropriate reduction shall be made thereunder in respect of each such allowance and section 14(4) of the Finance Act 1968 (which was replaced by section 24(1)) shall be deemed to have been enacted with the like omissions and addition; but nothing in this subsection shall affect the determination of any commissioners, or the judgment of any court, made or given before 17th March 1971.

;

Parent and child-repeal of aggregation provisions, and amendment of settlement provisions

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• (1) For the year 1972-73 and subsequent years of assessment—

• (a) Chapter V of Part I of the Taxes Act (under which a child's investment etc. income is, in certain circumstances, to be treated as income of his or her parent) shall not have effect, and

• (b) Chapter II of Part XVI of that Act (settlements by parents: treatment of income thereunder of unmarried children below the age of eighteen years, or between that age and twenty-one but not working regularly) shall not apply to any child who has attained the age of eighteen.

• (2) In consequence of subsection (1) above, the said Act shall be amended for those years as follows—

• (a) the following subsection shall be substituted for subsection (3) of section 168—

(3) A claim for relief under this section may require that the relief be given only by reference to the income of the person sustaining the loss, without extending to the income of that person's wife or husband.

,

• (b) in section 437(1), for all the words from “the child was unmarried ” to “working regularly ” there shall be substituted the words “the child was unmarried and below the age of eighteen ”,

• (c) in section 438(2)(b) and section 440(1), for the words “within subsection (1)(a) or subsection (1)(b) of section 437 above” (wherever occurring) and the words “within the said subsection (1)(a) or subsection (1)(b) ” there shall be substituted the words “below the age of eighteen ” , and

• (d) the following subsection shall be substituted for subsections (3) and (4) of the said section 437—

(3) Income paid to or for the benefit of a child of a settlor shall not be treated as provided in subsection (1) above for any year of assessment in which the aggregate amount of the income paid to or for the benefit of that child, which, but for this subsection, would be so treated by virtue of this Chapter, does not exceed £5

.

Partnership changes-time limit for elections under section 154 of Taxes Act

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• (1) Subject to subsection (2) below, section 154(2) of the Taxes Act (under which, at any time within twelve months after a change in the ownership of a trade, etc., the persons concerned may in certain circumstances elect that the trade is not to be treated as discontinued, or a new one as set up and commenced) shall be amended by substituting, for the words “twelve months ”, the words “two years ”.

• (2) Subsection (1) above shall not apply where the change referred to in the said section 154(2) occurred before 6th April 1970.

Exemption of invalidity benefit, attendance allowances and family income supplements, and increase in relief on savings bank interest

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• (1) Subsections (1) and (2) of section 219 of the Taxes Act (income tax treatment of social security benefits) shall be amended as follows—

• (a) in paragraph (a) of the said subsection (1) (which charges national insurance benefits except unemployment benefit, sickness benefit, maternity benefit and death grant), after the words “sickness benefit” there shall be inserted the words “invalidity benefit, attendance allowance ” , and

• (b) in the said subsection (2) (which exempts payments of benefit under the Ministry of Social Security Act 1966 and the Supplementary Benefits &c. Act (Northern Ireland) 1966), after the words “(Northern Ireland) 1966 ” there shall be inserted the words " and payments in respect of a family income supplement under the Family Income Supplements Act 1970 or the Family Income Supplements Act (Northern Ireland) 1971 ".

• (2) Section 414(1) of the Taxes Act (relief from income tax other than surtax on the first £15 of certain savings bank interest) shall be amended by substituting, for each reference to £15, a reference to £21.

Exemption of interest on damages for personal injuries

19

The following section shall be inserted in the Taxes Act after section 375:—