Finance Act 1972

(4) (1) Where the whole or part of any assets falling within sub-paragraph (2) below is disposed of by way of gift or is under subsection (3) or subsection (4) of section 25 of this Act deemed to be disposed of, the capital gains tax chargeable on a gain accruing on the disposal may, at the option of the person liable to pay it, be paid by eight equal yearly instalments or sixteen half-yearly instalments, but subject to the payment of interest under Part IX (except sections 87 and 88) of the Taxes Management Act 1970. (2) The assets referred to in sub-paragraph (1) above are:— (a) land or an estate or interest in land; (b) any shares or securities of a company not quoted on a recognised stock exchange in the United Kingdom or elsewhere ; and (c) any assets used exclusively for the purposes of a trade, profession or vocation which, immediately before the disposal, was carried on (whether alone or in partnership) by the person by whom the disposal was made or deemed to be made. (3) Where tax is payable by instalments by virtue of this paragraph, the first instalment shall be due at the expiration of twelve months from the time of the disposal and the interest on the unpaid portion of the tax shall be added to each instalment and paid accordingly; but the tax for the time being unpaid, with interest to the date of payment, may be paid at any time, and shall become due and payable forthwith if— (a) the disposal was by way of gift to a person connected with the donor or was deemed to be made under subsection (3) or subsection (4) of section 25 of this Act; and (b) the assets are disposed of for valuable consideration under a subsequent disposal (whether or not the subsequent disposal is made by the person who acquired them under the first disposal).

Replacement of business assets

118

Section 33 of the Finance Act 1965 (replacement of business assets) shall be amended by adding after paragraph (c) of subsection (10) the words

and (d) in relation to such of the activities of a body of persons whose activities are carried on otherwise than for profit and are wholly or mainly directed to the protection or promotion of the interests of its members in the carrying on of their trade or profession as are so directed ;

and the section as so amended shall apply in any case where the acquisition of the new assets, or of the interest in the new assets, referred to therein takes place on or after 11th April 1972.

Gifts to charities

119

• (1) Subsection (2) of this section shall apply where a disposal of an asset is made, after 21st March 1972, otherwise than under a bargain at arm's length—

• (a) to a charity ; or

• (b) to any of the bodies falling within Schedule 25 to this Act.

• (2) Section 22(4) of the Finance Act 1965 (consideration deemed to be equal to market value) and section 31(3) of that Act (concession for gifts of national and other interest) shall not apply; but if the disposal is by way of gift (including a gift in settlement) or for a consideration not exceeding the sums allowable as a deduction under paragraph 4 of Schedule 6 to that Act, then—

• (a) the disposal and acquisition shall be treated for the purposes of Part III of that Act, but not for the purposes of section 57 of the Finance Act 1971 (exemption or relief for small disposals) as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal; and

• (b) where, after the disposal, the asset is disposed of by the person who acquired it under the disposal, its acquisition by the person making the earlier disposal shall be treated for the purposes of Part III of the Finance Act 1965 as the acquisition of the person making the later disposal.

• (3) Where, otherwise than on the termination of a life interest (within the meaning of section 25 of the Finance Act 1965) by the death of the person entitled thereto, any assets or parts of any assets forming part of settled property are, under subsection (3) or subsection (4) of that section, deemed to be disposed of and re-acquired by the trustee, and—

• (a) the person becoming entitled as mentioned in subsection (3) of that section is a charity or a body falling within Schedule 25 to this Act; or

• (b) any of the assets which, or parts of which, are deemed to be disposed of and re-acquired under subsection (4) of that section are held for the purposes of a charity or a body falling within Schedule 25 to this Act;

then, if no consideration is received by any person for or in connection with any transaction by virtue of which the charity or other body becomes so entitled or the assets are so held, the disposal and re-acquisition of the assets to which the charity or other body becomes so entitled or of the assets or parts of the assets which are held as mentioned in paragraph (b) above shall, notwithstanding those subsections, be treated for the purposes of Part III of that Act as made for such consideration as to secure that neither a gain nor a loss accrues on the disposal.

Alteration of amount of estate duty

120

Estate duty: relief for surviving spouse, charities and certain institutions

121

PART VII — Miscellaneous

Abolition of selective employment tax

122

Registered trade unions

123

Payments to or by Export Credits Guarantee Department under investment insurance scheme

124

Reduction of stamp duty on conveyances and leases

125

Abolition of stamp duty on bank notes and of bankers' licences

126

Disclosure of information between revenue departments

127

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Vehicle excise duty-disabled persons

128

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

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Summary award of penalties

129

Compensation for loss of office etc. by clerks to General Commissioners

130

• (1) The Commissioners of Inland Revenue may, with the concurrence of the Minister for the Civil Service, by regulations provide for the payment out of money provided by Parliament of compensation to or in respect of any clerk to the General Commissioners for any division who suffers or has suffered loss of office or loss or diminution of emoluments which is attributable to any order affecting that division made (whether before or after the passing of this Act) under section 2(6) of the Taxes Management Act 1970 (alteration and abolition of divisions).

• (2) Regulations under this section may—

• (a) include provision as to the manner in which and the person to whom any claim for compensation under the regulations is to be made, and for the determination of all questions arising under the regulations;

• (b) make different provision for different classes of persons and for different circumstances, and make, or authorise the Commissioners of Inland Revenue to make, exceptions and conditions;

• (c) be framed so as to have effect from a date earlier than the making of the regulations,

but so that regulations having effect from a date earlier than their making shall not place any individual in a worse position than he would have been in if the regulations had been so framed as to have effect only from the date of their making.

• (3) Regulations under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

Post-war credits

131

• (1) On the repayment of any post-war credit, or payment to a building society of any amount outstanding under section 3 of the Income Tax (Repayment of Post-War Credits) Act 1959, the sum payable, inclusive of the interest, may be taken by the Commissioners of Inland Revenue as amounting to 138 per cent. of the credit as notified under section 7 of the Finance Act 1941 or of the amount so outstanding, as the case may be.

• (2) An application for such repayment made before the applicant is qualified may, if he later becomes qualified, be treated as made on the date when he does so.

• (3) No such repayment shall be made unless application therefor is made before such time (not earlier than the beginning of the year 1974) as the Treasury may by order direct.

Any order under this subsection shall be made by statutory instrument, which shall be laid before Parliament after being made, and may be varied by a subsequent order so as to extend the time for applications for repayment.

• (3A) An order under subsection (3) above may make different provision for different cases or classes of case and may provide that no amount shall be ascertained, recorded or notified under section 7 of the Finance Act 1941 after any such time as may be specified in the order.

• (4) In this section “post-war credit” has the same meaning as in the Income Tax (Repayment of Post-War Credits) Act 1959.

• (5) This section shall be deemed to have had effect from the beginning of April 1972.

Local loans

132

Advances to trustee savings banks

133

Citation, interpretation, construction, extent and repeals

134

• (1) This Act may be cited as the Finance Act 1972.

• (2) In this Act “the Taxes Act” means the Income and Corporation Taxes Act 1988.

• (3) In this Act—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) Parts IV and V, so far as they relate to income tax, shall be construed as one with the Income Tax Acts and, so far as they relate to corporation tax, shall be construed as one with the Corporation Tax Acts;

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Except so far as the context otherwise requires, any reference in this Act to any enactment shall be construed as a reference to that enactment as amended, and as including a reference to that enactment as applied, by or under any other enactment, including this Act.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) If the Parliament of Northern Ireland passes provisions amending or replacing any enactment of that Parliament referred to in this Act the reference shall be construed as a reference to the enactment as so amended or, as the case may be, as a reference to those provisions.

• (7) The enactments mentioned in Schedule 28 to this Act are hereby repealed to the extent mentioned in the third column of that Schedule, but subject to any provision at the end of any Part of that Schedule.

SCHEDULES 1—6

Liability to be registered

1

A person who makes taxable supplies but is not registered is liable to be registered—

• (a) after the end of any quarter, if the value of his taxable supplies in the period of one, two, three or four quarters then ending has exceeded the amount shown in the following Table as applicable to that period ; or

• (b) at any time, if there are reasonable grounds for believing that the value of his taxable supplies in the period of one year beginning at that or any later time will exceed £5,000 ;

except that a person is not liable to be registered by virtue of sub-paragraph (a) above on the ground that the value of his taxable supplies in a period of less than a year has exceeded the amount applicable to that period if the Commissioners are satisfied that the value of his taxable supplies in that period and the remaining quarter or quarters of the year will not exceed £5,000.

Number of quarters comprised in period	Amount applicable
	£
1	1,750
2	3,000
3	4,250
4	5,000

2

A registered person who makes taxable supplies shall cease to be liable to be registered—

• (a) after the end of any quarter, if he has been registered for the whole of the two years then ending and the value of his taxable supplies in each of those years has been £4,000 or less, or the value of his taxable supplies in each of the quarters comprised in those years has been £1,250 or less ; and

• (b) at any time, if the Commissioners are satisfied that the value of his taxable supplies in the period of one year then beginning will be £4,000 or less.

Notification of liability and registration

3

A person who, on 1st April 1973, will be liable to be registered shall notify the Commissioners of that fact within ten days of the earliest date after September 1972 on which he knows or could with reasonable diligence have known that he will be so liable or within such longer time as the Commissioners may allow ; and the Commissioners shall register any such person with effect from 1st April 1973.

4

The following three paragraphs apply to persons not required to notify the Commissioners under paragraph 3 of this Schedule.

5

A person who by virtue of paragraph 1(a) of this Schedule is liable to be registered after the end of any quarter shall notify the Commissioners of his liability within ten days of the end of that quarter and the Commissioners shall register any such person with effect from the twenty-first day of the next quarter or such earlier date as may be agreed between them and that person.

6

A person who, by virtue of paragraph 1(b) of this Schedule, is liable to be registered by reason of the value of his taxable supplies in any period shall notify the Commissioners of that liability not later than the beginning of that period, and the Commissioners shall register any such person with effect from the beginning of that period or such earlier date as may be agreed between them and that person.

7

Where a person who intends to make taxable supplies, and will be liable to be registered when he does so, notifies the Commissioners of the fact and requests to be registered the Commissioners may, subject to such conditions as they think fit to impose, register him from such date as may be agreed between them and that person.

Notification of end of liability and cancellation of registration

8

A registered person who ceases to make taxable supplies shall notify the Commissioners of that fact within ten days of the date on which he does so and the Commissioners shall cancel the registration of any such person.

9

Where, by virtue of paragraph 2(a) of this Schedule, a registered person ceases to be liable to be registered and notifies the Commissioners of that fact, the Commissioners shall cancel his registration with effect from the end of the period of fourteen days beginning with the date on which he so notifies them or from such other date as may be agreed between them and that person.

10

Where a registered person requests the Commissioners to cancel his registration by virtue of paragraph 2(b) of this Schedule and the Commissioners are at any time satisfied as mentioned in that paragraph they shall cancel his registration as from that time.

Discretionary registration or exemption from registration

11

Notwithstanding the preceding provisions of this Schedule,—

• (a) where a person who makes or intends to make taxable supplies satisfies the Commissioners that any such supply is zero-rated or would be zero-rated if he were a taxable person they may, if he so requests and they think fit, exempt him from registration ; and

• (b) where a person who makes or intends to make taxable supplies is not and will not be liable to be registered the Commissioners may, if he so requests and they think fit, treat him as so liable, subject to such conditions as they think fit to impose ;

until it appears to the Commissioners that the request should no longer be acted upon or the request is withdrawn; but the Commissioners may by notice given in such manner as appears to them appropriate for the information of persons making taxable supplies prevent the withdrawal of such a request made after the publication of the notice for such period after it is made as may be specified in the notice.

Supplementary

12

The provisions of this Part of this Act relating to the determination of the value of a supply of goods or services shall apply for the purposes of this Schedule with the modification that no allowance shall be made for tax.

13

Any notification required under this Schedule shall be made in such form and shall contain such particulars as the Commissioners may by regulations prescribe.

14

References in this Schedule to registration are references to registration in a register kept by the Commissioners for the purposes of this Part of this Act.

SCHEDULE 2

1

Where goods acquired or produced by a taxable person in the course of a business carried on by him are applied by him to the personal use of himself or any other person they shall be deemed to be supplied by him in the course of that business.

2

Where goods acquired or produced by a taxable person in the course of a business carried on by him are, under any power exercisable by another person, sold by the other person in or towards satisfaction of a debt owed by the taxable person they shall be deemed to be supplied by the taxable person in the course of that business.

3

Where a person ceases to be a taxable person, any goods then forming part of the assets of a business carried on by him shall be deemed to be supplied by him in the course of that business immediately before he ceases to be a taxable person, unless—

• (a) the business is transferred as a going concern to another taxable person ; or

• (b) the business is carried on by another person who, under regulations made under section 23(3) of this Act, is treated as a taxable person.

SCHEDULE 3

1

Where it appears to the Commissioners—

• (a) that a taxable person has supplied goods or services for a consideration in money the amount of which has been determined with a view to securing a reduction of liability to tax ; and

• (b) that it is likely that goods or services will be similarly supplied by him ; and

• (c) that it is necessary for the protection of the revenue to exercise their powers under this paragraph ;

they may by notice in writing give directions to that person for securing that the value by reference to which tax is charged on any supply by him of goods or services after the giving of the notice or after such later date as may be specified therein is not less than the open market value of the supply.

2

Where it appears to the Commissioners—

• (a) that a taxable person carries on his business or part of his business by supplying to a number of individuals goods to be sold, whether by them or others, by retail; and

• (b) that those individuals are not taxable persons ; and

• (c) that it is necessary for the protection of the revenue to exercise their powers under this paragraph ;

they may by notice in writing give directions to the taxable person for securing that the value by reference to which tax is charged on any such supply by him after the giving of the notice or after such later date as may be specified therein shall be determined as if the consideration given by any such individual for the supply were equal to the price at which the goods are sold by retail.

3

Where goods are supplied in pursuance of an agreement with respect to which the requirements of section 7 of the Hire-Purchase Act 1965, section 7 of the Hire-Purchase (Scotland) Act 1965 or section 7 of the Hire-Purchase Act (Northern Ireland) 1966 are complied with the consideration for the supply shall be taken for the purposes of this Part of this Act to be the cash price stated in the agreement.

4

Where goods or services are supplied for a consideration in money which is to be reduced if payment is made immediately or within a specified time the consideration shall be taken for the purposes of this Part of this Act as so reduced whether or not payment is so made.

5

Where a right to receive goods or services for an amount stated on any token, stamp or voucher is granted for a consideration, the consideration shall be disregarded for the purposes of this Part of this Act except to the extent (if any) that it exceeds that amount.

6

Where a supply is a gift of goods or a supply deemed to be made under paragraph 1 of Schedule 2 to this Act, the value of the supply shall be taken to be the cost of the goods to the person making the supply ; except that if that cost does not exceed £10 and the supply is a gift its value shall be taken to be nil.

7

Where a supply of services consists in the provision of accommodation in a hotel, inn, boarding house or similar establishment for a period exceeding four weeks—

• (a) the value of so much of the supply as is in excess of four weeks shall be taken to be reduced to such part thereof as is attributable to facilities other than the right to occupy the accommodation ; and

• (b) that part shall be taken to be not less than 20 per cent.

8

A direction under paragraph 1 or paragraph 2 of this Schedule may be varied or withdrawn by the Commissioners by a further direction given by notice in writing.

SCHEDULES 9—23

GROUP 1—FOOD

The supply of anything comprised in the general items set out below, except—

General items

Item No.

Excepted items

Item No.

Items overriding the exceptions

Item No.

Notes :

GROUP 2—WATER

Item No.

GROUP 3—BOOKS, ETC.

Item No.

Note : This Group does not include plans or drawings for industrial, architectural, engineering, commercial or similar purposes.

GROUP 4—TALKING BOOKS FOR THE BLIND

Item No.

GROUP 5—NEWSPAPER ADVERTISEMENTS

Item No.

GROUP 6—NEWS SERVICES

Item No.

Note : This item does not include the supply of photographs.

GROUP 7—FUEL AND POWER

Item No.

GROUP 8—CONSTRUCTION OF BUILDINGS, ETC.

Item No.

Notes :

GROUP 9—SERVICES TO OVERSEAS TRADERS OR FOR OVERSEAS PURPOSES

Item No.

Notes :

GROUP 10—TRANSPORT

Item No.

Notes :

GROUP 11—CARAVANS

Item No.

Note : This item does not include removable contents other than goods of a kind mentioned in Item 3 of Group 8.

GROUP 12—GOLD

Item No.

Notes :

GROUP 13—BANK NOTES

Item No.

GROUP 14—DRUGS, MEDICINES AND APPLIANCES SUPPLIED ON PRESCRIPTION

Item No.

Note : Section 12(3) of this Act does not apply to goods forming part of this description of supply.

SCHEDULE 5

GROUP 1—LAND

Item No.

GROUP 2—INSURANCE

Item No.

GROUP 3—POSTAL SERVICES

Item No.

Note : " Postal packet" has the same meaning as in the Post Office Act 1953, except that it does not include a telegram.

GROUP 4—BETTING, GAMING AND LOTTERIES

Item No.

Notes :

GROUP 5—FINANCE

Item No.

Note : Item 1 does not include anything included in Item 4.

GROUP 6—EDUCATION

Item No.

Notes :

GROUP 7—HEALTH

Item No.

GROUP 8—BURIAL AND CREMATION

Item No.

SCHEDULE 6

Establishment of Value Added Tax Tribunals

1

Value added tax tribunals shall be established for England and Wales, Scotland and Northern Ireland respectively.

The President

2

• (1) There shall be a President of Value Added Tax Tribunals, who shall perform the functions conferred on him by the following provisions of this Schedule in relation to value added tax tribunals in any part of the United Kingdom.

• (2) The President shall be appointed by the Lord Chancellor and shall be a barrister, advocate or solicitor of not less than ten years' standing.

3

• (1) The President may resign his office at any time and shall vacate his office at the end of the completed year of service in which he attains the age of seventy-two.

• (2) The Lord Chancellor may, if he thinks fit, remove the President from office on the ground of incapacity or misbehaviour.

• (3) The functions of the President may, if he is for any reason unable to act or his office is vacant, be discharged by a person nominated for the purpose by the Lord Chancellor.

• (4) There shall be paid to the President such salary or fees and there may be paid to or in respect of a former President such pension, as the Treasury may with the approval of the Minister for the Civil Service determine.

• (5) If a person ceases to be President of Value Added Tax Tribunals and it appears to the Treasury that there are special circumstances which make it right that he should receive compensation and the Minister for the Civil Service approves, there may be paid to that person a sum of such amount as the Treasury may, with the approval of that Minister, determine.

Sittings of tribunals

4

Such number of value added tax tribunals shall be established as the President may from time to time with the consent of the Treasury determine, and they shall sit at such times and at such places as he may from time to time determine.

Composition of tribunals

5

• (1) A value added tax tribunal shall consist of a chairman sitting either with two other members or with one other member or alone.

• (2) If the tribunal does not consist of the chairman sitting alone its decisions may be taken by a majority of votes and the chairman, if sitting with one other member, shall have a casting vote.

Membership of tribunals

6

For each sitting of a value added tax tribunal the chairman shall be either the President or a person selected by him from a panel constituted in accordance with paragraph 7 of this Schedule ; and any other member shall be a person so selected.

7

• (1) There shall be a panel of chairmen and a panel of other members of value added tax tribunals for England and Wales, Scotland and Northern Ireland respectively.

• (2) Each panel of chairmen shall include one or more full-time chairmen, including one to be known as Vice-President of Value Added Tax Tribunals.

• (3) A member of a panel appointed as full-time chairman shall be appointed—

• (a) for England and Wales, by the Lord Chancellor ;

• (b) for Scotland, by the Lord President of the Court of Session ; and

• (c) for Northern Ireland, by the Lord Chief Justice of Northern Ireland;

and all other members of a panel shall be appointed by the Treasury.

• (4) There shall be paid to a full-time chairman of value added tax tribunals such salary or fees, and to other members such fees, as the Treasury, with the approval of the Minister for the Civil Service, may determine ; and there may be paid to or in respect of a former full-time chairman of value added tax tribunals such pension as the Treasury may, with that approval, determine.

• (5) If a person ceases to be a full-time chairman of value added tax tribunals and it appears to the Treasury that there are special circumstances which make it right that he should receive compensation and the Minister for the Civil Service approves, there may be paid to that person a sum of such amount as the Treasury may, with the approval of that Minister, determine.

Disqualifications for membership of House of Commons and exemption from jury service

8

In Part II of Schedule 1 to the House of Commons Disqualification Act 1957 (bodies of which all members are disqualified for membership) and in that Part as it applies by virtue of Schedule 3 to that Act in relation to the Senate and House of Commons of Northern Ireland, there shall be inserted at the appropriate place the words " A value added tax tribunal ".

9

No member of a value added tax tribunal shall be compelled to serve on any jury.

Rules of procedure

10

The Commissioners may make rules with respect to the procedure to be followed on appeals to value added tax tribunals and such rules may include provisions—

• (a) for limiting the time within which appeals may be brought;

• (b) for enabling hearings to be held in private in such circumstances as may be determined by or under the rules ;

• (c) for parties to proceedings to be represented by such persons as may be determined by or under the rules ;

• (d) for requiring persons to attend to give evidence and produce documents ;

• (e) for the payment of expenses and allowances to persons attending as witnesses ;

• (f) for the award and recovery of costs ; and

• (g) for authorising the administration of oaths to witnesses.

SCHEDULE 7

Interpretation

1

In this Schedule " authorised person " means any person acting under the authority of the Commissioners, " the Commissioners " means the Commissioners of Customs and Excise, " the tax " means car tax and " chargeable vehicle " and (in relation to vehicles) " registered " have the same meanings as in section 52 of this Act; and references to the making of a chargeable vehicle shall be construed as in that section.

Administration and collection of tax

2

• (1) The tax shall be under the care and management of the Commissioners.

• (2) All money and securities for money collected or received for or on account of the tax shall—

• (a) if collected or received in Great Britain, be placed to the general account of the Commissioners kept at the Bank of England under section 11 of the Customs and Excise Act 1952;

• (b) if collected or received in Northern Ireland, be paid into the Consolidated Fund of the United Kingdom in such manner as the Treasury may direct.

• (3) The Government of Ireland Act 1920 shall have effect as if the tax were one of the taxes mentioned in section 22(1) of that Act (reserved taxes).

• (4) The Provisional Collection of Taxes Act 1968 shall be amended by inserting in subsection (1) of section 1, after the words " value added tax " the words " car tax "; and the Act as so amended shall apply in relation to a resolution of the House of Commons passed before 1st April 1974 and providing for any variation of the tax as it applies in relation to such a resolution as is mentioned in subsection (2)(a) of that section.

Liability to and payment of tax

3

Subject to paragraph 6 of this Schedule, the tax on any vehicle shall be payable—

• (a) if the vehicle is made or imported by a person registered under this Schedule, by that person; and

• (b) in any other case by the person who for the purposes of the registration of the vehicle is treated as the person keeping the vehicle.

4

• (1) Where tax on a vehicle is payable by a person registered under this Schedule, it shall become due—

• (a) if the vehicle is appropriated to the use of that person, at the time when it is so appropriated;

• (b) if it is delivered under an agreement providing for its sale or return, at the time when, in accordance with the agreement, it ceases to be the property of that person or when it is treated for the purposes of the tax as so ceasing to be his property in pursuance of regulations made under this Schedule;

• (c) in any other case, when it is sent out from the premises of that person;

and shall become payable at the time provided for by those regulations.

• (2) For the purposes of this paragraph, a vehicle which is to be sold by retail by a person registered under this Schedule shall be deemed to be sent out from the premises of that person when it is sent to the place from which it is to be sold.

5

Where tax on a vehicle is payable as mentioned in paragraph 3(b) of this Schedule it shall become due and payable before the vehicle is registered.

6

• (1) Where a chargeable vehicle is made by the conversion of a vehicle which is not a chargeable vehicle and the person converting it is not registered under this Schedule, the tax on the vehicle shall become due—

• (a) at the time the conversion is completed; or

• (b) at the time when the vehicle is first used after the conversion was begun;

whichever is the earlier, and shall be payable by the person who is the owner of the vehicle at the time the tax becomes due; except that if at that time a person other than the owner is entitled to possession of the vehicle under a hire-purchase agreement the tax shall be payable by that person instead of by the owner,

• (2) Where another person carries out the conversion under a contract to the order of the person by whom the tax is payable he shall be accountable for the tax as well as that person but may recover from him any tax paid in pursuance of this sub-paragraph.

Relief for vehicles exported

7

Tax shall not be charged on any vehicle which is shown to the satisfaction of the Commissioners to have been exported and not to have been registered before it was exported or which is to be exported under arrangements approved by the Commissioners and is not registered.

Remission of tax on vehicles acquired for export

8

• (1) Where it is shown to the satisfaction of the Commissioners that a person who acquires a chargeable vehicle is only temporarily in the United Kingdom or is about to become resident outside the United Kingdom the Commissioners may, subject to such conditions as they think necessary for the protection of the revenue, remit the tax on the vehicle.

• (2) If tax has been remitted on a vehicle under sub-paragraph (1) of this paragraph and—

• (a) the vehicle is found in the United Kingdom after the date by which the Commissioners on granting the remission directed that it should be exported; or

• (b) any other condition imposed by the Commissioners under that sub-paragraph is not complied with;

and the presence of the vehicle in the United Kingdom after that date or the non-observance of that condition has not been authorised for the purposes of this sub-paragraph by the Commissioners, the tax which would have been payable but for the remission shall become payable forthwith by the person by whom the vehicle was acquired or by any other person in whose possession the vehicle is found in the United Kingdom, and shall be recoverable as a debt due to the Crown, unless, or except to the extent that, the Commissioners see fit to waive payment of the whole or part, thereof.

Remission of tax on vehicles used outside United Kingdom

9

• (1) Regulations under this Schedule may make provision for enabling the Commissioners to remit the tax on a chargeable vehicle, subject to such conditions as they think necessary for the protection of the revenue, where the vehicle has been used and owned outside the United Kingdom for not less than such period as may be prescribed by the regulations and such other conditions are satisfied as may be so prescribed ; and the conditions that may be imposed in pursuance of the regulations may include conditions prohibiting or restricting the disposal of the vehicle for such period as may be so prescribed.

• (2) If tax has been remitted on a vehicle under sub-paragraph (1) of this paragraph and any condition imposed by the Commissioners under that sub-paragraph is not complied with, the tax which would have been payable but for the remission shall be payable forthwith by the person who then owns the vehicle or by any other person in whose possession the vehicle is found, and shall be recoverable as a debt due to the Crown, unless, or except to the extent that, the Commissioners see fit to waive payment of the whole or part thereof.

Remission of tax on chargeable vehicles converted into other vehicles

10

Where it is shown to the satisfaction of the Commissioners that, under arrangements approved by them, an unused vehicle which was a chargeable vehicle has been converted into a vehicle which is not a chargeable vehicle, they may, subject to such conditions as they think necessary for the protection of the revenue, remit the tax on the vehicle.

Wholesale value

11

• (1) For the purposes of the tax the wholesale value of any vehicle shall be taken, subject to paragraph 13(2) of this Schedule, to be the price which, in the opinion of the Commissioners, the vehicle would fetch on a sale made at the time the tax becomes due by a person selling by wholesale in the open market in the United Kingdom to a retail trader carrying on business in the United Kingdom only, on the assumption that—

• (a) the price was the sole consideration for the sale; and

• (b) the vehicle was to be delivered to the retail trader at the seller's place of business; and

• (c) neither the tax nor value added tax was payable.

• (2) In this paragraph " retail trader " means a person who sells by retail and does not sell to a person who carries on a business of selling vehicles.

Disputes as to wholesale value

12

• (1) Where the person by whom the tax is payable is dissatisfied with the determination of the wholesale value by the Commissioners he may, within such period from the time when their decision is communicated to him as may be prescribed by regulations under this Schedule or such further time as the Commissioners may allow, by notice in writing given to the Commissioners require the determination to be referred to the arbitration of a person appointed under this paragraph, whose decision shall be final and conclusive; but no such reference shall be made unless, within that period or such further time as the Commissioners may allow, the person requiring the reference has deposited with the Commissioners the amount of tax which would be due on the basis of their determination.

• (2) If the tax chargeable as a result of a reference under this paragraph is less than the amount deposited with the Commissioners the excess shall be repaid with interest at such rate as the referee may determine.

• (3) A referee for the purposes of this paragraph shall be appointed by the Lord Chancellor except that—

• (a) if the person by whom the tax is payable has his principal place of business in Scotland, the referee shall be appointed by the Lord President of the Court of Session; and

• (b) if that person has his principal place of business in Northern Ireland, the referee shall be appointed by the Lord Chief Justice of Northern Ireland.

Unfinished vehicles

13

• (1) For the purposes of the tax a vehicle which is not finished and complete but which, if finished and complete, would be a chargeable vehicle shall be treated as a chargeable vehicle.

• (2) If in the opinion of the Commissioners a vehicle is not finished and complete, they shall determine its wholesale value as if it were finished and complete, having regard to the parts and accessories that remain to be provided and the processes that remain to be undergone for the vehicle to be in a state to be expected of a finished and complete chargeable vehicle.

Converted and adapted vehicles

14

Where it appears to the Commissioners that a person adapts or converts unused chargeable vehicles and that the vehicles as so adapted or converted remain chargeable vehicles they may direct—

• (a) that the conversion or adaptation shall for the purposes of the tax be treated as the making of the vehicles resulting from it, whether or not it would otherwise fall to be so treated; and

• (b) that, subject to such conditions as they think necessary for the protection of the revenue, tax shall not be charged on vehicles delivered to that person, under arrangements approved by the Commissioners, by a person registered under this Schedule;

and where they so direct that person shall, while the direction is in force, be liable to be registered under this Schedule, whether or not he would otherwise be so liable.

Registration of makers and importers of chargeable vehicles

15

• (1) A person who, in any calendar year, makes or imports not less than ten chargeable vehicles is liable to be registered by the Commissioners.

• (2) Every person who, on or after 1st October 1972, is liable to be registered under this paragraph and is not for the time being so registered shall notify the Commissioners of the fact within fourteen days of that date or of becoming so liable, whichever is the later; and the Commissioners may, if they think fit, register any such person.

• (3) A person for the time being registered under this paragraph who ceases to make or import chargeable vehicles shall notify the Commissioners of that fact and the Commissioners shall cancel the registration of any such person when all tax due from him has been accounted for; and they may, if they think fit, cancel the registration of any other person.

• (4) The Treasury may from time to time by order made by statutory instrument substitute another number for that specified in sub-paragraph (1) of this paragraph.

A statutory instrument made by virtue of this sub-paragraph shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Recovery of tax

16

• (1) The tax due from any person shall be recoverable as a debt due to the Crown.

• (2) Regulations under this Schedule may make provision for authorising distress to be levied on the goods and chattels of any person refusing or neglecting to pay any tax due from him, and for the disposal of any goods or chattels on which distress is levied in pursuance of the regulations.

• (3) In the application of the preceding sub-paragraph to Scotland, for the references to the levying of distress on any goods or chattels there shall be substituted references to the doing of diligence on goods and corporeal movables.

Power of Commissioners to assess tax due

17

• (1) Where an amount is due from any person on account of the tax, but by reason of his failure to keep or to produce or furnish any records, accounts or other documents as required by or under this Schedule, or of his failure to take or permit to be taken any other step so required, or by reason of such records, accounts or other documents being materially incomplete or inaccurate, the Commissioners are unable to ascertain the exact amount of tax due from him, the Commissioners may assess the amount due from him to the best of their judgment and notify it to him.

• (2) An assessment under this paragraph of an amount of tax due shall not be made after the later of the following:—

• (a) two years after the time when the amount became payable; or

• (b) one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge;

but may, where further such evidence comes to their knowledge after the making of such an assessment, be made in addition to that assessment; but no such assessment shall be made more than six years after the time when the tax became payable, except for the purpose of recovering tax lost to the Crown through the fraud or wilful default or neglect of any person.

• (3) An amount assessed and notified under this paragraph shall be recoverable as an amount of tax due unless in any action relating thereto the person liable proves the amount actually due and that amount is less than the amount assessed.

Priority of tax in bankruptcy, winding-up, etc.

18

• (1) There shall be included among the debts which—

• (a) under section 33 of the Bankruptcy Act 1914 are to be paid in priority to all other debts in the distribution of the property of a bankrupt or person dying insolvent; or

• (b) under section 118 of the Bankruptcy (Scotland) Act 1913 are to be paid in priority to all other debts in the division of a bankrupt's estate; or

• (c) under section 1 of the Preferential Payments (Bankruptcies and Arrangements) Act (Northern Ireland) 1964 are to be paid in priority to all other debts in the distribution of the property of a bankrupt, arranging debtor or person dying insolvent; or

• (d) under section 319 of the Companies Act 1948 or section 287 of the Companies Act (Northern Ireland) 1960 are to be paid in priority to all other debts in the winding up of a company, or under section 94 of the Act of 1948 or section 92 of the Act of 1960 are on an appointment of a receiver on behalf of debenture holders or taking of possession by or on behalf of debenture holders to be paid in priority to any claim for principal or interest in respect of the debenture;

the amount of any tax due at the relevant date from the bankrupt, debtor, person dying or company and having become due within twelve months next before that date.

• (2) In this paragraph " the relevant date "—

• (a) in relation to section 33 of the Act of 1914, means the date of the receiving order or of the death, as the case may be;

• (b) in relation to section 118 of the Act of 1913, means the date mentioned in subsection (4) of that section;

• (c) in relation to section 1 of the Act of 1964, means the date of the order of adjudication, the date of the filing of a petition for arrangement or of the death, as the case may be; and

• (d) in relation to section 319 of the Act of 1948, or section 287 of the Act of 1960, has the meaning assigned to it by that section, and in relation to section 94 of the Act of 1948 or section 92 of the Act of 1960, means the date of the appointment of the receiver or taking of possession.

Records, accounts and returns

19

• (1) A person registered under this Schedule shall—

• (a) keep such records and accounts and preserve them for such period as may be prescribed by regulations under this Schedule or as the Commissioners may direct either generally or in any particular case;

• (b) if so required by or on behalf of the Commissioners, produce, at a time and place specified in the requirement, such records or accounts relating to the chargeable vehicles made or imported by him as may be so specified; and

• (c) make such returns of the chargeable vehicles made or imported by him and of the amounts of tax for which he is accountable as may be prescribed by regulations under this Schedule.

• (2) A person who, in the course of a business carried on by him, has chargeable vehicles delivered to him on which tax has not been paid shall—

• (a) keep such records and preserve them for such periods as may be prescribed by regulations under this Schedule or as the Commissioners may direct either generally or in any particular case;

• (b) if so required by or on behalf of the Commissioners, produce, at a time and place specified in the requirement, such records relating to the vehicles as may be so specified; and

• (c) make to the persons by whom the vehicles are sent such returns of the vehicles ceasing or treated as ceasing to be that person's property as may be prescribed by regulations under this Schedule.

Giving of information

20

• (1) Every person who is concerned (in whatever capacity) with the making, sale, importation or exportation of chargeable vehicles shall—

• (a) furnish to the Commissioners, within such time and in such form as they may require, such information relating to the vehicles or any materials used or kept for use in making such vehicles as the Commissioners may specify; and

• (b) upon demand made by an authorised person produce or cause to be produced any documents relating to the vehicles or any materials used or kept for use in making such vehicles for inspection by the authorised person and shall permit him to take copies of or to make extracts from the documents and for that purpose to remove them at a reasonable time and for a reasonable period.

• (2) Every person who converts a vehicle of another description into a chargeable vehicle shall inform the Commissioners of that fact forthwith unless he is a person registered under this Schedule.

Entry and search

21

• (1) An authorised person may at any reasonable time enter premises which are used in connection with the making, sale, importation or exportation of chargeable vehicles.

• (2) Where an authorised person has reasonable cause to believe that any premises are used in connection with—

• (a) the making, sale, importation or exportation of chargeable vehicles; or

• (b) the storage of chargeable vehicles on which tax has not been paid;

and that chargeable vehicles are on those premises, he may at any reasonable time enter and inspect those premises and inspect and take account of any vehicles or materials found on them.

• (3) If a justice of the peace is satisfied on information on oath that there is reasonable ground for suspecting that an offence in connection with the tax is being, has been, or is about to be committed on any premises, or that evidence of the commission of such an offence is to be found there, he may issue a warrant in writing authorising any authorised person to enter those premises, if necessary by force, at any time within fourteen days from the time of the issue of the warrant and search them; and any person who enters the premises under the authority of the warrant may—

• (a) take with him such other persons as appear to him to be necessary;

• (b) seize and remove any documents or other things whatsoever found on the premises which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence; and

• (c) search or cause to be searched any person found on the premises whom he has reasonable cause to believe to have committed or to be about to commit such an offence or to be in possession of any such documents or other things;

but no woman or girl shall be searched except by a woman.

• (4) In the application of sub-paragraph (3) above to Scotland, the reference to a justice of the peace includes a reference to the sheriff and a magistrate.

Offences

22

• (1) If any person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of the tax by him or any other person, he shall be liable to a penalty of £1,000 or three times the amount of the tax, whichever is the greater, or to imprisonment for a term not exceeding two years, or to both.

• (2) If any person—

• (a) with intent to deceive produces, furnishes or sends for the purposes of this Schedule or regulations made under it or made by virtue of paragraph 27 of this Schedule, or otherwise makes use for those purposes of any document which is false in a material particular; or

• (b) in furnishing any information for the purposes of this Schedule or regulations made under it makes any statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular; or

• (c) with intent to deceive uses or allows to be used any certificate issued in pursuance of regulations under this Schedule;

he shall be liable to a penalty of £1,000 or to imprisonment for a term not exceeding two years, or to both.

• (3) If any person acquires possession of, deals with or uses a chargeable vehicle having reason to believe—

• (a) that tax on the vehicle has been or will be evaded; or

• (b) that the vehicle ought to have been registered but that tax on it has not been paid;

he shall be liable to a penalty of £1,000 or three times the amount of the tax, whichever is the greater.

• (4) If a person fails to comply with any requirement imposed by or under this Schedule or regulations made under it, he shall be liable to a penalty of £100 together with a penalty of £10 for each day on which the failure continues.

• (5) Sections 281 to 291 of the Customs and Excise Act 1952 (proceedings for offences, mitigation of penalties and certain other matters) shall apply in relation to offences under this paragraph (which include any act or omission in respect of which a penalty is imposed) and penalties imposed under this Schedule as they apply in relation to offences and penalties under the customs and excise Acts as defined in that Act.

• (6) Section 290(2) of the Customs and Excise Act 1952 as it applies by virtue of this paragraph shall have effect as if the question mentioned in paragraph (a) thereof were the question whether or not tax on any vehicle has become due or has been paid or secured.

Forfeiture

23

A chargeable vehicle shall be liable to forfeiture under the Customs and Excise Act 1952 if—

• (a) tax on it would have become payable before its registration and it ought to have been but has not been registered; or

• (b) tax on it ought to have been, but has not been, paid; or

• (c) tax on it has been remitted subject to a condition and the condition has not been complied with.

Evidence by certificate

24

• (1) A certificate of the Commissioners—

• (a) that a person was or was not, at any date, registered under this Schedule; or

• (b) that any return required by or under this Schedule has not been made or had not been made at any date; or

• (c) that any tax shown as due in any return or assessment made in pursuance of this Schedule has not been paid;

shall be sufficient evidence of the fact until the contrary is proved; and any document purporting to be such a certificate shall be deemed to be such a certificate until the contrary is proved.

• (2) A photograph of any document furnished to the Commissioners for the purposes of this Schedule and certified by them to be such a photograph shall be admissible in any proceedings, whether civil or criminal, to the same extent as the document itself.

• (3) Any document purporting to be a certificate under sub-paragraph (2) of this paragraph shall be deemed to be such a certificate until the contrary is proved.

Service of notices

25

A notice to be served on any person for any of the purposes of this Schedule may be served by sending it by post in a letter addressed to that person at his last or usual residence or place of business.

Regulations

26

• (1) The Commissioners may by regulations made by statutory instrument make provision for any matter for which it appears to them necessary to make provision for the purpose of enabling them to discharge their functions in relation to the tax, and in particular, but without prejudice to the generality of this provision—

• (a) for requiring persons registered under this Schedule to account for the tax payable by them by reference to such periods as may be prescribed by the regulations and to pay the tax due in respect of any such period within such time from the end of the period as may be so prescribed;

• (b) for the particulars to be contained in any notification under paragraph 15 of this Schedule;

• (c) for requiring persons registered under this Schedule to furnish to persons acquiring chargeable vehicles from them certificates in such form as may be prescribed by the regulations that the tax on the vehicles has been or will be paid;

• (d) for requiring persons not registered under this Schedule to furnish to persons acquiring chargeable vehicles from them statements in such form as may be prescribed by the regulations that the vehicles are chargeable vehicles on which tax will be payable;

• (e) for treating, for a limited time, as registered under this Schedule persons who carry on the business of persons so registered who have died or have become incapacitated;

• (f) for the issue by the Commissioners of certificates stating that the tax on any chargeable vehicle has been paid or remitted;

• (g) for specifying the circumstances in which a chargeable vehicle supplied by a person under an agreement for sale or return is to be treated for the purposes of the tax as ceasing to be his property in accordance with the agreement;

• (h) for any other matter for which, under this Schedule, provision may be made by regulations.

• (2) Without prejudice to the generality of the preceding sub-paragraph, the regulations may make special provision with respect to certificates and other documents to be issued for the purposes of the tax before the end of March 1973.

• (3) A statutory instrument made under this paragraph shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

Restriction on registration of chargeable vehicles

27

Regulations made under section 23 of the Vehicles (Excise) Act 1971 may enable the Secretary of State to refuse to register a vehicle unless he is satisfied, by such evidence as may be prescribed by the regulations, either—

• (a) that the vehicle is not a chargeable vehicle; or

• (b) that the tax chargeable on it has been or will be paid; or

• (c) that tax on it has been remitted.

Isle of Man

28

• (1) If an Act of Tynwald makes provision similar to the provision made with respect to the car tax by this Act, Her Majesty may by Order in Council make provision for securing that—

• (a) tax is charged under either Act as if references therein to the United Kingdom or to the Isle of Man included both the United Kingdom and the Isle of Man, but is not charged under both Acts on the same vehicle;

• (b) persons who are registered under either this Schedule or that Act are treated as registered also under the other; and

• (c) the removal of a vehicle from the United Kingdom into the Isle of Man or from the Isle of Man into the United Kingdom is not treated for the purposes of either Act as an importation or exportation of the vehicle;

and for making such modifications in those Acts and regulations made thereunder as may be requisite for those purposes; and similarly with respect to any Act passed after this Act and relating to the car tax.

• (2) An Order in Council under this paragraph may include provision for section 2 of the Isle of Man Act 1958 (Isle of Man share of certain duties) to apply as if the car tax and the tax for which provision is made by Act of Tynwald were included among the duties mentioned in subsection (4) of that section.

• (3) An Order in Council under this paragraph may be varied or revoked by a subsequent Order in Council.

Schedule 8

SCHEDULE 9

PART I — Loans for Purchase or Improvement of Land

1

Subject to the following provisions of this Part of this Schedule, interest is protected interest if it is paid by a person for the time being owning an estate or interest in land in the United Kingdom or the Republic of Ireland on a loan to defray money applied—

• (a) in purchasing the estate or interest, or one absorbed into, or given up to obtain, the estate or interest, or

• (b) in improving or developing the land, or buildings on the land, or

• (c) in paying off another loan, if interest on that other loan would have been protected interest had the loan not been paid off (on the assumption, if the loan was free of interest, that it carried interest).

2

Paragraph 1 above does not apply to a loan unless made in connection with the application of money, and either on the occasion of its application or within what is in the circumstances a reasonable time from the application of the money; and that paragraph does not apply to a loan the proceeds of which are applied for some other purpose before being applied as mentioned in that paragraph.

3

References in this Part of this Schedule to money applied in improving or developing land or buildings include references to payments in respect of maintenance or repairs incurred by reason of dilapidation attributable to a period before the estate or interest was acquired, but otherwise do not include references to payments in respect of maintenance or repairs, or any of the other payments mentioned in section 72(1) of the Taxes Act (payments deductible from rent).

4

References in this Part of this Schedule to money applied in improving or developing land include references to expenditure incurred or defrayed directly or indirectly in respect of street works, other than works of maintenance or repair, for any highway or road, or in Scotland any right of way, adjoining or serving the land.

5

References in this Part of this Schedule to an estate or interest in land include references to the property in any caravan, but interest is protected interest by virtue of this paragraph only if—

• (a) the caravan is a large caravan, or

• (b) the caravan, taken with the land on which it stands, is for the time being a rateable hereditament for the purposes of the General Rate Act 1967 or any corresponding enactment in force in Scotland, Northern Ireland or the Republic of Ireland and the owner, or the wife or husband of the owner, has, as occupier of the caravan, duly paid rates under the Act or any such enactment for the period in which the interest was paid.

6

References in this Part of this Schedule to an estate or interest do not include references—

• (a) to a rentcharge or, in Scotland, a superiority or the interest of a creditor in a contract of ground annual; or

• (b) to the interest of a chargee or mortgagee or, in Scotland, the interest of a creditor in a charge or security of any kind over land.

7

Where interest is payable by the tenant occupier of any property to the landlord in pursuance of arrangements whereby money advanced at interest by the landlord is applied by the tenant in purchasing the landlord's estate or interest, but that estate or interest is not to pass to the tenant until some time after the interest begins to be payable, this Part of this Schedule shall have effect in relation to the tenant as if he were the owner of the landlord's estate or interest.

8

Paragraph 1(a) above shall not apply—

• (a) where the seller and purchaser are husband and wife and either sells to the other, or

• (b) where the purchaser, or the wife or husband of the purchaser, has since 15th April 1969 disposed of an estate or interest in the land in question, and it appears that the main purpose of the disposal and purchase was to obtain relief in respect of interest on the loan, or

• (c) where the purchasers are the trustees of a settlement, and the seller is the settlor, or the wife or husband of the settlor, and it appears that the main purpose of the purchase is to obtain relief in respect of interest on the loan, or

• (d) where the purchaser is directly or indirectly purchasing from a person who is, within the terms of section 533 of the Taxes Act, connected with him, and the price substantially exceeds the value of what is acquired;

and paragraph 1(b) above shall not apply where the person spending the money is, within the terms of the said section 533, connected with the person who, directly or indirectly, receives the money, and the money substantially exceeds the value of the work done.

9

In this Part of this Schedule, as it applies throughout the United Kingdom and in relation to the Republic of Ireland—

• " caravan " has the meaning given by section 29(1) of the Caravan Sites and Control of Development Act 1960;

• " large caravan " means one which has either or both of the following dimensions— an overall length (excluding any draw bar) exceeding twenty-two feet, an overall width exceeding seven feet six inches, where " overall length" and " overall width " have the meanings given in Regulation 3 of the Motor Vehicles (Construction and Use) Regulations 1966;

• " street works " means any works for the sewering, levelling, paving, metalling, flagging, channelling and making good of a road, and includes the provision of proper means for lighting a road.

PART II — Loans to Purchase Machinery or Plant

10

Where an individual is a member of a partnership which, under section 44 of the Capital Allowances Act 1968, is entitled to a capital allowance or liable to a balancing charge for any year of assessment in respect of machinery or plant belonging to the individual, any interest paid by him in the basis period (as defined in section 72 of that Act) for that year on a loan to defray money applied as capital expenditure on the provision of that machinery or plant is protected interest, except interest falling due and payable more than three years after the end of the year of assessment in which the debt was incurred.

11

Where the machinery or plant is in use partly for the purposes of the trade, profession or vocation carried on by the partnership and partly for other purposes such part only of the interest is protected interest as it is just and reasonable to attribute to the purposes of the trade, profession or vocation, having regard to all the relevant circumstances and, in particular, to the extent of the use for the said other purposes.

12

Where the holder of an office or employment—

• (a) is under Chapter LT of Part I of the Capital Allowances Act 1968 or Chapter I of Part III of the Finance Act 1971 entitled to a capital allowance, or liable to a balancing charge (or would be so entitled or liable but for some contribution made by the employer), for any year of assessment in respect of machinery or plant belonging to him and in use for the purposes of the office or employment, and

• (b) pays interest in that year on a loan to defray money applied as capital expenditure on the provision of that machinery or plant,

the interest so paid is protected interest unless it is interest falling due and payable more than three years after the end of the year of assessment in which the debt was incurred.

13

Where the machinery or plant is in use partly for the purposes of the office or employment and partly for other purposes such part only of the interest is protected interest as it is just and reasonable to attribute to the purposes of the office or employment, having regard to all the relevant circumstances and, in particular, to the extent of the use for the said other purposes.

PART III — Supplementary

14

For the purposes of this Schedule the giving of credit for any money due from the purchaser under any sale shall be treated as the making of a loan to defray money applied by him in making the purchase.

15

Where part only of a debt fulfils the conditions required under the preceding provisions of this Schedule for interest on the debt to be protected interest, such proportion of the interest shall be treated as protected interest as is equal to the proportion of the debt fulfilling those conditions at the time of the application of the money in question.

SCHEDULE 10

Exclusion of double relief or relief by different methods

1

Interest in respect of which relief is given under section 75 of this Act shall not be allowable as a deduction for any other purpose of the Income Tax Acts.

2

Relief shall not be given under section 75 of this Act against income chargeable to corporation tax, and shall not be given against any other income of a company, except where both of the following conditions are satisfied, that is to say—

• (a) that the company is not resident in the United Kingdom; and

• (b) that the interest cannot be taken into account in computing corporation tax chargeable on the company.

3

Where interest on any debt or liability is taken into account in the computation of profits or gains or losses for the purposes of Case I or II of Schedule D no relief shall be given under section 75 of this Act—

• (a) in respect of the payment of that interest; or

• (b) in respect of interest on the same debt or liability which is paid in any year of assessment for which that computation is relevant.

4

Where relief is given under section 75 of this Act in respect of the interest paid in any year of assessment on any debt or liability—

• (a) that interest shall not be taken into account in the computation of profits or gains or losses for the purposes of Case I or II of Schedule D for any year of assessment; and

• (b) interest on that debt or liability shall not be taken into account in that computation for any year of assessment for which the interest so paid could have been taken into account but for the relief.

5

For the purposes of paragraphs 3 and 4 above, all interest capable of being taken into account in such a computation as is mentioned therein which is payable by any person on money advanced to him on current account, whether advanced on one or more accounts or by the same or separate banks or other persons, shall be treated as interest payable on the same debt.

6

References in paragraphs 3 and 4 above to relief given or an amount taken into account are references to relief given or an amount taken into account on a claim or in an assessment which has been finally determined.

Furnishing of information

7

A person who claims relief under section 75 of this Act in respect of any payment of interest shall furnish to the inspector a statement in writing by the person to whom the payment is made, which—

• (a) if the interest is such as is mentioned in subsection (1)(a) of that section, shall show the amount of the interest paid in the year of assessment for which the claim is made and the name and address of the person by whom it is paid; and

• (b) if the interest is such as is mentioned in subsection (1)(b) of that section, shall contain such particulars and be in such form as the Board may prescribe.

8

Where any such interest as is mentioned in section 75 of this Act is paid, the person to whom it is paid shall, if the person who pays it so requests in writing, furnish him with such statement as regards that interest as is mentioned in paragraph 7 above and the duty imposed by this paragraph shall be enforceable at the suit or instance of the person making the request.

9

Paragraphs 7 and 8 above do not apply to interest paid to a building society as defined in section 343(8) of the Taxes Act, to a company within section 343(9) of that Act, or to a local authority.

Commencement

10

Section 75 of this Act and the amendments and repeals mentioned in subsection (8) of that section do not apply in relation to interest paid or payable before the year 1972-73.

11

If, by any arrangements made after 21st March 1972, any interest payable before the year 1972-73 becomes payable in or after that year or is, directly or indirectly, replaced by any interest payable in or after that year, the interest payable in pursuance of the arrangements shall be deemed for the purposes of paragraph 10 above to have been payable before that year.

SCHEDULE 11

1

The Taxes Act shall be amended as follows.

2

In section 122(1)(b) for the words " annuity or other annual payment (not being interest)" there shall be substituted the words " annual interest or any annuity or other annual payment ".

3

In section 175(2) the following shall be substituted for paragraphs (a) and (b):—

(a) relief under section 75 of the Finance Act 1972

.

4

In section 248(3) for the words " (4) to (6) " there shall be substituted the words " (4) and (5) ".

5

In section 301(1) and (5) for the words " 300 " there shall be substituted the words " 299 ".

6