Finance (No. 2) Act 1975

Part I — Customs and Excise

Miscellaneous

Increase of duties on spirits, beer, wine, British wine and tobacco

1

Gaming licence duty

2

Bingo duty

3

Gaming machine licence duties

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• (1) In section 23(1) of the Betting and Gaming Duties Act 1972 (duty on ordinary gaming machine licences)—

• (a) in Table A (premises with local authority approval) for " £75 " there shall be substituted " £50 ", and for " £150 " there shall be substituted " £100 "; and

• (b) in Table B (premises without local authority approval) for " £150 " there shall be substituted " £100 ", and for " £300 " there shall be substituted " £200 ".

• (2) In section 24(b) of that Act (duty on holiday season licences) for " £15 " there shall be substituted " £7.50 ".

• (3) In paragraph 2 of Schedule 4 to that Act (exemption for provision of gaming machines at pleasure fairs)—

• (a) in sub-paragraph (2)(b), for " l0p " (in both places) there shall be substituted " 15p ", and for " 25p " (in both places) there shall be substituted " 40p ";

• (b) in sub-paragraph (3)(a) and (b), for " 25p " (wherever occurring) there shall be substituted " 40p "; and

• (c) in sub-paragraph (4), for " l0p " there shall be substituted " 15p ".

• (4) In Part I of that Schedule there shall be inserted after paragraph 2—

(2A) (1) The Commissioners may by order made by statutory instrument provide that any provision of paragraph 2 of this Schedule which is specified in the order and which mentions a sum shall have effect, as from a date so specified, as if for that sum there were substituted such larger sum as may be specified in the order. (2) An order under this paragraph may be varied or revoked by a subsequent order. (3) Any statutory instrument containing an order under this paragraph shall be subject to annulment in pursuance of a resolution of the House of Commons.

• (5) In Part V of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 (gaming machine licences in Northern Ireland)—

• (a) in the Table in section 44(4) (duty where rewards from machines exceed l0p) for " £150 " there shall be substituted " £100 ", and for " £300" there shall be substituted " £200 ";

• (b) in the Table in section 45(3) (duty where rewards do not exceed l0p) for " £75" there shall be substituted " £50 "; and

• (c) in section 45(5) (duty on eight-month licences) for " £15 " there shall be substituted " £7.50 ".

• (6) Subsections (1), (2) and (5) of this section shall have effect in relation to licences for periods beginning at any time after the end of September 1975 ; and subsection (3) shall be deemed to have had effect from the beginning of May 1975.

Vehicles excise duty: Great Britain

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

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

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Vehicles excise duty: Northern Ireland

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• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Continuation of powers under Finance Act 1961 s. 9

7

Conversion of revenue duties and related provisions taking effect on 1st January 1976

Conversion of certain revenue duties and amendment of customs and excise and other Acts in connection therewith

8

Spirits

9

Beer

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• (1) There shall be charged on beer—

• (a) imported into the United Kingdom ; or

• (b) brewed in the United Kingdom,

a duty of excise at the rate of £13.6800 for every 36 gallons, that rate being, however, increased in the case of beer of an original gravity exceeding 1,030 degrees, by £0.4560 for each additional degree.

• (2) Drawback under sections 137 and 138 of the Act of 1952 shall, where it is shown to the satisfaction of the Commissioners that a duty of excise charged under this section has been paid, be allowed at the same rate as the rate at which the duty is charged; but as respects beer of an original gravity of less than 1,030 degrees the amount of drawback allowable shall not exceed the amount of the duty shown to the satisfaction of the Commissioners to have been paid.

Hydrocarbon oil

11

Matches

12

Mechanical lighters

13

• (1) There shall be charged on mechanical lighters—

• (a) imported into the United Kingdom ; or

• (b) manufactured in the United Kingdom and sent out from the premises of a manufacturer of mechanical lighters,

a duty of excise at the rate of £0.2000 for each lighter.

• (2) The duty chargeable under subsection (1) above shall be chargeable on mechanical lighters which when so imported or sent out are incomplete as well as on lighters which at that time are complete.

• (3) No duty shall be chargeable under subsection (1) above on a domestic gas lighter, that is to say, a mechanical lighter which is shown to the satisfaction of the Commissioners to be contracted solely for the purposes of igniting gas for domestic use.

Wine

14

Made-wine

15

• (1) There shall be charged on made-wine—

• (a) imported into the United Kingdom ; or

• (b) produced in the United Kingdom by a person who is required by subsection (2) below to be licensed to produce made-wine for sale,

a duty of excise at the rates shown in Schedule 5 to this Act and the duty shall, in so far as it is chargeable on made-wine produced in the United Kingdom, be charged and paid in accordance with regulations under section 140 of the Act of 1952 (as substituted by paragraph 27 of Schedule 3 to this Act).

• (2) Subject to subsections (3) and (4) below, a person who, on any premises in the United Kingdom, produces made-wine for sale must hold an excise licence under this subsection in respect of those premises for that purpose and on such a licence there shall be charged an excise duty at the rate of £5.25 per annum.

• (3) A person who, in warehouse, produces made-wine for sale by rendering it sparkling in accordance with regulations under section 16(2) of this Act need not hold an excise licence under subsection (2) above in respect of those premises.

• (4) A person need not hold an excise licence under subsection (2) above in respect of premises on which he produces made-wine for sale so long as all the following conditions are satisfied in relation to the production of made-wine by him on those premises, that is to say—

• (a) the excise duty chargeable on each alcoholic ingredient used by him has become payable before he uses it;

• (b) the ingredients he uses do not include non-excisable cider or black beer ;

• (c) he does not by fermentation increase the alcoholic strength of any liquor or substance used by him; and

• (d) he does not render any made-wine sparkling.

• (5) If any person who is required by subsection (2) above to hold a licence under that subsection in respect of any premises produces made-wine on those premises without being the holder of a licence under that subsection in respect of those premises he shall be liable to a penalty of £500 and the made-wine and all vessels, utensils and materials for producing made-wine found in his possession shall be liable to forfeiture.

• (6) In this section (and in the customs Acts and excise Acts)—

• " made-wine " means any liquor obtained from the alcoholic fermentation of any substance or by mixing a liquor so obtained or derived from a liquor so obtained with any other liquor or substance but does not include wine, beer, black beer, spirits or non-excisable cider;

• " non-excisable cider " means cider (or perry) of a strength less than 8-7 per cent, of alcohol by volume (at a temperature of 20°C) obtained from the fermentation of apple or pear juice without the addition at any time of any alcoholic liquor or of any liquor or substance which communicates colour or flavour other than such as the Commissioners may allow as appearing to them to be necessary to produce cider (or perry);

and, subject to any provision contained in Schedule 3 to this Act, in the excise Acts in force on 1st January 1976, for the expression " British wine " (substituted for " sweets " by section 1(4) of the Finance Act 1962) wherever occurring, there shall be substituted the expression " made-wine ".

Regulation of warehouses and warehoused goods

16

Part II

VAT: higher rate

17

VAT: conversion of certain goods

18

VAT: time of supply

19

• (1) In section 7 of the Finance Act 1972 (time of supply), after subsection (6) there shall be inserted as subsection (6A)—

(6A) The Commissioners may, at the request of a taxable person, by direction alter the time at which supplies made by him (or such supplies made by him as may be specified in the direction) are to be treated as taking place, either— (a) by directing those supplies to be treated as taking place— (i) at times or on dates determined by or by reference to the occurring of some event described in the direction ; or (ii) at times or on dates determined by or by reference to the time when some event so described would in the ordinary course of events occur, the resulting times or dates being in every case earlier than would otherwise apply; or (b) by directing that, notwithstanding subsections (5) and (6) of this section, those supplies shall (to the extent that they are not treated as taking place at the time mentioned in subsection (4) of this section) be treated as taking place— (i) at the beginning of the relevant working period (as defined in his case in and for the purposes of the direction); or (ii) at the end of the relevant working period (as so defined)

.

• (2) In section 7(8) of the Finance Act 1972 (Commissioners' power to make regulations about time of supply in certain cases), after the words " notwithstanding the preceding provisions of this section " there shall be inserted the words " other than subsection (6A) ".

• (3) Where there were in force immediately before 21st April 1975 arrangements between the Commissioners and any taxable person for supplies made by him (or such supplies made by him as were specified in the arrangements) to be treated as taking place at times or on dates which, had subsections (1) and (2) above been in force when the arrangements were made, could have been provided for by a direction under subsection (6A) of the said section 7, he shall be treated for the purposes of the said subsection (6A) as having requested the Commissioners to give a direction thereunder to the like effect, and the Commissioners may give a direction (or a general direction applying to cases of any class or description specified in the direction) accordingly.

• (4) Where a taxable person provides a document to himself which—

• (a) purports to be a tax invoice in respect of a supply of goods or services to him by another taxable person; and

• (b) is in accordance with regulations under section 30 of the Finance Act 1972 treated as the tax invoice required by the regulations to be provided by the supplier,

section 7(5) and (6) of the Finance Act 1972 (under which the time of supply depends on the issue of a tax invoice by the supplier) shall have effect in relation to that supply—

• (i) as if the provision of the document to himself by the first-mentioned taxable person were the issue by the supplier of a tax invoice in respect of the supply ; and

• (ii) as if any notice of election given or request made by the first-mentioned taxable person for the purposes of those provisions had been given or made by the supplier.

• (5) This section shall be deemed to have come into force on 21st April 1975.

VAT: power to alter rates

20

In section 9(3) of the Finance Act 1972 (which enables the Treasury to alter the rates of value added tax by not more than 20 per cent, thereof) for " 20 " there shall be substituted " 25 ".

VAT: gaming machines

21

• (1) Where a person plays a game of chance by means of a gaming machine, then for the purposes of value added tax (but without prejudice to subsection (2) below) the amount paid by him to play shall be treated as the consideration for a supply of services to him.

• (2) The value to be taken as the value of supplies made in the circumstances mentioned in subsection (1) above in any period shall be determined as if the consideration for the supplies were reduced by an amount equal to the amount (if any) received in that period by persons (other than the person making the supply and persons acting on his behalf) playing successfully.

• (3) The insertion of a token into a machine shall be treated for the purposes of subsection (1) above as the payment of an amount equal to that for which the token can be obtained ; and the receipt of a token by a person playing successfully shall be treated for the purposes of subsection (2) above—

• (a) if the token is of a kind used to play the machine, as the receipt of an amount equal to that for which such a token can be obtained ;

• (b) if the token is not of such a kind but can be exchanged for money, as the receipt of an amount equal to that for which it can be exchanged.

• (4) In this section—

• " game of chance " has the same meaning as in the Gaming Act 1968; and

• " gaming machine " means a machine in respect of which the following conditions are satisfied, namely— it is constructed or adapted for playing a game of chance by means of it; and a player pays to play the machine (except where he has an opportunity to play payment-free as the result of having previously played successfully), either by inserting a coin or token into the machine or in some other way ; and the element of chance in the game is provided by means of the machine.

• (5) This section shall come into force on 1st November 1975.

Car tax on caravans

22

Repayment of car tax on exported vehicles

23

• (1) In Schedule 7 to the Finance Act 1972 the following paragraph shall be substituted for paragraph 7 (which provides that car tax is not to be charged on certain unregistered vehicles which have been or are to be exported)—

(7) Where the Commissioners are satisfied that a vehicle— (a) has been exported and was not registered before it was exported, or (b) is to be exported under arrangements approved by them and is not registered, they shall remit the tax on the vehicle or, if the tax has been paid, repay it; but where such a vehicle is imported after having been exported the provisions of section 52 of this Act and of this Schedule shall apply in relation to it as they apply in relation to a vehicle made outside the United Kingdom and not previously imported.

• (2) In paragraph 8 of that Schedule (remission of tax on vehicles acquired for export)—

• (a) at the end of sub-paragraph (1) there shall be added the words " or, if the tax has been paid and the vehicle is unused, repay the tax ";

• (b) in sub-paragraph (2)—

• (i) after the words " has been remitted " there shall be inserted the words " or repaid ";

• (ii) for the words " on granting the remission directed" there shall be substituted the words " directed, as a condition of the remission or repayment, "; and

• (iii) after the words " but for the remission " there shall be inserted the words " or, as the case may be, an amount of tax equal to that repaid ".

Car tax: converted and adapted vehicles

24

In Schedule 7 to the Finance Act 1972 the following paragraph shall be substituted for paragraph 14 (converted and adapted vehicles)—

(14) (1) If it appears to the Commissioners that a person converts or adapts chargeable vehicles and that the vehicles so converted or adapted remain chargeable vehicles, they may direct that the conversion or adaptation shall, where it is of a description specified in the direction, be treated for the purposes of the tax as the making of the vehicles resulting from it, whether or not it would otherwise fall to be so treated. (2) A person in respect of whom a direction under this paragraph is in force shall be liable to be registered under this Schedule, whether or not he would otherwise be so liable. (3) Where a direction under this paragraph is in force in respect of any person, then, subject to such conditions as the Commissioners think necessary for the protection of the revenue and as are specified in the direction.— (a) tax shall not be charged on any unused vehicle delivered to that person, under arrangements approved by the Commissioners, by a person registered under this Schedule ; and (b) the wholesale value of any used vehicle which has been converted or adapted shall be taken to be reduced by an amount equal to what would have been its wholesale value if it had not been converted or adapted.

Part III — Income Tax, Corporation Tax and Capital Gains Tax

CHAPTER I — General

Charge of income tax for 1975-76

25

Charge of corporation tax for financial year 1974

26

Corporation tax shall be charged for the financial year 1974 at the rate of 52 per cent.

Corporation tax: other rates and fractions

27

• (1) The fraction by which, under section 93(2) of the Finance Act 1972, chargeable gains are to be reduced before they are for the purposes of corporation tax included in the profits of an authorised unit trust or investment trust shall, as from 1st April 1974, be seventy-one one-hundred-and-fourths (instead of the fraction specified in section 10(1)(b) of the Finance Act 1974).

• (2) The small companies rate for the financial year 1974 shall be 42 per cent, and for that year the fraction mentioned in section 95(2) of the Finance Act 1972 (marginal relief for small companies) shall be one-sixth.

Rate of advance corporation tax for financial year 1975

28

The rate of advance corporation tax for the financial year 1975 shall be thirty-five sixty-fifths.

Relief for interest: limit for 1975-76

29

In paragraph 5(1) of Schedule 1 to the Finance Act 1974 (limit on relief for interest on certain loans for purchase or improvement of land used as an only or main residence) the references to £25,000 shall have effect for the year 1975-76 as well as for the year 1974-75.

Alteration of personal reliefs

30

• (1) In section 8 of the Taxes Act (personal relief)—