Finance Act 1978

PART I — CUSTOMS AND EXCISE

Tobacco products duty

1

Repayment of excise duty on beer etc.

2

Warehousing regulations

3

Control of movement of goods

4

• (1) The Commissioners may by regulations impose conditions and restrictions as respects—

• (a) the movement of imported goods between the place of importation and a place approved by the Commissioners for the clearance out of charge of such goods; and

• (b) the movement of goods intended for export between a place approved by the Commissioners for the examination of such goods and the place of exportation.

• (2) The regulations may in particular—

• (a) require the goods to be moved within such period and by such route as may be specified by or under the regulations;

• (b) require the goods to be carried in a vehicle or container complying with such requirements and secured in such manner as may be so specified ; and

• (c) prohibit, except in such circumstances as may be so specified, any unloading or loading of the vehicle or container or any interference with its security.

• (3) If any person contravenes or fails to comply with any regulation or any requirement imposed by or under the regulations, that person and the person then in charge of the goods shall each be liable to a penalty of £500 and any goods in respect of which the offence was committed shall be liable to forfeiture.

Penalty for removing seals etc.

5

• (1) Where, in pursuance of any power conferred by the customs and excise Acts or of any requirement imposed by or under those Acts, a seal, lock or mark is used to secure or identify any goods for any of the purposes of those Acts and—

• (a) at any time while the goods are in the United Kingdom or within the limits of any port or on passage between ports in the United Kingdom, the seal, lock or mark is wilfully and prematurely removed or tampered with by any person ; or

• (b) at any time before the seal, lock or mark is lawfully removed, any of the goods are wilfully removed by any person,

that person and the person then in charge of the goods shall each be liable to a penalty of £500 ; and for the purposes of this subsection goods in a ship or aircraft shall be deemed to be in the charge of the master of the ship or commander of the aircraft.

• (2) Where, in pursuance of any Community requirement or practice which relates to the movement of goods between countries or of any international agreement to which the United Kingdom is a party and which so relates,—

• (a) a seal, lock or mark is used (whether in the United Kingdom or elsewhere) to secure or identify any goods for customs or excise purposes ; and

• (b) at any time while the goods are in the United Kingdom, the seal, lock or mark is wilfully and prematurely removed or tampered with by any person,

that person and the person then in charge of the goods shall each be liable to a penalty of £500.

• (3) This section shall be treated for all purposes as included in Part II of the Customs and Excise Act 1952 and section 70 of that Act, which is superseded by this section, shall cease to have effect.

Anti-dumping measures on ECSC products

6

• (1) In relation to any product covered by the ECSC treaty, the Secretary of State may by order make such provision as appears to him to be appropriate for the purpose of giving effect to any Recommendation or other EU obligation arising under that treaty and relating to the imposition, amendment, suspension, revocation or annulment of anti-dumping measures, that is to say, measures for affording protection against dumping or the granting of bounties or subsidies by countries which are not members of the European Union.

• (2) Without prejudice to the generality of the power conferred by subsection (1) above, so far as may be necessary for giving effect to EU obligation, an order under that subsection may, in circumstances specified in the order,—

• (a) require the provision of security of an amount determined under the order by way of provisional duty;

• (b) provide for the collection of the whole or a particular proportion of any amount so secured;

• (c) charge a duty of customs; and

• (d) make provisions of the order applicable to goods imported into the United Kingdom or another member State before the order comes into force ;

and the power to make an order under that subsection includes power to vary or revoke an order previously made in the exercise of that power and shall be exercisable by statutory instriment which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.

• (3) Where the application or amount of any charge imposed by an order under subsection (1) above depends in some factor other than the country of origin, the Commissioners may require the importer of any goods to state such facts as they may think necessary in order to determine the duty chargeable on those goods ; and if any facts so required are not stated, the duty chargeavle shall be determined on the basis that the facts are such as the Commissioners may determine.

• (4) . . . any duty chargeable on goods by virtue of subsection (1) above, . . . shall be addition to any other duty of customs for the time being chargeable on those goods.

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

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

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gaming licence duty in Scotland

7

Vehicles excise duty: Great Britain

8

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

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

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

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

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

Vehicles excise duty: Northern Ireland

9

Continuation of powers under Finance Act 1961 s. 9

10

PART II — VALUE ADDED TAX

Registration

11

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

• (3) After paragraph 10 of that Schedule (cancellation of registration) there shall be inserted—

(10A) Where a registered person who has at any time ceased to be liable to be registered by virtue of paragraph 2 of this Schedule has before that time failed or subsequently failsto make any return or account for or pay any tax as required by or under this Act, the Commissioners may, if they think fit, cancel his registration with effect from such date as they may determine.

• (4) In paragraph 11 of that Schedule (discretionary registration) the existing provisions shall become sub-paragraph (1) and after those provisions there shall be inserted—

(2) Where the Commissioners refuse to act or to continue to act on a request made by a person under sub-paragraph (1)(b) above, they shall give him written notice of their decision and of the grounds on which it was made.

;

and in section 40(1) of the said Act of 1972 (appeals) after paragraph (g) ther shall be inserted—

(g) any refusal to act or to continue to act on a request under paragraph 11(1)(b) of Schedule 1 to this Act;

.

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

Bad debt relief

12

PART III — INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAX

CHAPTER I — General

Charge of income tax for 1978-79

13

Lower rate income tax

14

• (1) In paragraph (a) of subsection (1) of section 32 of the Finance Act 1971 (income tax charged at basic and other rates) for the words " income not falling within paragraph (b) below " there shall be substituted the words " income not falling within paragraph (aa) or (b) below and after that paragraph there shall be inserted—

(aa) in respect of so much of an individual's total income as does not exceed such amount as Parliament may determine, at such lower rate or rates as Parliament may determine ; and

.

• (2) After subsection (1) of that section there shall be inserted—

(1A) In the case of a husband whose total income includes relevant earned income of his wife— (a) the income chargeable in accordance with paragraph (aa) of subsection (1) of this section shall be— (i) so much of his total income, other than relevant earned income of his wife, as does not exceed the amount referred to in that paragraph; and (ii) so much of the relevant earned income of his wife as does not exceed that amount; and (b) if there are two or more such rates as are referred to in that paragraph, those rates shall be applied separately to the income mentioned in sub-paragraph (i) and the income mentioned in sub-paragraph (ii) above, and any provision charging income tax in accordance with that paragraph shall have effect accordingly. (1B) For the purposes of subsection (1A) of this section earned income of the wife has the same meaning as for the purposes of subsection (2) of section 8 of the Taxes Act and relevant earned income of the wife means so much of her earned income as exceeds the relief available in respect of it under that subsection. (1C) Where income tax at the basic rate has been borne on income chargeable at a lower rate any necessary repayment of tax shall be made on the making of a claim. (1D) Except where the context otherwise requires, references in the Income Tax Acts to a rate or rates lower or higher than the basic rate are references to any such rate or rates as are mentioned in paragraph (aa) or (b) of subsection (1) of this section respectively.

• (3) The enactments mentioned in Schedule 2 to this Act shall have effect with the amendments there specified, being amendments consequential on the provisions of this section.

Charge of corporation tax for financial year 1977

15

Corporation tax shall be charged for the financial year 1977 at the rate of 52 per cent.

Rate of advance corporation tax for financial year 1978

16

The rate of advance corporation tax for the financial year 1978 shall be thirty-three sixty-sevenths.

Corporation tax: other rates and fractions

17

• (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 1977, be twenty-one twenty-sixths instead of the fraction specified in section 27(1) of the Finance Act 1976.

• (2) The small companies rate for the financial year 1977 shall be 42 per cent., and for that year the fraction mentioned in subsection (2) of section 95 of the said Act of 1972 (marginal relief for small companies) shall be one-seventh.

• (3) For the financial year 1977 and subsequent financial years subsection (3) of the said section 95 shall have effect with the substitution for any reference to £40,000 of a reference to £50,000 and with the substitution for any reference to £65,000 of a reference to £85,000.

• (4) Where by virtue of subsection (3) above the said section 95 has effect with different relevant amounts in relation to different parts of the same accounting period, those parts shall be treated for the purposes of that section as if they were separate accounting periods, and the profits and income of the company for that period (as defined in that section) shall be apportioned between those parts.

Relief for interest: limit for 1978-79

18

In paragraph 5(1) of Schedule 1 to the Finance Act 1974 (limit on relief for interest on certain loans for the purchase or improvement of land) the references to £25,000 shall have effect for the year 1978-79 as well as for previous years of assessment.

Alteration of personal reliefs

19

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

• (a) in subsection (1)(a) (married) for "£1,455" there shall be substituted " £1,535 ";

• (b) in subsection (1)(b) (single) and (2) (wife's earned income relief) for " £945 " there shall be substituted " £985 ";

• (c) in subsection (1A) (age allowance) for " £1,975 " and "£1,250" there shall be substituted " £2,075 " and "£1,300 " respectively;

• (d) in subsection (1B) (income limit for age allowance) for " £3,500 " there shall be substituted " £4,000 ".

• (2) In section 12 of that Act (allowance for female housekeeper)—

• (a) the word " female", wherever it occurs, shall be omitted;

• (b) in subsection (1)(ii) after the word " above " there shall be inserted the words " or the relative is a man who has claimed and been allowed that higher relief ".

• (3) In section 13(a) of that Act (allowance where claimant's mother or other female relative takes charge of his brother or sister)—

• (a) for the words " either his mother, being a widow or a person living apart from her husband, or some other female relative " there shall be substituted the words " a relative ";

• (b) the words " mother or other " shall be omitted.

• (4) In section 14(2) and (3) of that Act (additional relief for widows and others in respect of children) for "£510" there shall be substituted " £550 ".

• (5) In section 17 of that Act (allowance for services of daughter) for the word " daughter " there shall be substituted the words " son or daughter " and the like amendment shall be made in sections 18(5) and 39(1)(d) of that Act (which contain references to the allowance under section 17).

• (6) In section 18 of that Act (relief for blind persons)—

• (a) in subsection (1)(a) and (b) for the words "throughout the year a registered blind person " there shall be substituted the words " a registered blind person for the whole or part of the year ";

• (b) in subsection (2)(b) for the words " throughout the year both he and his wife were registered blind persons " there shall be substituted the words " he was a registered blind person for the whole or part of the year and his wife was also a registered blind person for the whole or part of the year ";

• (c) subsections (3) and (4) shall be omitted.

Child tax allowances and benefits in respect of children

20

• (1) Except in the case of a child to whom section 25 or 26 of the Finance Act 1977 applies, the appropriate amount to be deducted from the claimant's total income under subsection (1) of section 10 of the Taxes Act (children) for the year 1978-79 shall, instead of being determined in accordance with subsection (3) of that section, be determined in accordance with subsection (2) below.

• (2) The appropriate amount for the child shall vary according to the age of the child at the commencement of the year of assessment, and, subject to subsection (5) of the said section 10—

• (a) for a child shown by the claimant to have been then over the age of sixteen, shall be £165;

• (b) for a child not so shown, but shown by the claimant to have been then over the age of eleven, shall be £135;

• (c) in any other case, shall be £100.

• (3) For the year 1978-79 and subsequent years of assessment subsection (5) of the said section 10 shall have effect with the substitution for " £350 " (in both places) and " £235 " of " £500 " and " £385 " respectively.

• (4) Section 23(3) of the said Act of 1977 (£52 of certain benefits in respect of children to be exempt from income tax for the year 1977-78) shall have effect also in relation to the year 1978-79 but with the substitution for " £52 " of " £80 ".

• (5) Section 25 of the said Act of 1977 (tax allowances in the year 1977-78 for children living abroad) shall have effect also in relation to years of assessment after that year.

Maintenance payments

21

In section 15(1) of the Finance Act 1974 (the first £1,500 of any amounts paid as maintenance payments not to be investment income) the words " the first £1,500 of " shall be omitted.

Tax repayments to wives

22

• (1) Where in any year of assessment tax has been deducted under section 204 of the Taxes Act (pay as you earn) from the earned income of a wife and, apart from this section, a repayment of tax for that year would fall to be made to her husband in consequence of an assessment under Schedule E, so much of the repayment as is attributable to the tax so deducted shall be made to her and not to him.

• (2) The amount of a repayment attributable to tax deducted as mentioned in subsection (1) above is the excess (if any) of the total net tax so deducted in the year of assessment over the tax chargeable on the wife's relevant earned income included in her husband's total income for that year after allowing—

• (a) any relief for that year under section 19 of the Taxes Act in respect of any payment made by her of the kind mentioned in paragraph 14A of Schedule 4 to the Finance Act 1976 (retirement benefits schemes); and

• (b) any relief for that year to which her husband is entitled under any other provision of the Income Tax Acts to the extent to which it cannot be allowed because his income, exclusive of her earned income, is insufficient;

but that amount shall not exceed the aggregate of the amounts repayable for that year in respect of the total net tax deducted in that year under the said section 204 from the income of the wife and the income of her husband.

• (3) Where in consequence of an assessment under Schedule E any amount is repayable under this section to the wife of the person on whom the assessment is made the inspector shall notify both of them of his determination of that amount and, subject to subsection (4) below, an appeal shall lie against the determination as if it were a decision on a claim.

• (4) Any appeal under subsection (3) above shall be to the General Commissioners for the division in which the spouses reside or, if they reside in different divisions, for the division in which one of them resides, as the Board may direct, or if neither resides in Great Britain to the Special Commissioners; and on any such appeal by one of the spouses the other shall have the same rights as an appellant, including any right to require the statement of a case for the opinion of the court.