Finance Act 1981

Part I — Customs and Excise

Contracts with deferred payment.

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

• (2) In section 36 of that Act (excise duty on beer) for “£13.05” and “£0.435” there shall be substituted “ £18.00 ” and “ £0.60 ” respectively.

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

• (5) In section 62(1) of that Act (excise duty on cider) for “£6.05” there shall be substituted “ £7.20 ”.

• (6) This section shall be deemed to have come into force on 11th March 1981.

Tobacco products

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Matches and mechanical lighters

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Increase of duty on hydrocarbon oil etc.

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• (1) In section 6(1) of the Hydrocarbon Oil Duties Act 1979 for the words “a duty of excise at the rate of £0.10 a litre” there shall be substituted the words “ a duty of excise at the rate of £0.1382 a litre in the case of light oil and £0.1191 a litre in the case of heavy oil ”.

• (2) In consequence of subsection (1) above—

• (a) in sections 7 and 8(3) and (4)(c) of the said Act of 1979 and Article 3 of the Excise Duties (Gas as Road Fuel) Order 1972 (under which duty is charged by reference to the duty on hydrocarbon oil); and

• (b) in section 92(2) of the Finance Act 1965 and section 14(2) of the Finance Act (Northern Ireland) 1966 (grants towards duty on bus fuel),

for the words “hydrocarbon oil” there shall be substituted the words “ light oil ”.

• (3) This section shall be deemed to have come into force at 6 o’clock in the evening on 10th March 1981 but as respects the period beginning at that time and ending at 6 o’clock in the evening on 2nd July 1981 the rate of the duty of excise charged by section 6(1) of the said Act of 1979 shall, notwithstanding subsection (1) above, be £0.1382 a litre in the case of heavy oil as well as light oil and the provisions mentioned in subsection (2) above shall have effect accordingly.

Energy for refineries etc.

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• (1) The Hydrocarbon Oil Duties Act 1979 shall have effect with the following amendments, being amendments providing for relief from duty where energy is produced for use in refineries and other premises used for the production of hydrocarbon oil.

• (2) After section 19 there shall be inserted—

(19A) (1) If on an application made for the purposes of this section by an approved person it is shown to the satisfaction of the Commissioners— (a) that any quantity of rebated hydrocarbon oil has been used by him, otherwise than at a refinery or other premises used for the production of hydrocarbon oil, as fuel for producing energy; and (b) that not less than one-sixth or more than one-third of that energy was used in the treatment of hydrocarbon oil at a refinery or in the production of hydrocarbon oil at other premises used for the production of such oil, the applicant shall be entitled to obtain from the Commissioners repayment of one-third of the amountof excise duty which has been paid in respect of the quantity so used less the rebate allowed in respect of the duty. (2) In this section “an approved person” means a person for the time being approved in accordance with regulations made for the purposes of this section under section 24(1) below.

• (3) In section 27(1) for the definition of “refinery” there shall be substituted—

“refinery” means any premises which— (a) are approved by the Commissioners for the treatment of hydrocarbon oil; or (b) are approved by them for the production of energy for use in the treatment of hydrocarbon oil at premises approved under paragraph (a) above or in the production of hydrocarbon oil at other premises used for the production of such oil; and the Commissioners may approve any premises under paragraph (b) above if it appears to them that more than one-third of the energy will be produced for such use as is mentioned in that paragraph;

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• (4) after section 27(1) there shall be inserted—

(1A) If in the case of any premises which the Commissioners can approve under paragraph (b) of the definition of “refinery” in subsection (1) above it appears to them appropriate to do so, they may direct that the provisions of this Act (other than that definition) shall apply to them as if, instead of being a refinery, they were other premises used for the production of hydrocarbon oil.

• (5) Subsection (2) above has effect in relation to oil used on or after 1st September 1981.

Repayment of hydrocarbon oil duty

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• (1) The Hydrocarbon Oil Duties Act 1979 shall have effect with the amendments in subsections (2) and (3) below, being amendments which enable regulations to be made with respect to applications for repayment of duty under sections 17, . . ., 19 and 19A of that Act.

• (2) In section 24(1) for the words “or section 14(1) above” there shall be substituted the words “ , section 14(1), section 17, section 18(1), 19 or section 19A above ”.

• (3) For paragraph 3 of Schedule 4 there shall be substituted—

(3) Requiring claims or applications for repayment under section 9(4), 17, 18(1), 19 or 19A of this Act to be made at such times and in respect of such periods as are prescribed; providing that no such claim or application shall lie where the amount to be paid is less than the prescribed minimum; and preventing, where a claim or application can be made under section 9(4) or 19, the payment of drawback.

• (4) It is hereby declared for the avoidance of doubt that references in sections 17(1), . . . and 19(3) of the said Act of 1979 to duty paid in respect of the oil used as mentioned in those provisions are to the duty less any rebate allowed in respect of it and accordingly those provisions shall have effect, and be deemed always to have had effect, with the insertion after the words “so used” of the words “ less any rebate allowed in respect of the duty ”.

Vehicles excise duty: Great Britain

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

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

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

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

Vehicles excise duty: Northern Ireland

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Betting and gaming duties

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• (1) In section 1(2)(b) of the Betting and Gaming Duties Act 1972 and section 17(1)(b) of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 (general betting duty on bets other than on-course bets) for the words “7½ percent.” there shall be substituted the words “8 per cent.”.

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

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

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

• (8) Subsection (1) above shall be deemed to have come into force on 12th July 1981, . . . and (6) above shall come into force on 1st October 1981.

Import and export procedures

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• (1) The Customs and Excise Management Act 1979 shall have effect with the amendments specified in Schedule 6 to this Act, being amendments relating to the control of importation.

• (2) For sections 53 to 58 of that Act (which relate to the control of exportation) there shall be substituted the sections set out in Part I of Schedule 7 to this Act ; and the provisions of that Act mentioned in Part II of that Schedule (which also relate to that matter) shall have effect with the amendments there specified.

• (3) Subsection (1) above shall come into force on such day as may be appointed by the Commissioners of Customs and Excise by order made by statutory instrument and different days may be appointed in relation to different paragraphs of the Schedule mentioned in that subsection.

• (4) Subsection (2) above does not affect the operation of the said Act of 1979 in relation to goods exported before 1st October 1981.

Miscellaneous customs and excise amendments

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• (1) The enactments mentioned in Schedule 8 to this Act (which relate among other things to the administration and regulation of alcoholic liquor duties, warehousing and excise licences) shall have effect with the amendments there specified.

• (2) The following provisions of that Schedule shall come into force on 1st July 1982, namely—

• (a) paragraph 5, so far as it affects section 105 of the Customs and Excise Management Act 1979;

• (b) paragraph 20, in so far as it affects sections 65(1) to (7), 70, 86(1)(a) and (2) and 89 of the Alcoholic Liquor Duties Act 1979; and

• (c) paragraphs 24 to 28.

• (3) Section 16 of the Customs Duties (Dumping and Subsidies) Act 1969 (which requires the Secretary of State to lay before Parliament for each financial year a report on the anti-dumping and countervailing duties in force under that Act) shall not apply to any financial year ending after 31st March 1981.

Part II

Registration

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Goods acquired before incorporation

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In section 3(8) of the Finance Act 1972 (power to make regulations about input tax) after paragraph (b) there shall be inserted—

(bb) for a taxable person that is a body corporate to count as its input tax, in such circumstances, to such extent and subject to such conditions as may be prescribed, tax under either of those Parts on the supply or importation of goods acquired for it before its incorporation or on the supply of services before that time for its benefit or in connection with its incorporation ;

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Valuation: special cases

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• (1) In Schedule 3 to the Finance Act 1972, for paragraphs 1 to 3 there shall be substituted—

(1) (1) Where— (a) the value of a supply made by a taxable person for a consideration in money is (apart from this paragraph) less than its open market value, and (b) the person making the supply and the person to whom it is made are connected, and (c) the person to whom the supply is made is not entitled under sections 3 and 4 of this Act to credit for all the tax on the supply, the Commissioners may direct that the value of the supply shall be taken to be its open market value. (2) A direction under this paragraph shall be given by notice in writing to the person making the supply, but no direction may be given more than three years after the time of the supply. (3) A direction given to a person under this paragraph in respect of a supply made by him may include a direction that the value of any supply— (a) which is made by him after the giving of the notice, or after such later date as may be specified in the notice, and (b) as to which the conditions in paragraphs (a) to (c) of sub-paragraph (1) above are satisfied, shall be taken to be its open market value. (4) For the purposes of this paragraph any question whether a person is connected with another shall be determined in accordance with section 533 of the Income and Corporation Taxes Act 1970. (5) This paragraph does not apply to a supply to which paragraph 9 A below applies. (2) (1) Where— (a) goods are imported at a price in money which (together with all such taxes, duties, charges and costs as are specified in subsection (2)(a) and (b) of section 11 of this Act and not included in the price) is less than their value as determined in accordance with subsection (3) of that section, and (b) the person importing the goods and the person entitled to the price are connected, and (c) the person importing the goods is not entitled under sections 3 and 4 of this Act to credit for all the tax paid or payable by him on the importation, the Commissioners may direct that the value of the goods shall be taken to be their value as determined in accordance with the said subsection (3). (2) A direction under this paragraph shall be given by notice in writing to the person importing the goods, but no direction may be given more than three years after the time of importation. (3) A direction given to a person under this paragraph in respect of goods imported by him may include a direction that the value of any goods— (a) which are imported by him after the giving of the notice, or after such later date as may be specified in the notice, and (b) as to which the conditions in paragraphs (a) to (c) of sub-paragraph (1) above are satisfied, shall be taken to be their value as determined in accordance with section 11(3) of this Act. (4) For the purposes of this paragraph any question whether a person is connected with another shall be determined in accordance with section 533 of the Income and Corporation Taxes Act 1970. (3) Where— (a) the whole or part of a business carried on by a taxable person consists in supplying to a number of persons goods to be sold, whether by them or others, by retail, and (b) those persons are not taxable persons, the Commissioners may by notice in writing to the taxable person direct that the value of any such supply by him after the giving of the notice or after such later date as may be specified therein shall be taken to be its open market value on a sale by retail.

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• (2) In paragraphs 7 and 8 of that Schedule, at the end, there shall be added the words " except where paragraph 9A below applies ".

• (3) After paragraph 9 of that Schedule there shall be inserted—

(9A) (1) This paragraph applies to a supply of goods or services, whether or not for a consideration, which is made by an employer and consists of— (a) the provision in the course of catering of food or beverages to his employees, or (b) the provision of accommodation for his employees in a hotel, inn, boarding house or similar establishment. (2) The value of a supply to which this paragraph applies shall be taken to be nil unless the supply is for a consideration consisting wholly or partly of money, and in that case its value shall be determined without regard to any consideration other than money.

Appeals

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In section 40 of the Finance Act 1972, after subsection (5) there shall be added—

(6) Where an appeal under this section is against a decision of the Commissioners which depended upon a prior decision taken by them in relation to the appellant, the fact that the prior decision is not within subsection (1) above shall not prevent the tribunal from allowing the appeal on the ground that it would have allowed an appeal against the prior decision.

Part III

Extension to motor cycles

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Import and export

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• (1) For paragraph (b) of section 52(1) of the Finance Act 1972 (charge of car tax on vehicles made or registered in the United Kingdom by person not registered under Schedule 7 to that Act or under the corresponding provisions in force in the Isle of Man) there shall be substituted—

(b) made or registered in, or imported into, the United Kingdom by any other person except a person registered under Schedule 7 to the Value Added Tax and Other Taxes Act 1973 (an Act of Tynwald).

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• (2) In paragraph 3 of Schedule 7 to that Act (persons by whom car tax is payable) after paragraph (a) there shall be inserted the words

and (aa) if the vehicle is imported by a person not registered under this Schedule as if it were a duty of excise chargeable on importation ; and

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• (3) The provisions of paragraph 3 of the said Schedule 7 as amended by subsection (2) above shall become sub-paragraph (1) and after that sub-paragraph there shall be inserted—

(2) Subject to sub-paragraph (3) below, the Customs and Excise Management Act 1979 and, except where the contrary intention appears, any other enactments (including provisions of regulations or other instruments having statutory effect) relating generally to excise duties on imported goods, whether passed or made before or after the passing of this Act, shall have effect, with such exceptions and adaptations as the Commissioners may by regulations prescribe, as if chargeable vehicles in respect of which tax is payable in accordance with sub-paragraph (1)(aa) above were liable to a duty of excise on importation and as if the tax were that duty. (3) The following enactments shall be excepted from those which are to have effect as mentioned in sub-paragraph (2) above— (a) sections 43(5), 125, 126 and 127(1)(« of the said Act of 1979; (b) the Customs and Excise Duties (General Reliefs) Act 1979; and (c) sections 8 and 9 of the Isle of Man Act 1979.

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• (4) In paragraph 7 of the said Schedule 7 (relief for exported vehicles)—

• (a) there shall be omitted in sub-paragraph (a) the words " and was not registered before it was exported " and in sub-paragraph (b) the words " and is not registered "; and

• (b) after the words " repay it" there shall be inserted the words " subject, in the case of a vehicle registered before exportation, to such conditions as they think fit ".

• (5) In paragraph 9(1) of the said Schedule 7 (remission of tax on vehicles used outside the United Kingdom and Isle of Man) after the words " protection of the revenue " there shall be inserted the words " where the vehicle is imported after having been exported and tax was not remitted or repaid under paragraph 7 of this Schedule or ".

• (6) Subsections (1) to (4) above shall be deemed to have come into force on 1st April 1981.

Penalties

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• (1) After paragraph 22(4) of Schedule 7 to the Finance Act 1972 (daily penalty of £10 for failure to comply with certain requirements) there shall be inserted—

(4A) Where the failure referred to in sub-paragraph (4) of this paragraph consists— (a) in not paying the tax due in respect of any period within the time required by regulations under paragraph 26 of this Schedule ; or (b) in not furnishing a return in respect of any period within the time required by any such regulations, that sub-paragraph shall have effect as if for £10 there were substituted (if it is greater) an amount equal to ½ per cent, of the tax due in respect of that period; and for that purpose the tax due shall, if the person concerned has furnished a return, be taken to be the tax shown in the return as that for which he is accountable for that period and, in any other case, be taken to be such tax as has been assessed and notified to him under paragraph 17 of this Schedule.

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

Chapter I — General

Charge of income tax for 1981-82

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Charge of corporation tax for financial year 1980

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Corporation tax shall be charged for the financial year 1980 at the rate of 52 per cent.