Finance Act 1987

Part I — Customs and Excise and Value Added Tax

Chapter I — Customs and Excise

Duties of excise

Warrants to purchase Government stock, etc.

1

• (1) After section 13 of the Hydrocarbon Oil Duties Act 1979 there shall be inserted the following section—

(13A) (1) On unleaded petrol charged with the excise duty on hydrocarbon oil and delivered for home use there shall be allowed at the time of delivery a rebate of duty at the rate of £0.0096 a litre. (2) For the purposes of this section petrol is “unleaded” if it contains not more than 0.013 grams of lead per litre of petrol or, if the petrol is delivered for home use before 1st April 1990, not more than 0.020 grams of lead per litre of petrol. (3) Rebate shall not be allowed under this section in any case where it is allowed under section 14 below.

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

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

• (4) This section shall be deemed to have come into force at 6 o’clock in the evening of 17th March 1987.

Vehicles excise duty

2

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

• (2) In Schedule 4 to each of the Acts of 1971 and 1972 (annual rates of duty on goods vehicles)—

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

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

• (6) . . . section 102 of the Customs and Excise Management Act of 1979, as it applies in relation to licences under the Act of 1971, shall have effect subject to the further amendments in Part III of Schedule 1 to this Act.

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

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

Abolition of general betting duty on on-course bets

3

• (1) General betting duty shall not be chargeable on any bet made on or after 29th March 1987 which is an on-course bet within the meaning of Part I of the Betting and Gaming Duties Act 1981 (in this section referred to as “the 1981 Act”) and, accordingly, with respect to bets made on or after that date, section 1 of the 1981 Act (charge to, and rates of, duty) shall be amended as follows—

• (a) in subsection (1) after the words “on any bet” there shall be inserted “ which is not an on-course bet and ”; and

• (b) in subsection (2) the words from the beginning of paragraph (a) to “bet” in paragraph (b) shall be omitted.

• (2) With respect to bets made on or after 29th March 1987 but before the betting commencement date within the meaning of section 6 of the Finance Act 1986, Part III of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972 (in this section referred to as “the 1972 Act”) (which made separate provision for Northern Ireland corresponding to that made by the 1981 Act and which ceased to have effect on the betting commencement date except in relation to bets made before that date) shall be deemed to have been amended as follows—

• (a) in section 16(1) (charge of duty) after the words “on any bet” there shall be inserted “ which is not an on-course bet and ”; and

• (b) in section 17 (rates of duty) in subsection (1) paragraph (a) and, in paragraph (b), the words from the beginning to “bet” shall be omitted.

• (3) In Schedule 1 to the 1981 Act (supplementary provisions)—

• (a) in paragraph 1 (definitions) at the end of the definition of “general betting business” there shall be added the words “ or would or might involve such sums becoming so payable if on-course bets were not excluded from that duty ”; and

• (b) in paragraph 2 (power to make regulations for administration of general betting duty) in sub-paragraph (4)(a) after the words “liable for duty” there shall be inserted “ or would be or might be or become liable for duty if on-course bets were not excluded from duty ”.

• (4) The amendments made by subsection (3) above shall be deemed to have come into force on 29th March 1987.

• (5) During the period beginning with 29th March 1987 and ending with the betting commencement date within the meaning of section 6 of the Finance Act 1986, in Schedule 2 to the 1972 Act (supplementary provisions) the references to a business which involves, or may involve, general betting duty becoming payable by any person and the references to any activity by reason of which a person is or may be or become liable for that duty shall be deemed to have included respectively references to a business which would or might involve that duty becoming payable, and to an activity by reason of which a person would be or might be or become liable for that duty, if on-course bets were not excluded from that duty.

Gaming machine licence duty: rates

4

Gaming machine licence duty: other amendments

5

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

• (2) In subsection (3) of section 26 of the 1981 Act (which provides that if one or more gaming machines are made available on any premises in such a way that they can be played, any gaming machine anywhere on the premises shall be treated as provided for gaming) after the word “and” there shall be inserted “ subject to subsection (3A) below ”.

• (3) After subsection (3) of the said section 26 there shall be inserted the following subsection—

(3A) The Commissioners may by regulations make provision for the purpose of enabling spare gaming machines to be kept on premises for use in the case of the breakdown of other gaming machines on those premises; and such regulations may provide that, in such circumstances and subject to such conditions as may be specified in the regulations, a gaming machine on any premises which is not made available as mentioned in subsection (3) above, or is not in a state in which it can be played, shall not be treated by virtue of that subsection as provided for gaming on those premises.

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

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

Amendments of the Management Act

Access to approved wharves and transit sheds

6

Powers of search and access etc. in respect of vehicles

7

• (1) In section 27 of the Customs and Excise Management Act 1979 (officers’ power of boarding) in subsection (1) for the words from “a vehicle” to “any officer” there shall be substituted

a vehicle is— (a) entering, leaving or about to leave the United Kingdom, (b) within the prescribed area, (c) within the limits of or entering or leaving a port or any land adjacent to a port and occupied wholly or mainly for the purpose of activities carried on at the port, (d) at, entering or leaving an aerodrome, (e) at, entering or leaving an approved wharf, transit shed, customs warehouse or free zone, or (f) at, entering or leaving any such premises as are mentioned in subsection (1) of section 112 below, any officer

.

• (2) In section 28 of that Act (officers’ powers of access, etc.) in subsection (1) after the words “any vehicle” there shall be inserted “ which falls within paragraphs (a) to (f) of subsection (1) of section 27 above or is ”.

Local export control

8

• (1) In section 58A of the Customs and Excise Management Act 1979 (local export control) at the end of subsection (1) there shall be inserted “ and, subject to and to such modifications as may be specified in the directions, this section and section 58D below shall apply in relation to goods which, for the purposes of any Community regulation relating to export refunds or monetary compensatory amounts, are treated as exports as if the supply of the goods were their exportation or, as the case may require, their shipping for exportation ”.

• (2) In subsection (3)(b) of that section (conditions for the application of local export control) after the word “shipped” there shall be inserted “ for exportation or exported by land ”.

• (3) After subsection (7) of that section (power of Commissioners to relax requirements) there shall be inserted—

(7A) Without prejudice to the powers of the Commissioners under subsection (7) above, they may direct that, in relation to goods of a description specified in the directions which are shipped for exportation or exported by land by an exporter of a description so specified, paragraph (a) of subsection (3) above shall have effect as if— (a) in sub-paragraph (i) the words “time and” were omitted; and (b) for sub-paragraph (ii) there were substituted— (ii) at the time that notice is delivered or immediately thereafter, the exporter enters such paarticulars of the goods and of such other matters as may be required by the directions in a record maintained by him at such place as the proper officer may require; and (iii) the proper officer informs the exporter that he consents to the removal of the goods; and

• (4) In section 58D of that Act (operative date for Community purposes) in subsection (2) (b) for the words following “above” there shall be substituted “ as set out in section 58A(7A)(b) above, the day entry is made ”.

Records relating to importation and exportation

9

After section 75 of the Customs and Excise Management Act 1979 there shall be inserted the following—

(75A) (1) Every person who is concerned (in whatever capacity) in the importation or exportation of goods of which an entry or specification is required for that purpose by or under this Act shall keep such records as the Commissioners may require. (2) The Commissioners may require any records kept in pursuance of this section to be preserved for such period not exceeding four years as they may require. (3) The duty under this section to preserve records may be discharged by the preservation of the information contained therein by such means as the Commissioners may approve; and where that information is so preserved a copy of any document forming part of the records shall, subject to the following provisions of this section, be admissible in evidence in any proceedings, whether civil or criminal, to the same extent as the records themselves. (4) The Commissioners may, as a condition of an approval under subsection (3) above of any means of preserving information, impose such reasonable requirements as appear to them necessary for securing that the information will be as readily available to them as if the records themselves had been preserved. (5) The Commissioners may at any time for reasonable cause revoke or vary the conditions of any approval given under subsection (3) above. (6) A statement contained in a document produced by a computer shall not by virtue of subsection (3) above be admissible in evidence— (a) in civil proceedings in England and Wales, except in accordance with sections 5 and 6 of the Civil Evidence Act 1968; (b) in criminal proceedings in England and Wales, except in accordance with sections 68 to 70 of the Police and Criminal Evidence Act 1984; (c) in civil proceedings in Northern Ireland, except in accordance with sections 2 and 3 of the Civil Evidence Act (Northern Ireland) 1971; and (d) in criminal proceedings in Northern Ireland, except in accordance with the said sections 2 and 3, which shall, for the purposes of this section, apply with the necessary modifications to such proceedings.

Information powers

10

In section 77 of the Customs and Excise Management Act 1979 (information in relation to goods imported, exported or shipped for carriage coastwise) in subsection (1)(a) the words “importation, exportation or” shall be omitted, and after that section there shall be inserted the following section—

(77A) (1) Every person who is concerned (in whatever capacity) in the importation or exportation of goods for which an entry or specification is required for that purpose by or under this Act shall— (a) furnish to the Commissioners, within such time and in such form as they may reasonably require, such information relating to the goods or to the importation or exportation as the Commissioners may reasonably specify; and (b) if so required by an officer, produce or cause to be produced for inspection by the officer— (i) at the principal place of business of the person upon whom the demand is made or at such other place as the officer may reasonably require, and (ii) at such time as the officer may reasonably require, any documents relating to the goods or to the importation or exportation. (2) Where, by virtue of subsection (1) above, an officer has power to require the production of any documents from any such person as is referred to in that subsection, he shall have the like power to require production of the documents concerned from any other person who appears to the officer to be in possession of them; but where any such other person claims a lien on any document produced by him, the production shall be without prejudice to the lien. (3) An officer may take copies of, or make extracts from, any document produced under subsection (1) or subsection (2) above. (4) If it appears to him to be necessary to do so, an officer may, at a reasonable time and for a reasonable period, remove any document produced under subsection (1) or subsection (2) above and shall, on request, provide a receipt for any document so removed; and where a lien is claimed on a document produced under subsection (2) above, the removal of the document under this subsection shall not be regarded as breaking lien. (5) Where a document removed by an officer under subsection (4) above is reasonably required for the proper conduct of a business, the officer shall, as soon as practicable, provide a copy of the document, free of charge, to the person by whom it was produced or caused to be produced. (6) Where any documents removed under the powers conferred by this section are lost or damaged, the Commissioners shall be liable to compensate their owner for any expenses reasonably incurred by him in replacing or repairing the documents. (7) If any person fails to comply with a requirement under this section, he shall be liable on summary conviction to a penalty of level 3 on the standard scale.

Chapter II — Value Added Tax

Accounting for and payment of tax

11

Credit for input tax

12

Supplies abroad etc.

13

Registration

14

Supplies to groups

15

Tour operators

16

Valuation of supplies at less than market value

17

Issue of securities

18

Interpretation and miscellaneous further amendments

19

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

Chapter I — General

Tax rates

Charge of income tax for 1987-88

20–39

Charge of corporation tax for financial year 1987

21

Corporation tax shall be charged for the financial year 1987 at the rate of 35 per cent.

Corporation tax: small companies

22

• (1) For the financial year 1987 the small companies rate shall be 27 per cent.

• (2) For the financial year 1987, the fraction mentioned in section 95(2) of the Finance Act 1972 (marginal relief for small companies) shall be one fiftieth.

Deduction rate for sub-contractors in construction industry

23

Section 69(4) of the Finance (No. 2) Act 1975 (which requires deductions to be made from payments to certain sub-contractors in the construction industry) shall have effect in relation to payments made on or after 2nd November 1987 with the substitution for the words "29 per cent." of the words "27 per cent.".

Personal reliefs etc.

Personal reliefs: operative date for PAYE

24

For the year 1987-88, in subsection (7) of section 24 of the Finance Act 1980 (which specifies the date from which indexed changes in income tax thresholds and allowances are to be brought into account for the purposes of PA YE) for "5th May" there shall be substituted "18th May".

Relief for interest

25

For the year 1987-88 the qualifying maximum referred to in paragraphs 5(1) and 24(3) of Schedule 1 to the Finance Act 1974 (limit on relief for interest on certain loans for the purchase or improvement of land) shall be £30,000.

Increased personal relief for those aged eighty and over

26

• (1) Subject to the provisions of this section, subsection (1) of section 8 of the Taxes Act (personal reliefs) shall have effect—

• (a) in relation to a claim by a person who proves that he or his wife was at any time within the year of assessment of the age of eighty or upwards, as if the sum specified in paragraph (a) (married) were £4,845; and

• (b) in relation to a claim by a person who proves that he was at any time within the year of assessment of the age of eighty or upwards, as if the sum specified in paragraph (b) (single) were £3,070.

• (2) For the purposes of subsection (1) above, a person who would have been of the age of eighty or upwards within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.

• (3) For any year of assessment for which a person is entitled to increased personal relief by virtue of this section, he shall not be entitled to increased relief under subsection (1A) of section 8 of the Taxes Act (increased relief for persons of sixty-five and upwards).

• (4) For the purpose of any enactment which refers to Part I of the Taxes Act or to Chapter II of that Part, subsections (1) and (2) above shall be taken to be included' in that Chapter.

• (5) In the following enactments—

• (a) subsection (1B) of section 8 of the Taxes Act (tapering of relief under subsection (1A)),

• (b) subsection (2) of section 14 of that Act (which, as applied by section 15A of that Act, determines the amount of widow's bereavement allowance), and

• (c) paragraph 3(3) of Schedule 4 to the Finance Act 1971 (exclusion of certain reliefs where there is separate taxation of wife's earnings),

any reference to subsection (1A) of section 8 of the Taxes Act includes a reference to subsection (1) above.

• (6) In subsection (8) of section 36 of the Finance Act 1976 (application of provisions relating to transfer of balance of certain reliefs between spouses) the reference in paragraph (b) to section 8(lA)(b) of the Taxes Act includes a reference to subsection (1)(b) above.