Finance Act 1993

Part I — Customs and Excise and Value Added Tax

Chapter I — General

Alcoholic liquor duties

Rates of duty

1

• (1) In section 36 of the Alcoholic Liquor Duties Act 1979 (beer), as that section has effect apart from section 7(1) of the Finance Act 1991, for “£1.108” there shall be substituted “ £1.163 ”.

• (2) For the Table of rates of duty in Schedule 1 to that Act (wine and made-wine) there shall be substituted the Table in Schedule 1 to this Act.

• (3) In section 62(1) of that Act (cider) for “£21.32” there shall be substituted “ £22.39 ”.

• (4) This section shall be deemed to have come into force at 6 o’clock in the evening of 16th March 1993.

Pay and file: miscellaneous amendments.

2

• (1) In section 36(1) of the Alcoholic Liquor Duties Act 1979 (beer duty), as substituted by section 7(1) of the Finance Act 1991, for “£10.60” there shall be substituted “ £10.45 ”.

• (2) This section shall be deemed to have come into force on 1st June 1993.

The basic rule: sterling to be used

3

• (1) In section 1 of the Alcoholic Liquor Duties Act 1979 (alcoholic liquors dutiable under that Act) in subsection (3) (beer) for “1.2 per cent.” there shall be substituted “ 0.5 per cent. ”.

• (2) In section 36 of that Act (beer duty), as substituted by section 7(1) of the Finance Act 1991, after subsection (1) there shall be inserted the following subsection—

(1A) No duty shall be chargeable under subsection (1) above on beer which is of a strength of 1.2 per cent. or less; but any such beer shall in all other respects be treated as if it were chargeable with a duty of excise.

• (3) This section shall apply in relation to liquor which is produced in or imported into the United Kingdom, or removed into the United Kingdom from the Isle of Man, on or after the day on which this Act is passed.

Reduction of rates of PRT and interest repayments for taxable oil fields.

4

• (1) The Alcoholic Liquor Duties Act 1979 shall be amended as follows.

• (2) In subsection (2) of section 42 (drawback on exportation etc. of beer)—

• (a) paragraph (a) (drawback on removal to excise warehouse) shall be omitted,

• (b) in paragraph (b) the words “or removal to the Isle of Man” shall be omitted,

• (c) also in paragraph (b) for “any such beer” there shall be substituted “ any beer to which this section applies ”, and

• (d) for “exported, removed or shipped” there shall be substituted “ exported or shipped ”.

• (3) In subsections (3) and (4) of that section the word “remove,”, in each place where it occurs, shall be omitted.

• (4) Section 43 (warehousing of beer for exportation, etc.) shall cease to have effect.

• (5) In section 45(1) (repayment of duty on beer used in the production or manufacture of other beverages etc.)—

• (a) at the end of paragraph (a) there shall be inserted “ or ”, and

• (b) paragraph (b) shall be omitted.

• (6) Section 51 (power to require production of books by brewers for sale) shall cease to have effect.

• (7) Subsections (2)(a) and (c) and (4) to (6) above shall come into force on 1st September 1993.

• (8) Subsections (2)(b) and (d) and (3) above shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint.

Blending of alcoholic liquors

5

• (1) In Part VI of the Alcoholic Liquor Duties Act 1979 the following section shall be inserted before section 67—

(66A) (1) Subject to subsections (4) to (6) below, a person shall not blend two or more alcoholic liquors— (a) each of which is of a kind mentioned in paragraphs (a) to (e) of section 1(1) above, but (b) not all of which fall within the same one of those paragraphs, except in an excise warehouse or on premises which, in relation to the liquors blended, are for the time being permitted premises. (2) Subject to subsections (4) to (6) below, a person shall not blend two or more alcoholic liquors which— (a) fall within the same paragraph of section 1(1) above, but (b) are not all of the same alcoholic strength, except in an excise warehouse or on premises which, in relation to the liquors blended, are for the time being permitted premises. (3) In relation to the blending of particular alcoholic liquors— (a) if the liquor which is the product of the blending is beer, permitted premises are premises which are registered under section 41A above and premises in respect of which a person is registered under section 47 above; (b) if the liquor which is the product of the blending is wine, permitted premises are premises in respect of which a licence under section 54(2) above is held; (c) if the liquor which is the product of the blending is made-wine, permitted premises are premises in respect of which a licence under section 55(2) above is held; (d) if the liquor which is the product of the blending is cider, permitted premises are premises in respect of which a person is registered under section 62 above. (4) Subsections (1) and (2) above do not apply unless the blending is done with a view to offering for sale the liquor which is the product of the blending. (5) Subsections (1) and (2) above do not apply where the liquor which is the product of the blending is intended for consumption on the premises on which the blending takes place. (6) The Commissioners may direct that subsections (1) and (2) above shall not apply to the blending of alcoholic liquors in such circumstances as are specified in the direction. (7) Where a person contravenes subsection (1) or (2) above, the following shall be liable to forfeiture— (a) the liquor which is the product of the blending; (b) all such vessels, utensils and materials for the blending of alcoholic liquors as are found in his possession. (8) In this section any reference to blending liquors includes a reference to otherwise mixing them.

• (2) In subsection (5) of section 55 of that Act (exemption for certain producers of made-wine from requirement to hold excise licence) before paragraph (a) there shall be inserted the following paragraph—

(aa) he does not blend or otherwise mix two or more alcoholic liquors to which paragraphs (a) and (b) of section 66A(1) below or paragraphs (a) and (b) of section 66A(2) below apply;

.

• (3) In that section—

• (a) paragraph (e) of subsection (5) and the word “and” immediately preceding that paragraph shall be omitted, and

• (b) subsection (5A) shall be omitted.

• (4) This section shall apply in relation to the blending or other mixing of alcoholic liquors on or after the day on which this Act is passed.

Mixing of wine and spirits in excise warehouse

6

• (1) In subsection (1) of section 58 of the Alcoholic Liquor Duties Act 1979 (mixing of wine and spirits in excise warehouse)—

• (a) for “6 litres” there shall be substituted “ 12 litres ”,

• (b) for “except as provided by subsection (2) below” there shall be substituted “ by virtue of this section ”, and

• (c) for “23 per cent.” there shall be substituted “ 22 per cent. ”.

• (2) Subsection (2) of that section shall be omitted.

• (3) This section shall apply in relation to mixing done on or after the day on which this Act is passed.

Sparkling wine or made-wine

7

• (1) In Schedule 1 to the Alcoholic Liquor Duties Act 1979 (rates of duty on wine and made-wine), for paragraphs 1 and 2 there shall be substituted the following paragraphs—

(1) Paragraphs 2 and 3 below apply for the purposes of this Act. (2) (1) Wine or made-wine which is for the time being in a closed container is sparkling if, due to the presence of carbon dioxide or any other gas, the pressure in the container, measured at a temperature of 20°C, is not less than 3 bars in excess of atmospheric pressure. (2) Wine or made-wine which is for the time being in a closed container is sparkling regardless of the pressure in the container if the container has a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening. (3) Wine or made-wine which is not for the time being in a closed container is sparkling if it has characteristics similar to those of wine or made-wine which has been removed from a closed container and which, before removal, fell within sub-paragraph (1) above. (3) (1) Wine or made-wine shall be regarded as having been rendered sparkling if, as a result of aeration, fermentation or any other process, it either falls within paragraph 2(1) above or takes on such characteristics as are referred to in paragraph 2(3) above. (2) Wine or made-wine which has not previously been rendered sparkling by virtue of sub-paragraph (1) above shall be regarded as having been rendered sparkling if it is transferred into a closed container which has a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening. (3) Wine or made-wine which is in a closed container and has not previously been rendered sparkling by virtue of sub-paragraph (1) or (2) above shall be regarded as having been rendered sparkling if the stopper of its container is exchanged for a stopper of a kind mentioned in sub-paragraph (2) above.

• (2) This section shall apply in relation to wine and made-wine which is produced in or imported into the United Kingdom, or removed into the United Kingdom from the Isle of Man, on or after the day on which this Act is passed.

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

8

Hydrocarbon oil duties

Rates of duty

9

• (1) In section 6(1) of the Hydrocarbon Oil Duties Act 1979 for “£0.2779” (duty on light oil) and “£0.2285” (duty on heavy oil) there shall be substituted “ £0.3058 ” and “ £0.2514 ” respectively.

• (2) In section 11(1) of that Act (rebate on heavy oil) for “£0.0095” (fuel oil) and “£0.0135” (gas oil) there shall be substituted “ £0.0105 ” and “ £0.0149 ” respectively.

• (3) In section 13A(1) of that Act (rebate on unleaded petrol) for “£0.0437” there shall be substituted “ £0.0482 ”.

• (4) In section 14(1) of that Act (rebate on light oil for use as furnace fuel) for “£0.0095” there shall be substituted “ £0.0105 ”.

• (5) This section shall be deemed to have come into force at 6 o’clock in the evening of 16th March 1993.

Mineral oil fuel substitutes

10

• (1) The Hydrocarbon Oil Duties Act 1979 (“the 1979 Act”) shall have effect in relation to such cases as may be specified in an order made by the Treasury as if references in that Act to hydrocarbon oil or to road fuel gas included references to any energy product which is designated by that order as a substance which is to be treated for the purposes of that Act as the equivalent of hydrocarbon oil or, as the case may be, of road fuel gas.

• (2) The Treasury may by order provide, in relation to any substance which by virtue of this section is to be treated for the purposes of the 1979 Act as the equivalent of hydrocarbon oil or road fuel gas, for that substance to be treated for the purposes of such of the provisions of that Act as may be specified in the order as if it fell within such class or description of substance as may be so specified.

• (3) In exercising their powers under this section, the Treasury shall so far as practicable secure that an energy product which is intended for, or capable of being put to, a particular use is treated for the purposes of the 1979 Act as if it were the substance to which, when put to that use, it is most closely equivalent.

• (4) In this section “energy product” means a substance which—

• (a) is an energy product for the purposes of Council Directive 2003/ 96/EC restructuring the Community framework for the taxation of energy products and electricity, and

• (b) is not (apart from as a result of this section) hydrocarbon oil or road fuel gas within the meaning of the 1979 Act.

• (5) The power of the Treasury to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons; and any such order may make different provision for different cases and different substances.

• (6) Where a duty of excise is charged on a substance under a provision of the 1979 Act by virtue of an order under this section, no duty shall be charged on the substance under any other provision of that Act.

Other fuel substitutes

11

• (1) After section 6 of the Hydrocarbon Oil Duties Act 1979 there shall be inserted the following section—

(6A) (1) A duty of excise shall be charged on the setting aside for a chargeable use by any person, or (where it has not already been charged under this section) on the chargeable use by any person, of any liquid which is not hydrocarbon oil. (2) In this section “chargeable use” in relation to any substance means the use of that substance— (a) as fuel for any engine, motor or other machinery; or (b) as an additive or extender in— (i) any substance on which duty is charged by virtue of paragraph (a) above; or (ii) any hydrocarbon oil which is or is to be used as mentioned in that paragraph. (3) The rate of the duty under this section shall be prescribed by order made by the Treasury. (4) In the following provisions of this Act references to hydrocarbon oil shall be construed as including references to any substance on which duty is charged under this section; and, accordingly, references to duty on hydrocarbon oil shall be construed, where a substance is to be treated as such oil, as including references to duty under this section. (5) The Treasury may by order provide for any substance on which duty is charged under this section to be treated for the purposes of such of the following provisions of this Act as may be specified in the order as if it fell within the description of such one or more of the following as may be so specified, that is to say— (a) heavy oil or light oil; (b) aviation gasoline; (c) fuel oil or gas oil, as defined in section 11(2) below; and (d) unleaded petrol, as defined in section 13A(2) below. (6) In exercising their powers under this section, the Treasury shall so far as practicable secure— (a) that a substance set aside for use or used as mentioned in subsection (2)(a) above is— (i) charged with duty at the same rate as, and (ii) otherwise treated for the purposes of the following provisions of this Act as if it were, the substance falling within the descriptions specified in subsection (5) above to which, when put to that use, it is most closely equivalent; and (b) that a substance set aside for use or used as an additive or extender in any substance is— (i) charged with duty at the same rate as, and (ii) otherwise treated for the purposes of the following provisions of this Act as if it were, the substance in which it is an additive or extender. (7) For the purposes of this section “liquid” does not include any substance which is gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars. (8) The power of the Treasury to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons. (9) An order under this section— (a) may make different provision for different cases and for different substances; (b) may prescribe the rate of duty under this section in respect of any substance by reference to the rate of duty under this Act in respect of any other substance; and (c) in making different provision for different substances, may define a substance by reference to the use for which it is set aside or the use to which it is put.

• (2) Sections 4, 7 and 16 of that Act (petrol substitutes and power methylated spirits) shall cease to have effect.

• (3) In section 22(1) of that Act (offence of using petrol substitutes on which duty has not been paid), for the words from the beginning to the word “shall”, in the first place where it occurs, there shall be substituted—

A person who— (a) puts to a chargeable use (within the meaning of section 6A above) any liquid which is not hydrocarbon oil; and (b) knows or has reasonable cause to believe that there is duty charged under section 6A above on that liquid which has not been paid and is not lawfully deferred, shall

.

• (4) In section 1(1)(b) of the Excise Duties (Surcharges or Rebates) Act 1979 (surcharges or rebates in respect of excise duties on hydrocarbon oil etc.), for paragraph (b) there shall be substituted the following paragraph—

(b) those chargeable by virtue of the Hydrocarbon Oil Duties Act 1979;

.

• (5) This section shall come into force on such day as the Treasury may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different provisions and for different purposes.

Measurement of volume

12

• (1) In ascertaining for the purposes of the Hydrocarbon Oil Duties Act 1979—

• (a) the amount of any duty of excise chargeable on any liquid by virtue of that Act; or

• (b) the amount of any rebate allowable on any such liquid by virtue of that Act,

the volume of that liquid shall be taken (if it would not otherwise be so taken) to be what would be its volume, calculated in accordance with regulations under subsection (2) below, at a temperature of 15°C.

• (2) The Commissioners of Customs and Excise may by regulations make such provision as they think fit as to the method by which, in ascertaining any amount mentioned in subsection (1) above—

• (a) the volume of any liquid is to be measured; or

• (b) the volume as at a temperature of 15°C of any amount of a liquid is to be determined;

and that provision may include provision made by reference to any internationally recognised conversion tables.

• (3) Any reference in sections 15 and 17 to 19A of that Act (drawback and relief) to the amount of any duty of excise which has been paid in respect of any substance, or to the amount of any rebate that has been allowed in respect of any substance, shall be construed as a reference—

• (a) to such amount as is shown to the satisfaction of the Commissioners of Customs and Excise to have been paid or, as the case may be, allowed in respect of that substance; or

• (b) where regulations made by those Commissioners so provide, to such amount as is calculated on such assumptions as to the volume of the substance in question as may be determined in accordance with any such regulations.

• (4) The power of the Commissioners of Customs and Excise to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament; and any such regulations—

• (a) may make different provision for different cases and for different substances; and

• (b) may contain such transitional, supplemental and incidental provision as those Commissioners think fit.

• (5) Provision made under this section by any regulations may provide for any determination or measurement under the regulations to be made, or any description of a case or substance to be framed, by reference to such circumstances or other factors, or to the opinion of such persons, as the Commissioners think fit.

• (6) For the purposes of this section “liquid” does not include any substance which is gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars.

• (7) In consequence of this section—

• (a) section 2(5) of that Act (measurement of heavy oil having a temperature exceeding 15°C) shall cease to have effect; and

• (b) the words “shown to the satisfaction of the Commissioners to have been” in section 15(1) of that Act (drawback) shall be omitted.

• (8) This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different provisions and for different purposes.

Tobacco products duty

Rates of duty

13

• (1) For the Table in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—

1. Cigarettes	An amount equal to 20 per cent. of the retail price plus £48.75 per thousand cigarettes.
2. Cigars	£72.30 per kilogram.
3. Hand-rolling tobacco	£76.29 per kilogram.
4. Other smoking tobacco and chewing tobacco	£31.93 per kilogram.

• (2) This section shall be deemed to have come into force at 6 o’clock in the evening of 16th March 1993.

Hand-rolling tobacco

14

• (1) In the Tobacco Products Duty Act 1979, section 1 (definition of tobacco products) shall be amended as follows.

• (2) In subsection (2) (definition of hand-rolling tobacco) after paragraph (a) there shall be inserted—

(aa) which is of a kind used for making into cigarettes; or

.

• (3) In paragraph (b) of subsection (2) (more than 25 per cent. by weight of the tobacco particles have a width of less than 0.6 mm) for “0.6” there shall be substituted “ 1 ”.

• (4) The following subsection shall be inserted after subsection (2)—

(2A) For the purposes of subsection (2)(aa) above the use for making into cigarettes must amount to more than occasional use but need not amount to common use.

• (5) In subsection (3) (power to amend definitions) after “(2)” there shall be inserted “ or (2A) ”.

Gaming machine licence duty

Rates of duty

15

Small-prize machines

16

• (1) The Betting and Gaming Duties Act 1981 shall be amended as follows.

• (2) In section 21 (gaming machine licences) in subsection (1) (licence required for machine other than a two-penny machine) for “a two-penny machine” there shall be substituted “ an excepted machine ”.

• (3) In that section the following subsection shall be inserted after subsection (3)—

(3A) For the purposes of this section an excepted machine is— (a) a two-penny machine, or (b) a five-penny machine which is a small-prize machine.

• (4) In section 22 (charge to duty)—

• (a) in subsection (1) for the words from “by reference” to the end of the subsection there shall be substituted “ in accordance with section 23 below ”;

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

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

• (6) For subsection (4) of section 25 (meaning of “gaming machine”) there shall be substituted the following subsections—

(4) Subject to subsection (5) below, for the purposes of determining whether a machine is a gaming machine it is immaterial whether it is capable of being played by only one person at a time, or is capable of being played by more than one person. (5) For the purposes of sections 21 to 24 above a machine (the actual machine) which two or more persons can play simultaneously (whether or not participating with one another in the same game) shall, instead of being treated as one machine, be treated as if it were a number of machines (accountable machines) equal to the number of persons who can play the actual machine simultaneously. (6) Subsection (5) above does not apply to a machine which is a two-penny machine, or is both a small-prize machine and a five-penny machine. (7) If the actual machine is a small-prize machine but not a five-penny machine, the accountable machines shall be taken to be small-prize machines which are not five-penny machines. (8) If the actual machine is not a small-prize machine, the accountable machines shall be taken not to be small-prize machines, and in such a case— (a) if the actual machine is a five-penny machine, the accountable machines shall be taken to be five-penny machines; (b) if the actual machine is not a five-penny machine, the accountable machines shall be taken not to be five-penny machines. (9) For the purposes of subsection (5) above the number of persons who can play a particular machine simultaneously shall be determined by reference to the number of individual playing positions provided on the machine.

• (7) In section 26(2) (interpretation) the following definition shall be inserted after the definition of “two-penny machine”—

“five-penny machine” means a gaming machine which can only be played by the insertion into the machine of a coin or coins of a denomination, or aggregate denomination, not exceeding 5p;

.

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

• (9) This section shall apply in relation to licences for any period beginning on or after 1st November 1993.

Vehicles excise duty

Rates of duty: general

17

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

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

• (3) In Schedule 2 (annual rate of duty on hackney carriages) in the Table set out in Part II—

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

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

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

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

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

• (7) In Schedule 5 (annual rate of duty on vehicles not falling within Schedules 1 to 4) in the Table set out in Part II—

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

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

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

Exceptional loads

18

Trade licences

19

Old bicycles

20

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

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

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

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

Simplification of duty on goods vehicles

21

Miscellaneous

Mutual recovery and disclosure of information

22

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

VAT and customs duty on vehicles subject to VED

23

Chapter II — Lottery Duty

The duty

Lottery duty

24

• (1) Subject to subsections (3) and (4) below, a duty of excise called “lottery duty” is chargeable—

• (a) on the taking in the United Kingdom of a ticket or chance in a lottery, and

• (b) in such cases as may be determined by regulations, on the taking outside the United Kingdom of a ticket or chance in a lottery promoted in the United Kingdom.

• (2) Regulations may make provision for determining when and where the taking of a ticket or chance in a lottery is to be treated as occurring for the purposes of this Chapter.

• (3) Lottery duty is not chargeable in respect of a lottery that constitutes a game of bingo (or any version of bingo, by whatever name called).

• (4) Lottery duty is not chargeable (in Great Britain) in respect of a lottery which is an exempt lottery within the meaning of the Gambling Act 2005 (see section 258) or is promoted under and operated in accordance with a lottery operating licence under Part 5 of that Act or (in Northern Ireland) in respect —

• (a) of a lottery promoted as an incident of an exempt entertainment within the meaning of ... the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985;

• (b) of a private lottery within the meaning of that ... Order;

• (c) of a society’s lottery within the meaning of that ... Order in respect of which the conditions set out in ... Article 135(1) of that Order are satisfied;

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

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) The Treasury may by order amend subsection (4) above so as to add to the descriptions of lottery for the time being mentioned in that subsection, so as to omit any of them or so as to substitute a different description of lottery for any of them.

Amount of duty

25

• (1) The amount of the lottery duty chargeable on the taking of a ticket or chance in a lottery is equal to 12 per cent. of the value of the consideration given for the ticket or chance.

• (2) Subject to subsection (3) below, the aggregate of everything paid or given by (or debited to the account of) the person taking the ticket or chance for, on account of, or in connection with, the ticket or chance shall be taken to be the consideration given for it.

• (3) If a price is shown on a lottery ticket or any other document providing evidence of the taking of a ticket or chance in a lottery and—

• (a) the consideration given for the ticket or chance is of lesser value than the price shown (or is of no value), or

• (b) no consideration is given for the ticket or chance,

consideration to the value of the price shown shall be taken to be given for the ticket or chance.

Time for payment

26

• (1) The lottery duty chargeable on the taking of a ticket or chance in a lottery becomes due and (subject to any regulations under subsection (2) below) payable at the time the ticket or chance is taken.

• (2) Regulations may provide for the payment of any lottery duty due in respect of a lottery of a description specified in the regulations to be deferred, subject to any conditions or requirements that may be imposed by or under the regulations.

• (3) Regulations may require payments (of amounts determined by or under the regulations) to be made on account of any lottery duty that may become due in respect of a lottery of a description specified in the regulations that is being or is to be promoted.

Persons liable for duty

27

• (1) Any lottery duty or payment on account of lottery duty that under section 26 above or regulations under that section is payable in respect of a lottery shall be paid (subject to any regulations under subsection (2) below) by the promoter of the lottery.

• (2) Regulations may require any lottery duty or payment on account of lottery duty that is payable in respect of a lottery of a description specified in the regulations to be paid by a person specified in the regulations (being a person who occupies or has occupied a position of responsibility in relation to the lottery) instead of by the promoter.

• (3) Any lottery duty that is payable in respect of a lottery may be recovered jointly and severally from—

• (a) the promoter of the lottery,

• (b) any other person who occupies or has occupied a position of responsibility in relation to the lottery or who has or has had any degree of control over any of its proceeds, and

• (c) where the promoter or a person within paragraph (b) above is a body corporate, any director of that body corporate.

• (4) Where a persondoes not make a payment that he is required to make by subsection (1) above or regulations under subsection (2) above at the time the payment becomes payable his failure so to make the payment shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) which shall be calculated by reference to the amount which has not been paid and shall also attract daily penalties..

Administration and enforcement

General

28

• (1) Lottery duty shall be under the care and management of the Commissioners.

• (2) Regulations may provide for any matter for which provision appears to the Commissioners to be necessary or expedient for the administration or enforcement of lottery duty or for the protection of the revenue derived from lottery duty.

• (3) Where a person contravenes or does not comply with any regulations under subsection (2) above his contravention or failure to comply shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties)..

Registration of promoters etc

29

• (1) A lottery in respect of which lottery duty is chargeable (or, on the taking of a ticket or chance, will be chargeable) shall not be promoted in the United Kingdom unless the chargeable person is registered with the Commissioners under this section.

• (2) In this section “the chargeable person”, in relation to a lottery, means—

• (a) subject to paragraph (b) below, the promoter of the lottery;

• (b) in the case of a lottery of a description specified in regulations under section 27(2) above, the other person referred to in that subsection.

• (3) Regulations may make provision—

• (a) as to the time at which an application for registration is to be made, as to the form and manner of such an application and as to the information to be contained in or provided with it,

• (b) as to the requirements that must be satisfied as a condition of a person’s registration or continued registration, and

• (c) as to other requirements that must be observed by a person while he remains registered.

• (4) The requirements imposed by virtue of subsection (3)(b) above may include requirements as to the giving of security or further security (by means of a deposit or otherwise) for any lottery duty that may become due.

• (5) Subject to regulations under subsection (3)(a) and (b) above, the Commissioners—

• (a) shall register any person applying to them for registration who satisfies them that he will be the chargeable person in relation to a lottery that is to be promoted, and

• (b) shall not remove any person from the register unless it appears to them that no lottery is being or is to be promoted in relation to which he is or will be the chargeable person.

• (6) Where—

• (a) the Commissioners determine that a person should be removed from the register because any requirement imposed by regulations under subsection (3)(b) above is not (or is no longer) satisfied in relation to him, and

• (b) a lottery in relation to which he is the chargeable person is being promoted at the time they make that determination,

they shall not remove him from the register until the promotion of that lottery has come to an end.

• (7) If subsection (1) above is contravened in relation to a lottery at any time during its promotion, the chargeable person is guilty of an offence and liable—

• (a) on summary conviction, to a penalty of £20,000 or to imprisonment for a term not exceeding six months, or to both, or

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years, or to both.

• (8) Where a person contravenes or fails to comply with any requirements imposed by regulations under subsection (3)(c) above his contravention or failure to comply shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties).

Application of revenue trade provisions of CEMA 1979

30

• (1) Section 1(1) of the Customs and Excise Management Act 1979 (interpretation) shall be amended in accordance with subsections (2) and (3) below.

• (2) In the definition of “the revenue trade provisions of the customs and excise Acts”—

• (a) the word “and” at the end of paragraph (b) shall be omitted, and

• (b) at the end there shall be added

; and (d) the provisions of Chapter II of Part I of the Finance Act 1993;

.

• (3) In paragraph (a) of the definition of “revenue trader”—

• (a) the word “or” at the end of sub-paragraph (i) shall be omitted,

• (b) after sub-paragraph (i) there shall be inserted—

(i) the buying, selling, importation, exportation, dealing in or handling of tickets or chances on the taking of which lottery duty is or will be chargeable; or

, and

• (c) in sub-paragraph (ii) after “activities” there shall be inserted “ as are mentioned in sub-paragraph (i) or (ia) above ”.

• (4) In section 117 of the Customs and Excise Management Act 1979 (execution and distress against revenue traders) after subsection (1) there shall be inserted—

(1A) In subsection (1) above as it applies in relation to a sum owing by a revenue trader in respect of lottery duty or of a relevant penalty— (a) references to goods liable to any excise duty include lottery tickets on the taking of which lottery duty will be chargeable, and (b) “the trade in respect of which the duty is imposed” includes any trade or business carried on by the revenue trader that consists of or includes the buying, selling, importation, exportation, dealing in or handling of tickets or chances on the taking of which lottery duty is or will be chargeable.

General offences

31

• (1) A person who is knowingly concerned—

• (a) in the fraudulent evasion (by him or another person) of lottery duty, or

• (b) in taking steps with a view to such fraudulent evasion,

is guilty of an offence.

• (2) A person guilty of an offence under subsection (1) above is liable—

• (a) on summary conviction, to a penalty of £20,000 or, if greater, treble the amount of the duty evaded or sought to be evaded or to imprisonment for a term not exceeding six months, or to both, or

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 14 years, or to both.

• (3) A person who in connection with lottery duty—

• (a) makes a statement that he knows to be false in a material particular or recklessly makes a statement that is false in a material particular, or

• (b) with intent to deceive, produces or makes use of a book, account, return or other document that is false in a material particular,

is guilty of an offence.

• (4) A person guilty of an offence under subsection (3) above is liable—

• (a) on summary conviction, to a penalty of £20,000 or to imprisonment for a term not exceeding six months, or to both, or

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding two years, or to both.

Offences by bodies corporate

32

Where an offence under this Chapter is committed by a body corporate, every person who at the date of the commission of the offence is a director, manager, secretary or other similar officer of the body corporate (or is purporting to act in such a capacity) is also guilty of the offence unless—

• (a) the offence is committed without his consent or connivance, and

• (b) he has exercised all such diligence to prevent its commission as he ought to have exercised, having regard to the nature of his functions in that capacity and to all the circumstances.

Forfeiture

33

• (1) Where a person has committed an offence under section 31(1) or (3) above, any goods used in the promotion of, or in any other way related to, a relevant lottery are liable to forfeiture.

• (2) In subsection (1) above “relevant lottery”—

• (a) in relation to an offence under section 31(1) above, means a lottery in respect of which lottery duty was fraudulently evaded or (as the case may be) in respect of which the fraudulent evasion of lottery duty was sought, and

• (b) in relation to an offence under section 31(3) above, means a lottery to which the false statement or (as the case may be) false document related.

Protection of officers etc

34

Where a person takes an action in pursuance of instructions of the Commissioners given in connection with the enforcement of this Chapter or of regulations under it and, apart from this section, the person would in taking that action be committing an offence under any enactment relating to lotteries, he shall not be guilty of that offence.

Evidence by certificate etc

35

• (1) A certificate of the Commissioners—

• (a) that a person was or was not, at any date, registered under section 29 above,

• (b) that any return required by regulations under this Chapter had not been made at any date, or

• (c) that any lottery duty shown as due in a return made in pursuance of such regulations or in an estimate made under section 116A of the Customs and Excise Management Act 1979 had not been paid at any date,

is sufficient evidence of that fact until the contrary is proved.

• (2) A photograph of any document furnished to the Commissioners for the purposes of this Chapter and certified by them to be such a photograph is 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 subsection (1) or (2) above shall be taken to be such a certificate until the contrary is proved.

Duty a preferential debt in insolvency

36

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

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

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

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

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

Disclosure of information

37

• (1) Notwithstanding any obligation not to disclose information that would otherwise apply, the Commissioners may disclose information—

• (a) to the Secretary of State,

• (b) to the Gambling Commission, or

• (c) to an authorised officer of the Secretary of State or Gambling Commission,

for the purpose of assisting the Secretary of State or Gambling Commission (as the case may be) in the performance of duties imposed by or under any enactment in relation to lotteries.

• (2) Notwithstanding any such obligation as is mentioned in subsection (1) above—

• (a) the Secretary of State,

• (b) the Gambling Commission , or

• (c) an authorised officer of the Secretary of State or Gambling Commission,

may disclose information to the Commissioners or to an authorised officer of the Commissioners for the purpose of assisting the Commissioners in the performance of duties in relation to lottery duty.

• (3) Information that has been disclosed to a person by virtue of this section shall not be disclosed by him except—

• (a) to another person to whom (instead of him) disclosure could by virtue of this section have been made, or

• (b) for the purpose of any proceedings connected with the operation of any enactment in relation to lotteries or lottery duty.

• (4) References above in this section to the Secretary of State include any person who has been designated by the Secretary of State as a person to and by whom information may be disclosed under this section.

• (5) The Secretary of State shall notify the Commissioners in writing if he designates a person under subsection (4) above.

Supplementary

Regulations and orders

38

• (1) Any regulations under this Chapter may make—

• (a) different provision for different cases or circumstances, and

• (b) incidental, supplemental or consequential provision.

• (2) Any power to make regulations or orders under this Chapter is exercisable by statutory instrument.

• (3) Subject to subsection (4) below, a statutory instrument containing such regulations or an order under section 24(5) above is subject to annulment in pursuance of a resolution of the House of Commons.

• (4) An order under section 24(5) above that will result in lottery duty becoming chargeable in respect of any description of lottery shall not be made unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, the House of Commons.

Disapplication of pool betting duty

39

In section 6 of the Betting and Gaming Duties Act 1981 (pool betting duty)—

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

• (b) subsection (4) shall cease to have effect.

Interpretation etc

40

• (1) In this Chapter—

• “the Commissioners” means the Commissioners of Customs and Excise,

• “document” includes a document of any kind whatsoever and, in particular, a record kept by means of a computer,

• “promotion”, in relation to a lottery, includes the conduct of the lottery (and “promoted” is to be read accordingly), and

• “regulations” means regulations made by the Commissioners.

• (2) This Chapter applies in relation to lotteries promoted on behalf of the Crown in pursuance of any enactment as it applies in relation to lotteries not so promoted.

• (3) The imposition by this Chapter of lottery duty does not make lawful anything that is unlawful apart from this Chapter.

Commencement

41

This Chapter shall come into force on such day as the Commissioners may by order appoint, and different days may be appointed for different provisions or for different purposes.

Chapter III — Value Added Tax

Fuel and power for domestic or charity use

42

Vehicle fuel for private use

43

Acquisitions from persons belonging in other member States

44

Customers to account for tax on supplies of gold etc

45

Appeals in respect of input tax

46

Deemed supplies

47

Bad debts

48

Penalties etc

49

Amendments in connection with abolition of car tax

50

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

Chapter I — General

Income tax: charge, rates and allowances

Charge and rates of income tax for 1993-94

51

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

Personal and married couple’s allowances

52

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

Corporation tax charge and rate

Charge and rate of corporation tax for 1993

53

Corporation tax shall be charged for the financial year 1993 at the rate of 33 per cent.

Small companies

54

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

Interest: general

Relief for interest

55

For the year 1993-94 the qualifying maximum defined in section 367(5) of the Taxes Act 1988 (limit on relief for interest on certain loans) shall be £30,000.

Interest relief: substitution of security

56

Temporary relief for interest payments

57

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

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

• (3) In section 365 of that Act (relief on interest on loans to buy a life annuity), after subsection (1) there shall be inserted the following subsections—

(1A) Where, in the case of any loan— (a) the condition specified in subsection (1)(d) above would not (apart from this subsection) be fulfilled with respect to any land by reason of its having ceased at any time to be used by a particular person as his only or main residence; and (b) the intention at that time of the person to whom the loan was made, or of each of the annuitants owning an estate or interest in that land, was to take steps, before the end of the period of 12 months after the day on which it ceased to be so used, with a view to the disposal of his estate or interest, that condition shall be treated in relation to interest on that loan as continuing to be fulfilled with respect to the land from that time until the end of that period or (if sooner) the abandonment by that person or any of those annuitants of his intention to dispose of his estate or interest. (1B) If it appears to the Board reasonable to do so, having regard to all the circumstances of a particular case, they may direct that in relation to that case subsection (1A) above shall have effect as if for the reference to 12 months there were substituted a reference to such longer period as meets the circumstances of that case.

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

• (5) This section shall have effect in relation to payments of interest made on or after 16th March 1993 (whenever falling due).

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

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

Overclaims in respect of deductions of mortgage interest

58

• (1) After subsection (6) of section 369 of the Taxes Act 1988 (recovery of amount treated as paid by recipient of interest paid subject to a deduction under that section) there shall be inserted the following subsection—

(7) The following provisions of the Management Act, namely— (a) section 29(3)(c) (excessive relief), (b) section 30 (tax repaid in error etc.), (c) section 88 (interest), and (d) section 95 (incorrect return or accounts), shall apply in relation to an amount which is paid to any person by the Board as an amount recoverable in accordance with regulations made by virtue of subsection (6) above but to which that person is not entitled as if it were income tax which ought not to have been repaid and, where that amount was claimed by that person, as if it had been repaid as a relief which was not due.

• (2) This section shall not apply in relation to any payment if the payment, or the claim on which it is made, was made before the day on which this Act is passed.

Interest payments to persons not ordinarily resident in UK

59

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

Certain interest not allowed as a deduction

60

Interest etc. on debts between associated companies

Qualifying debts for purposes of sections 63 to 66

61

Exempted debts for those purposes

62

Accrued income securities

63

Deep discount securities

64

Deep gain securities

65

Avoidance of double charging

66

Charitable donations

Donations from companies and individuals

67

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

Payroll deduction schemes

68

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

Contributions to agent’s expenses

69

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

Benefits in kind

Car benefits: 1993-94

70

• (1) In Schedule 6 to the Taxes Act 1988 (taxation of directors and others in respect of cars) for Part I (tables of flat rate cash equivalents) there shall be substituted—

Cylinder capacity of car in cubic centimetres	Age of car at end of relevant year of assessment	Age of car at end of relevant year of assessment
	Under 4 years	4 years or more
1,400 or less	£2,310	£1,580
More than 1,400 but not more than 2,000	£2,990	£2,030
More than 2,000	£4,800	£3,220
Original market value of car	Age of car at end of relevant year of assessment	Age of car at end of relevant year of assessment
---	---	---
	Under 4 years	4 years or more
Less than £6,000	£2,310	£1,580
£6,000 or more but less than £8,500	£2,990	£2,030
£8,500 or more but not more than £19,250	£4,800	£3,220
Original market value of car	Age of car at end of relevant year of assessment	Age of car at end of relevant year of assessment
---	---	---
	Under 4 years	4 years or more
More than £19,250 but not more than £29,000	£6,210	£4,180
More than £29,000	£10,040	£6,660

• (2) This section shall have effect for the year 1993-94.

Car fuel: 1993-94

71

• (1) In section 158 of the Taxes Act 1988 (car fuel) for the Tables in subsection (2) (tables of cash equivalents) there shall be substituted—

Cylinder capacity of car in cubic centimetres	Cash equivalent
1,400 or less	£600
More than 1,400 but not more than 2,000	£760
More than 2,000	£1,130
Cylinder capacity of car in cubic centimetres	Cash equivalent
---	---
2,000 or less	£550
More than 2,000	£710
Original market value of car	Cash equivalent
---	---
Less than £6,000	£600
£6,000 or more but less than £8,500	£760
£8,500 or more	£1,130

• (2) In subsection (5) of that section (reductions in cash equivalents) the words “or 3” shall be omitted.

• (3) This section shall have effect for the year 1993-94.

Car and car fuel benefits: 1994-95 onwards

72

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

Vans

73

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

Heavier commercial vehicles

74

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

Sporting and recreational facilities

75

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

Removal expenses and benefits

76

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

Taxation of distributions etc.

Application of lower rate

77

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

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

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

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

• (5) This section shall apply in relation to the year 1993-94 and subsequent years of assessment.

Rate of advance corporation tax and tax credits

78

Provisions supplemental to sections 77 and 78

79

• (1) Schedule 6 to this Act (which makes further provision for the purposes of and in connection with the provisions of sections 77 and 78 above) shall have effect.

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

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

Transitional relief for charities etc

80

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

Restriction of set-off of ACT

81

Chargeable gains

Annual exempt amount for 1993-94

82

For the year 1993-94 section 3 of the Taxation of Chargeable Gains Act 1992 (annual exempt amount) shall have effect as if the amount specified in subsection (2) were £5,800, and accordingly subsection (3) of that section (indexation) shall not apply for that year.

Annual exempt amount: indexation for 1994-95 onwards

83

• (1) In section 3(3) of the Taxation of Chargeable Gains Act 1992 (indexation of annual exempt amount) for “December” (in each place) there shall be substituted “ September ”.

• (2) This section shall have effect for the year 1994-95 and subsequent years of assessment.

Re-organisations etc. involving debentures

84

• (1) In section 117 of the Taxation of Chargeable Gains Act 1992 (meaning of qualifying corporate bond), after subsection (6) there shall be inserted the following subsection—

(6A) For the purposes of this section “corporate bond” also includes, except in relation to a person who acquires it on or after a disposal in relation to which section 115 has or has had effect in accordance with section 116(10)(c), any debenture issued on or after 16th March 1993 which is not a security (as defined in section 132) but— (a) is issued in circumstances such that it would fall by virtue of section 251(6) to be treated for the purposes of section 251 as such a security; and (b) would be a corporate bond if it were a security as so defined.

• (2) In section 251 of that Act (general provisions in relation to debts), after subsection (5) there shall be inserted the following subsection—

(6) For the purposes of this section a debenture issued by any company on or after 16th March 1993 shall be deemed to be a security (as defined in section 132) if— (a) it is issued on a reorganisation (as defined in section 126(1)) or in pursuance of its allotment on any such reorganisation; (b) it is issued in exchange for shares in or debentures of another company and in a case unaffected by section 137 where one or more of the conditions mentioned in paragraphs (a) to (c) of section 135(1) is satisfied in relation to the exchange; (c) it is issued under any such arrangements as are mentioned in subsection (1)(a) of section 136 and in a case unaffected by section 137 where section 136 requires shares or debentures in another company to be treated as exchanged for, or for anything that includes, that debenture; or (d) it is issued in pursuance of rights attached to any debenture issued on or after 16th March 1993 and falling within paragraph (a), (b) or (c) above.

• (3) This section shall have effect in relation to any chargeable period ending on or after 16th March 1993 but, in relation to any accounting period of a company which began before 6th April 1992, this section shall have effect as if the references in this section, and in the amendments made by this section, to provisions of the Taxation of Chargeable Gains Act 1992 were references to such of the provisions of the Capital Gains Tax Act 1979 and the Finance Act 1984 as correspond to those provisions and have effect in relation to that accounting period.

Personal equity plans

85

After subsection (3) of section 151 of the Taxation of Chargeable Gains Act 1992 (personal equity plans) there shall be inserted the following subsection—

(4) Regulations under this section may include provision which, for cases where a person subscribes to a plan by transferring or renouncing shares or rights to shares— (a) modifies the effect of this Act in relation to their acquisition and their transfer or renunciation; and (b) makes consequential modifications of the effect of this Act in relation to anything which (apart from the regulations) would have been regarded on or after their acquisition as an indistinguishable part of the same asset.

Roll-over relief

86

• (1) In section 155 of the Taxation of Chargeable Gains Act 1992 (classes of assets for the purposes of roll-over relief), after Class 5 there shall be inserted—

Ewe and suckler cow premium quotas (that is, rights in respect of any ewes or suckler cows to receive payments by way of any subsidy entitlement to which is determined by reference to limits contained in an EU instrument).

• (2) The Treasury may by order made by statutory instrument amend section 155 of the Taxation of Chargeable Gains Act 1992 (roll-over relief: relevant classes of assets) so as to add to or amend the classes of assets specified in that section.

• (2A) But an order under subsection (2) may not restrict the assets which fall within a class listed in that section (whether by virtue of subsection (2) or otherwise).

• (2B) An order under subsection (2) may make such consequential amendments of section 156ZB of, or Schedule 7AB to, the Taxation of Chargeable Gains Act 1992 as appear to the Treasury to be appropriate.

• (3) A statutory instrument containing an order under subsection (2) above shall be subject to annulment in pursuance of a resolution of the House of Commons.

• (4) Subsection (1) above shall apply where the disposal of the old assets (or an interest in them) or the acquisition of the new assets (or an interest in them) is on or after 1st January 1993; but, in relation to any accounting period of a company which began before 6th April 1992, subsection (1) above shall have effect as if the inserted class were numbered 5 and were inserted after Class 4 in section 118 of the Capital Gains Tax Act 1979.

Relief on retirement or re-investment

87

• (1) Schedule 7 to this Act (which amends the provisions of the Taxation of Chargeable Gains Act 1992 with respect to retirement relief and makes new provision in relation to relief on the re-investment of certain gains) shall have effect.

• (2) This section and that Schedule shall have effect in relation to any disposal made on or after 16th March 1993.

Restriction on set-off of pre-entry losses

88

• (1) After section 177 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section—

(177A) Schedule 7A to this Act (which makes provision in relation to losses accruing to a company before the time when it becomes a member of a group of companies and losses accruing on assets held by any company at such a time) shall have effect.

• (2) The Schedule set out in Schedule 8 to this Act shall be inserted after Schedule 7 to that Act.

• (3) This section and that Schedule—

• (a) shall apply for the calculation of the amount to be included in respect of chargeable gains in a company’s total profits for any accounting period ending on or after 16th March 1993; but

• (b) shall so apply only in relation to the deduction from chargeable gains accruing on or after 16th March 1993 of amounts in respect of, or of amounts carried forward in respect of—

• (i) pre-entry losses accruing before it became a member of the relevant group to a company whose membership of that group began or begins at a time on or after 1st April 1987; and

• (ii) losses accruing on the disposal of any assets so far as it is by reference to such a company that the assets fall to be treated as being or having been pre-entry assets or assets incorporating a part referable to pre-entry assets.

• (4) In relation to accounting periods beginning before 6th April 1992 this section and that Schedule shall have effect as if—

• (a) the section and Schedule inserted by subsections (1) and (2) above were inserted in the Capital Gains Tax Act 1979; and

• (b) references in the Schedule so inserted to provisions of the Taxation of Chargeable Gains Act 1992 were references to such of the provisions of that Act of 1979 or of any other enactment as correspond to the provisions referred to and have effect in relation to that accounting period.

De-grouping charges

89

• (1) In section 179(4) of the Taxation of Chargeable Gains Act 1992 (time at which de-grouping charges accrue), for the words from “as follows” onwards there shall be substituted

at whichever is the later of the following, that is to say— (a) the time immediately after the beginning of the accounting period of that company in which or, as the case may be, at the end of which the company ceases to be a member of the group; and (b) the time when under subsection (3) above it is treated as having reacquired the asset; and subsection (2) of section 409 of the Taxes Act (group relief) shall require any apportionment under that subsection to be made accordingly but shall not require any reference in this subsection to an accounting period to have effect for any of the purposes specified in subsection (3) of that section as a reference to any accounting period other than a true accounting period.

• (2) This section shall have effect in relation to accounting periods ending after the day appointed for the purposes of section 180(1)(b) of that Act.

Insurance: transfers of business

90

Deemed disposals of unit trusts by insurance companies

91

• (1) Section 212 of the Taxation of Chargeable Gains Act 1992 (annual deemed disposal by insurance companies of unit trusts) shall have effect in relation to accounting periods beginning on or after 1st January 1993; and neither that section nor section 46 of the Finance Act 1990 (which is consolidated in that section) shall have effect in relation to any earlier accounting period in relation to which either of them would have applied apart from this subsection.

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

• (3) In subsection (7) of that section 212, in the words after paragraph (b) (application of definitions in the Taxes Act 1988), for “and 214” there shall be substituted “ to 214A ”.

• (4) After section 213(1) of that Act of 1992 (spreading of gains and losses), there shall be inserted the following subsection—

(1A) Subsection (1) above shall not apply to chargeable gains or allowable losses except so far as they are gains or losses which— (a) are referable to basic life assurance and general annuity business; or (b) would (apart from that subsection) be taken into account in computing the profits of any business treated as a separate business under section 458 of the Taxes Act; and that subsection shall apply separately in relation to the gains and losses falling within paragraph (a) above and those falling within paragraph (b) above for the purpose of determining what chargeable gains or allowable losses so referable are to be treated as accruing under that subsection and what chargeable gains or allowable losses to be so taken into account are to be treated as so accruing.

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

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

Corporation tax: currency

The basic rule: sterling to be used

92

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

Currency other than sterling for trades

93

• (1) This section applies where in an accounting period a company carries on a business and the condition in subsection (2) below is fulfilled.

• (2) The condition is that—

• (a) the accounts of the company as a whole are prepared in a currency other than sterling in accordance with generally accepted accounting practice; and

• (b) in the case of a company which is not resident in the United Kingdom, the company makes a return of accounts for its permanent establishment in the United Kingdom prepared in such a currency in accordance with such practice.

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

• (4) The profits or losses of the business for an accounting period shall for the purposes of corporation tax be found by—

• (a) taking the amount of all the profits and losses of the business for the period computed and expressed in the relevant foreign currency;

• (b) taking account of any of the following which are so computed and expressed—

• (i) any management expenses brought forward under section 75(3) of the Taxes Act 1988 from an earlier accounting period;

• (ii) any losses of the business brought forward under section 392B or 393 of that Act from such a period; and

• (iii) any non-trading deficits on loan relationships brought forward under section 83 of the Finance Act 1996 from the previous accounting period; and

• (c) taking the sterling equivalent of the amount found by applying paragraphs (a) and (b) above.

• (5) In the application of section 578A(2) or (3) of the Taxes Act 1988 or section 43(3), 74(2), 75(1), 76(2), (3) or (4), 99(1), (2) or (3) or 208(1) of the Capital Allowances Act for the purposes of subsection (4)(a) or (b) above, it shall be assumed that any sterling amount mentioned in any of those sections is its equivalent expressed in the relevant foreign currency.

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

• (7) In this section, unless the context otherwise requires—

• “accounts”, in relation to a company, means—the annual accounts of the company prepared in accordance with Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986; orif the company is not required to prepare such accounts, the accounts which it is required to keep under the law of its home State; orif the company is not so required to keep accounts, such of its accounts as most closely correspond to accounts which it would have been required to prepare if the provisions of that Part applied to it;

• . . .

• . . .

• “home State”, in relation to a company, means the country or territory under whose laws the company is incorporated;

• “losses” has the same meaning as in section 92 above except that it does not include allowable losses within the meaning of the Taxation of Chargeable Gains Act 1992;

• “profits” has the same meaning as in section 92 above except that it does not include chargeable gains within the meaning of that Act;

• “the relevant foreign currency” means the currency other than sterling or, where the condition in subsection (2) above is fulfilled and two different such currencies are involved, the currency in which the return of accounts is prepared;

• “return of accounts”, in relation to a permanent establishment in the United Kingdom, means a return of such accounts of the permanent establishment as may be required by the Inland Revenue under paragraph 3 of Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters).

Parts of trades

94

• (1) Any receipt or expense which is to be taken into account in making a computation under subsection (1) of section 92 above for an accounting period, and is denominated in a currency other than sterling, shall be translated into its sterling equivalent—

• (a) if either of the conditions mentioned in subsection (2) below is fulfilled, by reference to the rate used in the preparation of the accounts of the company as a whole for that period;

• (b) if neither of those conditions is fulfilled, by reference to the London closing exchange rate for the relevant day.

• (2) The conditions are—

• (a) that the rate is an arm’s length exchange rate for the relevant day;

• (b) that the rate is an average arm’s length exchange rate for a period ending with that day, or for a period not exceeding three months which includes that day, and the arm’s length exchange rate for any day in that period (except the first) is not significantly different from that for the preceding day.

• (3) Subject to subsections (5) and (7) below, any amount found by applying paragraphs (a) and (b) of subsection (4) of section 93 above shall be translated into its sterling equivalent by reference to the London closing exchange rate for the relevant day.

• (4) The following—

• (a) any receipt or expense which is to be taken into account in making a calculation for the purposes of subsection (4)(a) or (b) of section 93 above, and is denominated in a currency other than the relevant foreign currency; and

• (b) any such sterling amount as is referred to in subsection (5) of that section,

shall be translated into its equivalent expressed in the relevant foreign currency by reference to the London closing exchange rate for the relevant day.

• (5) Where section 93 above applies by virtue of the first condition mentioned in that section, then, as regards the business or part of the business, the company—

• (a) may elect, by a notice given to an officer of the Board, that as from the first day of the accounting period in which the notice is given, an average arm’s length exchange rate shall be used for the purposes of subsection (3) above instead of the rate there mentioned; and

• (b) may withdraw such an election, by a notice so given, as from the first day of the first accounting period beginning on or after the date of the notice.

• (6) Where an election under subsection (5) above is withdrawn, no further election may be made under that subsection so as to take effect before the third anniversary of the day on which the withdrawal takes effect.

• (7) Where—

• (a) section 93 above applies by virtue of the second condition mentioned in that section; and

• (b) the accounts of the company, so far as relating to the business or part of the business, are prepared by reference to an average arm’s length exchange rate,

that exchange rate shall be used for the purposes of subsection (3) above instead of the rate there mentioned.

• (8) In this section—

• “accounts” has the same meaning as in section 93 above;

• “arm’s length exchange rate” means such exchange rate as might reasonably be expected to be agreed between persons dealing at arm’s length;

• “average arm’s length exchange rate”, in relation to a period, means the rate which represents an appropriate average of arm’s length exchange rates for the period;

• “the relevant day” means—for the purposes of subsections (1), (2) and (4)(a) above, the day on which the company becomes entitled to the receipt or incurs (or is treated as incurring) the expense;for the purposes of subsection (3) above, the last day of the accounting period in question;for the purposes of subsection (4)(b) above, the day on which the company incurs the capital expenditure.

• (9) Nothing in this section affects the operation of Chapter IV of Part VII of the Taxes Act 1988 (controlled foreign companies) or Chapter II of this Part.

• (10) Nothing in paragraph 88 of Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) shall be taken to prevent any amount which is taken to be conclusively determined for the purposes of the Corporation Tax Acts from being translated under this section by reference to an exchange rate which was not used to determine the amount which can no longer be altered.

Currency to be used: supplementary

95

Foreign companies: trading currency

96

• (1) In Schedule 24 to the Taxes Act 1988 (assumptions for calculating chargeable profits, creditable tax and corresponding United Kingdom tax of foreign companies) the following paragraph shall be inserted after paragraph 4—

(4A) (1) Sub-paragraph (2) below applies where— (a) the company carries on a trade, and (b) the currency used in the accounts of the company for an accounting period is a currency other than sterling. (2) It shall be assumed that by virtue of regulations under section 93 of the Finance Act 1993 (corporation tax: currency to be used) the basic profits or losses of the trade for the accounting period are to be computed and expressed for the purposes of corporation tax in the currency used in the accounts of the company for the period. (3) References in this paragraph to the accounts of a company— (a) are to the accounts which the company is required by the law of its home State to keep, or (b) if the company is not required by the law of its home State to keep accounts, are to the accounts of the company which most closely correspond to the individual accounts which companies formed and registered under the Companies Act 1985 are required by that Act to keep; and for the purposes of this paragraph the home State of a company is the country or territory under whose law the company is incorporated. (4) The reference in sub-paragraph (2) above to the basic profits or losses of the trade for the accounting period shall be construed in accordance with section 93 of the Finance Act 1993.

• (2) This section applies in relation to any accounting period beginning on or after the day appointed under section 165(7)(b) below.

Overseas life insurance companies

Modification of Taxes Act 1988

97

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

Modification of section 440 of Taxes Act 1988

98

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

Qualifying distributions, tax credits, etc

99

Income from investments attributable to BLAGAB, etc

100

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

• (2) In section 475 of that Act (tax-free Treasury securities: exclusion of interest on borrowed money), in subsection (6)—

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

• (b) for the words “of the life assurance fund”, in each place where they occur, there shall be substituted the words “ attributable to basic life assurance and general annuity business ”.

• (3) This section shall apply in relation to accounting periods beginning after 31st December 1992.

Modification of Finance Act 1989

101

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

Modification of Taxation of Chargeable Gains Act 1992

102

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

Amendment of definition and repeals

103

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

• (2) The following provisions of that Act shall cease to have effect—

• (a) section 445 (charge to tax on investment income of overseas life insurance company);

• (b) section 446(1) (qualifying distributions part of profits of pension business of overseas life insurance company);

• (c) section 447(1), (2) and (4) (set-off of income tax and tax credits against corporation tax assessed under section 445);

• (d) section 448 (qualifying distributions and tax credits);

• (e) section 449 (double taxation agreements);

• (f) section 724(5) to (8) (special provisions of accrued income scheme for overseas life insurance companies);

• (g) section 811(2)(c) (provision about deduction of foreign tax not to affect overseas life insurance company charged under section 445);

• (h) paragraph 1(9) of Schedule 19AB (payments on account of tax credits in case of pension business: special provision for overseas life insurance companies).

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

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

Approved share option schemes

Calculation of consideration

104

After section 149 of the Taxation of Chargeable Gains Act 1992 there shall be inserted the following section—

(149A) (1) This section applies where— (a) an option is granted on or after 16th March 1993, (b) the option consists of a right to acquire shares in a body corporate and is obtained as mentioned in section 185(1) of the Taxes Act (approved share option schemes), and (c) section 17(1) would (apart from this section) apply for the purposes of calculating the consideration for the grant of the option. (2) The grantor of the option shall be treated for the purposes of this Act as if section 17(1) did not apply for the purposes of calculating the consideration and, accordingly, as if the amount or value of the consideration was its actual amount or value. (3) Where the option is granted wholly or partly in recognition of services or past services in any office or employment, the value of those services shall not be taken into account in calculating the actual amount or value of the consideration. (4) The preceding provisions of this section shall not affect the treatment for the purposes of this Act of the person to whom the option is granted.

Expenditure on shares

105

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

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

• (3) In section 32A(5) of the Capital Gains Tax Act 1979 (expenditure: amounts to be included as consideration)—

• (a) for the words “section 185(6)” there shall be substituted the words “ the applicable provision ”, and

• (b) at the end there shall be inserted

; and in this subsection “the applicable provision” means— (a) subsection (6) of section 185 of the Taxes Act (as that subsection had effect before the coming into force of section 39(5) of the Finance Act 1991), or (b) subsection (6A) of that section.

• (4) The amendments made by subsection (3) above shall be deemed to have come into force on 1st January 1992 (but shall have effect subject to the repeals made by the Taxation of Chargeable Gains Act 1992).

Indexation: miscellaneous

Earnings cap etc: no indexation in 1993-94

106

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

Indexation of allowances etc. for 1994-95 onwards

107

• (1) The Taxes Act 1988 shall be amended as mentioned in subsections (2) to (6) below.

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

• (3) In section 257C—

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

• (b) subsection (2) (no change required for PAYE before 18th May) shall be omitted.

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

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

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

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

• (8) This section shall have effect for the year 1994-95 and subsequent years of assessment.

Miscellaneous provisions about reliefs

Counselling services for employees

108

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

Pre-trading expenditure

109

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

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

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

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

Waste disposal expenditure

110

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

Business expansion scheme: loan linked investments

111

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

Employers' pension contributions

112

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

Capital allowances

Initial allowances: industrial buildings and structures

113

Initial allowances: agricultural buildings etc

114

First year allowances: machinery and plant

115

Leasing

116

Transactions between connected persons etc

117

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

Miscellaneous

Scottish trusts

118

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

Controlled foreign companies

119

• (1) In section 750(1) of the Taxes Act 1988 (meaning of lower level of taxation for purposes of provisions relating to controlled foreign companies) for “one-half” there shall be substituted “ three-quarters ”.

• (2) Subsection (1) above shall apply in relation to accounting periods beginning on or after 16th March 1993.

• (3) Where a company is by virtue of section 749(1) or (2) of the Taxes Act 1988 regarded as resident in a territory outside the United Kingdom and (apart from this section)—

• (a) an accounting period of the company would begin before 16th March 1993 and end on or after that date, and

• (b) the company would not be considered to be subject, by virtue of section 750(1) of that Act, to a lower level of taxation in that accounting period in the territory in which it is regarded as resident,

for the purposes of Chapter IV of Part XVII of that Act that accounting period shall be treated as ending on 15th March 1993.

Pay and file: miscellaneous amendments

120

Schedule 14 to this Act (which makes various amendments of the Taxes Management Act 1970, the Taxes Act 1988 and the Finance Act 1989 with a view to, or in connection with, the introduction of “pay and file”) shall have effect.

Repayments and payments to friendly societies

121

Application of Income Tax Acts etc. to public departments

122

• (1) In subsection (2) of section 829 of the Taxes Act 1988 (restriction on application of Income Tax Acts to public departments), at the end there shall be inserted “ unless it is tax which would not have been so borne but for a failure by a public office or department of the Crown to make a deduction required by virtue of subsection (1) above. ”

• (2) The provisions of Parts IX and X of the Taxes Management Act 1970 (interest and penalties) shall apply in relation to public offices and departments of the Crown for the purposes, so far as they so apply, of the other provisions of that Act and of the provisions of the Income Tax Acts mentioned in section 829(1) of the Taxes Act 1988.

• (3) This section shall have effect in relation to the year 1993-94 and subsequent years of assessment.

Expenditure involving crime

123

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

Expenses of Members of Parliament

124

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

Chapter II — Exchange Gains and Losses

Accrual of gains and losses