Legalize / United Kingdom / Public General Act

Finance Act 1994

Type Public General Act

Publication 1994-05-03

Last updated 2025-05-01

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(a) if the passenger's agreement for carriage provides for standard class travel in relation to every flight on the passenger's journey, the rate is the rate set by an Act of the Northern Ireland Assembly for the purposes of this paragraph, and

(b) in any other case, the rate is the rate set by an Act of the Northern Ireland Assembly for the purposes of this paragraph.

(5A) In relation to the carriage of a chargeable passenger on an aircraft to which section 30(4F) applies—

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

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

(i) the rate set by an Act of the Northern Ireland Assembly for the purposes of this paragraph, ...

(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The rate of £0 may be set for the purposes of any paragraph.

(7) The same rate may be set for the purposes of two or more paragraphs.

(7A) For the purposes of any paragraph, an Act of the Northern Ireland Assembly may set one rate for cases within section 30(2A) and a different rate for cases within section 30(4A).

(8) Subsections (5) to (7) and (10) to (12) of section 30 apply for the purposes of this section as they apply for the purposes of that section.

(9) “The relevant day” means the day appointed as such by an order.

(10) Section 42(4) and (5) does not apply to an order under subsection (9).

(11) None of the following applies to any matter in respect of which this section authorises provision to be made by an Act of the Northern Ireland Assembly—

(a) any paragraph of Schedule 2 or 3 to the Northern Ireland Act 1998 (excepted and reserved matters);

(b) section 63 of that Act (financial acts of the Assembly).

(12) A Bill containing provision authorised by this section may not be passed by the Northern Ireland Assembly except in pursuance of a recommendation which—

(a) is made by the Minister of Finance and Personnel, and

(b) is signified to the Assembly by the Minister or on the Minister's behalf.

(13) A Bill containing provision authorised by this section may not be passed by the Northern Ireland Assembly without cross-community support (as defined in section 4(5) of the Northern Ireland Act 1998).

(14) “Passed”, in relation to a Bill, means passed at the final stage (at which the Bill can be passed or rejected but not amended).

(15) Duty paid to the Commissioners in respect of the carriage of chargeable passengers to which this section applies must be paid by the Commissioners into the Consolidated Fund of Northern Ireland.

Passengers: exceptions.

31

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

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

(3) A passenger whose agreement for carriage is evidenced by a ticket is not a chargeable passenger in relation to a flight which is the second or a subsequent flight on his journey if—

(a) the prescribed particulars of the flight are shown on the ticket, and

(b) that flight and the previous flight are connected.

(4) A child who—

(a) has not attained the age of two years, and

(b) is not allocated a separate seat before he first boards the aircraft,

(4ZA) A child who has not attained the age of 16 years is not a chargeable passenger in relation to a flight if the child's agreement for carriage—

(a) is evidenced by a ticket, and

(b) provides for standard class travel in relation to every flight on the child's journey.

(4ZB) Subsections (10) to (12) of section 30 (meaning of “standard class travel”) apply for the purposes of subsection (4ZA) as they apply for the purposes of that section.

(4A) A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket)—

(a) the flight is to depart from and return to the same airport, and

(b) the duration of the flight (excluding any period during which the aircraft’s doors are open for boarding or disembarkation) is not to exceed 60 minutes.

(4B) A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket) the flight is to depart from an airport which is in a region of England, Wales or Northern Ireland designated by order.

(4C) An order may be made for the purposes of subsection (4B) above in respect of any region which has a population density of not more than 12.5 persons per square kilometre.

(4D) In subsections (4B) and (4C) above, references to a region are references to an area which is determined by the Treasury to constitute a region for the purposes of those subsections.

(5) A passenger not carried for reward is not a chargeable passenger if he is carried—

(a) in pursuance of any requirement imposed under any enactment, or

(b) for the purpose only of inspecting matters relating to the aircraft or the flight crew.

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

Change of circumstances after ticket issued etc.

32

(1) Subsections (2) and (3) below apply in the case of a person whose agreement for carriage is evidenced by a ticket.

(2) Where—

(a) at the time the ticket is issued or, if it is altered, at the time it is last altered, he would not (assuming there is no change of circumstances) be a chargeable passenger in relation to any flight in the course of his journey, and

(b) by reason only of a change of circumstances not attributable to any act or default of his, he arrives at or departs from an airport in the course of that journey on a flight the prescribed particulars of which were not shown on his ticket at that time,

he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight.

(3) Where—

(a) at the time the ticket is issued or, if it is altered, at the time it is last altered, he would (assuming there is no change of circumstances) be a chargeable passenger in relation to one or more flights (“the proposed chargeable flights”) in the course of his journey,

(b) by reason only of a change of circumstances not attributable to any act or default of his, he arrives at or departs from an airport in the course of that journey on a flight the prescribed particulars of which were not shown on his ticket at that time, and

(c) but for this subsection he would by reason of the change be a chargeable passenger in relation to a number of flights exceeding the number of the proposed chargeable flights,

he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight.

(4) Where—

(a) at the time a passenger’s flight begins, by virtue of section 31(4A) above he would not (assuming there is no change of circumstances) be a chargeable passenger in relation to the flight, and

(b) by reason only of a change of circumstances not attributable to any act or default of his, the flight does not return to the airport from which it departed or exceeds 60 minutes in duration (excluding any period during which the aircraft’s doors are open for boarding or disembarkation),

he shall not by reason of the change of circumstances be treated as a chargeable passenger in relation to that flight.

Persons liable for the duty

Registration of aircraft operators.

33

(1) The Commissioners shall under this section keep a register of aircraft operators.

(2) The operator of a chargeable aircraft becomes liable to be registered under this section if the aircraft is used for the carriage of any chargeable passengers.

(2A) If the Commissioners decide to keep a register under section 33A below, an operator of a chargeable aircraft does not become liable to be registered under this section just because the aircraft is used for the carriage of chargeable passengers to which section 30A above applies.

(3) A person who has become liable to be registered under this section ceases to be so liable if the Commissioners are satisfied at any time—

(a) that he no longer operates any chargeable aircraft, or

(b) that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers or, if the Commissioners have decided to keep a register under section 33A below, that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers apart from the carriage of chargeable passengers to which section 30A above applies .

(4) A person who is not registered under this section and has not given notice under this subsection shall, if he becomes liable to be registered under this section at any time, give written notice of that fact to the Commissioners not later than the end of the prescribed period beginning with that time.

(5) Notice under subsection (4) above shall be in such form, be given in such manner and contain such information as the Commissioners may direct.

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

(7) Regulations may make provision as to the information to be included in, and the correction of, the register kept under this section or section 33A below .

(8) In particular, the regulations may provide—

(a) for the inclusion in the register of persons who have not given notice under this section but appear to the Commissioners to be liable to be registered,

(b) for persons who are liable to be registered—

(i) not to be included in, or

(ii) to be removed from,

the register in prescribed circumstances,

(d) for the time from which an entry in the register is to be effective (which may be earlier than the time when the entry is first made in the register).

Registration of Northern Ireland long haul aircraft operators

33A

(1) The Commissioners may under this section keep a register of aircraft operators.

(2) If the Commissioners decide to keep a register under this section, the operator of a chargeable aircraft becomes liable to be registered under this section if the aircraft is used for the carriage of chargeable passengers to which section 30A above applies.

(3) A person who has become liable to be registered under this section ceases to be so liable if the Commissioners are satisfied at any time—

(a) that he no longer operates any chargeable aircraft, or

(b) that no chargeable aircraft which he operates will be used for the carriage of chargeable passengers to which section 30A above applies.

(4) A person who is not registered under this section and has not given notice under this subsection shall, if he becomes liable to be registered under this section at any time, give written notice of that fact to the Commissioners not later than the end of the prescribed period beginning with that time.

(5) Notice under subsection (4) above shall be in such form, be given in such manner and contain such information as the Commissioners may direct.

Fiscal representatives.

34

(1) An aircraft operator who—

(a) is or is liable to be registered, and

(b) does not meet the requirements of subsection (3) below,

is required to have a fiscal representative.

(2) In this Chapter “fiscal representative”, in relation to an aircraft operator, means a person who meets those requirements and stands appointed by the operator for the purposes of this section.

(3) A person meets the requirements of this subsection if—

(a) he has any business establishment or other fixed establishment in the United Kingdom, or

(b) if he is an individual, he has his usual place of residence in the United Kingdom.

(4) Where any person is appointed under this section to be the fiscal representative of any aircraft operator (in this section referred to as his “principal”), then, subject to subsection (5) below and section 34A, the fiscal representative—

(a) shall be entitled to act on his principal’s behalf for any of the purposes of the enactments relating to duty,

(b) shall, subject to such provisions as may be made by regulations, secure (where appropriate by acting on his principal’s behalf) his principal’s compliance with and discharge of the obligations and liabilities to which his principal is subject by virtue of those enactments, and

(c) shall be personally liable in respect of any failure of his principal to comply with or discharge any such obligation or liability as if the obligations and liabilities imposed on his principal were imposed jointly and severally on the fiscal representative and his principal.

(5) A fiscal representative shall not be liable by virtue of subsection (4) above himself to be registered ..., but regulations may—

(a) require the names of fiscal representatives to be shown in such manner as may be prescribed against the names of their principals in the register kept under section 33 or 33A above , and

(b) make it the duty of a fiscal representative, for the purposes of registration, to notify the Commissioners, within such period as may be prescribed, that his appointment has taken effect or has ceased to have effect.

Administrative representatives.

34A

(1) Subject to the following provisions of this section, where—

(a) the appointment of any person to be the fiscal representative of an aircraft operator contains a statement that the appointment is made for administrative purposes only,

(b) the operator has complied with any obligations for the provision of security imposed, in relation to appointments containing such statements, by any general directions given by the Commissioners, and

(c) the operator is not for the time being in contravention of any requirement to provide any security that he is required to provide under section 36 below,

that appointment shall have effect in accordance with subsection (2) below.

(2) Where the appointment of any person as a fiscal representative has effect in accordance with this subsection section 34(4)(b) and (c) above shall be taken, in the case of that person—

(a) not to impose any requirement on the representative to secure the payment of amounts of duty which are or may become due from his principal, and

(b) not to make him personally liable either to pay any such amounts or in respect of any failure by his principal to pay them.

(3) The security that may be required by general directions given by the Commissioners for the purposes of this section is any such security for the payment of amounts of duty which are or may become due from the person providing the security as may be determined in accordance with the directions.

(4) The power of the Commissioners under section 36 below to require the provision of security shall not include any power to require a fiscal representative of an aircraft operator whose appointment has effect in accordance with subsection (2) above to provide any security for the payment of amounts of duty which are or may become due from his principal.

(5) In this section references to an amount of duty include references to any penalty or interest that is recoverable as if it were an amount of duty, but only in so far as the penalty or interest is in respect of a failure by an aircraft operator to pay an amount of duty, or to pay such an amount before a certain time.

Fiscal representatives: supplementary.

35

(1) Regulations may make provision about—

(a) the manner in which a person is to be appointed as a fiscal representative, and

(b) the circumstances in which a person is to be treated as having ceased to be a fiscal representative.

(2) If any aircraft operator who is required to have a fiscal representative fails to appoint such a representative before the prescribed time, his failure shall attract a penalty under section 9 above.

(3) Any failure of a fiscal representative to give any notice which he is required to give by regulations under section 34(5)(b) above shall attract a penalty under section 9 above.

Security for payment of duty.

36

(1) The Commissioners may require—

(a) any operator of an aircraft who is or is liable to be registered, or

(b) any fiscal representative,

to provide such security, or further security, as they may think appropriate for the payment of any duty which is or may become due from the operator.

(2) Any failure by a person to provide any security which he is required by the Commissioners to provide under subsection (1) above shall attract a penalty under section 9 above.

(3) For the purposes of this section, a person shall not be treated as having been required to provide security under subsection (1) above unless the Commissioners have either—

(a) served notice of the requirement on him, or

(b) taken all such other steps as appear to them to be reasonable for bringing the requirement to his attention.

Handling agents.

37

(1) Where any amount of duty becomes payable at any time by the operator of an aircraft and, within the period of ninety days beginning with that time, that amount, or any other amount which becomes payable by him within the period, is not paid, the Commissioners may give notice under this section to any handling agent of his.

(2) If any operator of an aircraft who is required to have a fiscal representative fails to appoint such a representative before the prescribed time, the Commissioners may give notice under this section to any handling agent of his.

(3) In this Chapter “handling agent”, in relation to the operator of an aircraft (“the principal”), means any person (other than an individual) who, under an agreement with the principal, makes arrangements for—

(a) the allocation of seats to passengers on aircraft operated by the principal, or

(b) the supervision of the boarding of such aircraft by passengers.

(4) A notice under this section—

(a) may be given on the ground referred to in subsection (1) above only if the Commissioners consider it necessary to do so for the protection of the revenue, and

(b) may at any time be withdrawn by the Commissioners.

(5) A notice under this section shall become effective on the date stated in it or, if later, the time when the notice is received by the handling agent and shall continue to be effective until withdrawn.

(6) If, where a notice given to a handling agent under this section is effective—

(a) the allocation of seats to passengers on aircraft operated by his principal, or the supervision of the boarding of such aircraft by passengers, is carried out in pursuance of arrangements made by him under any agreement with his principal, and

(b) any duty payable in respect of those passengers is not paid,

the handling agent shall be liable jointly and severally with his principal for the payment of the duty.

Accounting for and payment of duty.

38

(1) Regulations shall require aircraft operators who are registered or liable to be registered—

(a) to keep accounts for the purposes of duty in such form and manner as may be prescribed, and

(b) to make returns in respect of duty—

(i) by reference to such periods as may be prescribed or as may be allowed by the Commissioners, in relation to a particular operator, in accordance with regulations, and

(ii) at such time and in such manner as may be prescribed or specified.

(2) Any person from whom any duty is due shall pay the duty at such time and in such manner as may be prescribed or specified.

(2A) Regulations may require a prescribed person to make, at prescribed times during a prescribed period, payments based on an estimate of what the person's liability will be for duty charged in the period.

(2B) The estimate and the amounts of the payments are to be determined in accordance with provision made by the regulations.

(2C) The payments are to be treated as being payments on account of the person's liability for duty charged in the period.

(2D) The regulations must make provision for dealing with cases where this results in an overpayment of duty by providing for amounts—

(a) to be repaid by the Commissioners, or

(b) to be treated as having been paid on account of the person's liability for duty charged in other periods,

or both.

(3) In this section “specified” means specified in a notice published, and not withdrawn, by the Commissioners.

(4) Any failure by any person to comply with regulations under this section shall, unless he is complying with the corresponding provisions of such a notice, attract a penalty under section 9 above and, in the case of any failure to keep accounts, daily penalties.

Schemes for simplified operation of Chapter

39

(1) This section applies if the Commissioners consider that, having regard to difficulties encountered or expected to be encountered by any registered operator in obtaining and recording information about passengers and their journeys, it is appropriate for this Chapter to have effect in relation to the registered operator in accordance with a special accounting scheme.

(2) The Commissioners may agree with the registered operator that this Chapter is to have effect in relation to the registered operator in accordance with a special accounting scheme agreed between the Commissioners and the registered operator (but subject to subsection (4)).

(3) A special accounting scheme is a scheme which makes provision for methods of calculating—

(a) how many persons are to be regarded for the purposes of this Chapter as chargeable passengers carried by chargeable aircraft operated by a registered operator, and

(b) how many of those are to be so regarded as having been so carried on journeys in respect of which duty is chargeable at any particular rate.

(4) The Commissioners may publish a notice specifying terms and conditions subject to which special accounting schemes are to have effect.

(5) Where the Commissioners and a registered operator have agreed that this Chapter is to have effect in relation to the registered operator in accordance with a special accounting scheme, this Chapter has effect in relation to the registered operator in accordance with the scheme (and with any notice under subsection (4) which has been published by the Commissioners and not withdrawn) for the period agreed by the Commissioners and the registered operator.

(6) The Commissioners and the registered operator may at any time agree to vary the special accounting scheme for the future.

(7) The Commissioners may at any time terminate the operation of the special accounting scheme—

(a) on the application of the registered operator, or

(b) where they have reasonable grounds for doing so,

by giving notice to the registered operator.

Administration and enforcement

Administration and enforcement.

40

(1) Air passenger duty shall be a duty of excise and, accordingly, shall be under the care and management of the Commissioners.

(2) Schedule 6 to this Act (administration and enforcement) shall have effect.

Offences.

41

(1) A person who is knowingly concerned—

(a) in the fraudulent evasion (by him or another person) of 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—

(i) £20,000, or

(ii) 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 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.

Northern Ireland long haul rates of duty: disclosure of information

41A

(1) An officer of Revenue and Customs may disclose to the Secretary of State, the Treasury or the Department of Finance and Personnel in Northern Ireland any information for purposes connected with the setting of rates of duty under section 30A above, including (in particular) to enable the setting of rates under that section to be taken into account for the purposes of section 58 of the Northern Ireland Act 1998 (payments by Secretary of State into Consolidated Fund of Northern Ireland).

(2) Information disclosed under subsection (1) above may not be further disclosed without the consent of the Commissioners (which may be general or specific).

(3) In section 19 of the Commissioners for Revenue and Customs Act 2005 (wrongful disclosure) references to section 18(1) of that Act are to be read as including a reference to subsection (2) above.

Supplementary

Regulations and orders.

42

(1) In this Chapter “regulations” means regulations made by the Commissioners and “order” means an order made by the Treasury.

(2) Regulations and orders may make different provision for different cases or circumstances and make incidental, supplemental, saving or transitional provision.

(3) Any power to make regulations or an order is exercisable by statutory instrument.

(4) No order which appears to the Treasury to extend the circumstances in which passengers are to be treated as chargeable passengers , or to increase the rate of air passenger duty to be charged on the carriage of any chargeable passengers whose journeys end in any place, shall be made unless a draft of the order has been laid before and approved by the House of Commons.

(5) Any other order, and any regulations, shall be subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation.

43

(1) In this Chapter—

“accounting period” means any period prescribed or allowed for the purposes of section 38 above,

“agreement for carriage”, in relation to the carriage of any person, means the agreement or arrangement under which he is carried, whether the carriage is by a single carrier or successive carriers,

“Air Navigation Order” has the same meaning as in the Civil Aviation Act 1982,

“airport” means any aerodrome (within the meaning of that Act),

“carriage” means carriage wholly or partly by air, and “carried” is to be read accordingly,

“connected”, in relation to any flights, has the meaning given by section 30(8) above,

“document” includes information recorded in any form,

“duty” means air passenger duty,

“fiscal representative” has the meaning given by section 34(2) above,

“flight” has the meaning given by section 28(5) above,

“operator”, in relation to any aircraft, means the person having the management of the aircraft for the time being,

“passenger”, in relation to any aircraft, means any person carried on the aircraft other than— a member of the flight crew,a cabin attendant, ora person who is not carried for reward and who satisfies such other requirements as may be prescribed.

“prescribed” means prescribed by regulations,

“reward”, in relation to the carriage of any person, includes any form of consideration received or to be received wholly or partly in connection with the carriage, irrespective of the person by whom or to whom the consideration has been or is to be given, and

“ticket” means a document or documents evidencing an agreement (wherever made) for the carriage of any person.

(1A) The agreements and arrangements covered by the definition of “agreement for carriage” in subsection (1) include informal agreements or arrangements between, for example, members of a family or friends.

(2) . . ., in this Chapter, in relation to a passenger whose agreement for carriage is evidenced by a ticket—

“journey” means the journey from his original place of departure to his final place of destination, and

“original place of departure” and “final place of destination” mean the original place of departure and the final place of destination indicated on his ticket.

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

(4) Subject to the preceding provisions of this section, expressions used in this Chapter and in the Customs and Excise Management Act 1979 have the same meaning as in that Act.

Commencement.

44

(1) This Chapter applies to any carriage of a passenger on an aircraft which begins after 31st October 1994.

(2) For the purpose of determining whether or not a person is a chargeable passenger in relation to any carriage on an aircraft beginning after that date, the provisions of section 31 above and any order made by virtue of that section shall be treated as having applied to any such carriage of that person which began on or before that date as they would apply to any such carriage of that person beginning after that date.

Part II — Value Added Tax

45

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

Repayment supplement.

46

(1) Section 20 of the Finance Act 1985 (repayment supplement) shall be amended as follows.

(2) In subsection (1) (supplement of 5 per cent. or £30, whichever is greater) for “£30” there shall be substituted “ £50 ”.

(3) In subsection (2)(a) (return or claim must be received not later than one month after last day on which it is required) the words “one month after” shall be omitted.

(4) This section shall apply where the requisite return or claim is received after the expiry of the period of one month beginning with the day after that on which this Act is passed.

47

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

Part III — Insurance Premium Tax

The basic provisions

Insurance premium tax.

48

(1) A tax, to be known as insurance premium tax, shall be charged in accordance with this Part.

(2) The tax shall be under the care and management of the Commissioners of Customs and Excise.

Charge to tax.

49

Tax shall be charged on the receipt of a premium by an insurer if the premium is received—

(a) under a taxable insurance contract, and

(b) on or after 1st October 1994.

Chargeable amount.

50

(1) Tax shall be charged by reference to the chargeable amount.

(2) For the purposes of this Part, the chargeable amount is such amount as, with the addition of the tax chargeable, is equal to the amount of the premium.

(3) Subsections (1) and (2) above shall have effect subject to sections 69 and 69A below.

Rate of tax.

51

(1) Tax shall be charged—

(a) at the higher rate, in the case of a premium which is liable to tax at that rate; and

(b) at the standard rate, in any other case.

(2) For the purposes of this Part—

(a) the higher rate is 20 per cent .; and

(b) the standard rate is 12 per cent .

Premiums liable to tax at the higher rate.

51A

(1) A premium received under a taxable insurance contract by an insurer is liable to tax at the higher rate if it falls within one or more of the paragraphs of Part II of Schedule 6A to this Act.

(2) Part I of Schedule 6A to this Act shall have effect with respect to the interpretation of that Schedule.

(3) Provision may be made by order amending Schedule 6A as it has effect for the time being.

(4) This section is subject to section 69 below.

Liability to pay tax.

52

(1) Tax shall be payable by the person who is the insurer in relation to the contract under which the premium is received.

(2) Subsection (1) above shall have effect subject to any regulations made under section 65 below.

Certain fees to be treated as premiums under higher rate contracts.

52A

(1) This section applies where—

(a) at or about the time when a higher rate contract is effected, and

(b) in connection with that contract,

a fee in respect of an insurance-related service is charged by a taxable intermediary to a person who is or becomes the insured (or one of the insured) under the contract or to a person who acts for or on behalf of such a person.

(2) Where this section applies—

(a) a payment in respect of the fee shall be treated for the purposes of this Part as a premium received under a taxable insurance contract by an insurer, and

(b) that premium—

(i) shall be treated for the purposes of this Part as so received at the time when the payment is made, and

(ii) shall be chargeable to tax at the higher rate.

(3) Tax charged by virtue of subsection (2) above shall be payable by the taxable intermediary as if he were the insurer under the contract mentioned in paragraph (a) of that subsection.

(4) For the purposes of this section, a contract of insurance is a “higher rate contract” if—

(a) it is a taxable insurance contract; and

(b) the whole or any part of a premium received under the contract by the insurer is (apart from this section) liable to tax at the higher rate.

(5) For the purposes of this Part a “taxable intermediary” is a person falling within subsection (6) or (6A) below who—

(a) at or about the time when a higher rate contract is effected, and

(b) in connection with that contract,

charges a fee in respect of an insurance-related service to a person who is or becomes the insured (or one of the insured) under the contract or to a person who acts for or on behalf of such a person.

(6) A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 2 or 3 of Schedule 6A to this Act (motor cars or motor cycles, or relevant goods) and the person is—

(a) within the meaning of the paragraph in question, a supplier of motor cars or motor cycles or, as the case may be, of relevant goods; or

(b) a person connected with a person falling within paragraph (a) above; or

(i) the whole or any part of the premium received under that contract, or

(ii) a fee connected with the arranging of that contract,

to a person falling within paragraph (a) or (b) above.

(6A) A person falls within this subsection if the higher rate contract mentioned in subsection (1) above falls within paragraph 4 of Schedule 6A to this Act (travel insurance) and the person is—

(a) the insurer under that contract; or

(b) a person through whom that contract is arranged in the course of his business; or

(d) a person connected with a person falling within paragraph (b) above; or

(e) a person who in the course of his business pays—

(i) the whole or any part of the premium received under that contract, or

(ii) a fee connected with the arranging of that contract,

to a person falling within any of paragraphs (a) to (d) above.

(8) For the purposes of this section, any question whether a person is connected with another shall be determined in accordance with section 1122 of the Corporation Tax Act 2010 .

(9) In this section—

“insurance-related service” means any service which is related to, or connected with, insurance;

. . .

Administration

Registration of insurers.

53

(1) A person who—

(a) receives, as insurer, premiums in the course of a taxable business, and

(b) is not registered,

is liable to be registered.

(1A) The register kept under this section may contain such information as the Commissioners think is required for the purposes of the care and management of the tax.

(2) A person who—

(a) at any time forms the intention of receiving, as insurer, premiums in the course of a taxable business, and

(b) is not already receiving, as insurer, premiums in the course of another taxable business,

shall notify the Commissioners of those facts.

(3) A person who at any time—

(a) ceases to have the intention of receiving, as insurer, premiums in the course of a taxable business, and

(b) has no intention of receiving, as insurer, premiums in the course of another taxable business,

shall notify the Commissioners of those facts.

(4) Where a person is liable to be registered by virtue of subsection (1) above the Commissioners shall register him with effect from the time when he begins to receive premiums in the course of the business concerned; and it is immaterial whether or not he notifies the Commissioners under subsection (2) above.

(5) Where a person—

(a) notifies the Commissioners under subsection (3) above, and

(b) satisfies them of the facts there mentioned, . . .

(5A) In a case where—

(a) the Commissioners are satisfied that a person has ceased to receive, as insurer, premiums in the course of any taxable business, but

(b) he has not notified them under subsection (3) above,

they may cancel his registration with effect from the earliest practicable time after he so ceased.

(6) For the purposes of this section regulations may make provision—

(a) as to the time within which a notification is to be made;

(b) as to the circumstances in which premiums are to be taken to be received in the course of a taxable business;

(c) as to the form and manner in which any notification is to be made and as to the information to be contained in or provided with it;

(d) requiring a person who has made a notification to notify the Commissioners if any information contained in or provided in connection with it is or becomes inaccurate;

(e) as to the correction of entries in the register.

(7) References in this section to receiving premiums are to receiving premiums on or after 1st October 1994.

Registration of taxable intermediaries.

53AA

(1) A person who—

(a) is a taxable intermediary, and

(b) is not registered,

is liable to be registered.

(2) The register kept under this section may contain such information as the Commissioners think is required for the purposes of the care and management of the tax.

(3) A person who—

(a) at any time forms the intention of charging taxable intermediary’s fees, and

(b) is not already charging such fees in the course of another business,

shall notify the Commissioners of those facts.

(4) A person who at any time—

(a) ceases to have the intention of charging taxable intermediary’s fees in the course of his business, and

(b) has no intention of charging such fees in the course of another business of his,

shall notify the Commissioners of those facts.

(5) Where a person is liable to be registered by virtue of subsection (1) above, the Commissioners shall register him with effect from the time when he begins to charge taxable intermediary’s fees in the course of the business concerned; and it is immaterial whether or not he notifies the Commissioners under subsection (3) above.

(6) Where a person—

(a) notifies the Commissioners under subsection (4) above, and

(b) satisfies them of the facts there mentioned,

the Commissioners shall cancel his registration with effect from the earliest practicable time after he ceases to charge taxable intermediary’s fees in the course of any business of his.

(7) In a case where—

(a) the Commissioners are satisfied that a person has ceased to charge taxable intermediary’s fees in the course of any business of his, but

(b) he has not notified them under subsection (4) above,

they may cancel his registration with effect from the earliest practicable time after he so ceased.

(8) For the purposes of this section regulations may make provision—

(a) as to the time within which a notification is to be made;

(b) as to the form and manner in which any notification is to be made and as to the information to be contained in or provided with it;

(c) requiring a person who has made a notification to notify the Commissioners if any information contained in or provided in connection with it is or becomes inaccurate;

(d) as to the correction of entries in the register.

(9) In this Part “taxable intermediary’s fees” means fees which, to the extent of any payment in respect of them, are chargeable to tax by virtue of section 52A above.

Information required to keep register up to date.

53A

(1) Regulations may make provision requiring a registrable person to notify the Commissioners of particulars which—

(a) are of changes in circumstances relating to the registrable person or any business carried on by him,

(b) appear to the Commissioners to be required for the purpose of keeping the register kept under section 53 or 53AA above up to date, and

(2) Regulations may make provision—

(a) as to the time within which a notification is to be made;

(b) as to the form and manner in which a notification is to be made;

(c) requiring a person who has made a notification to notify the Commissioners if any information contained in it is inaccurate.

Accounting for tax and time for payment.

54

Regulations may provide that a registrable person shall—

(a) account for tax by reference to such periods (accounting periods) as may be determined by or under the regulations;

(b) make, in relation to accounting periods, returns in such form as may be prescribed and at such times as may be so determined;

Credit.

55

(1) Regulations may provide that where an insurer or taxable intermediary has paid tax and all or part of the premium or taxable intermediary’s fee (as the case may be) is repaid, the insurer or taxable intermediary shall be entitled to credit of such an amount as is found in accordance with prescribed rules.

(2) Regulations may provide that where—

(a) by virtue of regulations made under section 68 below tax is charged in relation to a premium which is shown in the accounts of an insurer as due to him,

(b) that tax is paid, and

(c) it is shown to the satisfaction of the Commissioners that the premium, or part of it, will never actually be received by or on behalf of the insurer,

the insurer shall be entitled to credit of such an amount as is found in accordance with prescribed rules.

(3) Regulations may make provision as to the manner in which an insurer or taxable intermediary is to benefit from credit, and in particular may make provision—

(a) that an insurer or taxable intermediary shall be entitled to credit by reference to accounting periods;

(b) that an insurer or taxable intermediary shall be entitled to deduct an amount equal to his total credit for an accounting period from the total amount of tax due from him for the period;

(c) that if no tax is due from an insurer or taxable intermediary for an accounting period but he is entitled to credit for the period, the amount of the credit shall be paid to him by the Commissioners;

(d) that if the amount of credit to which an insurer or taxable intermediary is entitled for an accounting period exceeds the amount of tax due from him for the period, an amount equal to the excess shall be paid to him by the Commissioners;

(e) for the whole or part of any credit to be held over to be credited for a subsequent accounting period;

(f) as to the manner in which a person who has ceased to be registrable (whether under section 53 or section 53AA) is to benefit from credit.

(4) Regulations under subsection (3)(c) or (d) above may provide that where at the end of an accounting period an amount is due to an insurer or taxable intermediary who has failed to submit returns for an earlier period as required by this Part, the Commissioners may withhold payment of the amount until he has complied with that requirement.

(5) Regulations under subsection (3)(e) above may provide for credit to be held over either on the insurer’s or taxable intermediary’s application or in accordance with general or special directions given by the Commissioners from time to time.

(6) Regulations may provide that—

(a) no deduction or payment shall be made in respect of credit except on a claim made in such manner and at such time as may be determined by or under regulations;

(b) payment in respect of credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to repayment in specified circumstances;

(c) deduction in respect of credit shall be made subject to such conditions (if any) as the Commissioners think fit to impose, including conditions as to the payment to the Commissioners, in specified circumstances, of an amount representing the whole or part of the amount deducted.

(7) Regulations may require a claim by an insurer or taxable intermediary to be made in a return required by provision made under section 54 above.

(8) Regulations may provide that where—

(a) all or any of the tax payable in respect of a premium or taxable intermediary’s fee has not been paid, and

(b) the circumstances are such that a person would be entitled to credit if the tax had been paid,

prescribed adjustments shall be made as regards any amount of tax due from any person.

Power to assess.

56

(1) In a case where—

(a) a person has failed to make any returns required to be made under this Part,

(b) a person has failed to keep any documents necessary to verify returns required to be made under this Part,

(d) it appears to the Commissioners that returns required to be made by a person under this Part are incomplete or incorrect,

the Commissioners may assess the amount of tax due from the person concerned to the best of their judgment and notify it to him.

(2) Where a person has for an accounting period been paid an amount to which he purports to be entitled under regulations made under section 55 above, then, to the extent that the amount ought not to have been paid or would not have been paid had the facts been known or been as they later turn out to be, the Commissioners may assess the amount as being tax due from him for that period and notify it to him accordingly.

(3) Where a person is assessed under subsections (1) and (2) above in respect of the same accounting period the assessments may be combined and notified to him as one assessment.

(4) Where the person failing to make a return, or making a return which appears to the Commissioners to be incomplete or incorrect, was required to make the return as a personal representative, trustee in bankruptcy, trustee in sequestration, receiver, liquidator or person otherwise acting in a representative capacity in relation to another person, subsection (1) above shall apply as if the reference to tax due from him included a reference to tax due from that other person.

(5) An assessment under subsection (1) or (2) above of an amount of tax due for an accounting period shall not be made after the later of the following—

(a) two years after the end of the accounting period;

(b) one year after evidence of facts, sufficient in the Commissioners’ opinion to justify the making of the assessment, comes to their knowledge;

but where further such evidence comes to their knowledge after the making of an assessment under subsection (1) or (2) above another assessment may be made under the subsection concerned in addition to any earlier assessment.

(6) In a case where—

(a) as a result of a person’s failure to make a return for an accounting period the Commissioners have made an assessment under subsection (1) above for that period,

(b) the tax assessed has been paid but no proper return has been made for the period to which the assessment related, and

(c) as a result of a failure to make a return for a later accounting period, being a failure by the person referred to in paragraph (a) above or a person acting in a representative capacity in relation to him, as mentioned in subsection (4) above, the Commissioners find it necessary to make another assessment under subsection (1) above,

then, if the Commissioners think fit, having regard to the failure referred to in paragraph (a) above, they may specify in the assessment referred to in paragraph (c) above an amount of tax greater than that which they would otherwise have considered to be appropriate.

(7) Where an amount has been assessed and notified to any person under subsection (1) or (2) above it shall be deemed to be an amount of tax due from him and may be recovered accordingly unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.

(8) For the purposes of this section notification to—

(a) a personal representative, trustee in bankruptcy, trustee in sequestration, receiver or liquidator, or

(b) a person otherwise acting in a representative capacity in relation to another person,

shall be treated as notification to the person in relation to whom the person mentioned in paragraph (a) above, or the first person mentioned in paragraph (b) above, acts.

Tax representatives

Tax representatives.

57

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

Rights and duties of tax representatives.

58

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

Review and appeal

Appeals

59

(1) Subject to section 60, an appeal shall lie to an appeal tribunal from any person who is or will be affected by any decision of HMRC with respect to the any of the following matters—

(a) the registration or cancellation of registration of any person under this Part;

(b) whether tax is chargeable in respect of a premium or how much tax is chargeable;

(bb) whether a payment falls to be treated under section 52A(2) above as a premium received under a taxable insurance contract by an insurer and chargeable to tax at the higher rate;

(c) whether a person is entitled to credit by virtue of regulations under section 55 above or how much credit a person is entitled to or the manner in which he is to benefit from credit;

(d) an assessment falling within subsection (1A) below or the amount of such an assessment;

(e) any refusal of an application under section 63 below;

(f) whether a notice may be served on a person by virtue of regulations made under section 65 below;

(g) an assessment under regulations made under section 65 below or the amount of such an assessment;

(h) whether a scheme established by regulations under section 68 below applies to an insurer as regards an accounting period;

(ha) a refusal of an application for an exemption under section 69C or the withdrawal of such an exemption;

(i) the requirement of any security under paragraph 24 of Schedule 7 to this Act or its amount;

(j) any liability to a penalty under paragraphs 12 to 19 of Schedule 7 to this Act;

(k) the amount of any penalty or interest specified in an assessment under paragraph 25 of Schedule 7 to this Act;

(l) a claim for the repayment of an amount under paragraph 8 of Schedule 7 to this Act;

(m) any liability of the Commissioners to pay interest under paragraph 22 of Schedule 7 to this Act or the amount of the interest payable.

(1A) An assessment falls within this subsection if it is an assessment under section 56 above in respect of an accounting period in relation to which a return required to be made by virtue of regulations under section 54 above has been made.

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

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

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

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

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

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

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

Offer of review

59A

(1) HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under section 59 in respect of the decision.

(2) The offer of the review must be made by notice given to P at the same time as the decision is notified to P.

(3) This section does not apply to the notification of the conclusions of a review.

Right to require review

59B

(1) Any person (other than P) who has the right of appeal under section 59 against a decision may require HMRC to review that decision if that person has not appealed to the appeal tribunal under section 59G.

(2) A notification that such a person requires a review must be made within 30 days of that person becoming aware of the decision.

Review by HMRC

59C

(1) HMRC must review a decision if—

(a) they have offered a review of the decision under section 59A, and

(b) P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer.

(2) But P may not notify acceptance of the offer if P has already appealed to the appeal tribunal under section 59G.

(3) HMRC must review a decision if a person other than P notifies them under section 59B.

(4) HMRC shall not review a decision if P, or another person, has appealed to the appeal tribunal under section 59G in respect of the decision.

Extensions of time

59D

(1) If under section 59A HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended.

(2) If under section 59B another person may require HMRC to review a matter, HMRC may within the relevant period notify the other person that the relevant period is extended.

(3) If notice is given the relevant period is extended to the end of 30 days from—

(a) the date of the notice, or

(b) any other date set out in the notice or a further notice.

(4) In this section “relevant period” means—

(a) the period of 30 days referred to in—

(i) section 59C(1)(b) (in a case falling within subsection (1)), or

(ii) section 59B(2) (in a case falling within subsection (2)), or

(b) if notice has been given under subsection (1) or (2), that period as extended (or as most recently extended) in accordance with subsection (3).

Review out of time

59E

(1) This section applies if—

(a) HMRC have offered a review of a decision under section 59A and P does not accept the offer within the time allowed under section 59C(1)(b) or 59D(3); or

(b) a person who requires a review under section 59B does not notify HMRC within the time allowed under that section or section 59D(3).

(2) HMRC must review the decision under section 59C if—

(a) after the time allowed, P, or the other person, notifies HMRC in writing requesting a review out of time,

(b) HMRC are satisfied that P, or the other person, had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and

(c) HMRC are satisfied that P, or the other person, made the request without unreasonable delay after the excuse had ceased to apply.

(3) HMRC shall not review a decision if P, or another person, has appealed to the appeal tribunal under section 59G in respect of the decision.

Nature of review etc

59F

(1) This section applies if HMRC are required to undertake a review under section 59C or 59E.

(2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

(3) For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—

(a) by HMRC in reaching the decision, and

(b) by any person in seeking to resolve disagreement about the decision.

(4) The review must take account of any representations made by P, or the other person, at a stage which gives HMRC a reasonable opportunity to consider them.

(5) The review may conclude that the decision is to be—

(a) upheld,

(b) varied, or

(6) HMRC must give P, or the other person, notice of the conclusions of the review and their reasoning within—

(a) a period of 45 days beginning with the relevant date, or

(b) such other period as HMRC and P, or the other person, may agree.

(7) In subsection (6) “relevant date” means—

(a) the date HMRC received P’s notification accepting the offer of a review (in a case falling within section 59A), or

(b) the date HMRC received notification from another person requiring review (in a case falling within section 59B), or

(8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the review is to be treated as having concluded that the decision is upheld.

(9) If subsection (8) applies, HMRC must notify P or the other person of the conclusion which the review is treated as having reached.

Bringing of appeals

59G

(1) An appeal under section 59 is to be made to the appeal tribunal before—

(a) the end of the period of 30 days beginning with—

(i) in a case where P is the appellant, the date of the document notifying the decision to which the appeal relates, or

(ii) in a case where a person other than P is the appellant, the date that person becomes aware of the decision, or

(b) if later, the end of the relevant period (within the meaning of section 59D).

(2) But that is subject to subsections (3) to (5).

(3) In a case where HMRC are required to undertake a review under section 59C—

(a) an appeal may not be made until the conclusion date, and

(b) any appeal is to be made within the period of 30 days beginning with the conclusion date.

(4) In a case where HMRC are requested to undertake a review by virtue of section 59E—

(a) an appeal may not be made to an appeal tribunal—

(i) unless HMRC have notified P, or the other person, as to whether or not a review will be undertaken, and

(ii) if HMRC have notified P, or the other person, that a review will be undertaken, until the conclusion date;

(b) any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date;

(c) if HMRC have notified P, or the other person, that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so.

(5) In a case where section 59F(8) applies, an appeal may be made at any time from the end of the period specified in section 59F(6) to the date 30 days after the conclusion date.

(6) An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if the appeal tribunal gives permission to do so.

(7) In this section “conclusion date” means the date of the document notifying the conclusion of the review.

Further provisions relating to appeals

60

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

(2) Without prejudice to paragraph 13 of Schedule 7 to this Act, nothing in section 59 above shall be taken to confer on a tribunal any power to vary an amount assessed by way of penalty or interest except in so far as it is necessary to reduce it to the amount which is appropriate under paragraphs 12 to 21 of that Schedule.

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

(4) Subject to subsections (4A) and (4B), where the appeal is against the decisions with respect to any of the matters mentioned in section 59(1)(b) and (d), it shall not be entertained unless the amount which HMRC have determined to be payable as tax has been paid or deposited with them.

(4A) In a case where the amount determined to be payable as tax has not been paid or deposited an appeal shall be entertained if—

(a) HMRC are satisfied (on the application of the appellant), or

(b) the appeal tribunal decides (HMRC not being so satisfied and on the application of the appellant),

that the requirement to pay or deposit the amount determined would cause the appellant to suffer hardship.

(4B) Notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, the decision of the appeal tribunal as to the issue of hardship is final.

(5) Where on an appeal against a decision with respect to any of the matters mentioned in section 59(1)(d) above—

(a) it is found that the amount specified in the assessment is less than it ought to have been, and

(b) the tribunal gives a direction specifying the correct amount,

the assessment shall have effect as an assessment of the amount specified in the direction and that amount shall be deemed to have been notified to the appellant.

(6) Where on an appeal under this section it is found that the whole or part of any amount paid or deposited in pursuance of subsection (4) above is not due, so much of that amount as is found not to be due shall be repaid with interest at the rate applicable under section 197 of the Finance Act 1996 .

(7) Where on an appeal under this section it is found that the whole or part of any amount due to the appellant by virtue of regulations under section 55(3)(c) or (d) or (f) above has not been paid, so much of that amount as is found not to have been paid shall be paid with interest at the rate applicable under section 197 of the Finance Act 1996 .

(8) Where an appeal under this section has been entertained notwithstanding that an amount determined by HMRC to be payable as tax has not been paid or deposited and it is found on the appeal that that amount is due it shall be paid with interest at the rate applicable under section 197 of the Finance Act 1996.

(8A) Interest under subsection (8) shall be paid without any deduction of income tax.

(9) On an appeal against an assessment to a penalty under paragraph 12 of Schedule 7 to this Act, the burden of proof as to the matters specified in paragraphs (a) and (b) of sub-paragraph (1) of paragraph 12 shall lie upon HMRC .

(10) Sections 85 and 85B of the Value Added Tax Act 1994 (settling of appeals by agreement and payment of tax where there is a further appeal) shall have effect as if—

(a) the references to section 83 of that Act included references to section 59 above, and

(b) the references to value added tax included references to insurance premium tax.

Review and appeal: commencement.

61

Sections 59 and 60 above shall come into force on such day as may be appointed by order.

Miscellaneous

Partnership, bankruptcy, transfer of business, etc.

62

(1) Regulations may make provision for determining by what persons anything required by this Part to be done by an insurer or taxable intermediary is to be done where the business concerned is carried on in partnership or by another unincorporated body.

(2) The registration under this Part of an unincorporated body other than a partnership may be in the name of the body concerned; and in determining whether premiums are received by such a body no account shall be taken of any change in its members.

(3) Regulations may make provision for determining by what person anything required by this Part to be done by an insurer is to be done in a case where insurance business is carried on by persons who are underwriting members of Lloyd’s and are members of a syndicate of such underwriting members.

(4) Regulations may—

(a) make provision for the registration for the purposes of this Part of a syndicate of underwriting members of Lloyd’s;

(b) provide that for purposes prescribed by the regulations no account shall be taken of any change in the members of such a syndicate;

and regulations under paragraph (a) above may modify section 53 above.

(5) As regards any case where a person carries on a business of an insurer or taxable intermediary who has died or become bankrupt or incapacitated or been sequestrated, or of an insurer or taxable intermediary which is in liquidation or receivership or administration , regulations may—

(a) require the person to inform the Commissioners of the fact that he is carrying on the business and of the event that has led to his carrying it on;

(b) make provision allowing the person to be treated for a limited time as if he were the insurer or taxable intermediary;

(6) Regulations may make provision for securing continuity in the application of this Part in cases where a business carried on by a person is transferred to another person as a going concern.

(7) Regulations under subsection (6) above may in particular provide—

(a) for liabilities and duties under this Part of the transferor to become, to such extent as may be provided by the regulations, liabilities and duties of the transferee;

(b) for any right of either of them to repayment or credit in respect of tax to be satisfied by making a repayment or allowing a credit to the other;

but the regulations may provide that no such provision as is mentioned in paragraph (a) or (b) of this subsection shall have effect in relation to any transferor and transferee unless an application in that behalf has been made by them under the regulations.

Groups of companies.

63

(1) Where under the following provisions of this section any bodies corporate are treated as members of a group, for the purposes of this Part—

(a) any taxable business carried on by a member of the group shall be treated as carried on by the representative member,

(aa) any business carried on by a member of the group who is a taxable intermediary shall be treated as carried on by the representative member,

(b) the representative member shall be taken to be the insurer in relation to any taxable insurance contract as regards which a member of the group is the actual insurer,

(bb) the representative member shall be taken to be the taxable intermediary in relation to any taxable intermediary’s fees as regards which a member of the group is the actual taxable intermediary,

(c) any receipt by a member of the group of a premium under a taxable insurance contract shall be taken to be a receipt by the representative member, and

(d) all members of the group shall be jointly and severally liable for any tax due from the representative member.

(2) Two or more bodies corporate are eligible to be treated as members of a group if each of them falls within subsection (3) below and—

(a) one of them controls each of the others,

(b) one person (whether a body corporate or an individual) controls all of them, or

(3) A body falls within this subsection if it is resident in the United Kingdom or it has an established place of business in the United Kingdom.

(4) Where an application to that effect is made to the Commissioners with respect to two or more bodies corporate eligible to be treated as members of a group, then—

(a) from the beginning of an accounting period they shall be so treated, and

(b) one of them shall be the representative member,

unless the Commissioners refuse the application; and the Commissioners shall not refuse the application unless it appears to them necessary to do so for the protection of the revenue.

(5) Where any bodies corporate are treated as members of a group and an application to that effect is made to the Commissioners, then, from the beginning of an accounting period—

(a) a further body eligible to be so treated shall be included among the bodies so treated,

(b) a body corporate shall be excluded from the bodies so treated,

(d) the bodies corporate shall no longer be treated as members of a group,

unless the application is to the effect mentioned in paragraph (a) or (c) above and the Commissioners refuse the application.

(6) The Commissioners may refuse an application under subsection (5)(a) or (c) above only if it appears to them necessary to do so for the protection of the revenue.

(7) Where a body corporate is treated as a member of a group as being controlled by any person and it appears to the Commissioners that it has ceased to be so controlled, they shall, by notice given to that person, terminate that treatment from such date as may be specified in the notice.

(8) An application under this section with respect to any bodies corporate must be made by one of those bodies or by the person controlling them and must be made not less than 90 days before the date from which it is to take effect, or at such later time as the Commissioners may allow.

(9) For the purposes of this section a body corporate shall be taken to control another body corporate if it is empowered by statute to control that body’s activities or if it is that body’s holding company within the meaning of section 1159 of and Schedule 6 to the Companies Act 2006 ; and an individual or individuals shall be taken to control a body corporate if he or they, were he or they a company, would be that body’s holding company within the meaning of those provisions .

Information, powers, penalties, etc.

64

Schedule 7 to this Act (which contains provisions relating to information, powers, penalties and other matters) shall have effect.

Liability of insured in certain cases.

65

(1) Regulations may make provision under this section with regard to any case where at any time ...the insurer—

(a) does not have any business establishment or other fixed establishment in the United Kingdom, and

(b) is established in a country or territory in respect of which it appears to the Commissioners that the condition in subsection (1A) below is met.

(1A) The condition mentioned in subsection (1)(b) above is that there are no arrangements in relation to the country or territory relating to insurance premium tax which—

(a) have effect by virtue of an Order in Council under section 173 of the Finance Act 2006, and

(b) contain provision of a kind mentioned in subsection (2)(a) and (b) of that section.

(2) Regulations may make provision allowing notice to be served in accordance with the regulations on—

(a) the person who is insured under a taxable insurance contract, if there is one insured person, or

(b) one or more of the persons who are insured under a taxable insurance contract, if there are two or more insured persons;

and a notice so served is referred to in this section as a liability notice.

(3) Regulations may provide that if a liability notice has been served in accordance with the regulations—

(a) the Commissioners may assess to the best of their judgment the amount of any tax due in respect of premiums received by the insurer under the contract concerned after the material date and before the date of the assessment, and

(b) that amount shall be deemed to be the amount of tax so due.

(4) The material date is—

(a) where there is one person on whom a liability notice has been served in respect of the contract, the date when the notice was served or such later date as may be specified in the notice;

(b) where there are two or more persons on whom liability notices have been served in respect of the contract, the date when the last of the notices was served or such later date as may be specified in the notices.

(5) Regulations may provide that where—

(a) an assessment is made in respect of a contract under provision included in the regulations by virtue of subsection (3) above, and

(b) the assessment is notified to the person, or each of the persons, on whom a liability notice in respect of the contract has been served,

the persons mentioned in subsection (6) below shall be jointly and severally liable to pay the tax assessed, and that tax shall be recoverable accordingly.

(6) The persons are—

(a) the person or persons mentioned in subsection (5)(b) above, and

(b) the insurer.

(7) Where regulations make provision under subsection (5) above they must also provide that any provision made under that subsection shall not apply if, or to the extent that, the assessment has subsequently been withdrawn or reduced.

(8) Regulations may make provision as to the time within which, and the manner in which, tax which has been assessed is to be paid.

(9) Where any amount is recovered from an insured person by virtue of regulations made under this section, the insurer shall be liable to pay to the insured person an amount equal to the amount recovered; and regulations may make provision requiring an insurer to pay interest where this subsection applies.

(10) Regulations may make provision for adjustments to be made of a person’s liability in any case where—

(a) an assessment is made under section 56 above in relation to the insurer, and

(b) an assessment made by virtue of regulations under this section relates to premiums received (or assumed for the purposes of the assessment to be received) within a period which corresponds to any extent with the accounting period to which the assessment under section 56 relates.

(11) Regulations may make provision as regards a case where—

(a) an assessment made in respect of a contract by virtue of regulations under this section relates to premiums received (or assumed for the purposes of the assessment to be received) within a given period, and

(b) an amount of tax is paid by the insurer in respect of an accounting period which corresponds to any extent with that period;

and the regulations may include provision for determining whether, or how much of, any of the tax paid as mentioned in paragraph (b) above is attributable to premiums received under the contract in the period mentioned in paragraph (a) above.

(12) Regulations may—

(a) make provision requiring the Commissioners, in prescribed circumstances, to furnish prescribed information to an insured person;

(b) make provision requiring any person on whom a liability notice has been served to keep records, to furnish information, or to produce documents for inspection or cause documents to be produced for inspection;

(c) make such provision as the Commissioners think is reasonable for the purpose of facilitating the recovery of tax from the persons having joint and several liability (rather than from the insurer alone);

(d) modify the effect of any provision of this Part.

(13) Regulations may provide for an insured person to be liable to pay tax assessed by virtue of the regulations notwithstanding that he has already paid an amount representing tax as part of a premium.

Directions as to amounts of premiums.

66

(1) This section applies where—

(a) anything is received by way of premium under a taxable insurance contract, and

(b) the amount of the premium is less than it would be if it were received under the contract in open market conditions.

(2) The Commissioners may direct that the amount of the premium shall be taken for the purposes of this Part to be such amount as it would be if it were received under the contract in open market conditions.

(3) A direction under subsection (2) above shall be given by notice in writing to the insurer, and no direction may be given more than three years after the time of the receipt.

(4) Where the Commissioners make a direction under subsection (2) above in the case of a contract they may also direct that if—

(a) anything is received by way of premium under the contract after the giving of the notice or after such later date as may be specified in the notice, and

(b) the amount of the premium is less than it would be if it were received under the contract in open market conditions,

the amount of the premium shall be taken for the purposes of this Part to be such amount as it would be if it were received under the contract in open market conditions.

(5) For the purposes of this section a premium is received in open market conditions if it is received—

(a) by an insurer standing in no such relationship with the insured person as would affect the premium, and

(b) in circumstances where there is no other contract or arrangement affecting the parties.

(6) For the purposes of this section it is immaterial whether what is received by way of premium is money or something other than money or both.

Rate increases: deemed date of receipt of certain premiums

66A

(1) This section applies where a Minister of the Crown announces a proposed increase in the rate at which tax is to be charged on a premium if it is received by the insurer on or after a date specified in the announcement (“the change date”).

(2) This section applies whether or not the announcement includes an announcement of a proposed exception from the increase (for example, for premiums in respect of risks for which the period of cover begins before the change date).

(3) Subsection (4) applies where—

(a) a premium under a contract of insurance is received by the insurer on or after the date of the announcement and before the change date, and

(b) the period of cover for the risk begins on or after the change date.

(4) For the purposes of this Part the premium is to be taken to be received on the change date.

(5) Subsection (6) applies where—

(a) a premium under a contract of insurance is received by the insurer on or after the date of the announcement and before the change date,

(b) the period of cover for the risk—

(i) begins before the change date, and

(ii) ends on or after the first anniversary of the change date (“the first anniversary”), and

(c) the premium, or any part of it, is attributable to such of the period of cover as falls on or after the first anniversary.

(6) For the purposes of this Part—

(a) so much of the premium as is attributable to such of the period of cover as falls on or after the first anniversary is to be taken to be received on the change date, and

(b) so much as is so attributable is to be taken to be a separate premium.

(7) In determining whether the condition in subsection (3)(a) or (5)(a) is met, regulations under section 68(3) or (7) apply as they would apart from this section.

(8) But where subsection (4) or (6) applies—

(a) that subsection has effect despite anything in section 68 or regulations under that section, and

(b) any regulations under section 68 have effect as if the entry made in the accounts of the insurer showing the premium as due to the insurer had been made as at the change date.

(9) A premium treated by subsection (6) as received on the change date is not to be taken to fall within any exception, from an increase announced by the announcement, for premiums in respect of risks for which the period of cover begins before the change date.

(10) Any attribution under this section is to be made on such basis as is just and reasonable.

(11) In this section—

“increase”, in relation to the rate of tax, includes the imposition of a charge to tax by adding to the descriptions of contract which are taxable insurance contracts;

“Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975.

Section 66A: exceptions and apportionments

66B

(1) Section 66A(3) and (4) do not apply in relation to a premium if the risk to which that premium relates belongs to a class of risk as regards which the normal practice is for a premium to be received by or on behalf of the insurer before the date when cover begins.

(2) Section 66A(5) and (6) do not apply in relation to a premium if the risk to which that premium relates belongs to a class of risk as regards which the normal practice is for cover to be provided for a period of more than twelve months.

(3) If a contract relates to more than one risk, then in the application of section 66A(3) and (4) or 66A(5) and (6)—

(a) the reference in section 66A(3)(b) or (5)(b) to the risk is to be read as a reference to any given risk,

(b) so much of the premium as is attributable to any given risk is to be taken for the purposes of section 66A(3) and (4) or 66A(5) and (6) to be a separate premium relating to that risk,

(d) any further attribution required by section 66A(5) and (6) is to be made accordingly,

and subsections (1) and (2) and section 66A(9) apply accordingly.

(4) Any attribution under this section is to be made on such basis as is just and reasonable.

Rate changes: premiums relating to more than one period of cover

66C

(1) This section applies if any Act—

(a) makes an amendment of section 51(2)(a) or (b) which alters the higher rate or standard rate (“the relevant rate”),

(b) provides for the amendment to have effect in relation to a premium falling to be regarded for the purposes of this Part as received under a taxable insurance contract by an insurer on or after a particular date (“the change date”), and

(c) makes provision that excepts from that amendment a premium which is in respect of a risk for which the period of cover begins before the change date.

(2) Subsection (3) applies if a premium which is liable to tax at the relevant rate, and which falls to be regarded for the purposes of this Part as received under a taxable insurance contract by an insurer on or after the change date, is—

(a) partly in respect of a risk for which the period of cover begins before the change date, and

(b) partly in respect of a risk for which the period of cover begins on or after that date.

(3) So much of the premium as is attributable to the risk for which the period of cover begins on or after the change date is to be treated for the purposes of this Part and the provision mentioned in subsection (1)(c) as a separate premium.

(4) Where a premium is in respect of a relevant rate matter and also a matter that is not a relevant rate matter—

(a) for the purposes of the provision mentioned in subsection (1)(c), the premium is to be treated as in respect of a risk for which the period of cover begins before the change date if the part of it attributable to the relevant rate matter is in respect of such a risk, and

(b) the reference in subsection (2) to a premium which is liable to tax at the relevant rate is to be read as a reference to so much of the premium as is attributable to the relevant rate matter (and subsection (3) is to be read accordingly).

(5) If premiums of any description are excluded from the exception mentioned in subsection (1)(c), nothing in subsections (2) to (4) applies to a premium of that description.

(6) Nothing in subsection (4) applies to an excepted premium (within the meaning given by section 69A).

(7) Any attribution under this section is to be made on such basis as is just and reasonable.

(8) In this section a “relevant rate matter” means—

(a) where the relevant rate is the standard rate, a standard rate matter as defined by section 69(12)(c);

(b) where the relevant rate is the higher rate, a higher rate matter as defined by section 69(12)(d).

(9) In subsection (1) the reference to any Act includes a resolution which has statutory effect under the Provisional Collection of Taxes Act 1968.

Deemed date of receipt of certain premiums.

67

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

Announced increase in rate of tax: certain premiums treated as received on date of increase.

67A

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

Announced increase in rate of tax: certain contracts treated as made on date of increase.

67B

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

Announced increase in rate of tax: exceptions and apportionments.

67C

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

Special accounting schemes.

68

(1) Regulations may make provision establishing a scheme in accordance with the following provisions of this section; and in this section “a relevant accounting period”, in relation to an insurer, means an accounting period as regards which the scheme applies to the insurer.

(2) Regulations may provide that if an insurer notifies the Commissioners that the scheme should apply to him as regards accounting periods beginning on or after a date specified in the notification and prescribed conditions are fulfilled, then, subject to any provision made under subsection (9) below, the scheme shall apply to the insurer as regards accounting periods beginning on or after that date.

(3) Regulations may provide that where—

(a) an entry is made in the accounts of an insurer showing a premium under a taxable insurance contract as due to him, and

(b) the entry is made as at a particular date which falls within a relevant accounting period,

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