Finance Act 2000

Section 106 of the Taxation of Chargeable Gains Act 1992

18

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Section 116 of the Taxation of Chargeable Gains Act 1992

19

• (1) In section 116 of the Taxation of Chargeable Gains Act 1992 (reorganisations, conversions and reconstructions), in subsection (11) for “171(1) or 172" substitute “ or 171(1) ”.

• (2) The above amendment has effect in accordance with paragraph 3(2).

Section 117A of the Taxation of Chargeable Gains Act 1992

20

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Section 117B of the Taxation of Chargeable Gains Act 1992

21

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Section 138A of the Taxation of Chargeable Gains Act 1992

22

The main amendments have effect for the purposes of section 138A of the Taxation of Chargeable Gains Act 1992 (use of earn-out rights for exchange of securities) in relation to rights conferred on or after 1st April 2000.

Section 140 of the Taxation of Chargeable Gains Act 1992

23

• (1) In section 140 of the Taxation of Chargeable Gains Act 1992 (postponement of charge on transfer of assets to non-resident company), in subsection (6)(b) for “apart from section 170(2)(a) and (9)" substitute “ if subsections (1)(b) and (1A) of that section and section 170(9) were disregarded ”.

• (2) The above amendment has effect in relation to disposals on or after 1st April 2000.

Section 176 of the Taxation of Chargeable Gains Act 1992

24

• (1) In section 176 of the Taxation of Chargeable Gains Act 1992 (depreciatory transactions within a group), in subsection (7), paragraph (c) and the word “and" immediately preceding it shall cease to have effect.

• (2) The above amendment, and the main amendments so far as they apply for the purposes of section 176, have effect in relation to cases in which the depreciatory transaction (within the meaning of that section) is on or after 1st April 2000.

Section 177 of the Taxation of Chargeable Gains Act 1992

25

• (1) In section 177 of the Taxation of Chargeable Gains Act 1992 (dividend stripping), in subsection (2) for “171 or 172" substitute “ or 171 ”.

• (2) The above amendment, and the main amendments so far as they apply for the purposes of section 177, have effect in relation to disposals on or after 1st April 2000.

Section 178 of the Taxation of Chargeable Gains Act 1992

26

Section 178 of the Taxation of Chargeable Gains Act 1992 (which is spent) shall cease to have effect.

Section 180 of the Taxation of Chargeable Gains Act 1992

27

Section 180 of the Taxation of Chargeable Gains Act 1992 (which is spent) shall cease to have effect.

Section 181 of the Taxation of Chargeable Gains Act 1992

28

• (1) In section 181 of the Taxation of Chargeable Gains Act 1992 (exemption from de-grouping charge in the case of certain mergers)—

• (a) in subsection (1), for “neither section 178 nor section 179 shall" substitute “ section 179 shall not ”; and

• (b) subsection (5) shall cease to have effect.

• (2) The amendment made by sub-paragraph (1)(b) above, and the main amendments so far as they apply for the purposes of section 181, have effect in relation to cases in which the company ceases to be a member of a group on or after 1st April 2000.

Section 192 of the Taxation of Chargeable Gains Act 1992

29

In section 192 of the Taxation of Chargeable Gains Act 1992 (tax exempt distributions), in subsection (3) for “neither section 178 nor 179 shall" substitute “ section 179 shall not ”.

Section 211 of the Taxation of Chargeable Gains Act 1992

30

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

Section 216 of the Taxation of Chargeable Gains Act 1992

31

The main amendments have effect for the purposes of section 216 of the Taxation of Chargeable Gains Act 1992 (assets transferred from building society to company) in relation to transfers on or after 1st April 2000.

Section 217C of the Taxation of Chargeable Gains Act 1992

32

• (1) In section 217C of the Taxation of Chargeable Gains Act 1992 (disposal of assets by incorporated friendly society), for subsection (2) substitute—

(2) If the disposal by the incorporated society is in the circumstances mentioned in subsection (8) of section 41, the disposal to which section 217A(3) applies shall for the purposes of that subsection be taken to have been a previous transfer of the asset in such circumstances.

.

• (2) The above amendment has effect in relation to cases in which the disposal by the incorporated society is on or after 1st April 2000.

Section 228 of the Taxation of Chargeable Gains Act 1992

33

The main amendments have effect for the purposes of section 228 of the Taxation of Chargeable Gains Act 1992 (conditions for roll-over relief: supplementary) in relation to disposals on or after 1st April 2000.

Section 253 of the Taxation of Chargeable Gains Act 1992

34

The main amendments have effect for the purposes of section 253 of the Taxation of Chargeable Gains Act 1992 (relief for loans to traders)—

• (a) in relation to loans made on or after 1st April 2000;

• (b) in relation to guarantees given on or after that date.

Section 276 of the Taxation of Chargeable Gains Act 1992

35

• (1) In section 276 of the Taxation of Chargeable Gains Act 1992 (application of the 1992 Act to the territorial sea and the continental shelf), for subsection (8) substitute—

(8) The provisions specified in subsection (9) below shall apply in relation to a disposal of exploration or exploitation rights or exploration or exploitation assets if (and only if) the disposal is— (a) by a company resident in a territory outside the United Kingdom to a company resident in the same territory, (b) by a company resident in the United Kingdom to another company which is so resident, or (c) by a company which is not resident in the United Kingdom to another company which is resident there. (9) Those provisions are— (a) section 41(8), (b) section 171 (except subsections (1)(b) and (1A)), (c) section 173 (with the omission of the words “to which this section applies" in subsections (1)(a) and (2)(a) and “such" in subsections (1)(c) and (2)(c) and with the omission of subsection (3)), (d) section 174(4) (with the substitution of “at a time when both were members of the group" for “in a transfer to which section 171(1) applied”), (e) section 179 (except subsections (1)(b) and (1A)), and (f) section 181. (10) The provisions specified in subsection (9) above shall apply in accordance with subsection (8) above with the following modifications— (a) for the purposes of paragraph (a) of subsection (9) above, section 41(8) applies as if section 170 applied, for the purposes of section 171, with the omission of subsection (9), and (b) for the purposes of paragraphs (b) to (f) of subsection (9) above, the provisions specified in those paragraphs apply as if in section 170 subsection (9) were omitted.

• (2) The above amendment has effect in cases in which section 41, 171, 173, 174(4), 179 or 181, as the case may be, has effect as amended by this Schedule.

Schedule A1 to the Taxation of Chargeable Gains Act 1992

36

The main amendments have effect for the purposes of paragraph 11 of Schedule A1 to the Taxation of Chargeable Gains Act 1992 (rules for application of taper relief) in relation to any determination whether, at any time on or after 1st April 2000, a company is a 51 per cent subsidiary of another company.

Schedule 2 to the Taxation of Chargeable Gains Act 1992

37

The main amendments have effect for the purposes of paragraph 5 of Schedule 2 to the Taxation of Chargeable Gains Act 1992 (disposals of assets held on 6th April 1965) in relation to any determination whether, at any time on or after 1st April 2000, a company is a member, or the principal company, of a group of companies.

Schedule 3 to the Taxation of Chargeable Gains Act 1992

38

The main amendments have effect for the purposes of paragraphs 8 and 9 of Schedule 3 to the Taxation of Chargeable Gains Act 1992 (disposals of assets held on 31st March 1982: supplementary provisions) in relation to any determination whether, at any time on or after 1st April 2000, a company is a member, or the principal company, of a group of companies.

Schedule 7B to the Taxation of Chargeable Gains Act 1992

39

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Schedule 7C to the Taxation of Chargeable Gains Act 1992

40

The main amendments have effect for the purposes of Schedule 7C to the Taxation of Chargeable Gains Act 1992 (which is inserted by virtue of section 48 of this Act).

Section 136 of the Finance Act 1993

41

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Section 136A of the Finance Act 1993

42

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Schedule 17 to the Finance Act 1993

43

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Schedule 9 to the Finance Act 1996

44

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Schedule 15 to the Finance Act 1996

45

• (1) In Schedule 15 to the Finance Act 1996 (loan relationships: savings and transitional provisions), in paragraph 8(2) for “171(1) or 172" substitute “ or 171(1) ”.

• (2) The above amendment has effect in accordance with paragraph 3(2) above.

Part III — Transitional provisions

46

• (1) For the purposes of this paragraph—

• (a) references to a company which was a member of an old group are references to it being, immediately before the time when the main amendments have effect in accordance with the preceding provisions of this Schedule, a member of a group for the purposes of section 170 of the Taxation of Chargeable Gains Act 1992 (as it stood before the main amendments), and

• (b) references to a company which is a member of a new group are references to it being, immediately after that time, a member of a group for the purposes of that section (as amended by the main amendments).

• (2) Where the same two or more companies were members of an old group and are members of a new group, those groups shall be regarded as the same group for the purposes of the provisions amended by this Schedule in relation to which the main amendments have effect.

• (3) Sub-paragraph (2) above applies irrespective of whether the new group includes companies which were not members of the old group.

• (4) Sub-paragraph (5) below applies in relation to a company which—

• (a) was a member of an old group, but

• (b) is not a member of a new group by reason only that—

• (i) the principal company of the old group is not the principal company of the new group, and

• (ii) the company in question is not an effective 51 per cent subsidiary of the principal company of the new group.

• (5) For the purposes of the provisions amended by this Schedule in relation to which the main amendments have effect, section 170(3)(b) of the Taxation of Chargeable Gains Act 1992 shall not apply in relation to the company for so long as it remains an effective 51 per cent subsidiary of the company which was the principal company of the old group.

• (6) Expressions used in this paragraph and in section 170 of the Taxation of Chargeable Gains Act 1992 shall be construed for the purposes of this paragraph in accordance with that section.

SCHEDULE 30

Power to make treaty provision for matching credit for tax spared in foreign country

1

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

Matching credit for tax spared below immediate overseas subsidiary: treaty relief

2

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

Matching credit for tax spared below immediate overseas subsidiary: unilateral relief

3

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

Relief for persons resident outside the UK who have branches or agencies in the UK

4

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

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

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

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

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

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

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

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

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

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

No double relief etc.

5

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Limits on credit: minimisation of the foreign tax

6

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Foreign tax on amounts underlying non-trading credits

7

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Restriction of relief for underlying tax

8

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Computation of underlying tax: the relevant profits

9

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

Dividends paid between related companies but not covered by arrangements

10

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Restriction of relief for underlying tax: dividends paid between related companies

11

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Dividends paid out of transferred profits

12

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

Separate streaming of dividend so far as representing an ADP dividend of a CFC

13

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UK insurance companies trading overseas: repeal of section 802

14

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Underlying tax: foreign taxation of group as a single entity

15

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Life assurance companies with overseas branches etc: restriction of credit

16

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Allocation of foreign tax to different categories of insurance business

17

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Allocation of expenses etc in a computation under Case I of Schedule D

18

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Interpretation of sections 804A to 804E

19

• (1) After section 804E of the Taxes Act 1988 insert—

(804F) Expressions used in sections 804A to 804E and in Chapter I of Part XII have the same meaning in those sections as in that Chapter.

• (2) The section inserted by sub-paragraph (1)—

• (a) so far as relating to sections 804A and 804B, has effect in relation to accounting periods beginning on or after 1st April 2000; and

• (b) so far as relating to sections 804C to 804E, has effect in relation to periods of account beginning on or after 1st April 2000.

Time limits for claims for credit relief

20

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Foreign dividends: onshore pooling and utilisation of certain unrelieved foreign tax

21

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Application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere

22

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Unrelieved foreign tax: profits of overseas branch or agency

23

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Foreign tax on amounts underlying non-trading credits

24

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

Royalties: special relationship

25

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Postponement of capital allowances to obtain double taxation relief

26

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Time limits where reduction under s.811 rendered excessive or insufficient

27

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Mutual agreement procedure

28

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Restriction of interest on repayment of tax resulting from carry back of relievable tax

29

• (1) Amend section 826 of the Taxes Act 1988 as follows.

• (2) After subsection (7B) insert—

(7BB) Subject to subsection (7BC) below, in any case where— (a) within the meaning of section 806D, any relievable underlying tax or relievable withholding tax arises in an accounting period of a company (“the later period”), (b) pursuant to a claim under section 806G, the whole or any part of that tax is treated as mentioned in section 806D(4)(c) or (5)(c) in relation to the single related dividend or the single unrelated dividend arising in an earlier accounting period (“the earlier period”), and (c) a repayment falls to be made of corporation tax paid for the earlier period or of income tax in respect of a payment received by the company in that period, then, in determining the amount of interest (if any) payable under this section on the repayment referred to in paragraph (c) above, no account shall be taken of so much of the amount of the repayment as falls to be made as a result of the claim under section 806G, except so far as concerns interest for any time after the date on which any corporation tax for the later period became due and payable (as mentioned in subsection (7D) below). (7BC) Where, in a case falling within subsection (7A)(a) and (b) above— (a) as a result of the claim under section 393A(1), an amount or increased amount of eligible unrelieved foreign tax arises for the purposes of section 806A(1), and (b) pursuant to a claim under section 806G, the whole or any part of an amount of relievable underlying tax or relievable withholding tax is treated as mentioned in section 806D(4)(c) or (5)(c) in relation to the single related dividend or the single unrelated dividend arising in an accounting period before the earlier period, then subsection (7BB) above shall have effect in relation to the claim under section 806G as if the reference in the words after paragraph (c) to the later period within the meaning of that subsection were a reference to the period which, in relation to the claim under section 393A(1), would be the later period for the purposes of subsection (7A) above.

• (3) In subsection (7D) (date on which corporation tax is due and payable for the purposes of certain provisions) after “(7B)" insert “ , (7BB) ”.

• (4) In subsection (7E) (which, for the purposes of certain provisions, restricts the power in section 59A of the Taxes Management Act 1970 to alter the date on which corporation tax is due and payable) after “(7B),", in both places where it occurs, insert “ (7BB), ”.

Time limits where deduction under s.278 of the 1992 Act rendered excessive or insufficient

30

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SCHEDULE 31

Introductory

1

Amend Chapter IV of Part XVII of the Taxes Act 1988 as follows.

Conditions for company to be controlled foreign company

2

• (1) Amend section 747 as follows.

• (2) After subsection (1) insert—

(1A) A company which would not, apart from this subsection, fall to be regarded as controlled by persons resident in the United Kingdom shall be taken for the purposes of this Chapter to be so controlled if— (a) there are two persons who, taken together, control the company; (b) one of those persons is resident in the United Kingdom and is a person in whose case the 40 per cent test in section 755D(3) is satisfied; and (c) the other is a person in whose case the 40 per cent test in section 755D(4) is satisfied.

Designer rate tax provisions: deemed lower level of taxation

3

After section 750 insert—

(750A) (1) Where— (a) in any accounting period a company is to be regarded by virtue of any of subsections (1) to (4) of section 749 as resident in a particular territory outside the United Kingdom, and (b) within the meaning of section 750(1), the local tax in respect of the profits arising to the company in that accounting period is equal to or greater than three-quarters of the corresponding United Kingdom tax on those profits, but (c) that local tax is determined under designer rate tax provisions, the company shall be taken for the purposes of this Chapter to be subject to a lower level of taxation in that territory in that accounting period. (2) In subsection (1) above “designer rate tax provisions” means provisions— (a) which appear to the Board to be designed to enable companies to exercise significant control over the amount of tax which they pay; and (b) which are specified in regulations made by the Board. (3) Regulations under subsection (2) above— (a) may make different provision for different cases or with respect to different territories; and (b) may contain such supplementary, incidental, consequential or transitional provision as the Board may think fit. (4) The first regulations under subsection (2) above may make provision having effect in relation to accounting periods beginning not more than fifteen months before the date on which the regulations are made.

“Control" and the two “40 per cent" tests

4

• (1) After section 755C insert—

(755D) (1) For the purposes of this Chapter “control", in relation to a company, means the power of a person to secure— (a) by means of the holding of shares or the possession of voting power in or in relation to the company or any other company, or (b) by virtue of any powers conferred by the articles of association or other document regulating the company or any other company, that the affairs of the company are conducted in accordance with his wishes. (2) Where two or more persons, taken together, have the power mentioned in subsection (1) above, they shall be taken for the purposes of this Chapter to control the company. (3) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing at least 40 per cent of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company. (4) The 40 per cent test in this subsection is satisfied in the case of one of two persons who, taken together, control a company if that one of them has interests, rights and powers representing— (a) at least 40 per cent, but (b) not more than 55 per cent, of the holdings, rights and powers in respect of which the pair of them fall to be taken as controlling the company. (5) For the purposes of this Chapter any question— (a) whether a company is controlled by a person, or by two or more persons taken together, or (b) whether, in the case of any company, the applicable 40 per cent test is satisfied in the case of each of two persons who, taken together, control the company, shall be determined after attributing to each of the persons all the rights and powers mentioned in subsection (6) below that are not already attributed to that person for the purposes of subsections (1) to (4) above. (6) The rights and powers referred to in subsection (5) above are— (a) rights and powers which the person is entitled to acquire at a future date or which he will, at a future date, become entitled to acquire; (b) rights and powers of other persons, to the extent that they are rights or powers falling within subsection (7) below; (c) if the person is resident in the United Kingdom, rights and powers of any person who is resident in the United Kingdom and connected with the person; and (d) if the person is resident in the United Kingdom, rights and powers which for the purposes of subsection (5) above would be attributed to a person who is resident in the United Kingdom and connected with the person (a “UK connected person”) if the UK connected person were himself the person. (7) Rights and powers fall within this subsection to the extent that they— (a) are required, or may be required, to be exercised in any one or more of the following ways, that is to say— (i) on behalf of the person; (ii) under the direction of the person; or (iii) for the benefit of the person; and (b) are not confined, in a case where a loan has been made by one person to another, to rights and powers conferred in relation to property of the borrower by the terms of any security relating to the loan. (8) In subsections (6)(b) to (d) and (7) above, the references to a person’s rights and powers include references to any rights or powers which he either— (a) is entitled to acquire at a future date, or (b) will, at a future date, become entitled to acquire. (9) In paragraph (d) of subsection (6) above, the reference to rights and powers which would be attributed to a UK connected person if he were the person includes a reference to rights and powers which, by applying that paragraph wherever one person resident in the United Kingdom is connected with another person, would be so attributed to him through a number of persons each of whom is resident in the United Kingdom and connected with at least one of the others. (10) In determining for the purposes of this section whether one person is connected with another in relation to a company, subsection (7) of section 839 shall be disregarded. (11) References in this section— (a) to rights and powers of a person, or (b) to rights and powers which a person is or will become entitled to acquire, include references to rights or powers which are exercisable by that person, or (when acquired by that person) will be exercisable, only jointly with one or more other persons.

• (2) In consequence of sub-paragraph (1), in section 756(3) (application of provisions of Part XI)—

• (a) omit paragraph (a); and

• (b) omit the words following paragraph (b).

Exempt activities: wholesale, distributive, financial or service business

5

• (1) In Part II of Schedule 25 (exempt activities) amend paragraph 6 as follows.

• (2) In sub-paragraph (2)(b) (company mainly engaged in wholesale, distributive or financial business: percentage of gross trading receipts from connected persons etc)—

• (a) for “or financial" substitute “ financial or service ”; and

• (b) for the words from “connected" to the end substitute “ persons falling within sub-paragraph (2A) below. ”

• (3) After sub-paragraph (2) insert—

(2A) Those persons are— (a) persons who are connected or associated with the company; (b) persons who have a 25 per cent assessable interest in the company in the case of the accounting period in question; and (c) if the company is a controlled foreign company in that accounting period by virtue of subsection (1A) of section 747, persons who are connected or associated with either or both of the two persons mentioned in that subsection.

Local holding companies

6

• (1) In Part II of Schedule 25 (exempt activities) amend paragraph 6 as follows.

• (2) In sub-paragraph (3) (local holding companies) after “90 per cent of its gross income during the accounting period in question" insert “ is received by it in the territory in which it is resident and ”.

Other holding companies

7

• (1) In Part II of Schedule 25 (exempt activities) amend paragraph 6 as follows.

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

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

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

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

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

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

• (8) In sub-paragraph (5) (interpretation of sub-paragraphs (3) to (4B)) after “a reference to a trading company" insert

to which sub-paragraph (5ZA) or (5ZB) below applies. (5ZA) This sub-paragraph applies to a trading company

.

• (9) After sub-paragraph (5ZA) insert—

(5ZB) This sub-paragraph applies to a trading company if— (a) it is a controlled foreign company by virtue of subsection (1A) of section 747; and (b) the person who satisfies the requirement in paragraph (b) of that subsection in relation to the company also controls the holding company or superior holding company.

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Businesses to which requirement as to derivation of receipts applies

8

• (1) In Part II of Schedule 25 (exempt activities) amend paragraph 11 as follows.

• (2) In sub-paragraph (1) (meaning of “wholesale, distributive or financial business” for purposes of paragraph 6(2)(b))—

• (a) in the opening words, for “or financial" substitute “ financial or service ”;

• (b) omit the word “and" immediately preceding paragraph (g); and

• (c) at the end of paragraph (g) add

; and (h) the provision of services not falling within any of the preceding paragraphs.

Commencement

9

• (1) Paragraph 2 has effect on and after 21st March 2000.

• (2) Paragraph 3 has effect in relation to any accounting period of a company resident outside the United Kingdom which begins on or after 6th October 1999.

• (3) Paragraph 4 has effect—

• (a) for the purpose of determining whether at any time on or after 21st March 2000 a company resident outside the United Kingdom is to be regarded for the purposes of Chapter IV of Part XVII of the Taxes Act 1988 as controlled by persons resident in the United Kingdom; and

• (b) for any accounting period of a company resident outside the United Kingdom which begins on or after 21st March 2000.

• (4) Paragraphs 5 to 8 have effect in relation to any accounting period of a controlled foreign company which begins on or after 21st March 2000.

• (5) In this paragraph “accounting period” and “controlled foreign company” have the same meaning as they have in Chapter IV of Part XVII of the Taxes Act 1988.

SCHEDULE 32

Introductory

1

In this Schedule—

• “additional duty”, in relation to an instrument, means additional stamp duty chargeable on the instrument as a result of section 116;

• “the appropriate amount of duty”, in relation to an instrument, means the stamp duty that would have been chargeable on the instrument if section 116 had been in force when it was executed; and

• “the commencement date” means 28th March 2000.

Instruments to which this Schedule applies

2

The instruments to which this Schedule applies are—

• (a) leases of land for a term of seven years, and

• (b) agreements for leases of land for a term of seven years,

executed on or after 1st October 1999 and before the commencement date.

Instruments which remain duly stamped

3

An instrument to which this Schedule applies which is stamped with the appropriate amount of duty is duly stamped, whenever it was executed.

Instruments which cease to be duly stamped

4

• (1) An instrument to which this Schedule applies which—

• (a) immediately before the commencement date was duly stamped, but

• (b) was stamped with less than the appropriate amount of duty,

ceases to be duly stamped on the commencement date.

• (2) Sub-paragraph (1) applies even if the instrument has been stamped in accordance with section 12(5) of the Stamp Act 1891 with a stamp denoting that it is duly stamped.

• (3) If an instrument ceases to be duly stamped on the commencement date as a result of sub-paragraph (1)—

• (a) section 12(6) of the Stamp Act 1891 (adjudicated instruments admissible in evidence) does not apply to it at any time when it is not duly stamped, and

• (b) section 14(1) of that Act (receipt in evidence of insufficiently stamped instruments if unpaid duty paid to court) does not apply to it at any time when it is not duly stamped, unless the unpaid duty and any interest or penalty is paid in accordance with that subsection.

Stamping following earlier adjudication

5

Section 12A(1) of the Stamp Act 1891 (adjudicated instruments not to be stamped other than in accordance with adjudication decision) does not prevent an instrument to which this Schedule applies which is stamped with less than the appropriate amount of duty from being stamped with additional duty.

Use of instruments in evidence, etc.

6

Section 14(4) of the Stamp Act 1891 (instruments not to be used unless duly stamped in accordance with law in force when executed) applies in relation to an instrument to which this Schedule applies as if, as respects any time on or after the commencement date, the reference to the law in force at the time when it was executed were to the law in force on the commencement date.

Adjudication, interest and penalties

7

• (1) This paragraph applies for the purpose of applying sections 12 to 13B and 15 to 15B of the Stamp Act 1891 (adjudication by Commissioners and interest and penalties on late stamping) in relation to any additional duty chargeable on an instrument to which this Schedule applies.

• (2) Those sections continue to apply without modification as respects any other stamp duty chargeable on the instrument.

• (3) Those sections have effect as respects the additional duty as if—

• (a) the additional duty were the only stamp duty chargeable on the instrument;

• (b) the instrument had been executed on the commencement date; and

• (c) in the case of an instrument executed outside the United Kingdom and first received in the United Kingdom before the commencement date, the instrument had been first received in the United Kingdom on the commencement date.

• (4) Accordingly, those sections apply as respects additional duty as if—

• (a) references to duty were to additional duty;

• (b) references to stamping were to stamping with additional duty;

• (c) references to an instrument’s being stamped were to its being stamped with additional duty;

• (d) references to an instrument’s being duly stamped were to its being stamped with all the additional duty chargeable on it;

• (e) references to an instrument’s being unstamped were to its not being stamped with any additional duty;

• (f) references to an instrument’s being insufficiently stamped were to its being stamped with insufficient additional duty;

• (g) references to adjudication, or an appeal, under any of those sections were to adjudication or an appeal under the section in question as it has effect as respects additional duty; and

• (h) references to the maximum penalty were to the maximum penalty as respects additional duty.

SCHEDULE 33

Power of Treasury to make provision by regulations

1

• (1) The Treasury may if they consider it expedient in the public interest make provision by regulations for the variation of an existing stamp duty.

• (2) The power conferred by this paragraph includes, in particular, power to alter the descriptions of document in respect of which an existing stamp duty, or an existing rate or amount of duty, is chargeable.

• (3) The power to make regulations under this paragraph is exercisable by statutory instrument.

Power only to be used for cases involving land or shares etc.

2

• (1) The power conferred by paragraph 1 does not include power—

• (a) to vary the amount chargeable by way of stamp duty on an excepted instrument, or

• (b) to cause stamp duty to become chargeable on an excepted instrument.

• (2) For the purposes of this paragraph—

• (a) an “excepted instrument" is any document that is not a relevant property instrument, and

• (b) a “relevant property instrument" is a document that (whether or not it also relates to any other transaction) relates to a transaction that to any extent involves—

• (i) land, stock or marketable securities, or

• (ii) any estate or interest in land, stock or marketable securities.

Power not to be used to vary rates or thresholds

3

The power conferred by paragraph 1 does not, except as mentioned in paragraph 1(2), include power to vary—

• (a) the rate, or rates, of an existingad valorem stamp duty,

• (b) the amount of an existing fixed stamp duty,

• (c) any threshold specified in paragraph 4 of Schedule 13 to the Finance Act 1999 (rate bands for conveyance or transfer on sale), or

• (d) any threshold specified in paragraph 11 or 12 of that Schedule (duty on leases) in respect of rent or the term of a lease.

Approval of regulations by House of Commons

4

• (1) An instrument containing regulations under paragraph 1 shall be laid before the House of Commons after being made.

• (2) If the regulations are not approved by the House of Commons before the end of the period of 28 days beginning with the day on which they are made, they shall cease to have effect at the end of that period if they have not already ceased to have effect under sub-paragraph (3).

• (3) If on any day during that period of 28 days the House of Commons, in proceedings on a motion that (or to the effect that) the regulations be approved, comes to a decision rejecting the regulations, they shall cease to have effect at the end of that day.

• (4) Where regulations cease to have effect under sub-paragraph (2) or (3), their ceasing to have effect is without prejudice to anything done in reliance on them.

• (5) In reckoning any such period of 28 days take no account of any time during which—

• (a) Parliament is prorogued or dissolved, or

• (b) the House of Commons is adjourned for more than four days.

Claim for repayment if regulations not approved

5

• (1) Where regulations cease to have effect under paragraph 4(2) or (3), any amount paid by way of stamp duty, or interest or penalty on late stamping, that would not have been payable but for the regulations shall, on a claim, be repaid by the Commissioners.

• (2) Section 110 of the Finance Act 1999 (interest on repayment of duty overpaid etc.) applies to a repayment under this paragraph of any amount paid by way of stamp duty or penalty on late stamping.

In the case of a repayment under this paragraph, the relevant time for the purposes of that section is 30 days after the day on which the instrument in question was executed or, if later, the date on which the payment of duty or penalty was made.

• (3) A claim for repayment must be made within two years after the date of the instrument in question or, if it is not dated, within two years after its execution.

• (4) No repayment shall be made on a claim until the instrument in question has been produced to the Commissioners for such cancelling of stamps, and such stamping to denote the making of the repayment or the producing of the instrument under this paragraph, as the Commissioners consider appropriate.

• (5) Any repayment shall, subject to any regulations under sub-paragraph (6)(d), be made to such person as the Commissioners consider appropriate.

• (6) The Commissioners may make provision by regulations—

• (a) for varying the time limit having effect under sub-paragraph (3);

• (b) for varying or repealing the condition having effect under sub-paragraph (4);

• (c) as to any other conditions that must be met before repayment is made;

• (d) as to the person to whom repayment is to be made.

• (7) Regulations under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.

Use in evidence, etc. of instruments affected by regulations ceasing to have effect

6

• (1) Where regulations cease to have effect under paragraph 4(2) or (3), the following provisions apply to an instrument that—

• (a) was executed at a time when the regulations were in force, and

• (b) was at that time chargeable with any amount of stamp duty with which it would not have been chargeable apart from the regulations.

• (2) If the instrument was stamped while the regulations were in force, nothing done in pursuance of paragraph 5 (repayment of duty etc.) prevents it being treated for any purpose as duly stamped in accordance with the law in force at the time when it was executed.

• (3) If the instrument was not stamped while the regulations were in force, the law in force at the time when it was executed shall be deemed to have been what the law would have been apart from the regulations.

Temporary effect of regulations

7

• (1) Regulations under paragraph 1 shall not apply in relation to instruments executed after the end of—

• (a) the period of 18 months beginning with the day on which the regulations were made, or

• (b) such shorter period as may be specified in the regulations.

• (2) This does not affect the power to make further provision by regulations under paragraph 1 to the same or similar effect.

Power to make transitional etc. provision

8

Any power to make regulations under this Schedule includes power to make such transitional, supplementary and incidental provision as appears to the authority making the regulations to be necessary or expedient.

Interpretation

9

• (1) In relation to a bearer instrument (as defined in paragraph 3 of Schedule 15 to the Finance Act 1999), references in this Schedule to the execution of the instrument shall be read as references to its issue.

• (2) This Schedule shall be construed as one with the Stamp Act 1891.

SCHEDULE 34

Introduction

1

In this Schedule “intellectual property” has the same meaning as in section 129(1).

Stamp duty reduced in certain other cases

2

• (1) This paragraph applies where—

• (a) stamp duty under Part I of Schedule 13 to the Finance Act 1999 (conveyance or transfer on sale) is chargeable on an instrument, and

• (b) part of the property concerned consists of intellectual property.

• (2) In such a case—

• (a) the consideration in respect of which duty would otherwise be charged shall be apportioned, on such basis as is just and reasonable, as between the part of the property which consists of intellectual property and the part which does not, and

• (b) the instrument shall be charged only in respect of the consideration attributed to such of the property as is not intellectual property.

• (3) This paragraph applies to instruments executed on or after 28th March 2000.

Apportionment of consideration for stamp duty purposes

3

• (1) Where part of the property referred to in section 58(1) of the Stamp Act 1891 (consideration to be apportioned between different instruments as parties think fit) consists of intellectual property, that provision shall have effect as if “the parties think fit" read “is just and reasonable".

• (2) Where—

• (a) part of the property referred to in section 58(2) of the Stamp Act 1891 (property contracted to be purchased by two or more persons etc.) consists of intellectual property, and

• (b) both or (as the case may be) all the relevant persons are connected with one another,

that provision shall have effect as if the words from “for distinct parts of the consideration" to the end of the subsection read “, the consideration is to be apportioned in such manner as is just and reasonable, so that a distinct consideration for each separate part or parcel is set forth in the conveyance relating thereto, and such conveyance is to be charged withad valorem duty in respect of such distinct consideration.".

• (3) In a case where sub-paragraph (1) or (2) applies and the consideration is apportioned in a manner that is not just and reasonable, the enactments relating to stamp duty shall have effect as if—

• (a) the consideration had been apportioned in a manner that is just and reasonable, and

• (b) the amount of any distinct consideration set forth in any conveyance relating to a separate part or parcel of property were such amount as is found by a just and reasonable apportionment (and not the amount actually set forth).

• (4) For the purposes of sub-paragraph (2)—

• (a) a person is a relevant person if he is a person by or for whom the property is contracted to be purchased;

• (b) the question whether persons are connected with one another shall be determined in accordance with section 1122 of the Corporation Tax Act 2010.

• (5) In sub-paragraph (3) “the enactments relating to stamp duty” means the Stamp Act 1891 and any enactment amending or which is to be construed as one with that Act.

• (6) This paragraph applies to instruments executed on or after 28th March 2000.

Certification of instruments for stamp duty purposes

4

• (1) Intellectual property shall be disregarded for the purposes of paragraph 6 of Schedule 13 to the Finance Act 1999 (certification of instrument as not forming part of transaction or series of transactions exceeding specified amount).

• (2) Any statement as mentioned in paragraph 6(1) of that Schedule shall be construed as leaving out of account any matter which is to be so disregarded.

• (3) This paragraph applies to instruments executed on or after 28th March 2000.

Acquisition under statute

5

• (1) Section 12 of the Finance Act 1895 (property vested by Act or purchased under statutory powers) does not require any person who is authorised to purchase any property as mentioned in that section on or after 28th March 2000 to include any intellectual property in the instrument of conveyance required by that section to be produced to the Commissioners.

• (2) If the property consists wholly of intellectual property no instrument of conveyance need be produced to the Commissioners under that section.

• (3) This paragraph applies where the Act mentioned in that section, and by virtue of which property is vested or a person is authorised to purchase property, is passed on or after 28th March 2000.

SCHEDULE 35

1

Schedule A1 to the Value Added Tax Act 1994 (charge at reduced rate) has effect with the following amendments.

2

• (1) Paragraph 1(1) (supplies benefiting from the reduced rate) is amended as follows.

• (2) After paragraph (a) insert—

(aa) supplies of services of installing List A energy-saving materials in residential accommodation or in a building intended for use solely for a relevant charitable purpose; (ab) supplies of List A energy-saving materials by a person who installs those materials in residential accommodation or a building intended for use solely for a relevant charitable purpose;

.

• (3) In each of paragraphs (b) and (c), before “energy-saving materials" insert “ List B ”.

• (4) After paragraph (c) insert—

(d) supplies to a qualifying person of services of connecting, or reconnecting, a mains gas supply to the qualifying person’s sole or main residence; (e) supplies of goods made to a qualifying person by a person connecting, or reconnecting, a mains gas supply to the qualifying person’s sole or main residence, being goods whose installation is necessary for the connection, or reconnection, of the mains gas supply; (f) supplies to a qualifying person of services of installing, maintaining or repairing a central heating system in the qualifying person’s sole or main residence; (g) supplies of goods made to a qualifying person by a person installing, maintaining or repairing a central heating system in the qualifying person’s sole or main residence, being goods whose installation is necessary for the installation, maintenance or repair of the central heating system; (h) supplies consisting in the leasing of goods that form the whole or part of a central heating system installed in the sole or main residence of a qualifying person; (i) supplies of goods that form the whole or part of a central heating system installed in a qualifying person’s sole or main residence and that, immediately before being supplied, were goods leased under arrangements such that the consideration for the supplies consisting in the leasing of the goods was, in whole or in part, funded by a grant made under a relevant scheme; (j) supplies to a qualifying person of services of installing qualifying security goods in the qualifying person’s sole or main residence; and (k) supplies of qualifying security goods made to a qualifying person by a person who installs those goods in the qualifying person’s sole or main residence.

3

For paragraph 1(1A) (supplies benefit from reduced rate only if funded by grants) substitute—

(1A) A supply to which any of paragraphs (b) to (k) of sub-paragraph (1) above applies is a supply falling within this paragraph only to the extent that the consideration for it— (a) is, or is to be, funded by a grant made under a relevant scheme; or (b) in the case of a supply to which paragraph (i) of that sub-paragraph applies— (i) is, or is to be, funded by such a grant, or (ii) is a payment becoming due only by reason of the termination (whether by the passage of time or otherwise) of the leasing of the goods in question.

4

In paragraph 1(1B) (interpretation of sub-paragraph (1A))—

• (a) for “sub-paragraph (1)(b) or (c)" substitute “ any of paragraphs (b) to (k) of sub-paragraph (1) ”, and

• (b) for “neither of those sub-paragraphs" substitute “ none of those paragraphs ”.

5

In paragraph 5(3)(c), for “disability working allowance" substitute “ disabled person’s tax credit ”.

6

In paragraph 5(3)(d), for “family credit" substitute “ working families’ tax credit ”.

7

In paragraph 5 (interpretation), after sub-paragraph (3) insert—

(3A) For the purposes of paragraph 1(1)(aa) and (ab) above “residential accommodation” means— (a) a building, or part of a building, that consists of a dwelling or a number of dwellings; (b) a building, or part of a building, used for a relevant residential purpose; (c) a caravan used as a place of permanent habitation; or (d) a houseboat. (3B) For the purposes of paragraph 1(1)(aa) and (ab) above “use for a relevant charitable purpose” means use by a charity in either or both of the following ways, namely— (a) otherwise than in the course or furtherance of a business; (b) as a village hall or similarly in providing social or recreational facilities for a local community.

8

• (1) Paragraph 5(4) (meaning of “energy-saving materials”) is amended as follows.

• (2) For “For the purposes of paragraph 1(1)(b) and (c) above “energy-saving materials" means" substitute “ For the purposes of paragraph 1(1)(aa) and (ab) above “List A energy-saving materials" means ”.

• (3) In paragraph (c), after “central heating system controls" insert “ (including thermostatic radiator valves) ”.

• (4) After paragraph (d) insert—

(e) solar panels;

.

• (5) After paragraph (e) (which is inserted by sub-paragraph (4) above) insert—

(f) wind turbines; (g) water turbines.

9

In paragraph 5, after sub-paragraph (4) insert—

(4A) For the purposes of paragraph 1(1)(b) and (c) above “List B energy-saving materials” means any of the following— (a) gas-fired room heaters that are fitted with thermostatic controls; (b) electric storage heaters; (c) closed solid fuel fire cassettes; (d) electric dual immersion water heaters with foam-insulated hot water tanks; (e) gas-fired boilers; (f) oil-fired boilers; (g) radiators. (4B) For the purposes of paragraph 1(1)(j) and (k) above, “qualifying security goods” means any of the following— (a) locks or bolts for windows; (b) locks, bolts or security chains for doors; (c) spy holes; (d) smoke alarms.

10

In paragraph 5(5) (meaning of “relevant scheme”), for “paragraph 1(1A) and (1B)" substitute “ paragraph 1 ”.

SCHEDULE 36

The Schedule inserted after Schedule 3 to the Value Added Tax Act 1994 is as follows:

SCHEDULE 37

SCHEDULE 38

Introduction

1

• (1) Regulations may be made in accordance with this Schedule for providing incentives to use electronic communications—

• (a) for the purposes mentioned in section 132(1) of the Finance Act 1999 (power to provide for use of electronic communications for delivery of information and making of payments), or

• (b) for any other communications with the tax authorities or in connection with taxation matters.

• (2) The power to make regulations under this Schedule is conferred—

• (a) on the Commissioners of Inland Revenue in relation to matters which are under their care and management, and

• (b) on the Commissioners of Customs and Excise in relation to matters which are under their care and management.

Kinds of incentive

2

• (1) The incentives shall be of such description as may be provided for in the regulations.

• (2) They may, in particular, take the form of—

• (a) discounts;

• (b) the allowing of additional time to comply with any obligations under tax legislation (including obligations relating to the payment of tax or other amounts); or

• (c) the facility to deliver information or make payments at more convenient intervals.

Conditions of entitlement

3

• (1) The regulations may make provision as to the conditions of entitlement to an incentive.

• (2) They may, in particular, make entitlement conditional—

• (a) on the use of electronic communications for all communications or payments (or all communications and payments of a specified description) with, to or from the tax authority concerned, and

• (b) on the use of specified means of electronic communication or payment acceptable to the tax authority concerned.

• (3) The regulations may make provision for an appeal against a decision that the conditions of entitlement are not met.

Withdrawal of entitlement

4

• (1) The regulations may make provision for the withdrawal of an incentive in specified circumstances.

• (2) If they do, they may make provision—

• (a) for giving notice of the withdrawal,

• (b) for an appeal, and

• (c) for the recovery of an amount not exceeding the value of the incentive.

• (3) The regulations may provide that specified enactments relating to assessments, reviews, appeals and recovery of tax are to apply, with such adaptations as may be specified, in relation to the withdrawal of an incentive.

Power to authorise provision by directions

5

The regulations may authorise the making of any such provision as is mentioned in paragraph 3 or 4 by means of a specific or general direction given by the Commissioners of Inland Revenue or the Commissioners of Customs and Excise.

Power to provide for penalties

6

• (1) The regulations may provide for contravention of, or failure to comply with, a specified provision of any such regulations to attract a penalty of a specified amount not exceeding £1,000.

• (2) If they do, they may provide that specified enactments relating to penalties imposed in relation to any taxation matter (including enactments relating to assessments, review and appeals) are to apply, with or without modifications, in relation to penalties under the regulations.

General supplementary provisions

7

• (1) Power to make provision by regulations under this Schedule includes power—

• (a) to make different provision for different cases; and

• (b) to make such incidental, supplemental, consequential and transitional provision in connection with any provision contained in any such regulations as the persons exercising the power think fit.

• (2) The power to make regulations under this Schedule is exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

Interpretation

8

• (1) In this Schedule—

• “discount” includes payment;

• “electronic communications” includes any communications by means of an electronic communications service;

• “legislation” means any enactment, EU legislation or subordinate legislation;

• “payment” includes a repayment;

• “subordinate legislation” has the same meaning as in the Interpretation Act 1978;

• “taxation matter” means any of the matters under the care and management of the Commissioners of Inland Revenue or the Commissioners of Customs and Excise;

• “tax authorities” means—the Commissioners of Inland Revenue or the Commissioners of Customs and Excise,any officer of either body of Commissioners; orany other person who for the purposes of electronic communications is acting under the authority of either body of Commissioners;

• “tax legislation” means legislation relating to any taxation matter.

• (2) References in this Schedule to the delivery of information have the same meaning as in section 132 of the Finance Act 1999.

SCHEDULE 39

The Schedule inserted after Schedule 1 to the Taxes Management Act 1970 is as follows:

SCHEDULE 40

Part I — Excise duties

Part II — Income tax, corporation tax and capital gains tax

Part III — Stamp duty and stamp duty reserve tax

Part IV — Value Added Tax

Part V — Information powers

Rate of duty on beer.

Rates of duty on cider.

Rates of duty and rebate on hydrocarbon oil.

Mixing of rebated light oils.

Rates of tobacco products duty.

Management of excise duty on tobacco products.

Amusement machine licence duty.

Enforcement provisions for graduated rates.

Increase in general rate.

Correction of reference.

Phasing out of relief for payments to trustees of profit sharing schemes.

Gifts to charity from certain trusts.

Approved profit sharing scheme: other awards of shares.

Further provisions about share options.

Machinery and plant allowances for non-residents etc.

Machinery and plant allowances for non-residents etc.

Employee share ownership trusts.

Disposal of interest in settled property: deemed disposal of underlying assets.

Rate of duty on seven year leases.

Power to vary stamp duties.

Approved profit sharing schemes: loan arrangements.

Meaning of “research and development".

Machinery and plant allowances for non-residents etc.

Exemption of payments under New Deal 50plus.

Grant of leases etc between associated companies.

Grant of leases etc between associated companies.

Grant of leases etc between associated companies.

Rates: duty on lease chargeable by reference to rent.

Overseas life assurance business.

Group relief for non-resident companies etc.

Transfer of property between associated companies: Northern Ireland.

Abolition of duty on instruments relating to intellectual property.

Operating expenditure incurred while safeguard relief applies.

Disposals which are not taxable.

International exchange of information: general.

Offence of fraudulent evasion of income tax

Search warrants: miscellaneous amendments.

International exchange of information: inheritance tax.

Search warrants: miscellaneous amendments.

Land transferred etc for other property.

Disposals which are not taxable.

Treatment of employee share ownership trusts.

Secondary liability.

Debt Management Account.

Deduction for contribution to plan trust

Search warrants: miscellaneous amendments.

Treatment of employee share ownership trusts.

Withdrawal of deduction under paragraph 112A

Disposals which are not taxable.

Secondary liability.

Offence of fraudulent evasion of income tax

Treatment of mileage allowances

Treatment of mileage allowances

Debt Management Account.

After Part I of Schedule 1 to the Vehicle Excise and Registration Act 1994, insert—

Exemption: electricity produced in combined heat and power stations

11A

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

20A

• (1) A supply of electricity is exempt from the levy chargeable under paragraph 5(1) if—

• (a) the supply is not one that is deemed to be made under paragraph 23(3),

• (b) the supply is made under a contract that contains a CHP declaration given by the supplier,

• (c) prescribed conditions are fulfilled, ...

• (d) the supplier, and each other person (if any) who is a generator of any CHP electricity allocated by the supplier to supplies under the contract, has in a written notice given to the Commissioners agreed that he will fulfil those conditions so far as they may apply to him ; and

• (e) the electricity is actually supplied before 1 April 2018.

• (2) Sub-paragraph (1) does not apply in relation to a supply to a person of electricity produced in a wholly or partly exempt combined heat and power station where the supply is made to that person from the station.

• (3) In this paragraph “CHP declaration” means a declaration that, in each averaging period, the amount of electricity supplied by exempt CHP supplies made by the supplier in the period will not exceed the difference between—

• (a) the total amount of CHP electricity that during that period is either acquired or generated by the supplier, and

• (b) so much of that total amount as is allocated by the supplier otherwise than to exempt CHP supplies made by him in the period.

In this sub-paragraph “averaging period” has the same meaning as in paragraph 20B; and “exempt CHP supplies” means supplies made on the basis that they are exempt under this paragraph.

• (4) For the purposes of this paragraph and paragraph 20B, electricity is “CHP electricity” if—

• (a) the electricity was—

• (i) produced in a fully exempt combined heat and power station before 1 April 2013, or

• (ii) produced in a partly exempt combined heat and power station before 1 April 2013 and originally supplied from the station without causing the limit referred to in paragraph 16(2) to be exceeded,

• (b) the electricity is not renewable source electricity (within the meaning of paragraph 19), and

• (c) prescribed conditions are fulfilled.

• (5) The conditions that may be prescribed under sub-paragraph (1)(c) include, in particular, conditions in connection with—

• (a) the giving of effect to CHP declarations;

• (b) the supply of information;

• (c) the inspection of records and, for that purpose, the production of records in legible form and entry into premises;

• (d) monitoring by the Gas and Electricity Markets Authority, or the Director General of Electricity Supply for Northern Ireland, of the application of provisions of, or made under, this paragraph;

• (e) the doing of things to or by a person authorised by the Authority or the Director General (as well as the doing of things to or by the Authority or the Director General);

• (f) things being done at times or in ways specified by the Authority, the Director General or such an authorised person.

• (6) A condition prescribed under sub-paragraph (1)(c) may be one that is required to be fulfilled throughout a period, including a period ending after the time when a supply whose exemption turns on the fulfilment of the condition is treated as being made.

• (7) The conditions that may be prescribed under sub-paragraph (4)(c) include in particular conditions in connection with any of the matters mentioned in paragraphs (b) to (f) of sub-paragraph (5).

• (8) Each of—

• (a) the Gas and Electricity Markets Authority, and

• (b) the Director General of Electricity Supply for Northern Ireland,

shall supply the Commissioners with such information (whether or not obtained under this paragraph), and otherwise give the Commissioners such co-operation, as the Commissioners may require in connection with the application of this paragraph (whether generally or in relation to any particular case).

• (9) Paragraph 19(10) (disclosure of information) applies in relation to sub-paragraph (8) above as it applies in relation to paragraph 19(8).

20B

• (1) This paragraph applies where a person (“the supplier”) makes supplies of electricity on the basis that they are exempt under paragraph 20A (“exempt CHP supplies”).

• (2) The rules about balancing and averaging periods are—

• (a) a balancing period is a period of three months;

• (b) when a balancing period ends, a new one begins;

• (c) the first balancing period and the first averaging period begin at the same time;

• (d) unless the supplier specifies an earlier time, that time is the time when he is treated as making the first of the exempt CHP supplies;

• (e) when an averaging period ends, a new one begins;

• (f) an averaging period ends once it has run for two years (but may end sooner under paragraph (g) or sub-paragraph (4)(a) or (5)(a));

• (g) if the supplier stops making exempt CHP supplies, the end of the balancing period in which he makes the last exempt CHP supply is also the end of the averaging period in which the balancing period falls.

• (3) At the end of each balancing period calculate—

• (a) the total of—

• (i) the quantity of CHP electricity that the supplier acquired or generated in that period, and

• (ii) any balancing credit carried forward to that balancing period; and

• (b) the total of—

• (i) the quantity of electricity supplied by exempt CHP supplies made by him in that period, and

• (ii) any balancing debit carried forward to that balancing period.

• (4) If the total mentioned in sub-paragraph (3)(a) exceeds that mentioned in sub-paragraph (3)(b)—

• (a) the averaging period within which the balancing period fell ends at the end of the balancing period, and

• (b) a balancing credit equal to the difference between the two totals is carried forward to the next balancing period.

• (5) If the totals mentioned in paragraphs (a) and (b) of sub-paragraph (3) are the same—

• (a) the averaging period within which the balancing period fell ends at the end of the balancing period, and

• (b) no balancing credit or debit is carried forward to the next balancing period.

• (6) If the total mentioned in sub-paragraph (3)(b) exceeds that mentioned in sub-paragraph (3)(a), then—

• (a) in a case where, at the time when the balancing period ends, an averaging period also ends because of sub-paragraph (2)(f) or (g), the supplier is for the purposes of this Schedule deemed to make at that time a taxable supply of a quantity of electricity equal to the excess;

• (b) in any other case, a balancing debit equal to the excess is carried forward to the next balancing period.

Other supplies spanning change of rate etc.

38

• (1) This paragraph applies where there is—

• (a) a change in the descriptions of supplies that are taxable supplies,

• (b) a change in the rate of levy in force,

• (c) a change consisting in the rate of levy applicable to any supply ceasing to be, or becoming, the rate that is applicable to ... reduced-rate supplies, or

• (d) the change consisting in the transition from 31st March 2001 to 1st April 2001.

• (2) Where—

• (a) a supply affected by the change would apart from special provisions be treated under paragraph 30(2) or 33(2) as made wholly or partly at a time when it would not have been affected by the change, or

• (b) a supply not so affected would apart from special provisions be treated under paragraph 30(2) or 33(2) as made wholly or partly at a time when it would have been so affected,

the rate at which levy is chargeable on the supply, or any question whether it is a taxable supply, shall, if the person liable to account for any levy on the supply so elects, be determined without regard to the special provisions.

• (3) In this paragraph “special provisions” means the provisions of paragraphs 31, 32, 33(4) and 35.

Regulations as to time of supply

39

• (1) The Commissioners may make provision by regulations as to the time at which a supply is to be treated as taking place—

• (a) in cases where the supply is for a consideration and the whole or part of the consideration—

• (i) is determined or payable periodically, or from time to time, or at the end of any period, or

• (ii) is determined at the time when the commodity is appropriated for any purpose;

• (b) in the case of a supply otherwise than for consideration;

• (c) in the case of any supply that is deemed to be made under paragraph 23 , 24 , 24A, 24B, 24C, 42D or 43B.

• (2) In any such case as is mentioned in sub-paragraph (1) the regulations may provide that a taxable commodity shall be treated as separately and successively supplied at prescribed times or intervals.

• (3) Paragraphs 26 to 36 (main rules as to time of supply) and 38A have effect subject to any regulations under this paragraph.

• (4) The power to make regulations under this paragraph includes power to provide for specified provisions of the regulations to be treated as special provisions for the purposes of paragraph 38 (supplies spanning change of rate etc.).

Part IV — Payment and rate of levy

Persons liable to account for levy

40

• (1) The person liable to account for the levy charged on a taxable supply is, except in a case where sub-paragraph (2) or (3) applies, the person making the supply.

• (2) In the case of a taxable supply made by a person who—

• (a) is not resident in the United Kingdom, and

• (b) is not a utility,

the person liable to account for the levy charged on the supply is the person to whom the supply is made.

• (3) In the case of levy charged on a taxable supply under paragraph 45B, the person liable to account for the levy is the operator of the facility to which the supply was made.

Returns and payment of levy

41

• (1) The Commissioners may by regulations make provision—

• (a) for persons liable to account for levy to do so—

• (i) by reference to such periods (“accounting periods”) as may be determined by or under the regulations, or

• (ii) in such other way as may be so determined;

• (b) for persons who are or are required to be registered for the purposes of the levy to be subject to such obligations to make returns for those purposes for such periods, at such times and in such form as may be so determined; and

• (c) for persons who are required to account for levy ... to become liable to pay the amounts due from them at such times and in such manner as may be so determined.

• (2) Without prejudice to the generality of the powers conferred by sub-paragraph (1), regulations under this paragraph may contain provision—

• (a) for levy falling in accordance with the regulations to be accounted for by reference to one accounting period to be treated in prescribed circumstances, and for prescribed purposes, as levy due for a different period;

• (b) for the correction of errors made when accounting for levy by reference to any period;

• (c) for the entries to be made in any accounts in connection with the correction of any such errors and for the financial adjustments to be made in that connection;

• (d) for a person, for purposes connected with the making of any such entry or financial adjustment, to be required to provide to any prescribed person, or to retain, a document in the prescribed form containing prescribed particulars of the matters to which the entry or adjustment relates;

• (e) for enabling the Commissioners, in such cases as they may think fit, to dispense with or relax a requirement imposed by regulations made by virtue of paragraph (d);

• (f) for the amount of levy which, in accordance with the regulations, is treated as due for a later period than that by reference to which it should have been accounted for to be treated as increased by an amount representing interest at the rate applicable under section 197 of the Finance Act 1996 for such period as may be determined in accordance with the regulations.

• (2A) Paragraph 91(5) provides for the application of Part 7 of this Schedule (recovery and interest) in relation to cases where, by virtue of regulations under sub-paragraph (1)(a)(ii) above or by virtue of paragraph 45B(8), a person is liable to account for levy otherwise than by reference to accounting periods.

• (2B) Regulations under this paragraph may provide for the application of any provision of this Schedule in relation to such cases.

• (3) Subject to the following provisions of this paragraph, if any person (“the taxpayer”) fails—

• (a) to comply with so much of any regulations under this paragraph as requires him, at or before a particular time, to make a return for any accounting period, or

• (b) to comply with so much of any regulations under this paragraph as requires him, at or before a particular time, to pay an amount of levy due from him,

he shall be liable to a penalty of £250.

• (4) Liability to a penalty under sub-paragraph (3) shall not arise if the taxpayer satisfies the Commissioners or, on appeal, an appeal tribunal—

• (a) that there is a reasonable excuse for the failure to make the return or to pay the levy in accordance with the regulations; and

• (b) that there is not an occasion after the last day on which the return or payment was required by the regulations to be made when there was a failure without a reasonable excuse to make it.

• (5) Where, by reason of any failure falling within paragraph (a) or (b) of sub-paragraph (3)—

• (a) a person is convicted of an offence (whether under this Schedule or otherwise), or

• (b) a person is assessed to a penalty under paragraph 98 (penalty for evasion) or to a penalty for a deliberate inaccuracy under Schedule 24 to the Finance Act 2007 (penalties for errors),

that person shall not, by reason of that failure, be liable also to a penalty under that sub-paragraph (3).

Amount payable by way of levy

42

• (1) The amount payable by way of levy on a taxable supply is—

• (a) if the supply is not a reduced-rate supply ..., the amount ascertained from the Table in accordance with sub-paragraph (2);

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

• (ba) if the supply is a reduced-rate supply of electricity, 8 per cent of the amount that would be payable if the supply were a supply to which paragraph (a) applies;

• (bb) if the supply is a reduced-rate of supply of any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state, 23 per cent of the amount that would be payable if the supply were a supply to which paragraph (a) applies;

• (c) if the supply is any other reduced-rate supply, 11 per cent. of the amount that would be payable if the supply were a supply to which paragraph (a) applies;

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

Taxable commodity supplied	Rate at which levy payable if supply is not a reduced-rate supply
Electricity	£0.00827 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility	£0.00827 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.02175 per kilogram
Any other taxable commodity	£0.06468 per kilogram

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

• (1A) Sub-paragraph (1) is subject to paragraph 45B.

• (1B) Sub-paragraph (1) does not apply to a deemed supply under paragraph 24A or 24B.

• (2) The levy payable on a fraction of a quantity of a commodity is that fraction of the levy payable on that quantity of the commodity.

• (3) If a reduced-rate supply is part of an aid scheme within Article 25 of Commission Regulation (EC) No. 800/2008, sub-paragraph (4) cites the title and publication reference of that Regulation for the purpose of complying with Article 3(1) of that Regulation.

• (4) That citation is Commission Regulation (EC) No. 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General block exemption Regulation) (O.J. 2008 No. L214/3) (with the reference to Articles 87 and 88 being read, as a result of the Treaty of Lisbon, as a reference to Articles 107 and 108 of the Treaty on the Functioning of the European Union).

Half-rate for supplies to horticultural producers

43

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

Reduced-rate for supplies covered by climate change agreement

44

• (1) For the purposes of this Schedule, a taxable supply is a reduced-rate supply if—

• (a) the taxable commodity is supplied to a facility specified in a certificate given by the Administrator to the Commissioners as a facility which is to be taken as being covered by a climate change agreement for a period specified in the certificate, and

• (b) the supply is made at a time falling in that period.

• (2) Sub-paragraph (1) has effect subject to sub-paragraphs (2A) to (2D) and paragraphs 45 and 45B.

• (2A) The Administrator may—

• (a) give a certificate that includes provision specifying one or more descriptions of taxable commodity as being ineligible for reduced-rate supply,

• (b) vary a certificate so that it includes provision (or further provision) specifying one or more descriptions of taxable commodity as being ineligible for reduced-rate supply, or

• (c) vary a certificate so that it ceases to include the provision (or some of the provision) specifying one or more descriptions of taxable commodity as being ineligible for reduced-rate supply.

• (2B) A taxable supply of a taxable commodity to a facility is not a reduced-rate supply if, at the time of the supply, the commodity falls within a description that is specified (by virtue of sub-paragraph (2A)(a) or (b)) in the certificate relating to the facility.

• (2C) The Administrator may only include provision in a certificate by virtue of sub-paragraph (2A)(a) or (b)—

• (a) if the Treasury consents in writing to the specification before the specification is made, and

• (b) in a case described in sub-paragraph (2CA), if, and for as long as, the result is compatible with the common market by virtue of Commission Regulation (EC) No. 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty establishing the European Community (General block exemption Regulation) (O.J. 2008 No. L214/3).

• (2CA) That case is where the result is required to be compatible with the common market by virtue of relevant separation agreement law (as defined in section 7C(3) of the European Union (Withdrawal) Act 2018).

• (2D) In sub-paragraphs (2A) to (2C) “certificate” means such a certificate as is mentioned in sub-paragraph (1)(a).

• (3) The Commissioners may by regulations make provision for giving effect to sub-paragraph (1).

• (4) Regulations under this paragraph may, in particular, include provision for determining whether any taxable commodity is supplied to a facility.

• (5) The provision that may be made by virtue of sub-paragraph (4) includes, in particular, provision for a taxable commodity of any description specified in the regulations to be taken as supplied to a facility only if the commodity is delivered to the facility.

Reduced-rate supplies: variation of certificates under paragraph 44

45

• (1) This paragraph applies where the Administrator, after having given in respect of a facility such a certificate as is mentioned in paragraph 44(1) (“the original certificate”), gives a certificate (a “variation certificate”) to the Commissioners stating—

• (a) that, throughout the period (“the original period”) specified for the facility in the original certificate, the facility is to be taken as not being covered by a climate change agreement; or