Finance Act 2004

Part 1 — Excise duties

Tobacco products duty

Rates of tobacco products duty

1

• (1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—

1. Cigarettes	An amount equal to 22 per cent of the retail price plus £99.80 per thousand cigarettes.
2. Cigars	£145.35 per kilogram.
3. Hand-rolling tobacco	£104.47 per kilogram.
4. Other smoking tobacco and chewing tobacco	£63.90 per kilogram.

• (2) This section shall be deemed to have come into force at 6 o'clock in the evening of 17th March 2004.

Alcoholic liquor duties

Rate of duty on beer

2

• (1) In section 36(1AA)(a) of the Alcoholic Liquor Duties Act 1979 (c. 4) (rate of duty on beer) for “£12.22” substitute “ £12.59 ”.

• (2) This section shall be deemed to have come into force at midnight on 21st March 2004.

Rates of duty on wine and made-wine

3

• (1) For Part 1 of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (rates of duty on wine and made-wine) substitute—

Description of wine or made-wine	Rates of duty per hectolitre
	£
Wine or made-wine of a strength not exceeding 4 per cent	50.38
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent	69.27
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling	163.47
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent	166.70
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent	220.54
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent	217.95

• (2) This section shall be deemed to have come into force at midnight on 21st March 2004.

Duty stamps for spirits etc

4

• (1) At the beginning of Part 6 of the Alcoholic Liquor Duties Act 1979 (c. 4) (general control provisions) under the heading “Sale of dutiable alcoholic liquors” insert—

(64A) Schedule 2A to this Act (duty stamps) has effect.

.

• (2) Before Schedule 3 to that Act insert the Schedule 2A set out in Schedule 1 to this Act.

• (3) In section 12(2) of the Finance Act 1994 (c. 9) (defaults engaging Commissioners' power to assess excise duty to the best of their judgement) after paragraph (c) insert—

(ca) any failure by any person to comply with a requirement to which he is made subject by or under Schedule 2A to the Alcoholic Liquor Duties Act 1979 (duty stamps);

.

• (4) In section 14(1) of that Act (reviewable decisions) after paragraph (bc) insert—

(bd) any decision by the Commissioners as to whether or not any person is entitled to any repayment or credit by virtue of regulations under paragraph 4(2)(h) of Schedule 2A to the Alcoholic Liquor Duties Act 1979 (duty stamps), or the amount of the repayment or credit to which any person is so entitled; (be) any decision by the Commissioners made by virtue of regulations under paragraph 4(2)(i) of that Schedule that some or all of a payment made, or security provided, is forfeit, or the amount which is so forfeit;

.

• (5) The amendments made by this section have effect in relation to retail containers containing alcoholic liquor if the excise duty point for the alcoholic liquor falls on or after such day as the Treasury may by order made by statutory instrument appoint.

• (6) An order under subsection (5) may contain such supplemental and transitional provision and savings as the Treasury think fit in connection with the coming into effect of those amendments.

• (7) In subsection (5) “excise duty point” has the meaning given by section 1 of the Finance (No. 2) Act 1992 (c. 48).

Hydrocarbon oil etc duties

Rates

5

• (1) In section 6 of the Hydrocarbon Oil Duties Act 1979 (c. 5) (hydrocarbon oil: rates of duty)—

• (a) in subsection (1A)(a) (ultra low sulphur petrol) for “£0.4710” substitute “ £0.4902 ”,

• (b) in subsection (1A)(b) (other light oil) for “£0.5620” substitute “ £0.5790 ”,

• (c) in subsection (1A)(c) (ultra low sulphur diesel) for “£0.4710” substitute “ £0.4902 ”, and

• (d) in subsection (1A)(d) (other heavy oil) for “£0.5327” substitute “ £0.5487 ”.

• (2) In section 6AA(3) of that Act (biodiesel: rate of duty) for “£0.2710” substitute “ £0.2852 ”.

• (3) In section 11(1) of that Act (rebate on heavy oil)—

• (a) in paragraph (a) (fuel oil) for “£0.0382” substitute “ £0.0624 ”,

• (b) in paragraph (b) (gas oil: general) for “£0.0422” substitute “ £0.0664 ”, and

• (c) in paragraph (ba) (ultra low sulphur diesel) for “£0.0422” substitute “ £0.0664 ”.

• (4) In section 13A(1) of that Act (rebate on unleaded petrol) for “£0.0601” substitute “ £0.0620 ”.

• (5) In section 14(1) of that Act (rebate on light oil for use as furnace fuel) for “£0.0382” substitute “ £0.0624 ”.

• (6) This section shall come into force on 1st September 2004.

Road fuel gas

6

• (1) At the end of section 5 of the Hydrocarbon Oil Duties Act 1979 (road fuel gas) (which becomes subsection (1)) add—

(2) In this Act “natural road fuel gas”is road fuel gas with a methane content of not less than 80%.

• (2) For section 8(3) of that Act (rate of duty on road fuel gas) substitute—

(3) The rate of the duty under this section shall be— (a) in the case of natural road fuel gas, £0.1110 a kilogram, and (b) in any other case, £0.1303 a kilogram.

• (3) After section 21(2) of that Act (regulations) insert—

(2A) In the case of regulations made for the purposes mentioned in subsection (1)(c) above, different regulations may be made for different classes of road fuel gas.

• (4) This section shall come into force on 1st September 2004.

Taxation of non-pension benefits

7

• (1) For section 1(3A) and (3B) of the Hydrocarbon Oil Duties Act 1979 (descriptions of hydrocarbon oil: ultra low sulphur petrol and unleaded petrol) substitute—

(3A) “Ultra low sulphur petrol” means unleaded petrol— (a) the sulphur content of which does not exceed 0.005 per cent. by weight, (b) the aromatics content of which does not exceed 35 per cent. by volume, and (c) which is not sulphur-free petrol. (3B) “Sulphur-free petrol” means unleaded petrol the sulphur content of which does not exceed 0.001 per cent. by weight (or is nil). (3C) “Unleaded petrol” means petrol that contains not more than 0.013 grams of lead per litre of petrol; and petrol is “leaded petrol”if it is not unleaded petrol.

• (2) For section 1(6) of that Act (ultra low sulphur diesel) substitute—

(6) “Ultra low sulphur diesel” means gas oil— (a) the sulphur content of which does not exceed 0.005 per cent. by weight, (b) the density of which does not exceed 835 kilograms per cubic metre at a temperature of 15°C, (c) of which not less than 95 per cent. by volume distils at a temperature not exceeding 345°C, and (d) which is not sulphur-free diesel. (7) “Sulphur-free diesel” means gas oil the sulphur content of which does not exceed 0.001 per cent. by weight (or is nil).

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

• (4) For section 2A(1) of that Act (power to amend definitions) substitute—

(1) The Treasury may by order made by statutory instrument amend the definition for the purposes of this Act of— (a) sulphur-free diesel; (b) sulphur-free petrol; (c) ultra low sulphur diesel; (d) ultra low sulphur petrol; (e) unleaded petrol and leaded petrol.

• (5) In section 6(1A) of that Act (rates of duty)—

• (a) after paragraph (a) insert—

(aa) £0.4852 a litre in the case of sulphur-free petrol;

,

• (b) in paragraph (b) after “other than ultra low sulphur petrol” insert “ and sulphur-free petrol ”,

• (c) after paragraph (c) insert—

(ca) £0.4852 a litre in the case of sulphur-free diesel;

, and

• (d) in paragraph (d) after “other than ultra low sulphur diesel” insert “ and sulphur-free diesel ”.

• (6) In section 13AA(6) of that Act (restrictions on use of rebated kerosene) after “which is not ultra low sulphur diesel” insert “ or sulphur-free diesel ”.

• (7) In section 13A(1) of that Act (rebate on unleaded petrol) after “, other than ultra low sulphur petrol” insert “ and sulphur-free petrol ”.

• (8) In section 27 of that Act (interpretation)—

• (a) after the definition of “road vehicle” insert—

“sulphur-free diesel” has the meaning given by section 1(7) above; “sulphur-free petrol” has the meaning given by section 1(3B) above;

, and

• (b) in the definition of “unleaded petrol” and “leaded petrol” for “section 1(3B) above.” substitute “ section 1(3C) above. ”

• (9) This section shall come into force on 1st September 2004.

Duty of parties to notifiable arrangements to notify Board of number, etc.

8

Before section 2A(2) of the Hydrocarbon Oil Duties Act 1979 (c. 5) (power to amend definitions) insert—

(1C) The Treasury may by order made by statutory instrument amend the definition for the purposes of section 11 of “fuel oil”.

Shared ownership leases

9

• (1) For section 20AAA of the Hydrocarbon Oil Duties Act 1979 (mixing of rebated oil) substitute—

(20AAA) (1) A duty of excise shall be charged on a mixture which is— (a) produced by mixing fully rebated heavy oil with heavy oil which is not fully rebated, and (b) supplied for use as fuel for any engine, motor or other machinery. (2) A duty of excise shall be charged on a mixture which is— (a) produced by mixing partially rebated heavy oil with heavy oil which is not partially rebated, and (b) supplied for use as fuel for any engine, motor or other machinery; but a mixture on which duty is charged under subsection (1) shall not be charged under this subsection. (3) A duty of excise shall be charged on a mixture which is produced by mixing— (a) fully or partially rebated heavy oil, with (b) biodiesel or a substance containing biodiesel. (4) The rate of duty on a mixture under subsection (1) or (2) shall be— (a) in the case of a mixture supplied for use as fuel for a road vehicle, the rate of duty specified in section 6(1A)(d) (general rate for heavy oil), and (b) in any other case, equivalent to the rate of rebate specified in section 11(1)(b) (general rate for gas oil). (5) The rate of duty on a mixture under subsection (3) shall be the rate of duty specified in section 6(1A)(d). (6) For the purposes of this section— (a) oil is fully rebated if a rebate has been allowed in respect of it under section 11(1)(c) (general rebate for heavy oil), (b) oil is partially rebated if a rebate has been allowed in respect of it under any other provision of section 11 or under section 13AA, and (c) a reference to mixing is a reference to non-approved mixing (within the meaning given by section 20A(5)). (7) The person liable to pay duty charged under this section on supply or production of a mixture is the person supplying or producing the mixture. (8) Where duty under a provision of this Act has been paid on an ingredient of a mixture, the duty charged under this section shall be reduced by the amount of any duty that the Commissioners are satisfied has been paid on the ingredient (but not to a negative amount). (9) The Commissioners may exempt a person from liability to pay duty under any provision of this Act in respect of production or supply of a mixture of a kind described in subsection (1)(a), (2)(a) or (3) if satisfied that— (a) the liability was incurred accidentally, and (b) in the circumstances the person should be exempted.

• (2) In section 20AAB of that Act (mixing of rebated oil: supplementary)—

• (a) for subsections (1) and (2) substitute—

(1) A person who supplies or produces a mixture on which duty is charged under section 20AAA above must notify the Commissioners of the supply or production— (a) in advance, or (b) within the period of seven days beginning with the date of supply or production.

, and

• (b) in subsection (3) omit “or (2)”.

• (3) Schedule 2A to that Act shall cease to have effect.

• (4) This section—

• (a) in so far as it imposes or relates to the charge specified in section 20AAA(1) or (2) of that Act (as substituted by subsection (1) above), shall have effect in relation to anything supplied on or after the date on which this Act is passed,

• (b) in so far as it imposes or relates to the charge specified in section 20AAA(3) of that Act (as substituted by subsection (1) above), shall have effect in relation to anything produced on or after the date on which this Act is passed, and

• (c) in so far as it causes sections 20AAA and 20AAB(1) and (2) of, and Schedule 2A to, that Act to cease to have effect in their present form, shall come into force on the day on which this Act is passed.

• (5) But no duty shall be charged on the supply of a mixture under section 20AAA(1) or (2) of that Act (as substituted by subsection (1) above) if duty was charged on the production of the mixture under section 20AAA as it had effect before the date on which this Act is passed.

Bioethanol

10

• (1) After section 2AA of the Hydrocarbon Oil Duties Act 1979 (c. 5) (biodiesel) insert—

(2AB) (1) In this Act “bioethanol” means a liquid fuel— (a) consisting of ethanol produced from biomass, and (b) capable of being used for the same purposes as light oil. (2) In subsection (1)— (a) “liquid” does not include any substance that is gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars, and (b) “biomass” means vegetable and animal substances constituting the biodegradable fraction of— (i) products, wastes and residues from agriculture, forestry and related activities, or (ii) industrial and municipal waste. (3) A substance shall be treated as falling within subsection (1)(a) if it— (a) is denatured alcohol for the purposes of section 5 of the Finance Act 1995 (c. 4), and (b) would fall within subsection (1)(a) above (without reliance on this subsection) but for the presence of a component introduced— (i) for the purpose of rendering the substance denatured alcohol, and (ii) in the minimum proportion necessary for that purpose.

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

• (3) After section 6AC of that Act (biodiesel: application of provisions relating to hydrocarbon oil) insert—