LegalizeFinance Act 2005
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 £102.39 per thousand cigarettes. |
|---|---|
| 2.Cigars | £149.12 per kilogram. |
| 3.Hand-rolling tobacco | £107.18 per kilogram. |
| 4.Other smoking tobacco and chewing tobacco | £65.56 per kilogram. |
- (2) This section shall be deemed to have come into force at 6 o'clock in the evening of 16th March 2005.
Alcoholic liquor duties
Rate of duty on beer
2
- (1) In section 36(1AA)(a) of ALDA 1979 (rate of duty on beer) for “£12.59” substitute “ £12.92 ”.
- (2) This section shall be deemed to have come into force at midnight on 20th March 2005.
Rates of duty on wine and made-wine
3
- (1) For Part 1 of the Table of rates of duty in Schedule 1 to ALDA 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 | 51.69 |
| Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent | 71.07 |
| Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling | 167.72 |
| 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 | 223.62 |
- (2) This section shall be deemed to have come into force at midnight on 20th March 2005.
Hydrocarbon oil etc duties
Consolidation of current rates of hydrocarbon oil duties etc.
4
- (1) HODA 1979 is amended as follows.
- (2) In subsection (1A) of section 6 (hydrocarbon oil: rates of duty)—
- (a) in paragraph (a) (ultra low sulphur petrol), for “£0.4902” substitute “ £0.4710 ”,
- (b) in paragraph (aa) (sulphur-free petrol), for “£0.4852” substitute “ £0.4710 ”,
- (c) in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol), for “£0.5790” substitute “ £0.5620 ”,
- (d) in paragraph (c) (ultra low sulphur diesel), for “£0.4902” substitute “ £0.4710 ”,
- (e) in paragraph (ca) (sulphur-free diesel), for “£0.4852” substitute “ £0.4710 ”, and
- (f) in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel), for “£0.5487” substitute “ £0.5327 ”.
- (3) In subsection (3) of that section (aviation gasoline), for “(1A) above in relation to light oil” substitute “ (1A)(b) above ”.
- (4) In section 6AA(3) (biodiesel), for “£0.2852” substitute “ £0.2710 ”.
- (5) In section 6AD(3) (bioethanol), for “£0.2852” substitute “ £0.2710 ”.
- (6) In section 8(3) (road fuel gas)—
- (a) in paragraph (a) (natural road fuel gas), for “£0.1110” substitute “ £0.0900 ”, and
- (b) in paragraph (b) (other road fuel gas), for “£0.1303” substitute “ £0.0900 ”.
- (7) In section 11(1) (rebate on heavy oil)—
- (a) in paragraph (a) (fuel oil), for “£0.0624” substitute “ £0.0482 ”,
- (b) in paragraph (b) (gas oil which is not ultra low sulphur diesel), for “£0.0664” substitute “ £0.0522 ”, and
- (c) in paragraph (ba) (ultra low sulphur diesel), for “£0.0664” substitute “ £0.0522 ”.
- (8) In section 13AA(1) (restrictions on use of rebated kerosene), for “for rebated gas oil which is then in force, instead of at the rate then in force under section 11(1)(c) above” substitute “ then in force under paragraph (b) of subsection (1) of section 11, instead of at the rate then in force under paragraph (c) of that subsection ”.
- (9) In section 13A(1) (rebate on unleaded petrol), for “£0.0620” substitute “ £0.0601 ”.
- (10) In section 14(1) (rebate on light oil for use as furnace oil), for “£0.0624” substitute “ £0.0482 ”.
- (11) In consequence of the preceding provisions the following instruments are revoked—
- (a) the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2004 (S.I. 2004/2063),
- (b) the Excise Duties (Road Fuel Gas) (Reliefs) Regulations 2004 (S.I. 2004/2069),
- (c) the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Amendment) Order 2004 (S.I. 2004/3160), and
- (d) the Excise Duties (Surcharges or Rebates) (Bioethanol) Order 2004 (S.I. 2004/3162).
- (12) This section comes into force on the day on which this Act is passed.
Lorry road-user charge
5
- (1) HODA 1979 is amended as follows.
- (2) In subsection (1A) of section 6 (hydrocarbon oil: rates of duty)—
- (a) in paragraph (a) (ultra low sulphur petrol), for “£0.4710” substitute “ £0.4832 ”,
- (b) in paragraph (aa) (sulphur-free petrol), for “£0.4710” substitute “ £0.4832 ”,
- (c) in paragraph (b) (light oil other than ultra low sulphur petrol and sulphur-free petrol), for “£0.5620” substitute “ £0.5766 ”,
- (d) in paragraph (c) (ultra low sulphur diesel), for “£0.4710” substitute “ £0.4832 ”,
- (e) in paragraph (ca) (sulphur-free diesel), for “£0.4710” substitute “ £0.4832 ”, and
- (f) in paragraph (d) (heavy oil other than ultra low sulphur diesel and sulphur-free diesel), for “£0.5327” substitute “ £0.5465 ”.
- (3) In section 6AA(3) (biodiesel), for “£0.2710” substitute “ £0.2832 ”.
- (4) In section 6AD(3) (bioethanol), for “£0.2710” substitute “ £0.2832 ”.
- (5) In section 8(3) (road fuel gas)—
- (a) in paragraph (a) (natural road fuel gas), for “£0.0900” substitute “ £0.1080 ”, and
- (b) in paragraph (b) (other road fuel gas), for “£0.0900” substitute “ £0.1270 ”.
- (6) In section 11(1) (rebate on heavy oil)—
- (a) in paragraph (a) (fuel oil), for “£0.0482” substitute “ £0.0604 ”,
- (b) in paragraph (b) (gas oil which is not ultra low sulphur diesel), for “£0.0522” substitute “ £0.0644 ”, and
- (c) in paragraph (ba) (ultra low sulphur diesel), for “£0.0522” substitute “ £0.0644 ”.
- (7) In section 13A(1) (rebate on unleaded petrol), for “£0.0601” substitute “ £0.0617 ”.
- (8) In section 14(1) (rebate on light oil for use as furnace oil), for “£0.0482” substitute “ £0.0604 ”.
- (9) This section comes into force on 1st September 2005.
Gaming duty
Rates of gaming duty
6
- (1) For the Table in section 11(2) of FA 1997 (rates of gaming duty) substitute—
| Part of gross gaming yield | Rate |
|---|---|
| The first £534,500 | 2.5 per cent. |
| The next £1,186,500 | 12.5 per cent. |
| The next £1,186,500 | 20 per cent. |
| The next £2,078,000 | 30 per cent. |
| The remainder | 40 per cent. |
- (2) This section has effect in relation to accounting periods beginning on or after 1st April 2005.
Vehicle excise duty
Rates
7
- (1) VERA 1994 is amended as follows.
- (2) In section 4 (vehicle licences: amount of duty), omit—
- (a) subsection (3)(treatment of fractions of five pence in determining rate of duty on six month licence which is set at 55% of annual rate), and
- (b) in subsection (7)(power to amend or repeal by order), “or (3)”.
- (3) In section 13(3)(b) (trade licences: annual rate of duty for licences not to be used only for motorcycles not exceeding 450 kilograms in weight unladen) as currently in force, for “annual rate currently applicable to a vehicle under paragraph 1(2) of Schedule 1” substitute “ basic goods vehicle rate currently applicable ”.
- (4) In section 13(4)(b) (trade licences: annual rate of duty for licences not to be used only for motorcycles not exceeding 450 kilogrammes in weight unladen) as set out in paragraph 8(1) of Schedule 4 to have effect on and after a day appointed by order, for “annual rate currently applicable to a vehicle under paragraph 1(2) of Schedule 1” substitute “ basic goods vehicle rate currently applicable ”.
- (5) In both versions of section 13, after subsection (6) insert—
(7) In this section “the basic goods vehicle rate” means the annual rate applicable, by virtue of sub-paragraph (1) of paragraph 9 of Schedule 1, to a rigid goods vehicle which— (a) is not a vehicle with respect to which the reduced pollution requirements are satisfied, and (b) falls within column (3) of the table in that sub-paragraph and has a revenue weight exceeding 3,500 kilograms and not exceeding 7,500 kilograms.
- (6) In sections 35A(5) and 36(3) (dishonoured cheques: appropriate annual rate of vehicle excise duty), for the words from “to the annual rate” to “(or” substitute—
(a) in the case of a vehicle licence, to the annual rate which at the beginning of the relevant period was applicable to a vehicle of the description specified in the application, or (b) in the case of a trade licence, to the basic goods vehicle rate (within the meaning of section 13) which was applicable at that time (or to the annual rate which at that time was applicable
.
- (7) Schedule 1 (annual rates of duty) is amended as follows.
- (8) In paragraph 1(2) (general rate of duty except in case of vehicle with engine with cylinder capacity not exceeding 1,549 cubic centimetres), for “£165” substitute “ £170 ”.
- (9) For the Table in paragraph 1B (rates of duty applicable to light passenger vehicles registered on or after 1st March 2001 on basis of certificate specifying CO₂ emissions figure) substitute—
| CO₂ emissions figure | CO₂ emissions figure | Rate | Rate | Rate |
|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) |
| Exceeding | Not exceeding | Reduced rate | Standard rate | Premium rate |
| g/km | g/km | £ | £ | £ |
| 100 | 55 | 65 | 75 | |
| 100 | 120 | 65 | 75 | 85 |
| 120 | 150 | 95 | 105 | 115 |
| 150 | 165 | 115 | 125 | 135 |
| 165 | 185 | 140 | 150 | 160 |
| 185 | 160 | 165 | 170 |
- (10) In paragraph 3(1A) (rate applicable to buses with respect to which reduced pollution requirements are satisfied), for “the general rate specified in paragraph 1(2)” substitute “ £165 ”.
- (11) In paragraph 7(3A)(b) (rate applicable to haulage vehicles which are not showman's vehicles and with respect to which reduced pollution requirements are satisfied), for “the general rate specified in paragraph 1(2)” substitute “ £165 ”.
- (12) In paragraph 10 (trailer supplement)—
- (a) in sub-paragraph (2) (rate where plated gross weight of trailer exceeds 4,000 kilograms but does not exceed 12,000 kilograms), for “an amount equal to the amount of the general rate specified in paragraph 1(2)” substitute “ £165 ”,
- (b) in sub-paragraph (3) (rate where plated gross weight of trailer exceeds 12,000 kilograms), for “an amount equal to 140 per cent of the amount of the general rate specified in paragraph 1(2)” substitute “ £230 ”, and
- (c) omit sub-paragraphs (3A) and (3B)(rounding of rate set under sub-paragraph (3) as percentage of general rate specified in paragraph 1(2)).
- (13) Subsection (2), and subsection (1) so far as relating to it, have effect on the day on which this Act is passed.
- (14) Subsection (4), and subsections (1) and (5) so far as relating to it, have effect on and after that day.
- (15) Subsection (6), and subsection (1) so far as relating to it, have effect on and after 17th March 2005.
- (16) Subject to that, this section has effect in relation to licences taken out on or after 17th March 2005 for a period beginning on or after 1st April 2005.
Part 2 — Income tax, corporation tax and capital gains tax
Chapter 1 — Income tax and corporation tax charge and rate bands
Income tax
Charge and rates for 2005-06
8
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Personal allowances for those aged 65 or more
9
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Corporation tax
Charge and main rate for financial year 2006
10
Corporation tax shall be charged for the financial year 2006 at the rate of 30%.
Small companies' rate and fraction for financial year 2005
11
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Corporation tax starting rate and fraction for financial year 2005
12
For the financial year 2005—
- (a) the corporation tax starting rate shall be 0%, and
- (b) the fraction mentioned in section 13AA of ICTA (marginal relief for small companies) shall be 19/400ths.
Non-corporate distribution rate for financial year 2005
13
The non-corporate distribution rate for the financial year 2005 shall be 19%.
Trusts
Special trust rates not to apply to first slice of trust income
14
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Chapter 2 — Personal taxation
Taxable benefits
Childcare vouchers: exempt amount
15
- (1) Section 270A of ITEPA 2003 (limited exemption for qualifying childcare vouchers) is amended as follows.
- (2) In subsection (6) (exempt amount), for “£50 for each qualifying week in that year” substitute
the sum of— (a) £50 for each qualifying week in that year, and (b) the voucher administration costs for that year.
- (3) After that subsection insert—
(6A) The “voucher administration costs” for any tax year in respect of which qualifying childcare vouchers are provided for an employee means the difference between the cost of provision of the vouchers and their face value. The face value of a voucher is the amount stated on or recorded in the voucher as the value of the provision of care for a child that may be obtained by using it.
- (4) After subsection (10) insert—
(10A) In this section “cost of provision”, in relation to a childcare voucher, has the meaning given in section 87(3) and (3A).
- (5) This section has effect for the year 2005-06 and subsequent years of assessment.
Extension of exemptions for childcare, workplace parking, cycles etc
16
- (1) ITEPA 2003 is amended as follows.
- (2) In section 237(1) (exemption for provision of workplace parking), for “No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge)” substitute “ No liability to income tax arises ”.
- (3) In section 244(1) (exemption for provision of cycles and cyclist's safety equipment), for “No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge)” substitute “ No liability to income tax arises ”.
- (4) In section 270A(1) (limited exemption for qualifying childcare vouchers), for “employee, liability” substitute
employee— (a) no liability to income tax arises by virtue of section 62 (general definition of earnings), and (b) liability
.
- (5) In section 318(1) (childcare: exemption for employer-provided care), for “No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable benefits: residual liability to charge)” substitute “ No liability to income tax arises ”.
- (6) In section 318A(1) (childcare: limited exemption for other care), for “child, liability” substitute
child— (a) no liability to income tax arises by virtue of section 62 (general definition of earnings), and (b) liability
.
- (7) This section has effect for the year 2005-06 and subsequent years of assessment.
Transfer of previously loaned computer or cycle etc
17
- (1) Section 206 of ITEPA 2003 (cost of the benefit: transfer of used or depreciated asset) is amended as follows.
- (2) In subsection (3)(a), for “a car (within the meaning of Chapter 6)” substitute “ an excluded asset (see subsection (6)) ”.
- (3) After subsection (5) insert—
(6) An excluded asset is— (a) a car (within the meaning of Chapter 6), (b) computer equipment that has previously been applied as mentioned in subsection (3)(b) in circumstances in which the conditions set out in section 320 were met, or (c) a cycle or cyclist's safety equipment that has previously been so applied in circumstances in which the conditions set out in section 244 were met.
- (4) This section has effect for the year 2005-06 and subsequent years of assessment.
Extension of outplacement services etc exemption: part-time employees
18
- (1) ITEPA 2003 is amended as follows.
- (2) In section 310 (counselling and other outplacement services) in subsection (4) (person to have been employed full-time in the employment which is ceasing for a specified period) omit “full-time”.
- (3) In section 311 (retraining courses) in subsection (3) (conditions to be satisfied in relation to the course)—
- (a) at the end of paragraph (b) insert “ and ”;
- (b) in paragraph (c) (course to last no more than one year) for “one year” substitute “ two years ”;
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