Finance Act 2007

[^key-dcab0d3e73ab0b2f4802dd1a40d55519]: Sch. 24 para. 6 modified (with effect in accordance with Sch. 18 paras. 2-13 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 18 para. 15(3)

[^key-f349ae37041c76e6a9d671443f4d10b6]: Sch. 24 paras. 3A, 3B and cross-heading inserted (with effect in accordance with s. 64(5)(6) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 64(2)

[^key-bc8b10f15eb103fbcf6ebb569b8d8ad9]: Sch. 24 para. 21ZA inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), s. 68(6)

[^key-61919f2fdf55cfb6e6a6878a0326ddba]: Sch. 24 para. 18(6) inserted (with effect in accordance with s. 64(5)(6) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), s. 64(3)

[^key-d5ef0a109e6a434a93b51e3ff1c456b5]: Word in Sch. 24 para. 28(fa)(ivd) omitted (for specified purposes and with effect in accordance with Sch. 6 paras. 20, 21(1)(b) of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 8

[^key-0c51e8bd29a93f06c36bde0ef4627808]: Sch. 24 para. 28(fa)(ive) inserted (for specified purposes and with effect in accordance with Sch. 6 paras. 20, 21(1)(b) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 8

[^key-a3aa7be4986dd8f463b82018bb107743]: S. 87(2E) inserted (25.1.2018) by The Criminal Justice (Scotland) Act 2016 (Consequential Provisions) Order 2018 (S.I. 2018/46), arts. 2(2)(d), 19(3)(a) (with art. 19(2))

[^key-a3d7360546009f441eb12b12d2d71e7e]: S. 87(3) repealed (25.1.2018) by The Criminal Justice (Scotland) Act 2016 (Consequential Provisions) Order 2018 (S.I. 2018/46), arts. 2(2)(d), 19(3)(b) (with art. 19(2))

[^key-4ca6b630aefcc818843713aacd9d73a2]: Sch. 23 para. 4 repealed (25.1.2018) by The Criminal Justice (Scotland) Act 2016 (Consequential Provisions) Order 2018 (S.I. 2018/46), arts. 2(2)(d), 19(4) (with art. 19(2))

[^key-f4262babff67ea1d94a5074ef39f605d]: Sch. 23 para. 5 repealed (25.1.2018) by The Criminal Justice (Scotland) Act 2016 (Consequential Provisions) Order 2018 (S.I. 2018/46), arts. 2(2)(d), 19(4) (with art. 19(2))

[^key-4f1aa2ec579ed47ce870faa382a46547]: Words in s. 87(4) substituted (31.1.2017 for specified purposes, 1.3.2018 in so far as not already in force) by Policing and Crime Act 2017 (c. 3), ss. 118, 183(1)(5)(e); S.I. 2018/227, art. 2(f)

[^key-898b8a909f1262f76aea278706f89e4e]: S. 87(2A)-(2D) inserted (31.1.2017 for specified purposes, 1.3.2018 in so far as not already in force) by Policing and Crime Act 2017 (c. 3), s. 183(1)(5)(e), Sch. 17 para. 9(2); S.I. 2018/227, art. 2(g)

[^key-e8483d11d871d66f704964512f8f62a0]: Sch. 16 para. 8 excluded (15.3.2018) by Finance Act 2018 (c. 3), s. 15(1)(2)(a)

[^key-6eb5a45c5b836bf8711c47b6358ef3cf]: Words in Sch. 24 para. 1 inserted (6.4.2018) by Finance Act 2017 (c. 10), s. 61(2), Sch. 11 para. 3; S.I. 2018/467, reg. 2

[^key-a2ee418775b6f9ec7e9d94501566359c]: Words in Sch. 16 para. 3(6)(b) inserted (6.4.2018) by Finance Act 2018 (c. 3), Sch. 5 paras. 9, 13; S.I. 2018/931, reg. 4(e)

[^key-a88d5eb07d698509a2c7f4ca8e3a4c04]: Words in Sch. 24 para. 1(4) substituted (with effect in accordance with Sch. 2 para. 32(1) of the amending Act) by Finance Act 2019 (c. 1), Sch. 2 para. 27(2)

[^key-dafe386bf2388230605675b3adaeeb04]: Words in Sch. 24 para. 21C substituted (with effect in accordance with Sch. 2 para. 32(1) of the amending Act) by Finance Act 2019 (c. 1), Sch. 2 para. 27(3)

[^key-720ef3ee954b1882d43c7b769015eb62]: Words in Sch. 24 para. 1 table inserted (22.7.2020) by Finance Act 2020 (c. 14), Sch. 10 para. 3(2)

[^key-2dec234d0bc630d77ff91f9139788d28]: Words in Sch. 24 para. 1 omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 111(2) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

[^key-705d32eadc3a0140ff10c23cd8a76264]: Sch. 24 para. 1(4A)-(4C) omitted (31.12.2020) by virtue of Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 111(3) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

[^key-4de79d41bc5bc7218ae64f90a91504b6]: Sch. 24 para. 1 modified (temp.) (with effect in accordance with Sch. 10 para. 43 of the amending Act) by Finance Act 2022 (c. 3), Sch. 10 para. 27 (as amended (5.1.2023) by S.I. 2022/1321, regs. 1, 2(2))

[^key-604d33bdcc0997c5cd7b74a51941cdb9]: Sch. 24 Pt. 1 modified (10.6.2021 for specified purposes, 1.7.2021 for specified purposes) by 1994 c. 23, Sch. 9ZF para. 9 (as inserted by Finance Act 2021 (c. 26), s. 95(6)(a), Sch. 18 para. 6); S.I. 2021/770, regs. 3, 4 (with regs. 5-7) (as amended (1.4.2022) by The Value Added Tax (Enforcement Related to Distance Selling and Miscellaneous Amendments) Regulations 2022 (S.I. 2022/226), regs. 1, 26(b))

[^key-1b91c47eb0fe054030dd9110bda8df50]: Sch. 24 applied (with modifications) (1.5.2023) by The Value Added Tax (Margin Schemes and Removal or Export of Goods: VAT-related Payments) Order 2023 (S.I. 2023/68), arts. 1(1), 14 (with art. 1(2))

[^key-8de2714e19342600d77694a6954f7741]: Sch. 24 para. 3C and cross-heading inserted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 5 para. 5(2)

[^key-c994eb00f8bb0d21778f630150dc47e9]: Sch. 24 para. 5(5)(6) inserted (with effect in accordance with Sch. 3 paras. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 26(3)

[^key-4b6b845f78a3c2775f850382f88915bf]: Sch. 24 para. 5(4)(za) inserted (with effect in accordance with Sch. 3 paras. 30-36 of the amending Act) by Finance (No. 2) Act 2023 (c. 30), Sch. 3 para. 26(2)

[^key-1adbe756fb77cdc9320120093ad4a9c5]: Words in Sch. 24 para. 18(6) substituted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 5 para. 5(3)(a)

[^key-2c0d868a3004f65892428673ca181282]: Words in Sch. 24 para. 18(6) substituted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 5 para. 5(3)(b)

[^key-7b0e8d42b8dd4d367f590a4e8c096015]: Words in Sch. 24 para. 1 substituted (1.8.2023) by Finance (No. 2) Act 2023 (c. 30), s. 120(2), Sch. 13 para. 17; S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

[^key-42284e9e65bcb0ea5bf1c3f6bbac463d]: Sch. 24 applied (14.9.2023) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 (S.I. 2023/912), regs. 1(2), 40(2) (with reg. 1(3))

[^M_F_21d1eb0a-4ab3-4108-f93d-ce990b640cce]: Words in Sch. 24 para. 1 inserted (10.12.2021 for specified purposes, 1.4.2022 in so far as not already in force and with effect in accordance with s. 85(1)(b) of the amending Act) by Finance Act 2021 (c. 26), s. 85(1)(a), Sch. 15 para. 6; S.I. 2021/1409, regs. 3, 4

[^key-ce6847b37cd77112e259d883e5d27ff5]: Words in Sch. 24 para. 1 Table inserted (with effect in relation to accounting periods commencing on or after 31.12.2023) by Finance (No. 2) Act 2023 (c. 30), s. 264, Sch. 14 para. 45

[^key-21e8a23f69efbf9852e6824a3b66d151]: Words in Sch. 24 para. 1 Table inserted (with effect in relation to accounting periods commencing on or after 31.12.2023) by Finance (No. 2) Act 2023 (c. 30), s. 278, Sch. 18 para. 6(2)

[^key-478271f8f124fcd664b0f67b4e9e721b]: Sch. 24 para. 21A applied (6.4.2024 for specified purposes) by Finance Act 2021 (c. 26), s. 116(3), Sch. 25 para. 4(8); S.I. 2024/440, reg. 2(1)

[^M_F_ef63cfd9-6efe-4459-e24b-a365ba7920f5]: Sch. 24 para. 28(fa)(iiia) inserted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 2 para. 4 (with Sch. 2 paras. 16(1), 17-25)

[^M_F_9e0ae3c6-d3be-4577-96df-daf0ee038335]: Words in Sch. 24 para. 28(fa)(ia) substituted (with effect in relation to accounting periods beginning on or after 1.4.2024) by Finance Act 2024 (c. 3), Sch. 1 paras. 11, 16; S.I. 2024/286, reg. 2

[^key-269c8978aaba631dbe1e8bb17b273a20]: Words in Sch. 24 para. 1 omitted (1.2.2025) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 120(2), Sch. 13 para. 29(2); S.I. 2025/96, reg. 2(e) (with reg. 3)

[^key-ec560b2bf1b74d295eb89517d5792847]: Words in Sch. 24 para. 1 inserted (1.2.2025) by Finance (No. 2) Act 2023 (c. 30), s. 120(2), Sch. 13 para. 29(3); S.I. 2025/96, reg. 2(e) (with reg. 3)

[^key-44226652e87b08d3bf113b9049609461]: Sch. 24 para. 12(2) modified (1.1.2023 for specified purposes, 6.4.2024 for specified purposes, 12.11.2024 for specified purposes, 28.3.2025 for specified purposes) by Finance Act 2021 (c. 26), s. 117(2), Sch. 26 para. 15(b); S.I. 2022/1278, reg. 2(2); S.I. 2024/440, reg. 2(2); S.I. 2024/1132, reg. 2; S.I. 2025/399, reg. 2

[^key-b956cf68104f7b407c1ff0c315b50d40]: Sch. 24 applied (24.4.2025 for the tax year 2023-24 and subsequent tax years) by The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2025 (S.I. 2025/419), regs. 1(2)(3), 15(3)

Losses transferred under section 444AZA

85

• (1) This paragraph applies where a loss ... is treated by virtue of section 444AZA of ICTA as a loss of the transferee ....

• (2) Where any losses so treated would (assuming the transferor had continued to carry on the business transferred after the transfer) have been losses to which paragraph 81(1) would have applied, the amount of such losses to be treated as losses of the transferee in any period of account must not exceed—

$$GRBP×PBTLGRBTL$where—“GRBP” has the same meaning as in section 444AZA(2) of ICTA,“PBTL” is the mean of the opening and closing liabilities of the transferred pension business for the period of account, and“GRBTL” is the mean of the opening and closing liabilities of the transferred gross roll-up business for the period of account.$

Losses transferred under section 444AZB

86

• (1) This paragraph applies where section 444AZB of ICTA has effect in relation to a transferee and the circumstances specified in sub-paragraph (2) or (3) below apply.

• (2) The circumstancesare that—

• (a) the profits of the life assurance business of the transferee for the period of account immediately preceding the first period of account beginning on or after 1st January 2007 were chargeable to tax in accordance with Case I of Schedule D by virtue of section 439A of ICTA, and

• (b) in that period, the transferee carried on pension business.

• (3) The circumstances are that—

• (a) paragraph 29 of Schedule 8 applies in relation to the transferee, and

• (b) the transferee has an unused pension business loss within the meaning given by paragraph 81(4).

• (4) The appropriate fraction of any amount treated by virtue of section 444AZB(2) of ICTA as a loss of the transferee (a “gross roll-up business loss”) available to be set off against profits chargeable under section 436A of ICTA is to be treated for the purposes of paragraph 81 as an unused pension business loss.

• (5) The relevant fraction of any gross roll-up business loss is to be treated for the purposes of paragraph 82 as an unused non-pension business loss.

• (6) In this paragraph “the appropriate fraction”, in relation to a period of account, is—

$$PBTLTL$where—“PBTL” is the mean of the opening and closing liabilities of the transferred pension business for the period of account, and“TL” is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.$

• (7) In this paragraph the “the relevant fraction”, in relation to a period of account, is—

$$NPBTLTL$where—“NPBTL” is the mean of the opening and closing liabilities of the transferred gross roll-up business which is not pension business for the period of account, and“TL” is the mean of the opening and closing liabilities of the transferred life assurance business for the period of account.$

Trust gains on contracts for life insurance

Unpaid remuneration and employee benefit contributions

Partnerships

Sale and repurchase of securities

Gift aid: limits

Enterprise management incentives: excluded activities

Trust income

Personal tax returns

Enterprise management incentives: excluded activities

Abolition of contributions relief for life assurance premium contributions

VAT: joint and several liability of traders in supply chain where tax unpaid

IPT: meaning of “premium”

SDLT: exchanges

Abolition of PRT for fields recommissioned after earlier decommissioning

Meaning of “recognised stock exchange” etc

Disclosure of tax avoidance schemes

Northern Ireland criminal investigations

Sections 82 and 83: supplementary

Payment by cheque

Abolition of PRT for fields recommissioned after earlier decommissioning

Mandatory electronic payment

Payment by cheque

Tax-exempt tariffing receipts

IPT: meaning of “premium”

Allowance of unrelievable loss from abandoned field

Limitation period in old actions for mistake of law relating to direct tax

Disclosure of tax avoidance schemes

Meaning of “recognised stock exchange” etc

Climate change levy: reduced-rate supplies etc

Managed service companies

Restriction on expenses of management

Offshore funds

Enterprise management incentives: excluded activities

Unpaid remuneration and employee benefit contributions

Sale and repurchase of securities

Sale and repurchase of securities

Trust income

Offshore funds

Election out of special film rules for film production companies

Northern Ireland criminal investigations

Acquisition relief: disregard of company holding own shares

Commencement

SDLT: exchanges

Enquiry into returns

SDLT: shared ownership trusts

Northern Ireland criminal investigations

Personal tax returns

Commencement

Penalties for errors

VAT: joint and several liability of traders in supply chain where tax unpaid

IPT: meaning of “premium”

Tax-exempt tariffing receipts

Limitation period in old actions for mistake of law relating to direct tax

Meaning of “recognised stock exchange” etc

Meaning of “recognised stock exchange” etc

Interpretation

Error in taxpayer's document attributable to another person

1A

• (1) A penalty is payable by a person (T) where—

• (a) another person (P) gives HMRC a document of a kind listed in the Table in paragraph 1,

• (b) the document contains a relevant inaccuracy, and

• (c) the inaccuracy was attributable to T deliberately supplying false information to P (whether directly or indirectly), or to T deliberately withholding information from P, with the intention of the document containing the inaccuracy.

• (2) A “relevant inaccuracy” is an inaccuracy which amounts to, or leads to—

• (a) an understatement of a liability to tax,

• (b) a false or inflated statement of a loss, or

• (c) a false or inflated claim to repayment of tax.

• (3) A penalty is payable under this paragraph in respect of an inaccuracy whether or not P is liable to a penalty under paragraph 1 in respect of the same inaccuracy.

23A

“Tax”, without more, includes duty.

Rates of vehicle excise duty

Rates of air passenger duty

Restrictions on trade loss relief for partners

Life policies etc: effect of rebated or reinvested commission

Restriction on expenses of management

Purchased life annuities: self-assessment

Benefits code: whether employment is “lower-paid employment”

Schemes etc designed to increase double taxation relief

Profit share agency

Trust gains on contracts for life insurance

Benefits code: whether employment is “lower-paid employment”

Unpaid remuneration and employee benefit contributions

Northern Ireland criminal investigations

Enterprise management incentives: excluded activities

Abolition of contributions relief for life assurance premium contributions

Payment by cheque

Self-certificate declarations

Northern Ireland criminal investigations

Interpretation

Commencement

Mandatory electronic payment

IPT: meaning of “premium”

Allowance of unrelievable loss from abandoned field

Disclosure of tax avoidance schemes

Interpretation

Climate change levy: reduced-rate supplies etc

Extension of income tax deduction for expenditure on energy-saving items

Companies carrying on business of leasing plant or machinery

Schemes etc designed to increase double taxation relief

Election out of special film rules for film production companies

Profit share agency

Trust income

Trust gains on contracts for life insurance

Offshore funds

Securitisation companies

Alternatively secured pensions etc

Partnerships

SDLT: shared ownership lease

Self-certificate declarations

Criminal investigations: powers of Revenue and Customs

Northern Ireland criminal investigations

Criminal investigations: Scotland

Mandatory electronic payment

Enquiry into returns

VAT: non-business use etc of business goods

Amendments connected with Gambling Act 2005

Limitation period in old actions for mistake of law relating to direct tax

Mergers Directive: regulations

Repeals

Rates of gaming duty

Amusement machine licence duty

Rates of vehicle excise duty

Rates of climate change levy

Rates of landfill tax

Emissions trading: charges for allocations

SDLT relief for new zero-carbon homes

Income tax exemption for domestic microgeneration

Restriction on expenses of management

Life policies etc: effect of rebated or reinvested commission

Companies carrying on business of leasing plant or machinery

Employee benefit contributions

Trust gains on contracts for life insurance

Benefits code: whether employment is “lower-paid employment”

Alternatively secured pensions etc

Criminal investigations: powers of Revenue and Customs

Self-certificate declarations

SDLT: shared ownership lease

Self-certificate declarations

Criminal investigations: powers of Revenue and Customs

Trustee's tax return

Penalties for errors

VAT: non-business use etc of business goods

Tax-exempt tariffing receipts

Amendments connected with Gambling Act 2005

Disclosure of tax avoidance schemes

Mergers Directive: regulations

Repeals

4A

• (1) An inaccuracy is in category 1 if—

• (a) it involves a domestic matter, or

• (b) it involves an offshore matter and—

• (i) the territory in question is a category 1 territory, or

• (ii) the tax at stake is a tax other than income tax or capital gains tax.

• (2) An inaccuracy is in category 2 if—

• (a) it involves an offshore matter or an offshore transfer ,

• (b) the territory in question is a category 2 territory, and

• (c) the tax at stake is income tax , capital gains tax or inheritance tax .

• (3) An inaccuracy is in category 3 if—

• (a) it involves an offshore matter or an offshore transfer ,

• (b) the territory in question is a category 3 territory, and

• (c) the tax at stake is income tax , capital gains tax or inheritance tax .

• (4) An inaccuracy “involves an offshore matter” if it results in a potential loss of revenue that is charged on or by reference to—

• (a) income arising from a source in a territory outside the UK,

• (b) assets situated or held in a territory outside the UK,

• (c) activities carried on wholly or mainly in a territory outside the UK, or

• (d) anything having effect as if it were income, assets or activities of a kind described above.

• (4A) Where the tax at stake is inheritance tax, assets are treated for the purposes of sub-paragraph (4) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable.

• (4B) An inaccuracy “involves an offshore transfer” if—

• (a) it does not involve an offshore matter,

• (b) it is deliberate (whether or not concealed) and results in a potential loss of revenue,

• (c) the tax at stake is income tax, capital gains tax or inheritance tax, and

• (d) the applicable condition in paragraph 4AA is satisfied.

• (5) An inaccuracy “involves a domestic matter” if it results in a potential loss of revenue and does not involve either an offshore matter or an offshore transfer .

• (6) If a single inaccuracy is in more than one category (each referred to as a “relevant category”)—

• (a) it is to be treated for the purposes of this Schedule as if it were separate inaccuracies, one in each relevant category according to the matters or transfers that it involves, and

• (b) the potential lost revenue is to be calculated separately in respect of each separate inaccuracy.

• (7) “Category 1 territory”, “category 2 territory” and “category 3 territory” are defined in paragraph 21A.

• (8) “Assets” has the meaning given in section 21(1) of TCGA 1992, but also includes sterling.

4B

The penalty payable under paragraph 1A is 100% of the potential lost revenue.

4C

The penalty payable under paragraph 2 is 30% of the potential lost revenue.

4D

Paragraphs 5 to 8 define “potential lost revenue”.

Classification of territories

21A

• (1) A category 1 territory is a territory designated as a category 1 territory by order made by the Treasury.

• (2) A category 2 territory is a territory that is neither—

• (a) a category 1 territory, nor

• (b) a category 3 territory.

• (3) A category 3 territory is a territory designated as a category 3 territory by order made by the Treasury.

• (4) In considering how to classify a territory for the purposes of this paragraph, the Treasury must have regard to—

• (a) the existence of any arrangements between the UK and that territory for the exchange of information for tax enforcement purposes,

• (b) the quality of any such arrangements (in particular, whether they provide for information to be exchanged automatically or on request), ...

• (c) the benefit that the UK would be likely to obtain from receiving information from that territory, were such arrangements to exist with it.

• (d) the existence of any other arrangements between the UK and that territory for co-operation in the area of taxation, and

• (e) the quality of any such other arrangements (in particular, the extent to which the co-operation provided for in them assists or is likely to assist in the protection of revenue raised from taxation in the UK).

• (5) An order under this paragraph is to be made by statutory instrument.

• (6) Subject to sub-paragraph (7), an instrument containing an order under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.

• (7) If the order is—

• (a) the first order to be made under sub-paragraph (1), or

• (b) the first order to be made under sub-paragraph (3),

it may not be made unless a draft of the instrument containing it has been laid before, and approved by a resolution of, the House of Commons.

• (8) An order under this paragraph does not apply to inaccuracies in a document given to HMRC (or, in a case within paragraph 3(2), inaccuracies discovered by P) before the date on which the order comes into force.

Location of assets etc

21B

• (1) The Treasury may by regulations make provision for determining for the purposes of paragraph 4A where—

• (a) a source of income is located,

• (b) an asset is situated or held, or

• (c) activities are wholly or mainly carried on.

• (1A) The Treasury may by regulations make provision for determining for the purposes of paragraph 4AA where—

• (a) income is received or transferred,

• (b) the proceeds of a disposal are received or transferred, or

• (c) assets are transferred.

• (2) Different provision may be made for different cases and for income tax , capital gains tax and inheritance tax .

• (3) Regulations under this paragraph are to be made by statutory instrument.

• (4) An instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.

23B

“UK” means the United Kingdom, including the territorial sea of the United Kingdom.

Charge and rates for 2007-08

Rates of tobacco products duty

Remote gaming duty

Rates of vehicle excise duty

Rates of air passenger duty

Rates of landfill tax

Emissions trading: charges for allocations

Avoidance involving financial arrangements

Lloyd's corporate members: restriction of group relief

Purchased life annuities: self-assessment

Sale and repurchase of securities

Abolition of contributions relief for life assurance premium contributions

SDLT: shared ownership trusts

Sections 82 and 83: supplementary

Trustee's tax return

Mandatory electronic payment

Mandatory electronic payment

Disclosure of tax avoidance schemes

Meaning of “recognised stock exchange” etc

Limitation period in old actions for mistake of law relating to direct tax

Mergers Directive: regulations

Repeals

Mandatory electronic payment

Payment by cheque

Penalties for errors

Allowance of unrelievable loss from abandoned field

Alternatively secured pensions etc

Acquisition relief: disregard of company holding own shares

Criminal investigations: Scotland

Commencement

Mandatory electronic payment

Payment by cheque

Penalties for errors

IPT: meaning of “premium”

Tax-exempt tariffing receipts

Limitation period in old actions for mistake of law relating to direct tax

Treatment of certain payments on account of tax

21C

In paragraphs 1(2) and 5 references to “tax” are to be interpreted as if amounts payable under Schedule 2 to FA 2019 and amounts payable on account of apprenticeship levy were tax.

4AA

• (1) This paragraph makes provision in relation to offshore transfers.

• (2) Where the tax at stake is income tax, the applicable condition is satisfied if the income on or by reference to which the tax is charged, or any part of the income—

• (a) is received in a territory outside the UK, or

• (b) is transferred before the filing date to a territory outside the UK.

• (3) Where the tax at stake is capital gains tax, the applicable condition is satisfied if the proceeds of the disposal on or by reference to which the tax is charged, or any part of the proceeds—

• (a) are received in a territory outside the UK, or

• (b) are transferred before the filing date to a territory outside the UK.

• (4) Where the tax at stake is inheritance tax, the applicable condition is satisfied if—

• (a) the disposition that gives rise to the transfer of value by reason of which the tax becomes chargeable involves a transfer of assets, and

• (b) after that disposition but before the filing date the assets, or any part of the assets, are transferred to a territory outside the UK.

• (5) In the case of a transfer falling within sub-paragraph (2)(b), (3)(b) or (4)(b), references to the income, proceeds or assets transferred are to be read as including references to any assets derived from or representing the income, proceeds or assets.

• (6) In relation to an offshore transfer, the territory in question for the purposes of paragraph 4A is the highest category of territory by virtue of which the inaccuracy involves an offshore transfer.

• (7) “Filing date” means the date when the document containing the inaccuracy is given to HMRC.

• (8) “Assets” has the same meaning as in paragraph 4A.

10A

• (1) If a person who would otherwise be liable to a penalty of a percentage shown in column 1 of the Table (a “standard percentage”) has made a disclosure, HMRC must reduce the standard percentage to one that reflects the quality of the disclosure.

• (2) But the standard percentage may not be reduced to a percentage that is below the minimum shown for it—

• (a) in the case of a prompted disclosure, in column 2 of the Table, and

• (b) in the case of an unprompted disclosure, in column 3 of the Table.

Standard %	Minimum % for prompted disclosure	Minimum % for unprompted disclosure
30%	15%	0%
37.5%	18.75%	0%
45%	22.5%	0%
60%	30%	0%
70%	45%	30%
87.5%	53.75%	35%
100%	60%	40%
105%	62.5%	40%
125%	72.5%	50%
140%	80%	50%
150%	85%	55%
200%	110%	70%

Errors related to avoidance arrangements

3A

• (1) This paragraph applies where a document of a kind listed in the Table in paragraph 1 is given to HMRC by a person (“P”) and the document contains an inaccuracy which—

• (a) falls within paragraph 1(2), and

• (b) arises because the document is submitted on the basis that particular avoidance arrangements (within the meaning of paragraph 3B) had an effect which in fact they did not have.

• (2) It is to be presumed that the inaccuracy was careless, within the meaning of paragraph 3, unless—

• (a) the inaccuracy was deliberate on P's part, or

• (b) P satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid inaccuracy.

• (3) In considering whether P took reasonable care to avoid inaccuracy, HMRC and (on an appeal notified to the tribunal) the tribunal must take no account of any evidence of any reliance by P on advice where the advice is disqualified.

• (4) Advice is “disqualified” if any of the following applies—

• (a) the advice was given to P by an interested person;

• (b) the advice was given to P as a result of arrangements made between an interested person and the person who gave the advice;

• (c) the person who gave the advice did not have appropriate expertise for giving the advice;

• (d) the advice took no account of P's individual circumstances;

• (e) the advice was addressed to, or given to, a person other than P;

but this is subject to sub-paragraphs (5) and (7).

• (5) Where (but for this sub-paragraph) advice would be disqualified under any of paragraphs (a) to (c) of sub-paragraph (4), the advice is not disqualified under that paragraph if at the relevant time P—

• (a) has taken reasonable steps to find out whether the advice falls within that paragraph, and

• (b) reasonably believes that it does not.

• (6) In sub-paragraph (4) “an interested person” means—

• (a) a person, other than P, who participated in the avoidance arrangements or any transaction forming part of them, or

• (b) a person who for any consideration (whether or not in money) facilitated P's entering into the avoidance arrangements.

• (7) Where (but for this sub-paragraph) advice would be disqualified under paragraph (a) of sub-paragraph (4) because it was given by a person within sub-paragraph (6)(b), the advice is not disqualified under that paragraph if—

• (a) the person giving the advice had appropriate expertise for giving it,

• (b) the advice took account of P's individual circumstances, and

• (c) at the time when the question whether the advice is disqualified arises—

• (i) Condition E in paragraph 3B(5) is met in relation to the avoidance arrangements, but

• (ii) none of Conditions A to D in paragraph 3B(5) is or has at any time been met in relation to them.

• (8) If the document mentioned in sub-paragraph (1) is given to HMRC by P as a personal representative of a deceased person (“D”)—

• (a) sub-paragraph (4) is to be read as if—

• (i) the references in paragraphs (a) and (b) to P were to P or D;

• (ii) the reference in paragraph (d) to P were to D, and

• (iii) the reference in paragraph (e) to a person other than P were to a person who is neither P nor D,

• (b) sub-paragraph (6) is to be read as if—

• (i) the reference in paragraph (a) to P were a reference to the person to whom the advice was given, and

• (ii) the reference in paragraph (b) to P were to D (or, where P also participated in the avoidance arrangements, P or D), and

• (c) sub-paragraph (7) is to be read as if the reference in paragraph (b) to P were to D.

• (9) In this paragraph—

• “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

• “the relevant time” means the time when the document mentioned in sub-paragraph (1) is given to HMRC;

• “the tribunal” has the same meaning as in paragraph 17 (see paragraph 17(5A)).

3B

• (1) In paragraph 3A “avoidance arrangements” means, subject to sub-paragraph (3), arrangements which fall within sub-paragraph (2).

• (2) Arrangements fall within this sub-paragraph if, having regard to all the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage was the main purpose, or one of the main purposes, of the arrangements.

• (3) Arrangements are not avoidance arrangements for the purposes of paragraph 3A if (although they fall within sub-paragraph (2))—

• (a) they are arrangements which accord with established practice, and

• (b) HMRC had, at the time the arrangements were entered into, indicated its acceptance of that practice.

• (4) If, at any time, any of Conditions A to E is met in relation to particular arrangements—

• (a) for the purposes of this Schedule the arrangements are to be taken to fall within (and always to have fallen within) sub-paragraph (2), and

• (b) in relation to the arrangements, sub-paragraph (3) (and the reference to it in sub-paragraph (1)) are to be treated as omitted.

This does not prevent arrangements from falling within sub-paragraph (2) other than by reason of one or more of Conditions A to E being met.

• (5) Conditions A to E are as follows—

• (a) Condition A is that the arrangements are DOTAS arrangements within the meaning given by section 219(5) and (6) of FA 2014;

• (b) Condition B is that the arrangements are disclosable VAT arrangements or disclosable indirect tax arrangements for the purposes of Schedule 18 to FA 2016 (see paragraphs 8A to 9A of that Schedule);

• (c) Condition C is that both of the following apply—

• (i) P has been given a notice under a provision mentioned in sub-paragraph (6) stating that a tax advantage arising from the arrangements is to be counteracted, and

• (ii) that tax advantage has been counteracted under section 209 of FA 2013;

• (d) Condition D is that a follower notice under section 204 of FA 2014 has been given to P by reference to the arrangements (and not withdrawn) and—

• (i) the necessary corrective action for the purposes of section 208 of FA 2014 has been taken in respect of the denied advantage, or

• (ii) the denied advantage has been counteracted otherwise than as mentioned in sub-paragraph (i);

• (e) Condition E is that a tax advantage asserted by reference to the arrangements has been counteracted (by an assessment, an amendment of a return or claim, or otherwise) on the basis that an avoidance-related rule applies in relation to P's affairs.

• (6) The provisions referred to in sub-paragraph (5)(c)(i) are—

• (a) paragraph 12 of Schedule 43 to FA 2013 (general anti-abuse rule: notice of final decision);

• (b) paragraph 8 or 9 of Schedule 43A to that Act (pooled or bound arrangements: notice of final decision);

• (c) paragraph 8 of Schedule 43B to that Act (generic referrals: notice of final decision).

• (7) In sub-paragraph (5)(d) the reference to giving a follower notice to P includes giving a partnership follower notice in respect of a partnership return in relation to which P is a relevant partner; and for the purposes of this sub-paragraph—

• (a) “relevant partner” has the meaning given by paragraph 2(5) of Schedule 31 to FA 2014;

• (b) a partnership follower notice is given “in respect of” the partnership return mentioned in paragraph 2(2)(a) or (b) of that Schedule.

• (8) For the purposes of sub-paragraph (5)(d) it does not matter whether the denied advantage has been dealt with—

• (a) wholly as mentioned in one or other of sub-paragraphs (i) and (ii) of sub-paragraph (5)(d), or

• (b) partly as mentioned in one of those sub-paragraphs and partly as mentioned in the other;

and “the denied advantage” has the same meaning as in Chapter 2 of Part 4 of FA 2014 (see section 208(3) of and paragraph 4(3) of Schedule 31 to that Act).

• (9) For the purposes of sub-paragraph (5)(e) a tax advantage has been “asserted by reference to” the arrangements if a return, claim or appeal has been made by P on the basis that the tax advantage results from the arrangements.

• (10) In this paragraph—

• “arrangements” has the same meaning as in paragraph 3A;

• “avoidance-related rule” has the same meaning as in Part 4 of Schedule 18 to FA 2016 (see paragraph 25 of that Schedule);

• a “tax advantage” includes—relief or increased relief from tax,repayment or increased repayment of tax,avoidance or reduction of a charge to tax or an assessment to tax,avoidance of a possible assessment to tax,deferral of a payment of tax or advancement of a repayment of tax,avoidance of an obligation to deduct or account for tax, andin relation to VAT, anything which is a tax advantage for the purposes of Schedule 18 to FA 2016 under paragraph 5 of that Schedule.

21ZA

• (1) A person is not liable to a penalty under paragraph 1 in respect of an inaccuracy if—

• (a) the inaccuracy involves a claim by the person to exercise or rely on a VAT right (in relation to a supply) that has been denied or refused by HMRC as mentioned in subsection (4) of section 69C of VATA 1994, and

• (b) the person has been assessed to a penalty under that section (and the assessment has not been successfully appealed against or withdrawn).

• (2) In sub-paragraph (1)(a) “VAT right” has the same meaning as in section 69C of VATA 1994.

Personal tax returns

Penalties for errors

Interpretation

Errors related to transfer pricing records

3C

• (1) This paragraph applies where—

• (a) a document of a kind listed in the Table in paragraph 1 relating to a relevant tax period is given to HMRC by a person (“P”),

• (b) the document contains an inaccuracy—

• (i) which falls within paragraph 1(2), and

• (ii) which involves the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing) for the purposes of that period, and

• (c) the relevant person (whether or not P) failed to comply, in relation to specified relevant transfer pricing records that relate to the inaccuracy, with one or more of—

• (i) section 12B of TMA 1970 (records to be kept for the purposes of returns),

• (ii) paragraph 21 of Schedule 18 to FA 1998 (duty to keep and preserve records), and

• (iii) an information notice (within the meaning of Schedule 36 to FA 2008 (information and inspection powers)).

• (2) It is to be presumed that the inaccuracy was careless, within the meaning of paragraph 3, unless—

• (a) the inaccuracy was deliberate on P’s part, or

• (b) P satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid the inaccuracy.

• (3) Sub-paragraphs (4) to (6) apply for the purposes of this paragraph.

• (4) “Relevant person”, in relation to a document of a kind listed in the Table in paragraph 1, means—

• (a) the person to whose tax liability the document relates,

• (b) in the case of a return under section 8A of TMA 1970 (trustee's return), a relevant trustee (within the meaning of that Act), or

• (c) in the case of a partnership return, or a statement, declaration or accounts in connection with a partnership return, a person who was required by a notice under section 12AA of TMA 1970 (partnership return) to make and deliver a return in respect of relevant tax period.

• (5) “Relevant tax period” means a tax period—

• (a) in respect of which—

• (i) the person mentioned in sub-paragraph (4)(a),

• (ii) in the case mentioned in sub-paragraph (4)(b), the trustees of the trust concerned, or

• (iii) in the case mentioned in sub-paragraph (4)(c), the partnership to which the partnership return relates,

together with one or more other enterprises, constitutes an MNE Group within the meaning of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations), and

• (b) in respect of which the MNE Group meets the threshold requirement within the meaning of those Regulations (see regulations 3(2) to (4) of those Regulations).

• (6) Records are “specified relevant transfer pricing records” if—

• (a) they are relevant transfer pricing records specified, or of a description specified, in regulations under section 12B of TMA 1970 or paragraph 21 of Schedule 18 to FA 1998 (duties to keep and preserve records), and

• (b) the relevant person is required to keep and preserve those records under either or both of those provisions.