Legalize / United Kingdom / Public General Act

Finance Act 2009

Type Public General Act

Publication 2009-07-21

Last updated 2025-09-01

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

	Tax to which payment relates	Amount of tax payable	Date after which penalty is incurred
*PRINCIPAL AMOUNTS*	*PRINCIPAL AMOUNTS*	*PRINCIPAL AMOUNTS*	*PRINCIPAL AMOUNTS*
1	Income tax or capital gains tax	Amount payable under section 59B(3) or (4) of TMA 1970	The date falling 30 days after the date specified in section 59B(3) or (4) of TMA 1970 as the date by which the amount must be paid
1A	Income tax or capital gains tax	Amount payable under section 59BA(4) or (5) of TMA 1970	The date falling 30 days after the date specified in section 59BA(4) or (5) of TMA 1970 as the date by which the amount must be paid.
2	Income tax	Amount payable under PAYE regulations ...	The date determined by or under PAYE regulations as the date by which the amount must be paid
3	Income tax	Amount shown in return under section 254(1) of FA 2004	The date falling 30 days after the date specified in section 254(5) of FA 2004 as the date by which the amount must be paid
3A	Income tax	Amount payable under regulations under section 244L(2)(a) of FA 2004	The date falling 30 days after the due date determined by or under the regulations
3B	Capital gains tax	Amount payable under paragraph 6 of Schedule 2 to FA 2019 where not included in a return under section 8 or 8A of TMA 1970	The date falling 30 days after 31 January in the tax year following the one in which the disposal was made
3C	Capital gains tax	Amount payable under a CGT exit charge payment plan entered into in accordance with Schedule 3ZAA to TMA 1970	The later of—the date falling 30 days after the date specified in section 59B of TMA 1970 as the date by which the amount is due to be paid, andthe date on which the amount is payable under the plan.
4	Deductions on account of tax under Chapter 3 of Part 3 of FA 2004 (construction industry scheme)	Amount payable under section 62 of FA 2004 (except an amount falling within item 17, 23 or 24)	The date determined by or under regulations under section 71 of FA 2004 as the date by which the amount must be paid
4A	Apprenticeship levy	Amount payable under regulations under section 105 of FA 2016	The date determined by or under regulations under section 105 of FA 2016
5	Corporation tax	Amount shown in company tax return under paragraph 3 of Schedule 18 to FA 1998	The filing date for the company tax return for the accounting period for which the tax is due (see paragraph 14 of Schedule 18 to FA 1998)
6	Corporation tax	Amount payable under regulations under section 59E of TMA 1970 (except an amount falling within item 17, 23 or 24)	The filing date for the company tax return for the accounting period for which the tax is due (see paragraph 14 of Schedule 18 to FA 1998)
6ZZA	Corporation tax	Amount payable under section 357YQ of CTA 2010	The end of the period within which, in accordance with section 357YQ(5), the amount must be paid.
6ZA	Corporation tax	Amount payable under an exit charge payment plan entered into in accordance with Schedule 3ZB to TMA 1970	The later of—the first day after the period of 12 months beginning immediately after the migration accounting period (as defined in Part 1 or 2 of Schedule 3ZB to TMA 1970, as the case may be), andthe date on which the amount is payable under the plan.
6ZAA	Corporation tax	Amount payable under a CT payment plan entered into in accordance with Schedule 3ZC to TMA 1970	The later of—the first day after the period of 12 months beginning immediately after the accounting period to which the CT payment plan relates, andthe date on which the amount is payable under the plan.
6ZB	Diverted profits tax	Amount of diverted profits tax payable under Part 3 of FA 2015	The date when, in accordance with section 98(2) of FA 2015, the amount must be paid
6A	Value added tax	Amount payable under section 25(1) of VATA 1994 (except an amount falling within item 6B, 13A, 23 or 24)	The date determined—by or under regulations under section 25 of VATA 1994, orin accordance with an order under section 28 of that Act,as the date by which the amount must be paid
6B	Value added tax	Amount payable under section 25(1) of VATA 1994 which is an instalment of an amount due in respect of a period of 9 months or more (“amount A”)	The date on or before which P must pay any balancing payment or other outstanding payment due in respect of amount A
6C	Insurance premium tax	Amount payable under regulations under section 54 of FA 1994 (except an amount falling within item 13B, 23 or 24)	The date determined by or under regulations under section 54 of FA 1994 as the date by which the amount must be paid
7	Inheritance tax	Amount payable under section 226 of IHTA 1984 (except an amount falling within item 14 or 21)	The filing date (determined under section 216 of IHTA 1984) for the account in respect of the liability for that amount
8	Inheritance tax	Amount payable under section 227 or 229 of IHTA 1984 (except an amount falling within item 14 or 21)	For the first instalment, the filing date (determined under section 216 of IHTA 1984) for the account in respect of the liability for that amountFor any later instalment, the date falling 30 days after the date determined under section 227 or 229 of IHTA 1984 as the date by which the instalment must be paid
9	Stamp duty land tax	Amount payable under section 86(1) or (2) of FA 2003	The date falling 30 days after the date specified in section 86(1) or (2) of FA 2003 as the date by which the amount must be paid
10	Stamp duty reserve tax	Amount payable under section 87, 93 or 96 of FA 1986 or Schedule 19 to FA 1999 (except an amount falling within item 17, 23 or 24)	The date falling 30 days after the date determined by or under regulations under section 98 of FA 1986 as the date by which the amount must be paid
10A	Annual tax on enveloped dwellings	Amount payable under section 163(1) or (2) of FA 2013 (except an amount falling within item 23).	The date falling 30 days after the date specified in section 163(1) or (2) of FA 2013 as the date by which the amount must be paid
11	Petroleum revenue tax	Amount charged in an assessment under paragraph 11(1) of Schedule 2 to OTA 1975	The date falling 30 days after the date determined in accordance with paragraph 13 of Schedule 2 to OTA 1975 as the date by which the amount must be paid
11ZA	Soft drinks industry levy	Amount payable under regulations under section 52 of FA 2017 or paragraphs 6 or 14 of Schedule 8 to that Act	The date determined by or under regulations under section 52 of FA 2017
11A	Aggregates levy	Amount payable under regulations under section 25 of FA 2001 (except an amount falling within item 16A, 23 or 24)	The date determined by or under regulations under section 25 of FA 2001 as the date by which the amount must be paid
11AA	Plastic packaging tax	Amount payable under regulations under section 61 of FA 2021	The date determined by or under regulations under section 61 of FA 2021 as the date by which the amount must be paid
11AB	Plastic packaging tax	Amount payable by virtue of secondary liability and assessment notice or joint and several liability notice under Schedule 9 to FA 2021	The date determined in accordance with Schedule 9 to FA 2021 as the date by which the amount must be paid
11B	Climate change levy	Amount payable under regulations under paragraph 41 of Schedule 6 to FA 2000 (except an amount falling within item 16B, 23 or 24)	The date determined by or under regulations under paragraph 41 of Schedule 6 to FA 2000 as the date by which the amount must be paid
11C	Landfill tax	Amount payable under regulations under section 49 of FA 1996 (except an amount falling within item 16C, 23 or 24)	The date determined by or under regulations under section 49 of FA 1996 as the date by which the amount must be paid
11D	Air passenger duty	Amount payable under regulations under section 38 of FA 1994 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under section 38 of FA 1994 as the date by which the amount must be paid
11E	Alcohol duty	Amount payable under regulations under section 88 of F(No. 2)A 2023 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under section 88 of F(No. 2)A 2023 as the date by which the amount must be paid
11F	Tobacco products duty	Amount payable under regulations under section 7 of TPDA 1979 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under section 7 of TPDA 1979 as the date by which the amount must be paid
11G	Hydrocarbon oil duties	Amount payable under regulations under section 21 or 24 of HODA 1979 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under section 21 or 24 of HODA 1979 as the date by which the amount must be paid
11GA	Excise duties	Amount payable under regulations under section 60A of the Customs and Excise Management Act 1979 (except an amount falling within item 17A, 23 or 24).	The date determined by or under regulations under section 60A of the Customs and Excise Management Act 1979 as the date by which the amount must be paid
11H	General betting duty	Amount payable under section 5B of BGDA 1981 (except an amount falling within item 17A, 23 or 24)	The date determined—under section 5B of BGDA 1981, orby or under regulations under para-graph 2 of Schedule 1 to that Act,as the date by which the amount must be paid
11I	Pool betting duty	Amount payable under section 8 of BGDA 1981 (except an amount falling within item 17A, 23 or 24)	The date determined—under section 8 of BGDA 1981, orby or under regulations under that section or directions under para-graph 3 of Schedule 1 to that Act,as the date by which the amount must be paid
11J	Bingo duty	Amount payable under regulations under paragraph 9 of Schedule 3 to BGDA 1981 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under paragraph 9 of Schedule 3 to BGDA 1981 as the date by which the amount must be paid
11K	Lottery duty	Amount payable under section 26 of FA 1993 (except an amount falling within item 17A, 23 or 24)	The date determined—by section 26 of FA 1993, orby or under regulations under that section,as the date by which the amount must be paid
11L	Gaming duty	Amount payable under section 12 of FA 1997 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under—section 12 of FA 1997, orparagraph 11 of Schedule 1 to that Act,as the date by which the amount must be paid
11M	Remote gaming duty	Amount payable under section 26I of BGDA 1981 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under section 26I of BGDA 1981 as the date by which the amount must be paid
11N	Machine games duty	Amount payable under paragraph 6 of Schedule 24 to FA 2012 (except an amount falling within item 17A, 23 or 24)	The date determined by or under regulations under paragraph 19 of Schedule 24 to FA 2012 as the date by which the amount must be paid
*AMOUNTS PAYABLE IN DEFAULT OF A RETURN BEING MADE*	*AMOUNTS PAYABLE IN DEFAULT OF A RETURN BEING MADE*	*AMOUNTS PAYABLE IN DEFAULT OF A RETURN BEING MADE*	*AMOUNTS PAYABLE IN DEFAULT OF A RETURN BEING MADE*
12	Income tax or capital gains tax	Amount payable under section 59B(5A) of TMA 1970	The date falling 30 days after the date specified in section 59B(5A) of TMA 1970 as the date by which the amount must be paid
13	Corporation tax	Amount shown in determination under paragraph 36 or 37 of Schedule 18 to FA 1998	The filing date for the company tax return for the accounting period for which the tax is due (see paragraph 14 of Schedule 18 to FA 1998)
13A	Value added tax	Amount assessed under section 73(1) of VATA 1994 in the absence of a return	The date by which the amount would have been required to be paid if it had been shown in the return
13B	Insurance premium tax	Amount assessed under section 56(1) of FA 1994 in the absence of a return	The date by which the amount would have been required to be paid if it had been shown in the return
14	Inheritance tax	Amount shown in a determination made by HMRC in the circumstances set out in paragraph 2	The filing date (determined under section 216 of IHTA 1984) for the account in respect of the liability for that amount
15	Stamp duty land tax	Amount shown in determination under paragraph 25 of Schedule 10 to FA 2003 (including that paragraph as applied by section 81(3) of that Act)	The date falling 30 days after the filing date for the return in question
15A	Annual tax on enveloped dwellings	Amount shown in determination under paragraph 18 of Schedule 33 to FA 2013	The date falling 30 days after the filing date for the return in question
16	Petroleum revenue tax	Amount charged in an assessment made where participator fails to deliver return for a chargeable period	The date falling 6 months and 30 days after the end of the chargeable period
16A	Aggregates levy	Amount assessed under paragraph 2 or 3 of Schedule 5 to FA 2001 in the absence of a return	The date by which the amount would have been required to be paid if it had been shown in the return
16AA	Plastic packaging tax	Amount assessed under Schedule 10 to FA 2021	The date by which the amount would have been required to be paid if it had been shown in the return
16B	Climate change levy	Amount assessed under paragraph 78 or 79 of Schedule 6 to FA 2000 in the absence of a return	The date by which the amount would have been required to be paid if it had been shown in the return
16C	Landfill tax	Amount assessed under section 50(1) of FA 1996 in the absence of a return	The date by which the amount would have been required to be paid if it had been shown in the return
17	Tax falling within any of items 1 2, 3B to 6, 9 , 10 or 10A	Amount (not falling within any of items 12 13 to 15A) which is shown in an assessment or determination made by HMRC in the circumstances set out in paragraph 2	The date falling 30 days after the date by which the amount would have been required to be paid if it had been shown in the return in question
17A	Tax falling within any of items 11D to 11M11N	Amount assessed under section 12(1) of FA 1994 in the absence of a return	The date by which the amount would have been required to be paid if it had been shown in the return
*AMOUNTS SHOWN TO BE DUE IN OTHER ASSESSMENTS, DETERMINATIONS, ETC*	*AMOUNTS SHOWN TO BE DUE IN OTHER ASSESSMENTS, DETERMINATIONS, ETC*	*AMOUNTS SHOWN TO BE DUE IN OTHER ASSESSMENTS, DETERMINATIONS, ETC*	*AMOUNTS SHOWN TO BE DUE IN OTHER ASSESSMENTS, DETERMINATIONS, ETC*
18	Income tax or capital gains tax	Amount payable under section 55 of TMA 1970	The date falling 30 days after the date determined in accordance with section 55(3), (4), (6) or (9) of TMA 1970 as the date by which the amount must be paid
19	Income tax or capital gains tax	Amount payable under section 59B(5) or (6) of TMA 1970	The date falling 30 days after the date specified in section 59B(5) or (6) of TMA 1970 as the date by which the amount must be paid
20	. . .	. . .	. . .
21	Inheritance tax	Amount shown in—an amendment or correction of a return showing an amount falling within item 7 or 8, ora determination made by HMRC in circumstances other than those set out in paragraph 2	The later of—the filing date (determined under section 216 of IHTA 1984) for the account in respect of the liability for that amount, andthe date falling 30 days after the date on which the amendment, correction, assessment or determination is made
22	Petroleum revenue tax	Amount charged in an assessment, or an amendment of an assessment, made in circumstances other than those set out in items 11 and 16	The date falling 30 days after—the date by which the amount must be paid, orthe date on which the assess-ment or amendment is made,whichever is later
23	Tax falling within any of items 1 to 6, 9 or 10 items 1 to 6A 2, 3B to 6 , 6C, 9, 10, 11A or 11B to 11M 11N	Amount (not falling within any of items 18 to 20 item 18 or 19) shown in an amendment or correction of a return showing an amount falling within any of items 1 to 6, 9 or 10 items 1 to 6A 2, 3B to 6 , 6C, 9, 10, 11A or 11B to 11M 11N	The date falling 30 days after—the date by which the amount must be paid, orthe date on which the amendment or correction is made,whichever is later
24	Tax falling within any of items 1 to 6, 9 or 10 items 1 to 6A 2, 3B to 6 , 6C, 9, 10, 11A or 11B to 11M 11N	Amount (not falling within any of items 18 to 20 item 18 or 19) shown in an assessment or determination made by HMRC in circumstances other than those set out in paragraph 2	The date falling 30 days after—the date by which the amount must be paid, orthe date on which the assessment or determin-ation is made,whichever is later

Assessments and determinations in default of return

2

The circumstances referred to in items 14, 17, 21 and 24 are where—

(a) P or another person is required to make or deliver a return falling within any item in the Table in Schedule 55,

(b) that person fails to make or deliver the return on or before the date by which it is required to be made or delivered, and

(c) if the return had been made or delivered as required, the return would have shown that an amount falling within any of items 1 2 and 3B to 10 11M 11N was due and payable.

Amount of penalty: occasional amounts and amounts in respect of periods of 6 months or more

3

(1) This paragraph applies in the case of—

(a) a payment of tax falling within any of items 1, 3 , 3B , 3C and 7 to 24 3B, 6B, 7 to 11ZA and 12 13 to 24 in the Table,

(aza) a payment of tax falling within items 11AA or 11AB in the Table,

(aa) a payment of tax falling within item 6ZB in the Table,

(b) a payment of tax falling within item 4A or item 2 or 4 any of items 2, 4, 6A, 6C and 11A to 11M 11N which relates to a period of 6 months or more, and

(c) a payment of tax falling within item 2 which is payable under regulations under section 688A of ITEPA 2003 (recovery from other persons of amounts due from managed service companies),

(ca) an amount in respect of apprenticeship levy falling within item 4A which is payable by virtue of regulations under section 106 of FA 2016 (recovery from third parties).

(d) a payment of tax falling within item 6A which relates to a transitional period for the purposes of the annual accounting scheme;

(1A) In sub-paragraph (1)(d), a transitional period for the purposes of the annual accounting scheme is a prescribed accounting period (within the meaning of section 25(1) of VATA 1994) which—

(a) ends on the day immediately preceding the date indicated by the Commissioners for Her Majesty's Revenue and Customs in a notification of authorisation under regulation 50 of the Value Added Tax Regulations 1995 (S.I. 1995/2518) (admission to annual accounting scheme), or

(b) begins on the day immediately following the end of the last period of 12 months for which such an authorisation has effect.

(2) P is liable to a penalty of 5% of the unpaid tax.

(3) If any amount of the tax is unpaid after the end of the period of 5 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

(4) If any amount of the tax is unpaid after the end of the period of 11 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

4

(1) This paragraph applies in the case of a payment of tax falling within any of items 5 to 6ZAA in the Table.

(2) P is liable to a penalty of 5% of the unpaid tax.

(3) If any amount of the tax is unpaid after the end of the period of 3 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

(4) If any amount of the tax is unpaid after the end of the period of 9 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

Amount of penalty: PAYE and CIS amounts

5

(1) Paragraphs 6 to 8 apply in the case of a payment of tax falling within item 2 , 4 or 4A in the Table.

(2) But those paragraphs do not apply in the case of a payment mentioned in paragraph 3(1)(b) , (c) or (ca).

6

(1) P is liable to a penalty under this paragraph, in relation to each tax, each time that P makes a default in relation to a tax year.

(2) For the purposes of this paragraph, P makes a default in relation to a tax year when P fails to make one of the following payments (or to pay an amount comprising two or more of those payments) in full on or before the date on which it becomes due and payable—

(a) a payment under PAYE regulations of tax payable in relation to the tax year;

(b) a payment of earnings-related contributions within the meaning of the Social Security (Contributions) Regulations 2001 ( S.I. 2001/1004) payable in relation to the tax year;

(ba) a payment under regulations under section 105 of FA 2016 of an amount in respect of apprenticeship levy payable in relation to the tax year;

(c) a payment due under the Income Tax (Construction Industry Scheme) Regulations 2005 ( S.I. 2005/2045) payable in relation to the tax year ;

(d) a repayment in respect of a student loan due under the Education (Student Loans) (Repayments) Regulations 2009 ( S.I. 2009/470) or the Education (Student Loans) (Repayments) Regulations (Northern Ireland) 2000 (S.R. 2000 No. 121) and due for the tax year .

(3) But where a failure to make one of those payments (or to pay an amount comprising two or more of those payments) would, apart from this sub-paragraph, constitute the first default in relation to a tax year, that failure does not count as a default in relation to that year for the purposes of a penalty under this paragraph.

(4) The amount of the penalty for a default made in relation to a tax year is determined by reference to—

(a) the amount of the tax comprised in the default, and

(b) the number of previous defaults that P has made in relation to the same tax year.

(5) If the default is P's 1st, 2nd or 3rd default in relation to the tax year, P is liable, at the time of the default, to a penalty of 1% of the amount of tax comprised in the default.

(6) If the default is P's 4th, 5th or 6th default in relation to the tax year, P is liable, at the time of the default, to a penalty of 2% of the amount of tax comprised in the default.

(7) If the default is P's 7th, 8th or 9th default in relation to the tax year, P is liable, at the time of the default, to a penalty of 3% of the amount of tax comprised in the default.

(7A) If the default is P's 10th or subsequent default in relation to the tax year, P is liable, at the time of the default, to a penalty of 4% of the amount of tax comprised in the default.

(8) For the purposes of this paragraph—

(a) the amount of a tax comprised in a default is the amount of that tax comprised in the payment which P fails to make;

(b) a previous default counts for the purposes of sub-paragraphs (5) to (7A) even if it is remedied before the time of the default giving rise to the penalty.

(8A) Regulations made by the Commissioners for Her Majesty's Revenue and Customs may specify—

(a) circumstances in which, for the purposes of sub-paragraph (2), a payment of less than the full amount may be treated as a payment in full;

(b) circumstances in which sub-paragraph (3) is not to apply.

(8B) Regulations under sub-paragraph (8A) may—

(a) make different provision for different cases, and

(b) include incidental, consequential and supplementary provision.

(9) The Treasury may by order made by statutory instrument make such amendments to sub-paragraph (2) as they think fit in consequence of any amendment, revocation or re-enactment of the regulations mentioned in that sub-paragraph.

7

If any amount of the tax is unpaid after the end of the period of 6 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

8

If any amount of the tax is unpaid after the end of the period of 12 months beginning with the penalty date, P is liable to a penalty of 5% of that amount.

Special reduction

9

(1) If HMRC think it right because of special circumstances, they may reduce a penalty under any paragraph of this Schedule.

(2) In sub-paragraph (1) “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another.

(3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to—

(a) staying a penalty, and

(b) agreeing a compromise in relation to proceedings for a penalty.

Suspension of penalty during currency of agreement for deferred payment

10

(1) This paragraph applies if—

(a) P fails to pay an amount of tax when it becomes due and payable,

(b) P makes a request to HMRC that payment of the amount of tax be deferred, and

(2) If P would (apart from this sub-paragraph) become liable, between the date on which P makes the request and the end of the deferral period, to a penalty under any paragraph of this Schedule for failing to pay that amount, P is not liable to that penalty.

(3) But if—

(a) P breaks the agreement (see sub-paragraph (4)), and

(b) HMRC serves on P a notice specifying any penalty to which P would become liable apart from sub-paragraph (2),

P becomes liable, at the date of the notice, to that penalty.

(4) P breaks an agreement if—

(a) P fails to pay the amount of tax in question when the deferral period ends, or

(b) the deferral is subject to P complying with a condition (including a condition that part of the amount be paid during the deferral period) and P fails to comply with it.

(5) If the agreement mentioned in sub-paragraph (1)(c) is varied at any time by a further agreement between P and HMRC, this paragraph applies from that time to the agreement as varied.

Assessment

11

(1) Where P is liable for a penalty under any paragraph of this Schedule HMRC must—

(a) assess the penalty,

(b) notify P, and

(2) A penalty under any paragraph of this Schedule must be paid before the end of the period of 30 days beginning with the day on which notice of the assessment of the penalty is issued.

(3) An assessment of a penalty under any paragraph of this Schedule—

(a) is to be treated for procedural purposes in the same way as an assessment to tax (except in respect of a matter expressly provided for by this Schedule),

(b) may be enforced as if it were an assessment to tax, and

(4) A supplementary assessment may be made in respect of a penalty if an earlier assessment operated by reference to an underestimate of an amount of tax which was due or payable.

(4A) If an assessment in respect of a penalty is based on an amount of tax due or payable that is found by HMRC to be excessive, HMRC may by notice to P amend the assessment so that it is based upon the correct amount.

(4B) An amendment made under sub-paragraph (4A)—

(a) does not affect when the penalty must be paid;

(b) may be made after the last day on which the assessment in question could have been made under paragraph 12.

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

12

(1) An assessment of a penalty under any paragraph of this Schedule in respect of any amount must be made on or before the later of date A and (where it applies) date B.

(2) Date A is the last day of the period of 2 years beginning with the date specified in or for the purposes of column 4 of the Table (that is to say, the last date on which payment may be made without incurring a penalty).

(3) Date B is the last day of the period of 12 months beginning with—

(a) the end of the appeal period for the assessment of the amount of tax in respect of which the penalty is assessed, or

(b) if there is no such assessment, the date on which that amount of tax is ascertained.

(4) In sub-paragraph (3)(a) “appeal period” means the period during which—

(a) an appeal could be brought, or

(b) an appeal that has been brought has not been determined or withdrawn.

Appeal

13

(1) P may appeal against a decision of HMRC that a penalty is payable by P.

(2) P may appeal against a decision of HMRC as to the amount of a penalty payable by P.

14

(1) An appeal under paragraph 13 is to be treated in the same way as an appeal against an assessment to the tax concerned (including by the application of any provision about bringing the appeal by notice to HMRC, about HMRC review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal).

(2) Sub-paragraph (1) does not apply—

(a) so as to require P to pay a penalty before an appeal against the assessment of the penalty is determined, or

(b) in respect of any other matter expressly provided for by this Act.

15

(1) On an appeal under paragraph 13(1) that is notified to the tribunal, the tribunal may affirm or cancel HMRC's decision.

(2) On an appeal under paragraph 13(2) that is notified to the tribunal, the tribunal may—

(a) affirm HMRC's decision, or

(b) substitute for HMRC's decision another decision that HMRC had power to make.

(3) If the tribunal substitutes its decision for HMRC's, the tribunal may rely on paragraph 9—

(a) to the same extent as HMRC (which may mean applying the same percentage reduction as HMRC to a different starting point), or

(b) to a different extent, but only if the tribunal thinks that HMRC's decision in respect of the application of paragraph 9 was flawed.

(4) In sub-paragraph (3)(b) “flawed” means flawed when considered in the light of the principles applicable in proceedings for judicial review.

(5) In this paragraph “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of paragraph 14(1)).

Reasonable excuse

16

(1) If P satisfies HMRC or (on appeal) the First-tier Tribunal or Upper Tribunal that there is a reasonable excuse for a failure to make a payment—

(a) liability to a penalty under any paragraph of this Schedule does not arise in relation to that failure, and

(b) the failure does not count as a default for the purposes of paragraphs 6, 8B, 8C, 8G and 8H.

(2) For the purposes of sub-paragraph (1)—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside P's control,

(b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and

(c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Double jeopardy

17

P is not liable to a penalty under any paragraph of this Schedule in respect of a failure or action in respect of which P has been convicted of an offence.

Interpretation

18

(1) This paragraph applies for the construction of this Schedule.

(2) “HMRC” means Her Majesty's Revenue and Customs.

(3) References to tax include construction industry deductions under Chapter 3 of Part 3 of FA 2004.

(4) References to a determination, in relation to an amount payable under PAYE regulations or under Chapter 3 of Part 3 of FA 2004, include a certificate.

(5) References to an assessment to tax, in relation to inheritance tax and stamp duty reserve tax, are to a determination.

SCHEDULE 57

Part 1 — Amendments of Schedule 24 to FA 2007

1

Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

2

In paragraph 2 (under-assessment by HMRC), insert at the end—

(4) In this paragraph (and in Part 2 of this Schedule so far as relating to this paragraph)— (a) “assessment” includes determination, and (b) accordingly, references to an under-assessment include an under-determination.

3

In paragraph 5 (normal rule for calculating potential lost revenue), for sub-paragraph (4)(b) substitute—

(b) any relief under subsection (4) of section 419 of ICTA (relief in respect of repayment etc of loan) which is deferred under subsection (4A) of that section;

4

In paragraph 9(1)(b) and (c) (reductions for disclosure), for “supply or false information” substitute “ supply of false information ”.

5

In paragraph 13 (assessment), insert at the end—

(7) In this Part of this Schedule references to an assessment to tax, in relation to inheritance tax and stamp duty reserve tax, are to a determination.

6

For paragraph 16(2) (appeals) substitute—

(2) Sub-paragraph (1) does not apply— (a) so as to require P to pay a penalty before an appeal against the assessment of the penalty is determined, or (b) in respect of any other matter expressly provided for by this Act.

7

(1) Paragraph 19 (companies: officers' liability) is amended as follows.

(2) In sub-paragraph (3)—

(a) after “a body corporate” insert “ other than a limited liability partnership ”,

(b) in paragraph (a), omit the “or” at the end, and

(aa) a manager, and

(3) After that sub-paragraph insert—

(3A) In the application of sub-paragraph (1) to a limited liability partnership, “officer” means a member.

(4) Insert at the end—

(6) In this paragraph “company” means any body corporate or unincorporated association, but does not include a partnership, a local authority or a local authority association.

8

Omit paragraph 28(da) (interpretation of references to assessment).

9

In paragraphs 30 and 31 (consequential amendments) for “paragraph 7” substitute “ paragraphs 7 and 7B ”.

Part 2 — Amendments of Schedule 41 to FA 2008

10

Schedule 41 to FA 2008 (penalties for failure to notify and certain other wrongdoing) is amended as follows.

11

For paragraph 18(2) (appeals) substitute—

(2) Sub-paragraph (1) does not apply— (a) so as to require P to pay a penalty before an appeal against the assessment of the penalty is determined, or (b) in respect of any other matter expressly provided for by this Act.

12

(1) Paragraph 22 (companies: officers' liability) is amended as follows.

(2) In sub-paragraph (3)—

(a) after “a body corporate” insert “ other than a limited liability partnership ”,

(b) in paragraph (a), omit the “or” at the end,

(aa) a manager, and

(3) After that sub-paragraph insert—

(3A) In the application of sub-paragraph (1) to a limited liability partnership, “officer” means a member.

(4) Insert at the end—

(6) In this paragraph “company” means any body corporate or unincorporated association, but does not include a partnership, a local authority or a local authority association.

Part 3 — Other amendments

13

(1) TMA 1970 is amended as follows.

(2) In section 100(2) (determination of penalties by officer), omit paragraph (g) and the “or” before it.

(3) After section 103 insert—

(103ZA) Sections 100 to 103 do not apply to a penalty under— (a) Schedule 24 to FA 2007 (penalties for errors), (b) Schedule 36 to FA 2008 (information and inspection powers), (c) Schedule 41 to that Act (penalties for failure to notify and certain other wrongdoing), (d) Schedule 55 to FA 2009 (penalties for failure to make returns etc), or (e) Schedule 56 to that Act (penalties for failure to make payments on time).

14

In FA 2008 omit—

(a) paragraph 74 of Schedule 36 (information and inspection powers), and

(b) paragraph 20(3) of Schedule 40 (amendment of Schedule 24 to FA 2007).

SCHEDULE 58

PAYE regulations

1

Section 684 of ITEPA 2003 (PAYE regulations) is amended as follows.

2

In subsection (1), omit “for Her Majesty's Revenue and Customs”.

3

(1) Subsection (2) is amended as follows.

(2) For “PAYE regulations may, in particular, include” substitute “ The provision that may be made in PAYE regulations includes ”.

(3) In the list of provisions, in item 1, in paragraph (a), omit “for Her Majesty's Revenue and Customs”.

(4) In item 2, for “or remaining unpaid (or treated as overpaid or remaining unpaid)” substitute “ (or treated as overpaid) on account of, or any amounts other than relevant debts remaining unpaid (or treated as remaining unpaid) ”.

(5) After item 2 insert—

(2A) Provision— (a) for deductions to be made in respect of relevant debts of a payee, (b) as to the circumstances in which such deductions may be made, and (c) where such deductions are made, as to the date on which the relevant debts are to be treated as paid.

(6) In item 3, for “income tax has been and is” substitute “ amounts have been and are ”.

4

After subsection (3) insert—

(3A) PAYE regulations under item 2A in the above list may not make provision enabling deductions totalling more than £2,000 to be made from a payee's income for a tax year without the payee's consent. (3B) The Treasury may by order amend the amount specified in subsection (3A).

5

In paragraph (a) of subsection (7A), after “tax” insert “ or other amounts ”.

6

After that subsection insert—

(7AA) In this section “relevant debt”, in relation to a payee, means— (a) a sum payable by the payee to the Commissioners under or by virtue of an enactment, other than an excluded debt, and (b) a sum payable by the payee to the Commissioners under a contract settlement. (7AB) For the purposes of subsection (7AA)— (a) child tax credit or working tax credit that the payee is liable to repay is an excluded debt, and (b) if the payee is an employer, any amount that the payee is required to deduct from the PAYE income of employees for a tax year is an excluded debt until the tax year has ended.

7

In subsection (7C), before the definition of “payer” insert—

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs; “contract settlement” means an agreement made in connection with the liability of the payee or another person to make a payment to the Commissioners under or by virtue of an enactment.

Consequential provision

8

In section 29(5) of the Tax Credits Act 2002 (recovery of overpayments)—

(a) for “tax” substitute “ income tax ”, and

(b) insert at the end “that is not a relevant debt (within the meaning of section 684 of the Income Tax (Earnings and Pensions) Act 2003)”.

9

(1) Part 11 of ITEPA 2003 (pay as you earn) is amended as follows.

(2) In section 682(1) (scope of Part), insert at the end “ and includes provision in respect of the deduction of certain other amounts from, and the repayment of certain other amounts with, PAYE income ”.

(3) In section 685 (tax tables)—

(a) in subsection (1), omit “for Her Majesty's Revenue and Customs”, and

(b) in subsection (2)(b), for “or 2” substitute “ , 2 or 2A ”.

10

(1) The Treasury may by order make provision—

(a) amending or repealing provisions of Part 11 of ITEPA 2003,

(b) amending, repealing or revoking provisions of enactments or instruments that refer to provisions of that Part, and

(c) amending, repealing or revoking provisions of enactments or instruments that apply, or confer power to apply, PAYE regulations or otherwise refer to such regulations.

(2) An order under this paragraph may only make provision to the extent that it is appropriate in consequence of, or in connection with, the amendments made by this Schedule.

(3) An order under this paragraph may include transitional provision and savings.

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

(5) A statutory instrument containing an order under this paragraph is subject to annulment in pursuance of a resolution of the House of Commons.

SCHEDULE 59

Part 1 — New provision for removal of reduced rate

1

In Schedule 6 to FA 2000 (climate change levy), after paragraph 45A insert—

(45B) (1) This paragraph applies where, by virtue of such a certificate as is mentioned in paragraph 44(1), a facility is to be taken as being covered by a climate change agreement for a period specified in that certificate (“the certification period”). (2) If it appears to the Secretary of State that the progress made in the certification period towards meeting targets set for the facility by the agreement has been such as under the provisions of the agreement is unsatisfactory, the Secretary of State may issue a certificate under this paragraph. (3) The certificate must (in addition to specifying the facility, agreement and certification period to which it applies) specify— (a) T, that is, the value (expressed in terms of a reduction in tonnes of carbon dioxide equivalent) of achieving the targets set for the facility by the agreement, and (b) P, that is, the value (expressed in the same terms) of the progress made by the facility, during the certification period, towards meeting those targets. (4) Where a certificate has been issued under this paragraph— (a) each taxable supply made to the facility at any time falling within the certification period is to be treated as not being a reduced-rate supply, and (b) accordingly, an amount (determined in accordance with sub-paragraph (5)) is payable by way of levy on that taxable supply. (5) The amount payable under this paragraph on a taxable supply is— $$T-PT×0.8R$where—T and P have the values mentioned in sub-paragraph (3), andR is the amount which would have been payable by way of levy on the supply (had it not been a reduced-rate supply) at the time that it was made, in accordance with paragraph 42(1)(a).$ (6) The Secretary of State must send the certificate to— (a) the Commissioners, and (b) the person who is the operator of the facility. (7) A certificate under this paragraph may be issued after the certification period ends. (8) A person liable to account for levy under this paragraph— (a) is liable to account for it otherwise than by reference to an accounting period, and (b) must not (by virtue of regulations under paragraph 41) become liable to pay it as from a date before the date on which the certificate under this paragraph is issued. (9) Levy due under this paragraph is payable in addition to any levy already payable on any supply made in the certification period. (10) In this paragraph— - “certification period”, in a case where the certificate referred to in sub-paragraph (1) has been varied under paragraph 45, means the period for which that certificate has effect as varied; - “tonne of carbon dioxide equivalent” has the meaning given in the Climate Change Act 2008.

Part 2 — Consequential amendments

2

Schedule 6 to FA 2000 is amended as follows.

3

(1) Paragraph 40 (persons liable to account for levy) is amended as follows.

(2) In sub-paragraph (1), after “sub-paragraph (2)” insert “ or (3) ”.

(3) After sub-paragraph (2) insert—

(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.

4

In paragraph 41(2A) (application of Part 7 where person liable to account otherwise than by reference to accounting period), after “regulations under sub-paragraph (1)(a)(ii) above” insert “ or by virtue of paragraph 45B(8) ”.

5

In paragraph 42 (amount payable by way of levy), after sub-paragraph (1) insert—

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

6

In paragraph 44(2) (definition of “reduced-rate supply” to have effect subject to paragraph 45), for “paragraph 45” substitute “ paragraphs 45 and 45B ”.

7

In paragraph 45A (deemed supplies), after sub-paragraph (2) insert—

(3) This paragraph does not apply where a supply is treated as not being a reduced-rate supply by virtue of paragraph 45B.

8

(1) Paragraph 91 (interpretation etc of Part 7 of the Schedule) is amended as follows.

(2) In sub-paragraph (5) (modification of references to accounting periods in case of levy due otherwise than by reference to such periods), after “regulations under paragraph 41(1)(a)(ii)” insert “ or by virtue of paragraph 45B(8) ”.

9

In paragraph 147 (interpretation), in the definition of “reduced-rate supply”, for “paragraph 45” substitute “ paragraphs 45 and 45B ”.

SCHEDULE 60

Introduction

1

Part 3 of FA 1996 (landfill tax) is amended as follows.

Prescribed landfill site activities to be treated as disposals

2

After section 65 insert—

(65A) (1) An order may prescribe a landfill site activity for the purposes of this section. (2) If a prescribed landfill site activity is carried out at a landfill site, the activity is to be treated— (a) as a disposal at the landfill site of the material involved in the activity, (b) as a disposal of that material as waste, and (c) as a disposal of that material made by way of landfill. (3) Connected provision may be made by order. (4) Provision may be made under this section in such way as the Treasury think fit. (5) An order under subsection (1) may prescribe a landfill site activity by reference to conditions. (6) Those conditions may, in particular, relate to either or both of the following— (a) whether the landfill site activity is carried out in a designated area of a landfill site, and (b) whether there has been compliance with a requirement to give information relating to— (i) the landfill site activity, or (ii) the material involved in the landfill site activity, including information relating to whether the activity is carried out in a designated area of a landfill site. (7) An order under this section— (a) may amend, or otherwise modify, this Part or any other enactment relating to landfill tax, but (b) may not alter any rate at which landfill tax is charged. (8) Subsections (5) to (7) do not limit the generality of subsection (4). (9) In this section— - “connected provision” means provision which appears to the Treasury to be necessary or expedient in connection with provision made under subsection (1); - “designated area” means an area of a landfill site designated in accordance with— 1. an order under this section, or 2. regulations under Part 1 of Schedule 5; - “landfill site activity” means any of the following descriptions of activity, or an activity that falls within any of the following descriptions— 1. using or otherwise dealing with material at a landfill site; 2. storing or otherwise having material at a landfill site.

3

In section 71(7) (orders and regulations), after paragraph (c) insert—

(ca) an order under section 65A above which produces the result that a landfill site activity which would not otherwise be prescribed for the purposes of section 65A is so prescribed; (cb) an order under section 65A above which amends this Part or any enactment contained in an Act;

Material temporarily held

4

Omit section 62 (taxable disposals: regulations about material temporarily held at a landfill site).

Material at landfill sites

5

Part 1 of Schedule 5 (information) is amended as follows.

6

For the heading before paragraph 1 substitute— “ Information: general ”

7

After paragraph 1 insert—

(1A) (1) Regulations may make provision about giving the Commissioners information relating to material at a landfill site or a part of a landfill site. (2) Regulations under this paragraph may require a person to give information. (3) Regulations under this paragraph may— (a) require a person, or authorise an officer of Revenue and Customs to require a person, to designate a part of a landfill site (an “information area”), and (b) require material, or prescribed descriptions of material, to be deposited in an information area. (4) Regulations under this paragraph may make provision about information relating to what is done with material. (5) Sub-paragraphs (2) to (4) do not prejudice the generality of sub-paragraph (1).

8

For the heading before paragraph 2 substitute— “ Records: registrable persons ”

9

After paragraph 2 insert—

(2A) (1) Regulations may require a person to make records relating to material at a landfill site or a part of a landfill site. (2) Regulations under this paragraph may make provision about records relating to what is done with material. (3) Sub-paragraphs (2) to (7) of paragraph 2 apply in relation to regulations under this paragraph as they apply in relation to regulations under paragraph 2. (4) But, in the application of paragraph 2(3)(a) in relation to regulations under this paragraph, the reference to registrable persons has effect as a reference to persons.

Site restoration

10

Omit section 43C (site restoration).

11

In Part 1 of Schedule 5 (information), after paragraph 1A (inserted by paragraph 7) insert—

(1B) (1) Before commencing restoration of all or part of a landfill site, the operator of the site must— (a) notify the Commissioners in writing that the restoration is to commence, and (b) provide such other written information as the Commissioners may require generally or in the particular case. (2) In this paragraph “restoration” means work, other than capping waste, which is required by a relevant instrument to be carried out to restore a landfill site to use on completion of waste disposal operations. (3) The following are relevant instruments— (a) a planning consent, (b) a waste management licence, and (c) a permit authorising the disposal of waste on or in land.

Landfill tax returns

12

In section 49(b) (accounting for tax and time for payment), omit “as may be prescribed”.

Commencement and savings

13

(1) The repeal made by paragraph 10 comes into force on 1 September 2009.

(2) The amendment made by paragraph 11 has effect in relation to restoration of landfill sites commencing on or after 1 September 2009.

(3) The repeal of section 62 made by paragraph 4, and the repeal in section 49 made by paragraph 12—

(a) do not affect any regulations made under the repealed provisions before the passing of this Act, and

(b) do not prevent the powers conferred by the repealed provisions from being used after the passing of this Act to revoke any regulations made under the powers before that time.

SCHEDULE 61

Part 1 — Introductory

Interpretation

1

(1) In this Schedule—

“alternative finance investment bond” means arrangements to which section 564G of ITA 2007 or section 151N of TCGA 1992 (investment bond arrangements) applies ;

“bond assets”, “bond-holder”, “bond-issuer” and “capital” have the meaning given by that section;

“effective date”, for a transaction relating to land in Scotland or Wales, is the date which would be the effective date (under section 119 of FA 2003) if Part 4 of FA 2003 applied to land in Scotland or Wales;

“HMRC” means Her Majesty's Revenue and Customs;

“prescribed” means prescribed in regulations made by HMRC;

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

(1A) In this Schedule “qualifying interest” means—

(a) in relation to land in England and Wales—

(i) an estate in fee simple absolute, or

(ii) a term of years absolute,

whether subsisting at law or in equity;

(b) in relation to land in Scotland—

(i) the interest of an owner of land, or

(ii) the tenant's right over or interest in a property subject to a lease;

(i) any freehold estate, or

(ii) any leasehold estate,

whether subsisting at law or in equity;

except that it does not include a lease for a term of years, or (in Scotland) for a period, of 21 years or less.

(2) Section 564S of ITA 2007 (treatment of bond-holder and bond-issuer) applies for the purposes of any enactment about stamp duty land tax as it applies for the purposes of the Income Tax Acts.

Part 2 — Issue, transfer and redemption of rights under arrangements

Issue, transfer and redemption of rights under bond not be treated as chargeable transaction

2

Section 564S of ITA 2007 (treatment of bond-holder and bond-issuer) applies for the purposes of any enactment about stamp duty land tax as it applies for the purposes of the Income Tax Acts.

Relief not available where bond-holder acquires control of underlying asset

3

(1) Paragraph 2 does not apply if control of the underlying asset is acquired by—

(a) a bond-holder, or

(b) a group of connected bond-holders.

(2) A bond-holder (“BH”), or a group of connected bond-holders, acquires control of the underlying asset if—

(a) the rights of bond-holders under an alternative finance investment bond include the right of management and control of the bond assets, and

(b) BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise the right of management and control of the bond assets to the exclusion of any other bond-holders.

4

(1) But paragraph 3(1) does not apply (and, accordingly, section 564S of ITA 2007 applies by virtue of paragraph 2) in either of the following cases.

(2) The first case is where—

(a) at the time that the rights were acquired BH (or all of the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets to the exclusion of other bond-holders, and

(b) as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that exercise no longer to be possible.

(3) The second case is where BH—

(a) underwrites a public offer of rights under the bond, and

(b) does not exercise the right of management and control of the bond assets.

(4) In this paragraph—

“connected” is to be read in accordance with section 1122 of CTA 2010, and

“underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.

Part 3 — Transactions relating to underlying assets consisting of land

Introductory

General conditions for operation of reliefs etc

5

(1) This paragraph defines conditions A to G for the purposes of paragraphs 6 to 18.

Paragraphs 20 and 22 set out circumstances in which the reliefs provided by paragraphs 6 to 18 are not available even if conditions A to G are met.

(2) Condition A is that one person (“P”) and another (“Q”) enter into arrangements under which—

(a) P transfers to Q a qualifying interest in land (“the first transaction”), and

(b) P and Q agree that, when the interest ceases to be held by Q as mentioned in sub-paragraph (3)(b), Q will transfer the interest to P.

(3) Condition B is that—

(a) Q, as bond-issuer, enters into an alternative finance investment bond (whether before or after entering into the arrangements mentioned in sub-paragraph (2)), and

(b) the interest in land to which those arrangements relate is held by Q as a bond asset.

(4) Condition C is that, for the purpose of generating income or gains for the alternative finance investment bond—

(a) Q and P enter into a leaseback agreement, or

(b) such other condition or conditions as may be specified in regulations made by the Treasury is or are met.

(5) For the purposes of condition C, Q and P enter into a leaseback agreement if Q grants to P, out of the interest transferred to Q—

(a) a lease (if the interest transferred is freehold or, in Scotland, the interest of the owner), or

(b) a sub-lease (if the interest transferred is leasehold or, in Scotland, the tenant's right over or interest in a property subject to a lease).

(6) Condition D (which applies in the case of land in England ... or Northern Ireland) is that, before the end of the period of 120 days beginning with the effective date of the first transaction, Q provides HMRC with the prescribed evidence that—

(a) in England ..., a satisfactory legal charge has been entered in the register of title kept under section 1 of the Land Registration Act 2002,

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

(c) in Northern Ireland, a satisfactory charge has been entered in the register of titles kept under section 10 of the Land Registration Act (Northern Ireland) 1970.

(7) A charge ... is satisfactory for the purposes of condition D if it—

(a) is a first charge on... the interest transferred to Q,

(b) is in favour of the Commissioners for Her Majesty's Revenue and Customs, and

(8) That amount is the total of—

(a) the amount of stamp duty land tax which would (apart from paragraph 6(2)) be chargeable on the first transaction if the chargeable consideration for that transaction had been the market value of the interest at that time, and

(b) any interest and any penalties which would for the time being be payable on or in respect of that amount of tax, if the tax had been due and payable (but not paid) in respect of the first transaction.

(9) Condition E is that the total of the payments of capital made to Q before the termination of the bond is not less than 60% of the value of the interest in the land at the time of the first transaction.

(10) Condition F is that Q holds the interest in the land as a bond asset until the termination of the bond.

(11) Condition G is that—

(a) before the end of the period of 30 days beginning with the date on which the interest in the land ceases to be held as a bond asset, that interest is transferred by Q to P (“the second transaction”), and

(b) the second transaction is effected not more than 10 years after the first transaction.

(12) The Treasury may by regulations amend sub-paragraph (11)(b) by substituting for the period mentioned there such other period as may be specified.

Stamp duty land tax

Relief from stamp duty land tax: first transaction

6

(1) This paragraph applies if—

(a) the first transaction relates to an interest in land in England ... or Northern Ireland, and

(b) each of conditions A to C is met before the end of the period of 30 days beginning with the effective date of that transaction.

(2) Where this paragraph applies the first transaction is exempt from charge to stamp duty land tax.

(3) Where the interest in the land is replaced as the bond asset by an interest in other land, this paragraph is subject to paragraph 18.

(4) This paragraph is also subject to paragraph 20.

7

(1) This paragraph applies if paragraph 6 applies but —

(a) the interest in the land is transferred by Q to P without conditions E and F having been met,

(b) the period mentioned in paragraph 5(11)(b) expires without each of those conditions having been met, or

(2) This paragraph also applies if paragraph 6 applies but condition D is not met.

(3) The relief provided by paragraph 6(2) is withdrawn and stamp duty land tax is chargeable on the first transaction in accordance with this paragraph.

(4) The amount chargeable is the tax that would have been chargeable in respect of the first transaction (but for relief under paragraph 6(2)) if the chargeable consideration for that transaction had been the market value of the interest at the time of that transaction.

(5) Interest is due and payable on the amount of that tax as from the end of the period of 14 days after the effective date of that transaction until the tax is paid.

(6) Q must deliver a further land transaction return before the end of the period of 30 days after the date on which this paragraph first applies.

(7) The return must include a self-assessment of the amount of tax chargeable.

(8) Tax payable must be paid not later than the filing date for the further return.

(9) Schedule 10 to FA 2003 (returns, assessments and other matters) applies to a return under this paragraph as it applies to a return under section 76 of that Act (general requirement to deliver land transaction return), with the following modifications—

(a) references to the transaction to which the return relates are to the event by virtue of which this paragraph applies, and

(b) references to the effective date of the transaction are to the date on which that event occurs.

Relief from stamp duty land tax: second transaction

8

(1) The second transaction is exempt from charge to stamp duty land tax if—

(a) each of conditions A to G is met, and

(b) the provisions of Part 4 of FA 2003 relating to the first transaction are complied with.

(2) Where the interest in the land is replaced as the bond asset by an interest in other land, this paragraph is subject to paragraph 18.

(3) This paragraph is also subject to paragraph 20.

Discharge of charge when conditions for relief met

9

If, after the effective date of the second transaction, Q provides HMRC with the prescribed evidence that each of conditions A to C and E to G has been met, the land ceases to be subject to the charge ... registered in pursuance of condition D.

Taxation of capital gains

Relief from taxation of capital gains: first transaction

10

(1) This paragraph applies if each of conditions A to C is met before the end of the period of 30 days beginning with the effective date of the first transaction.

(2) That transaction is not to be regarded for the purposes of TCGA 1992 as an acquisition by Q or a disposal by P.

(3) If condition C is met by virtue of Q and P having entered into a leaseback agreement, the granting of the lease or sub-lease is not to be regarded for the purposes of TCGA 1992 as an acquisition by P or a disposal by Q.

(4) Sub-paragraphs (2) and (3) are subject to paragraph 11 (treatment of transactions where any of conditions D to G is not met).

(5) Where the interest in the land is replaced as the bond asset by an interest in other land, this paragraph is subject to paragraph 18.

(6) This paragraph is also subject to paragraph 20.

11

(1) This paragraph applies if—

(a) the interest in the land is transferred by Q to P without conditions E and F having been met,

(b) the period mentioned in paragraph 5(11)(b) expires without each of those conditions having been met, or

(2) This paragraph also applies where (in the case of an interest in land in England ... or Northern Ireland) condition D is not met.

(3) Where this paragraph applies, paragraph 10(2) and (3) (disregard of transactions for purposes of TCGA 1992) do not apply.

(4) Where, by virtue of sub-paragraph (3), any chargeable gain or loss is treated as accruing to a person, that gain or loss is to be treated as accruing—

(a) in the case mentioned in sub-paragraph (1)(a), immediately before the transfer from Q to P,

(b) in any case mentioned in paragraph (b) or (c) of sub-paragraph (1), at the time mentioned in that paragraph, and

Relief from taxation of capital gains: second transaction

12

(1) The second transaction is not to be regarded for the purposes of TCGA 1992 as an acquisition by P or a disposal by Q if—

(a) each of conditions A to C and E to G is met, and

(b) in the case of an interest in land in England ... or Northern Ireland, condition D is met.

(2) Where the interest in the land is replaced as the bond asset by an interest in other land, this paragraph is subject to paragraph 18.

(3) This paragraph is also subject to paragraph 20.

Capital allowances

Introductory

13

(1) Paragraphs 14 to 17 make provision about the treatment, for the purposes of CAA 2001, of transactions relating to land in connection with an alternative finance investment bond.

(2) Any expression which is used in any of paragraphs 14 to 17 and in CAA 2001 has the meaning which it has in that Act.

Treatment for purposes of capital allowances

14

(1) This paragraph applies to an asset if—

(a) each of conditions A to C is met before the end of the period of 30 days beginning with the effective date of the first transaction, and

(b) the asset falls within sub-paragraph (2).

(2) An asset falls within this sub-paragraph if it is part of the subject matter of the first transaction and constitutes—

(a) plant or machinery, or

(b) a building or structure (or part of a building or structure).

(3) For the purposes of CAA 2001—

(a) expenditure incurred by Q in acquiring the asset by virtue of the first transaction is not to be regarded as capital expenditure, and

(b) in a case within sub-paragraph (2)(a), Q is not to be regarded as becoming, and P is not to be regarded as ceasing to be, the owner of the asset by virtue of that transaction; and

(c) in a case within sub-paragraph (2)(b), Q is not to be regarded as acquiring, and P is not to be regarded as ceasing to have, the relevant interest in the asset by virtue of that transaction.

(4) Sub-paragraph (3) applies in relation to the transactions mentioned in sub-paragraph (5) as it applies in relation to the first transaction (but reading the references to Q as references to P and the reference to P as a reference to Q).

(5) The transactions are—

(a) any leaseback agreement entered into by Q and P in order that condition C is met, and

(b) the second transaction.

(6) This paragraph is subject to paragraphs 15 to 17.

Loss or destruction of asset

15

(1) This paragraph applies to an asset if the first and second conditions are met.

(2) The first condition is that the asset—

(a) is part of the subject matter of the first transaction, and

(b) constitutes plant or machinery.

(3) The second condition is that, at any time when the asset is held as a bond asset, one of the following events occurs—

(a) the person with possession of the asset loses possession of it in circumstances where it is reasonable to assume that the loss is permanent, or

(b) the asset ceases to exist as such (as a result of destruction, dismantling or otherwise).

(4) That event is to be treated as a disposal event (in relation to P) occurring in the chargeable period in which that event occurs.

(5) For the purposes of sub-paragraph (4), the disposal value that P is required to bring into account is—

(a) where the case falls within item 3 or 4 of the Table in section 61(2) of CAA 2001 and the amount received by P as mentioned in that item is other than zero, that amount, and

(b) in any other case, the market value of the asset at the time of the event.

Q retaining asset when no longer held for purposes of bond

16

(1) This paragraph applies to an asset if the first and second conditions are met.

(2) The first condition is that the asset is part of the subject matter of the first transaction and constitutes—

(a) plant or machinery, or

(b) a building or structure (or part of a building or structure).

(3) The second condition is that Q—

(a) ceases to hold the asset as a bond asset (whether at the end of the bond term or at any other time), but

(b) does not transfer the asset to P or any other person.

(4) At the time that Q ceases to hold the asset as a bond asset —

(a) in a case within sub-paragraph (2)(a), Q is to be treated as becoming, and P is to be treated as ceasing to be, the owner of the asset, and

(b) in a case within sub-paragraph (2)(b), Q is to be treated as acquiring, and P is to be treated as ceasing to have, the relevant interest in the asset.

(5) Accordingly, Q's ceasing to hold the asset as a bond asset is to be treated—

(a) as regards plant or machinery, as a disposal event (in relation to P) occurring in the chargeable period in which the cessation takes place, ...

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

(6) For the purposes of sub-paragraph (5)—

(a) in the case falling within paragraph (a), the disposal value that P is required to bring into account is the market value of the asset at the time of the transfer, ...

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

Q transferring asset to third person

17

(1) This paragraph applies to an asset if the first and second conditions are met.

(2) The first condition is that the asset is part of the subject matter of the first transaction and constitutes—

(a) plant or machinery, or

(b) a building or structure (or part of a building or structure).

(3) The second condition is that Q transfers the asset to any person other than P.

(4) At the time that Q transfers the asset —

(a) in a case within sub-paragraph (2)(a), that other person is to be treated as becoming, and P is to be treated as ceasing to be, the owner of the asset, and

(b) in a case within sub-paragraph (2)(b), that other person is to be treated as acquiring, and P is to be treated as ceasing to have, the relevant interest in the asset.

(5) Accordingly, the transfer is to be treated—

(a) as regards plant or machinery, as a disposal event (in relation to P) occurring in the chargeable period in which the transfer takes place, ...

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

(6) For the purposes of sub-paragraph (5)—

(a) in the case falling within paragraph (a), the disposal value that P is required to bring into account is the market value of the asset at the time of the transfer, ...

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

Supplementary

Substitution of asset

18

(1) This paragraph applies if—

(a) conditions A to C and G are met in relation to an interest in land (“the original land”),

(b) Q ceases to hold the original land as a bond asset (and, accordingly, transfers it to P) before the termination of the alternative finance investment bond,

(c) P and Q enter into further arrangements falling within paragraph 5(2) relating to an interest in other land (“the replacement land”), and

(d) the value of the interest in the replacement land at the time that it is transferred from P to Q is greater than or equal to the value of the interest in the original land at the time of the first transaction.

(2) Paragraphs 6 to 17 apply—

(a) in relation to the original land with the modification set out in sub-paragraph (3), and

(b) in relation to the replacement land with the modifications set out in sub-paragraph (4).

(3) Condition F does not need to be met in relation to the original land if conditions A, B, C, F and G (as modified by sub-paragraph (4)) are met in relation to the replacement land.

(4) In relation to the replacement land—

(a) condition E applies as if the reference to the interest in the land were a reference to the interest in the original land, and

(b) condition G applies as if the reference in paragraph 5(11)(b) to the first transaction were a reference to the first transaction relating to the original land.

(5) If the replacement land is in England ... or Northern Ireland, the original land ceases to be subject to the charge ... registered in pursuance of condition D when—

(a) Q provides HMRC with the prescribed evidence that condition G is met in relation to the original land, and

(b) condition D is met in relation to the replacement land.

(6) If the replacement land is not in England ... or Northern Ireland, the original land ceases to be subject to the charge ... registered in pursuance of condition D when Q provides HMRC with the prescribed evidence that—

(a) condition G is met in relation to the original land, and

(b) each of conditions A to C is met in relation to the replacement land.

(7) This paragraph also applies where the replacement land is replaced by further replacement land; and in that event—

(a) the references to the original land (except those in sub-paragraph (4)) are to be read as references to the replacement land, and

(b) the references to the replacement land are to be read as references to the further replacement land.

HMRC to notify Registrar of discharge of charge

19

(1) Where a charge ... is discharged in accordance with paragraph 9 or 18(5) or (6), HMRC must—

(a) in the case of a charge on land in England ..., notify the Chief Land Register of the discharge in accordance with land registration rules (within the meaning of the Land Registration Act 2002),

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

(2) HMRC must do so within the period of 30 days beginning with the date on which Q provides the evidence in question.

Relief not available where bond-holder acquires control of underlying asset

20

(1) The reliefs provided by paragraphs 6 to 12 (and paragraph 18 so far as it relates to those paragraphs) are not available if control of the underlying asset is acquired by—

(a) a bond-holder, or

(b) a group of connected bond-holders.

(2) A bond-holder (“BH”), or a group of connected bond-holders, acquires control of the underlying asset if—

(a) the rights of bond-holders under an alternative finance investment bond include the right of management and control of the bond assets, and

(b) BH, or the group, acquires sufficient rights to enable BH, or the members of the group acting jointly, to exercise the right of management and control of the bond assets to the exclusion of any other bond-holders.

(3) In accordance with sub-paragraph (1), in the case of the reliefs provided by paragraphs 6 and 10—

(a) if BH, or the group, acquires control of the underlying asset before the end of the period of 14 days beginning with the effective date of the first transaction, paragraphs 6 and 10 do not apply, and

(b) if BH, or the group, acquires control of the underlying asset after the end of that period and conditions A to C have been met, paragraphs 7 and 11 apply.

21

(1) But paragraph 20 does not prevent the reliefs being available in either of the following cases.

(2) The first case is where—

(a) at the time that the rights were acquired BH (or all of the connected bond-holders) did not know and had no reason to suspect that the acquisition enabled the exercise of the right of management and control of the bond assets to the exclusion of other bond-holders, and

(b) as soon as reasonably practicable after BH (or any of the bond-holders) becomes aware that the acquisition enables that exercise, BH transfers (or some or all of the bond-holders transfer) sufficient rights for that no longer to be possible.

(3) The second case is where BH—

(a) underwrites a public offer of rights under the bond, and

(b) does not exercise the right of management and control of the bond assets.

(4) In this paragraph—

“connected” is to be read in accordance with section 1122 of CTA 2010, and

“underwrite”, in relation to an offer of rights under a bond, means to agree to make payments of capital under the bond in the event that other persons do not make those payments.

Relief not available if purpose of arrangements is improper

22

(1) The reliefs provided by paragraphs 6 to 12 (and paragraph 18 so far as it relates to those paragraphs) are not available if the arrangements mentioned in paragraph 5(2)—

(a) are not effected for genuine commercial reasons, or

(b) form part of arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to tax.

(2) In sub-paragraph (1) “tax” means income tax, corporation tax, capital gains tax, stamp duty or stamp duty land tax.

Regulations

23

(1) Regulations under any paragraph of this Schedule—

(a) may make provision generally or only for specified purposes, or different provision for different purposes, and

(b) may make consequential, supplementary or incidental provision (including amendments of any enactment).

(2) Regulations under any paragraph of this Schedule are to be made by statutory instrument.

(3) A statutory instrument containing regulations under any paragraph of this Schedule is subject to annulment in pursuance of a resolution of the House of Commons.

Part 4 — Supplementary

Consequential amendments of FA 2003

24

FA 2003 is amended as follows.

25

After section 73B insert—

(73C) Schedule 61 to the Finance Act 2009 makes provision for relief from charge in the case of arrangements falling within section 48A of the Finance Act 2005 (alternative finance investment bonds).

26

In section 86 (payment of tax), after subsection (5) insert—

(5A) The above provisions are also subject to paragraph 7 of Schedule 61 to the Finance Act 2009 (payment of tax where land ceases to qualify for relief in respect of alternative finance investment bonds).

Consequential amendments of FA 2005

27

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

Consequential amendment of CTA 2009

28

In CTA 2009, in Schedule 1, omit paragraph 651(a).

Commencement

29

(1) The following provisions of this Schedule come into force on the day on which this Act is passed—

(a) Part 2,

(b) Part 1 so far as relating to that Part, and

(2) The following provisions of this Schedule have effect where the effective date of the first transaction (within the meaning given by paragraph 5(2)) is on or after the day on which this Act is passed—

(a) Part 3,

(b) Part 1 so far as relating to that Part, and

Charge and main rates for 2009-10

Abolition of personal reliefs for non-residents

Charge and main rates for financial year 2010

Rates of alcoholic liquor duty

Rates of tobacco products duty

Rates from April 2010

Rates and rebates from Spring 2009

Rates and rebates from September 2009

Rates of air passenger duty

Rates of gaming duty

Amounts of duty on amusement machine licences

Temporary extension of loss carry back provisions

Corporation tax treatment of company distributions received

Income tax credits for foreign distributions

Foreign exchange matching: anti-avoidance

Exemption of benefit consisting of health-screening or medical check-up

MEPs' pay, allowances and pensions under European Parliament Statute

Manufactured overseas dividends

Payments by reference to foreign tax etc

Financial arrangements avoidance

Intangible fixed assets and goodwill

HMRC Charter

Financial assistance scheme

Repayment to those in business in other States

VAT exemption for gaming participation fees

Effect of VAT changes on arbitration of rent for agricultural holdings

Exercise of collective rights by tenants of flats

Stamp taxes in event of insolvency

Blended oil

Duties of senior accounting officers of qualifying companies

Penalties for failure to pay tax

Meaning of “gaming machine” and “gaming”

Taxable commodities ineligible for reduced-rate supply

Landfill tax: prescribed landfill site activities

Alternative finance investment bonds

Interpretation

Short title

Introduction

Abolition of reliefs

Consequential amendments

Repeals

Commencement

FA 2004

ITTOIA 2005

F(No.2)A 2005

The charge

Supply spanning the date of the VAT change

Grant of right spanning the date of the VAT change

“Basic time of supply”

Series of supplies

Financing

Connected persons

Receipt of payments

Power to change relevant conditions

Supplies treated as taking place before 31 March 2009

Letting etc of assets

Condition B cases involving normal commercial practice

Normal commercial practice

Further exceptions

Liability

Amount

“Listed supply”

“Basic time of supply”: listed supplies

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