Legalize / United Kingdom / Public General Act

Finance Act 2012

Type Public General Act

Publication 2012-07-17

Last updated 2024-02-22

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(4) For a prize in the form of a currency other than sterling or in the form of something that is reasonably considered to equate to such a currency—

(a) the value of the prize is, in relation to any day, the sterling equivalent of that currency determined by reference to the London closing rate for that currency for the previous day, and

(b) for the purposes of paragraph 7(3), the day in relation to which the value is assessed is the last day of the relevant accounting period.

(5) The value of a prize other than cash depends on the person (“A”) from whom the person paying out the prize (“B”) obtained it—

(a) if A was not connected with B when B obtained the prize from A, the value is the cost to B of obtaining the prize from A,

(b) if A was connected with B when B obtained the prize from A, the value is the smaller of—

(i) the cost to B of obtaining the prize from A, and

(ii) the amount that it would have cost B, at the time B obtained the prize, to obtain it from a person not connected with B.

(6) Whether A is connected with B is to be determined in accordance with section 1122 of CTA 2010.

(7) If the value of a prize other than cash cannot reasonably be determined in accordance with sub-paragraph (5), the value of the prize is such amount as is just and reasonable.

(8) For the purposes of sub-paragraph (5), an amount paid by way of value added tax on the acquisition of a thing is to be treated as part of its cost (whether or not the amount is taken into account for the purpose of a credit or refund).

(9) The Commissioners may by regulations make further provision about the way in which prizes are to be valued for the purposes of this Schedule.

(10) This paragraph applies to a part of a prize as it applies to a whole prize, and references to a prize are to be read accordingly.

Valuing charges

16

(1) This paragraph applies in determining for the purposes of this Schedule the amount of a charge (or the highest or lowest charge) payable or due for playing a machine game.

(2) If the amount of a charge in money's worth cannot be determined, it is assumed to be such amount as is just and reasonable.

(3) If a composite charge is payable or due for the opportunity to play a machine game more than once, the amount of the charge payable or due for each individual go is to be determined on a just and reasonable basis.

(4) If a composite charge is payable or due for the opportunity to play a machine game and for something else, the amount of the charge payable or due for playing the game is to be determined on a just and reasonable basis.

(5) The Commissioners may by regulations make further provision about the way in which the amount of charges is to be determined for the purposes of this Schedule.

(6) Sub-paragraph (7) applies if—

(a) a dutiable machine game is played in pursuance of an offer that permits the player to pay nothing or less than the charge that the player would have been required to pay without the offer,

(b) the offer was made available to the player by way of winnings from an activity in respect of which another duty of excise or value added tax is charged, and

(c) the value of the offer is deductible in calculating the amount of that other duty or value added tax payable in respect of that activity.

(7) The amount of the charge due from the player for playing the dutiable machine game is taken for the purposes of paragraph 7 to be the amount that the player would have been required to pay without the offer.

(8) Regulations under sub-paragraph (5) may include provision extending or modifying the circumstances in which sub-paragraph (7) applies.

Collection and management

17

The Commissioners are responsible for the collection and management of machine games duty.

Returns

18

(1) The Commissioners may make regulations requiring registrable persons to make returns to HMRC in respect of relevant machines.

(2) Regulations under this paragraph may in particular make provision about—

(a) liability to make a return,

(b) timing,

(d) content,

(e) method of making (including provision requiring returns to be made electronically),

(f) declarations,

(g) authentication, and

(h) when a return is to be treated as made.

Assessment and payment

19

(1) The Commissioners may make regulations about payment of machine games duty.

(2) The regulations may in particular make provision about—

(a) timing,

(b) instalments,

(d) when payment is to be treated as made, and

(e) the process and effect of assessments by HMRC of amounts due.

(3) Subject to regulations under this paragraph, section 12 of FA 1994 (assessment) applies in relation to liability to pay machine games duty.

Registration

20

(1) The Commissioners must maintain a register of those responsible for premises where relevant machines are located.

(2) The register is to be known as the MGD register.

(3) A person must not make a relevant machine available for use by others for playing dutiable machine games on it unless a registrable person (whether that person or someone else) is registered in respect of the premises where the machine is located.

(4) Paragraph 21 identifies who is a registrable person in respect of premises.

(5) This paragraph does not apply in relation to a relevant machine if it is reasonable to expect that the only takings and the only payouts in respect of the machine would be amounts that would be left out of account by virtue of paragraph 8.

Registrable persons

21

(1) If a person holds a relevant licence or permit in respect of premises, that person is a registrable person in respect of those premises.

(2) But if the premises are leased to a person (“T”) for the purposes of an activity for which an alcohol licence is required and the alcohol licence in respect of the premises is held by someone else, T (and not the licence-holder) is a registrable person in respect of those premises.

(3) If the premises are a stall at a travelling fair, each of the following is a registrable person in respect of the premises—

(a) the holder of the stall, and

(b) the person in charge of the fair.

(4) For premises not falling within any of the preceding sub-paragraphs, each person listed in sub-paragraph (5) is a registrable person in respect of the premises.

(5) The persons are—

(a) a person required to hold a relevant licence or permit in respect of the premises,

(b) an owner, lessee or occupier of the premises,

(d) a person who is responsible for controlling the use of machines that are made available on the premises for use by others for playing dutiable machine games on them, and

(e) a person who is responsible for controlling the admission of persons to the premises or for providing persons resorting to the premises with goods or services.

(6) “Relevant licence or permit” is defined in paragraph 22.

(7) “Alcohol licence” means—

(a) a premises licence issued under Part 3 of the Licensing Act 2003 that authorises the supply of alcohol for consumption on the licensed premises,

(b) a premises licence issued under Part 3 of the Licensing (Scotland) Act 2005, except where such a licence only applies to the sale of alcohol for consumption off the premises, and

(c) a licence issued under the Licensing (Northern Ireland) Order 1996 (S.I. 1996/3158 (N.I. 22)), except where such a licence only applies to the sale of intoxicating liquor by retail for consumption off the premises.

(8) “Travelling fair” means a fair—

(a) consisting wholly or principally of the provision of amusements,

(b) provided wholly or principally by persons who travel from place to place for the purpose of providing such fairs, and

(c) held at a place no part of which has been used for the provision of such a fair on more than 27 days in the same calendar year.

22

(1) A “relevant licence or permit” is—

(a) a licence issued under Part 8 of the Gambling Act 2005,

(b) a family entertainment centre gaming machine permit as defined in section 247 of that Act,

(d) a club machine permit as defined in section 273 of that Act,

(e) a prize gaming permit as defined in section 289 of that Act,

(f) an on-premises alcohol licence or a relevant Scottish licence as defined, in each case, in section 277 of that Act but only if a licence or permit listed above is not held in respect of the same premises,

(g) a club premises certificate granted under Part 4 of the Licensing Act 2003 but only if a licence or permit listed above is not held in respect of the same premises,

(h) a certificate of registration within the meaning of the Betting, Gaming Lotteries and Amusements (Northern Ireland) Order 1985 (S.I. 1985/1204 (N.I. 11)),

(i) a bookmaking office licence within the meaning of that Order,

(j) a bingo club licence within the meaning of that Order,

(k) an amusement permit within the meaning of that Order,

(l) a certificate of registration within the meaning of the Registration of Clubs (Northern Ireland) Order 1996 (S.I. 1996/3159 (N.I. 23)), or

(m) a licence issued under the Licensing (Northern Ireland) Order 1996 (S.I. 1996/3158 (N.I. 22)) but only if a licence, permit or certificate listed above is not held in respect of the same premises.

(2) In sub-paragraph (1), “listed above” means listed in any of the preceding provisions of that sub-paragraph.

(3) The Treasury may by order amend this paragraph to add to, vary or restrict the list in sub-paragraph (1).

Compulsory registration

23

(1) Sub-paragraph (2) applies if—

(a) it appears to HMRC that a relevant machine is being made available by anyone at premises for use by others for playing dutiable machine games on it, and

(b) no-one is registered in respect of the premises.

(2) HMRC may give a notice under this paragraph to any person they believe to be a registrable person in respect of the premises.

(3) The notice is referred to as a “registration notice”.

(4) A person to whom a registration notice is given may appeal to an appeal tribunal against the notice.

(5) The appeal may be made on either or both of the following grounds—

(a) that the person is not a registrable person in respect of the premises,

(b) that relevant machines are not being made available at the premises for use by others for playing dutiable machine games on them.

(6) The appeal must be made within the period of 30 days beginning with the date of the registration notice.

(7) If—

(a) no appeal is made within that period, or

(b) an appeal made within that period is dismissed or withdrawn,

HMRC may proceed to register the person in respect of the premises (unless another person has since become registered in respect of them).

(8) Registration under this paragraph is treated as made with effect from the date of the registration notice.

Procedure for registration, de-registration etc

24

(1) The Commissioners may make regulations about registration.

(2) Regulations under this paragraph may in particular make provision about—

(a) the procedure for applying for registration (including provision requiring applications to be made electronically),

(b) the timing of applications,

(d) the giving of registration notices and the making of appeals against them,

(e) the procedure for compulsory registration under paragraph 23,

(f) notification of changes to the register,

(g) de-registration, and

(h) re-registration after a person ceases to be registered.

(3) The regulations may permit HMRC to make registration, or continued registration, subject to conditions.

(4) Those conditions may in particular require—

(a) the provision of security for the payment of machine games duty, and

(b) (in the case of a foreign person) the appointment of a United Kingdom representative with responsibility for discharging liability to machine games duty.

(5) In sub-paragraph (4) “foreign person” means a person who—

(a) in the case of an individual, is not usually resident in the United Kingdom,

(b) in the case of a body corporate, does not have an established place of business in the United Kingdom, and

(6) The regulations may include provision for the registration of groups of persons; and may provide for the modification of the provisions of this Part of this Schedule in their application to groups.

(7) The modifications may, for example, include a modification ensuring that, where a representative member of a group is registered in place of the members, each member will be jointly and severally liable for the duty payable by the representative member on behalf of the group.

Publication of register

25

(1) The MGD register is to contain such details of those who are entered on the register and of the premises in respect of which they are registered as the Commissioners think fit.

(2) The Commissioners may publish the register (or a part of it).

(3) If they choose not to publish it or they choose to publish only a part of it, the Commissioners must nonetheless make arrangements for the provision of a copy of an entry in the register (or the unpublished part of it) to a member of the public on request.

(4) But the Commissioners may refuse a request under sub-paragraph (3) if the person making the request does not pay a fee specified by the Commissioners.

(5) The fee must not exceed the reasonable cost (including any indirect cost) of meeting the request.

Profit-sharers

26

(1) Sub-paragraph (2) applies if—

(a) it appears to HMRC that machine games duty may be chargeable in respect of a machine,

(b) no-one is registered in respect of the premises where the machine is located, and

(i) HMRC do not know the identity of any of those responsible for the premises (see paragraph 12), or

(ii) HMRC do know the identity of one or more such persons but none of them is in the United Kingdom.

(2) HMRC may give a notice under this paragraph to any person they believe to be beneficially entitled to a share of the machine's takings.

(3) The notice must inform the person to whom it is given (“P”) that P will become liable to pay a share of the duty in accordance with this paragraph unless, within the specified period—

(a) P provides HMRC with sufficient information to identify a person in the United Kingdom who is responsible for the premises, or

(b) P satisfies HMRC that, when P became beneficially entitled to a share of the machine's takings, P took all reasonable steps to ascertain that a registrable person was registered in respect of the premises.

(4) The specified period is—

(a) such period of 30 days or more as is specified in the notice, or

(b) such other period as may be agreed between HMRC and P.

(5) If P fails to satisfy sub-paragraph (3)(a) or (b) within the specified period, HMRC may assess to the best of their judgement an amount equal to P's share of the machine games duty that would have been due in respect of the machine for an accounting period on the assumptions set out in sub-paragraph (6).

(6) The assumptions are—

(a) that P had been liable for machine games duty in respect of the machine in the accounting period in accordance with paragraph 11,

(b) that the machine had been the only machine in respect of which P was so liable, and

(c) that the dutiable machine games in respect of which P is beneficially entitled to a share of the takings had been the only dutiable machine games played on the machine.

(7) P's share is a percentage equal to the share of the machine's takings to which P is beneficially entitled.

(8) An assessment under this paragraph may relate to more than one machine, more than one set of premises and more than one accounting period.

(9) But it may not relate to a period that began more than 4 years before the date of the assessment.

(10) An amount assessed under this paragraph is deemed to be an amount of machine games duty assessed under section 12 of FA 1994 and due from P in accordance with regulations under paragraph 19 of this Schedule.

(11) P is not entitled to any repayment from HMRC of an amount assessed under this paragraph if HMRC subsequently identify a person responsible for the premises.

(12) But if, after P has paid such an amount, HMRC make an assessment under section 12 of FA 1994 of an amount of machine games duty due from another person in respect of the same takings from the same machine for the same accounting period, account must be taken in that assessment of the amount paid by P.

Reviews and appeals

27

(1) The decisions mentioned in sub-paragraph (2) are to be treated as if they were listed in subsection (2) of section 13A of FA 1994 (customs and excise reviews and appeals: meaning of “relevant decision”) and, accordingly, as if they were relevant decisions for the purposes mentioned in subsection (1) of that section.

(2) The decisions are—

(a) a decision of HMRC to refuse a request for an agreement under paragraph 14,

(b) a decision to give a direction under that paragraph,

(d) a decision of HMRC under regulations by virtue of paragraph 24(2),

(e) a decision of HMRC about security by virtue of paragraph 24(4)(a), and

(f) a decision of HMRC about the appointment of a United Kingdom representative by virtue of paragraph 24(4)(b).

Interest

28

(1) This paragraph applies if an order is made under section 104(3) of FA 2009 appointing a day on which sections 101 to 103 of that Act are to come into force for the purposes of machine games duty.

(2) Interest charged under section 101 of that Act on an amount of machine games duty (or an amount enforceable as if it were machine games duty) may be enforced as if it were an amount of machine games duty payable by the person liable for the amount on which the interest is charged.

Penalties and enforcement

29

In Schedule 24 to FA 2007 (penalties for errors), in the Table in paragraph 1, after the entry relating to remote gaming duty insert—

Machine games duty	Return under regulations under paragraph 18 of Schedule 24 to FA 2012.

30

In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing), in the Table in paragraph 1, after the entry relating to remote gaming duty insert—

Machine games duty	Obligation under paragraph 20(3) of Schedule 24 to FA 2012 (obligation to register in respect of premises).

31

In Schedule 55 to FA 2009 (penalty for failure to make returns etc), in the Table in paragraph 1, after item 28 insert—

29	Machine games duty	Return under regulations under paragraph 18 of Schedule 24 to FA 2012

32

In that Schedule, in each of the following provisions, for “28” substitute “ 29 ”

(a) paragraph 2(1)(b),

(b) paragraph 13A(1), and

33

In Schedule 56 to FA 2009 (penalty for failure to make payments on time), in the Table in paragraph 1, after item 11M insert—

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

34

In that Schedule, in each of the following provisions, for “11M” substitute “ 11N ”

(a) items 17A, 23 and 24 of the Table in paragraph 1,

(b) paragraph 2(c),

(d) paragraph 8A(1), and

(e) paragraph 8F(1).

35

(1) Contravention of a provision mentioned in sub-paragraph (2) attracts a penalty under section 9 of FA 1994 (penalties) and also attracts daily penalties under that section.

(2) The provisions are—

(a) any provision of regulations made under paragraph 18,

(b) any provision of regulations made under paragraph 19,

(d) any provision of regulations made under paragraph 24.

Forfeiture

36

(1) A machine is liable to forfeiture if—

(a) an officer of Revenue and Customs finds it on any premises,

(b) the officer is satisfied that it is being, has been or is about to be made available on the premises for use by others for playing dutiable machine games on it, and

(2) Condition A is that—

(a) no-one is registered in respect of the premises, and

(b) there is a serious risk that any machine games duty chargeable in respect of the machine would not be paid.

(3) Condition B is that the officer is satisfied that an amount of machine games duty has become due and payable in respect of the machine, but has not been paid.

Offences

37

(1) A person commits an offence if the person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion (by that person or any other person) of any machine games duty.

(2) A person guilty of an offence under this paragraph is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding 14 years or a fine, or both;

(b) on summary conviction, to imprisonment for a term not exceeding 12 months the general limit in a magistrates’ court or a fine not exceeding the maximum amount, or both.

(3) The maximum amount is the greater of—

(a) £20,000, and

(b) three times the duty or other amount that is unpaid or the payment of which is sought to be avoided.

(4) In the application of this paragraph—

(a) in England and Wales, in relation to an offence committed before 2 May 2022, or

(b) in Northern Ireland,

the reference in sub-paragraph (2)(b) to 12 months the general limit in a magistrates’ court is to be read as a reference to 6 months.

(5) Section 27 of BGDA 1981 (offences by bodies corporate) has effect for the purposes of any offence under this paragraph as it has effect for the purposes of the offence mentioned in that section.

Protection of officers

38

Section 31 of BGDA 1981 applies in relation to machine games duty as it applies in relation to bingo duty.

Orders and regulations

39

(1) This paragraph applies to orders and regulations under this Part of this Schedule.

(2) Orders and regulations—

(a) may make provision that applies generally or only for specified purposes,

(b) may make different provision for different purposes, and

(3) Regulations may confer a discretion on HMRC.

(4) Orders and regulations are to be made by statutory instrument.

(5) For the purposes of making an order under paragraph 8(1)(b)—

(a) the statutory instrument containing the order must be laid before the House of Commons, and

(b) the order ceases to have effect at the end of the period of 28 days beginning with the day on which it was made unless, during that period, it is approved by a resolution of the House of Commons.

(6) In reckoning the 28-day period, no account is to be taken of any time during which—

(a) Parliament is dissolved or prorogued, or

(b) the House of Commons is adjourned for more than 4 days.

(7) An order ceasing to have effect by virtue of sub-paragraph (5)(b) does not affect—

(a) anything previously done under the order, or

(b) the making of a new order.

(8) A statutory instrument containing an order under paragraph 13(6) or 22(3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(9) Subject to sub-paragraphs (5) and (8), a statutory instrument containing an order or regulations is subject to annulment in pursuance of a resolution of the House of Commons.

Transitional provision

40

(1) The Commissioners may by notice direct that regulations under paragraph 24 (procedure for registration, de-registration etc) are to apply in relation to the period before the go-live date with the modifications specified in the notice.

(2) A notice under sub-paragraph (1) must be published by the Commissioners.

(3) For a person who, on the go-live date, is responsible for premises where a relevant machine is located, the first accounting period is to be the period beginning with that day and ending with—

(a) the day before the day on which the next accounting period is to begin by virtue of a direction given under paragraph 14(2), or

(b) such other day as is necessary to give effect to an agreement made under paragraph 14(4).

Consequential amendments

41

(1) Section 1(1) of CEMA 1979 (interpretation) is amended as follows.

(2) In the definition of “the revenue trade provisions of the customs and excise Acts”, at the end insert—

(f) the provisions of Part 1 of Schedule 24 to the Finance Act 2012;

(3) In the definition of “revenue trader”, in paragraph (a)—

(a) omit “or” at the end of sub-paragraph (ic),

(b) after that sub-paragraph insert—

(id) being responsible for premises where relevant machines are located (within the meaning of Part 1 of Schedule 24 to the Finance Act 2012); or

, and

42

(1) For section 118BC of that Act (inspection powers: gaming duty) substitute—

(118BC) (1) Subsection (2) applies to premises if an officer has reasonable cause to believe that— (a) section 10 gaming is taking place, has taken place or is about to take place on the premises, or (b) machines are located on the premises in respect of which a person is, has been or is about to become liable for machine games duty. (2) The officer may at any reasonable time enter and inspect the premises and inspect— (a) accounts, records and other documents in the custody or control of any relevant person, and (b) any relevant equipment. (3) Subsection (1) does not permit an officer to enter or inspect a particular part of premises if— (a) the officer has no reasonable cause to believe that paragraph (a) or, as the case may be, (b) of that subsection is satisfied with respect to that particular part, and (b) the part is used solely as a dwelling. (4) An officer may at any reasonable time (whether or not as part of an inspection under subsection (2)) require a relevant person or anyone acting on such a person's behalf— (a) to open relevant equipment, and (b) to carry out any other operation that may be necessary to enable the officer to ascertain whether any gaming duty or machine games duty is payable in respect of it and, if so, how much. (5) A “relevant person” is— (a) in relation to gaming duty, a person who is engaging, or whom the officer reasonably suspects of engaging, in section 10 gaming or in any activity by reason of which the person is or may become liable to gaming duty, and (b) in relation to machine games duty, a person who is, has been or is about to become liable to machine games duty or whom the officer reasonably suspects of being, having been or being about to become so liable. (6) “Relevant equipment” is— (a) in relation to gaming duty, equipment that is being, or the officer reasonably suspects of having been or of being intended to be, used on the premises for or in connection with section 10 gaming, and (b) in relation to machine games duty, any equipment that is, or the officer reasonably suspects of being, a machine in respect of which a person is, has been or may become liable to machine games duty and any other equipment used in connection with such a machine. (7) In this section— (a) “section 10 gaming” means gaming to which section 10 of the Finance Act 1997 applies, and (b) a reference to premises where a machine is located is to be read in accordance with Part 1 of Schedule 24 to the Finance Act 2012.

(2) In section 118G of that Act (offences under Part 9A), in subsection (1), for “or section 118B” substitute “ , 118B or 118BC(4) ”.

43

In section 2 of BGDA 1981 (bookmakers: general bets), in subsection (2), omit paragraph (d).

44

(1) Section 26H of BGDA 1981 (exemptions from remote gaming duty) is amended as follows.

(2) After subsection (2A) insert—

(2B) Subsection (2) does not apply in cases where the other gambling tax is machine games duty.

(3) In subsection (3), before paragraph (b) insert—

(aa) machine games duty,

45

In Schedule A1 to BGDA 1981 (betting duties: double taxation relief), in paragraph 7, after paragraph (c) insert—

(ca) machine games duty,

46

In Schedule 4B to BGDA 1981 (remote gaming duty: double taxation relief), in paragraph 7, after paragraph (c) insert—

(ca) machine games duty,

47

In section 12 of FA 1994 (assessment to excise duty), in subsection (2)(c), after “1997” insert “ or Part 1 of Schedule 24 to the Finance Act 2012 ”.

48

In section 10 of FA 1997 (gaming duty), for subsection (3AA) substitute—

(3AA) This section does not apply to the playing of a game in respect of which— (a) bingo duty or lottery duty is chargeable, or would be chargeable but for an express exception, or (b) machine games duty is chargeable.

49

In section 7 of the Borders, Citizenship and Immigration Act 2009 (Customs revenue functions of the director), in subsection (2)(e)—

(a) omit “and” at the end of sub-paragraph (vi), and

(b) at the end of sub-paragraph (vii) insert

and (viii) machine games duty;

Interpretation

50

In this Part of this Schedule—

“appeal tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal;

“cash” has the meaning given in paragraph 2 (and “non-cash” is to be read accordingly);

“charge”, in relation to a game, means a charge or deduction in money or money's worth, however it is described or levied and whether it becomes due before or after the game is played;

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

“dutiable machine game” has the meaning given in paragraph 2, subject to paragraphs 3 and 4;

“game” does not include a sport;

“the go-live date” is defined in paragraph 66(5);

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

“machine” means any apparatus that uses or applies mechanical power, electrical power or both;

“machine game” has the meaning given in paragraph 2;

“MGD register” has the meaning given in paragraph 20;

“money” means money in sterling or any other currency;

“payouts” means prizes paid out to players as a result of playing dutiable machine games on a machine;

“the payouts”, in relation to a particular taxable person and accounting period, has the meaning given in paragraph 7;

“premises” includes any place, any means of transport and any stall or other moveable structure;

“prize”, in relation to a game—means a prize in the form of cash or non-cash (or both), however it is described or paid out and whether it is a prize provided by a person making the game available or is winnings of money staked, buta benefit consisting of nothing more than the opportunity to play the game again does not count as a prize;

“registered” has the meaning given in paragraph 12 (and “registration” is to be read accordingly);

“registrable person” has the meaning given in paragraph 21;

“relevant machine” means—a machine in respect of which machine games duty is or will be chargeable, orin relation to a particular taxable person and accounting period, a machine in respect of which that person is liable for machine games duty in that period;

“representative” means a personal representative, trustee in bankruptcy, receiver or liquidator or any other person acting in a representative capacity;

“specified” includes described;

“takings” means charges due from players for playing dutiable machine games on a machine;

“the takings”, in relation to a particular taxable person and accounting period, has the meaning given in paragraph 7;

“taxable person” has the meaning given in paragraph 11;

“total net takings” has the meaning given in paragraph 6;

“United Kingdom” includes the territorial sea of the United Kingdom.

51

(1) This Part of this Schedule is to be read in accordance with this paragraph.

(2) A person “plays” a game if the person participates in the game—

(a) whether or not there are other participants in the game, and

(b) whether or not a computer generates images or data taken to represent the actions of other participants in the game.

(3) A reference to the charge (or the lowest or highest charge) payable for playing a machine game—

(a) is a reference to the charge (or the lowest or highest charge) payable for a single go at playing the game, and

(b) includes any charge that entitles the person paying it to play a machine game or to play it at a reduced rate (even if the charge is ostensibly a charge for something else).

(4) A reference to “paying” a charge is to be read, in the case of a charge in money's worth, as a reference to the provision of the thing, or performance of the service, in money's worth.

(5) A reference to a prize (or the maximum amount of cash) that can be won from playing a machine game is a reference to a prize (or the maximum amount of cash) that can be won from a single go at playing the game.

(6) A reference to “paying out” a prize is to be read, in the case of a prize in money's worth, as a reference to the provision of the thing, or performance of the service, in money's worth.

(7) A reference to the premises where a machine is located or made available includes, in the case of a portable machine, the premises where the machine is issued to those wanting to play dutiable machines games on it.

52

The imposition or payment of machine games duty does not make lawful anything that is otherwise unlawful.

PART 2 — Removal of amusement machine licence duty

Amendment of BGDA 1981

53

The following provisions of BGDA 1981 are omitted—

(a) sections 21 to 26,

(b) section 26H(3)(a),

(d) Schedules 4 and 4A.

54

(1) Part 3 of that Act (general) is amended as follows.

(2) In section 27 (offences by bodies corporate), for the words from “section 24” to “Schedule 4” substitute “ paragraph 13(1) or (3) or 14(1) of Schedule 1 or paragraph 16 of Schedule 3 ”.

(3) In section 31 (protection of officers), for “remote gaming duty or the duty on amusement machine licences” substitute “ or remote gaming duty ”.

(4) In section 33 (interpretation), in subsection (2), for “remote gaming duty or the duty on amusement machine licences” substitute “ or remote gaming duty ”.

Amendment of other enactments

55

In section 102 of CEMA 1979, in subsection (3)(a), omit “or an amusement machine licence”.

56

In section 10 of FA 1997 (gaming duty), omit subsection (3A).

57

In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing), in the Table in paragraph 1, omit the entry relating to amusement machine licence duty.

58

In section 7 of the Borders, Citizenship and Immigration Act 2009 (Customs revenue functions of the director), in subsection (2)(e), omit sub-paragraph (i).

Transitional provision and savings

59

(1) If a licence granted under section 21 of BGDA 1981 is to expire on or after the go-live date, the holder of the licence is entitled to repayment of an amount of duty.

(2) That amount is the difference between—

(a) the amount of duty actually paid on the licence before the go-live date in accordance with section 23 of that Act, and

(b) the amount (if less) determined in accordance with sub-paragraph (3).

(3) The amount is to be determined as follows—

Step 1 Calculate the amount of duty that would have been paid if the period for which the licence was granted had been the number of complete months beginning with the date on which the licence was granted and ending immediately before the go-live date. The day immediately following the end of that period of complete months is referred to as “day X”.

Step 2 Add to the amount calculated under Step 1 an amount representing the duty payable for the period of days beginning with day X and ending with the day before the go-live date. The duty payable for each such day in that period is to be calculated as 1/365th of the amount of duty payable for a licence of 12 months for a machine of the relevant category.

(4) If—

(a) duty is being paid on the licence in accordance with arrangements made under paragraph 7A of Schedule 4 to BGDA 1981 (payment of duty by instalments), and

(b) the amount of duty actually paid on the licence before the go-live date in accordance with section 23 of that Act is less than the amount determined in accordance with sub-paragraph (3),

the difference between those amounts is to be treated under that Act as unpaid duty.

(5) If a person entitled to a repayment of more than £10 under this paragraph has not received the repayment within the period of 90 days beginning with the go-live date—

(a) the person may give notice to HMRC of that fact,

(b) the Commissioners must pay interest to the person on the amount of the repayment for the period from the end of that 90-day period until the day on which the repayment is made, and

(c) any such interest accrues at the rate under section 197 of FA 1996 (rates of interest) that is applicable for Parts 2 and 3 of Schedule 3 to FA 2001 (excise duty payment by Commissioners in case of error or delay).

60

(1) If a licence granted or to be granted under section 21 of BGDA 1981 would expire within the period of 30 days ending with the go-live date, a person may apply—

(a) for the licence to be treated as extended for the necessary period, or

(b) for a new amusement machine licence to be treated as granted in its place under Schedule 4 to that Act for the necessary period.

(2) The necessary period is the period from expiry of the licence until immediately before the go-live date.

(3) An application under this paragraph may be made before or after the licence is granted but, if made after the licence is granted, it must be made before the day on which the licence is to expire.

(4) The application must be made to HMRC in such form and manner as HMRC may require.

(5) HMRC must grant the application once it has received payment of an amount of duty payable on the licence (or new licence) in respect of the necessary period.

(6) The amount of duty payable in respect of the necessary period is to be the sum of the amounts payable for each day in that period, each such amount being 1/365th of the duty payable for a licence of 12 months for a machine of the relevant category.

(7) Schedule 4 to BGDA 1981 and any regulations made under that Schedule apply (subject to any modifications specified by the Commissioners in a notice published for the purposes of this paragraph) to an amount of duty payable in accordance with this paragraph as to an amount of duty payable in accordance with section 23 of that Act.

(8) Nothing in this paragraph affects the operation of that Act with respect to the provision of amusement machines in the necessary period in a case where no application is made under this paragraph or an application is not granted.

(9) But if a default licence is granted under Schedule 4A to BGDA 1981 for the necessary period, the amount of duty that may be assessed under paragraph 4 of that Schedule is limited to the amount that would have been payable if an application had been made for a licence under this paragraph.

61

(1) This paragraph applies to licences to be granted under section 21 of BGDA 1981 on or after 2 January 2013 (a “final month licence”).

(2) Section 21(3) of that Act has effect as if—

(a) the requirement to grant amusement machine licences for a period of one or more whole months were omitted, and

(b) the power to grant amusement machine licences for a period not exceeding 12 months were a power to grant such licences for a period ending with a day that is no later than the day before the go-live date.

(3) The requirement in section 21(4) of that Act to grant special amusement machine licences for a period of 12 months has effect in relation to a final month licence as if it were a requirement to grant a licence for the period beginning with the date of grant and ending with the day before the go-live date.

(4) The amount of duty payable on a final month licence is to be calculated in the manner described in paragraph 60(6).

(5) The Commissioners may by notice direct that Schedules 4 and 4A to BGDA 1981 and any regulations made under those Schedules are to apply to a final month licence with such modifications as may be specified in the notice.

(6) A notice under sub-paragraph (5) must be published by the Commissioners.

62

(1) The enactments repealed by this Part of this Schedule continue to have effect on and after the go-live date in relation to the provision of amusement machines before that date.

(2) Enactments continuing to have effect by virtue of sub-paragraph (1) are to be read with any necessary modifications.

(3) Without prejudice to the generality of sub-paragraph (2), paragraph 4 of Schedule 4A to BGDA 1981 (assessment of amount equivalent to duty) is to be read as if the reference in sub-paragraph (3) to the due date were a reference to the day before the go-live date.

PART 3 — VAT exemption

Amendment of VATA 1994

63

For section 23 of VATA 1994 substitute—

(23) (1) If a person plays a relevant machine game, then for the purposes of VAT the amount paid by the person is to be treated as consideration for a supply of services to that person. (2) “Relevant machine game” is defined in section 23A. (3) The value to be taken as the value of supplies made by a person (“the supplier”) in the circumstances mentioned in subsection (1) in any period is to be determined as if the consideration for the supplies were reduced by an amount equal to X. (4) X is the amount (if any) paid out in that period by way of winnings in respect of relevant machine games made available by the supplier (whether the games were played in the same period or an earlier one). (5) X does not include any winnings paid out to the supplier or a person acting on the supplier's behalf. (6) Inserting a token into a machine on which a relevant machine game is played is to be treated for the purposes of subsection (1) as the payment of an amount equal to that for which the token can be obtained. (7) Providing a specified kind of token by way of winnings is to be treated for the purposes of subsection (4) as the payment out of an amount by way of winnings equal to the value of the token. (8) A specified kind of token is— (a) a token that can be inserted into the same machine to enable games to be played on the machine, or (b) a token that is not of such a kind but can be exchanged for money. (9) The value of a specified kind of token is— (a) for a token within subsection (8)(a), an amount equal to that for which the token can be obtained, and (b) for a token within subsection (8)(b), an amount equal to that for which the token can be exchanged. (10) If it is not reasonably practicable to attribute payments and winnings to relevant machine games or to apportion them between relevant machine games and other games or other activities, any attribution or apportionment is to be done on a just and reasonable basis. (11) For the purposes of this section, a person plays a game if the person participates in the game— (a) whether or not there are other participants in the game, and (b) whether or not a computer generates images or data taken to represent the actions of other participants in the game. (23A) (1) A “relevant machine game” is a game (whether of skill or chance or both) that— (a) is played on a machine for a prize, and (b) is not excluded by subsection (2). (2) A game is excluded by this subsection if— (a) takings and payouts in respect of it are taken into account in determining any charge to machine games duty, (b) it involves betting on future real events, (c) bingo duty is charged on the playing of it or would be so charged but for paragraphs 1 to 5 of Schedule 3 to the Betting and Gaming Duties Act 1981 (exemptions from bingo duty), (d) lottery duty is charged on the taking of a ticket or chance in it or would be so charged but for an express exception, (e) it is a real game of chance and playing it amounts to dutiable gaming for the purposes of section 10 of the Finance Act 1997 or would do so but for subsection (3), (3B) or (4) of that section, or (f) playing it amounts to remote gaming within the meaning of section 26A of the Betting and Gaming Duties Act 1981 (remote gaming duty: interpretation). (3) In this section— - “game” does not include a sport; - “machine” means any apparatus that uses or applies mechanical power, electrical power or both; - “prize”, in relation to a game, does not include the opportunity to play the game again; - “real game of chance” means a game of chance (within the meaning of the Betting and Gaming Duties Act 1981) that is non-virtual. (4) The Treasury may by order amend this section.

64

(1) In Part 2 of Schedule 9 to that Act (exemptions: the groups), the provisions of Group 4 are amended as follows.

(2) After Item 1 insert—

(1A) The provision of any facilities for the playing of dutiable machine games (as defined in Part 1 of Schedule 24 to the Finance Act 2012) but only to the extent that— (a) the facilities are used to play such games, and (b) the takings and payouts in respect of those games are taken into account in determining the charge to machine games duty.

(3) In Note (1)—

(a) for “Item 1 does” substitute “ Items 1 and 1A do ”, and

(b) omit paragraph (d) and the word “or” immediately preceding that paragraph.

(4) After Note (1) insert—

(1A) Item 1 does not apply to the provision of facilities to the extent that the facilities are used to play a relevant machine game (as defined in section 23A).

(5) Accordingly—

(a) in Part 2 of Schedule 9, in the heading of Group 4, after “GAMING” insert “ , DUTIABLE MACHINE GAMES ”, and

(b) in Part 1 of that Schedule, in the Index, for “Betting, gaming and lotteries” substitute “ Betting, gaming, dutiable machine games and lotteries ”.

65

(1) Paragraph 9 of Schedule 11 to that Act (administration, collection and enforcement) is amended as follows.

(2) For paragraph (a) substitute—

(a) to open any machine on which relevant machine games (as defined in section 23A) are capable of being played; and

(3) In paragraph (b), for “subsection (2) of that section” substitute “ section 23(3) ”.

(4) Accordingly, in the heading immediately before paragraph 9, for “gaming machines” substitute “ machines on which relevant machine games are played ”.

PART 4 — Miscellaneous

Application

66

(1) The provisions of this Schedule have effect as follows.

(2) Part 1 has effect in relation to the playing of machine games on or after 1 February 2013 (and Schedules 55 and 56 to FA 2009, as amended by Part 1 of this Schedule, are taken to have come into force for the purposes of machine games duty on that date).

(3) Part 2 has effect in relation to the provision of amusement machines on or after 1 February 2013.

(4) Part 3 has effect in relation to supplies made on or after that date.

(5) A reference in this Schedule to the “go-live date” is to 1 February 2013.

67

(1) The Treasury may by regulations make transitional or saving provision in connection with the removal of amusement machine licence duty and the introduction of machine games duty.

(2) The power in sub-paragraph (1) is without prejudice to—

(a) the provision made by Part 2 of this Schedule, and

(b) any power in this Schedule apart from this paragraph to make transitional or saving provision in connection with the matters mentioned in sub-paragraph (1).

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

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

SCHEDULE 25

Unilateral relief

1

BGDA 1981 is amended as follows.

2

After section 5D insert—

(5E) (1) This section applies if a person (“P”) is liable to pay a qualifying foreign tax in respect of bets in respect of which P is also liable to pay general betting duty under a provision of sections 2 to 4 or section 5AB (“the relevant provision”). (2) Bets in respect of which P is liable to pay both general betting duty under the relevant provision and the qualifying foreign tax are referred to as “eligible bets”. (3) Credit may be allowed for all or part of the qualifying foreign tax paid by P. (4) Whether any credit is allowed is determined in accordance with Schedule A1. (5) If credit is allowed for an accounting period, P is entitled to claim a repayment of so much of the duty actually paid as is equal to the amount of credit allowed. (6) Total repayments to P for that accounting period in respect of bets of the applicable class (taking into account all qualifying foreign taxes) must not, in aggregate, exceed the duty actually paid. (7) “The applicable class” means the class of bets to which the relevant provision applies. (8) “The duty actually paid” means the general betting duty paid by P for that accounting period in respect of bets of the applicable class. (9) A bet does not count as an “eligible bet” if it was made by or on behalf of P.

3

After section 8 insert—

(8ZA) (1) This section applies if a person (“P”) is liable to pay a qualifying foreign tax in respect of bets in respect of which P is also liable to pay pool betting duty. (2) Bets in respect of which P is liable to pay both pool betting duty and the qualifying foreign tax are referred to as “eligible bets”. (3) Credit may be allowed for all or part of the qualifying foreign tax paid by P. (4) Whether any credit is allowed is determined in accordance with Schedule A1. (5) If credit is allowed for an accounting period, P is entitled to claim a repayment of so much of the duty actually paid as is equal to the amount of credit allowed. (6) Total repayments to P for that accounting period (taking into account all qualifying foreign taxes) must not, in aggregate, exceed the duty actually paid. (7) “The duty actually paid” means the pool betting duty paid by P for that accounting period. (8) A bet does not count as an “eligible bet” if it was made by or on behalf of P.

4

After section 10 insert—

(10A) (1) For the purposes of general betting duty or pool betting duty, a “qualifying foreign tax” is a foreign tax specified by the Commissioners in relation to that duty (“the relevant duty”). (2) “Specified” means specified in a notice published by the Commissioners, as revised or replaced from time to time. (3) The Commissioners must specify a foreign tax under this section if they are satisfied that— (a) it is a gambling tax, (b) the activities on which it is charged include betting, (c) the bets in respect of which it is charged include bets in respect of which the relevant duty is also charged, and (d) the charge in respect of such bets is based on betting by persons in or deemed to be in the country or territory where the tax is imposed. (4) The following factors indicate that a tax is a gambling tax— (a) that it is charged on activities involving betting or gaming (rather than activities generally), and (b) that it goes towards meeting general public expenditure (rather than being ring-fenced for a particular purpose). (5) A notice specifying a foreign tax may provide that the tax is to be treated as having been specified with effect from a date that is earlier than the date of the notice.

5

After section 26I insert—

(26IA) (1) This section applies if— (a) P is liable to pay remote gaming duty on the provision of facilities for remote gaming, and (b) P is also liable to pay a qualifying foreign tax in respect of remote gaming using those facilities. (2) The remote gaming using those facilities in respect of which the qualifying foreign tax is charged is referred to as “eligible gaming”. (3) Credit may be allowed for all or part of the qualifying foreign tax paid by P. (4) Whether any credit is allowed is determined in accordance with Schedule 4B. (5) If credit is allowed for an accounting period, P is entitled to claim a repayment of so much of the duty actually paid as is equal to the amount of credit allowed. (6) Total repayments to P for that period (taking into account all qualifying foreign taxes) must not, in aggregate, exceed the duty actually paid. (7) “The duty actually paid” means the remote gaming duty paid by P for that accounting period. (8) Remote gaming does not count as “eligible gaming” if one of the participants in the game in question is P or someone acting on P's behalf. (26IB) (1) For the purposes of remote gaming duty, a “qualifying foreign tax” is a foreign tax specified by the Commissioners in relation to remote gaming duty. (2) “Specified” means specified in a notice published by the Commissioners, as revised or replaced from time to time. (3) The Commissioners must specify a foreign tax under this section if they are satisfied that— (a) it is a gambling tax, (b) the activities on which it is charged include remote gaming, (c) the remote gaming on which it is charged includes remote gaming using facilities in respect of which remote gaming duty is also charged, and (d) the charge is based on remote gaming by persons in or deemed to be in the country or territory where the tax is imposed. (4) The following factors indicate that a tax is a gambling tax— (a) that it is charged on activities involving betting or gaming (rather than activities generally), and (b) that it goes towards meeting general public expenditure (rather than being ring-fenced for a particular purpose). (5) A notice specifying a foreign tax may provide that the tax is to be treated as having been specified with effect from a date that is earlier than the date of the notice. (26IC) (1) The Commissioners may make regulations about— (a) claims for repayment under section 26IA, and (b) the making of repayments under that section. (2) Regulations under this section may in particular include provision about— (a) the time within which claims may be made, (b) the form, content and delivery of claims, (c) the evidence required to satisfy the Commissioners of the validity of claims, and (d) the investigation and processing of claims.

6

In section 33 (interpretation)—

(a) in subsection (1), after the definition of “the Commissioners” insert—

“foreign tax” means a tax, including any sort of duty or levy, imposed in a country or territory outside the United Kingdom (see also subsection (1B));

, and

(b) after subsection (1A) insert—

(1B) A reference in this Act to a foreign tax does not include any penalty, interest, surcharge or other such cost arising in connection with the tax (whether or not recoverable as if it were that tax).

7

Before Schedule 1 insert—

SCHEDULE A1 (1) This Schedule sets out the rules for determining whether credit is allowed under section 5E or 8ZA for qualifying foreign tax paid by P. (2) (1) This Schedule is to be read as follows. (2) “The applicable class”— (a) in the case of section 5E, has the meaning given in that section, and (b) in the case of section 8ZA, means dutiable pool bets. (3) A “reconciliation period” is— (a) if P has monthly accounting periods, a period consisting of 12 consecutive accounting periods, (b) if P has quarterly accounting periods, a period consisting of 4 consecutive accounting periods, and (c) if P has any other length of accounting period, a period consisting of such number of consecutive accounting periods as would produce a period as near as possible to 365 days. (4) In relation to an accounting period, a reference to “the reconciliation period” is to the reconciliation period in which that accounting period falls. (3) (1) To determine whether credit is allowed for an accounting period— (a) calculate the notional UK liability and the notional foreign liability for the accounting period, and (b) compare the two figures. (2) No credit is allowed if either figure is nil or both figures are nil. (3) Subject to that, credit is allowed of an amount equal to the smaller of the two figures (or, if they are the same, of an amount equal to that figure). (4) The notional UK liability for an accounting period is calculated as follows— - Step 1 If the applicable class is a class to which a provision of sections 2 to 4 applies, calculate P's net stake receipts for the period in accordance with section 5 but by reference to eligible bets (rather than bets of the applicable class).If the applicable class is the class to which section 5AB applies, calculate the commission charges in accordance with that section relating to eligible bets determined in the period (rather than bets to which that section applies).If the applicable class is dutiable pool bets, calculate P's net pool betting receipts for the period in accordance with section 7A but by reference to eligible bets (rather than dutiable pool bets).In calculating P's net stake receipts or net pool betting receipts for the purposes of this Step, do not carry forward to the period any losses in respect of eligible bets that arose in an accounting period before the start of the reconciliation period. - Step 2 If the amount calculated under Step 1 is nil or a negative amount, the notional UK liability for the period is nil.Otherwise, apply the appropriate rate to the amount calculated under Step 1. The result is the notional UK liability for the period.“The appropriate rate” is the percentage specified in whichever of section 2(3), 3(3)(a), 3(3)(b), 4(3), 5AB(4) or 7(2) applies to the applicable class, as in force for the accounting period in question. (5) The notional foreign liability for an accounting period is calculated as follows— - Step 1 Calculate the amount of qualifying foreign tax that would be payable by P for the accounting period if the tax were charged solely in respect of eligible bets and accounted for by reference to periods corresponding to P's accounting periods.Any apportionment needed for this calculation is to be done on a just and reasonable basis.If the law under which the qualifying foreign tax is imposed provides for losses to be carried forward, do not carry forward to the period any losses (in respect of eligible bets) that arose before the start of the reconciliation period. - Step 2 If the amount calculated under Step 1 is nil, the notional foreign liability for the period is nil.Otherwise, calculate the sterling equivalent of the amount calculated under Step 1. The result is the notional foreign liability for the period.The sterling equivalent is to be calculated using the London closing exchange rate for the last day of the accounting period. (6) (1) This paragraph applies if in respect of the applicable class of bets— (a) P receives a repayment under section 5E or 8ZA for one or more accounting periods in a reconciliation period, and (b) the amount calculated under Step 1 in paragraph 4 for the final accounting period in that reconciliation period is a negative amount. (2) P is liable to repay all or part of the repayment or repayments received. (3) The amount that P is liable to repay is the smallest of— (a) the loss multiplied by the rate at which the qualifying foreign tax is charged in respect of eligible bets, (b) the loss multiplied by the appropriate rate (as defined in paragraph 4) for the applicable class of bets, and (c) the repayment (or the sum of the repayments) made to P for the reconciliation period. (4) “The loss” means the negative amount mentioned in sub-paragraph (1)(b) but expressed as a positive number. (5) If there is more than one rate at which the qualifying foreign tax is charged in respect of eligible bets, each rate is to be applied to an appropriate portion of the loss in order to arrive at the amount under sub-paragraph (3)(a). (6) If all or part of the qualifying foreign tax is calculated other than on a net receipts basis, sub-paragraph (3) has effect as if paragraph (a) were omitted. (7) Any amount due from P under this paragraph is to be treated as if it were an amount of unpaid general betting duty or, as the case may be, pool betting duty. (7) The Commissioners are not required to make a repayment under section 5E or 8ZA if P is in breach of any obligation to deliver a return with respect to— (a) general betting duty, (b) pool betting duty, (c) bingo duty, (d) remote gaming duty, (e) gaming duty, or (f) lottery duty. (8) (1) Sub-paragraphs (2) to (4) apply if any of the following events take place— (a) the way in which a qualifying foreign tax is charged or calculated is changed retrospectively, (b) a tax authority waives or refunds all or part of an amount of qualifying foreign tax due from P, or (c) as a result of being liable to pay an amount of qualifying foreign tax, P or a connected person is entitled to any kind of tax deduction or relief calculated by reference to the amount of qualifying foreign tax. (2) P must notify the Commissioners of the event on becoming aware of it. (3) If the event is a retrospective change in the way in which the qualifying foreign tax is charged or calculated, the amount for which credit is allowed under section 5E or 8ZA is to be recalculated in accordance with this Schedule. (4) In any other case, the amount for which credit is allowed under section 5E or 8ZA is to be reduced by a just and reasonable sum to reflect the amount of tax waived or refunded or the deduction or relief given. (5) If it transpires (on account of this paragraph or otherwise) that a repayment or part of a repayment under section 5E or 8ZA should not have been made, P is liable for the amount that should not have been repaid, as if it were unpaid general betting duty or, as the case may be, pool betting duty. (6) Section 1122 of the Corporation Tax Act 2010 (connected persons) applies for the purposes of sub-paragraph (1)(c).

8

(1) Schedule 1 (betting duties) is amended as follows.

(2) In paragraph 2, after sub-paragraph (4) insert—

(5) Regulations under this paragraph may also in particular include provision about claims for repayment under section 5E and about the making of any such repayment, including provision about— (a) the time within which claims may be made, (b) the form, content and delivery of claims, (c) the evidence required to satisfy the Commissioners of the validity of claims, and (d) the investigation and processing of claims.

(3) In paragraph 2A, after sub-paragraph (3) insert—

(4) Regulations under sub-paragraph (2) may also include provision about claims for repayment under section 8ZA and about the making of any such repayment, including provision about anything mentioned in paragraph 2(5)(a) to (d).

9

After Schedule 4A insert—

SCHEDULE 4B (1) This Schedule sets out the rules for determining whether credit is allowed under section 26IA for qualifying foreign tax paid by P. (2) (1) For the purposes of this Schedule, a “reconciliation period” is— (a) if P has quarterly accounting periods, a period consisting of 4 consecutive accounting periods, and (b) if P has any other length of accounting period, a period consisting of such number of consecutive accounting periods as would produce a period as near as possible to 365 days. (2) In relation to an accounting period, a reference to “the reconciliation period” is to the reconciliation period in which that accounting period falls. (3) (1) To determine whether credit is allowed for an accounting period— (a) calculate the notional UK liability and the notional foreign liability for the accounting period, and (b) compare the two figures. (2) No credit is allowed if either figure is nil or both figures are nil. (3) Subject to that, credit is allowed of an amount equal to the smaller of the two figures (or, if they are the same, of an amount equal to that figure). (4) The notional UK liability for an accounting period is calculated as follows— - Step 1 Calculate P's remote gaming profits for the period in accordance with section 26C(2) but by reference to the use of the facilities provided by P for eligible gaming (rather than remote gaming generally).In calculating P's remote gaming profits for the purposes of this Step, do not carry forward to the period any losses (in respect of the use of the facilities for eligible gaming) that arose in an accounting period before the start of the reconciliation period. - Step 2 If the amount calculated under Step 1 is nil or a negative amount, the notional UK liability for the period is nil.Otherwise, apply the appropriate rate to the amount calculated under Step 1. The result is the notional UK liability for the period.“The appropriate rate” is the percentage specified in section 26C(1) as in force for the accounting period in question. (5) The notional foreign liability for an accounting period is calculated as follows— - Step 1 Calculate the amount of qualifying foreign tax that would be payable by P for the accounting period if the tax were charged in respect of eligible gaming and were accounted for by reference to periods corresponding to P's accounting periods.Any apportionment needed for this calculation is to be done on a just and reasonable basis.If the law under which the qualifying foreign tax is imposed provides for losses to be carried forward, do not carry forward to the period any losses (in respect of eligible gaming) that arose before the start of the reconciliation period. - Step 2 If the amount calculated under Step 1 is nil, the notional foreign liability for the period is nil.Otherwise, calculate the sterling equivalent of the amount calculated under Step 1. The result is the notional foreign liability for the period.The sterling equivalent is to be calculated using the London closing exchange rate for the last day of the accounting period. (6) (1) This paragraph applies if in respect of eligible gaming— (a) P receives a repayment under section 26IA for one or more accounting periods in a reconciliation period, and (b) the amount calculated under Step 1 in paragraph 4 for the final accounting period in that reconciliation period is a negative amount. (2) P is liable to repay all or part of the repayment or repayments received. (3) The amount that P is liable to repay is the smallest of— (a) the loss multiplied by the rate at which the qualifying foreign tax is charged in respect of eligible gaming, (b) the loss multiplied by the appropriate rate (as defined in paragraph 4), and (c) the repayment (or the sum of the repayments) made to P for the reconciliation period. (4) “The loss” means the negative amount mentioned in sub-paragraph (1)(b) but expressed as a positive number. (5) If there is more than one rate at which the qualifying foreign tax is charged in respect of eligible gaming, each rate is to be applied to an appropriate portion of the loss in order to arrive at the amount under sub-paragraph (3)(a). (6) If all or part of the qualifying foreign tax is calculated other than on a net receipts basis, sub-paragraph (3) has effect as if paragraph (a) were omitted. (7) Any amount due from P under this paragraph is to be treated as if it were an amount of unpaid remote gaming duty. (7) The Commissioners are not required to make a repayment under section 26IA if P is in breach of any obligation to deliver a return with respect to— (a) general betting duty, (b) pool betting duty, (c) bingo duty, (d) remote gaming duty, (e) gaming duty, or (f) lottery duty. (8) (1) Sub-paragraphs (2) to (4) apply if any of the following events take place— (a) the way in which a qualifying foreign tax is charged or calculated is changed retrospectively, (b) a tax authority waives or refunds all or part of an amount of qualifying foreign tax due from P, or (c) as a result of being liable to pay an amount of qualifying foreign tax, P or a connected person is entitled to any kind of tax deduction or relief calculated by reference to the amount of qualifying foreign tax. (2) P must notify the Commissioners of the event on becoming aware of it. (3) If the event is a retrospective change in the way in which the qualifying foreign tax is charged or calculated, the amount for which credit is allowed under section 26IA is to be recalculated in accordance with this Schedule. (4) In any other case, the amount for which credit is allowed under that section is to be reduced by a just and reasonable sum to reflect the amount of tax waived or refunded or the deduction or relief given. (5) If it transpires (on account of this paragraph or otherwise) that a repayment or part of a repayment under section 26IA should not have been made, P is liable for the amount that should not have been repaid, as if it were unpaid remote gaming duty. (6) Section 1122 of the Corporation Tax Act 2010 (connected persons) applies for the purposes of sub-paragraph (1)(c).

Consequential amendments

10

In section 13A(2) of FA 1994 (meaning of “relevant decision”), after paragraph (g) insert—

(ga) any decision by HMRC as to whether or not any person is entitled to any repayment under section 5E, 8ZA or 26IA of the Betting and Gaming Duties Act 1981 (double taxation relief), or the amount of the repayment to which any person is so entitled;

11

(1) The Table in paragraph 1 of Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing) is amended as follows.

(2) In the second column of the entry for general betting duty, for “paragraph 4(1) to (3) of Schedule 1 to BGDA 1981” substitute “ paragraph 8(2) of Schedule A1 to BGDA 1981 (obligation to notify reduction etc in qualifying foreign tax) or paragraph 4(1) to (3) of Schedule 1 to that Act ”.

(3) In the second column of the entry for pool betting duty, for “paragraphs 4(2) and 5(1) of Schedule 1 to BGDA 1981” substitute “ paragraph 8(2) of Schedule A1 to BGDA 1981 (obligation to notify reduction etc in qualifying foreign tax) or paragraphs 4(2) and 5(1) of Schedule 1 to that Act ”.

(4) In the second column of the entry for remote gaming duty, for “to register under regulations under section 26J of BGDA 1981” substitute “ to notify under paragraph 8(2) of Schedule 4B to BGDA 1981 (reduction etc in qualifying foreign tax) and obligation to register under regulations under section 26J of that Act ”.

Commencement

12

The amendments made by this Schedule have effect in relation to accounting periods ending on or after 1 April 2012 (and, accordingly, the first reconciliation period begins with the first accounting period in relation to which the amendments have effect).

SCHEDULE 26

PART 1 — Zero-rated supplies

Introductory

1

Part 2 of Schedule 8 of VATA 1994 (zero-rating) is amended as follows.

Food

2

(1) Group 1 (food) is amended as follows.

(2) After excepted item 4 insert—

(4A) Sports drinks that are advertised or marketed as products designed to enhance physical performance, accelerate recovery after exercise or build bulk, and other similar drinks, including (in either case) syrups, concentrates, essences, powders, crystals or other products for the preparation of such drinks.

(3) In Note (3), omit the words from “and for the purposes of paragraph (b) above” to the end.

(4) After that Note insert—

(3A) For the purposes of Note (3), in the case of any supplier, the premises on which food is supplied include any area set aside for the consumption of food by that supplier's customers, whether or not the area may also be used by the customers of other suppliers. (3B) “Hot food” means food which (or any part of which) is hot at the time it is provided to the customer and— (a) has been heated for the purposes of enabling it to be consumed hot, (b) has been heated to order, (c) has been kept hot after being heated, (d) is provided to a customer in packaging that retains heat (whether or not the packaging was primarily designed for that purpose) or in any other packaging that is specifically designed for hot food, or (e) is advertised or marketed in a way that indicates that it is supplied hot. (3C) For the purposes of Note (3B)— (a) something is “hot” if it is at a temperature above the ambient air temperature, and (b) something is “kept hot” after being heated if the supplier stores it in an environment which provides, applies or retains heat, or takes other steps to ensure it remains hot or to slow down the natural cooling process. (3D) In Notes (3B) and (3C), references to food being heated include references to it being cooked or reheated.

Protected buildings

3

(1) Group 6 (protected buildings) is amended as follows.

(2) Omit items 2 and 3 (approved alterations and building materials).

(3) In Note (3), for “(12) to (14) and (22) to (24)” substitute “ and (12) to (14) ”.

(4) For Note (4) substitute—

(4) For the purposes of item 1, a protected building is not to be regarded as substantially reconstructed unless, when the reconstruction is completed, the reconstructed building incorporates no more of the original building (that is to say, the building as it was before the reconstruction began) than the external walls, together with other external features of architectural or historic interest.

(5) In Note (5), in paragraphs (a), (b) and (c) omit “or other supply”.

(6) Omit Notes (6) to (11).

Caravans

4

(1) Group 9 (caravans and houseboats) is amended as follows.

(2) For item 1 substitute—

(1) Caravans which exceed the limits of size of a trailer for the time being permitted to be towed on roads by a motor vehicle having a maximum gross weight of 3,500 kilogrammes and which— (a) were manufactured to standard BS 3632:2005 approved by the British Standards Institution, or (b) are second hand, were manufactured to a previous version of standard BS 3632 approved by that Institution and were occupied before 6 April 2013.

(3) In item 3 for “5(3)” substitute “ 5(4) ”.

(4) In the Note for “item 3” substitute “ item 4 ”.

PART 2 — Exempt supplies

Land: self storage and facilities to supply hairdressing services

5

(1) In Part 2 of Schedule 9 to VATA 1994 (exemptions), Group 1 (land) is amended as follows.

(2) In item 1, after paragraph (k) insert—

(ka) the grant of facilities for the self storage of goods;

(3) In that item, omit “and” at the end of paragraph (m) and after that paragraph insert—

(ma) the grant of facilities to a person who uses the facilities wholly or mainly to supply hairdressing services; and

(4) In that item, in paragraph (n), for “(m)” substitute “ (ma) ”.

(5) After Note (15) insert—

(15A) In paragraph (ka)— - “facilities for the self storage of goods” means the use of a relevant structure for the storage of goods by the person (or persons) to whom the grant of facilities is made, and - “goods” does not include live animals. (15B) For the purposes of Note (15A), use by a person with the permission of the person (or any of the persons) to whom the grant of facilities is made counts as use by the person (or persons) to whom that grant is made. (15C) A grant of facilities for the self storage of goods does not fall within paragraph (ka) if— (a) the person making the grant (“P”)— (i) is doing so in circumstances where the relevant structure used is, or forms part of, a relevant capital item, and (ii) is connected with any person who uses that relevant structure for the self storage of goods, (b) the grant is made to a charity which uses the relevant structure solely otherwise than in the course of a business, or (c) in a case where the relevant structure is part of a building, its use for the storage of goods by the person (or persons) to whom the grant is made is ancillary to other use of the building by that person (or those persons). (15D) In Notes (15A) and (15C) “relevant structure” means the whole or part of— (a) a container or other structure that is fully enclosed, or (b) a unit or building. (15E) In Note (15C)(a)(i) “relevant capital item” means a capital item which— (a) is subject to adjustments of input tax deduction by P under regulations made under section 26(3), and (b) has not yet reached the end of its prescribed period of adjustment.

(6) After Note (16) insert—

(17) Paragraph (ma) does not apply to a grant of facilities which provides for the exclusive use, by the person to whom the grant is made, of a whole building, a whole floor, a separate room or a clearly defined area, unless the person making the grant or a person connected with that person provides or makes available (directly or indirectly) services related to hairdressing for use by the person to whom the grant is made. (18) For the purposes of Note (17)— (a) “services related to hairdressing” means the services of a hairdresser's assistant or cashier, the booking of appointments, the laundering of towels, the cleaning of the facilities subject to the grant, the making of refreshments and other similar services typically used in connection with hairdressing, but does not include the provision of utilities or the cleaning of shared areas in a building, and (b) it does not matter if the services related to hairdressing are shared with other persons. (19) For the purposes of Notes (15C) and (17) any question whether a person is connected with any other person is to be determined in accordance with section 1122 of the Corporation Tax Act 2010 (connected person).

PART 3 — Supplies chargeable at reduced rate

6

(1) Schedule 7A to VATA 1994 (charge at reduced rate) is amended as follows.

(2) In Part 1 (index to reduced-rate supplies of goods and services), at the appropriate place insert—

Caravans	Group 12

(3) In Part 2 (the groups), at the end insert—

(1) Supplies of caravans which exceed the limits of size of a trailer for the time being permitted to be towed on roads by a motor vehicle having a maximum gross weight of 3,500 kilogrammes. (2) The supply of such services as are described in paragraph 1(1) or 5(4) of Schedule 4 in respect of a caravan within item 1. NOTE: This Group does not include— (a) removable contents other than goods of a kind mentioned in item 4 of Group 5 of Schedule 8, or (b) the supply of accommodation in a caravan.

PART 4 — Commencement and transitional provision

7

(1) Subject to sub-paragraphs (2) and (3), the amendments made by this Schedule come into force on 1 October 2012.

(2) Paragraphs 4 and 6 come into force on 6 April 2013.

(3) Paragraph 3(2) to (6) comes into force, in relation to relevant supplies, on 1 October 2015.

(4) A supply is “relevant” if it is—

(a) a supply of any services, other than excluded services, which is made—

(i) in the course of an approved alteration of a protected building, and

(ii) pursuant to a written contract entered into, or a relevant consent applied for, before 21 March 2012, or

(b) a supply of building materials which is made—

(i) to a person to whom the supplier is supplying services within paragraph (a) which include the incorporation of the materials into the building (or its site) in question, and

(ii) pursuant to a written contract entered into, or a relevant consent applied for, before 21 March 2012.

(5) In relation to supplies made on or after 1 October 2012 but before 1 October 2015, Group 6 has effect as if, for the purposes of item 1 of that Group, a protected building were also regarded as substantially reconstructed if sub-paragraph (6) or (7) applies.

(6) This sub-paragraph applies if at least three-fifths of the works carried out to effect the reconstruction (measured by reference to cost) are of such a nature that the supply of services (other than excluded services), materials and other items to carry out the works would, if supplied by a taxable person, be relevant supplies.

(7) This sub-paragraph applies if—

(a) at least 10% (measured by reference to cost) of the reconstruction of the protected building was completed before 21 March 2012, and

(b) at least three-fifths of the works carried out to effect the reconstruction (measured by reference to cost) are of such a nature that the supply of services (other than excluded services), materials and other items to carry out the works would, if supplied by a taxable person, be relevant supplies but for the requirement for a written contract to have been entered into or relevant consent to have been applied for before that date.

(8) For the purposes of sub-paragraph (4), works carried out that are not within the scope of the written contract entered into, or the relevant consent applied for, as it stood immediately before 21 March 2012, are not a supply made pursuant to that contract or relevant consent.

(9) In this paragraph—

“excluded services” means the services of an architect, surveyor or other person acting as consultant or in a supervisory capacity;

“Group 6” means Group 6 of Part 2 of Schedule 8 to VATA 1994 (protected buildings);

“relevant consent” means—in the case of an ecclesiastical building to which section 60 of the Planning (Listed Buildings and Conservation Areas) Act 1990 applies, consent for the approved alterations by a competent body with the authority to approve alterations to such buildings, orin any other case, consent under any provision of—Part 1 of the Planning (Listed Buildings and Conservation Areas) Act 1990,Part 1 of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997,Part 5 of the Planning (Northern Ireland) Order 1991,Part 1 of the Ancient Monuments and Archaeological Areas Act 1979, orPart 2 of the Historic Monuments and Archaeological Objects (Northern Ireland) Order 1995.

(10) The Notes of Group 6 apply in relation to this paragraph as they apply in relation to that Group, except that in applying Notes (9), (10) and (11), references to item 2 are to be read as references to sub-paragraph (4) of this paragraph.

SCHEDULE 27

PART 1 — Anti-forestalling charge to VAT

Introductory

1

In this Schedule—

“date of the VAT change” means 1 October 2012;

“pre-change supply” means a supply of a description specified in paragraph 3 which—is treated as taking place before the date of the VAT change, andif it had been treated as taking place on that date, would have been charged to VAT at the standard rate as a result of the amendments made by Schedule 26.

The charge

2

(1) There is an anti-forestalling charge to value added tax on any pre-change supply which—

(a) is treated as taking place on or after 21 March 2012, and

(b) is a supply linked to the post-change period (see paragraph 4).

(2) “Chargeable pre-change supply” means a supply to which sub-paragraph (1) applies.

(3) An anti-forestalling charge to value added tax under this Schedule is to be treated for all purposes as if it were value added tax charged in accordance with VATA 1994.

The supplies

3

(1) The descriptions of supplies are—

(a) the supply, in the course of an approved alteration of a protected building, of any services, other than the services of an architect, surveyor or any person acting as consultant or in a supervisory capacity,

(b) the supply of building materials to a person to whom the supplier is supplying services within paragraph (a) which include the incorporation of the materials into the building (or its site),

(d) the grant of a right to receive a supply within paragraph (c).

(2) The Notes to Group 6 in Schedule 8 to VATA 1994 have effect for the purposes of sub-paragraph (1)(a) and (b) as they had effect for the purposes of items 1 to 3 of that Group on 21 March 2012.

(3) For the purposes of this Schedule a right to receive a supply includes—

(a) any option to receive that supply, and

(b) any interest deriving from such an option.

Supplies linked to the post-change period

4

(1) A supply of services within paragraph 3(1)(a) or (c) is linked to the post-change period if, and to the extent that, the services are carried out or provided on or after the date of the VAT change.

(2) A supply of goods within paragraph 3(1)(b) is linked to the post-change period if, and to the extent that, the goods are incorporated into the building concerned (or its site) on or after that date.

(3) A supply within paragraph 3(1)(d) is linked to the post-change period if, and to the extent that, the services to which the grant relates are carried out or provided on or after that date.

Power to modify this Schedule

5

(1) The Treasury may by order modify this Schedule for the purposes of preventing an anti-forestalling charge from arising, in the circumstances specified in the order, in relation to any description of supplies specified in the order.

(2) An order under this paragraph may contain provision having retrospective effect.

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

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

PART 2 — Liability and amount

Liability

6

(1) An anti-forestalling charge under this Schedule on a chargeable pre-change supply—

(a) is a liability of the supplier (subject to sub-paragraph (2)), and

(b) becomes due on the date of the VAT change (rather than at the time of supply).

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