Legalize / United Kingdom / Public General Act

Finance Act 2014

Type Public General Act

Publication 2014-07-17

Last updated 2024-11-18

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(6) Where a prize is a voucher (whether or not it falls within subsection (4)) no expenditure is to be treated as having been incurred on the prize for the purposes of sections 156 and 157 if—

(a) it does not satisfy subsection (5)(a) and (b), or

(b) its use as described in subsection (5)(a) is subject to a specified restriction, condition or limitation which may make the value of the voucher to the recipient significantly less than the amount mentioned in subsection (5)(b).

(7) In the case of a prize which is neither money nor a voucher and which does not fall within subsection (4), the expenditure on the prize for the purposes of sections 156 and 157 is—

(a) the amount which the prize would cost if obtained from a person not connected with the person who provides it, or

(b) where no amount can reasonably be determined in accordance with paragraph (a), nil.

(8) For the purposes of this section—

(a) a reference to connection between two persons is to be construed in accordance with section 1122 of CTA 2010 (connected persons), and

(b) an amount paid by way of value added tax on the acquisition of a thing is to be treated as part of its cost (irrespective of whether or not the amount is taken into account for the purpose of a credit or refund).

(9) This section has effect subject to section 160A.

Exemptions

161

(1) Remote gaming duty is not charged on participation by a chargeable person in remote gaming if—

(a) the arrangements between the chargeable person and the gaming provider are not entered into in or from the United Kingdom, and

(b) the facilities used to participate in the gaming are not capable of being used in or from the United Kingdom.

(2) Remote gaming duty is not charged on participation by a chargeable person in remote gaming so far as the remote gaming—

(a) is charged with another gambling tax, or

(b) would be charged with another gambling tax but for an express exception.

(3) Subsection (2)(b)—

(a) does not prevent remote gaming duty being charged where the remote gaming in question is the playing of bingo which is not licensed bingo (as to the meaning of which terms see section 20C of BGDA 1981), and

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

(4) In this section “gambling tax” means—

(a) machine games duty,

(b) bingo duty,

(d) general betting duty,

(e) lottery duty, and

(f) pool betting duty.

(5) The Treasury may by regulations—

(a) confer an exemption from remote gaming duty, or

(b) remove or vary (whether or not by textual amendment) an exemption under this section.

(6) In calculating a gaming provider's profits on remote gaming for an accounting period, no account is to be taken of gaming payments, assignments of amounts to a pool or expenditure on prizes so far as they relate to remote gaming to which an exemption applies as a result of this section or regulations under it.

Liability to pay

162

(1) A gaming provider is liable for any remote gaming duty charged on the provider's profits on remote gaming for an accounting period.

(2) If the gaming provider is a body corporate, the provider and the provider's directors are jointly and severally liable for any remote gaming duty charged on the provider's profits on remote gaming for an accounting period.

(3) Remote gaming duty which is charged on the gaming provider's profits on remote gaming for an accounting period may be recovered from the holder of a remote operating licence for the business in the course of which the gaming took place as if the holder of the licence and the provider were jointly and severally liable to pay the duty.

CHAPTER 4 — General

Administration

163

(1) The Commissioners are responsible for the collection and management of general betting duty, pool betting duty and remote gaming duty.

(2) General betting duty, pool betting duty and remote gaming duty are to be accounted for by such persons, and accounted for and paid at such times and in such manner, as may be required by or under regulations made by the Commissioners.

(3) The Commissioners may make regulations providing for any matter for which provision appears to them to be necessary for the administration or enforcement of, or for the protection of the revenue from, general betting duty, pool betting duty and remote gaming duty.

(4) Nothing in sections 164 to 169 affects the generality of the powers conferred by this section.

Registration

164

(1) The Commissioners must maintain the following registers—

(a) a register of persons who, by virtue of being bookmakers, being treated by section 133 as bookmakers or providing facilities for making bets, are (or may become) liable to pay general betting duty,

(b) a register of persons who, by virtue of being bookmakers, are (or may become) liable to pay pool betting duty, and

(c) a register of persons who, by virtue of entering into arrangements for chargeable persons to participate in remote gaming, are (or may become) liable to pay remote gaming duty.

(2) A person falling within any paragraph of subsection (1) may not carry on an activity by virtue of which the person falls within that paragraph without being registered in the register maintained under that paragraph.

(3) The Commissioners may make regulations about registration; in particular, the regulations may include provision about—

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

(b) the timing of applications (including provision for applications to be made and determined before 1 December 2014);

(d) notification of changes;

(e) de-registration;

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

(4) The regulations may require a person registered under this section to give notice to the Commissioners before applying for a remote operating licence.

(5) The regulations may permit the Commissioners to impose conditions or requirements on persons registered under this section.

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

(7) The modifications may, for example, include a modification ensuring that each member of a group will be jointly and severally liable for the duty payable by any member of the group.

Accounting period

165

(1) For the purposes of this Part—

(a) a period of 3 consecutive months is an accounting period, but

(b) the Commissioners may by regulations provide for some other period specified in, or determined in accordance with, the regulations to be an accounting period.

(2) The first day of an accounting period is such day as the Commissioners may direct.

(3) The Commissioners may agree with a person to make either or both of the following changes for the purposes of that person's liability to general betting duty, pool betting duty or remote gaming duty—

(a) to treat specified periods (whether longer or shorter than 3 months) as accounting periods;

(b) to begin accounting periods on days other than those applying by virtue of subsection (2).

(4) The Commissioners may by direction make transitional arrangements for periods (whether of 3 months or otherwise) to be treated as accounting periods where—

(a) a person becomes or ceases to be registered, or

(b) an agreement under subsection (3) begins or ends.

(5) A direction under this section—

(a) may apply generally or only to a particular case or class of case, and

(b) must be published unless it applies only to a particular case.

Returns

166

(1) The Commissioners may make regulations requiring returns to be made to the Commissioners in respect of general betting duty, pool betting duty and remote gaming duty.

(2) The regulations 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.

Payment

167

(1) The Commissioners may by regulations make provision about payment of general betting duty, pool betting duty and remote gaming duty.

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

(a) timing (including provision requiring payments to be made on account),

(b) instalments,

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

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

(3) Subject to regulations under section 163 and this section, section 12 of FA 1994 (assessment) applies in relation to liability to pay general betting duty, pool betting duty and remote gaming duty.

Information and records

168

The Commissioners may by regulations require the provision to such persons, or display in such manner, of such information or records as the regulations may specify—

(a) by persons engaging or proposing to engage in any activity by reason of which they are, or may be or become, liable for general betting duty, pool betting duty or remote gaming duty (or would be or might be or become liable to general betting duty if on-course bets were not excluded), and

(b) by persons providing facilities for another to engage in such an activity or entering into any transaction in the course of any such activity.

Stake funds and gaming prize funds

169

(1) The Treasury may by regulations make provision as to the circumstances in which—

(a) the stake money on a bet is, or is not, to be treated for the purposes of this Part as assigned to a Chapter 1 stake fund or a Chapter 2 stake fund,

(b) gaming payments are, or are not, to be treated for the purposes of this Part as assigned to a gaming prize fund,

(c) an amount contained in a Chapter 1 stake fund or a Chapter 2 stake fund is, or is not, to be treated for the purposes of this Part as being used otherwise than to provide winnings, and

(d) an amount contained in a gaming prize fund is, or is not, to be treated for the purposes of this Part as being used otherwise than to provide prizes.

(2) The Commissioners may by notice published by them make provision about Chapter 1 stake funds, Chapter 2 stake funds and gaming prize funds, and such a notice may (in particular) make provision as to how such funds are to be held.

Security and enforcement

Security for payment

170

(1) The Commissioners may by notice given to a registrable person require the person to give security, or further security, for the payment of any general betting duty, pool betting duty or remote gaming duty for which the person is or may become liable.

(2) The Commissioners may give such a notice only if they consider—

(a) that there is a serious risk that the duty will not be paid, or

(b) that the person usually lives in or, if a body corporate, is legally constituted in a country or territory with which the United Kingdom does not have satisfactory arrangements for the enforcement of liabilities.

(3) The notice must specify—

(a) the amount of security or further security to be given, and

(b) the manner in which, and the date by which, the security or further security is to be given.

(4) That date must not be less than 30 days after the date when the notice is given (and must not be before 1 December 2014).

(5) Any requirement imposed by the notice has no effect at any time when—

(a) the registrable person is entitled under Chapter 2 of Part 1 of FA 1994 to require a review of, or to bring an appeal against, the decision to give the notice,

(b) an appeal may ordinarily be brought against a decision on such a review or appeal, or

(6) A person is a “registrable person” for the purposes of this Part if the person—

(a) is, or is required to be, registered under section 164, or

(b) has applied for registration under that section.

Appointment of UK representative

171

(1) The Commissioners may by notice given to a registrable person require the person to appoint a United Kingdom representative.

(2) The representative must be a person approved by the Commissioners for the purposes of this section.

(3) The Commissioners may give such a notice only if they consider that the registrable person usually lives in or, if a body corporate, is legally constituted in a country or territory with which the United Kingdom does not have satisfactory arrangements for the enforcement of liabilities.

(4) The notice must specify the date by which the representative must be appointed.

(5) That date must not be less than 30 days after the date when the notice was given (and must not be before 1 December 2014).

(6) It is for the registrable person to decide whether the representative is to have responsibility—

(a) for making returns in respect of general betting duty, pool betting duty or remote gaming duty on behalf of the registrable person, or

(b) for making such returns and for discharging the registrable person's liability to general betting duty, pool betting duty or remote gaming duty.

(7) The notice may be combined with a notice under section 170, and in such a case any requirement contained in the notice under that section ceases to have effect if the registrable person appoints a representative with the responsibilities mentioned in subsection (6)(b).

(8) Any requirement imposed by the notice has no effect at any time when—

(a) the registrable person is entitled under Chapter 2 of Part 1 of FA 1994 to require a review of, or to bring an appeal against, the decision to give the notice,

(b) an appeal may ordinarily be brought against a decision on such a review or appeal, or

Security and representatives: review and appeal

172

(1) A decision to give a notice under section 170(1) or 171(1) is to be treated as a relevant decision for the purposes of sections 15A and 15C to 16 of FA 1994 (customs and excise reviews and appeals) and, accordingly, the notice must include an offer of a review of the decision under section 15A of FA 1994.

(2) Only the registrable person may bring an appeal under section 16 of FA 1994 as applied by subsection (1).

(3) The decision appealed against is to be treated for the purposes of that section as a decision as to an ancillary matter.

(4) Such amendments to the notice as are necessary to give effect to any decision on a review, appeal or further appeal must be made by whichever of the following is appropriate in the case in question—

(a) the Commissioners,

(b) the appeal tribunal, and

(5) An appeal under section 16 of FA 1994 as applied by subsection (1) may not be entertained unless any amount of general betting duty, pool betting duty or remote gaming duty (whether or not it is an amount to which the appeal relates) due from the registrable person at the date when the appeal is brought has been paid.

(6) But an appeal may be entertained despite subsection (5) if, on the application of the registrable person, the Commissioners are satisfied or (the Commissioners not being so satisfied) the appeal tribunal decides that the requirement to pay the duty for which the person is liable would cause the person to suffer hardship.

(7) Despite sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007 (rights of appeal), the decision of the appeal tribunal as to the issue of hardship is final.

(8) In this section “appeal tribunal” has the same meaning as in Chapter 2 of Part 1 of FA 1994.

Offence of failing to provide security or appoint representative

173

(1) A person who is, or is required to be, registered under section 164 is guilty of an offence if the person—

(a) is required to give security or further security by a notice under section 170 and does not comply with that requirement, or

(b) is required to appoint a representative by a notice under section 171 and does not comply with that requirement.

(2) A person guilty of an offence under this section is liable, on summary conviction, to—

(a) in England and Wales, a fine, or

(b) in Scotland or Northern Ireland, a fine not exceeding level 5 on the standard scale.

(3) The reference in subsection (2)(a) to a fine is to be read as a reference to a fine not exceeding level 5 on the standard scale in relation to an offence committed before section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 comes into force.

Fraudulent evasion

174

(1) A person commits an offence if the person is knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of general betting duty, pool betting duty or remote gaming duty.

(2) A person guilty of an offence under subsection (1) is liable on summary conviction to—

(a) imprisonment for a term not exceeding 12 months,

(b) a fine not exceeding—

(i) in England and Wales, £20,000 or, if greater, three times the duty which is unpaid or the payment of which is sought to be avoided, or

(ii) in Scotland or Northern Ireland, the statutory maximum or, if greater, three times the duty which is unpaid or the payment of which is sought to be avoided, or

(3) A person guilty of an offence under subsection (1) is liable on conviction on indictment to—

(a) imprisonment for a term not exceeding 14 years,

(b) a fine, or

(3A) In the application of this section in England and Wales, the reference in subsection (2)(a) to 12 months is to be read as a reference to the general limit in a magistrates’ court (or to 6 months in relation to an offence committed before 2 May 2022).

(4) The reference in subsection (2)(a) to 12 months is to be read as a reference to 6 months in relation to an offence committed—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) in Northern Ireland.

(5) Section 85(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 does not apply in relation to the offence under subsection (1), but where such an offence is committed before section 85(1) comes into force the reference in subsection (2)(b)(i) to £20,000 is to be read as a reference to the statutory maximum.

Penalties under section 9 of FA 1994

175

(1) Where general betting duty, pool betting duty or remote gaming duty is payable by a person, the person's failure to pay attracts a penalty under section 9 of FA 1994, which is to be calculated by reference to the amount of duty payable.

(2) Any such failure to pay as is mentioned in subsection (1) also attracts daily penalties under that section.

(3) Subsection (4) applies to a contravention of—

(a) section 152 or a notice under that section,

(b) section 164 or regulations under that section,

(d) regulations under section 167,

(e) regulations under section 168,

(f) a notice under section 169, or

(g) a notice under section 186.

(4) Such a contravention—

(a) is conduct to which section 9 of FA 1994 applies (penalties), and

(b) attracts daily penalties under that section.

Interest

176

(1) This section 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 general betting duty, pool betting duty or remote gaming duty.

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

Suspension and revocation of remote operating licences

177

Schedule 27 makes provision about the suspension and revocation of remote operating licences.

Offences and evidence

Offences by bodies corporate

178

Where an offence under this Part is committed by a body corporate, every person who at the date of the commission of the offence is a director, general manager, secretary or other similar officer of the body corporate (or purporting to act in such a capacity) is also guilty of the offence unless—

(a) the offence is committed without the person's consent or connivance, and

(b) the person has exercised all such diligence to prevent its commission as the person ought to have exercised, having regard to the nature of the person's functions in that capacity and to all the circumstances.

Protection of officers

179

Where an officer of Revenue and Customs takes any action in pursuance of instructions of the Commissioners given in connection with the enforcement of the enactments relating to general betting duty, pool betting duty or remote gaming duty and, apart from the provisions of this section, the officer would in taking that action be committing an offence under the enactments relating to betting or gaming, the officer is not guilty of that offence.

Evidence by certificate, etc

180

(1) A certificate of the Commissioners—

(a) that any notice required by or under this Part to be given to them had or had not been given at any date,

(b) that any registration required by or under this Part had or had not been effected at any date,

(d) that any duty shown as due in any return made in pursuance of this Part or in any assessment made under section 12 of FA 1994 had not been paid at any date,

is sufficient evidence of that fact until the contrary is proved.

(2) A photograph of any document furnished to the Commissioners for the purposes of this Part and certified by them to be such a photograph is admissible in any proceedings, whether civil or criminal, to the same extent as the document itself.

(3) Any document purporting to be a certificate under subsection (1) or (2) is to be treated as being such a certificate until the contrary is proved.

Facilities capable of being used in United Kingdom: burden of proof

181

(1) This section applies where, in civil proceedings in any court or tribunal, it is necessary to determine whether the facilities used to make a bet or to participate in remote gaming were capable of being used in or from the United Kingdom.

(2) The burden of proof lies on any person claiming that the facilities were not capable of being so used.

Review and appeal

182

(1) The decisions mentioned in subsection (2) are to be treated as if they were listed in subsection (2) of section 13A of FA 1994 (customs and excise decisions: 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 consisting in the giving of a direction under section 153(3),

(b) a decision to direct that section 160(2) is not to apply in a specified case,

(d) a decision to refuse an agreement relating to a person's liability to general betting duty, pool betting duty or remote gaming duty under section 165(3).

(3) A decision mentioned in subsection (2) is to be treated as an ancillary matter for the purposes of sections 14 to 16 of FA 1994.

Definitions

Bet

183

In this Part “bet” does not include any bet made or stake hazarded in the course of, or incidentally to, any gaming.

Pool betting

184

(1) For the purposes of this Part, a bet is to be treated as being made by way of pool betting unless it is a bet at fixed odds.

(2) In particular, bets are to be treated as being made by way of pool betting wherever a number of persons make bets—

(a) on terms that the winnings of such of those persons as are winners are to be, or to be a share of, or to be determined by reference to, the stake money paid or agreed to be paid by those persons, whether the bets are made by means of a totalisator, or by filling up and returning coupons or other printed or written forms, or in any other way,

(b) on terms that the winnings of such of those persons as are winners are to be, or are to include, an amount (not determined by reference to the stake money paid or agreed to be paid by those persons) which is divisible in any proportions among such of those persons as are winners, or

(c) on the basis that the winners or their winnings are, to any extent, to be at the discretion of the promoter or some other person.

(3) Where there is or has been issued any advertisement or other publication calculated to encourage in persons making bets of any description with or through a bookmaker a belief that such bets are made on the basis mentioned in subsection (2)(c), then any bets of that description subsequently made with or through the bookmaker are to be treated for the purposes of this section as being made on that basis.

Fixed odds

185

(1) A bet is at fixed odds for the purposes of this Part only if, when making the bet, each of the persons making it knows or can know the amount the person will win, except in so far as that amount is to depend on—

(a) the result of the event or events betted on,

(b) any such event taking place or producing a result,

(d) the starting prices or totalisator odds for any such event, or

(e) the time when the person's bet is received by any person with or through whom it is made.

(2) A bet made with or through a person carrying on a business of receiving or negotiating bets and made in the course of that business is not a bet at fixed odds for the purposes of this Part if the winnings of the person by whom it is made consist or may consist wholly or in part of something other than money.

(3) In this section—

“starting prices” means, in relation to any event, the odds ruling at the scene of the event immediately before the start, and

“totalisator odds” means the odds paid on bets made—by means of a totalisator, andat the scene of the event to which the bets relate.

UK person

186

(1) In this Part “UK person” means—

(a) an individual who usually lives in the United Kingdom, or

(b) a body corporate which is legally constituted in the United Kingdom.

(2) The Treasury may by regulations—

(a) amend the definition of “UK person” in subsection (1),

(b) make provision as to the cases in which a person is, or is not, a UK person for the purposes of this Part, and

(c) make provision about bets made, and arrangements to participate in remote gaming entered into, by bodies of persons unincorporate.

(3) The Commissioners may by notice published by them—

(a) specify steps that must be taken in order to determine whether a person making a bet or entering into arrangements to participate in remote gaming is a UK person,

(b) specify who must take those steps,

(c) specify circumstances in which a person making a bet or entering into arrangements to participate in remote gaming is to be treated as a UK person because of a failure to produce sufficient evidence to the contrary, and

(d) specify circumstances in which a person making a bet or entering into arrangements to participate in remote gaming is to be treated as not being a UK person on the basis of evidence of a description specified in the notice.

On-course betting and excluded betting

187

(1) A bet is an on-course bet for the purposes of this Part if it—

(a) is made by a person present at a horse or dog race meeting or by a bookmaker,

(b) is not made through an agent of an individual making the bet or through an intermediary, and

(i) with a bookmaker present at the meeting, or

(ii) by means of a totalisator situated in the United Kingdom, using facilities provided at the meeting by or by arrangement with the person operating the totalisator.

(2) A bet is an excluded bet for the purposes of this Part if—

(a) it is not made in or from the United Kingdom, and

(b) the facilities used to receive or negotiate the bet or (in the case of pool betting) to conduct the pool betting operations are not capable of being used in or from the United Kingdom.

(3) The Treasury may by regulations amend subsection (2).

Gaming

188

(1) In this Part—

(a) “gaming” means playing a game of chance for a prize, and

(b) “game of chance” has the meaning given by section 6(2) of the Gambling Act 2005.

(2) For the purposes of subsection (1)—

(a) “playing a game of chance” is to be read in accordance with section 6(3) of the Gambling Act 2005, and

(b) “prize” does not include the opportunity to play the game again.

(3) But a game is not a “game of chance” for the purposes of this Part if—

(a) it can only be played with the participation of two or more persons, and

(b) no amounts are paid or required to be paid—

(i) in respect of entitlement to participate in the game, or

(ii) otherwise for, on account of or in connection with participation in the game.

Other definitions

189

In this Part—

“betting facilities” means facilities for receiving or negotiating bets or conducting pool betting operations;

“bookmaker” means a person who—carries on the business of receiving or negotiating bets or conducting pool betting operations (whether as principal or agent and whether regularly or not), orholds himself or herself out or permits himself or herself to be held out, in the course of a business, as a person within paragraph (a);

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

“operator”, in relation to bets made by means of a totalisator, means the person who, as principal, operates the totalisator;

“promoter”, in relation to any betting, means the person to whom the persons making the bets look for the payment of their winnings, if any;

“remote operating licence” has the same meaning as in the Gambling Act 2005 (see section 67 of that Act);

“winnings”, in relation to any betting, includes winnings of any kind, and references to amount and to payment in relation to winnings are to be read accordingly.

Index

190

The Table lists the places where some of the expressions used in this Part are defined or otherwise explained.

Supplementary

Amounts not in sterling

191

(1) If any amount of stake money, gaming payment, winnings or prize is in a currency or method of payment other than sterling, it is to be treated for the purposes of this Part as being the equivalent amount in sterling.

(2) The equivalent amount in sterling, in relation to any day, is to be determined by reference to—

(a) the London closing exchange rate for the previous day, or

(b) if no such rate exists, the rate specified in or determined in accordance with a notice published by the Commissioners.

Limited liability partnerships

192

(1) This Part applies to limited liability partnerships as it applies to companies.

(2) In its application to a limited liability partnership, references to a director of a company are references to a member of the limited liability partnership.

Effect of imposition of duties

193

The imposition by this Part of general betting duty, pool betting duty, or remote gaming duty does not make lawful anything which is unlawful apart from this Part.

Regulations

194

(1) Regulations under this Part—

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

(b) may make different provision for different cases or purposes,

(d) may confer a discretion on the Commissioners, and

(e) may make provision by reference to things specified in a notice published by the Commissioners in accordance with the regulations (and not withdrawn by a subsequent notice).

(2) Regulations under this Part are to be made by statutory instrument.

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

(4) But the following provisions of this section apply instead of subsection (3) in the case of—

(za) regulations under section 159(6);

(a) regulations under section 161(5) which have the effect of adding to the class of activities in respect of which remote gaming duty is chargeable;

(b) regulations under section 169(1) which have the effect of increasing the amount of duty that is chargeable in any case;

(c) regulations under section 186(2) which have the effect of adding to the class of persons falling within the definition of “UK person”;

(d) regulations under section 187(3).

(5) In such a case—

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

(b) the regulations cease to have effect at the end of the period of 28 days beginning with the day on which the instrument was made unless, before the end of that period, the instrument 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) If regulations cease to have effect as a result of subsection (5), that does not—

(a) affect anything previously done under the regulations, or

(b) prevent the making of new regulations.

Notices

195

A notice published by the Commissioners under this Part may be revised or replaced by them.

Consequential amendments and repeals

196

Schedule 28 contains consequential amendments and repeals.

Transitional and saving provisions

197

Schedule 29 contains transitional and saving provisions.

Commencement and effect

198

(1) This Part (except sections 164(2), 173 and 196 and Schedule 28) comes into force on the day on which this Act is passed.

(2) The following provisions come into force on 1 December 2014—

(a) section 164(2),

(b) section 173, and

(3) Paragraphs 28 to 30 of Schedule 28 (and section 196 so far as relating to those paragraphs) come into force on such day as the Treasury may by order made by statutory instrument appoint.

(4) An order under subsection (3)—

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

(b) may appoint different days for different provisions or for different purposes.

(5) Sections 125 to 182 have effect for the purposes of accounting periods beginning on or after 1 December 2014, and—

(a) the charges under sections 127(1), 129(1), 130(1), 135(1) and 144(1) are on bets made on or after that date,

(b) the charge under section 141(2) is in respect of bets determined on or after that date, and

PART 4 — Follower notices and accelerated payments

CHAPTER 1 — Introduction

Overview

Overview of Part 4

199

In this Part—

(a) sections 200 to 203 set out the main defined terms used in the Part,

(b) Chapter 2 makes provision for follower notices and for penalties if account is not taken of judicial rulings which lay down principles or give reasoning relevant to tax cases,

(i) provision for accelerated payments to be made on account of tax,

(ii) provision restricting the circumstances in which payments of tax can be postponed pending an appeal, ...

(iii) provision to enable a court to prevent repayment of tax, for the purpose of protecting the public revenue, and

(iv) provision restricting the surrender of losses and other amounts for the purposes of group relief.

(d) Chapter 4—

(i) makes special provision about the application of this Part in relation to stamp duty land tax and annual tax for enveloped dwellings,

(ii) confers a power to extend the provisions of this Part to other taxes, and

(iii) makes amendments consequential on this Part.

Main definitions

“Relevant tax”

200

In this Part, “relevant tax” means—

(a) income tax,

(b) capital gains tax,

(c) corporation tax, including any amount chargeable as if it were corporation tax or treated as if it were corporation tax,

(ca) apprenticeship levy,

(d) inheritance tax,

(e) stamp duty land tax, and

(f) annual tax on enveloped dwellings.

“Tax advantage” and “tax arrangements”

201

(1) This section applies for the purposes of this Part.

(2) “Tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(d) avoidance of a possible assessment to tax,

(e) deferral of a payment of tax or advancement of a repayment of tax, and

(f) avoidance of an obligation to deduct or account for tax.

(3) Arrangements are “tax arrangements” if, having regard to all the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage was the main purpose, or one of the main purposes, of the arrangements.

(4) “Arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

“Tax enquiry” and “return”

202

(1) This section applies for the purposes of this Part.

(2) “Tax enquiry” means—

(a) an enquiry under section 9A or 12AC of TMA 1970 (enquiries into self-assessment returns for income tax and capital gains tax), including an enquiry by virtue of notice being deemed to be given under section 9A of that Act by virtue of section 12AC(6) of that Act,

(b) an enquiry under paragraph 5 of Schedule 1A to that Act (enquiry into claims made otherwise than by being included in a return),

(c) an enquiry under paragraph 24 of Schedule 18 to FA 1998 (enquiry into company tax return for corporation tax etc), including an enquiry by virtue of notice being deemed to be given under that paragraph by virtue of section 12AC(6) of TMA 1970,

(d) an enquiry under paragraph 12 of Schedule 10 to FA 2003 (enquiries into SDLT returns),

(e) an enquiry under paragraph 8 of Schedule 33 to FA 2013 (enquiries into annual tax for enveloped dwellings returns), or

(f) a deemed enquiry under subsection (6).

(3) The period during which an enquiry is in progress—

(a) begins with the day on which notice of enquiry is given, and

(b) ends with the day on which the enquiry is completed.

(4) Subsection (3) is subject to subsection (6).

(5) In the case of inheritance tax, each of the following is to be treated as a return—

(a) an account delivered by a person under section 216 or 217 of IHTA 1984 (including an account delivered in accordance with regulations under section 256 of that Act);

(b) a statement or declaration which amends or is otherwise connected with such an account produced by the person who delivered the account;

and such a return is to be treated as made by the person in question.

(6) An enquiry is deemed to be in progress, in relation to a return to which subsection (5) applies, during the period which—

(a) begins with the time the account is delivered or (as the case may be) the statement, declaration, information or document is produced, and

(b) ends when the person is issued with a certificate of discharge under section 239 of that Act, or is discharged by virtue of section 256(1)(b) of that Act, in respect of the return (at which point the enquiry is to be treated as completed).

“Tax appeal”

203

In this Part “tax appeal” means—

(a) an appeal under section 31 of TMA 1970 (income tax: appeals against amendments of self-assessment, amendments made by closure notices under section 28A or 28B of that Act, etc), including an appeal under that section by virtue of regulations under Part 11 of ITEPA 2003 (PAYE),

(b) an appeal under paragraph 9 of Schedule 1A to TMA 1970 (income tax: appeals against amendments made by closure notices under paragraph 7(2) of that Schedule, etc),

(d) an appeal under paragraph 34(3) or 48 of Schedule 18 to FA 1998 (corporation tax: appeals against amendment of a company's return made by closure notice, assessments other than self-assessments, etc),

(e) an appeal under section 750 of CTA 2010 (corporation tax: appeals against counteraction notices),

(ea) an appeal under section 114 of FA 2016 (apprenticeship levy: appeal against an assessment),

(f) an appeal under section 222 of IHTA 1984 (appeals against HMRC determinations) other than an appeal made by a person against a determination in respect of a transfer of value at a time when a tax enquiry is in progress in respect of a return made by that person in respect of that transfer,

(g) an appeal under paragraph 35 of Schedule 10 to FA 2003 (stamp duty land tax: appeals against amendment of self-assessment, discovery assessments, etc),

(h) an appeal under paragraph 35 of Schedule 33 to FA 2013 (annual tax on enveloped dwellings: appeals against amendment of self-assessment, discovery assessments, etc), or

(i) an appeal against any determination of—

(i) an appeal within paragraphs (a) to (h), or

(ii) an appeal within this paragraph.

CHAPTER 2 — Follower notices

Giving of follower notices

Circumstances in which a follower notice may be given

204

(1) HMRC may give a notice (a “follower notice”) to a person (“P”) if Conditions A to D are met.

(2) Condition A is that—

(a) a tax enquiry is in progress into a return or claim made by P in relation to a relevant tax, or

(b) P has made a tax appeal (by notifying HMRC or otherwise) in relation to a relevant tax, but that appeal has not yet been—

(i) determined by the tribunal or court to which it is addressed, or

(ii) abandoned or otherwise disposed of.

(3) Condition B is that the return or claim or, as the case may be, appeal is made on the basis that a particular tax advantage (“the asserted advantage”) results from particular tax arrangements (“the chosen arrangements”).

(4) Condition C is that HMRC is of the opinion that there is a judicial ruling which is relevant to the chosen arrangements.

(5) Condition D is that no previous follower notice has been given to the same person (and not withdrawn) by reference to the same tax advantage, tax arrangements, judicial ruling and tax period.

(6) A follower notice may not be given after the end of the period of 12 months beginning with the later of—

(a) the day on which the judicial ruling mentioned in Condition C is made, and

(b) the day the return or claim to which subsection (2)(a) refers was received by HMRC or (as the case may be) the day the tax appeal to which subsection (2)(b) refers was made.

“Judicial ruling” and circumstances in which a ruling is “relevant”

205

(1) This section applies for the purposes of this Chapter.

(2) “Judicial ruling” means a ruling of a court or tribunal on one or more issues.

(3) A judicial ruling is “relevant” to the chosen arrangements if—

(a) it relates to tax arrangements,

(b) the principles laid down, or reasoning given, in the ruling would, if applied to the chosen arrangements, deny the asserted advantage or a part of that advantage, and

(4) A judicial ruling is a “final ruling” if it is—

(a) a ruling of the Supreme Court, or

(b) a ruling of any other court or tribunal in circumstances where—

(i) no appeal may be made against the ruling,

(ii) if an appeal may be made against the ruling with permission, the time limit for applications has expired and either no application has been made or permission has been refused,

(iii) if such permission to appeal against the ruling has been granted or is not required, no appeal has been made within the time limit for appeals, or

(iv) if an appeal was made, it was abandoned or otherwise disposed of before it was determined by the court or tribunal to which it was addressed.

(5) Where a judicial ruling is final by virtue of sub-paragraph (ii), (iii) or (iv) of subsection (4)(b), the ruling is treated as made at the time when the sub-paragraph in question is first satisfied.

Content of a follower notice

206

A follower notice must—

(a) identify the judicial ruling in respect of which Condition C in section 204 is met,

(b) explain why HMRC considers that the ruling meets the requirements of section 205(3), and

Representations

Representations about a follower notice

207

(1) Where a follower notice is given under section 204, P has 90 days beginning with the day that notice is given to send written representations to HMRC objecting to the notice on the grounds that—

(a) Condition A, B or D in section 204 was not met,

(b) the judicial ruling specified in the notice is not one which is relevant to the chosen arrangements, or

(2) HMRC must consider any representations made in accordance with subsection (1).

(3) Having considered the representations, HMRC must determine whether to—

(a) confirm the follower notice (with or without amendment), or

(b) withdraw the follower notice,

and notify P accordingly.

Penalties

Penalty if corrective action not taken in response to follower notice

208

(1) This section applies where a follower notice is given to P (and not withdrawn).

(2) P is liable to pay a penalty if the necessary corrective action is not taken in respect of the denied advantage (if any) before the specified time.

(3) In this Chapter “the denied advantage” means so much of the asserted advantage (see section 204(3)) as is denied by the application of the principles laid down, or reasoning given, in the judicial ruling identified in the follower notice under section 206(a).

(4) The necessary corrective action is taken in respect of the denied advantage if (and only if) P takes the steps set out in subsections (5) and (6).

(5) The first step is that—

(a) in the case of a follower notice given by virtue of section 204(2)(a), P amends a return or claim to counteract the denied advantage;

(b) in the case of a follower notice given by virtue of section 204(2)(b), P takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing the denied advantage.

(6) The second step is that P notifies HMRC—

(a) that P has taken the first step, and

(b) of the denied advantage and (where different) the additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.

(7) In determining the additional amount which has or will become due and payable in respect of tax for the purposes of subsection (6)(b), it is to be assumed that, where P takes the necessary action as mentioned in subsection (5)(b), the agreement is then entered into.

(8) In this Chapter—

“the specified time” means—if no representations objecting to the follower notice were made by P in accordance with subsection (1) of section 207, the end of the 90 day post-notice period;if such representations were made and the notice is confirmed under that section (with or without amendment), the later of—the end of the 90 day post-notice period, andthe end of the 30 day post-representations period;

“the 90 day post-notice period” means the period of 90 days beginning with the day on which the follower notice is given;

“the 30 day post-representations period” means the period of 30 days beginning with the day on which P is notified of HMRC's determination under section 207.

(9) No enactment limiting the time during which amendments may be made to returns or claims operates to prevent P taking the first step mentioned in subsection (5)(a) before the tax enquiry is closed (whether or not before the specified time).

(10) No appeal may be brought, by virtue of a provision mentioned in subsection (11), against an amendment made by a closure notice in respect of a tax enquiry to the extent that the amendment takes into account an amendment made by P to a return or claim in taking the first step mentioned in subsection (5)(a) (whether or not that amendment was made before the specified time).

(11) The provisions are—

(a) section 31(1)(b) or (c) of TMA 1970,

(b) paragraph 9 of Schedule 1A to TMA 1970,

(d) paragraph 35(1)(b) of Schedule 10 to FA 2003, and

(e) paragraph 35(1)(b) of Schedule 33 to FA 2013.

Amount of a section 208 penalty

209

(1) The penalty under section 208 is 30% of the value of the denied advantage.

(1A) The penalty under section 208A is 20% of the value of the denied advantage.

(2) Schedule 30 contains provision about how the denied advantage is valued for the purposes of calculating penalties under this section.

(3) Where P before the relevant time —

(a) amends a return or claim to counteract part of the denied advantage only, or

(b) takes all necessary action to enter into an agreement with HMRC (in writing) for the purposes of relinquishing part of the denied advantage only,

in subsections (1) , (1A) and (2) the references to the denied advantage are to be read as references to the remainder of the denied advantage.

(4) The “relevant time” means—

(a) in the case of a penalty under section 208, the specified time;

(b) in the case of a penalty under section 208A, the day after the end of the appeal period.

(5) “The appeal period” has the same meaning for the purposes of this section as it has for the purposes of section 208A (see section 208A(10) and (11)).

Reduction of a section 208 penalty for co-operation

210

(1) Where—

(a) P is liable to pay a penalty under section 208 of the amount specified in section 209(1),

(b) the penalty has not yet been assessed, and

HMRC may reduce the amount of that penalty to reflect the quality of that co-operation.

(2) In relation to co-operation, “quality” includes timing, nature and extent.

(3) P has co-operated with HMRC only if P has done one or more of the following—

(a) provided reasonable assistance to HMRC in quantifying the tax advantage;

(b) counteracted the denied advantage;

(d) provided HMRC with information enabling HMRC to enter an agreement with P for the purpose of counteracting the denied advantage;

(e) allowed HMRC to access tax records for the purpose of ensuring that the denied advantage is fully counteracted.

(4) But nothing in this section permits HMRC to reduce a penalty to less than 10% of the value of the denied advantage.

Assessment of a section 208 penalty

211

(1) Where a person is liable for a penalty under section 208, HMRC may assess the penalty.

(2) Where HMRC assess the penalty, HMRC must—

(a) notify the person who is liable for the penalty, and

(b) state in the notice a tax period in respect of which the penalty is assessed.

(3) A penalty under section 208 must be paid before the end of the period of 30 days beginning with the day on which the person is notified of the penalty under subsection (2).

(4) An assessment—

(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 Chapter),

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

(5) No penalty under section 208 may be notified under subsection (2) later than—

(a) in the case of a follower notice given by virtue of section 204(2)(a) (tax enquiry in progress), the end of the period of 90 days beginning with the day the tax enquiry is completed, and

(b) in the case of a follower notice given by virtue of section 204(2)(b) (tax appeal pending), the end of the period of 90 days beginning with the earliest of—

(i) the day on which P takes the necessary corrective action (within the meaning of section 208(4)),

(ii) the day on which a ruling is made on the tax appeal by P, or any further appeal in that case, which is a final ruling (see section 205(4)), and

(iii) the day on which that appeal, or any further appeal, is abandoned or otherwise disposed of before it is determined by the court or tribunal to which it is addressed.

(6) In this section a reference to an assessment to tax, in relation to inheritance tax, is to a determination.

Aggregate penalties

212

(1) Subsection (2) applies where—

(a) two or more penalties are incurred by the same person and fall to be determined by reference to an amount of tax to which that person is chargeable,

(b) one of those penalties is incurred under section 208, and

(2) The aggregate of the amounts of the penalties mentioned in subsection (1)(b) and (c) and any penalty under section 208A that is additional to the penalty mentioned in subsection (1)(b), so far as determined by reference to that amount of tax, must not exceed—

(a) the relevant percentage of that amount, or

(b) in a case where at least one of the penalties is under paragraph 5(2)(b) or 6(3)(b), (4)(b) or (5)(b) of Schedule 55 to FA 2009 or paragraph 3(3)(b) or (5)(b) or 20(4) of Schedule 25 to FA 2021, £300 (if greater).

(3) In the application of section 97A of TMA 1970 (multiple penalties), no account is to be taken of a penalty under section 208 or 208A.

(4) “Relevant penalty provision” means—

(a) Schedule 24 to FA 2007 (penalties for errors),

(b) Schedule 41 to FA 2008 (penalties: failure to notify etc), ...

(d) Part 5 of Schedule 18 to FA 2016 (serial tax avoidance) , or

(e) section 212A of FA 2013 (general anti-abuse rule)., or

(f) Schedule 25 to FA 2021 (penalties for deliberately withholding information).

(5) “The relevant percentage” means—

(a) 200% in a case where at least one of the penalties is determined by reference to the percentage in—

(i) paragraph 4(4)(c) of Schedule 24 to FA 2007,

(ii) paragraph 6(4)(a) of Schedule 41 to FA 2008, or

(iii) paragraph 6(3A)(c) of Schedule 55 to FA 2009, or

(iv) paragraph 3(4)(c) of Schedule 25 to FA 2021,

(b) 150% in a case where paragraph (a) does not apply and at least one of the penalties is determined by reference to the percentage in—

(i) paragraph 4(3)(c) of Schedule 24 to FA 2007,

(ii) paragraph 6(3)(a) of Schedule 41 to FA 2008, or

(iii) paragraph 6(3A)(b) of Schedule 55 to FA 2009, or

(iv) paragraph 3(4)(b) of Schedule 25 to FA 2021,

(ba) 125% in a case where neither paragraph (a) nor paragraph (b) applies and at least one of the penalties is determined by reference to the percentage in—

(i) paragraph 4(2)(c) of Schedule 24 to FA 2007,

(ii) paragraph 6(2)(a) of Schedule 41 to FA 2008, or

(iii) paragraph 6(3A)(a) of Schedule 55 to FA 2009,

(c) 140% in a case where none of paragraphs (a) to (ba) applies and at least one the penalties is determined by reference to the percentage in—

(i) paragraph 4(4)(b) of Schedule 24 to FA 2007,

(ii) paragraph 6(4)(b) of Schedule 41 to FA 2008,

(iii) paragraph 6(4A)(c) of Schedule 55 to FA 2009, or

(iv) paragraph 3(6)(c) of Schedule 25 to FA 2021,

(d) 105% in a case where none of paragraphs (a) to (c) applies and at least one of the penalties is determined by reference to the percentage in—

(i) paragraph 4(3)(b) of Schedule 24 to FA 2007,

(ii) paragraph 6(3)(b) of Schedule 41 to FA 2008,

(iii) paragraph 6(4A)(b) of Schedule 55 to FA 2009, and or

(iv) paragraph 3(6)(b) of Schedule 25 to FA 2021, and

(e) in any other case, 100%.

Alteration of assessment of a section 208 penalty

213

(1) After notification of an assessment has been given to a person under section 211(2) or 211A(1), the assessment may not be altered except in accordance with this section or on appeal.

(2) A supplementary assessment may be made in respect of a penalty if an earlier assessment operated by reference to an underestimate of the value of the denied advantage.

(3) An assessment or supplementary assessment may be revised as necessary if it operated by reference to an overestimate of the denied advantage; and, where more than the resulting assessed penalty has already been paid by the person to HMRC, the excess must be repaid.

Appeal against a section 208 penalty

214

(1) P may appeal against a decision of HMRC that a penalty is payable by P under section 208.

(2) P may appeal against a decision of HMRC as to the amount of a penalty payable by P under section 208.

(3) The grounds on which an appeal under subsection (1) may be made include in particular—

(a) that Condition A, B or D in section 204 was not met in relation to the follower notice,

(b) that the judicial ruling specified in the notice is not one which is relevant to the chosen arrangements,

(d) that it was reasonable in all the circumstances for P not to have taken the necessary corrective action (see section 208(4)) in respect of the denied advantage.

(4) An appeal under this section must be made within the period of 30 days beginning with the day on which notification of the penalty is given under section 211.

(5) An appeal under this section 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's review of the decision or about determination of the appeal by the First-tier Tribunal or Upper Tribunal).

(6) Subsection (5) does not apply—

(a) so as to require a person 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 Part.

(7) In this section a reference to an assessment to tax, in relation to inheritance tax, is to a determination.

(8) On an appeal under subsection (1), the tribunal may affirm or cancel HMRC's decision.

(8A) If the tribunal cancels a decision of HMRC that a penalty is payable by P under section 208, any penalty additional to that penalty to which P is liable under section 208A is also cancelled.

(9) On an appeal under subsection (2), the tribunal may—

(a) affirm HMRC's decision, or

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

(10) The cancellation under subsection (8) of HMRC's decision on the ground specified in subsection (3)(d) does not affect the validity of the follower notice, or of any accelerated payment notice or partner payment notice under Chapter 3 related to the follower notice.

(11) In this section “tribunal” means the First-tier Tribunal or Upper Tribunal (as appropriate by virtue of subsection (5)).

Partners and partnerships

Follower notices: treatment of partners and partnerships

215

Schedule 31 makes provision about the application of this Chapter in relation to partners and partnerships.

Appeals out of time

Late appeal against final judicial ruling

216

(1) This section applies where a final judicial ruling (“the original ruling”) is the subject of an appeal by reason of a court or tribunal granting leave to appeal out of time.

(2) If a follower notice has been given identifying the original ruling under section 206(a), the notice is suspended until such time as HMRC notify P that—

(a) the appeal has resulted in a judicial ruling which is a final ruling, or

(b) the appeal has been abandoned or otherwise disposed of (before it was determined).

(3) Accordingly the period during which the notice is suspended does not count towards the periods mentioned in section 208(8).

(4) When a follower notice is suspended under subsection (2), HMRC must notify P as soon as reasonably practicable.

(5) If the new final ruling resulting from the appeal is not a judicial ruling which is relevant to the chosen arrangements (see section 205), the follower notice ceases to have effect at the end of the period of suspension.

(6) In any other case, the follower notice continues to have effect after the end of the period of suspension and, in a case within subsection (2)(a), is treated as if it were in respect of the new final ruling resulting from the appeal.

(7) The notice given under subsection (2) must—

(a) state whether subsection (5) or (6) applies, and

(b) where subsection (6) applies in a case within subsection (2)(a), make any amendments to the follower notice required to reflect the new final ruling.

(8) No new follower notice may be given in respect of the original ruling unless the appeal has been abandoned or otherwise disposed of before it is determined by the court or tribunal to which it is addressed.

(9) Nothing in this section prevents a follower notice being given in respect of a new final ruling resulting from the appeal.

(10) Where the appeal is abandoned or otherwise disposed of before it is determined by the court or tribunal to which it is addressed, for the purposes of the original ruling the period beginning when leave to appeal out of time was granted, and ending when the appeal is disposed of, does not count towards the period of 12 months mentioned in section 204(6).

Transitional provision

217

(1) In the case of judicial rulings made before the day on which this Act is passed, this Chapter has effect as if for section 204(6) there were substituted—

(6) A follower notice may not be given after— (a) the end of the period of 24 months beginning with the day on which this Act is passed, or (b) the end of the period of 12 months beginning with the day the return or claim to which subsection (2)(a) refers was received by HMRC or (as the case may be) with the day the tax appeal to which subsection (2)(b) refers was made, whichever is later.

(2) Accordingly, the reference in section 216(10) to the period of 12 months includes a reference to the period of 24 months mentioned in the version of section 204(6) set out in subsection (1) above.

Defined terms

Defined terms used in Chapter 2

218

For the purposes of this Chapter—

“arrangements” has the meaning given by section 201(4);

“the asserted advantage” has the meaning given by section 204(3);

“the chosen arrangements” has the meaning given by section 204(3);

“the denied advantage” has the meaning given by section 208(3);

“follower notice” has the meaning given by section 204(1);

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

“judicial ruling”, and “relevant” in relation to a judicial ruling and the chosen arrangements, have the meaning given by section 205;

“relevant tax” has the meaning given by section 200;

“the specified time” has the meaning given by section 208(8);

“tax advantage” has the meaning given by section 201(2);

“tax appeal” has the meaning given by section 203;

“tax arrangements” has the meaning given by section 201(3);

“tax enquiry” has the meaning given by section 202(2);

“tax period” means a tax year, accounting period or other period in respect of which tax is charged;

“P” has the meaning given by section 204(1);

“the 30 day post-representations period” has the meaning given by section 208(8);

“the 90 day post-notice period” has the meaning given by section 208(8).

CHAPTER 3 — Accelerated payment

Accelerated payment notices

Circumstances in which an accelerated payment notice may be given

219

(1) HMRC may give a notice (an “accelerated payment notice”) to a person (“P”) if Conditions A to C are met.

(2) Condition A is that—

(a) a tax enquiry is in progress into a return or claim made by P in relation to a relevant tax, or

(b) P has made a tax appeal (by notifying HMRC or otherwise) in relation to a relevant tax but that appeal has not yet been—

(i) determined by the tribunal or court to which it is addressed, or

(ii) abandoned or otherwise disposed of.

(3) Condition B is that the return or claim or, as the case may be, appeal is made on the basis that a particular tax advantage (“the asserted advantage”) results from particular arrangements (“the chosen arrangements”).

(4) Condition C is that one or more of the following requirements are met—

(a) HMRC has given (or, at the same time as giving the accelerated payment notice, gives) P a follower notice under Chapter 2—

(i) in relation to the same return or claim or, as the case may be, appeal, and

(ii) by reason of the same tax advantage and the chosen arrangements;

(b) the chosen arrangements are DOTAS arrangements;

(c) a GAAR counteraction notice has been given in relation to the asserted advantage or part of it and the chosen arrangements (or is so given at the same time as the accelerated payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel which considered the matter under paragraph 10 of Schedule 43 to FA 2013 was as set out in paragraph 11(3)(b) of that Schedule (entering into tax arrangements not reasonable course of action etc).

(d) a notice has been given under paragraph 8(2) or 9(2) of Schedule 43A to FA 2013 (notice of final decision after considering Panel's opinion about referred or counteracted arrangements) in relation to the asserted advantage or part of it and the chosen arrangements (or is so given at the same time as the accelerated payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel about the other arrangements (see subsection (8)) was as set out in paragraph 11(3)(b) of Schedule 43 to FA 2013;

(e) a notice under paragraph 8(2) of Schedule 43B to FA 2013 (GAAR: generic referral of tax arrangements) has been given in relation to the asserted advantage or part of it and the chosen arrangements (or is so given at the same time as the accelerated payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel which considered the generic referral in respect of those arrangements under paragraph 6 of Schedule 43B to FA 2013 was as set out in paragraph 6(4)(b) of that Schedule.

(5) “DOTAS arrangements” means—

(a) ... arrangements to which HMRC has allocated a reference number under section 311 of FA 2004,

(b) ... arrangements implementing a ... proposal where HMRC has allocated a reference number under that section to the proposed ... arrangements, or

(c) arrangements in respect of which a person must provide prescribed information under section 312(2) or 312ZA(2) of that Act by reason of the arrangements being substantially the same as ... arrangements within paragraph (a) or (b).

(6) But the ... arrangements within subsection (5) do not include arrangements in relation to which HMRC has given notice under section 312(6) or 312ZA(4) of FA 2004 (notice that persons not under duty imposed to notify client of reference number).

(7) “GAAR counteraction notice” means a notice under paragraph 12 of Schedule 43 to FA 2013 (notice of final decision to counteract under the general anti-abuse rule).

(8) In subsection (4)(d) “other arrangements” means—

(a) in relation to a notice under paragraph 8(2) of Schedule 43A to FA 2013, the referred arrangements (as defined in that paragraph);

(b) in relation to a notice under paragraph 9(2) of that Schedule, the counteracted arrangements (as defined in paragraph 2 of that Schedule).

Content of notice given while a tax enquiry is in progress

220

(1) This section applies where an accelerated payment notice is given by virtue of section 219(2)(a) (notice given while a tax enquiry is in progress).

(2) The notice must—

(a) specify the paragraph or paragraphs of section 219(4) by virtue of which the notice is given,

(b) specify the payment (if any) required to be made under section 223 and the requirements of that section, ...

(c) explain the effect of sections 222 and 226, and of the amendments made by sections 224 and 225 (so far as relating to the relevant tax in relation to which the accelerated payment notice is given), and

(d) if the denied advantage consists of or includes an asserted surrenderable amount, specify that amount and any action which is required to be taken in respect of it under section 225A.

(3) The payment required to be made under section 223 is an amount equal to the amount which a designated HMRC officer determines, to the best of that officer's information and belief, as the understated tax (and disregarding any dispute which has been referred to a tribunal under section 12ABZB (3) of TMA 1970 but not yet determined).

(4) “The understated tax” means the additional amount that would be due and payable in respect of tax if—

(a) in the case of a notice given by virtue of section 219(4)(a) (cases where a follower notice is given)—

(i) it were assumed that the explanation given in the follower notice in question under section 206(b) is correct, and

(ii) the necessary corrective action were taken under section 208 in respect of what the designated HMRC officer determines, to the best of that officer's information and belief, as the denied advantage;

(b) in the case of a notice given by virtue of section 219(4)(b) (cases where the DOTAS requirements are met), such adjustments were made as are required to counteract what the designated HMRC officer determines, to the best of that officer's information and belief, as the denied advantage;

(c) in the case of a notice given by virtue of section 219(4)(c), (d) or (e) (cases involving counteraction under the general anti-abuse rule), such of the adjustments set out in the GAAR counteraction notice as have effect to counteract the denied advantage were made.

(4A) Asserted surrenderable amount” means so much of a surrenderable loss as a designated HMRC officer determines, to the best of that officer's information and belief, to be an amount—

(a) which would not be a surrenderable loss of P if the position were as stated in paragraphs (a), (b) or (c) of subsection (4), and

(b) which is not the subject of a claim by P for relief from corporation tax reflected in the understated tax amount (and hence in the payment required to be made under section 223).

(4B) “Surrenderable loss” means a loss or other amount within section 99(1) of CTA 2010 (or part of such a loss or other amount).

(5) “The denied advantage”—

(a) in the case of a notice given by virtue of section 219(4)(a), has the meaning given by section 208(3),

(b) in the case of a notice given by virtue of section 219(4)(b), means so much of the asserted advantage as is not a tax advantage which results from the chosen arrangements or otherwise, and

(c) in the case of a notice given by virtue of section 219(4)(c), (d) or (e) , means so much of the asserted advantage as would be counteracted by making the adjustments set out in the GAAR counteraction notice.

(6) If a notice is given by reason of two or all of the requirements in section 219(4) being met, any payment specified under subsection (2)(b) or amount specified under subsection (2)(d) is to be determined as if the notice were given by virtue of such one of them as is stated in the notice as being used for this purpose.

(7) “The GAAR counteraction notice” means the notice under—

(a) paragraph 12 of Schedule 43 to FA 2013,

(b) paragraph 8 or 9 of Schedule 43A to that Act, or

as the case may be.

Content of notice given pending an appeal

221

(1) This section applies where an accelerated payment notice is given by virtue of section 219(2)(b) (notice given pending an appeal).

(2) The notice must—

(a) specify the paragraph or paragraphs of section 219(4) by virtue of which the notice is given,

(b) specify the disputed tax (if any), ...

(c) explain the effect of section 222 and of the amendments made by sections 224 and 225 so far as relating to the relevant tax in relation to which the accelerated payment notice is given, and

(d) if the denied advantage consists of or includes an asserted surrenderable amount (within the meaning of section 220(4A)), specify that amount and any action which is required to be taken in respect of it under section 225A.

(3) “The disputed tax” means so much of the amount of the charge to tax arising in consequence of—

(a) the amendment or assessment to tax appealed against, or

(b) where the appeal is against a conclusion stated by a closure notice, that conclusion,

as a designated HMRC officer determines, to the best of the officer's information and belief, as the amount required to ensure the counteraction of what that officer so determines as the denied advantage (and disregarding any dispute which has been referred to a tribunal under section 12ABZB (3) of TMA 1970 but not yet determined).

(4) “The denied advantage” has the same meaning as in section 220(5).

(5) If a notice is given by reason of two or all of the requirements in section 219(4) being met, the denied advantage is to be determined as if the notice were given by virtue of such one of them as is stated in the notice as being used for this purpose.

(6) In this section a reference to an assessment to tax, in relation to inheritance tax, is to a determination.

Representations about a notice

222

(1) This section applies where an accelerated payment notice has been given under section 219 (and not withdrawn).

(2) P has 90 days beginning with the day that notice is given to send written representations to HMRC—

(a) objecting to the notice on the grounds that Condition A, B or C in section 219 was not met, ...

(b) objecting to the amount specified in the notice under section 220(2)(b) or section 221(2)(b), or

(3) HMRC must consider any representations made in accordance with subsection (2).

(4) Having considered the representations, HMRC must—

(a) if representations were made under subsection (2)(a), determine whether—

(i) to confirm the accelerated payment notice (with or without amendment), or

(ii) to withdraw the accelerated payment notice, ...

(b) if representations were made under subsection (2)(b) (and the notice is not withdrawn under paragraph (a)), determine whether a different amount (or no amount) ought to have been specified under section 220(2)(b) or section 221(2)(b), and then—

(i) confirm the amount specified in the notice, ...

(ii) amend the notice to specify a different amount, or

(iii) remove from the notice the provision made under section 220(2)(b) or section 221(2)(b), and

(c) if representations were made under subsection (2)(c) (and the notice is not withdrawn under paragraph (a)), determine whether a different amount (or no amount) ought to have been specified under section 220(2)(d) or 221(2)(d), and then—

(i) confirm the amount specified in the notice,

(ii) amend the notice to specify a different amount, or

(iii) remove from the notice the provision made under section 220(2)(d) or section 221(2)(d),

and notify P accordingly.

Forms of accelerated payment

Effect of notice given while tax enquiry is in progress

223

(1) This section applies where—

(a) an accelerated payment notice is given by virtue of section 219(2)(a) (notice given while a tax enquiry is in progress) (and not withdrawn), and

(b) an amount is stated in the notice in accordance with section 220(2)(b).

(2) P must make a payment (“the accelerated payment”) to HMRC of that amount.

(3) The accelerated payment is to be treated as a payment on account of the understated tax (see section 220).

(4) The accelerated payment must be made before the end of the payment period.

(5) “The payment period” means—

(a) if P made no representations under section 222, the period of 90 days beginning with the day on which the accelerated payment notice is given, and

(b) if P made such representations, whichever of the following periods ends later—

(i) the 90 day period mentioned in paragraph (a);

(ii) the period of 30 days beginning with the day on which P is notified under section 222 of HMRC's determination.

(6) But where the understated tax would be payable by instalments by virtue of an election made under section 227 of IHTA 1984, to the extent that the accelerated payment relates to tax payable by an instalment which falls to be paid at a time after the payment period, the accelerated payment must be made no later than that time.

(7) If P pays any part of the understated tax before the accelerated payment in respect of it, the accelerated payment is treated to that extent as having been paid at the same time.

(8) Any tax enactment which relates to the recovery of a relevant tax applies to an amount to be paid on account of the relevant tax under this section in the same manner as it applies to an amount of the relevant tax.

(9) “Tax enactment” means provisions of or made under—

(a) the Tax Acts,

(b) any enactment relating to capital gains tax,

(d) Part 4 of FA 2003 or any other enactment relating to stamp duty land tax, or

(e) Part 3 of FA 2013 or any other enactment relating to annual tax on enveloped dwellings.

Restriction on powers to postpone tax payments pending initial appeal

224

(1) In section 55 of TMA 1970 (recovery of tax not postponed), after subsection (8A) insert—

(8B) Subsections (8C) and (8D) apply where a person has been given an accelerated payment notice or partner payment notice under Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been withdrawn. (8C) Nothing in this section enables the postponement of the payment of (as the case may be)— (a) the understated tax to which the payment specified in the notice under section 220(2)(b) of that Act relates, (b) the disputed tax specified in the notice under section 221(2)(b) of that Act, or (c) the understated partner tax to which the payment specified in the notice under paragraph 4(1)(b) of Schedule 32 to that Act relates. (8D) Accordingly, if the payment of an amount of tax within subsection (8C)(b) is postponed by virtue of this section immediately before the accelerated payment notice is given, it ceases to be so postponed with effect from the time that notice is given, and the tax is due and payable— (a) if no representations were made under section 222 of that Act in respect of the notice, on or before the last day of the period of 90 days beginning with the day the notice or partner payment notice is given, and (b) if representations were so made, on or before whichever is later of— (i) the last day of the 90 day period mentioned in paragraph (a), and (ii) the last day of the period of 30 days beginning with the day on which HMRC's determination in respect of those representations is notified under section 222 of that Act.

(2) In section 242 of IHTA 1984 (recovery of tax), after subsection (3) insert—

(4) Where a person has been given an accelerated payment notice under Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been withdrawn, nothing in this section prevents legal proceedings being taken for the recovery of (as the case may be)— (a) the understated tax to which the payment specified in the notice under section 220(2)(b) of that Act relates, or (b) the disputed tax specified in the notice under section 221(2)(b) of that Act.

(3) In Schedule 10 to FA 2003 (SDLT: returns, enquiries, assessments and appeals), in paragraph 39 (direction by the tribunal to postpone payment), after sub-paragraph (8) insert—

(9) Sub-paragraphs (10) and (11) apply where a person has been given an accelerated payment notice under Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been withdrawn. (10) Nothing in this paragraph enables the postponement of the payment of (as the case may be)— (a) the understated tax to which the payment specified in the notice under section 220(2)(b) of that Act relates, or (b) the disputed tax specified in the notice under section 221(2)(b) of that Act. (11) Accordingly, if the payment of an amount of tax within sub-paragraph (10)(b) is postponed by virtue of this paragraph immediately before the accelerated payment notice is given, it ceases to be so postponed with effect from the time that notice is given, and the tax is due and payable— (a) if no representations were made under section 222 of that Act in respect of the notice, on or before the last day of the period of 90 days beginning with the day the notice is given, and (b) if representations were so made, on or before whichever is later of— (i) the last day of the 90 day period mentioned in paragraph (a), and (ii) the last day of the period of 30 days beginning with the day on which HMRC's determination in respect of those representations is notified under section 222 of that Act.

(4) In paragraph 40 of that Schedule (agreement to postpone payment of tax), after sub-paragraph (3) insert—

(4) Sub-paragraphs (9) to (11) of paragraph 39 apply for the purposes of this paragraph as they apply for the purposes of paragraph 39.

(5) In Schedule 33 to FA 2013 (annual tax on enveloped dwellings: returns, enquiries, assessments and appeals), in paragraph 48 (application for payment of tax to be postponed), after sub-paragraph (8) insert—

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.

This text is published under legislation.gov.uk's own terms of reuse, not a Legalize or public-domain licence. legislation.gov.uk
Open Government Licence v3.0 (attribution required)
© Crown and database right. Derived from content available under the Open Government Licence v3.0 from legislation.gov.uk.