Finance Act 2015

(1126A) (1) Expenditure on consumable items is not to be treated as attributable to relevant research and development if— (a) the relevant research and development relates to an item that is produced in the course of the research and development, (b) the consumable items form part of the item produced, (c) the item produced is transferred by a relevant person for consideration in money or money's worth, and (d) the transfer is made in the ordinary course of the relevant person's business. (2) Expenditure on consumable items is not to be treated as attributable to relevant research and development if— (a) the relevant research and development relates to a process of producing an item, (b) the consumable items form part of an item produced in the course of that research and development, (c) the item produced is transferred by a relevant person for consideration in money or money's worth, and (d) the transfer is made in the ordinary course of the relevant person's business. (3) If— (a) the item produced as described in subsection (1) or (2) may be divided, and (b) only a proportion (“the appropriate proportion”) of that item is transferred by a relevant person as described in subsection (1)(c) and (d) or (2)(c) and (d), the appropriate proportion of the expenditure on the consumable items is not to be treated as attributable to the relevant research and development. (4) If— (a) a number of items are produced in the course of the relevant research and development described in subsection (2), and (b) only a proportion (“the appropriate proportion”) of those items is transferred by a relevant person as described in subsection (2)(c) and (d), the appropriate proportion of the expenditure on the consumable items is not to be treated as attributable to the relevant research and development. (5) A reference in this section to producing an item includes a reference to preparing an item for transfer. (6) For the purposes of this section a consumable item forms part of an item produced if— (a) it is incorporated into the item produced, or (b) it is turned into, or it and other materials are turned into, the item produced or a part of the item produced. (7) A reference in this section to the transfer of an item is a reference to— (a) the transfer of ownership of an item to another person (whether by sale or otherwise), or (b) the transfer of possession of an item to another person (whether by letting on hire or otherwise), and a reference to the transfer of an item includes, where the item is incorporated into another item, the transfer of that other item. (8) For the purposes of this section the provision of information obtained in testing an item is not to be regarded as consideration for the transfer of that item. (9) For the purposes of this section a transfer of an item produced in the course of research and development is not to be regarded as a transfer in the ordinary course of business if the item being transferred is waste. (10) In this section— - “item” includes any substance; - “relevant person”, in relation to relevant research and development, means— 1. the company that incurs the cost of the research and development, whether it is undertaken by itself or contracted out, 2. the company to which the research and development is contracted out, whether it is undertaken by itself or contracted out, 3. the person (other than a company) who contracts out the research and development to a company and incurs the cost of the research and development, 4. the person (other than a company) to whom the research and development is contracted out, or 5. a person who is connected to a company or person described in paragraph (a), (b), (c) or (d). (1126B) (1) The Treasury may by regulations make provision for the purpose of identifying when expenditure on consumable items is attributable to relevant research and development, including provision modifying the effect of section 1126 or 1126A. (2) Regulations under this section may include provision about— (a) the circumstances in which expenditure on consumable items employed directly in relevant research and development is, or is not, to be treated as attributable to that relevant research and development; (b) the circumstances in which consumable items are, or are not, to be treated as employed directly in relevant research and development. (3) Regulations under this section may— (a) make different provision for different purposes; (b) make incidental, consequential, supplementary or transitional provision or savings. (4) Regulations under this section may amend— (a) section 1126; (b) section 1126A; (c) any other provision of this Act, if that is appropriate in consequence of provision made under paragraph (a) or (b). (5) Regulations under this section may make provision that has effect in relation to expenditure incurred before the making of the regulations, provided that it does not increase any person's liability to tax.

• (4) In each of the following, after “1126” insert “ to 1126B ”

• (a) section 104D(5);

• (b) section 104E(5);

• (c) section 104G(6);

• (d) section 104H(7);

• (e) section 104J(6);

• (f) section 104K(7);

• (g) section 1052(7);

• (h) section 1053(6);

• (i) section 1066(5);

• (j) section 1067(5);

• (k) section 1071(7);

• (l) section 1072(8);

• (m) section 1077(6);

• (n) section 1078(7);

• (o) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (p) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) In section 104Y(2), for “and 1126” substitute “ to 1126B ”.

• (6) In section 1310(4) (orders and regulations subject to affirmative procedure), after paragraph (za) insert—

(zb) section 1126B (provision about when expenditure on consumable items is attributable to relevant research and development),

.

• (7) The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2015.

Film tax relief

29

• (1) Part 15 of CTA 2009 (film production) is amended as follows.

• (2) In section 1184 (definitions of terms including “limited-budget film”)—

• (a) omit subsections (2) and (3), and

• (b) in the heading for that section omit “and “limited-budget film””.

• (3) For section 1200(3) (film tax relief: amount of additional deduction: rate of enhancement) substitute—

(3) The rate of enhancement is 100%.

• (4) In section 1202 (surrendering of loss and amount of film tax credit)—

• (a) in subsection (2) for “R is the payable credit rate (see subsection (3))” substitute “ R is 25% ”, and

• (b) omit subsection (3).

• (5) Omit section 1215 (film tax relief on basis that film is limited-budget film).

• (6) In Schedule 4 (index of defined expressions) omit the entry for “limited-budget film”.

• (7) In consequence of subsection (4), in section 32 of FA 2014—

• (a) omit subsection (3),

• (b) in subsection (4) for “amendments made by subsections (2) and (3) have” substitute “ amendment made by subsection (2) has ”,

• (c) omit subsection (5), and

• (d) in subsection (7) for “sections 1198(1) and 1202(2) and (3)” substitute “ section 1198(1) ”.

• (8) The amendments made by this section have effect in relation to films the principal photography of which is not completed before such day as the Treasury may specify by regulations.

• (9) The specified day may be before the day on which the regulations are made, but may not be before 1 April 2015.

• (10) Section 1171(4) of CTA 2010 (orders and regulations subject to negative resolution procedure) does not apply in relation to any regulations made under subsection (8).

Reliefs for makers of children’s television programmes

30

• (1) Part 15A of CTA 2009 (television production reliefs) is amended as follows.

• (2) In section 1216AB(2) (programmes that are not animation can be relevant programmes only if conditions C and D are met in addition to conditions A and B) for “not animation” substitute “ neither animation nor a children's programme ”.

• (3) In section 1216AB(3) (condition A: types of programme that can be relevant programmes)—

• (a) omit the “or” after paragraph (b), and

• (b) after paragraph (c) insert

, or (d) a children's programme.

• (4) In section 1216AC (types of programme: definitions) after subsection (2) insert—

(2A) A programme is a children's programme if, when television production activities begin, it is reasonable to expect that the persons who will make up the programme's primary audience will be under the age of 15.

• (5) In section 1216AD(1) (meaning of “excluded programme”) after “For the purposes of this Part” insert “ , but subject to section 1216ADA, ”.

• (6) After section 1216AD insert—

(1216ADA) (1) A children's programme is not an excluded programme for the purposes of this Part if— (a) the programme falls within— (i) sub-head 3A set out in subsection (2), or (ii) Head 4 set out in section 1216AD(5), and (b) the prize total (see subsection (3)) does not exceed £1,000. (2) Sub-head 3A is any quiz show or game show. (3) “The prize total” for a programme is the total of— (a) the amount of each relevant prize that is a money prize, and (b) the amount spent on each other relevant prize by, or on behalf of, its provider, and here “relevant prize” means a prize offered in connection with participation in a quiz, game, competition or contest in, or promoted by, the programme. (4) The Treasury may by regulations amend subsection (1)(b) for the purpose of increasing the amount of the money limit for the time being specified in subsection (1)(b).

• (7) The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2015.

• (8) Subsections (9) and (10) apply where—

• (a) a company has an accounting period beginning before, and ending on or after, 1 April 2015 (“the straddling period”),

• (b) in the part of the straddling period beginning with 1 April 2015 and ending with the end of the straddling period, the company carries on activities in relation to a television programme that—

• (i) is within the definition of “children's programme” given by the new section 1216AC(2A), but

• (ii) is not a relevant programme for the purposes of Part 15A of CTA 2009, and

• (c) if that part of the straddling period were a separate accounting period, in that separate accounting period—

• (i) the programme would be a relevant programme for the purposes of Part 15A of CTA 2009,

• (ii) the company would for those purposes be the television production company in relation to the programme, and

• (iii) the conditions for television tax relief (see section 1216C(2) of CTA 2009) would be met in relation to the programme.

• (9) For the purposes of calculating for corporation tax purposes the company's profits or losses for the straddling period of its activities in relation to the programme—

• (a) so much of the straddling period as falls before 1 April 2015, and

• (b) so much of that period as falls on or after that date,

are to be treated as separate accounting periods.

• (10) Any amounts brought into account for the purposes of calculating for corporation tax purposes the company's profits or losses for the straddling period of its activities in relation to the programme are to be apportioned to the two separate accounting periods on such basis as is just and reasonable.

Television tax relief

31

• (1) In section 1216CE(1) of CTA 2009 (television tax relief: UK expenditure condition) for “25%” substitute “ 10% ”.

• (2) The amendment made by subsection (1) has effect in relation to relevant programmes the principal photography of which is not completed before 1 April 2015.

Restrictions applying to certain deductions made by banking companies

32

Schedule 2 contains provision restricting the amount of deductions which banking companies may make in respect of certain losses carried forward from previous accounting periods.

Tax avoidance involving carried-forward losses

33

Schedule 3 contains provision restricting the circumstances in which companies may make a deduction in respect of certain losses carried forward from previous accounting periods.

CHAPTER 4 — Other provisions

Pensions

Pension flexibility: annuities etc

34

Schedule 4 contains provision about pension annuities, and other pension, paid in respect of deceased members of pension schemes.

Flood and coastal defence

Relief for contributions to flood and coastal erosion risk management projects

35

Schedule 5 makes provision about relief for contributions to flood and coastal erosion risk management projects.

Investment reliefs

Investment reliefs: excluded activities

36

Schedule 6 makes provision about excluded activities for the purposes of the following provisions of ITA 2007—

• (a) Part 5 (enterprise investment scheme) and, by virtue of section 257DA(9) of that Act, Part 5A (seed enterprise investment scheme),

• (b) Part 5B (tax relief for social investments), and

• (c) Part 6 (venture capital trusts).

Capital gains tax

Disposals of UK residential property interests by non-residents etc

37

Schedule 7 contains provision about capital gains tax on the disposal of UK residential property interests—

• (a) by a person who is not resident in the United Kingdom, or

• (b) by an individual, in the overseas part of a split tax year.

Relevant high value disposals: gains and losses

38

Schedule 8 contains provision about the calculation of relevant high value disposals within the meaning of section 2C of TCGA 1992.

Private residence relief

39

Schedule 9 contains amendments of TCGA 1992 in connection with private residence relief.

Wasting assets

40

• (1) In section 45 of TCGA 1992 (exemption for certain wasting assets), after subsection (3) insert—

(3A) But subsection (3) does not apply in the case of a disposal in relation to which subsection (3B) disapplies subsection (1). (3B) Subsection (1) does not apply to a disposal of, or of an interest in, an asset if— (a) at any time in the period of ownership of the person making the disposal, the asset is used for the purposes of a trade, profession or vocation carried on by another person, (b) as a result of that use, the asset becomes plant, (c) but for the asset therefore being regarded under section 44(1)(c) as having a predictable life of less than 50 years, the disposal would not be of, or of an interest in, a wasting asset, and (d) the disposal is not within subsection (3C). (3C) A disposal of, or of an interest in, an asset is within this subsection if the asset is plant used for the purpose of leasing under a long funding lease and— (a) the disposal takes place after the commencement of the term of the lease but before the termination of the lease, or (b) the disposal is the deemed disposal of the asset under section 25A(3)(a) on the termination of the lease. (3D) Section 25A(5) applies for the purposes of subsection (3C).

• (2) The amendment made by this section has effect—

• (a) for corporation tax purposes, in relation to disposals on or after 1 April 2015, and

• (b) for capital gains tax purposes, in relation to disposals on or after 6 April 2015.

Entrepreneurs’ relief: associated disposals

41

• (1) Section 169K of TCGA 1992 (disposal associated with relevant material disposal) is amended as follows.

• (2) For subsections (1) and (2) substitute—

(1) There is a disposal associated with a relevant material disposal if— (a) condition A1, A2 or A3 is met, and (b) conditions B and C are met. (1A) Condition A1 is that an individual (“P”) makes a material disposal of business assets which consists of the disposal of the whole or part of P's interest in the assets of a partnership, and— (a) P's disposed of interest is at least a 5% interest in the partnership's assets, and (b) at the date of the disposal, no partnership purchase arrangements exist. (1B) Condition A2 is that P makes a material disposal of business assets which consists of the disposal of shares in a company, all or some of which are ordinary shares, and at the date of the disposal— (a) the ordinary shares disposed of— (i) constitute at least 5% of the company's ordinary share capital, and (ii) carry at least 5% of the voting rights in the company, and (b) no share purchase arrangements exist. (1C) But condition A2 is not met if the disposal of shares is a disposal by virtue of section 122, other than such a disposal treated as made in consideration of a capital distribution from a company which is made in the course of dissolving or winding up the company. (1D) Condition A3 is that P makes a material disposal of business assets which consists of the disposal of securities of a company, and at the date of the disposal— (a) the securities disposed of constitute at least 5% of the value of the securities of the company, and (b) no share purchase arrangements exist. (1E) For the purposes of conditions A2 and A3, in relation to the disposal of shares in or securities of a company (“company A”), “share purchase arrangements” means arrangements under which P or a person connected with P is entitled to acquire shares in or securities of— (a) company A, or (b) a company which is a member of a trading group of which company A is a member. (2) For the purposes of subsection (1E)(b), a company is treated as a member of a trading group of which company A is a member if, at the date of the disposal mentioned in condition A2 or A3, arrangements exist which it is reasonable to assume will result in the company and company A becoming members of the same trading group.

• (3) In subsection (3)—

• (a) for “the individual”, in the first place it occurs, substitute “ P ”, and

• (b) for “the withdrawal of the individual” substitute “ P's withdrawal ”.

• (4) After subsection (3) insert—

(3A) The disposal mentioned in condition B is not treated as part of P's withdrawal from participation in the business carried on by a partnership if at the date of that disposal there exist any partnership purchase arrangements. (3B) The disposal mentioned in condition B is not treated as part of P's withdrawal from participation in the business carried on by a company (“company A”) if at the date of that disposal there exist any arrangements under which P or a person connected with P is entitled to acquire shares in or securities of— (a) company A, or (b) a company which is a member of a trading group of which company A is a member. (3C) For the purposes of subsection (3B)(b), a company is treated as a member of a trading group of which company A is a member if, at the date of the disposal mentioned in condition B, arrangements exist which it is reasonable to assume will result in the company and company A becoming members of the same trading group.

• (5) After subsection (5) insert—

(6) In this section, in relation to a partnership, “partnership purchase arrangements” means arrangements under which P or a person connected with P is entitled to acquire any interest in, or increase that person's interest in, the partnership (including a share of the profits or assets of the partnership or an interest in such a share). (7) In this section— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); - “securities” includes an interest in securities, and an “interest in securities” includes (in particular) an option to acquire securities; - “shares” includes an interest in shares, and an “interest in shares” includes (in particular) an option to acquire shares. (8) For the purposes of this section, a person is treated as entitled to acquire anything which the person— (a) is entitled to acquire at a future date, or (b) will at a future date be entitled to acquire. (9) For the purposes of this section the assets of— (a) a Scottish partnership, or (b) a partnership under the law of any other country or territory under which assets of a partnership are regarded as held by or on behalf of the partnership as such, are to be treated as held by the members of the partnership in the proportions in which they are entitled to share in the profits of the partnership. References in this section to an individual's interest in the partnership's assets are to be construed accordingly.

• (6) The amendments made by this section have effect in relation to disposals made on or after 18 March 2015.

Entrepreneurs’ relief: exclusion of goodwill in certain circumstances

42

• (1) Chapter 3 of Part 5 of TCGA 1992 (entrepreneurs' relief) is amended as follows.

• (2) In section 169H (introduction), in subsection (3), for “section 169L” substitute “ sections 169L and 169LA ”.

• (3) In section 169L (relevant business assets), in subsection (2), after “including” insert “ , subject to section 169LA, ”.

• (4) After that section insert—

(169LA) (1) Subsection (4) applies if— (a) as part of a qualifying business disposal, a person (“P”) disposes of goodwill directly or indirectly to a close company (“C”), (b) at the time of the disposal, P is a related party in relation to C, and (c) P is not a retiring partner. (2) P is a related party in relation to C for the purposes of this section if P is a related party in relation to C for the purposes of Part 8 of CTA 2009 (intangible fixed assets) (see Chapter 12 of that Part (related parties) and, in particular, section 835(5) of that Act). (3) P is a retiring partner if the goodwill is goodwill in a business carried on, immediately before the disposal, by a partnership of which P is a member and at the time of the disposal— (a) P is not, and no arrangements exist under which P could become, a participator in C or in a company that has control of, or holds a major interest in, C (a “relevant participator”), (b) P is a related party in relation to C because P is an associate of one or more relevant participators, and (c) P is only an associate of each of those relevant participators because they are also members of the partnership. (4) For the purposes of this Chapter, the goodwill is not one of the relevant business assets comprised in the qualifying business disposal. (5) If a company— (a) is not resident in the United Kingdom, but (b) would be a close company if it were resident in the United Kingdom, the company is to be treated as being a close company for the purposes of this section (including for the purposes of determining whether a person is a related party in relation to the company for the purposes of this section). (6) If a person— (a) disposes of goodwill as part of a qualifying business disposal, and (b) is party to relevant avoidance arrangements, subsection (4) applies (if it would not otherwise do so). (7) In subsection (6) “relevant avoidance arrangements” means arrangements the main purpose, or one of the main purposes, of which is to secure— (a) that subsection (4) does not apply in relation to the goodwill, or (b) that the person is not a related party (for whatever purposes) in relation to a company to which the disposal of goodwill is directly or indirectly made. (8) In this section— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); - “associate”, “control”, “major interest” and “participator” have the same meaning as in Chapter 12 of Part 8 of CTA 2009 (see, in particular, sections 836, 837 and 841 of that Act).

• (5) The amendments made by this section have effect in relation to qualifying business disposals made on or after 3 December 2014.

Entrepreneurs’ relief: trading company etc

43

• (1) Section 169S of TCGA 1992 (entrepreneurs' relief - interpretation) is amended as follows.

• (2) After subsection (4) insert—

(4A) In this Chapter “trading company” and “trading group” have the same meaning as in section 165 (see section 165A), except that, for the purposes of this Chapter— (a) subsections (7) and (12) of section 165A are to be disregarded; (b) in determining whether a company which is a member of a partnership is a trading company, activities carried on by the company as a member of that partnership are to be treated as not being trading activities (see section 165A(4)); and (c) in determining whether a group of companies is a trading group in a case where any one or more companies in the group is a member of a partnership, activities carried on by such a company as a member of the partnership are to be treated as not being trading activities (see section 165A(9)).

• (3) In subsection (5), omit the entry relating to “trading company” and “trading group” and the “and” preceding that entry.

• (4) For the purposes of conditions B and D in section 169I of TCGA 1992 (material disposal of business assets), any reference to a company ceasing to be a trading company or ceasing to be a member of a trading group does not include a case where a company ceases to be a trading company or ceases to be a member of a trading group by virtue only of the coming into force of subsections (2) and (3).

• (5) This section comes into force on 18 March 2015.

Deferred entrepreneurs’ relief on invested gains

44

• (1) In Part 5 of TCGA 1992 (transfer of business assets) after Chapter 3 (entrepreneurs' relief) insert—

(169T) This Chapter makes provision about claiming entrepreneurs' relief in certain cases where, in relation to held-over gains that originally arose on a business disposal, there is a chargeable event for the purposes of Schedule 5B or 8B (relief for gains invested under the enterprise investment scheme or in social enterprises). (169U) (1) Section 169V applies if, ignoring the operation of section 169V(2)(b), each of the following conditions is met. (2) The first condition is that a chargeable gain (“the first eventual gain”) accrues as a result of the operation of— - paragraph 4 of Schedule 5B (enterprise investment scheme), or - paragraph 5 of Schedule 8B (investments in social enterprises). (3) If the first condition is met, the paragraph and Schedule mentioned in subsection (2) that apply in the case are referred to in this section, and section 169V, as “the relevant paragraph” and “the applicable Schedule”. (4) The second condition is— (a) that the first eventual gain accrues in a case in which the original gain would, but for the operation of the applicable Schedule, have accrued on a relevant business disposal, or (b) where the first eventual gain accrues in a case in which the original gain would, but for the operation of the applicable Schedule, have accrued as a result of the operation of either of the paragraphs mentioned in subsection (2), that the underlying disposal is a relevant business disposal. (5) The third condition is that a claim for entrepreneurs' relief in respect of the first eventual gain is made, on or before the first anniversary of the 31 January following the tax year in which the first eventual gain accrues, by the individual who made the disposal mentioned in subsection (4)(a) or (b). (6) The fourth condition is that the first eventual gain is the first gain to accrue in the case as a result of the operation of the relevant paragraph. (7) In subsection (4) “the underlying disposal” means the disposal (not being a disposal within paragraph 3 of Schedule 5B or paragraph 6 of Schedule 8B) by virtue of which Schedule 5B or 8B has effect. (8) For the purposes of subsection (4), whether the disposal on which the original gain would have accrued is a relevant business disposal, or whether the underlying disposal is a relevant business disposal, is to be decided according to the law applicable to disposals made at the time the disposal was made. (9) In this section— - “the original gain”, in relation to a particular case, has the same meaning as in the applicable Schedule, - “relevant business asset” has the meaning given by section 169L, and - “relevant business disposal” means— 1. a disposal— 1. within section 169H(2)(a) or (c) (qualifying business disposals), and 2. consisting of the disposal of (or of interests in) shares in or securities of a company, or 2. a disposal of relevant business assets which is comprised in a disposal— 1. within section 169H(2)(a) or (c), and 2. not consisting of the disposal of (or of interests in) shares in or securities of a company. (169V) (1) Where this section applies, the following rules have effect. (2) The gain mentioned in section 169U(2) (“the first eventual gain”)— (a) is treated for ER purposes as the amount resulting from a calculation under section 169N(1) carried out— (i) in respect of a qualifying business disposal made when the first eventual gain accrues, and (ii) because of the claim mentioned in section 169U(5), and (b) except for ER purposes, is not to be taken into account under this Act as a chargeable gain. (3) If the first eventual gain is a part only of the original gain in the case concerned, each part of the original gain that subsequently accrues as a chargeable gain as a result of the operation of the relevant paragraph— (a) is treated for ER purposes as the amount resulting from a calculation under section 169N(1) carried out— (i) in respect of a qualifying business disposal made when that chargeable gain so accrues, and (ii) because of the claim mentioned in section 169U(5), and (b) except for ER purposes, is not to be taken into account under this Act as a chargeable gain. (4) If the disposal mentioned in paragraph (a) or (b) of section 169U(4) is a disposal within section 169H(2)(c) (qualifying business disposal: disposal associated with a relevant material disposal)— (a) a disposal mentioned in subsection (2) or (3) of this section is treated for the purposes of section 169P(1) as a disposal associated with a relevant material disposal, but (b) section 169P applies in relation to that disposal as if the disposal referred to in section 169P(4) were the disposal mentioned in section 169U(4)(a) or (b). (5) In this section “ER purposes” means the purposes of— (a) section 169N(2) to (4B), (7) and (8), and (b) section 169P.

• (2) The amendment made by subsection (1) has effect in relation to cases where the disposal mentioned in the new section 169U(4)(a) or (b) is made on or after 3 December 2014.

Capital allowances

Zero-emission goods vehicles

45

• (1) CAA 2001 is amended as follows.

• (2) In section 45DA(1)(a) (period during which first-year qualifying expenditure may be incurred), for “5 years” substitute “ 8 years ”.

• (3) Section 45DB (exclusions from allowances under section 45DA) is amended in accordance with subsections (4) to (7).

• (4) In subsection (7), omit “notified” (in both places).

• (5) In subsection (8), omit “to that extent”.

• (6) In subsection (11), omit the definition of “notified State aid”.

• (7) After that subsection insert—

(11A) Nothing in this section limits references to “State aid” to State aid which is required to be notified to and approved by the European Commission.

• (8) The amendments made by subsections (3) to (7) have effect—

• (a) in relation to a relevant grant or relevant payment made at any time (whether before or on or after the specified day) towards expenditure incurred on or after that day, and

• (b) in relation to a relevant grant or relevant payment made on or after the specified day towards expenditure incurred before that day.

• (9) “The specified day” means—

• (a) for income tax purposes, 6 April 2015, and

• (b) for corporation tax purposes, 1 April 2015.

Plant and machinery allowances: anti-avoidance

46

Schedule 10 contains provision about plant and machinery allowances.

Oil and gas

Extension of ring fence expenditure supplement

47

Schedule 11 contains provision enabling the ring fence expenditure supplement to be claimed for an additional 4 accounting periods (and as a result repeals provision for the extended ring fence expenditure supplement for onshore activities).

Reduction in rate of supplementary charge

48

• (1) In section 330 of CTA 2010 (supplementary charge in respect of ring fence trades), in subsection (1), for “32%” substitute “ 20% ”.

• (2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 1 January 2015 (but see also subsection (3)).

• (3) Subsections (4) to (6) apply where a company has an accounting period beginning before 1 January 2015 and ending on or after that date (“the straddling period”).

• (4) For the purpose of calculating the amount of the supplementary charge on the company for the straddling period—

• (a) so much of that period as falls before 1 January 2015, and so much of that period as falls on or after that date, are treated as separate accounting periods, and

• (b) the company's adjusted ring fence profits for the straddling period are apportioned to the two separate accounting periods in proportion to the number of days in those periods.

• (5) Sections 330A and 330B of CTA 2010 do not apply in relation to the straddling period (but do apply in relation to the separate accounting period ending on 31 December 2014).

• (6) The amount of the supplementary charge on the company for the straddling period is the sum of the amounts of supplementary charge that would, in accordance with subsections (4) and (5), be chargeable on the company for those separate accounting periods.

• (7) In this section—

• “adjusted ring fence profits” has the same meaning as in section 330 of CTA 2010;

• “supplementary charge” means any sum chargeable under section 330(1) of CTA 2010 as if it were an amount of corporation tax.

Supplementary charge: investment allowance

49

Schedule 12 contains provision about the reduction of adjusted ring fence profits by means of an investment allowance.

Supplementary charge: cluster area allowance

50

Schedule 13 contains provision about the reduction of adjusted ring fence profits by means of a cluster area allowance.

Amendments relating to investment allowance and cluster area allowance

51

Schedule 14 contains further amendments related to the amendments made by Schedules 12 and 13.

PART 2 — Excise duties and other taxes

Petroleum revenue tax

Reduction in rate of petroleum revenue tax

52

• (1) OTA 1975 is amended as follows.

• (2) In section 1(2) (rate of petroleum revenue tax) for “50” substitute “ 35 ”.

• (3) In paragraph 17(5)(b) of Schedule 2 (relevant percentage in relation to the amount of loss which is treated as reducing assessable profit) after “60 per cent” insert “ if that later repayment period ends on or before 31 December 2015, and 45 per cent if it ends after 31 December 2015 ”.

• (4) The amendment made by subsection (2) has effect with respect to chargeable periods ending after 31 December 2015.

Alcohol

Rates of alcoholic liquor duties

53

• (1) ALDA 1979 is amended as follows.

• (2) In section 5 (rate of duty on spirits), for “£28.22” substitute “ £27.66 ”.

• (3) In section 36(1AA) (rates of general beer duty)—

• (a) in paragraph (za) (rate of duty on lower strength beer), for “£8.62” substitute “ £8.10 ”, and

• (b) in paragraph (a) (standard rate of duty on beer), for “£18.74” substitute “ £18.37 ”.

• (4) In section 37(4) (rate of high strength beer duty), for “£5.29” substitute “ £5.48 ”.

• (5) In section 62(1A) (rates of duty on cider)—

• (a) in paragraph (b) (cider of strength exceeding 7.5% which is not sparkling cider) for “£59.52” substitute “ £58.75 ”, and

• (b) in paragraph (c) (other cider), for “£39.66” substitute “ £38.87 ”.

• (6) For Part 2 of the table in Schedule 1 substitute—

Description of wine or made-wine	Rates of duty per litre of alcohol in wine or made-wine £
Wine or made-wine of a strength exceeding 22 per cent	27.66

.

• (7) The amendments made by this section are treated as having come into force on 23 March 2015.

Wholesaling of controlled liquor

54

• (1) ALDA 1979 is amended as set out in subsections (2) to (5).

• (2) In section 4 (interpretation)—

• (a) in subsection (1), in the definition of “wholesale”, after “ “wholesale”” insert “ (except in Part 6A) ”,

• (b) in the Table in subsection (3), at the appropriate place insert—

excise duty point

, and

• (c) in subsection (4), after “Act” insert “ (except in Part 6A) ”.

• (3) After Part 6 insert—

(88A) (1) This section defines certain expressions used in this Part. (2) A sale is of “controlled liquor” if— (a) it is a sale of dutiable alcoholic liquor on which duty is charged under this Act at a rate greater than nil, and (b) the excise duty point for the liquor falls at or before the time of the sale. (3) Controlled liquor is sold “wholesale” if— (a) the sale is of any quantity of the liquor, (b) the seller is carrying on a trade or business and the sale is made in the course of that trade or business, (c) the sale is to a buyer carrying on a trade or business, for sale or supply in the course of that trade or business, and (d) the sale is not an incidental sale, a group sale or an excluded sale, and a reference to buying controlled liquor wholesale is to be read accordingly. (4) A sale is an “incidental sale” if— (a) the seller makes authorised retail sales of alcoholic liquor of any description, and (b) the sale is incidental to those sales. (5) A sale is an “authorised retail sale” if it is made by retail under and in accordance with a licence or other authorisation under an enactment regulating the sale and supply of alcohol. (6) A sale is a “group sale” if the seller and the buyer are both bodies corporate which are members of the same group (see section 88J). (7) A sale is an “excluded sale” if it is of a description prescribed by or under regulations made by the Commissioners. (8) “Controlled activity” means— (a) selling controlled liquor wholesale, (b) offering or exposing controlled liquor for sale in circumstances in which the sale (if made) would be a wholesale sale, or (c) arranging in the course of a trade or business for controlled liquor to be sold wholesale, or offered or exposed for sale in circumstances in which the sale (if made) would be a wholesale sale. (9) “UK person” means a person who is UK-established for the purposes of value added tax (see paragraph 1(10) of Schedule 1 to the Value Added Tax Act 1994). (10) “Enactment” includes an enactment contained in— (a) an Act of the Scottish Parliament; (b) an Act or Measure of the National Assembly for Wales; (c) Northern Ireland legislation. (88B) (1) The Commissioners may by regulations make provision as to the cases in which sales are, or are not, to be treated for the purposes of this Part as— (a) wholesale sales, (b) sales of controlled liquor, (c) incidental sales, (d) authorised retail sales, or (e) group sales. (2) The Commissioners may by regulations make provision as to the cases in which a person is, or is not, to be treated for the purposes of this Part as carrying on a controlled activity by virtue of section 88A(8)(b) or (c) (offering and exposing for sale and arranging for sale etc). (88C) (1) A UK person may not carry on a controlled activity otherwise than in accordance with an approval given by the Commissioners under this section. (2) The Commissioners may approve a person under this section to carry on a controlled activity only if they are satisfied that the person is a fit and proper person to carry on the activity. (3) The Commissioners may approve a person under this section to carry on a controlled activity for such periods and subject to such conditions or restrictions as they may think fit or as they may by or under regulations made by them prescribe. (4) The conditions or restrictions may include conditions or restrictions requiring the controlled activity to be carried on only at or from premises specified or approved by the Commissioners. (5) The Commissioners may at any time for reasonable cause revoke or vary the terms of an approval under this section. (6) In this Part “approved person” means a person approved under this section to carry on a controlled activity. (88D) (1) The Commissioners must maintain a register of approved persons. (2) The register is to contain such information relating to approved persons as the Commissioners consider appropriate. (3) The Commissioners may make publicly available such information contained in the register as they consider necessary to enable those who deal with a person who carries on a controlled activity to determine whether the person in question is an approved person in relation to that activity. (4) The information may be made available by such means (including on the internet) as the Commissioners consider appropriate. (88E) (1) The Commissioners may by regulations make provision— (a) regulating the approval and registration of persons under this Part, (b) regulating the variation or revocation of any such approval or registration or of any condition or restriction to which such an approval or registration is subject, (c) about the register maintained under section 88D, (d) regulating the carrying on of controlled activities, and (e) imposing obligations on approved persons. (2) The regulations may, in particular, make provision— (a) requiring applications, and other communications with the Commissioners, to be made electronically, (b) as to the procedure for the approval and registration of bodies corporate which are members of the same group and for members of such a group to be jointly and severally liable for any penalties imposed under— (i) the regulations, or (ii) Schedule 2B, (c) requiring approved persons to keep and make available for inspection such records relating to controlled activities as may be prescribed by or under the regulations, (d) imposing a penalty of an amount prescribed by the regulations (which must not exceed £1,000) for a contravention of— (i) the regulations, or (ii) any condition or restriction imposed under this Part, (e) for the assessment and recovery of such a penalty, and (f) for dutiable alcoholic liquor (whether or not charged with any duty and whether or not that duty has been paid) to be subject to forfeiture for a contravention of— (i) this Part or the regulations, or (ii) any condition or restriction imposed under this Part. (88F) A person may not buy controlled liquor wholesale from a UK person unless the UK person is an approved person in relation to the sale. (88G) (1) A person who contravenes section 88C(1) by selling controlled liquor wholesale is guilty of an offence if the person knows or has reasonable grounds to suspect that— (a) the buyer is carrying on a trade or business, and (b) the liquor is for sale or supply in the course of that trade or business. (2) A person who contravenes section 88C(1) by offering or exposing controlled liquor for sale in circumstances in which the sale (if made) would be a wholesale sale is guilty of an offence if the person intends to make a wholesale sale of the liquor. (3) A person who contravenes section 88C(1) by arranging in the course of a trade or business for controlled liquor to be sold wholesale, or offered or exposed for sale in circumstances in which the sale (if made) would be a wholesale sale, is guilty of an offence if the person intends to arrange for the liquor to be sold wholesale. (4) A person who contravenes section 88F is guilty of an offence if the person knows or has reasonable grounds to suspect that the UK person from whom the controlled liquor is bought is not an approved person in relation to the sale. (5) A person guilty of an offence under this section is liable on summary conviction— (a) in England and Wales to— (i) imprisonment for a term not exceeding 12 months, (ii) a fine, or (iii) both, (b) in Scotland to— (i) imprisonment for a term not exceeding 12 months, (ii) a fine not exceeding the statutory maximum, or (iii) both, and (c) in Northern Ireland to— (i) imprisonment for a term not exceeding 6 months, (ii) a fine not exceeding the statutory maximum, or (iii) both. (6) A person guilty of an offence under this section is liable on conviction on indictment to— (a) imprisonment for a period not exceeding 7 years, (b) a fine, or (c) both. (7) The reference in subsection (5)(a)(i) to 12 months is to be read as a reference to 6 months in relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003. (88H) Schedule 2B contains provision about penalties for contraventions of this Part. (88I) 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, (c) may include incidental, consequential, transitional or transitory provision, and (d) may confer a discretion on the Commissioners. (88J) (1) Two or more bodies corporate are members of a group for the purposes of this Part if each is established or has a fixed establishment in the United Kingdom and— (a) one of them controls each of the others, (b) one person (whether a body corporate or an individual) controls all of them, or (c) two or more individuals carrying on a business in partnership control all of them. (2) For the purposes of this section, a body corporate is to be taken to control another body corporate if— (a) it is empowered by or under an enactment to control that body's activities, or (b) it is that body's holding company within the meaning of section 1159 of, and Schedule 6 to, the Companies Act 2006. (3) For the purposes of this section— (a) an individual or individuals are to be taken to control a body corporate if the individual or individuals (were the individual or individuals a company) would be that body's holding company within the meaning of section 1159 of, and Schedule 6 to, the Companies Act 2006, and (b) a body corporate is established or has a fixed establishment in the United Kingdom if it is so established or has such an establishment for the purposes of value added tax. (88K) This Table lists the places where some of the expressions used in this Part are defined or otherwise explained.

approved person	section 88C(6)
authorised retail sale	section 88A(5)
controlled activity	section 88A(8)
enactment	section 88A(10)
group (in relation to bodies corporate)	section 88J(1)
group sale	section 88A(6)
incidental sale	section 88A(4)
sale of controlled liquor	section 88A(2)
UK person	section 88A(9)
wholesale	section 88A(3).

• (4) In section 90 (procedure for regulations)—

• (a) after subsection (1) insert—

(1A) A statutory instrument containing regulations under Part 6A is subject to annulment in pursuance of a resolution of the House of Commons.

, and

• (b) in subsection (2), after “containing” insert “ any other ”.

• (5) After Schedule 2A insert—

SCHEDULE 2B (1) A penalty is payable by a person (“P”) who contravenes section 88C(1) or 88F. (2) (1) If the contravention is deliberate and concealed, the amount of the penalty is the maximum amount (see paragraph 10). (2) If the contravention is deliberate but not concealed, the amount of the penalty is 70% of the maximum amount. (3) In any other case, the amount of the penalty is 30% of the maximum amount. (4) The contravention is— (a) “deliberate and concealed” if the contravention is deliberate and P makes arrangements to conceal the contravention, and (b) “deliberate but not concealed” if the contravention is deliberate but P does not make arrangements to conceal the contravention. (3) (1) Paragraph 4 provides for reductions in penalties under this Schedule where P discloses a contravention. (2) P discloses a contravention by— (a) telling the Commissioners about it, (b) giving the Commissioners reasonable help in identifying any other contraventions of section 88C(1) or 88F of which P is aware, and (c) allowing the Commissioners access to records for the purpose of identifying such contraventions. (3) Disclosure of a contravention— (a) is “unprompted” if made at a time when P has no reason to believe that the Commissioners have discovered or are about to discover the contravention, and (b) otherwise, is “prompted”. (4) In relation to disclosure “quality” includes timing, nature and extent. (4) (1) Where P discloses a contravention, the Commissioners must reduce the penalty to one that reflects the quality of the disclosure. (2) If the disclosure is prompted, the penalty may not be reduced below— (a) in the case of a contravention that is deliberate and concealed, 50% of the maximum amount, (b) in the case of a contravention that is deliberate but not concealed, 35% of the maximum amount, and (c) in any other case, 20% of the maximum amount. (3) If the disclosure is unprompted, the penalty may not be reduced below— (a) in the case of a contravention that is deliberate and concealed, 30% of the maximum amount, (b) in the case of a contravention that is deliberate but not concealed, 20% of the maximum amount, and (c) in any other case, 10% of the maximum amount. (5) (1) If the Commissioners think it right because of special circumstances, they may reduce a penalty under this Schedule. (2) In sub-paragraph (1) “special circumstances” does not include ability to pay. (3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to— (a) staying a penalty, and (b) agreeing a compromise in relation to proceedings for a penalty. (6) (1) Where P becomes liable for a penalty under this Schedule, the Commissioners must— (a) assess the penalty, (b) notify P, and (c) state in the notice the contravention in respect of which the penalty is assessed. (2) A penalty under this Schedule must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued. (3) An assessment is to be treated as an amount of duty due from P under this Act and may be recovered accordingly. (4) An assessment of a penalty under this Schedule may not be made later than one year after evidence of facts sufficient in the opinion of the Commissioners to indicate the contravention comes to their knowledge. (5) Two or more contraventions may be treated by the Commissioners as a single contravention for the purposes of assessing a penalty under this Schedule. (7) (1) Liability to a penalty does not arise under this Schedule in respect of a contravention which is not deliberate if P satisfies the Commissioners or (on an appeal made to the appeal tribunal) the tribunal that there is a reasonable excuse for the contravention. (2) For the purposes of sub-paragraph (1), where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the contravention. (8) (1) Where a penalty under this Schedule is payable by a company in respect of a contravention which was attributable to an officer of the company, the officer is liable to pay such portion of the penalty (which may be 100%) as the Commissioners may specify by written notice to the officer. (2) Sub-paragraph (1) does not allow the Commissioners to recover more than 100% of a penalty. (3) In the application of sub-paragraph (1) to a body corporate other than a limited liability partnership, “officer” means— (a) a director (including a shadow director within the meaning of section 251 of the Companies Act 2006), (b) a manager, and (c) a secretary. (4) In the application of sub-paragraph (1) to a limited liability partnership, “officer” means a member. (5) In the application of sub-paragraph (1) in any other case, “officer” means— (a) a director, (b) a manager, (c) a secretary, and (d) any other person managing or purporting to manage any of the company's affairs. (6) Where the Commissioners have specified a portion of a penalty in a notice given to an officer under sub-paragraph (1)— (a) paragraph 5 applies to the specified portion as to a penalty, (b) the officer must pay the specified portion before the end of the period of 30 days beginning with the day on which the notice is given, (c) sub-paragraphs (3) to (5) of paragraph 6 apply as if the notice were an assessment of a penalty, and (d) paragraph 9 applies as if the officer were liable to a penalty. (7) In this paragraph “company” means any body corporate or unincorporated association, but does not include a partnership. (9) P is not liable to a penalty under this Schedule in respect of a contravention in respect of which P has been convicted of an offence. (10) (1) In this Schedule “the maximum amount” means £10,000. (2) If it appears to the Treasury that there has been a change in the value of money since the last relevant date, they may by regulations substitute for the sum for the time being specified in sub-paragraph (1) such other sum as appears to them to be justified by the change. (3) In sub-paragraph (2), “relevant date” means— (a) the date on which the Finance Act 2015 is passed, and (b) each date on which the power conferred by that sub-paragraph has been exercised. (4) Regulations under this paragraph do not apply to any contravention which occurred before the date on which they come into force. (11) In this Schedule “appeal tribunal” has the same meaning as in Chapter 2 of Part 1 of the Finance Act 1994.

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

(ea) any decision by HMRC that a person is liable to a penalty, or as to the amount of the person's liability, under— (i) regulations under section 88E of the Alcoholic Liquor Duties Act 1979; or (ii) Schedule 2B to that Act;

.

• (7) In Schedule 5 to that Act (decisions subject to review and appeal), in paragraph 3(1), after paragraph (o) insert—

(p) any decision for the purposes of Part 6A (wholesaling of controlled liquor) as to whether or not, and in which respects, any person is to be, or to continue to be, approved and registered or as to the conditions or restrictions subject to which any person is approved and registered.

.

• (8) Subject as follows, the amendments made by this section come into force on the day on which this Act is passed.

• (9) So far as relating to section 88C(1) of ALDA 1979, subsection (3) comes into force on 1 January 2016 (but see subsection (12) for the application of section 88C(1) in cases where an application has been made but not disposed of by that date).

• (10) So far as relating to section 88F of ALDA 1979, subsection (3) comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.

• (11) An application for a person to be approved under section 88C of ALDA 1979 may not be made before 1 October 2015.

• (12) Where such an application made before 1 January 2016 has not been disposed of by that date, section 88C(1) of ALDA 1979 does not apply in relation to the person until the application is disposed of.

• (13) An application is “disposed of” when—

• (a) it is determined by Her Majesty's Revenue and Customs,

• (b) it is withdrawn, or

• (c) it is abandoned or otherwise ceases to have effect.

Tobacco

Rates of tobacco products duty

55

• (1) For the table in Schedule 1 to TPDA 1979 substitute—

1. Cigarettes	An amount equal to 16.5 per cent of the retail price plus £189.49 per thousand cigarettes
2. Cigars	£236.37 per kilogram
3. Hand-rolling tobacco	£185.74 per kilogram
4. Other smoking tobacco and chewing tobacco	£103.91 per kilogram

.

• (2) The amendment made by this section is treated as having come into force at 6 pm on 18 March 2015.

Excise duty on tobacco: anti-forestalling restrictions

56

After section 6 of TPDA 1979 (alteration of rates of duty) insert—

(6A) (1) If the Commissioners consider that an alteration to a rate of duty charged under section 2 on tobacco products may be made (whether under section 6 or otherwise), they may publish a notice under this section (an “anti-forestalling notice”). (2) An anti-forestalling notice— (a) must specify a period of up to 3 months (“the controlled period”), (b) may impose such restrictions (“anti-forestalling restrictions”), as to the quantities of the tobacco products that may during the controlled period be removed for home use, as the Commissioners consider to be reasonable for the purpose of protecting the public revenue, (c) may make provision for, and in connection with, the controlled period coming to an end early (including provision modifying an anti-forestalling restriction in such circumstances), (d) may make provision for the removal of tobacco products for home use to be disregarded for the purposes of one or more anti-forestalling restrictions in certain circumstances, and (e) may make different provision for different cases. (3) The anti-forestalling restrictions that may be imposed include, in particular— (a) restrictions as to the total quantity of the tobacco products, or of the tobacco products of a particular description, that may, during the controlled period, be removed for home use, and (b) restrictions as to the quantity of the tobacco products, or the tobacco products of a particular description, that may be removed for home use during any month, or any period of two weeks, in the controlled period. This is subject to subsections (4) and (5). (4) An anti-forestalling notice may not restrict a person, during the controlled period, to removing for home use a total quantity of the tobacco products, or of the tobacco products of a particular description, that is less than 80% of— $$TPY 365 × DCP$where—TPY is the total quantity of the tobacco products, or (as the case may be) of the tobacco products of a particular description, removed for home use by the person in the period of 12 months ending with the third month before the month in which the controlled period begins, andDCP is the number of days in the controlled period.$ (5) An anti-forestalling notice may not restrict a person, in any month of the controlled period, to removing for home use less than 30% of the total quantity of the tobacco products, or of the tobacco products of a particular description, that could, under the anti-forestalling restrictions imposed by the notice, be removed for home use during the whole controlled period. (6) If, before the end of the controlled period, it appears to the Commissioners that the rate of duty— (a) will not be altered during the controlled period, but (b) may be altered within a month of the end of the controlled period, the Commissioners may publish an extension notice. (7) An extension notice may— (a) extend the controlled period by up to one month, and (b) in accordance with subsections (2) to (5), make such other modifications of the anti-forestalling notice as the Commissioners think appropriate in consequence of the extension. (8) The Commissioners may vary or revoke an anti-forestalling notice— (a) as it applies generally, or (b) if the Commissioners consider that exceptional circumstances justify doing so, in relation to a particular person. (9) This section does not affect the Commissioners' powers— (a) under section 128 of the Customs and Excise Management Act 1979 (restriction of delivery of goods), or (b) to make regulations under section 7 of this Act in relation to periods specified under that section of that Act. (6B) (1) This section applies if a person fails to comply with an anti-forestalling notice published under section 6A by, on one or more occasions, removing tobacco products for home use during the controlled period in contravention of an anti-forestalling restriction. (2) The failure to comply attracts a penalty under section 9 of the Finance Act 1994 (civil penalties) of an amount determined in accordance with subsection (3) (rather than that section). (3) The person is liable to a penalty of— (a) if the person has given an admission notice, 150% of the lost duty, and (b) otherwise, 200% of the lost duty. (4) An “admission notice” is a notice— (a) in which the person admits that the person— (i) has failed to comply with the anti-forestalling notice, and (ii) is liable to a penalty determined in accordance with subsection (3), and (b) that is in such form, and that provides such information, as the Commissioners may specify. (5) An admission notice cannot be given if, at any time in the period of 3 years ending with the day before the controlled period, the person has given an admission notice in relation to a failure to comply with another anti-forestalling notice. (6) An admission notice cannot be given— (a) at a time when the person has reason to believe that Her Majesty's Revenue and Customs have discovered, or are about to discover, that the person has failed to comply with the anti-forestalling notice, or (b) after the end of the controlled period. (7) The “lost duty” is the amount (if any) by which the duty that would have been charged under section 2 on the excess tobacco products if they had, immediately after the end of the controlled period, been removed for home use exceeds the duty that was charged under that section on those tobacco products. (8) The “excess tobacco products” are the tobacco products mentioned in subsection (1) that the person removed, for home use, in contravention of an anti-forestalling restriction. (9) See section 6A for the meaning of “anti-forestalling notice”, “anti-forestalling restriction” and “controlled period”.

Air passenger duty

Air passenger duty: exemption for children in standard class

57

• (1) In section 31 of FA 1994 (passengers: exceptions), after subsection (4) insert—

(4ZA) A child who has not attained the age of 16 years is not a chargeable passenger in relation to a flight if the child's agreement for carriage— (a) is evidenced by a ticket, and (b) provides for standard class travel in relation to every flight on the child's journey. (4ZB) Subsections (10) to (12) of section 30 (meaning of “standard class travel”) apply for the purposes of subsection (4ZA) as they apply for the purposes of that section.

• (2) The amendment made by this section has effect in relation to any carriage of a passenger which begins on or after 1 May 2015.

But, in relation to any carriage of a passenger which begins before 1 March 2016, section 31(4ZA) of FA 1994 has effect as if for “16 years” there were substituted “ 12 years ”.

Vehicle excise duty

VED rates for light passenger vehicles and motorcycles

58

• (1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

• (2) In paragraph 1B (graduated rates of duty for light passenger vehicles)—

• (a) for the tables substitute—

CO₂ emissions figure	CO₂ emissions figure	Rate	Rate
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
130	140	120	130
140	150	135	145
150	165	170	180
165	175	285	295
175	185	340	350
185	200	480	490
200	225	630	640
225	255	860	870
255		1090	1100
CO₂ emissions figure	CO₂ emissions figure	Rate	Rate
---	---	---	---
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
100	110	10	20
110	120	20	30
120	130	100	110
130	140	120	130
140	150	135	145
150	165	170	180
165	175	195	205
175	185	215	225
185	200	255	265
200	225	280	290
225	255	480	490
255		495	505

;

• (b) in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—

(a) in column (3), in the last two rows, “280” were substituted for “480” and “ 495 ”, and (b) in column (4), in the last two rows, “290” were substituted for “490” and “ 505 ”.

• (3) In paragraph 2(1) (VED rates for motorcycles)—

• (a) in paragraph (c), for “£58” substitute “ £59 ”, and

• (b) in paragraph (d), for “£80” substitute “ £81 ”.

• (4) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2015.

VED: extension of old vehicles exemption from 1 April 2016

59

• (1) In Schedule 2 to VERA 1994 (exempt vehicles) in paragraph 1A(1) (exemption for old vehicles) for the words from “constructed” to the end substitute “ constructed before 1 January 1976 ”.

• (2) The amendment made by subsection (1) comes into force on 1 April 2016; but nothing in that subsection has the effect that a nil licence is required to be in force in respect of a vehicle while a vehicle licence is in force in respect of it.

Gaming duty

Rates of gaming duty

60

• (1) In section 11(2) of FA 1997 (rates of gaming duty) for the table substitute—

Part of gross gaming yield	Rate
The first £2,347,500	15 per cent
The next £1,618,000	20 per cent
The next £2,833,500	30 per cent
The next £5,981,000	40 per cent
The remainder	50 per cent

• (2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2015.

Aggregates levy

Tax credit in Northern Ireland

61

• (1) Part 2 of FA 2001 (aggregates levy) is amended in accordance with subsections (2) to (6).

• (2) After section 30A insert—