Finance Act 2016

(28H) (1) HMRC may make a simple assessment for a year of assessment in respect of a person (other than a person to whom section 28I applies) if, when the assessment is made, the person is not excluded by subsection (2) in relation to that year. (2) Subsection (1) does not apply to a person at any time in relation to that year of assessment if— (a) the person has delivered a return under section 8 for that year, or (b) the person is at that time subject to a requirement to make and deliver such a return by virtue of a notice under section 8. but nothing in this subsection prevents HMRC from giving the person notice of a simple assessment at the same time as a notice withdrawing a notice under section 8. (3) A simple assessment is— (a) an assessment of the amounts in which the person is chargeable to income tax and capital gains tax for the year of assessment to which it relates, and (b) an assessment of the amount payable by the person by way of income tax for that year, that is to say, the difference between the amount in which the person is assessed to income tax under paragraph (a) and the aggregate amount of any income tax deducted at source; but nothing in this subsection enables an assessment to show as repayable any income tax which any provision of the Income Tax Acts provides is not repayable. (4) The amounts in which a person is chargeable to income tax and capital gains are net amounts, taking into account any relief or allowance that is applicable. (5) A simple assessment must be based on information relating to the person that is held by HMRC (whether or not supplied by the person to whom the assessment relates). (6) The notice of a simple assessment required to be sent to the person by section 30A(3) must (among other things)— (a) include particulars of the income and gains, and any relief or allowance, taken into account in the assessment, and (b) state any amount payable by the person by virtue of section 59BA (with particulars of how it may be paid and the date by which it is payable). (7) The tax to be assessed on a person by a simple assessment does not include any tax which— (a) is chargeable on the scheme administrator of a registered pension scheme under Part 4 of Finance Act 2004, (b) is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pension Schemes (Splitting of Schemes) Regulations 2006, or (c) is chargeable on the person who is (or persons who are) the responsible person in relation to an employer-financed retirement benefits scheme under section 394(2) of ITEPA 2003. (8) Nothing in this section prevents HMRC issuing more than one simple assessment to the same person in respect of the same year of assessment (whether or not any earlier simple assessment for that year is withdrawn). (9) In this section references to a simple assessment are to an assessment under this section. (28I) (1) HMRC may make a simple assessment for a year of assessment in respect of a settlement if, when the assessment is made, the relevant trustees of the settlement are not excluded by subsection (2) in relation to that year. (2) Subsection (1) does not apply at any time in relation to that year of assessment if— (a) a return under section 8A has been delivered for that year by the relevant trustees or any of them, or (b) there is at that time a subsisting requirement to make and deliver such a return by virtue of a notice under section 8A; but nothing in this subsection prevents HMRC from giving notice of a simple assessment at the same time as a notice withdrawing a notice under section 8A. (3) A simple assessment is— (a) an assessment of the amounts in which the relevant trustees are chargeable to income tax and capital gains tax for the year of assessment to which it relates, and (b) an assessment of the amount payable by them by way of income tax for that year, that is to say, the difference between the amount in which they are assessed to income tax under paragraph (a) and the aggregate amount of any income tax deducted at source; but nothing in this subsection enables an assessment to show as repayable any income tax which any provision of the Income Tax Acts provides is not repayable. (4) The amounts in which the relevant trustees are chargeable to income tax and capital gains are net amounts, taking into account any relief or allowance that is applicable. (5) A simple assessment must be based only on information relating to the settlement that is held by HMRC (whether or not supplied by the relevant trustees). (6) The notice of a simple assessment required by section 30A(3) may be given to any one or more of the relevant trustees. (7) That notice must (among other things)— (a) include particulars of the income and gains, and any relief or allowance, taken into account in the assessment, and (b) state any amount payable by the relevant trustees by virtue of section 59BA (with particulars of how it may be paid and the date by which it is payable). (8) The tax to be assessed by a simple assessment does not include any tax which— (a) is chargeable on the scheme administrator of a registered pension scheme under Part 4 of Finance Act 2004, (b) is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pension Schemes (Splitting of Schemes) Regulations 2006, or (c) is chargeable on the person who is (or persons who are) the responsible person in relation to an employer-financed retirement benefits scheme under section 394(2) of ITEPA 2003. (9) Nothing in this section prevents HMRC issuing more than one simple assessment in respect of the same settlement and the same year of assessment (whether or not any earlier simple assessment for that year is withdrawn). (10) In this section references to a “simple assessment” are to an assessment under this section. (11) In this Act references to the person to whom a simple assessment relates are, in relation to one made under this section, to the relevant trustees of the settlement to which it relates. (28J) (1) HMRC may withdraw a simple assessment by notice to the person to which it relates. (2) An assessment that has been withdrawn ceases to have effect (and is to be taken as never having had any effect).

4

In section 31 (appeals: right to appeal), before subsection (4) insert—

(3A) In the case of a simple assessment, the right to appeal under subsection (1)(d) does not apply unless and until the person concerned has— (a) raised a query about the assessment under section 31AA, and (b) been given a final response to that query.

5

• (1) Section 31A (appeals: notice of appeal) is amended as follows.

• (2) In subsection (4), after “this Act” insert “ (other than an appeal against a simple assessment) ”.

• (3) After subsection (4) insert—

(4A) In relation to an appeal under section 31(1)(d) against a simple assessment— (a) the specified date is the date on which the person concerned is given notice under section 31AA of the final response to the query the person is required by section 31(3A) to make, and (b) the relevant officer of the Board is the officer by whom the notice of assessment was given.

6

After section 31A (notice of appeal) insert—

(31AA) (1) This section applies where a person has been given notice of a simple assessment. (2) The person may query the simple assessment by notifying HMRC of— (a) a belief that the assessment is or may be incorrect, and (b) the reasons for that belief. (3) The person may exercise the power to query the simple assessment at any time within— (a) the period of 60 days after the date on which the notice of assessment was issued, or (b) such longer period as HMRC may allow. (4) If the simple assessment is queried, HMRC must— (a) consider the query and the matters raised by it, and (b) give a final response to the query. (5) The person may at any time withdraw a query (which terminates HMRC's duties under subsection (4)). (6) If it appears to HMRC that— (a) they need time to consider the matters raised by the query, or (b) further information (whether from the person or anyone else) is required, HMRC may postpone the simple assessment in whole or part (according to how much of it is being queried by the person). (7) If the simple assessment is postponed in whole or part, HMRC must notify the person in writing— (a) whether the assessment is postponed in whole or part, and (b) if it is postponed in part, of the amount that remains payable under the assessment. (8) While the simple assessment is postponed the person is under no obligation to pay— (a) the payable amount specified in the notice of assessment (if the whole assessment is postponed), or (b) the postponed part of the payable amount so specified (if the assessment is postponed in part). (9) After considering the query the final response must be to— (a) confirm the simple assessment, (b) give the person an amended simple assessment (which supersedes the original assessment), or (c) withdraw the simple assessment (without replacing it). (10) HMRC must notify the person in writing of their final response. (11) This section does not apply to an amended simple assessment given as a final response to the query. (12) Nothing in this section affects— (a) a person's right to request an explanation from HMRC of a simple assessment or the information on which it is based, or (b) HMRC's power to give a person such explanation or information as they consider appropriate, whether as part of the querying process under this section or otherwise. (13) In subsection (12) “person” means a person who has been given notice of a simple assessment

.

7

• (1) Section 59B (payment of income tax and capital gains tax) is amended as follows.

• (2) In the heading, at end insert “ : assessments other than simple assessments ”.

• (3) In subsection (6), after “9” insert “ , 28H or 28I ”.

8

After section 59B insert—

(59BA) (1) This section applies where a person has been given a simple assessment in relation to a year of assessment. (2) Subject to subsection (3), the difference between— (a) the amount of income tax and capital gains tax for that year contained in the simple assessment, and (b) the aggregate of any payments on account made by the person in respect of that year (whether under section 59A or 59AA or otherwise) and any income tax which in respect of that year has been deducted at source, is payable by that person as mentioned in subsection (4) or (5). (3) Nothing in subsection (2) is to be read as requiring the repayment of any income tax which any provision of the Income Tax Acts provides is not repayable. (4) In a case where the person is given notice of the simple assessment after the 31st October next after the year of assessment, the difference is payable at the end of the period of 3 months after the day on which that notice was given. (5) In any other case the difference is payable on or before the 31st January next after the end of the year of assessment. (6) Section 59B(7) (which explains references to income tax deducted at source) applies for the purposes of this section. (7) PAYE regulations may provide that, for the purpose of determining the amount of the difference mentioned in subsection (2), any necessary adjustments in respect of matters prescribed in the regulations shall be made to the amount of tax deducted at source under PAYE regulations.

9

• (1) Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended as follows.

• (2) In the Table in paragraph 1, after item 1 insert—

1A	Income tax or capital gains tax	Amount payable under section 59BA(4) or (5) of TMA 1970	The date falling 30 days after the date specified in section 59BA(4) or (5) of TMA 1970 as the date by which the amount must be paid.

• (3) In paragraph 3(1)(a), after “items 1,” insert “ 1A, ”.

SCHEDULE 24

PART 1 — Tax advantages to which section 180(2)applies

Enhanced capital allowances

Creative tax reliefs

Research and development reliefs

PART 2 — Tax advantages to which section 180(5) applies

SCHEDULE 25

Membership

1

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Term of office

2

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Appointment of initial members

3

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

Termination of appointments

4

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

5

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

Remuneration

6

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

Provision of staff and facilities etc.

7

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

Validity of proceedings

8

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

9

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

Supplementary powers

10

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

Finance

11

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

Disqualification

12

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

13

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

Freedom of information

14

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

Public sector equality duty

15

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

Income tax charge and rates for 2016-17

Personal allowance for 2017-18

Savings allowance, and savings nil rate etc

Rates of tax on dividend income, and abolition of dividend tax credits etc

Structure of income tax rates

Taxable benefits: application of Chapters 5 to 7 of Part 3 of ITEPA 2003

Cars: appropriate percentage for 2019-20 and subsequent tax years

Cash equivalent of benefit of a van

Travel expenses of workers providing services through intermediaries

Taxable benefits: PAYE

Taxable benefits: PAYE

Employee share schemes

Standard lifetime allowance from 2016-17

Dependants' scheme pensions

Dependants' scheme pensions

Pension flexibility

Averaging profits of farmers etc

Relief for finance costs related to residential property businesses

EIS and VCTs: definition of certain periods

EIS, SEIS and VCTs: exclusion of energy generation

EIS and VCTs: definition of certain periods

EIS and VCTs: election

Transactions in securities: company distributions

Transactions in securities: company distributions

Transactions in securities: procedure for counteraction of advantage

Income-based carried interest

Tax treatment of supplementary welfare payments: Northern Ireland

Charge for financial year 2017

Abolition of vaccine research relief

Intangible fixed assets: pre-FA 2002 assets

Loans to participators etc: trustees of charitable trusts

Intangible fixed assets: transfers treated as at market value

Banking companies: excluded entities

Banking companies: restrictions on loss relief etc

Reduction in rate of supplementary charge

Investment allowance: disqualifying conditions

Investment allowance: power to expand meaning of “relevant income”

Cluster area allowance: power to expand meaning of “relevant income”

Cluster area allowance: power to expand meaning of “relevant income”

Profits from the exploitation of patents etc

Power to make regulations about the taxation of securitisation companies

Hybrid and other mismatches

Capital allowances: anti-avoidance relating to disposals

Capital allowances: designated assisted areas

Capital allowances: anti-avoidance relating to disposals

Transfer pricing: application of OECD principles

Property business deductions: wear and tear allowance

Corporation tax: territorial scope etc

Corporation tax: transactions in UK land

Income tax: territorial scope etc

Income tax: transactions in UK land

Pre-trading expenses

Reduction in rate of capital gains tax

Entrepreneurs' relief: associated disposals

Entrepreneurs' relief: disposal of goodwill

Entrepreneurs' relief: “trading company” and “trading group”

Employee shareholder shares: disguised fees and carried interest

Inheritance tax: pension drawdown funds

Inheritance tax: victims of persecution during Second World War era

Inheritance tax: victims of persecution during Second World War era

Inheritance tax: gifts for national purposes etc

Estate duty: objects of national, scientific, historic or artistic interest

Apprenticeship levy

Connected charities

Application of other regimes to apprenticeship levy

Anti-avoidance

VAT: representatives and security

Crown application

VAT: power to provide for persons to be eligible for refunds

SDLT: calculating tax on non-residential and mixed transactions

VAT: women's sanitary products

SDLT: calculating tax on non-residential and mixed transactions

SDLT higher rate: land purchased for commercial use

SDLT higher rate: acquisition under regulated home reversion plan

SDLT higher rate: properties occupied by certain employees etc

ATED: properties occupied by certain employees etc

ATED: properties occupied by certain employees etc

ATED: properties occupied by certain employees etc

Stamp duty: acquisition of target company's share capital

Stamp duty: acquisition of target company's share capital

SDRT: transfers to depositaries or providers of clearance services

Landfill tax: rates from 1 April 2017

Landfill tax: rates from 1 April 2018

Insurance premium tax: standard rate

CCL: abolition of exemption for electricity from renewable sources

CCL: abolition of exemption for electricity from renewable sources

CCL: abolition of exemption for electricity from renewable sources

CCL: main rates from 1 April 2018

APD: rates from 1 April 2016

VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc

VED: extension of old vehicles exemption from 1 April 2017

General anti-abuse rule: provisional counteractions

General anti-abuse rule: binding of tax arrangements to lead arrangements

General anti-abuse rule: penalty

Promoters of tax avoidance schemes

Penalties for enablers of offshore tax evasion or non-compliance

HMRC power to withdraw notice to file a tax return

Rate of interest applicable to judgment debts etc: Northern Ireland

HMRC power to withdraw notice to file a tax return

Data-gathering powers: daily penalties for extended default

Data-gathering powers: providers of payment or intermediary services

Data-gathering powers: daily penalties for extended default

Extension of provisions about set-off to Scotland

Interpretation

Power to publish state aid information

Functions of the OTS: general

Short title

Main repeals

Further amendments in ITTOIA 2005

Further amendments in CTA 2010

Other amendments

Commencement

Income tax: sporting testimonial payments treated as earnings

Income tax: limited exemption for sporting testimonial payments

Corporation tax: deductions from total profits for sporting testimonial payments and associated payments

Application of this Schedule

Enterprise management incentives and employee ownership trusts

Share incentive plans

Notification of plans and schemes to HMRC

Price for acquisition of shares under share option

Tag-along rights

Exercise of EMI options

The protection

The initial conditions

Protection-cessation events

Protection-cessation events: interpretation: “benefit accrual”

Protection-cessation events: interpretation: “impermissible transfer”

Protection-cessation events: interpretation: “permitted transfer”

Protection-cessation events: interpretation: “permitted circumstances”

Protection-cessation events: interpretation: relieved non-UK pension schemes

The protection

Amount A (pre-6 April 2006 pensions in payment)

Amount B (pre-6 April 2016 benefit crystallisation events)

Amount C (uncrystallised rights at end of 5 April 2016 under registered pension schemes)

Amount D (uncrystallised rights at end of 5 April 2016 under relieved non-UK schemes)

Issuing of reference numbers for fixed or individual protection 2016

Withdrawal of reference numbers

Appeals against non-issue or withdrawal of reference numbers

Notification of subsequent protection-cessation events

Notification of subsequent pension debits

Personal representatives

Penalties for non-supply, or fraudulent etc supply, of information under paragraph 17 or 18

Preservation of records in connection with individual protection 2016

Amendments of regulations

Interpretation of Parts 1, 2 and 3

Interpretation of Parts 3 and 4 and this Part

Regulations

Serious ill-health lump sums

Charity lump sum death benefits

Dependants' flexi-access drawdown funds

Trivial commutation lump sum

Top-up of dependants' death benefits

Inheritance tax as respects cash alternatives to annuities for dependants etc

Amendments of Chapter 2 of Part 15 of ITA 2007

Amendments relating to Chapter 2 of Part 15 of ITA 2007

Introductory

Non-market loans

Transfer pricing

Exchange gains and losses

Commencement

ICTA

FA 1998

CAA 2001

FA 2007

CTA 2009

FA 2009

CTA 2010

FA 1998

CTA 2009

CTA 2010

TIOPA 2010

Introductory

Definition

Charging of excise duty

Mixing of aqua methanol

Enforcement

Consequential amendments

HODA 1979

FA 1994

Duty to give warning notice

Warning period

Meaning of “tax”

Meaning of “tax advantage” in relation to VAT

Meaning of “non-deductible tax”

“Tax advantage”: other taxes

“DOTAS arrangements”

“Disclosable Schedule 11A VAT arrangements”

Paragraphs 8 to 9A: “failure to comply”

“Relevant defeat”

Condition A

Condition B

Condition C

Condition D

Condition E

Annual information notices

Naming

Duty to give a restriction relief notice

Restriction of relief

The restricted period

Reasonable excuse

Mitigation of restriction of relief

Appeal

Meaning of “avoidance-related rule”

Meaning of “relief”

“Claim” for relief

VAT and indirect taxes

Power to amend

Penalty

Simultaneous defeats etc

Value of the counteracted advantage: basic rule for taxes other than VAT

Value of counteracted advantage: losses for purposes of direct tax

Value of counteracted advantage: deferred tax

Meaning of “the counteracted advantage” in paragraphs 33 and 34

Value of the counteracted advantage: Conditions D and E

Value of counteracted advantage: delayed VAT

Assessment of penalty

Alteration of assessment of penalty

Aggregate penalties

Appeal against penalty

Penalties: reasonable excuse

Paragraph 42: meaning of “the relevant failure”

Mitigation of penalties

Representative member of a VAT group

Corporate groups

Associated persons treated as incurring relevant defeats

Meaning of “associated”

Partners treated as incurring relevant defeats

Partnership returns to which this paragraph applies

Partnerships: information

Partnerships: special provision about taxpayer emendations

Supplementary provision relating to partnerships

Meaning of “adjustments”

Time of “use” of defeated arrangements

Inheritance tax

National insurance contributions

General interpretation

Consequential amendments

Commencement

Purpose of Part 1

“Relevant body”

“UK company”

“UK permanent establishment”

“Qualifying company”

“Group” and related expressions

“Qualifying group”

“UK sub-group” and “head” (in relation to a UK sub-group)

“UK partnership”, “qualifying partnership” and “representative partner”

“Financial year”

“Turnover” and “balance sheet total”

“UK taxation”

Qualifying UK groups: duty to publish a group tax strategy

Content of group tax strategy

Penalty for non-compliance with paragraph 16

UK sub-groups: duty to publish a sub-group tax strategy

Content of a sub-group tax strategy

Penalty for non-compliance with requirements of paragraph 19

Qualifying companies: duty to publish a company tax strategy

Content of a company tax strategy

Penalty for non-compliance with paragraph 22

Qualifying partnerships: duty to publish a partnership tax strategy

Penalties under this Part: general provisions

Failure to comply with a time limit

Reasonable excuse

Assessment of penalties

Appeal

Enforcement

Power to change amount of penalties

Application of provisions of TMA 1970

Meaning of “tax strategy”

Large groups falling within Part 3

Warning notices

Special measures notices

Circumstances in which warning and special measures notices are treated as having been given

Sanctions: liability for penalties for errors in documents given to HMRC

Sanctions: Commissioners publishing information

Application of Part 3 to large UK sub-groups

Application of Part 3 to large companies

Application of Part 3 to large partnerships

Meaning of “designated HMRC officer”

Amendment of power under section 122 of FA 2015

Regulations

Liability for penalty

Meaning of “involving offshore activity” and related expressions

Amount of penalty

Potential lost revenue: enabling Q to commit relevant offence

Potential lost revenue: enabling Q to engage in conduct incurring relevant civil penalty

Treatment of potential lost revenue attributable to both offshore tax evasion or non-compliance and other tax evasion or non-compliance

Reduction of penalty for disclosure etc by P

Procedure for assessing penalty, etc

Appeals

Double jeopardy

Application of provisions of TMA 1970

Interpretation of Part 1

General application of information and inspection powers to suspected enablers

General modifications

Specific modifications

Naming etc of persons assessed to penalty or penalties under paragraph 1

Amendments to Schedule 24 to the Finance Act 2007 (c. 11)

Amendments to Schedule 41 to the Finance Act 2008 (c. 9)

Amendments to Schedule 55 to the Finance Act 2009 (c.10)

Circumstances in which asset-based penalty is payable

Meaning of standard offshore tax penalty

Tax year to which standard offshore tax penalty relates

Potential lost revenue threshold

Offshore PLR

Restriction on imposition of multiple asset-based penalties in relation to the same asset

Standard amount of asset-based penalty

Reductions for disclosure and co-operation

Special reduction

Introduction

Capital gains tax

Inheritance tax

Asset-based income tax

Jointly held assets

Assessment

Appeal

Interpretation

Consequential amendments etc

Membership

Term of office

Appointment of initial members

Termination of appointments

Remuneration

Provision of staff and facilities etc.

Validity of proceedings

Supplementary powers

Finance

Disqualification

Freedom of information

Public sector equality duty

Editorial notes