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Finance (No. 2) Act 2017

Type Public General Act

Publication 2017-11-16

Last updated 2025-03-20

State In force

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Source legislation.gov.uk

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(1) Paragraph 20(1) applies where—

(a) section 23E of ITTOIA 2005 would (ignoring paragraph 20) apply in relation to a relevant benefit arising to T,

(b) the relevant benefit is a loan or quasi-loan in relation to which paragraph 1(2) applies,

(c) an accelerated payment notice, or a partner payment notice, relating to a relevant charge (the “accelerated payment notice”) has been given under Chapter 3 of Part 4 of FA 2014,

(d) T makes a payment (the “accelerated payment”) in respect of the understated or disputed tax to which the notice relates,

(e) the accelerated payment is made on or before 5 April 2019, and

(f) the amount of the loan or quasi-loan that, at the end of 5 April 2019, is outstanding for the purposes of paragraph 1 (see paragraphs 3 to 14) is equal to or less than the amount of the accelerated payment.

(2) In sub-paragraph (1)(c), “relevant charge” means a charge to tax under section 23E of ITTOIA 2005 arising by reason of a relevant benefit which arises to T in pursuance of the relevant arrangement in pursuance of which the relevant benefit mentioned in sub-paragraph (1)(a) and (b) arises.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20

(1) T may make an application to the Commissioners for Her Majesty's Revenue and Customs to be treated—

(a) as if the relevant benefit mentioned in paragraph 19(1)(a) and (b) arises only if the condition in sub-paragraph (2) is met, and

(b) as if it arises immediately before the end of the 30 days beginning with the date on which the condition in sub-paragraph (2) becomes met.

(2) The condition is that, on the withdrawal of the accelerated payment notice or on the determination of an appeal, any part of the accelerated payment is repaid.

(3) Subject to sub-paragraph (4), an application under sub-paragraph (1) may be made in 2018.

(4) An application may be made after 2018 if an officer of Revenue and Customs considers it reasonable in all the circumstances for a late application to be made.

(5) An application must be made in such form and manner, and contain such information, as may be specified by, or on behalf of, the Commissioners for Her Majesty's Revenue and Customs.

(6) An officer of Revenue and Customs must notify the applicant of the decision on an application under this paragraph.

SCHEDULE 13

Liability to penalty

1

(1) A penalty is payable by a person (“P”) who—

(a) carries on an imported goods fulfilment business, and

(b) is not an approved person.

(2) In this Schedule references to a “contravention” are to acting as mentioned in sub-paragraph (1).

Amount of penalty

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.

Reductions for disclosure

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 which P is aware, and

(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, the maximum amount,

(b) in the case of a contravention that is deliberate but not concealed, 35% of the maximum amount, and

(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

Special reduction

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.

Assessment

6

(1) Where P becomes liable for a penalty under this Schedule, the Commissioners must—

(a) assess the penalty,

(b) notify P, and

(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) A penalty under this Schedule is recoverable as a debt due to the Crown.

(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.

Reasonable excuse

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.

Companies: officer’s liability

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

(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,

(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,

(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.

Double jeopardy

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.

The maximum amount

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 this Act 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 occurs wholly before the date on which they come into force.

Appeal tribunal

11

In this Schedule “appeal tribunal” has the same meaning as in Chapter 2 of Part 1 of the Finance Act 1994.

SCHEDULE 14

PART 1 — Amendments of TMA 1970

1

TMA 1970 is amended as follows.

2

(1) Section 7 (notice of liability) is amended as follows.

(2) In subsection (1A) for the words from “under section 8” to the end substitute “ to file under section 8 for the year of assessment ”.

(3) In subsection (1B)(a) for the words from “under section 8” to “gains” substitute “ to file under section 8 for the year of assessment ”.

(4) In subsection (7) for “section 9” substitute “ section 8 or 8A ”.

3

(1) Section 8 (personal return) is amended as follows.

(2) For the heading substitute “ Notices to file: persons other than trustees ”.

(3) For subsection (1) substitute—

(1) For the purpose of establishing— (a) the amounts in which a person is chargeable to income tax and capital gains tax for a year of assessment, and (b) the amount payable by the person by way of income tax for the year, an officer of Revenue and Customs may give the person a notice to file for the year of assessment.

(4) In subsection (1AA)(a) for “return” substitute “ information filed in response to the notice to file or in any end of period statement for the year of assessment provided to HMRC by the person ”.

(5) After subsection (1AA) insert—

(1AB) A notice to file for a year of assessment is a notice requiring the person concerned— (a) to file the following for that year (in addition to any end of period statement for the year that may be required by regulations under paragraph 8 of Schedule A1)— (i) such information as may reasonably be required in pursuance of the notice for the purpose mentioned in subsection (1), (ii) a self-assessment (but see section 9(2)), and (iii) a final declaration, and (b) to deliver to HMRC such accounts, statements, or other documents (relating to the information filed as mentioned in paragraph (a)(i) and (ii)) as may reasonably be required for the purpose mentioned in subsection (1). (1AC) The duty to file the things mentioned in subsection (1AB)(a) is to be complied with— (a) where the person is not required to provide an end of period statement for the year, by making and delivering to HMRC a return containing those things, and (b) where the person is required to provide such a statement, by— (i) making and delivering to HMRC a return containing those things, or (ii) providing those things to HMRC using the facility to file mentioned in paragraph 9 of Schedule A1. (1AD) It is immaterial that any of the information required as mentioned in subsection (1AB)(a)(i) in response to a notice to file has been provided to HMRC before the date of the notice.

(6) In subsection (1B)—

(a) for “a return under this section” substitute “ the information filed in response to a notice to file ”;

(b) after “relevant” insert “ partnership ”.

(7) In subsection (1C)—

(a) after “ “relevant” insert “ partnership ”;

(b) after “means a” insert “ partnership ”;

(8) For subsection (1D) substitute—

(1D) Where the method to be used for complying with a notice to file for a year of assessment (Year 1) is filing a return— (a) if the return is a non-electronic return, the person must comply with the notice on or before 31 October in Year 2, and (b) if the return is an electronic return, the person must comply with the notice on or before 31 January in Year 2.

(9) In subsection (1F) for “a return” substitute “ the return ”.

(10) In subsection (1G) for “a return” substitute “ the return ”.

(11) After subsection (1H) insert—

(1HA) Where the method to be used for complying with a notice to file for a year of assessment (Year 1) is using the facility mentioned in paragraph 9 of Schedule A1, the person must comply with the notice on or before— (a) 31 January in Year 2, or (b) if later, the last day of the period of 3 months beginning with the date of the notice.

(12) For subsection (2) substitute—

(2) The final declaration required by a notice to file is a declaration by the person concerned to the effect that to the best of the person's knowledge the information and self-assessment filed in response to the notice are (taken together) correct and complete.

(13) In subsections (3), (4) and (4A) for “under this section” substitute “ to file ”.

(14) In subsection (4B) for the words from “may” to “income” substitute “ to file may require the information filed in response ”.

(15) After subsection (5) insert—

(6) In this section “notice to file” means a notice to file under this section. (7) In the Taxes Acts, unless the contrary intention appears, a reference (whether specific or general)— (a) to a return under this section for a year of assessment, is to— (i) the information, self-assessment and final declaration filed for the year under this section, and (ii) any end of period statement for the year provided to HMRC; (b) to anything required to be included in a return under this section for a year of assessment, is to— (i) the information, self-assessment and final declaration required to be filed for the year under this section, and (ii) any end of period statement for the year required to be provided to HMRC, and (c) to making or delivering a return under this section, is to— (i) making or delivering a return as mentioned in subsection (1AC)(a) or (b)(i), or (ii) if the response to a notice to file is made using the facility mentioned in paragraph 9 of Schedule A1, making the final declaration required by the notice.

4

(1) Section 8A (trustee's return) is amended as follows.

(2) For the heading substitute “ Notices to file: trustees ”.

(3) For subsection (1) substitute—

(1) For the purpose of establishing— (a) the amounts in which the relevant trustees of a settlement, and the settlors and beneficiaries, are chargeable to income tax and capital gains tax for a year of assessment, and (b) the amount payable by them by way of income tax for the year, an officer of Revenue and Customs may give any relevant trustee a notice to file for the year of assessment. (1ZA) A notice to file may be given to any one trustee or separate notices may be given to each trustee or to such trustees as the officer giving the notice thinks fit.

(4) In subsection (1AA)(a) for “return” substitute “ information filed in response to the notice to file or in any end of period statement for the year of assessment provided to HMRC by the relevant trustees ”.

(5) After subsection (1AA) insert—

(1AB) A notice to file for a year of assessment is a notice requiring the trustee to whom it is given— (a) to file the following for that year (in addition to any end of period statement for the year that may be required by regulations under paragraph 8 of Schedule A1)— (i) such information as may reasonably be required in pursuance of the notice for the purpose mentioned in subsection (1), (ii) a self-assessment (but see section 9(2)), and (iii) a final declaration, and (b) to deliver to HMRC such accounts, statements, or other documents (relating to the information filed as mentioned in paragraph (a)(i) and (ii)) as may reasonably be required for the purpose mentioned in subsection (1). (1AC) The duty to file the things mentioned in subsection (1AB)(a) is to be complied with— (a) where the relevant trustees are not required to provide an end of period statement for the year, by the trustee making and delivering to HMRC a return containing those things, and (b) where the relevant trustees are required to provide such a statement, by the trustee— (i) making and delivering to HMRC a return containing those things, or (ii) providing those things to HMRC using the facility to file mentioned in paragraph 9 of Schedule A1. (1AD) It is immaterial that any of the information required as mentioned in subsection (1AB)(a)(i) in response to a notice to file has been provided to HMRC before the date of the notice.

(6) For subsection (1B) substitute—

(1B) Where the method to be used by the trustee for complying with a notice to file for a year of assessment (Year 1) is filing a return— (a) if the return is a non-electronic return, the trustee must comply with the notice on or before 31 October in Year 2, and (b) if the return is an electronic return, the trustee must comply with the notice on or before 31 January in Year 2.

(7) In subsection (1D) for “a return” substitute “ the return ”.

(8) In subsection (1E) for “a return” substitute “ the return ”.

(9) After subsection (1F) insert—

(1FA) Where the method to be used for complying with a notice to file for a year of assessment (Year 1) is using the facility mentioned in paragraph 9 of Schedule A1, the trustee must comply with the notice on or before— (a) 31 January in Year 2, or (b) if later, the last day of the period of 3 months beginning with the date of the notice.

(10) For subsection (2) substitute—

(2) The final declaration required by a notice to file is a declaration by the trustee to the effect that to the best of the trustee's knowledge the information and self-assessment filed in response to the notice are (taken together) correct and complete.

(11) In subsections (3) and (4) for “under this section” substitute “ to file ”.

(12) After subsection (5) insert—

(6) In this section “notice to file” means a notice to file under this section. (7) In the Taxes Acts, unless the contrary intention appears, a reference (whether specific or general)— (a) to a return under this section for a year of assessment, is to— (i) the information, self-assessment and final declaration filed for the year under this section, and (ii) any end of period statement for the year provided to HMRC, (b) to anything required to be included in a return under this section for a year of assessment, is to— (i) the information, self-assessment and final declaration required to be filed for the year under this section, and (ii) any end of period statement for the year required to be provided to HMRC, and (c) to making or delivering a return under this section, is to— (i) making or delivering a return as mentioned in subsection (1AC)(a) or (b)(i), or (ii) if the response to a notice to file is made using the facility mentioned in paragraph 9 of Schedule A1, making the final declaration required by the notice.

5

In section 8B (withdrawal of notice under section 8 or 8A)—

(a) in the heading after “notice” insert “ to file ”;

(b) in subsection (1) after “notice” insert “ to file ”.

6

(1) Section 9 (returns to include self-assessment) is amended as follows.

(2) For the heading substitute “ Self-assessment required by a notice to file ”.

(3) In subsection (1) for the words from the beginning to “say—” substitute “ Subject to subsection (1A), the self-assessment required by virtue of subsection (1AB)(a) of section 8 or 8A from a person given a notice to file for a year of assessment is— ”.

(4) In subsection (2) for “to comply with subsection (1) above” substitute “ by virtue of section 8 or 8A to make and file a self-assessment ”.

(5) In subsection (3) for the words from “, a person” to “above” substitute “ required by virtue of section 8 or 8A, a person does not include a self-assessment ”.

(6) In subsection (3A) after “self-assessment” insert “ under section 8 or 8A ”.

7

(1) Section 12ZH (NRCGT returns and self-assessment: section 8) is amended as follows.

(2) In subsection (3) for the words from “required” to “return” substitute “ given a notice to file ”.

(3) In subsection (4) after “(1G)” insert “ and (1HA) ”.

(4) In subsections (5) and (6) omit “, for the purposes set out in section 9(1),”.

(5) In subsection (8)(b) for “section 9” substitute “ section 8 ”.

(6) In subsection (10) for “section 9” substitute “ section 8 ”.

(7) In subsection (11) for “section 9” substitute “ section 8 ”.

8

(1) Section 12ZI (NRCGT returns and self-assessment: section 8A) is amended as follows.

(2) In subsection (3) for the words from “required” to “return” substitute “ given a notice to file ”.

(3) In subsection (4)(b) after “(1E)” insert “ and (1FA) ”.

(4) In subsections (5) and (6) omit “, for the purposes set out in section 9(1),”.

(5) In subsection (8)(b) for “section 9” substitute “ section 8A ”.

(6) In subsection (10) for “section 9” substitute “ section 8A ”.

(7) In subsection (11) for “section 9” substitute “ section 8A ”.

9

In section 12AA(10A) (definitions) for “ “partnership return”” substitute “ “section 12AA partnership return” ”.

10

In section 12AB(1) (partnership return to include partnership statement) in the words before paragraph (a) after “Every” insert “ section 12AA ”.

11

(1) Section 12ABA (amendment of partnership return by taxpayer) is amended as follows.

(2) In subsection (1)—

(a) omit the words from “by the” to “successor,”;

(b) at the end insert

given by— (a) in the case of a section 12AA partnership return, the partner who made and delivered the return or his successor, and (b) in the case of a Schedule A1 partnership return, the nominated partner.

(3) In subsection (4) after “date”” insert “ , in relation to a section 12AA partnership return, ”.

(4) After subsection (4) insert—

(5) In this section “the filing date”, in relation to a Schedule A1 partnership return for a year of assessment (Year 1), means 31 January of Year 2.

12

(1) Section 12ABB (HMRC power to correct partnership return) is amended as follows.

(2) In subsection (2), for the words from “by notice” to the end substitute—

(a) in the case of a section 12AA partnership return, by notice to the partner who made and delivered the return, or his successor, and (b) in the case of a Schedule A1 partnership return, by notice to the nominated partner.

(3) In subsection (4) for the words from “the person” to the end substitute

notice rejecting the correction is given— (a) in the case of a section 12AA partnership return, by the person to whom the notice of correction was given or his successor, and (b) in the case of a Schedule A1 partnership return, by the nominated partner.

13

(1) Section 12AC (notice of enquiry into partnership return) is amended as follows.

(2) In subsection (1)—

(a) after “return if” insert “ , within the time allowed, ”;

(b) at the beginning of paragraph (a) insert “ in the case of a section 12AA partnership return, ”;

(aa) in the case of a Schedule A1 partnership return, to the nominated partner.

;

(d) omit paragraph (b).

(3) In subsection (7)—

(a) the words from “the day” to the end become paragraph (a);

(b) at the beginning of that paragraph insert “ in relation to a section 12AA partnership return, ”;

(b) in relation to a Schedule A1 partnership return for a year of assessment (Year 1), means 31 January of Year 2.

14

(1) Section 12B (records to be kept for purposes of returns) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies to any person who may— (a) be given a notice to file under section 8 or 8A in respect of a year of assessment, (b) be required by a notice under section 12AA to make and deliver a partnership return in respect of a year of assessment or other period, or (c) be required by regulations under paragraph 10 of Schedule A1 to provide a partnership return for a year of assessment. (1A) The person must— (a) keep all such records as may be requisite for the purpose of enabling the person to make and deliver a correct and complete return, under that section or those regulations, for that year of assessment or period, and (b) preserve those records until the end of the relevant day (see subsections (2) to (2ZB)).

(3) In subsection (2) for “day referred to in subsection (1) above is” substitute “ relevant day is (subject to subsection (2ZB)) ”.

(4) After subsection (2) insert—

(2ZA) Subsection (2ZB) applies where, before the day mentioned in subsection (2), the person— (a) is given a notice under section 8, 8A or 12AA, or (b) becomes subject to a requirement imposed by regulations under paragraph 10 of Schedule A1. (2ZB) Where this subsection applies the relevant day is the later of the day mentioned in subsection (2), and— (a) if enquiries are made into the return, the day on which under section 28A(1B) or 28B(1B) those enquiries are completed, or (b) if no such enquiries are made, the day on which an officer no longer has power to make them.

(5) In subsection (2A)—

(a) in paragraph (a) for “(1)” substitute “ (1)(a) or (b) ”;

(b) in the words after paragraph (b)—

(i) omit “the relevant day, that is to say,”;

(ii) for “(1)” substitute “ (1A) ”.

(6) In subsection (3)(a) for “(1)” substitute “ (1A) ”.

(7) In subsection (4)—

(a) for “(1)” substitute “ (1A) ”;

(b) at the end insert “ and regulations under paragraph 11 of Schedule A1 ”.

(8) In subsection (5) for “(1)” substitute “ (1A) ”.

15

In section 28ZA(6) (referral of questions during enquiry)—

(a) in paragraph (b) after “of this Act” insert “ into a section 12AA partnership return ”;

(b) after paragraph (b) insert—

(c) in relation to an enquiry under section 12AC(1) of this Act into a Schedule A1 partnership return, the nominated partner.

16

In section 28B(8) (completion of enquiry into partnership return) for the words from “the person” to the end substitute—

(a) in relation to a section 12AA partnership return, the person to whom notice of enquiry was given or his successor, and (b) in relation to a Schedule A1 partnership return, the nominated partner.

17

In section 28C(3) (determination of tax where no return delivered) for “section 9” substitute “ section 8 or 8A ”.

18

In section 28H(2)(b) (simple assessments)—

(a) for the words “to make and deliver such a return” substitute “ imposed ”;

(b) after “notice” insert “ to file ”.

19

In section 28I(2)(b) (simple assessments for trustees)—

(a) for the words “to make and deliver such a return” substitute “ imposed ”;

(b) after “notice” insert “ to file ”.

20

(1) Section 29 (assessment where loss of tax discovered) is amended as follows.

(2) In subsection (2) at the end insert “(or, where the error or mistake is in an end of period statement forming part of the return, if that statement was provided on the basis of or in accordance with the practice generally prevailing at the time when it was provided).

(3) In subsection (6) after paragraph (a) insert—

(aa) it is contained in any information provided by the taxpayer to HMRC under regulations under paragraph 7 of Schedule A1 (periodic updates);

21

In section 30B(10) (amendment of partnership statement where loss of tax discovered) at the end insert “ or (in relation to a Schedule A1 partnership return) the nominated partner ”.

22

(1) Section 42 (procedure for making claims) is amended as follows.

(2) In subsection (2)—

(a) after “of this Act” insert “ , or where a partnership is required to provide a return by regulations under paragraph 10 of Schedule A1, ”;

(b) after “that section” insert “ or those regulations ”.

(3) In subsection (9) after “of this Act” insert “ or a Schedule A1 partnership return ”.

(4) In subsection (11)(a) after “of this Act” insert “ or a Schedule A1 partnership return ”.

23

(1) Section 59A (payments on account of income tax) is amended as follows.

(2) In subsection (1)(a) for “section 9” substitute “ section 8 or 8A ”.

(3) In subsection (4A)(a) for “section 9” substitute “ section 8 or 8A ”.

24

(1) Section 59B (payment of income tax and capital gains tax: assessments other than simple assessments) is amended as follows.

(2) In subsection (1)(a) for “section 9” substitute “ section 8 or 8A ”.

(3) In subsection (4A) for “section 9” substitute “ section 8 or 8A ”.

(4) In subsection (5A) for “section 9” substitute “ section 8 or 8A ”.

(5) In subsection (6) for “section 9” substitute “ section 8 or 8A ”.

25

(1) Section 106C (offence of failing to deliver a return) is amended as follows.

(2) In subsection (1)—

(a) for “required by a notice under section 8 to make and deliver a return” substitute “ given a notice to file under section 8 ”;

(b) in paragraph (a) for “the return” substitute “ a return under that section ”.

(3) In subsection (2) for “the return” substitute “ a return under section 8 ”.

26

In section 106D(1) (offence of making inaccurate return)—

(a) for “required by a notice under section 8 to make and deliver a return” substitute “ given a notice to file under section 8 ”;

(b) in paragraph (a) after “return” insert “ under that section ”.

27

In section 106E (exclusions from offences under sections 106B to 106D) for “or make and deliver the return” substitute “ under section 7, or is given the notice to file under section 8, ”.

28

In section 107A(2)(a) (trustee liability for penalties) after “section 12B of this Act” insert “ or paragraph 12 of Schedule A1 to this Act ”.

29

In section 118(1) (interpretation)—

(a) after the definition of “CTA 2010” insert—

“end of period statement” has the meaning given by paragraph 8(6) of Schedule A1, and references to an end of period statement for a tax year are to be read in accordance with that paragraph;

;

(b) after the definition of “ITA 2007” insert—

“nominated partner” has the meaning given by paragraph 5(5) of Schedule A1;

means (unless the context otherwise requires)— (a) a section 12AA partnership return, or (b) a Schedule A1 partnership return;

;

(d) after the definition of “partnership return” insert—

“partnership statement”— (a) in relation to a section 12AA partnership return, means the statement required by section 12AB; (b) in relation to a Schedule A1 partnership return, has the meaning given by paragraph 10(6) of that Schedule;

(e) after the definition of “return” insert—

“Schedule A1 partnership return” has the meaning given by paragraph 10(6) of Schedule A1; “section 12AA partnership return” has the meaning given by section 12AA(10A) of this Act;

;

(f) in the definition of “successor” after “delivered, a” insert “ section 12AA ”.

30

(1) Paragraph 3 of Schedule 1AB (recovery of overpaid tax) is amended as follows.

(2) In sub-paragraph (2)(a) after “of this Act” insert “ or a Schedule A1 partnership return ”.

(3) In sub-paragraph (3)(a) after “12AA” insert “ or a Schedule A1 partnership return ”.

(4) In sub-paragraph (4) at the end insert “ or a Schedule A1 partnership return ”.

PART 2 — Amendments of other Acts

TCGA 1992

31

In section 188J(2) of TCGA 1992 (the representative company of an NRCGT group) for “section 9(2)” substitute “ section 8(1AB)(a)(iii) ”.

FA 1998

32

In paragraph 12(2) of Schedule 18 to FA 1998 (information about business carried on in partnership) for “statement under section 12AB of” substitute “ partnership statement within the meaning of ”.

CAA 2001

33

In section 201(6) of CAA 2001 (elections) after “section 12AA of” insert “ or regulations under paragraph 10 of Schedule A1 to ”.

Tax Credits Act 2002

34

In section 19(4)(a) of the Tax Credits Act 2002 (power to enquire) for “by section 8 of the Taxes Management Act 1970 (c. 9) to make a return” substitute “ to make a return under section 8 of the Taxes Management Act 1970 ”.

ITTOIA 2005

35

In section 217(2) of ITTOIA 2005 (conditions for basis period to end with new accounting date)—

(a) in paragraph (a)—

(i) after “TMA 1970” insert “ , or of regulations under that Act, ” and

(ii) after “or 12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”;

(b) in paragraph (b) for “provision” substitute “ section or paragraph ”.

ITA 2007

36

In section 964(4)(b) (collection through self-assessment return) for “section 9 of that Act” substitute “ that section ”.

Crossrail Act 2008

37

In paragraph 44(1)(a) of Schedule 13 to the Crossrail Act 2008 (modification of transfer schemes: other persons and partnerships) after “12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

FA 2008

38

(1) Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.

(2) In paragraph 21(1) (taxpayer notices) after “12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

(3) In paragraph 37(2)(a) (partnerships) after “section 12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

TIOPA 2010

39

TIOPA 2010 is amended as follows.

40

In section 94(3) (information made available) in each of paragraphs (a) and (b) after “section 12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

41

In section 95(8)(a) (interpretation of “tax return”) after “12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

42

In section 171(5) (tax returns where transfer pricing notice given), in paragraph (a) of the definition of “tax return”, after “12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

FA 2014

43

FA 2014 is amended as follows.

44

In section 253(6)(c) (definition of “tax return”) after “section 12AA of” insert “ , or regulations under paragraph 10 of Schedule A1 to, ”.

45

(1) Schedule 31 (follower notices and partnerships) is amended as follows.

(2) In paragraph 2 (interpretation)—

(a) in sub-paragraph (3)—

(i) the words from “in pursuance” to the end become paragraph (a);

(ii) at the end of that paragraph insert “ (a “section 12AA partnership return”), or ”;

(iii) after that paragraph insert—

(b) required by regulations under paragraph 10 of Schedule A1 to TMA 1970 (a “Schedule A1 partnership return”).

;

(b) in sub-paragraph (4) after “in relation to a” insert “ section 12AA ”;

(4A) “The nominated partner”, in relation to a Schedule A1 partnership return, has the meaning given by paragraph 5 of Schedule A1 to TMA 1970.

(3) In paragraph 3 (giving of follower notices in relation to partnership returns)—

(a) in sub-paragraph (1), after “in relation to a” insert “ section 12AA ”;

(b) after sub-paragraph (1) insert—

(1A) For the purposes of section 204 a Schedule A1 partnership return, or an appeal in respect of the return, is to be regarded as made by the person who is for the time being the nominated partner (if that would not otherwise be the case).

;

(d) in sub-paragraph (4)—

(i) in paragraph (a), after “or a successor of that partner,” insert “ or as the nominated partner of a partnership, ”;

(ii) in paragraph (b) after “successors of that partner” insert “ or to a nominated partner ”.

(4) In paragraph 5 (calculation of penalty etc) in sub-paragraph (10)—

(a) the words from “the representative partner” to the end become paragraph (a);

(b) at the end of that paragraph insert “ (in relation to a section 12AA partnership return), or ”;

(b) the nominated partner (in relation to a Schedule A1 partnership return).

46

(1) Schedule 32 (accelerated payments and partnerships) is amended as follows.

(2) In paragraph 1 (interpretation)—

(a) in sub-paragraph (2)—

(i) the words from “in pursuance” to the end become paragraph (a);

(ii) at the end of that paragraph insert “ (a “section 12AA partnership return”), or ”;

(iii) after that paragraph insert—

(b) required by regulations under paragraph 10 of Schedule A1 to TMA 1970 (a “Schedule A1 partnership return”).

;

(b) in sub-paragraph (3) after “in relation to a” insert “ section 12AA ”;

(3A) “The nominated partner”, in relation to a Schedule A1 partnership return, has the meaning given by paragraph 5 of Schedule A1 to TMA 1970.

(3) In paragraph 2(2) (restriction on circumstances when accelerated payment notices can be given) after “a successor of that partner” insert “ (in relation to a section 12AA partnership return), or to the nominated partner of the partnership (in relation to a Schedule A1 partnership return) ”.

(4) In paragraph 3(5)(a) (circumstances in which partner payment notices can be given) after “or a successor of that partner” insert “ (in relation to a section 12AA partnership return), or the nominated partner (in relation to a Schedule A1 partnership return) ”.

(5) In paragraph 8(2)(aa) (withdrawal etc of partner payment notices), before “partnership return”, in both places, insert “section 12AA”.

FA 2016

47

FA 2016 is amended as follows.

48

(1) Schedule 18 (serial tax avoidance) is amended as follows.

(2) In paragraph 51(8)(b) (partnerships: information) after “TMA 1970” insert “ , or under equivalent provision made by regulations under paragraph 10 of Schedule A1 to that Act, ”.

(3) In paragraph 52 (partnerships: special provision about taxpayer emendations)—

(a) in sub-paragraph (1) for “subsection (1)(b) of section 12AB of that Act (partnership statement)” substitute “ section 12AB(1)(b) of that Act or under equivalent provision made by regulations under paragraph 10 of Schedule A1 to that Act (partnership statement) ”;

(b) in sub-paragraph (3)—

(i) in the words before paragraph (a), after “that person's successor” insert “ (in the case of a section 12AA partnership return) or the nominated partner (in the case of a Schedule A1 partnership return) ”;

(ii) for “subsection (1)(b) of section 12AB of TMA 1970 (partnership statement)” substitute “ section 12AB(1)(b) of TMA 1970 or under equivalent provision made by regulations under paragraph 10 of Schedule A1 to that Act (partnership statement) ”.

(4) In paragraph 53(1) (supplementary provision relating to partnerships)—

(a) in the definition of “the representative partner” after “in relation to a” insert “ section 12AA ”;

(b) after the definition of “successor” insert—

“the nominated partner”, in relation to a Schedule A1 partnership return, has the meaning given by paragraph 5 of Schedule A1 to TMA 1970.

(5) In paragraph 58(1) (general interpretation), for the definition of “partnership return” substitute—

“partnership return” means a return— (a) under section 12AA of TMA 1970 (a “section 12AA partnership return”), or (b) required by regulations made under paragraph 10 of Schedule A1 to TMA 1970 (a “Schedule A1 partnership return”);

49

(1) Schedule 19 (large businesses: tax strategies and sanctions) is amended as follows.

(2) In paragraph 12(5) (definition of “representative partner”)—

(a) the words from “the partner” to the end become paragraph (a);

(b) at the end of that paragraph insert “ , or ”;

(b) the nominated partner within the meaning of paragraph 5 of Schedule A1 to TMA 1970.

(3) In paragraph 13 (definition of “financial year”) in paragraph (c) for “under a return issued under section 12AB” substitute “ within the meaning of ”.

SCHEDULE 15

TMA 1970

1

TMA 1970 is amended as follows.

2

In section 9A (notice of enquiry), in subsection (5)—

(a) in paragraph (a), omit the final “or”;

(b) for paragraph (b) substitute—

(b) after a final closure notice has been issued in relation to an enquiry into the return, or (c) after a partial closure notice has been issued in such an enquiry in relation to the matters to which the amendment relates or which are affected by the amendment,

3

(1) Section 9B (amendment of return by taxpayer during enquiry) is amended as follows.

(2) In subsection (1), for “is in progress into the return” substitute “ into the return is in progress in relation to any matter to which the amendment relates or which is affected by the amendment ”.

(3) In subsection (3)—

(a) after “in progress” insert “ in relation to any matter to which the amendment relates or which is affected by the amendment ”;

(b) in paragraph (a), for “the closure notice” substitute “ a partial or final closure notice ”;

(c) in paragraph (b), for “the closure notice is issued” substitute “ a partial closure notice is issued in relation to the matters to which the amendment relates or which are affected by the amendment or, if no such notice is issued, a final closure notice is issued ”.

(4) In subsection (4)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

4

(1) Section 9C (amendment of self-assessment during enquiry to prevent loss of tax) is amended as follows.

(2) In subsection (1), for “is in progress into a return” substitute “ into a return is in progress in relation to any matter ”.

(3) In subsection (2), after “deficiency” insert “ so far as it relates to the matter ”.

(4) In subsection (4)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

5

In section 12ZM (NRCGT returns: notice of enquiry), in subsection (4)—

(a) in paragraph (a), omit the final “or”;

(b) for paragraph (b) substitute—

(b) after a final closure notice has been issued in relation to an enquiry into the return, or (c) after a partial closure notice has been issued in such an enquiry in relation to the matters to which the amendment relates or which are affected by the amendment,

6

(1) Section 12ZN (NRCGT returns: amendment of return by taxpayer during enquiry) is amended as follows.

(2) In subsection (1), for “is in progress into the return” substitute “ into the return is in progress in relation to any matter to which the amendment relates or which is affected by the amendment ”.

(3) In subsection (3)—

(a) after “in progress” insert “ in relation to any matter to which the amendment relates or which is affected by the amendment ”;

(b) in paragraph (a), for “the closure notice” substitute “ a partial or final closure notice ”;

(c) in paragraph (b), for “the closure notice is issued” substitute “ a partial closure notice is issued in relation to the matters to which the amendment relates or which are affected by the amendment or, if no such notice is issued, a final closure notice is issued ”.

(4) In subsection (4)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

7

In section 12AC (partnership return: notice of enquiry), in subsection (5)—

(a) in paragraph (a), omit the final “or”;

(b) for paragraph (b) substitute—

(b) after a final closure notice has been issued in relation to an enquiry into the return, or (c) after a partial closure notice has been issued in such an enquiry in relation to the matters to which the amendment relates or which are affected by the amendment,

8

(1) Section 12AD (amendment of partnership return by taxpayer during enquiry) is amended as follows.

(2) In subsection (1), for “is in progress into the return” substitute “ into the return is in progress in relation to any matter to which the amendment relates or which is affected by the amendment ”.

(3) In subsection (3)—

(a) after “in progress” insert “ in relation to any matter to which the amendment relates or which is affected by the amendment ”;

(b) in paragraph (a), for “the closure notice” substitute “ a partial or final closure notice ”;

(c) in paragraph (b), for “the closure notice is issued” substitute “ a partial closure notice is issued in relation to the matters to which the amendment relates or which are affected by the amendment or, if no such notice is issued, a final closure notice is issued ”.

(4) In subsection (4)(a), after “in progress” insert “ in relation to any matter to which the amendment relates or which is affected by the amendment ”.

(5) In subsection (5)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

9

In section 12B (records), in subsection (1)(b)(i), for “28A(1) or 28B(1)” substitute “ 28A(1B) or 28B(1B) ”.

10

(1) Section 28ZA (referral of questions during enquiry) is amended as follows.

(2) In subsection (1), after “of this Act” insert “ in relation to any matter ”.

(3) In subsection (5)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

11

In section 28ZD (effect of referral on enquiry), in subsection (1)—

(a) for paragraph (a) substitute—

(a) no partial closure notice relating to the question referred shall be given, (aa) no final closure notice shall be given in relation to the enquiry, and

;

(b) in paragraph (b), for “such a notice” substitute “ a notice referred to in paragraph (a) or (aa) ”.

12

(1) Section 28A (completion of enquiry into personal, trustee or NRCGT return) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies in relation to an enquiry under section 9A(1) or 12ZM of this Act. (1A) Any matter to which the enquiry relates is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “partial closure notice”) that the officer has completed his enquiries into that matter. (1B) The enquiry is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “final closure notice”) — (a) in a case where no partial closure notice has been given, that the officer has completed his enquiries, or (b) in a case where one or more partial closure notices have been given, that the officer has completed his remaining enquiries.

(3) In subsection (2)—

(a) for “closure notice” substitute “ partial or final closure notice ”;

(b) for “either” substitute “ state the officer's conclusions and ”.

(4) In subsections (3) and (4), for “closure notice” substitute “ partial or final closure notice ”.

(5) In subsection (6), for “a closure notice” substitute “ the partial or final closure notice ”.

(6) After subsection (6) insert—

(7) In this section “the taxpayer” means the person to whom notice of enquiry was given. (8) In the Taxes Acts, references to a closure notice under this section are to a partial or final closure notice under this section.

13

(1) Section 28B (completion of enquiry into partnership return) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies in relation to an enquiry under section 12AC of this Act. (1A) Any matter to which the enquiry relates is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “partial closure notice”) that the officer has completed his enquiries into that matter. (1B) The enquiry is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “final closure notice”)— (a) in a case where no partial closure notice has been given, that the officer has completed his enquiries, or (b) in a case where one or more partial closure notices have been given, that the officer has completed his remaining enquiries.

(3) In subsection (2)—

(a) for “closure notice” substitute “ partial or final closure notice ”;

(b) for “either” substitute “ state the officer's conclusions and ”.

(4) In subsections (3) and (5), for “closure notice” substitute “ partial or final closure notice ”.

(5) In subsection (7), for “a closure notice” substitute “ the partial or final closure notice ”.

(6) After subsection (7) insert—

(8) In this section “the taxpayer” means the person to whom notice of enquiry was given or his successor. (9) In the Taxes Acts, references to a closure notice under this section are to a partial or final closure notice under this section.

14

In section 29 (assessment where loss of tax discovered), in subsection (5), for paragraph (b) substitute—

(b) in a case where a notice of enquiry into the return was given— (i) issued a partial closure notice as regards a matter to which the situation mentioned in subsection (1) above relates, or (ii) if no such partial closure notice was issued, issued a final closure notice,

15

In section 29A (NRCGT disposals: determination of amount which should have been assessed), in subsection (5), for paragraph (b) substitute—

(b) in a case where a notice of enquiry into the return was given— (i) issued a partial closure notice as regards a matter to which the situation mentioned in subsection (1) relates, or (ii) if no such partial closure notice was issued, issued a final closure notice,

16

In section 30 (recovery of overpayment of tax etc), in subsection (5)(b), for “28A(1)” substitute “ 28A(1B) ”.

17

In section 30B (amendment of partnership statement where loss of tax discovered), in subsection (6), for paragraph (b) substitute—

(b) in a case where a notice of enquiry into that return was given— (i) issued a partial closure notice as regards a matter to which the situation mentioned in subsection (1) above relates, or (ii) if no such partial closure notice was issued, issued a final closure notice,

18

In section 31 (appeals: right of appeal), in subsection (2)—

(a) after “in progress” insert “ in relation to any matter to which the amendment relates or which is affected by the amendment ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

19

In section 59AA (NRCGT disposals: payments on account of CGT), in subsection (8)(a), for “28A(1)” substitute “ 28A(1B) ”.

20

In section 59B (payment of income tax and capital gains tax), in subsection (4A)(a), for “28A(1)” substitute “ 28A(1B) ”.

21

(1) In Schedule 3ZA (date by which payment to be made after amendment etc of self-assessment), paragraph 2 is amended as follows.

(2) In sub-paragraph (3)(b)—

(a) for the first “the closure notice” substitute “ a partial or final closure notice ”;

(b) for “the day on which the closure notice was given” substitute “ the relevant day ”.

(3) After sub-paragraph (3) insert—

(4) In sub-paragraph (3)(b), “the relevant day” means— (a) in the case of an amount of tax that is payable, the day on which the partial or final closure notice was given; (b) in the case of an amount of tax that is repayable— (i) if the closure notice was a final closure notice, the day on which that notice was given, and (ii) if the closure notice was a partial closure notice, the day on which the final closure notice relating to the enquiry was given.

TCGA 1992

22

(1) Section 184I of TCGA 1992 (notices under sections 184G and 184H) is amended as follows.

(2) In subsection (4)—

(a) after “completed” insert “ in relation to any matters ”;

(b) after “relevant notice” insert “ relating to those matters ”.

(3) In subsection (5), for “into the return” substitute “ referred to in subsection (4) ”.

(4) In subsection (7)(a), after “period” insert “ (so far as relating to the matters in question) ”.

(5) After subsection (9) insert—

(9A) Subsection (9) does not apply to a partial closure notice which does not relate to any matter to which the relevant notice relates.

(6) In subsection (10), after “completed,” insert “ so far as relating to the matters to which the relevant notice relates, ”.

FA 1998

23

Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.

24

(1) Paragraph 30 (amendment of self-assessment during enquiry to prevent loss of tax) is amended as follows.

(2) In sub-paragraph (1)—

(a) for “before the enquiry is completed” substitute “ while the enquiry is in progress in relation to a matter ”;

(b) after “deficiency” insert “ so far as it relates to the matter ”.

(3) After sub-paragraph (5) insert—

(6) For the purposes of this paragraph, the period during which an enquiry is in progress in relation to any matter is the whole of the period— (a) beginning with the day on which notice of enquiry is given, and (b) ending with the day on which a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued.

25

(1) Paragraph 31 (amendment of return by company during enquiry) is amended as follows.

(2) In sub-paragraph (1), for “is in progress into the return” substitute “ into the return is in progress in relation to any matter to which the amendment relates or which is affected by the amendment ”.

(3) In sub-paragraph (3) for “until after the enquiry is completed” substitute “ while the enquiry is in progress in relation to any matter to which the amendment relates or which is affected by the amendment ”.

(4) In sub-paragraph (4)(a)—

(a) for “the closure notice” substitute “ a partial or final closure notice ”;

(b) for “on the completion of the enquiry” substitute “ when a partial closure notice is issued in relation to the matters to which the amendment relates or which are affected by the amendment or, if no such notice is issued, a final closure notice is issued ”.

(5) In sub-paragraph (5)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

26

(1) Paragraph 31A (referral of questions to the tribunal during enquiry) is amended as follows.

(2) In sub-paragraph (1), for “into” substitute “ in relation to any matter relating to ”.

(3) In sub-paragraph (5)—

(a) after “in progress” insert “ in relation to any matter ”;

(b) for “the enquiry is completed” substitute “ a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued ”.

27

In paragraph 31C (effect of referral on enquiry), in sub-paragraph (1)—

(a) for paragraph (a) substitute—

(a) no partial closure notice relating to the question referred shall be given, (aa) no final closure notice shall be given in relation to the enquiry, and

;

(b) in paragraph (b), for “such a notice” substitute “ a notice referred to in paragraph (a) or (aa) ”.

28

(1) Paragraph 32 (completion of enquiry) is amended as follows.

(2) For sub-paragraph (1) substitute—

(1) Any matter to which an enquiry relates is completed when an officer of Revenue and Customs informs the company by notice (a “partial closure notice”) that they have completed their enquiries into that matter. (1A) An enquiry is completed when an officer of Revenue and Customs informs the company by notice (a “final closure notice”)— (a) in a case where no partial closure notice has been given, that they have completed their enquiries, or (b) in a case where one or more partial closure notices have been given, that they have completed their remaining enquiries. (1B) A partial or final closure notice takes effect when it is issued.

(3) In subsection (2), after “concludes” insert “ in a partial or final closure notice ”.

(4) After sub-paragraph (3) insert—

(4) In the Taxes Acts, references to a closure notice under this paragraph are to a partial or final closure notice under this paragraph.

29

In paragraph 33 (direction to complete enquiry), in sub-paragraphs (1) and (3), for “closure notice” substitute “ partial or final closure notice ”.

30

(1) Paragraph 34 (amendment of return after enquiry) is amended as follows.

(2) In sub-paragraph (1), for “closure notice” substitute “ partial or final closure notice ”.

(3) In sub-paragraph (2)—

(a) for “closure notice” substitute “ partial or final closure notice ”;

(b) after “must” insert “ state the officer's conclusions and ”.

(4) In sub-paragraphs (2A), (4)(c) and (5), for “closure notice” substitute “ partial or final closure notice ”.

31

In paragraph 42 (restriction on power to make discovery assessment or determination), in sub-paragraph (2A), for the words from “after any” to the end substitute “ a notice within sub-paragraph (4) after any enquiries have been completed into the return (so far as relating to the matters to which the notice relates) ”.

32

In paragraph 44 (situation not disclosed by return or related document etc), in sub-paragraph (1), for paragraph (b) substitute—

(b) in a case where a notice of enquiry into the return was given— (i) issued a partial closure notice as regards a matter to which the situation mentioned in paragraph 41(1) or (2) relates, or (ii) if no such partial closure notice was issued, issued a final closure notice,

33

In paragraph 61 (consequential claims etc), in sub-paragraphs (1)(a) and (3)(a), for “closure notice” substitute “ partial or final closure notice ”.

34

(1) Paragraph 88 (conclusiveness) is amended as follows.

(2) In sub-paragraph (3)(b), at the end insert “ (or is completed so far as relating to the matters to which the amount relates by the issue of a partial closure notice) ”.

(3) In sub-paragraph (4)(b), at the end insert “ (or the completion of the enquiry so far as relating to the matters to which the amount relates by the issue of a partial closure notice) ”.

Tax Credits Act 2002

35

(1) Section 20 of the Tax Credits Act 2002 (decisions on discovery) is amended as follows.

(2) In subsection (2)(f), for “a closure notice” substitute “ a partial or final closure notice ”.

(3) In subsection (3)(b), at the end insert “ as specified in subsection (1) ”.

FA 2008

36

In Schedule 36 to FA 2008 (information and inspection powers), in paragraphs 21(4) and 21ZA(3), at the end insert “ so far as relating to the matters to which the taxpayer notice relates ”.

TIOPA 2010

37

TIOPA 2010 is amended as follows.

38

(1) Section 92 (counteraction notices given after tax return made) is amended as follows.

(2) In subsection (3)—

(a) after “completed” insert “ in relation to any matters ”;

(b) after “counteraction notice” insert “ relating to those matters ”.

(3) In subsection (4), after “enquiries” insert “ referred to in subsection (3) ”.

(4) In subsection (5)(a), after “return” insert “ (so far as relating to the matters in question) ”.

39

(1) Section 93 (amendment, closure notices and discovery assessments in section 92 cases) is amended as follows.

(2) After subsection (3) insert—

(3A) Subsection (3) does not apply to a partial closure notice which does not relate to any matter to which the counteraction notice relates.

(3) In subsection (4), after “completed,” insert “ so far as relating to the matters to which the counteraction notice relates, ”.

40

In section 171 (tax returns where transfer pricing notice given), after subsection (2) insert—

(2A) Subsection (2) does not apply to a partial closure notice which does not relate to any matter to which the transfer pricing notice relates.

41

(1) Section 256 (notices given after tax return made), so far as continuing to have effect, is amended as follows.

(2) In subsection (2)—

(a) after “completed” insert “ in relation to any matters ”;

(b) after “receipt notice” insert “ relating to those matters ”.

(3) In subsection (6)(a), after “return” insert “ (so far as relating to the matters in question) ”.

42

(1) Section 257 (amendments, closure notices etc), so far as continuing to have effect, is amended as follows.

(2) After subsection (4) insert—

(4A) Subsection (4) does not apply to a partial closure notice which does not relate to any matter to which the Part 6 notice relates.

(3) In subsection (5), after “completed,” insert “ so far as relating to the matters to which the Part 6 notice relates, ”.

43

In section 371IJ (claims), in subsection (4)(b), after “completed” insert “ so far as relating to the matters to which the claim relates ”.

Commencement

44

The amendments made by this Schedule have effect in relation to an enquiry under section 9A, 12ZM or 12AC of TMA 1970 or Schedule 18 to FA 1998 where—

(a) notice of the enquiry is given on or after the day on which this Act is passed, or

(b) the enquiry is in progress immediately before that day.

SCHEDULE 16

PART 1 — Liability to penalty

1

Where—

(a) a person (“T”) has entered into abusive tax arrangements, and

(b) T incurs a defeat in respect of the arrangements,

a penalty is payable by each person who enabled the arrangements.

2

(1) Parts 2 to 4 of this Schedule define—

“abusive tax arrangements”;

a “defeat in respect of the arrangements”;

a “person who enabled the arrangements”.

(2) The other Parts of this Schedule make provision supplementing paragraph 1 as follows—

(a) Part 5 makes provision about the amount of a penalty;

(b) Parts 6 to 8 provide for the assessment of penalties, referrals to the GAAR Advisory Panel and appeals against assessments;

(c) Part 9 applies information and inspection powers, and makes provision about declarations relating to legally privileged communications;

(d) Part 10 confers power to publish details of persons who have incurred penalties;

(e) Parts 11 and 12 contain miscellaneous and general provisions.

PART 2 — “Abusive” and “tax arrangements”: meaning

3

(1) Arrangements are “tax arrangements” for the purposes of this Schedule 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.

(2) Tax arrangements are “abusive” for the purposes of this Schedule if they are arrangements the entering into or carrying out of which cannot reasonably be regarded as a reasonable course of action in relation to the relevant tax provisions, having regard to all the circumstances.

(3) The circumstances to which regard must be had under sub-paragraph (2) include—

(a) whether the substantive results, or the intended substantive results, of the arrangements are consistent with any principles on which the relevant tax provisions are based (whether express or implied) and the policy objectives of those provisions,

(b) whether the means of achieving those results involves one or more contrived or abnormal steps, and

(4) Where the tax arrangements form part of any other arrangements regard must also be had to those other arrangements.

(5) Each of the following is an example of something which might indicate that tax arrangements are abusive—

(a) the arrangements result in an amount of income, profits or gains for tax purposes that is significantly less than the amount for economic purposes;

(b) the arrangements result in deductions or losses of an amount for tax purposes that is significantly greater than the amount for economic purposes;

(c) the arrangements result in a claim for the repayment or crediting of tax (including foreign tax) that has not been, and is unlikely to be, paid;

but a result mentioned in paragraph (a), (b) or (c) is to be taken to be such an example only if it is reasonable to assume that such a result was not the anticipated result when the relevant tax provisions were enacted.

(6) The fact that tax arrangements accord with established practice, and HMRC had, at the time the arrangements were entered into, indicated their acceptance of that practice, is an example of something which might indicate that the arrangements are not abusive.

(7) The examples given in sub-paragraphs (5) and (6) are not exhaustive.

(8) In sub-paragraph (5) the reference to income includes earnings, within the meaning of Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

PART 3 — “Defeat” in respect of abusive tax arrangements

“Defeat” in respect of abusive tax arrangements

4

T (within the meaning of paragraph 1) incurs a “defeat” in respect of abusive tax arrangements entered into by T (“the arrangements concerned”) if—

(a) Condition A (in paragraph 5) is met, or

(b) Condition B (in paragraph 6) is met.

Condition A

5

(1) Condition A is that—

(a) T, or a person on behalf of T, has given HMRC a document of a kind listed in the Table in paragraph 1 of Schedule 24 to FA 2007 (returns etc),

(b) the document was submitted on the basis that a tax advantage (“the relevant tax advantage”) arose from the arrangements concerned,

(d) the counteraction is final.

(2) For the purposes of this paragraph the relevant tax advantage has been “counteracted” if adjustments have been made in respect of T's tax position on the basis that the whole or part of the relevant tax advantage does not arise.

(3) For the purposes of this paragraph a counteraction is “final” when the adjustments in question, and any amounts arising from the adjustments, can no longer be varied, on appeal or otherwise.

(4) In this paragraph “adjustments” means any adjustments, whether by way of an assessment, the modification of an assessment or return, the amendment or disallowance of a claim, a payment, the entering into of a contract settlement or otherwise.

Accordingly, references to “making” adjustments include securing that adjustments are made by entering into a contract settlement.

(5) Any reference in this paragraph to giving HMRC a document includes—

(a) communicating information to HMRC in any form and by any method;

(b) making a statement or declaration in a document.

(6) Any reference in this paragraph to a document of a kind listed in the Table in paragraph 1 of Schedule 24 to FA 2007 includes—

(a) a document amending a document of a kind so listed, and

(b) a document which—

(i) relates to national insurance contributions, and

(ii) is a document in relation to which that Schedule applies.

Condition B

6

(1) Condition B is that (in a case not falling within Condition A)—

(a) HMRC have made an assessment in relation to tax,

(b) the assessment counteracts a tax advantage that it is reasonable to assume T expected to obtain from the arrangements concerned (“the expected tax advantage”), and

(2) For the purposes of this paragraph an assessment “counteracts” the expected tax advantage if the assessment is on a basis which prevents T from obtaining (or obtaining the whole of) the expected tax advantage.

(3) For the purposes of this paragraph a counteraction is “final”—

(a) when a relevant contract settlement is made, or

(b) if no contract settlement has been made, when the assessment in question and any amounts arising from the assessment can no longer be varied, on appeal or otherwise.

(4) In sub-paragraph (3) a “relevant contract settlement” means a contract settlement on a basis which prevents T from obtaining (or obtaining the whole of) the expected tax advantage.

PART 4 — Persons who “enabled” the arrangements

Persons who “enabled” the arrangements

7

(1) A person is a person who “enabled” the arrangements mentioned in paragraph 1 if that person is—

(a) a designer of the arrangements (see paragraph 8),

(b) a manager of the arrangements (see paragraph 9),

(d) an enabling participant in the arrangements (see paragraph 11), or

(e) a financial enabler in relation to the arrangements (see paragraph 12).

(2) This paragraph is subject to paragraph 13 (excluded persons).

Designers of arrangements

8

(1) For the purposes of paragraph 7 a person is a “designer” of the arrangements if that person was, in the course of a business carried on by that person, to any extent responsible for the design of—

(a) the arrangements, or

(b) a proposal which was implemented by the arrangements;

but this is subject to sub-paragraph (2).

(2) Where a person would (in the absence of this sub-paragraph) fall within sub-paragraph (1) because of having provided advice which was used in the design of the arrangements or of a proposal, that person does not because of that advice fall within that sub-paragraph unless—

(a) the advice is relevant advice, and

(b) the knowledge condition is met.

(3) Advice is “relevant advice” if—

(a) the advice or any part of it suggests arrangements or an alteration of proposed arrangements, and

(b) it is reasonable to assume that the suggestion was made with a view to arrangements being designed in such a way that a tax advantage (or a greater tax advantage) might be expected to arise from them.

(4) The knowledge condition is that, when the advice was provided, the person providing it knew or could reasonably be expected to know—

(a) that the advice would be used in the design of abusive tax arrangements or of a proposal for such arrangements, or

(b) that it was likely that the advice would be so used.

(5) For the purposes of sub-paragraph (3), advice is not to be taken to “suggest” anything—

(a) which is put forward by the advice for consideration, but

(b) which the advice can reasonably be read as recommending against.

(6) In sub-paragraph (3)—

(a) the reference in paragraph (a) to arrangements or an alteration of proposed arrangements includes a proposal for arrangements or an alteration of a proposal for arrangements, and

(b) the reference in paragraph (b) to arrangements includes arrangements proposed by a proposal.

(7) For the purposes of this paragraph—

(a) references to advice include an opinion;

(b) advice is “used” in a design if the advice is taken account of in that design.

Managers of arrangements

9

(1) For the purposes of paragraph 7 a person is a “manager” of the arrangements if that person—

(a) was, in the course of a business carried on by that person, to any extent responsible for the organisation or management of the arrangements, and

(b) when carrying out any functions in relation to the organisation or management of the arrangements, knew or could reasonably be expected to know that the arrangements involved were abusive tax arrangements.

(2) Where—

(a) a person is, in the course of a business carried on by the person, to any extent responsible for facilitating T's withdrawal from the arrangements, and

(b) it is reasonable to assume that the obtaining of a tax advantage is not T's purpose (or one of T's purposes) in withdrawing from the arrangements,

that person is not because of anything done in the course of facilitating that withdrawal to be regarded as to any extent responsible for the organisation or management of the arrangements.

Marketers of arrangements

10

For the purposes of paragraph 7 a person “marketed” the arrangements to T if, in the course of a business carried on by that person—

(a) that person made available for implementation by T a proposal which has since been implemented, in relation to T, by the arrangements, or

(b) that person—

(i) communicated information to T or another person about a proposal which has since been implemented, in relation to T, by the arrangements, and

(ii) did so with a view to T entering into the arrangements or transactions forming part of the arrangements.

Enabling participants

11

For the purposes of paragraph 7 a person is “an enabling participant” in the arrangements if—

(a) that person is a person (other than T) who enters into the arrangements or a transaction forming part of the arrangements,

(b) without that person's participation in the arrangements or transaction (or the participation of another person in the arrangements or transaction in the same capacity as that person), the arrangements could not be expected to result in a tax advantage for T, and

(c) when that person entered into the arrangements or transaction, that person knew or could reasonably be expected to know that what was being entered into was abusive tax arrangements or a transaction forming part of such arrangements.

Financial enablers

12

(1) For the purposes of paragraph 7 a person is a “financial enabler” in relation to the arrangements if—

(a) in the course of a business carried on by that person, that person provided a financial product (directly or indirectly) to a relevant party,

(b) it is reasonable to assume that the purpose (or a purpose) of the relevant party in obtaining the financial product was to participate in the arrangements, and

(c) when the financial product was provided, the person providing it knew or could reasonably be expected to know that the purpose (or a purpose) of obtaining it was to participate in abusive tax arrangements.

(2) In this paragraph “a relevant party” means T or an enabling participant in the arrangements within the meaning given by paragraph 11.

(3) Any reference in this paragraph to a person's providing a financial product to a relevant party includes (but is not limited to) the person's doing any of the following—

(a) providing a loan to a relevant party;

(b) issuing or transferring a share to a relevant party;

(i) the person becomes a party to a relevant contract within the meaning of section 577 of CTA 2009 (derivative contracts);

(ii) there is a repo in respect of securities within the meaning of section 263A(A1) of TCGA 1992;

(iii) the person or the relevant party has a creditor repo, creditor quasi-repo, debtor repo or debtor quasi-repo within the meaning of sections 543, 544, 548 and 549 of CTA 2009;

(d) entering into a stock lending arrangement, within the meaning of section 263B(1) of TCGA 1992, with a relevant party;

(e) entering into an alternative finance arrangement, within the meaning of Chapter 6 of Part 6 of CTA 2009 or Part 10A of ITA 2007, with a relevant party;

(f) entering into a contract with a relevant party which, whether alone or in combination with one or more other contracts—

(i) is in accordance with generally accepted accounting practice required to be treated as a loan, deposit or other financial asset or obligation, or

(ii) would be required to be so treated by the person if the person were a company to which the Companies Act 2006 applies;

and references to obtaining a financial product are to be read accordingly.

(4) The Treasury may by regulations amend sub-paragraph (3).

Excluded persons

13

(1) A person who—

(a) would (in the absence of this paragraph) be regarded for the purposes of this Schedule as having enabled particular arrangements mentioned in paragraph 1, but

(b) is a person within sub-paragraph (2),

is not to be regarded as having enabled those arrangements.

(2) The persons within this sub-paragraph are—

(a) T;

(b) where T is a company, any company in the same group as T.

Powers to add categories of enabler and to provide exceptions

14

(1) The Treasury may by regulations add to the categories of persons who, in relation to arrangements mentioned in paragraph 1, are for the purposes of this Schedule persons who enabled the arrangements.

(2) The Treasury may by regulations provide that a person who would otherwise be regarded for the purposes of this Schedule as having enabled arrangements is not to be so regarded where conditions prescribed by the regulations are met.

(3) Regulations under this paragraph may—

(a) amend this Part of this Schedule;

(b) make supplementary, incidental, and consequential provision, including provision amending any other Part of this Schedule;

PART 5 — Amount of penalty

Amount of penalty

15

(1) For each person who enabled the arrangements mentioned in paragraph 1, the penalty payable under paragraph 1 is the total amount or value of all the relevant consideration received or receivable by that person (“the person in question”).

(2) Particular consideration is “relevant” for the purposes of this paragraph if—

(a) it is consideration for anything done by the person in question which enabled the arrangements mentioned in paragraph 1, and

(b) it has not previously been taken into account in calculating the amount of a penalty payable under paragraph 1.

(3) For the purposes of this paragraph a thing done by a person “enabled” the arrangements mentioned in paragraph 1 if, by doing that thing (alone or with anything else), the person fell within the definition in Part 4 of this Schedule of a person who enabled those arrangements.

16

(1) This paragraph applies for the purposes of paragraph 15.

(2) Where consideration for anything done by a person (“A”) is, under any arrangements with A, paid or payable to a person other than A, it is to be taken to be received or receivable by A.

(3) The “consideration” for anything done by a person does not include any amount charged by that person in respect of value added tax.

(4) Consideration attributable to two or more transactions is to be apportioned on a just and reasonable basis.

(5) Any consideration given for what is in substance one bargain is to be treated as attributable to all elements of the bargain, even though—

(a) separate consideration is, or purports to be, given for different elements of the bargain, or

(b) there are, or purport to be, separate transactions in respect of different elements of the bargain.

Reduction of penalty where other penalties incurred

17

(1) The amount of a penalty for which a person is liable under paragraph 1 is to be reduced by the amount of any other penalty incurred by the person in respect of conduct for which the person is liable to the penalty under paragraph 1.

(2) In this paragraph “any other penalty” means a penalty—

(a) which is a penalty under a provision other than paragraph 1, and

(b) which has been assessed.

Mitigation of penalty

18

(1) HMRC may in their discretion reduce a penalty under paragraph 1.

(2) In this paragraph the reference to reducing a penalty includes a reference to—

(a) entirely remitting the penalty, or

(b) staying, or agreeing a compromise in relation to, proceedings for the recovery of a penalty.

PART 6 — Assessment of penalty

Assessment of penalty

19

(1) Where a person is liable for a penalty under paragraph 1 HMRC must—

(a) assess the penalty, and

(b) notify the person.

(2) If—

(a) HMRC do not have all the information required to determine the amount or value of the relevant consideration within the meaning of paragraph 15, and

(b) HMRC have taken all reasonable steps to obtain that information,

HMRC may assess the penalty on the basis of a reasonable estimate by HMRC of that consideration.

(3) This paragraph is subject to—

(a) paragraphs 21 and 22 (limits on when penalty may be assessed); and

(b) Part 7 of this Schedule (requirement for opinion of GAAR Advisory Panel before penalty may be assessed).

20

(1) A penalty under paragraph 1 must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.

(2) An assessment of a penalty under paragraph 1—

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

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

Special provision about assessment for multi-user schemes

21

(1) This paragraph applies where—

(a) a proposal for arrangements is implemented more than once, by a number of tax arrangements which are substantially the same as each other (“related arrangements”),

(b) paragraph 1 applies in relation to particular arrangements (“the arrangements concerned”) which are one of the number of related arrangements implementing the proposal, and

(c) at the time when the person who entered into the arrangements concerned incurs a defeat in respect of them (other than a tribunal or court defeat), neither condition 1 nor condition 2 has been met.

(2) HMRC may not assess any penalty payable under paragraph 1 in respect of the arrangements concerned until condition 1 or condition 2 is met.

(2A) Condition 1 is that a defeat that is a tribunal or court defeat is incurred in the case of at least one of the number of related arrangements implementing the proposal.

(2B) Condition 2 is that the required number or percentage of relevant defeats is reached.

(2C) For the purposes of this paragraph, a defeat incurred in respect of arrangements is a “tribunal or court defeat” if—

(a) condition A (in paragraph 5) is met and the adjustments mentioned in paragraph 5(2) have been confirmed by a tribunal or court, or

(b) condition B (in paragraph 6) is met and the assessment mentioned in paragraph 6(2) has been confirmed by a tribunal or court.

(2D) An adjustment or assessment (as the case may be) has been confirmed by a tribunal or court if the First-tier Tribunal, the Upper Tribunal or a court has determined in proceedings before it that the adjustment or assessment in question should not be varied.

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