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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

Department Statute Law Database

Source legislation.gov.uk

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(7) The amendments made by this section have effect in relation to disposals made on or after 1 April 2017.

Domicile, overseas property etc

Deemed domicile: income tax and capital gains tax

29

(1) In Chapter 2A of Part 14 of ITA 2007 (income tax liability: domicile), after section 835B insert—

(835BA) (1) This section has effect for the purposes of the provisions of the Income Tax Acts or TCGA 1992 which apply this section. (2) An individual not domiciled in the United Kingdom at a time in a tax year (“the relevant tax year”) is to be regarded as domiciled in the United Kingdom at that time if— (a) condition A is met, or (b) condition B is met. (3) Condition A is that— (a) the individual was born in the United Kingdom, (b) the individual's domicile of origin was in the United Kingdom, and (c) the individual is UK resident for the relevant tax year. (4) Condition B is that the individual has been UK resident for at least 15 of the 20 tax years immediately preceding the relevant tax year. (5) But Condition B is not met if— (a) the individual is not UK resident for the relevant tax year, and (b) there is no tax year beginning after 5 April 2017 and preceding the relevant tax year in which the individual was UK resident.

(2) Schedule 8 contains—

(a) provision applying section 835BA of ITA 2007, and

(b) further provision relating to this section.

Deemed domicile: inheritance tax

30

(1) In section 267 of IHTA 1984 (persons treated as domiciled in the United Kingdom), in subsection (1)—

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

(b) after that paragraph insert—

(aa) he is a formerly domiciled resident for the tax year in which the relevant time falls (“the relevant tax year”), or

;

(b) he was resident in the United Kingdom— (i) for at least fifteen of the twenty tax years immediately preceding the relevant tax year, and (ii) for at least one of the four tax years ending with the relevant tax year.

(2) In that section, omit subsection (3).

(3) In that section, in subsection (4), for “in any year of assessment” substitute “ for any tax year ”.

(4) In section 48 of that Act (settlements: excluded property)—

(a) in subsection (3)(b), for “and (3D)” substitute “ to (3E) ”;

(b) in subsection (3A)(b), for “subsection (3B)” substitute “ subsections (3B) and (3E) ”;

(3E) In a case where the settlor of property comprised in a settlement is not domiciled in the United Kingdom at the time the settlement is made, the property is not excluded property by virtue of subsection (3) or (3A) above at any time in a tax year if the settlor was a formerly domiciled resident for that tax year.

(5) In section 64 of that Act (charge at ten-year anniversary), in subsection (1B), after “was made” insert “ and is not a formerly domiciled resident for the tax year in which the ten-year anniversary falls ”.

(6) In section 65 of that Act (charge at other times), after subsection (7A) insert—

(7B) Tax shall not be charged under this section by reason only that property comprised in a settlement becomes excluded property by virtue of section 48(3E) ceasing to apply in relation to it.

(7) In section 82 of that Act (excluded property)—

(a) for subsection (1) substitute—

(1) In a case where, apart from this section, property to which section 80 or 81 applies would be excluded property by virtue of section 48(3)(a) above, that property shall not be taken to be excluded property at any time (“the relevant time”) for the purposes of this Chapter (except sections 78 and 79) unless Conditions A and B are satisfied.

;

(b) in subsection (2), for “the condition in subsection (3) below” substitute “ Condition A ”;

(d) after subsection (3) insert—

(4) Condition B referred to in subsection (1) above is— (a) in the case of property to which section 80 above applies, that the person who is the settlor in relation to the settlement first mentioned in that section, and (b) in the case of property to which subsection (1) or (2) of section 81 above applies, that the person who is the settlor in relation to the first or second of the settlements mentioned in that subsection, was not a formerly domiciled resident for the tax year in which the relevant time falls.

(8) In section 272 of that Act (interpretation)—

(a) for the definition of “foreign-owned” substitute—

“foreign-owned”, in relation to property at any time, means property— (a) in the case of which the person beneficially entitled to it is at that time domiciled outside the United Kingdom, or (b) if the property is comprised in a settlement, in the case of which the settlor— (i) is not a formerly domiciled resident for the tax year in which that time falls, and (ii) was domiciled outside the United Kingdom when the property became comprised in the settlement;

;

(b) at the appropriate place insert—

“formerly domiciled resident”, in relation to a tax year, means a person— (a) who was born in the United Kingdom, (b) whose domicile of origin was in the United Kingdom, (c) who was resident in the United Kingdom for that tax year, and (d) who was resident in the United Kingdom for at least one of the two tax years immediately preceding that tax year;

(9) The amendments made by this section have effect in relation to times after 5 April 2017, subject to subsections (10) to (12).

(10) The amendment to section 267(1) of IHTA 1984 made by subsection (1)(c) does not have effect in relation to a person if—

(a) the person is not resident in the United Kingdom for the relevant tax year, and

(b) there is no tax year beginning after 5 April 2017 and preceding the relevant tax year in which the person was resident in the United Kingdom.

In this subsection “relevant tax year” is to be construed in accordance with section 267(1) of IHTA 1984 as amended by subsection (1).

(11) The amendment to section 267(1) of IHTA 1984 made by subsection (1)(c) also does not have effect in determining—

(a) whether settled property which became comprised in the settlement on or before that date is excluded property for the purposes of IHTA 1984;

(b) the settlor's domicile for the purposes of section 65(8) of that Act in relation to settled property which became comprised in the settlement on or before that date;

(c) whether, for the purpose of section 65(8) of that Act, the condition in section 82(3) of that Act is satisfied in relation to such settled property.

(12) Despite subsection (2), section 267(1) of IHTA 1984, as originally enacted, shall continue to be disregarded in determining—

(a) whether settled property which became comprised in the settlement on or before 9 December 1974 is excluded property for the purposes of IHTA 1984;

(b) the settlor's domicile for the purposes of section 65(8) of that Act in relation to settled property which became comprised in the settlement on or before that date;

(c) whether, for the purpose of section 65(8) of that Act, the condition in section 82(3) of that Act is satisfied in relation to such settled property.

(13) Subsections (14) and (15) apply if an amount of inheritance tax—

(a) would not be charged but for the amendments made by this section, or

(b) is, because of those amendments, greater than it would otherwise have been.

(14) Section 233 of IHTA 1984 (interest on unpaid inheritance tax) applies in relation to the amount of inheritance tax as if the reference, in the closing words of subsection (1) of that section, to the end of the period mentioned in paragraph (a), (aa), (b) or (c) of that subsection were a reference to—

(a) the end of that period, or

(b) if later, the end of the month immediately following the month in which this Act is passed.

(15) Subsection (1) of section 234 of IHTA 1984 (cases where inheritance tax payable by instalments carries interest only from instalment dates) applies in relation to the amount of inheritance tax as if the reference, in the closing words of that subsection, to the date at which an instalment is payable were a reference to—

(a) the date at which the instalment is payable, or

(b) if later, the end of the month immediately following the month in which this Act is passed.

(16) Subsection (17) applies if—

(a) a person is liable as mentioned in section 216(1)(c) of IHTA 1984 (trustee liable on 10-year anniversary, and other trust cases) for an amount of inheritance tax charged on an occasion, and

(b) but for the amendments made by this section—

(i) no inheritance tax would be charged on that occasion, or

(ii) a lesser amount of inheritance tax would be charged on that occasion.

(17) Section 216(6)(ad) of IHTA 1984 (delivery date for accounts required by section 216(1)(c)) applies in relation to the account to be delivered in connection with the occasion as if the reference to the expiration of the period of 6 months from the end of the month in which the occasion occurs were a reference to—

(a) the expiration of that period, or

(b) if later, the end of the month immediately following the month in which this Act is passed.

Settlements and transfer of assets abroad: value of benefits

31

Schedule 9 makes provision about the value of benefits received in relation to settlements and the transfer of assets abroad.

Exemption from attribution of carried interest gains

32

(1) TCGA 1992 is amended as follows.

(2) In section 13(1A) (attribution of gains to members of non-resident companies)—

(a) omit the “or” at the end of paragraph (a), and

(b) at the end of paragraph (b), insert

, or (c) a chargeable gain treated as accruing under section 103KA(2) or (3) (carried interest gains).

(3) In section 86 (attribution of gains to settlors with interest in non-resident or dual resident settlements), after subsection (4ZA) insert—

(4ZB) Where (apart from this subsection) the amount mentioned in subsection (1)(e) would include an amount of chargeable gains treated as accruing under section 103KA(2) or (3) (carried interest gains), the amount of the gains is to be disregarded for the purposes of subsection (1)(e).

(4) In section 87 (non-UK resident settlements: attribution of gains to beneficiaries), after subsection (5A) insert—

(5B) Where (apart from this subsection) the amount mentioned in subsection (4)(a) would include an amount of chargeable gains treated as accruing under section 103KA(2) or (3) (carried interest gains), the amount of the gains is to be disregarded for the purposes of determining the section 2(2) amount.

(5) The amendments made by this section have effect in relation to chargeable gains treated as accruing under section 103KA(2) or (3) of TCGA 1992 at any time before, as well as after, the passing of this Act.

Inheritance tax on overseas property representing UK residential property

33

Schedule 10 makes provision about the extent to which overseas property is excluded property for the purposes of inheritance tax, in cases where the value of the overseas property is attributable to residential property in the United Kingdom.

Disguised remuneration

Employment income provided through third parties

34

(1) In section 554XA of ITEPA 2003 (employment income provided through third parties: exclusion for payments in respect of a tax liability), in subsection (2), omit paragraphs (a) and (b).

(2) The amendment made by subsection (1) has effect in relation to relevant steps taken on or after 21 July 2017.

(3) Schedule 11 makes provision about the application of Part 7A of ITEPA 2003 in relation to loans and quasi-loans that are outstanding on 5 April 2019.

Trading income provided through third parties

35

(1) ITTOIA 2005 is amended as follows.

(2) After section 23 insert—

(23A) (1) Section 23E (tax treatment of relevant benefits) applies if Conditions A to E are met. (2) Condition A is that a person (“T”) is or has been carrying on a trade (the “relevant trade”) alone or in partnership. (3) Condition B is that— (a) there is an arrangement (“the arrangement”) in connection with the relevant trade to which T is a party or which otherwise (wholly or partly) covers or relates to T, and (b) it is reasonable to suppose that, in essence— (i) the arrangement, or (ii) the arrangement so far as it covers or relates to T, is (wholly or partly) a means of providing, or is otherwise concerned with the provision of, relevant benefits. (4) Condition C is that— (a) a relevant benefit arises to T, or a person who is or has been connected with T, in pursuance of the arrangement, or (b) a relevant benefit arises to any other person in pursuance of the arrangement and any of the enjoyment conditions (see section 23F) is met in relation to the relevant benefit. (5) Condition D is that it is reasonable to suppose that the relevant benefit (directly or indirectly) represents, or has arisen or derives from, or is otherwise connected with, the whole or part of a qualifying third party payment. (6) Condition E is that it is reasonable to suppose that a tax advantage would be obtained by T, or a person who is or has been connected with T, as a result of the arrangement. (7) For the purposes of subsection (3) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter. (8) In this section and sections 23B to 23H, “this group of sections” means this section and those sections. (9) The provisions of this group of sections apply to professions and vocations as they apply to trades. (10) See Schedule 12 to F(No.2)A 2017 for provision about the application of this group of sections in relation to loans and quasi-loans that are outstanding on 5 April 2019. (23B) (1) The following provisions apply for the purposes of this group of sections. (2) “Relevant benefit” means any payment (including a payment by way of a loan), a transfer of money's worth, or any other benefit. (3) The assumption of a liability of T by another person is to be treated as the provision of a relevant benefit to T. (4) The assumption, by a person other than T, of a liability of a person (“C”) who is or has been connected with T, is to be treated as the provision of a relevant benefit to C. (5) “Loan” includes— (a) any form of credit; (b) a payment that is purported to be made by way of a loan. (23C) (1) The following provisions apply for the purposes of this group of sections. (2) A payment is a “third party payment” if it is made (by T or another person) to— (a) T acting as trustee, or (b) any person other than T. (3) A third party payment is a “qualifying third party payment” if the deduction condition or the trade connection condition is met in relation to the payment. (4) The “deduction condition” is met in relation to a payment if— (a) a deduction for the payment is made in calculating the profits of the relevant trade, or (b) where the relevant trade is or has been carried on in partnership, a deduction for the payment is made in calculating the amount on which T is liable to income tax in respect of the profits of the trade. (5) The “trade connection condition” is met in relation to a payment if it is reasonable to suppose that in essence— (a) the payment is by way of consideration for goods or services provided in the course of the relevant trade, or (b) there is some other connection (direct or indirect) between the payment and the provision of goods or services in the course of the relevant trade. (6) For the purposes of subsection (5) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter. (23D) (1) The following provisions apply for the purposes of this group of sections. (2) “Arrangement” includes any agreement, understanding, scheme, settlement, trust, transaction or series of transactions (whether or not legally enforceable). (3) A “tax advantage” includes— (a) relief or increased relief from tax, (b) repayment or increased repayment of tax, (c) avoidance or reduction of a charge to tax or an assessment to tax, (d) avoidance of a possible assessment to tax, (e) deferral of a payment of tax or advancement of a repayment of tax, and (f) avoidance of an obligation to deduct or account for tax. (4) Section 993 of ITA 2007 (meaning of “connected” persons) applies for the purposes of this group of sections as if subsection (4) of that section 993 were omitted. (23E) (1) Where this section applies (see section 23A), the relevant benefit amount is to be treated for income tax purposes as profits of the relevant trade for— (a) the tax year in which the relevant benefit arises, or (b) if T has ceased to carry on the relevant trade in a tax year (the “earlier tax year”) before the tax year referred to in paragraph (a), the earlier tax year. (2) For the purposes of this section, “the relevant benefit amount” means— (a) if the relevant benefit is a payment otherwise than by way of a loan, an amount equal to the amount of the payment, (b) if the relevant benefit is a payment by way of loan, an amount equal to the principal amount lent, or (c) in any other case, an amount equal to the value of the relevant benefit. (3) For the purposes of subsection (2)(c), the value of a relevant benefit is— (a) its market value at the time it arises, or (b) if higher, the cost of providing it. (4) In subsection (3) “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act. (23F) (1) For the purposes of section 23A(4), the enjoyment conditions are— (a) that the relevant benefit, or part of it, is in fact so dealt with by any person as to be calculated at some time to enure for the benefit of T; (b) that the arising of the relevant benefit operates to increase the value to T of any assets— (i) which T holds, or (ii) which are held for the benefit of T; (c) that T receives, or is entitled to receive, at any time any benefit provided or to be provided out of, or deriving or to be derived from, the relevant benefit (or part of it); (d) where the relevant benefit is the payment of a sum of money (including a payment by way of loan), that T may become entitled to the beneficial enjoyment of the sum or part of the sum if one or more powers are exercised or successively exercised (and for these purposes it does not matter who may exercise the powers or whether they are exercisable with or without the consent of another person); (e) where the relevant benefit is the payment of a sum of money (including a payment by way of loan), that T is able in any manner to control directly or indirectly the application of the sum or part of the sum. (2) Where an enjoyment condition is met in relation to part only of a relevant benefit, that part is to be treated as a separate benefit for the purposes of section 23A(4). (3) In subsection (1) references to T include references to a person who is or has been connected with T. (4) In determining whether any of the enjoyment conditions is met in relation to a relevant benefit, regard must be had to the substantial result and effect of all the relevant circumstances. (23G) (1) In determining whether section 23E applies in relation to a relevant benefit, no regard is to be had to any arrangements the main purpose, or one of the main purposes, of which is to secure that section 23E does not apply in relation to the whole, or any part, of— (a) the relevant benefit, or (b) the relevant benefit and one or more other relevant benefits (whether or not all arising to the same person). (2) Where arrangements are disregarded under subsection (1), and a relevant benefit (or part of it)— (a) would, if the arrangements were not disregarded, arise before 6 April 2017, but (b) would, when the arrangements are disregarded, arise on or after that date, the relevant benefit (or part) is to be regarded for the purposes of this group of sections as arising on the date on which it would arise apart from the arrangements. (23H) (1) This section applies where— (a) income tax is charged on an individual by virtue of the application of section 23E in relation to a relevant benefit amount, and (b) at any time, a tax (whether income tax or another tax) is charged on the individual or another person otherwise than by virtue of the application of section 23E in relation to the relevant benefit concerned. (2) In order to avoid a double charge to tax, the individual may make a claim for one or more consequential adjustments to be made in respect of the tax charged as mentioned in subsection (1)(b). (3) On a claim under this section an officer of Revenue and Customs must make such of the consequential adjustments claimed (if any) as are just and reasonable. (4) The value of any consequential adjustments must not exceed the lesser of— (a) the income tax charged on the individual as mentioned in subsection (1)(a), and (b) the tax charged as mentioned in subsection (1)(b). (5) Consequential adjustments may be made— (a) in respect of any period, (b) by way of an assessment, the modification of an assessment, the amendment of a claim, or otherwise, and (c) despite any time limit imposed by or under any enactment.

(3) In section 7(2) (income charged: profits of a tax year) at the end insert “(including amounts treated as profits of the tax year under section 23E(1)).

(4) The amendments made by this section have effect in relation to relevant benefits arising on or after 6 April 2017.

(5) Schedule 12 contains provision about the application of new sections 23A to 23H of ITTOIA 2005 in relation to loans and quasi-loans that are outstanding on 5 April 2019.

Disguised remuneration schemes: restriction of income tax relief

36

(1) Section 38 of ITTOIA 2005 (restriction of deductions: employee benefit contributions) is amended in accordance with subsections (2) to (5).

(2) After subsection (1) insert—

(1A) No deduction is allowed under this section in respect of employee benefit contributions for a period of account which starts more than 5 years after the end of the period of account in which the contributions are made.

(3) After subsection (2) insert—

(2AA) Subsection (2) is subject to subsections (1A) and (2AB). (2AB) Where subsection (3C) applies, no deduction is allowed for an amount in respect of the contributions for the period except so far as the amount is a qualifying amount (see subsection (3D)).

(4) After subsection (3) insert—

(3A) Subsection (3) is subject to subsections (1A) and (3B). (3B) Where subsection (3C) applies, an amount disallowed under subsection (2) is allowed as a deduction for a subsequent period only so far as it is a qualifying amount. (3C) This subsection applies where the provision of qualifying benefits out of, or by way of, the contributions gives rise both to an employment income tax charge and to an NIC charge. (3D) An amount in respect of employee benefit contributions is a “qualifying amount” if the relevant tax charges are paid before the end of the relevant period (and are not repaid). (3E) For the purposes of subsection (3D)— (a) the “relevant tax charges”, in relation to an amount, are the employment income tax charge and the NIC charge arising in respect of benefits which are provided out of, or by way of, that amount, and (b) the “relevant period” is the period of 12 months immediately following the end of the period of account for which the deduction for the employee benefit contributions would (apart from this section) be allowable. (3F) For the purposes of subsections (3C) and (3E), “employment income tax charge” and “NIC charge” have the meaning given by section 40(7).

(5) After subsection (3F) (inserted by subsection (4)) insert—

(3G) Subsection (3H) applies where— (a) a deduction would, apart from this section, be allowable for an amount (the “remuneration amount”) in respect of employees' remuneration, and (b) in consequence of the payment of the employees' remuneration, employee benefit contributions are made, or are to be made, in respect of the remuneration amount. (3H) In calculating for income tax purposes the profits of a trade, the deduction referred to in subsection (3G)(a) is to be treated as a deduction in respect of employee benefit contributions made or to be made (and is to be treated as not being a deduction in respect of employees' remuneration).

(6) Section 866 of ITTOIA 2005 (employee benefit contributions: non-trades and non-property businesses) is amended in accordance with subsections (7) to (10).

(7) After subsection (2) insert—

(2A) No deduction is allowed under this section in respect of employee benefit contributions for a period of account which starts more than 5 years after the end of the period of account in which the contributions are made.

(8) After subsection (3) insert—

(3A) Subsection (3) is subject to subsections (2A) and (3B). (3B) Where subsection (4C) applies, no deduction is allowed for an amount in respect of the contributions for the period except so far as the amount is a qualifying amount (see subsection (4D)).

(9) After subsection (4) insert—

(4A) Subsection (4) is subject to subsections (2A) and (4B). (4B) Where subsection (4C) applies, an amount disallowed under subsection (3) is allowed as a deduction for a subsequent period only so far as it is a qualifying amount. (4C) This subsection applies where the provision of qualifying benefits out of, or by way of, the contributions gives rise both to an employment income tax charge and to an NIC charge. (4D) An amount in respect of employee benefit contributions is a “qualifying amount” if the relevant tax charges are paid before the end of the relevant period (and are not repaid). (4E) For the purposes of subsection (4D)— (a) the “relevant tax charges”, in relation to an amount, are the employment income tax charge and the NIC charge arising in respect of benefits which are provided out of, or by way of, that amount, and (b) the “relevant period” is the period of 12 months immediately following the end of the period of account for which the deduction for the employee benefit contributions would (apart from this section) be allowable. (4F) For the purposes of subsections (4C) and (4E), “employment income tax charge” and “NIC charge” have the meaning given by section 40(7).

(10) After subsection (4F) (inserted by subsection (9)) insert—

(4G) Subsection (4H) applies where— (a) a deduction would, apart from this section, be allowable for an amount (the “remuneration amount”) in respect of employees' remuneration, and (b) in consequence of the payment of the employees' remuneration, employee benefit contributions are made, or are to be made, in respect of the remuneration amount. (4H) In calculating for income tax purposes a person's profits or other income, the deduction referred to in subsection (4G)(a) is to be treated as a deduction in respect of employee benefit contributions made or to be made (and is to be treated as not being a deduction in respect of employees' remuneration).

(11) The amendments made by subsections (2) to (4) and (7) to (9) have effect in relation to employee benefit contributions made, or to be made, on or after 6 April 2017.

(12) The amendments made by subsections (5) and (10) have effect in relation to remuneration paid on or after 6 April 2017.

Disguised remuneration schemes: restriction of corporation tax relief

37

(1) Section 1290 of CTA 2009 (restriction of deductions: employee benefit contributions) is amended in accordance with subsections (2) to (5).

(2) After subsection (1) insert—

(1A) No deduction is allowed under this section in respect of employee benefit contributions for a period of account which starts more than 5 years after the end of the period of account in which the contributions are made.

(3) After subsection (2) insert—

(2A) Subsection (2) is subject to subsections (1A) and (2B). (2B) Where subsection (3C) applies, no deduction is allowed for an amount in respect of the contributions for the period except so far as the amount is a qualifying amount (see subsection (3D)).

(4) After subsection (3) insert—

(3A) Subsection (3) is subject to subsections (1A) and (3B). (3B) Where subsection (3C) applies, an amount disallowed under subsection (2) is allowed as a deduction for a subsequent period only so far as it is a qualifying amount. (3C) This subsection applies where the provision of qualifying benefits out of, or by way of, the contributions gives rise both to an employment income tax charge and to an NIC charge. (3D) An amount in respect of employee benefit contributions is a “qualifying amount” if the relevant tax charges are paid before the end of the relevant period (and are not repaid). (3E) For the purposes of subsection (3D)— (a) the “relevant tax charges”, in relation to an amount, are the employment income tax charge and the NIC charge arising in respect of benefits which are provided out of, or by way of, that amount, and (b) the “relevant period” is the period of 12 months immediately following the end of the period of account for which the deduction for the employee benefit contributions would (apart from this section) be allowable. (3F) For the purposes of subsections (3C) and (3E), “employment income tax charge” and “NIC charge” have the meaning given by section 1292(7).

(5) After subsection (3F) (inserted by subsection (4)) insert—

(3G) Subsection (3H) applies where— (a) a deduction would, apart from this section, be allowable for an amount (the “remuneration amount”) in respect of employees' remuneration, and (b) in consequence of the payment of the employees' remuneration, employee benefit contributions are made, or are to be made, in respect of the remuneration amount. (3H) In calculating for corporation tax purposes the profits of a company, the deduction referred to in subsection (3G)(a) is to be treated as a deduction in respect of employee benefit contributions made or to be made (and is to be treated as not being a deduction in respect of employees' remuneration).

(6) The amendments made by subsections (2) to (4) have effect in relation to employee benefit contributions made, or to be made, on or after 1 April 2017.

(7) The amendment made by subsection (5) has effect in relation to remuneration paid on or after 1 April 2017.

Capital allowances

First-year allowance for expenditure on electric vehicle charging points

38

(1) CAA 2001 is amended as follows.

(2) In section 39 (first-year qualifying expenditure) after the entry for section 45E insert—

section 45EA	expenditure on plant or machinery for electric vehicle charging point

(3) After section 45E insert—

(45EA) (1) Expenditure is first-year qualifying expenditure if— (a) it is incurred in the relevant period, (b) it is expenditure on plant or machinery for an electric vehicle charging point where the plant or machinery is unused and not second-hand, and (c) it is not excluded by section 46 (general exclusions). (2) For the purposes of this section expenditure on plant or machinery for an electric vehicle charging point is expenditure on plant or machinery installed solely for the purpose of charging electric vehicles. (3) The “relevant period” is the period beginning with 23 November 2016 and ending with— (a) in the case of expenditure incurred by a person within the charge to corporation tax, 31 March 2019, and (b) in the case of expenditure incurred by a person within the charge to income tax, 5 April 2019. (4) The Treasury may by regulations amend subsection (3) so as to extend the relevant period. (5) In this section— - “electric vehicle” means a road vehicle that can be propelled by electrical power (whether or not it can also be propelled by another kind of power); - “electric vehicle charging point” means a facility for charging an electric vehicle.

(4) In section 46 (general exclusions), in subsection (1) after the entry for section 45E insert— “ section 45EA (expenditure on plant or machinery for electric vehicle charging point) ”.

(5) In section 52 (amount of first-year allowances)—

(a) in the table in subsection (3), after the entry for expenditure qualifying under section 45E insert—

Expenditure qualifying under section 45EA (expenditure on plant or machinery for electric vehicle charging point)	100%

(b) after subsection (3) insert—

(3A) Subsection (3B) applies where the Treasury make regulations under section 45EA(4) (power to extend relevant period). (3B) The regulations may amend the amount specified in column 2 of the Table in subsection (3) for expenditure qualifying under section 45EA, but only in relation to expenditure incurred after the date on which the relevant period would have ended but for the regulations.

Transactions in UK land

Disposals concerned with land in United Kingdom

39

(1) The FA 2016 amendments have effect (so far as they would not otherwise have effect) in relation to—

(a) amounts that are recognised in GAAP accounts drawn up for any period of account beginning on or after 8 March 2017, or

(b) in the case of a straddling period, amounts that would be recognised in GAAP accounts drawn up for a period of account beginning on 8 March 2017 and ending when the straddling period ends.

(2) In subsection (1)—

“the FA 2016 amendments” means—the amendments made by sections 76, 77 and 80 of FA 2016 (corporation tax treatment of certain profits and gains realised from disposals concerned with land in the United Kingdom), orthe amendments made by sections 78 and 79 of that Act (corresponding rules for income tax purposes),

“GAAP accounts” means accounts drawn up in accordance with generally accepted accounting practice,

“recognised” means recognised as an item of profit or loss, and

“straddling period” means a period of account beginning before 8 March 2017 and ending on or after that date.

(3) In section 161 of TCGA 1992 (appropriations to and from stock), in subsection (5)(a), for “CTA 2010” substitute “ ITA 2007 ”.

(4) Section 79(10) of FA 2016 (which substitutes paragraph (a) of section 161(5) of TCGA 1992) is to be regarded as always having had effect with the amendment made by subsection (3).

Co-ownership authorised contractual schemes

Co-ownership authorised contractual schemes: capital allowances

40

In Part 2 of CAA 2001 (plant and machinery), in Chapter 20 (supplementary provisions), after the Chapter heading insert—

(262AA) (1) This section applies where the participants in a co-ownership authorised contractual scheme together carry on a qualifying activity. (2) Each participant in the scheme is for the purposes of this Part to be regarded as carrying on the qualifying activity. (3) Subsection (2) applies in relation to a participant only to the extent that the profits or gains arising to the participant from the qualifying activity are, or (if there were any) would be, chargeable to tax. (4) But in determining for the purposes of subsection (1) whether or to what extent the participants in a co-ownership authorised contractual scheme together carry on a qualifying activity, assume that profits or gains arising to all participants from the qualifying activity are, or (if there were any) would be, chargeable to tax. (262AB) (1) The operator of a co-ownership authorised contractual scheme may make an election under this section. (2) The election must specify an accounting period of the scheme as the first accounting period in relation to which the election has effect. (3) That first accounting period must not— (a) be longer than 12 months, or (b) begin before 1 April 2017. (4) The election has effect for that first accounting period and all subsequent accounting periods of the scheme. (5) The election is irrevocable. (6) The election is made by notice to an officer of Revenue and Customs. (262AC) (1) This section applies where an election under section 262AB has effect for an accounting period of a co-ownership authorised contractual scheme (“the relevant period”). (2) The operator of the scheme is to calculate the allowances that would be available to the scheme under this Part in relation to the relevant period on the basis of the assumptions in subsection (3). (3) The assumptions are— (a) the scheme is a person; (b) the relevant period is a chargeable period for the purposes of this Act; (c) any qualifying activity carried on by the participants in the scheme together is carried on by the scheme; (d) property which was subject to the scheme at the beginning of the first accounting period for which the election has effect— (i) ceased to be owned by the participants at that time, and (ii) was acquired by the scheme at that time; (e) the disposal value to be brought into account in relation to the cessation of ownership and the acquisition referred to in paragraph (d) is the tax written-down value; (f) any property which became subject to the scheme at a time during an accounting period for which the election has effect was acquired by the scheme at that time; (g) property which ceased to be subject to the scheme at any such time ceased to be owned by the scheme at that time; (h) the disposal value to be brought into account in relation to the cessation of ownership referred to in paragraph (g) is the tax written-down value; (i) the scheme is not entitled to a first-year allowance or an annual investment allowance in respect of any expenditure. (4) The operator of the co-ownership authorised contractual scheme must allocate to each participant in the scheme a proportion (which may be zero) of the allowances calculated under this section. (5) The allocation is to be on the basis of what is just and reasonable. (6) In determining what is just and reasonable— (a) regard is to be had in particular to the relative size of each participant's holding of units in the scheme; (b) no regard is to be had to— (i) whether or to what extent a participant is liable to income tax or corporation tax, or (ii) any other circumstances relating to a participant's liability to tax. (7) If the participants in the scheme together carry on more than one qualifying activity, the calculation and allocation under this section are to be made separately for each activity. (8) The proportion of an allowance allocated by the operator to a participant under this section for a qualifying activity is the total amount of the allowance available to the participant under this Part in relation to the relevant period by virtue of carrying on that activity as a participant in the scheme. (9) In this section “tax written-down value”, in relation to any cessation of ownership or acquisition, means such amount as would give rise to neither a balancing allowance nor a balancing charge. (10) For the purposes of subsection (9) assume that expenditure to which the disposal value relates is in its own pool. (11) For the purposes of subsections (3)(c) and (9), assume that profits or gains arising to all participants from the qualifying activity are, or (if there were any) would be, chargeable to tax. (262AD) (1) This section has effect where an election under section 262AB is made by the operator of a co-ownership authorised contractual scheme. (2) For the purposes of sections 61(1) and 196(1) (disposal events and values)— (a) a participant in the scheme is to be regarded as ceasing to own the participant's interest in the property subject to the scheme at the beginning of the first accounting period of the scheme for which the election has effect, and (b) the disposal value to be brought into account in relation to that cessation of ownership is the tax written-down value. (3) In subsection (2)(b) “tax written-down value” means such amount as would give rise to neither a balancing allowance nor a balancing charge. (4) For the purposes of subsection (3) assume that— (a) expenditure to which the disposal value relates is in its own pool; (b) profits or gains arising to all participants from the qualifying activity are, or (if there were any) would be, chargeable to tax. (262AE) (1) This section has effect where— (a) an election under section 262AB is made by the operator of a co-ownership authorised contractual scheme, (b) property consisting of a fixture ceased to be subject to the scheme at any time in an accounting period for which the election has effect, (c) in a calculation made by the operator of the scheme under section 262AC(2) the assumption in section 262AC(3)(g) was made in relation to that fixture, and (d) a person (“the current owner”) is treated as the owner of the fixture as a result of incurring capital expenditure on its provision (“the new expenditure”). (2) In determining the current owner's qualifying expenditure— (a) if the disposal value statement requirement is not satisfied, the new expenditure is to be treated as nil, and (b) in any other case, any amount of the new expenditure which exceeds the assumed disposal value is to be left out of account (or, if such an amount has already been taken into account, is to be treated as an amount that should never have been taken into account). (3) The disposal value statement requirement is that— (a) the operator of the scheme has, no later than 2 years after the date when the fixture ceased to be property subject to the scheme, made a written statement of the assumed disposal value, and (b) the current owner has obtained that statement or a copy of it (directly or indirectly) from the operator of the scheme. (4) Sections 185 (fixture on which a plant and machinery allowance has been claimed) and 187A (effect of changes in ownership of fixture) do not apply in relation to the new expenditure. (5) In this section “assumed disposal value” means the disposal value that, in making the calculation referred to in subsection (1)(c), was assumed to be brought into account pursuant to section 262AC(3)(h). (262AF) In sections 262AA to 262AE and this section— - “co-ownership authorised contractual scheme” means a co-ownership scheme which is authorised for the purposes of the Financial Services and Markets Act 2000 by an authorisation order in force under section 261D(1) of that Act; - “co-ownership scheme” has the same meaning as in Part 17 of that Act (see section 235A(2) of that Act); - “operator” and “units”, in relation to a co-ownership authorised contractual scheme, have the meanings given by section 237(2) of that Act; - “participant”, in relation to such a scheme, is to be read in accordance with section 235 of that Act.

Co-ownership authorised contractual schemes: information requirements

41

(1) The Treasury may by regulations impose requirements on the operator of a co-ownership authorised contractual scheme in relation to—

(a) the provision of information to participants in the scheme;

(b) the provision of information to Her Majesty's Revenue and Customs.

(2) Regulations under subsection (1)(a) may be made only for the purpose of enabling participants in a co-ownership authorised contractual scheme to meet their tax obligations in the United Kingdom with respect to their interests in the scheme.

(3) Regulations under subsection (1)(b) may in particular require the provision of information about—

(a) who the participants in the scheme were in any accounting period of the scheme;

(b) the number and classes of units in the scheme in any such period;

(d) what information has been provided to participants.

(4) Regulations under this section may specify—

(a) the time when information is to be provided;

(b) the form and manner in which information is to be provided.

(5) Regulations under this section may make provision for the imposition of penalties in respect of contravention of, or non-compliance with, the regulations, including provision—

(a) for Her Majesty's Revenue and Customs to exercise a discretion as to the amount of a penalty, and

(b) about appeals in relation to the imposition of a penalty.

(6) Regulations under this section may in particular be framed by reference to an accounting period of a co-ownership authorised contractual scheme beginning on or after 1 April 2017.

(7) Regulations under this section may contain consequential, supplementary and transitional provision.

(8) Regulations under this section must be made by statutory instrument.

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

(10) In this section—

“co-ownership authorised contractual scheme” means a co-ownership scheme which is authorised for the purposes of the Financial Services and Markets Act 2000 by an authorisation order in force under section 261D(1) of that Act;

“co-ownership scheme” has the same meaning as in Part 17 of that Act (see section 235A(2) of that Act);

“operator” and “units”, in relation to a co-ownership authorised contractual scheme, have the meanings given by section 237(2) of that Act;

“participant”, in relation to such a scheme, is to be read in accordance with section 235 of that Act.

Co-ownership authorised contractual schemes: offshore funds

42

(1) The Treasury may by regulations make provision about how participants in a co-ownership authorised contractual scheme are to be treated for income tax purposes or corporation tax purposes in relation to investments made for the purposes of the scheme in an offshore fund.

(2) Regulations under subsection (1) may, among other things, make provision—

(a) for the operator of a co-ownership authorised contractual scheme to allocate to participants in the scheme amounts relating to investments made for the purposes of the scheme in an offshore fund;

(b) for those amounts to be regarded as income of the participants to whom they are allocated;

(3) Regulations under this section may—

(a) modify an enactment (whenever passed or made);

(b) contain consequential, supplementary and transitional provision.

(4) Regulations under this section must be made by statutory instrument.

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

(6) References in this section to investments made for the purposes of a co-ownership authorised contractual scheme in an offshore fund include investments so made through one or more other co-ownership authorised contractual schemes.

(7) In this section—

“co-ownership authorised contractual scheme” means a co-ownership scheme which is authorised for the purposes of the Financial Services and Markets Act 2000 by an authorisation order in force under section 261D(1) of that Act;

“co-ownership scheme” has the same meaning as in Part 17 of that Act (see section 235A(2) of that Act);

“offshore fund” has the meaning given by section 355 of TIOPA 2010;

“operator”, in relation to a co-ownership authorised contractual scheme, has the meaning given by section 237(2) of the Financial Services and Markets Act 2000;

“participant”, in relation to such a scheme, is to be read in accordance with section 235 of that Act.

PART 2 — Indirect taxes

Air passenger duty: rates of duty from 1 April 2018

43

(1) In section 30 of FA 1994 (air passenger duty: rates of duty), in subsection (4A) (long haul rates of duty)—

(a) in paragraph (a), for “£75” substitute “ £78 ”;

(b) in paragraph (b), for “£150” substitute “ £156 ”.

(2) The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2018.

Petroleum revenue tax: elections for oil fields to become non-taxable

44

(1) In Schedule 20B to FA 1993, for paragraphs 2 to 12 substitute—

(2) An election must be made in writing. (3) An election must be notified to the Commissioners. (4) An election is deemed to have been made on the date on which notification of the election was sent to the Commissioners. (5) If an election is made, the field ceases to be taxable with effect from the start of the first chargeable period to begin after the election is made. (6) From the start of the first chargeable period to begin after an election is made, no allowable loss that accrues from the oil field is an allowable unrelievable field loss for the purposes of petroleum revenue tax. (7) (1) In this Schedule— - “Commissioners” means the Commissioners for Her Majesty‘s Revenue and Customs; - “participator”, in relation to a particular time, means a person who is a participator in the chargeable period which includes that time. (2) Expressions used in this Schedule and in Part 1 of the Oil Taxation Act 1975 have the same meaning in this Schedule as in Part 1 of that Act.

(2) In OTA 1975, in section 6(1A), for “paragraph 5” substitute “ paragraph 6 ”.

(3) In FA 1980, in paragraph 15(9A) of Schedule 17, for “paragraph 5” substitute “ paragraph 6 ”.

(4) The amendment made by this section is to be treated as having come into force on 23 November 2016.

Gaming duty: rates

45

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

Part of gross gaming yield	Rate
The first £2,423,500	15%
The next £1,670,500	20%
The next £2,925,500	30%
The next £6,175,500	40%
The remainder	50%

(2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2017.

Remote gaming duty: freeplay

46

(1) Part 3 of FA 2014 (general betting duty, pool betting duty and remote gaming duty) is amended in accordance with subsections (2) to (8).

(2) In section 159 (remote gaming duty: gaming payments), for subsection (4) substitute—

(4) For the purposes of this Chapter— (a) where the chargeable person participates in the remote gaming in reliance on an offer which waives all of a gaming payment, the person is to be treated as having made a gaming payment of the amount which would have been required to be paid without the offer (“the full amount”), and (b) where the chargeable person participates in the remote gaming in reliance on an offer which waives part of a gaming payment, the person is to be treated as having made an additional gaming payment of the difference between the gaming payment actually made and the full amount. (5) Where a person is treated by subsection (4) as having made a gaming payment, the payment is to be treated for the purposes of this Chapter— (a) as having been made to the gaming provider at the time when the chargeable person begins to participate in the remote gaming to which it relates, and (b) as not having been— (i) returned, or (ii) assigned to a gaming prize fund. (6) The Commissioners may by regulations make further provision about how a gaming payment which a person is treated as having made under subsection (4) is to be treated for the purposes of this Chapter. (7) This section has effect subject to section 159A.

(3) After section 159 insert—

(159A) (1) Where a chargeable person participates in remote gaming, an amount is not to be taken into account in determining the “gaming payment” (if any) under section 159 so far as the amount is paid out of money in relation to which the first and second conditions are met (“excluded winnings”). (2) The first condition is that the money has been won by participation in the gaming either— (a) in reliance on an offer which waives all or part of a gaming payment, or (b) in a case where the gaming payment was paid out of money in relation to which this condition and the second condition were met. (3) The second condition is that the chargeable person is not entitled to use the money otherwise than for the purpose of participation in the gaming. (4) Subsection (5) applies where— (a) a chargeable person participates in remote gaming in reliance on an offer which waives all or part of a gaming payment, and (b) that offer has been won in the course of the person's participation in the gaming (and the person was not given the choice of receiving a different benefit instead of the offer). (5) The amount which would, apart from this subsection, be treated by section 159(4)(a) or (b) as a gaming payment (or additional gaming payment) is not to be so treated. (6) For the purposes of this section, where a payment is made out of moneys which include both excluded winnings and money which is not excluded winnings (the “other funds”), the payment is not taken to be made out of excluded winnings except so far as the amount of the payment exceeds the amount of those other funds. (7) In this section “money” includes any amount credited and any other money's worth.

(4) In section 160 (remote gaming duty: prizes)—

(a) in subsection (1), in the opening words, after “account” insert “ only ”,

(b) omit subsection (2),

(c) in subsection (3), at the end insert “ (but where a gaming payment is returned by being credited to an account this subsection has effect subject to subsection (1)) ”, and

(d) at the end insert—

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

(5) After section 160 insert—

(160A) (1) Where a prize is a freeplay offer (whether or not in the form of a voucher) which does not fall within section 160(4)— (a) for the purposes of sections 156 and 157, the expenditure on the prize is nil, and (b) subsections (5) to (7) of section 160 do not apply in relation to the prize. (2) Where a prize is a voucher which gives the recipient a choice of using it in place of money for freeplay or as whole or partial payment for another benefit, section 160(5)(b) has effect as if after “used” there were inserted “ if it is used as payment for a benefit other than freeplay ”. (3) In this section— - “freeplay” means participation, in reliance on a freeplay offer, in— 1. remote gaming, or 2. an activity in respect of which a gambling tax listed in section 161(4) is charged; - “freeplay offer” means an offer which waives all or part of— 1. a gaming payment, or 2. a payment in connection with participation in an activity in respect of which a gambling tax listed in section 161(4) is charged.

(6) In section 188 (gaming), after subsection (2) insert—

(3) But a game is not a “game of chance” for the purposes of this Part if— (a) it can only be played with the participation of two or more persons, and (b) no amounts are paid or required to be paid— (i) in respect of entitlement to participate in the game, or (ii) otherwise for, on account of or in connection with participation in the game.

(7) In section 190 (index), in the Table, in the entry for “game of chance”, for “188(1)(b)” substitute “ 188(1)(b) and (3) ”.

(8) In section 194(4) (regulations under Part 3 to which the procedure in section 194(5) is to apply), before paragraph (a), insert—

(za) regulations under section 159(6);

(9) The amendments made by this section have effect with respect to accounting periods beginning on or after 1 August 2017.

Tobacco products manufacturing machinery: licensing scheme

47

(1) After section 8U of TPDA 1979 insert—

(8V) (1) In this section “tobacco products manufacturing machinery” means machinery that is designed primarily for use for the purpose of (or for purposes including) manufacturing tobacco products. (2) The Commissioners may by regulations— (a) prohibit a person from purchasing, acquiring, owning or being in possession of, or carrying out other specified activities in respect of, an item of tobacco products manufacturing machinery, except in accordance with a licence granted under the regulations; (b) provide that if a person contravenes the prohibition in relation to an item of tobacco products manufacturing machinery, the machinery is liable to forfeiture. (3) The regulations may provide that the prohibition does not apply— (a) in relation to persons, or items of tobacco products manufacturing machinery, of a specified description; (b) in specified circumstances. (4) Regulations under this section may include provision— (a) imposing obligations on licensed persons; (b) for a licensed person who fails to comply with a condition or restriction of a licence, or with an obligation imposed by the regulations, to be liable to a penalty of the amount for the time being specified in section 9(2)(b) of the Finance Act 1994; (c) for exceptions from liability to a penalty under the regulations; (d) for the assessment and recovery of a penalty, including provision for two or more contraventions to be treated as a single contravention for the purposes of assessment; (e) for the Commissioners, if they think it right because of special circumstances, to remit, reduce (including reduce to nil) or stay a penalty, or agree a compromise in relation to proceedings for a penalty; (f) about reviews by the Commissioners, or by an officer of Revenue and Customs, of decisions in connection with licensing and the imposition of penalties under the regulations and about appeals against those decisions (which may include provision for specified decisions of the Commissioners to be treated as if they were listed in section 13A(2) of, or Schedule 5 to, the Finance Act 1994); (g) for the Customs and Excise Management Act 1979 to have effect in relation to licensed persons as it has effect in relation to revenue traders, subject to such modifications as may be specified in the regulations. (5) The Commissioners may, by or under regulations under this section, make provision— (a) regulating the grant of licences, including provision about the circumstances in which a licence may be granted and the requirements to be met by or in relation to the applicant (which may include a requirement that the applicant is a fit and proper person to hold a licence); (b) about the form, manner and content of an application for or in respect of a licence; (c) for licences to be subject to specified conditions or restrictions; (d) regulating the variation or revocation of a licence, or of any condition or restriction to which a licence is subject; (e) about the renewal, surrender or transfer of a licence; (f) for communications by or with the Commissioners in connection with a licence to be made electronically; (g) as to the arrangements for licensing bodies corporate which are members of the same group (as defined in the regulations); (h) for members of a group to be jointly and severally liable for any penalties imposed under the regulations.

(2) In section 9 of TPDA 1979 (regulations), in subsection (1A), for “or 8U” substitute “ , 8U or 8V ”.

PART 3 — Fulfilment businesses

Carrying on a third country goods fulfilment business

48

(1) For the purposes of this Part a person carries on an imported goods fulfilment business if the person, by way of business—

(a) stores imported goods which are owned by a person who is not UK-established, or

(b) stores imported goods on behalf of a person who is not UK-established,

at a time when the conditions in subsection (2) are met in relation to the goods.

(2) The conditions are that—

(a) there has been no supply of the goods in the United Kingdom for the purposes of VATA 1994, and

(b) the goods are being offered for sale in the United Kingdom or elsewhere.

(3) But a person does not carry on an imported goods fulfilment business if the person's activities within subsection (1) are incidental to the carriage of the goods.

(4) Goods are “imported goods” if they have been imported into the United Kingdom for the purposes of VATA 1994 (as to which, see section 15 and paragraph 1 of Schedule 9ZB).

(4A) But goods that are treated as imported for the purposes of VATA 1994 as a result of paragraph 3 of Schedule 9ZB are not imported goods for the purposes of this Part.

(5) A person is “UK-established” if the person's business establishment is in the United Kingdom as determined for the purposes of section 9 of VATA 1994.

Requirement for approval

49

(1) A person may not carry on an imported goods fulfilment business otherwise than in accordance with an approval given by the Commissioners under this section.

(2) The Commissioners may approve a person to carry on an imported goods fulfilment business only if they are satisfied that the person is a fit and proper person to carry on the business.

(3) The Commissioners may approve a person to carry on an imported goods fulfilment business for such periods and subject to such conditions or restrictions as they may think fit or as they may by regulations made by them prescribe.

(4) The Commissioners may at any time for reasonable cause vary the terms of, or revoke, an approval under this section.

(5) In this Part “approved person” means a person approved under this section to carry on an imported goods fulfilment business.

Register of approved persons

50

(1) The Commissioners must maintain a register of approved persons.

(2) The register is to contain such information relating to approved persons as the Commissioners consider appropriate.

(3) The Commissioners may make publicly available such information contained in the register as they consider necessary to enable those who deal with a person who carries on an imported goods fulfilment business to determine whether the person in question is an approved person in relation to that activity.

(4) The information may be made available by such means (including the internet) as the Commissioners consider appropriate.

Regulations relating to approval, registration etc.

51

(1) The Commissioners may by regulations make provision—

(a) regulating the approval and registration of persons under this Part,

(b) regulating the variation or revocation of any such approval or registration, or of any condition or restriction to which such an approval or registration is subject,

(d) regulating the carrying on of an imported goods fulfilment business, and

(e) imposing obligations on approved persons.

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

(a) requiring applications, and other communications with the Commissioners, to be made electronically;

(b) as to the procedure for the approval and registration of bodies corporate which are members of the same group;

(c) requiring approved persons to keep and make available for inspection such records as may be prescribed by or under the regulations.

Disclosure of information by HMRC

52

(1) The Commissioners may disclose to an approved person information held by Her Majesty's Revenue and Customs in connection with a function of Her Majesty's Revenue and Customs, but only for the purpose mentioned in subsection (2).

(2) The purpose is to assist the approved person in complying with obligations imposed on that person by virtue of section 51.

(3) An approved person to whom information is disclosed under subsection (1)—

(a) may use the information only for the purpose of complying with obligations imposed on that person by virtue of section 51, and

(b) may not further disclose the information except with the consent of the Commissioners.

(4) Section 19 of the Commissioners for Revenue and Customs Act 2005 (offence) applies to a disclosure in contravention of subsection (3)(b) as it applies to a disclosure, in contravention of section 20(9) of that Act, of revenue and customs information relating to a person whose identity is specified in the disclosure or can be deduced from it.

Offence

53

(1) A person who—

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

(b) is not an approved person,

commits an offence.

(2) In proceedings for an offence under subsection (1) it is a defence to show that the person did not know, and had no reasonable grounds to suspect, that the person—

(a) was carrying on an imported goods fulfilment business, or

(b) was not an approved person.

(3) A person is taken to have shown the fact mentioned in subsection (2) if—

(a) sufficient evidence of that fact is adduced to raise an issue with respect to it, and

(b) the contrary is not proved beyond reasonable doubt.

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

(a) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court, or a fine, or both;

(b) in Scotland, to imprisonment for a term not exceeding 12 months, or a fine not exceeding the statutory maximum, or both;

(c) in Northern Ireland, to imprisonment for a term not exceeding 6 months, or a fine not exceeding the statutory maximum, or both.

(5) A person guilty of an offence under this section is liable on conviction on indictment to—

(a) imprisonment for a period not exceeding 7 years,

(b) a fine, or

(6) In relation to an offence committed before 2 May 2022 the reference in subsection (4)(a) to the general limit in a magistrates’ court is to be read as a reference to 6 months.

Forfeiture

54

(1) If a person—

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

(b) is not an approved person,

any goods within subsection (2) are liable to forfeiture under CEMA 1979.

(2) Goods are within this subsection if—

(a) they are stored by the person, and

(b) their storage by the person constitutes, or has constituted, the carrying on of an imported goods fulfilment business by the person.

Penalties

55

(1) Schedule 13 provides for a penalty to be payable by a person who carries on an imported goods fulfilment business and is not an approved person.

(2) The Commissioners may make regulations (“penalty regulations”) imposing a penalty for the contravention of—

(a) any condition or restriction imposed under this Part;

(b) regulations under this Part.

(3) The amount of a penalty imposed by the penalty regulations is to be specified in the regulations, but must not exceed £3,000.

(4) The penalty regulations may make provision for the assessment and recovery of a penalty imposed by the regulations.

(5) The Commissioners may by regulations make provision for corporate bodies which are members of the same group to be jointly and severally liable for any penalties imposed under—

(a) Schedule 13;

(b) penalty regulations.

Appeals

56

(1) FA 1994 is amended as follows.

(2) In section 13A(2) (customs and excise reviews and appeals: relevant decisions) after paragraph (gb) insert—

(gc) any decision by HMRC that a person is liable to a penalty, or as to the amount of a person's liability, under— (i) regulations under section 55 of the Finance (No. 2) Act 2017, or (ii) Schedule 13 to that Act;

(3) In Schedule 5 to that Act (decisions subject to review and appeal) after paragraph 9A insert—

(9B) Any decision for the purposes of Part 3 of the Finance (No. 2) Act 2017 (third country goods fulfilment businesses) as to— (a) whether or not, and in which respects, any person is to be, or to continue to be, approved and registered, or (b) the conditions or restrictions subject to which any person is approved and registered.

Regulations

57

(1) Regulations under this Part may—

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

(b) make different provision for different cases or purposes;

(d) confer a discretion on the Commissioners;

(e) make provision by reference to a notice to be published by the Commissioners.

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

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

(4) This section does not apply to regulations under section 59 (commencement).

Interpretation

58

(1) In this Part—

“approved person” has the meaning given by section 49(5);

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

(2) For the purposes of this Part two or more bodies corporate are members of a group if—

(a) one of them controls each of the others,

(b) one person (whether a body corporate or an individual) controls all of them, or

(3) A body corporate is to be taken to control another body corporate if—

(a) it is empowered by or under legislation to control that body's activities, or

(b) it is that body's holding company within the meaning of section 1159 of, and Schedule 6 to, the Companies Act 2006.

(4) An individual or individuals are to be taken to control a body corporate if the individual or individuals (were the individual or individuals a company) would be that body's holding company within the meaning of section 1159 of, and Schedule 6 to, the Companies Act 2006.

Commencement

59

(1) This Part comes into force—

(a) so far as it confers powers to make regulations, on the day on which this Act is passed, and

(b) for all other purposes, on such day as the Commissioners may by regulations made by statutory instrument appoint.

(2) Regulations under subsection (1)(b) may appoint different days for different purposes.

PART 4 — Administration, avoidance and enforcement

Reporting and record-keeping

Digital reporting and record-keeping for income tax etc

60

(1) TMA 1970 is amended as set out in subsections (2) and (3).

(2) After section 12B insert—

(12C) Schedule A1 (digital reporting and record-keeping) has effect.

(3) Before Schedule 1AA insert—

SCHEDULE A1 (1) (1) This Schedule applies to a person within the charge to income tax who, otherwise than in partnership, carries on (or has carried on)— (a) a trade, profession or vocation the profits of which are chargeable to income tax under Part 2 of ITTOIA 2005, (b) a property business the profits of which are chargeable to income tax under Part 3 of ITTOIA 2005, or (c) any other activity which may give rise to profits or other income chargeable to income tax under Part 2 or 3 of ITTOIA 2005. (2) This is subject to paragraph 2. (2) (1) This Schedule does not apply to— (a) the trustees of a charitable trust, or (b) the trustees of an exempt unauthorised unit trust (within the meaning of the Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819)), unless the trustees elect for this Schedule to apply to them. (2) This Schedule does not apply to a person in respect of an excluded activity unless the person elects for this Schedule to apply to the person in respect of the excluded activity. (3) The following are excluded activities— (a) the underwriting business of a member of Lloyd's (within the meaning of section 184 of the Finance Act 1993), (b) holding shares in respect of which a distribution may be made which is chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of section 548(6) of CTA 2010 (distributions to shareholders in real estate investment trusts), and (c) participating in an open-ended investment company which may make distributions chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of regulation 69Z18 of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964) (property income distributions). (4) The Commissioners may by regulations make provision about elections under this paragraph and the withdrawal of such elections, including provision— (a) about how an election may be made or withdrawn, and (b) about the period for which an election or withdrawal has effect. (3) (1) This Schedule applies to a partnership if one or more of the partners is within the charge to income tax. (2) This is subject to paragraph 4. (4) (1) If all the activities of a partnership which may give rise to profits or income are excluded activities, this Schedule does not apply to the partnership unless the partnership elects for this Schedule to apply to it. (2) The following are excluded activities— (a) the underwriting business of a Lloyd's partnership (as defined in section 184(1) of the Finance Act 1993), (b) holding shares in respect of which a distribution may be made which is chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of section 548(6) of CTA 2010 (distributions to shareholders in real estate investment trusts), and (c) participating in an open-ended investment company which may make distributions chargeable to income tax under Part 3 of ITTOIA 2005 by virtue of regulation 69Z18 of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964) (property income distributions). (3) The Commissioners may by regulations make provision about elections under this paragraph and the withdrawal of such elections, including provision— (a) about how an election may be made or withdrawn, and (b) about the period for which an election or withdrawal has effect. (5) (1) Requirements imposed by regulations under this Schedule on a partnership are to be met by a nominated partner. (2) A “nominated partner” is a partner nominated for the purposes of this Schedule— (a) by the partners, or (b) by the Commissioners. (3) A nomination, or a revocation of a nomination, by the partners does not have effect until notice of the revocation or nomination is given to HMRC. (4) The Commissioners may by regulations make provision about nominations and the revocation of nominations, including provision about the circumstances in which the Commissioners may nominate a partner. (5) In this Act references to a nominated partner are to a partner nominated for the purposes of this Schedule. (6) In this Part of this Schedule “business”— (a) in relation to a person to whom this Schedule applies (see paragraphs 1 and 2), means the activity by virtue of which this Schedule applies to the person (and if more than one, means each of them), and (b) in relation to a partnership to which this Schedule applies (see paragraphs 3 and 4), means any activity of the partnership. (7) (1) The Commissioners may by regulations require a person or partnership to whom this Schedule applies to provide to HMRC, by electronic communications, specified information about the business of the person or partnership. (2) The information which may be specified includes any information (“financial information”) relevant to calculating profits, losses or income of the business, including information about receipts and expenses. (3) The regulations may require information to be provided at or for specified intervals, times or periods. (4) The regulations may not require financial information about the business to be provided more often than once every 3 months. (8) (1) The Commissioners may by regulations require a person to whom this Schedule applies to provide to HMRC, by electronic communications, a statement containing specified information about the person's business in relation to each relevant period. (2) “Relevant period” means— (a) in relation to a business the profits or income of which are chargeable to income tax under Chapter 2 of Part 2 of ITTOIA 2005, a basis period (see Chapter 15 of that Part), and (b) otherwise, a tax year. (3) The information which may be specified includes any information relevant to calculating profits, losses or income of the business for the relevant period, including information about receipts and expenses. (4) Regulations under this paragraph may require the statement to include a declaration to the effect that the information included in it is correct and complete. (5) An end of period statement for a tax year must be provided to HMRC at or before— (a) the time at which the person delivers a return under section 8 or 8A for the tax year (see section 8(7)(c) and 8A(7)(c)), or (b) if earlier, the end of 31 January following the tax year. (6) In this Act— (a) references to an end of period statement are to a statement required by regulations under this paragraph; (b) references to an end of period statement for a tax year are to an end of period statement for that tax year or, where the relevant period is a basis period, for the basis period for that tax year. (9) The Commissioners may by regulations make provision for the establishment and use of a facility enabling a person to whom this Schedule applies to file or deliver, by electronic communications— (a) anything which under section 8(1AB) may be required to be filed or delivered by a notice to file under section 8; (b) anything which under section 8A(1AB) may be required to be filed or delivered by a notice to file under section 8A. (10) (1) The Commissioners may by regulations require a partnership to which this Schedule applies to provide to HMRC, by electronic communications, a return containing specified information about the partnership's business in relation to each tax year. (2) The information which may be specified includes any information which is or may be required to be included in a section 12AA partnership return, including information in respect of any partners within the charge to corporation tax. (3) In particular, the information which may be specified includes the information required to be included in a section 12AA partnership return by section 12AB (partnership statements). (4) Regulations under this paragraph may require the return to include a declaration to the effect that the information included in it is correct and complete. (5) A Schedule A1 partnership return for a tax year must be provided to HMRC on or before 31 January following the tax year. (6) In this Act— (a) references to a Schedule A1 partnership return are to a return required by regulations under this paragraph, and (b) references to a partnership statement, in relation to a Schedule A1 partnership return, are to information required to be included in the return by virtue of sub-paragraph (3). (7) In the Taxes Acts, unless the contrary intention appears, a reference (whether general or specific) to a return under, or a return required under, this Act includes a reference to a Schedule A1 partnership return. (11) (1) The Commissioners may by regulations require a person or partnership to whom this Schedule applies to— (a) keep specified records relating to the business in electronic form, and (b) preserve those records in electronic form for a specified period. (2) The records which may be specified are any records the Commissioners consider relevant to ascertaining information required to be provided by regulations under this Part of this Schedule. (3) A requirement imposed by regulations under this paragraph is in addition to, and not in place of, any other requirement that the person or partnership keep and preserve records (or keep and preserve records in a particular form). (4) Paragraph 5(1) (requirements imposed on partnership to be met by nominated partner) does not apply to requirements imposed by regulations under this paragraph. (12) (1) This paragraph applies where requirements imposed by regulations under paragraph 11 for any period are not complied with. (2) The person, or in the case of a partnership each relevant partner, is liable for a penalty. (3) “Relevant partner” means any person who was a partner in the partnership at any time during the period in question. (4) The amount of the penalty must not exceed £3,000. (5) A person or relevant partner is not liable to a penalty under this paragraph in relation to a period if the person or relevant partner is liable to a penalty under section 12B(5) in relation to that period. (13) (1) This paragraph applies to regulations under paragraphs 7, 8, 9, 10 and 11. (2) The regulations may (amongst other things) make provision— (a) as to the electronic form to be taken by information provided and records kept or preserved, (b) requiring persons to prepare and keep records of information provided by means of electronic communications, (c) for the production of the contents of records kept or preserved in accordance with regulations under this Part of this Schedule, (d) as to conditions that must be complied with in connection with the use of electronic communications or the keeping or preservation of electronic records, (e) for treating information as not having been provided or records as not having been kept or preserved unless conditions are complied with, (f) for determining the time at which and person by whom information is taken to have been delivered, and (g) for authenticating information or records. (3) The regulations may also make provision (which may include provision for the application of conclusive or other presumptions) about the manner of proving for any purpose— (a) whether any use of electronic communications is to be taken as having resulted in the provision of information, (b) the time at which information was provided, (c) the person by whom information was provided, (d) the contents of any information provided, (e) the contents of any records, and (f) any other matter for which provision may be made by the regulations. (4) The regulations may allow or require use to be made of intermediaries in connection with— (a) the provision of information by means of electronic communications, and (b) the authentication or security of anything transmitted by any such means. (5) The regulations may— (a) allow any authorisation or requirement for which the regulations may provide to be given by means of a specific or general direction given by the Commissioners, and (b) provide that the conditions of an authorisation or requirement are to be taken to be satisfied only where the Commissioners are satisfied as to specified matters. (6) The regulations may provide— (a) that information provided must meet standards of accuracy and completeness set by specific or general directions given by the Commissioners, and (b) that failure to meet those standards may be treated as a failure to provide the information, or as a failure to comply with the requirements of the regulations. (14) (1) The Commissioners must by regulations make provision— (a) for a person to be exempt from requirements imposed by regulations under paragraphs 7, 8 and 11 if the Commissioners are satisfied that the person is digitally excluded, and (b) for a partnership to be exempt from requirements imposed by regulations under paragraphs 7, 10 and 11 if the Commissioners are satisfied that the partnership is digitally excluded. (2) A person is digitally excluded if the digital exclusion condition is met in relation to the person. (3) A partnership is digitally excluded if the digital exclusion condition is met in relation to each partner. (4) The digital exclusion condition is met in relation to a person or partner if— (a) the person or partner is a practising member of a religious society or order whose beliefs are incompatible with using electronic communications or keeping electronic records, or (b) for any reason (including age, disability or location) it is not reasonably practicable for the person or partner to use electronic communications or to keep electronic records. (15) (1) The Commissioners may by regulations make provision for further exemptions. (2) The exemptions for which provision may be made include exemptions based on income or other financial criteria. (16) (1) An appeal may be brought against any decision made by the Commissioners, or by an officer of Revenue and Customs, under regulations under this Schedule. (2) Notice of an appeal under this paragraph must be given to HMRC within 30 days after the day on which notice of the decision is given. (3) The notice of appeal must— (a) be in writing, and (b) specify the grounds of appeal. (17) (1) Any power in this Schedule to require the provision of information includes power to require the provision of accounts, statements and documents relating to that information. (2) Where a partnership (“the reporting partnership”) includes a partner which is itself a partnership, references in this Schedule to a partner include an indirect partner in the reporting partnership. Section 12AA(1C) (meaning of “indirect partner”) applies for the purposes of this sub-paragraph. (18) (1) Regulations under this Schedule may— (a) make provision which applies generally or only for specified cases or purposes; (b) make different provision for different cases or purposes; (c) include incidental, supplemental, consequential, saving, transitional or transitory provision; (d) make provision for matters to be specified by the Commissioners in accordance with the regulations. (2) Sub-paragraph (1)(d) does not apply to any interval, time or period specified by virtue of paragraph 7(3) (which may be specified only by the regulations). (3) Regulations under this Schedule may make provision for a person or partnership to whom this Schedule applies, but who would not otherwise be subject to a requirement imposed by the regulations, to elect to be subject to that requirement. (4) Regulations under this Schedule may provide that, for the purposes of any provision of this Schedule or of the regulations, a change in the accounting date of a business is to be disregarded (and its period of account determined accordingly). (5) The power to make regulations under this Schedule is exercisable by statutory instrument. (6) A statutory instrument containing regulations under this Schedule is subject to annulment in pursuance of a resolution of the House of Commons.

(4) Subsections (1) to (3) come into force on such day as the Treasury may by regulations made by statutory instrument appoint.

(5) Regulations under subsection (4) may appoint different days for different purposes.

Digital reporting and record-keeping for income tax etc: further amendments

61

(1) Schedule 14 contains provision amending TMA 1970 and other Acts.

(2) The Commissioners for Her Majesty's Revenue and Customs may by regulations amend or modify any provision of the Taxes Acts in consequence of the provision made by section 60 or Schedule 14.

(3) Regulations under subsection (2) may make transitional, transitory or saving provision.

(4) Regulations under subsection (2) must be made by statutory instrument.

(5) A statutory instrument containing regulations under subsection (2) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

(6) Subsections (1) to (5) and Schedule 14 come into force on such day as the Treasury may by regulations made by statutory instrument appoint.

(7) Regulations under subsection (6) may appoint different days for different purposes.

Digital reporting and record-keeping for VAT

62

(1) Schedule 11 to VATA 1994 (administration, collection and enforcement) is amended as set out in subsections (2) to (4).

(2) In paragraph 2 (accounting and payment)—

(a) in sub-paragraph (1) for “and the making of returns” substitute “ , the making of returns and the submission of information ”;

(b) after sub-paragraph (11) insert—

(11A) Regulations under this paragraph may include incidental, supplemental, consequential, saving, transitional or transitory provision.

(3) In paragraph 6 (duty of taxable person to keep records)—

(a) omit sub-paragraph (4);

(b) at the end insert—

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