Legalize / United Kingdom / Public General Act

Finance Act 2020

Type Public General Act

Publication 2020-07-22

Last updated 2026-03-18

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

(a) state that in the opinion of an officer of Revenue and Customs no amendment of the claim is required, or

(b) make the amendments of the claim required to give effect to the conclusions stated in the notice.

(3) A closure notice takes effect when it is issued.

(4) The officer must give effect to any amendments made by the closure notice by making such adjustments as may be necessary whether—

(a) by way of assessment, or

(b) by discharge or repayment of tax.

(5) The adjustments must be made within 30 days of the date of issue of the closure notice.

(6) Paragraph 15 (direction to complete enquiry) applies in relation to an enquiry under paragraph 27 as it applies in relation to an enquiry under paragraph 6.

Assessment for excessive repayment etc

29

(1) This paragraph applies where—

(a) an amount has been paid by way of a repayment of tax, and

(b) the amount paid exceeded the amount which the Commissioners were liable at that time to repay.

(2) The Commissioners may—

(a) to the best of their judgment, assess the amount of the excess, and

(b) notify the amount to the responsible member.

Supplementary assessments

30

(1) This paragraph applies where—

(a) an assessment has been notified under paragraph 29, and

(b) it appears to the Commissioners that the amount which ought to have been assessed as due exceeds the amount that has already been assessed.

(2) The Commissioners may—

(a) on or before the last day on which the assessment under paragraph 29 could have been made, make a supplementary assessment of the amount of tax due, and

(b) notify the amount to the responsible member.

Further provision about assessments under paragraphs 29 and 30

31

(1) An amount assessed and notified under paragraph 29 or 30 counts as a liability to digital services tax for the purposes of this Part of this Act.

(2) But sub-paragraph (1) does not have effect if, or to the extent that, the assessment has been withdrawn or reduced.

Time limits for assessments

32

An assessment under paragraph 29 or 30 may not be made more than 4 years after the end of the accounting period in which evidence of facts sufficient in the opinion of the Commissioners to justify making the assessment comes to their knowledge.

PART 8 — Appeals against HMRC decisions on tax

Right of appeal

33

(1) An appeal may be brought against—

(a) an amendment of a DST return under paragraph 8 (amendment during enquiry to prevent loss of tax);

(b) an amendment made by a closure notice under paragraph 14;

(d) an amendment made by a closure notice under paragraph 28;

(e) an assessment made under paragraph 29 or 30.

(2) Any such appeal is to be brought by the responsible member (“the appellant”).

(3) If an appeal under sub-paragraph (1)(a) against an amendment of a self-assessment is made while an enquiry into the return is in progress none of the steps mentioned in paragraph 36(2)(a) to (c) may be taken in relation to the appeal until the enquiry is completed.

Notice of appeal

34

(1) Notice of appeal under paragraph 33 must be given to HMRC—

(a) in writing,

(b) within 30 days after the specified date.

(2) In sub-paragraph (1) “specified date” means—

(a) in relation to an appeal under paragraph 33(1)(a), the date on which the notice of amendment was issued;

(b) in relation to an appeal under paragraph 33(1)(b) or (d), the date on which the closure notice was issued;

(3) The notice of appeal must specify the grounds of appeal.

Late notice of appeal

35

(1) This paragraph applies in a case where—

(a) notice of appeal may be given to HMRC under this Schedule, but

(b) no notice is given before the relevant time limit.

(2) Notice may be given after the relevant time limit if—

(a) HMRC agree, or

(b) where HMRC do not agree, the tribunal gives permission.

(3) HMRC must agree to notice being given after the relevant time limit if the appellant has requested in writing that HMRC do so and HMRC are satisfied—

(a) that there was a reasonable excuse for not giving the notice before the relevant time limit, and

(b) that the request has been made without unreasonable delay.

(4) If a request of the kind mentioned in sub-paragraph (3) is made, HMRC must notify the appellant whether or not HMRC agree to the request.

(5) In this paragraph “relevant time limit”, in relation to notice of appeal, means the time before which the notice must be given (disregarding this paragraph).

Steps that may be taken following notice of appeal

36

(1) This paragraph applies if notice of appeal has been given to HMRC.

(2) In such a case—

(a) the appellant may notify HMRC that the appellant requires HMRC to review the matter in question (see paragraph 37),

(b) HMRC may notify the appellant of an offer to review the matter in question (see paragraph 38), or

(3) This paragraph does not prevent the matter in question from being dealt with in accordance with paragraph 44(1) and (2) (settling of appeals by agreement).

Right of appellant to require review

37

(1) If the appellant notifies HMRC that it requires them to review the matter in question, HMRC must—

(a) notify the appellant of HMRC's view of the matter in question within the relevant period, and

(b) review the matter in question in accordance with paragraph 39.

(2) Sub-paragraph (1) does not apply if—

(a) the appellant has already given a notification under this paragraph in relation to the matter in question,

(b) HMRC have given a notification under paragraph 40 in relation to the matter in question, or

(3) In this paragraph “the relevant period” means—

(a) the period of 30 days beginning with the day on which HMRC receive the notification from the appellant, or

(b) such longer period as is reasonable.

Offer of review by HMRC

38

(1) Sub-paragraphs (2) to (5) apply if HMRC notify the appellant of an offer to review the matter in question.

(2) The notification must include a statement of HMRC's view of the matter in question.

(3) If the appellant notifies HMRC within the acceptance period that it accepts the offer, HMRC must review the matter in question in accordance with paragraph 39.

(4) If the appellant does not accept the offer in accordance with sub-paragraph (3)—

(a) HMRC's view of the matter in question is treated as if it were contained in a settlement agreement (see paragraph 44(1)), but

(b) paragraph 44(3) (right to withdraw from agreement) does not apply in relation to that notional agreement.

(5) Sub-paragraph (4) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal under paragraph 42.

(6) HMRC may not take the action mentioned in sub-paragraph (1) at any time if before that time—

(a) HMRC have given a notification under this paragraph in relation to the matter in question,

(b) the appellant has given a notification under paragraph 37 in relation to the matter in question, or

(7) In this paragraph “acceptance period” means the period of 30 days beginning with the date of the document by which HMRC notify the appellant of the offer to review the matter in question.

Nature of review

39

(1) This paragraph applies if HMRC are required by paragraph 37 or 38 to review the matter in question.

(2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

(3) For the purpose of sub-paragraph (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—

(a) by HMRC in deciding the matter in question, and

(b) by any person in seeking to resolve disagreement about the matter in question.

(4) The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them.

(5) The review may conclude that HMRC's view of the matter in question is to be—

(a) upheld,

(b) varied, or

(6) HMRC must notify the appellant of the conclusions of the review and their reasoning within—

(a) the period of 45 days beginning with the relevant day, or

(b) such other period as may be agreed.

(7) In sub-paragraph (6) “relevant day” means—

(a) in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC's view of the matter in question;

(b) in a case where HMRC offered the review, the day when HMRC received notification of the appellant's acceptance of the offer.

(8) If HMRC do not give notice of the conclusions of the review within the period specified in sub-paragraph (6), the review is treated as having concluded that HMRC's view of the matter in question is upheld.

(9) If sub-paragraph (8) applies, HMRC must notify the appellant of the conclusions which the review is treated as having reached.

Effect of conclusions of review

40

(1) If HMRC give notice of the conclusions of a review (see paragraph 39)—

(a) the conclusions are to be treated as if they were contained in a settlement agreement (see paragraph 44(1)), but

(b) paragraph 44(3) (withdrawal from agreement) does not apply in relation to that notional agreement.

(2) Sub-paragraph (1) does not apply to the matter in question if, or to the extent that, the appellant notifies the appeal to the tribunal (see paragraphs 41 and 42).

Notifying appeal to tribunal after appellant has required review

41

(1) Where HMRC have notified an appellant under paragraph 37(1)(a) of their view of a matter to which an appeal under paragraph 33 relates, the appellant—

(a) may not notify the appeal to the tribunal before the beginning of the post-review period;

(b) may notify the appeal to the tribunal after the end of that period only if the tribunal gives permission.

(2) Except where sub-paragraph (3) applies, the post-review period is the period of 30 days beginning with the date of the document in which HMRC give notice of the conclusions of the review in accordance with paragraph 39(6).

(3) If the period specified in paragraph 39(6) ends without HMRC having given notice of the conclusions of the review, the post-review period is the period that—

(a) begins with the day following the last day of the period specified in paragraph 39(6), and

(b) ends 30 days after the date of the document in which HMRC give notice of the conclusions of the review in accordance with paragraph 39(9).

Notifying appeal to tribunal after HMRC have offered review

42

(1) Where HMRC have offered to review the matter to which a notice of an appeal under paragraph 33 relates, the right of the appellant at any time to notify the appeal to the tribunal depends on whether or not the appellant has accepted the offer at that time.

(2) If the appellant has accepted the offer, the appellant—

(a) may not notify the appeal to the tribunal before the beginning of the post-review period;

(b) may notify the appeal to the tribunal after the end of that period only if the tribunal gives permission.

(3) If the appellant has not accepted the offer, the appellant—

(a) may notify the appeal to the tribunal within the acceptance period;

(b) may notify the appeal to the tribunal after the end of that period only if the tribunal gives permission.

(4) In this paragraph—

(a) “acceptance period” has the same meaning as in paragraph 38;

(b) “post-review period” has the same meaning as in paragraph 41.

Interpretation of paragraphs 36 to 42

43

(1) In paragraphs 36 to 42—

(a) “matter in question” means the matter to which an appeal relates;

(b) a reference to a notification is to a notification in writing.

(2) In paragraphs 36 to 42, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—

(a) notification of HMRC's view under paragraph 37(1)(a);

(b) notification by HMRC of an offer of review (and of their view of the matter) under paragraph 38;

(3) But if a notification falling within any of paragraphs (a) to (c) of sub-paragraph (2) is given to the appellant, a copy of the notification may also be given to a person acting on behalf of the appellant.

Settling of appeals by agreement

44

(1) In relation to an appeal of which notice has been given under paragraph 34, “settlement agreement” means an agreement in writing between the appellant and an officer of Revenue and Customs that is—

(a) entered into before the appeal is determined, and

(b) to the effect that the decision appealed against should be upheld without variation, varied in a particular manner or discharged or cancelled.

(2) Where a settlement agreement is entered into in relation to an appeal, the consequences are to be the same (for all purposes) as if, at the time the agreement was entered into, the tribunal had decided the appeal and had upheld the decision without variation, varied it in that manner or discharged or cancelled it, as the case may be.

(3) Sub-paragraph (2) does not apply if, within 30 days beginning with the date on which the settlement agreement was entered into, the appellant gives notice in writing to HMRC that it wishes to withdraw from the agreement.

(4) Sub-paragraph (5) applies where notice of an appeal has been given under paragraph 34 and—

(a) the appellant notifies HMRC, orally or in writing, that the appellant does not wish to proceed with the appeal, and

(b) HMRC do not, within 30 days after that notification, give the appellant notice in writing indicating that they are unwilling that the appeal should be withdrawn.

(5) Sub-paragraphs (1) to (3) have effect as if, at the date of the appellant's notification, the appellant and an officer of Revenue and Customs had agreed that the decision under appeal should be upheld without variation.

Appeal does not postpone recovery of tax

45

(1) Where there is an appeal under paragraph 33, the tax in question remains due and payable as if there had been no appeal.

(2) That is subject to paragraphs 46 and 47.

Application for payment of tax to be postponed

46

(1) If the appellant has grounds for believing that the amendment or assessment overcharges a relevant person to tax, the appellant may—

(a) first apply by notice in writing to HMRC within 30 days after the specified date for a determination by them of the amount of tax the payment of which should be postponed pending the determination of the appeal, and

(b) if the appellant does not agree with a determination made by HMRC under paragraph (a), refer the application for postponement to the tribunal within 30 days from the date of the document notifying HMRC's determination.

An application under paragraph (a) must state the amount believed to be overcharged to tax and the grounds for that belief.

(2) An application under sub-paragraph (1) may be made more than 30 days after the specified date if there is a change in the circumstances of the case as a result of which the appellant has grounds for believing that the relevant person is overcharged to tax by the decision appealed against.

(3) If, after an application under sub-paragraph (1) has been determined, there is a change in the circumstances of the case as a result of which either party has grounds for believing that the amount determined has become either excessive or insufficient, that party may (if the parties cannot agree on a revised determination) apply to the tribunal for a revised determination of that amount.

(4) An application under sub-paragraph (3) may be made at any time before the determination of the appeal.

(5) Paragraphs 35 (late notice of appeal) and 44 (settling of appeals by agreement) apply to an application under this paragraph as they apply to an appeal under paragraph 33, subject to any necessary modifications.

(6) The amount of tax of which payment is to be postponed pending the determination of the appeal is the amount (if any) by which it appears that there are reasonable grounds for believing that the relevant person is overcharged.

(7) A decision of the tribunal under this paragraph is final and conclusive (despite the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007).

(8) In this paragraph “specified date” has the meaning given by paragraph 34.

Agreement to postpone payment of tax

47

(1) If the appellant and HMRC agree that payment of an amount of tax should be postponed pending the determination of the appeal, the consequences are to be the same (for all purposes) as if the tribunal had, at the time when the agreement was entered into, made a direction to the same effect as the agreement.

This is without prejudice to the making of a further agreement or further direction.

(2) Where the agreement is not in writing—

(a) sub-paragraph (1) does not apply unless the fact that an agreement was entered into, and the terms agreed, are confirmed by notice in writing given by HMRC to the appellant or by the appellant to HMRC, and

(b) the reference in sub-paragraph (1) to the time when the agreement was entered into is to be read as a reference to the time when notice of confirmation was given.

(3) References in this paragraph to an agreement being entered into with an appellant, and to the giving of notice to or by the appellant, include references to an agreement being entered into, or notice being given to or by, a person acting on behalf of the appellant in relation to the appeal.

Assessments and self-assessments

48

(1) This paragraph applies where an appeal under paragraph 33 has been notified to the tribunal.

(2) If the tribunal decides that a relevant person is overcharged by a self-assessment or any other assessment, the assessment must be reduced accordingly.

(3) If the tribunal decides that a relevant person is undercharged to tax by a self-assessment or any other assessment, the assessment must be increased accordingly.

(4) In a case where neither sub-paragraph (2) or (3) apply, the assessment is to stand good.

Payment of tax where appeal has been determined

49

(1) This paragraph applies where an appeal under paragraph 33 has been notified to the tribunal.

(2) On the determination of the appeal, any tax overpaid must be repaid.

(3) On the determination of the appeal, section 51 has effect in relation to any relevant tax.

(4) The reference to “relevant tax” is to any tax payable in accordance with the determination, so far as it is tax—

(a) the payment of which had been postponed, or

(b) which would not have been charged by the amendment or assessment if there had been no appeal.

Payment of tax where there is a further appeal

50

(1) Where a party to an appeal to the tribunal under paragraph 33 makes a further appeal, tax is to be payable or repayable in accordance with the determination of the tribunal or court (as the case may be), even though the further appeal is pending.

(2) But if the amount charged by the assessment is altered by the order or judgment of the Upper Tribunal or court, then—

(a) if too much tax has been paid, the amount overpaid must be refunded, with any interest allowed by the order or judgment, and

(b) if too little tax has been charged, section 51 has effect in relation to the amount undercharged.

Tribunal determinations

51

The determination of the tribunal in relation to any proceedings under this Part of this Schedule is final and conclusive except as otherwise provided in sections 9 to 14 of the Tribunals, Courts and Enforcement Act 2007 (or in this Part of this Act).

PART 9 — Penalties

Failure to deliver return: flat-rate penalty

52

(1) A person who is required to file a DST return and fails to do so by the filing date is liable to a penalty under this paragraph.

The person may also be liable to a penalty under paragraph 53 (tax-related penalties).

(2) The penalty is—

(a) £100, if the return is delivered within 3 months after the filing date;

(b) £200, in any other case.

(3) The amounts are increased to £500 and £1,000 (respectively) for a third successive failure.

(4) For this purpose, a “third successive failure” occurs where—

(a) the duty under section 56 (duty to file returns) applies in relation to a group for 3 successive accounting periods,

(b) a person was liable to a penalty under this paragraph in respect of each of the first 2 accounting periods, and

53

(1) A person who is required to file a DST return for an accounting period and fails to do so within 18 months from the end of that period is liable to a penalty under this paragraph.

This is in addition to any penalty under paragraph 52 (flat-rate penalty).

(2) The penalty is—

(a) 10% of the unpaid tax, if the return is filed within 2 years from the end of the accounting period;

(b) 20% of the unpaid tax, in any other case.

(3) The “unpaid tax” means the total amount of tax payable by members of the group for the accounting period which remains unpaid on the date when the liability to the penalty under this paragraph arises.

Failure to deliver a return: reasonable excuse

54

(1) Liability to a penalty under paragraph 52 or 53 in relation to a failure to make a return does not arise if the person (“P”) satisfies HMRC or (on appeal) the tribunal that there is a reasonable excuse for the failure.

(2) For that purpose—

(a) an insufficiency of funds is not a reasonable excuse,

(b) where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the failure, and

(c) where P had a reasonable excuse for the failure but the excuse has ceased, P is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Failure to keep and preserve records: penalty

55

(1) A person who fails to comply with paragraph 4 in relation to an accounting period is liable to a penalty not exceeding £3,000, subject to the following exception.

(2) No penalty is incurred if HMRC are satisfied that any facts which they reasonably require to be proved, and which would have been proved by the records, are proved by other documentary evidence provided to HMRC.

Assessment of penalty, etc

56

(1) If a person is liable to a penalty under this Part of this Schedule, HMRC must—

(a) assess the penalty, and

(b) notify the person.

(2) The assessment of a penalty—

(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),

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

(3) A supplementary assessment may be made in respect of a penalty if an earlier assessment is based on an amount of tax due and payable that is found by HMRC to be an underestimate or insufficient.

(4) Sub-paragraph (5) applies if—

(a) an assessment in respect of a penalty is based on a liability to tax that would have been shown in a return, and

(b) that liability is found by HMRC to be excessive.

(5) HMRC may by notice amend the assessment so it is based on the correct amount.

(6) An amendment under sub-paragraph (5)—

(a) does not affect when the penalty must be paid;

(b) may be made after the last day on which the assessment in question could have been made (under sub-paragraph (7)).

(7) An assessment of a penalty must be made before the end of the period of 12 months beginning with—

(a) the end of the appeal period for the assessment of the liability to tax which would have been shown in the return, or

(b) if there is no such assessment, the date on which that liability is ascertained or it is ascertained that the liability is nil.

(8) In sub-paragraph (7) “appeal period” means the period during which—

(a) an appeal could be brought, or

(b) an appeal that has been brought has not been determined or withdrawn.

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

Special reduction

57

(1) If HMRC think it right because of special circumstances, they may reduce a penalty under this Part of this Schedule.

(2) In sub-paragraph (1) “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another.

(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 in respect of a penalty.

Right to appeal against penalty

58

A person may appeal against—

(a) a decision of HMRC that a penalty under this Part of this Schedule is payable by the person, or

(b) a decision of HMRC as to the amount of any such penalty.

Procedure on appeal against penalty

59

(1) Part 8 of this Schedule (apart from paragraphs 33, 45 to 47, and 49) applies in relation to an appeal under paragraph 58 as it applies in relation to an appeal under paragraph 33.

(2) On an appeal under paragraph 58, payment of the penalty is postponed pending determination of the appeal.

(3) On an appeal under paragraph 58(a) that is notified to the tribunal, the tribunal may confirm or cancel the decision.

(4) On an appeal under paragraph 58(b) that is notified to the tribunal, the tribunal may—

(a) confirm the decision, or

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

(5) If the tribunal substitutes its decision for HMRC's, the tribunal may rely on paragraph 57—

(a) to the same extent as HMRC (which may mean applying the same percentage reduction as HMRC to a different starting point), or

(b) to a different extent, but only if the tribunal thinks that HMRC's decision in respect of the application of that paragraph was flawed.

(6) In sub-paragraph (5)(b) “flawed” means flawed when considered in the light of the principles applicable in proceedings for judicial review.

(7) On determination of an appeal under paragraph 58, where a penalty is payable it is to be paid before the end of 30 days beginning with the day on which the determination was issued.

Payments in respect of penalties

60

(1) This paragraph applies if—

(a) a person liable to a penalty under this Part of this Schedule has an agreement in relation to the penalty with one or more companies within the charge to corporation tax, and

(b) as a result of the agreement, the person receives a payment or payments in respect of the penalty that do not, in total, exceed the amount of the penalty.

(2) The payment—

(a) is not to be taken into account in calculating the profits for corporation tax purposes of either the person or the company making the payment, and

(b) is not to be regarded as a distribution for corporation tax purposes.

SCHEDULE 9

Introduction

1

(1) This Schedule applies where a payment notice has been given to a person (“the recipient”).

(2) In this Schedule—

“DST liability”, “payment notice” and “relevant person” have the same meaning as in section 66;

“relevant liability” means any DST liability in relation to the group for the accounting period.

Payment notice: effect

2

(1) For the purposes of the recovery from the recipient of any unpaid digital services tax, penalty or interest (including interest accruing after the date of the payment notice) the recipient is treated as if—

(a) any relevant liability of a person other than the recipient were a liability of the recipient (“the deemed liability”),

(b) the deemed liability became due and payable when the relevant liability became due and payable, and

(2) Nothing in this paragraph gives the recipient a right to appeal against any assessment, determination or other decision giving rise to a relevant liability (or against the deemed liability).

Payment notice: appeals

3

(1) The recipient may appeal against the notice, within the period of 30 days beginning with the date on which it is given, on the ground that the person is not a relevant person.

(2) Where an appeal is made, anything required by the notice to be paid is due and payable as if there had been no appeal.

Payment notices: effect of making payment etc

4

(1) If the recipient pays any amount in pursuance of the notice the recipient may recover that amount from the person liable to pay it.

(2) In calculating the recipient's income, profits or losses for any tax purposes—

(a) a payment in pursuance of the notice is not allowed as a deduction, and

(b) the reimbursement of any such payment is not regarded as a receipt.

(3) Any amount paid by the recipient in pursuance of the notice is to be taken into account in calculating—

(a) the amount unpaid, and

(b) the amount due by virtue of any other payment notice relating to the amount unpaid.

(4) Similarly, any payment by the person liable to pay it of any of the amount unpaid is to be taken into account in calculating the amount due by virtue of the payment notice (or by virtue of any other payment notice relating to the amount unpaid).

SCHEDULE 10

Provisional Collection of Taxes Act 1968

1

In section 1(1) of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax etc) after “the apprenticeship levy,” insert “ digital services tax, ”.

FA 1989

2

(1) Section 178(2) of FA 1989 (setting of interest rates) is amended as follows.

(2) Omit the “and” at the end of paragraph (u).

(3) After paragraph (v) insert—

(w) sections 67 and 68 of the Finance Act 2020.

FA 2007

3

(1) Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

(2) In paragraph 1, in the table after the entry relating to accounts in connection with ascertaining liability to corporation tax insert—

Digital services tax	DST return under paragraph 2 of Schedule 8 to FA 2020.

FA 2008

4

FA 2008 is amended as follows.

5

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

(2) In paragraph 63(1) after paragraph (cb) insert—

(cc) digital services tax,

6

(1) Schedule 41 (penalties for failure to notify etc) is amended as follows.

(2) In paragraph 1, in the table after the entry relating to diverted profits tax insert—

Digital services tax	Obligation under section 54 of FA 2020 (obligation to notify HMRC when threshold conditions for digital services tax are met).

(3) In paragraph 7 after sub-paragraph (4A) insert—

(4B) In the case of a relevant obligation relating to digital services tax and an accounting period, the potential lost revenue is so much of any digital services tax payable by members of the group for the accounting period as by reason of the failure is unpaid 12 months after the end of the accounting period.

SCHEDULE 11

Amendments of HODA 1979

1

HODA 1979 is amended as follows.

2

In section 6AB(4A) after “vehicles” insert “ etc ”.

3

(1) Section 12 is amended as follows.

(2) In subsection (1) after “vehicle” insert “ or as fuel for propelling a private pleasure craft ”.

(3) After subsection (2) insert—

(2A) For provision relating to private pleasure craft that corresponds to subsection (2), and for the meaning of “private pleasure craft”, see section 14E.

(4) In the heading at the end insert “ etc ”.

4

In section 13ZB(5), in paragraph (b) of the definition of “prohibited use” after “vehicle” insert “ or as fuel for a private pleasure craft ”.

5

In section 14A for subsection (4) substitute—

(4) For the meaning of “private pleasure craft”, see section 14E.

6

(1) Section 14B is amended as follows.

(2) In subsection (1)(a)—

(a) at the end of sub-paragraph (i) (but before the “or”) insert—

(ia) used as fuel for propelling a private pleasure craft,

;

(b) in sub-paragraph (ii) for “so used” substitute “ used as mentioned in sub-paragraph (i) or (ia) ”.

(3) In the heading at the end insert “ etc ”.

7

(1) Section 14C is amended as follows.

(2) In subsection (1)—

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

(b) omit the “or” at the end of paragraph (c);

(3) Omit subsection (4A).

8

For section 14E substitute—

(14E) (1) Restricted fuel must not— (a) be used as fuel for propelling a private pleasure craft, (b) be used as an additive or extender in any substance so used, or (c) be taken into the fuel supply of an engine provided for propelling a vessel that is being used as a private pleasure craft. (2) “Restricted fuel” means— (a) rebated fuel, or (b) marked oil that is not rebated fuel. (3) “Rebated fuel” means rebated heavy oil, rebated biodiesel or rebated bioblend. (4) “Marked oil” means any hydrocarbon oil in which a marker is present which is for the time being designated by regulations made by the Commissioners under subsection (5) below, other than marked oil which is in the fuel supply of an engine provided for propelling a vessel having been taken in to that supply in accordance with the law of the place where it was taken in. (5) The Commissioners may for the purposes of this section designate any marker which appears to them to be used for the purposes of the law of any place (whether within or outside the United Kingdom) for identifying hydrocarbon oil that is not to be used as fuel for propelling private pleasure craft. (6) In this Act “private pleasure craft” has the same meaning as in Article 14(1)(c) of Council Directive 2003/96/EC (taxation of energy products etc). (7) The Treasury may by regulations provide for cases in which a vessel is treated as not being a private pleasure craft for the purposes of this Act (which may include cases in which the vessel is used in accordance with instructions given by an officer of HMRC for the purposes of removing restricted fuel from the vessel).

9

For section 14F substitute—

(14F) (1) Conduct within any of the following paragraphs attracts a penalty under section 9 of the Finance Act 1994 (civil penalties)— (a) using restricted fuel in contravention of section 14E(1); (b) becoming liable for restricted fuel being taken into the fuel supply of an engine— (i) in contravention of section 14E(1), or (ii) having reason to believe that it will be put to a particular use that is a prohibited use; (c) supplying restricted fuel, having reason to believe that it will be put to a particular use that is a prohibited use. (2) An offence is committed if— (a) a person intentionally uses restricted fuel in contravention of section 14E(1), (b) a person is liable for restricted fuel being taken into the fuel supply of an engine, and the restricted fuel was taken in with the intention by the person that restrictions imposed by section 14E(1) should be contravened, or (c) a person supplies restricted fuel, intending that it will be put to a particular use that is a prohibited use. (3) A person guilty of an offence under this section is liable— (a) on summary conviction, to a fine not exceeding the maximum fine or imprisonment for a term not exceeding the maximum term (or both); (b) on conviction on indictment, to a fine or imprisonment for a term not exceeding 7 years (or both). (4) For the purposes of subsection (3)(a) the “maximum fine” is— (a) in England and Wales, £20,000 or (if greater) 3 times the value of the heavy oil, biodiesel or bioblend in question; (b) in Scotland or Northern Ireland, the statutory maximum or (if greater) 3 times the value of the heavy oil, biodiesel or bioblend in question. (5) For the purposes of subsection (3)(a) the “maximum term” is— (a) in England or Wales (subject to subsection (6)) or Scotland, 12 months; (b) in Northern Ireland, 6 months. (6) In relation to an offence committed before 2 May 2022, subsection (5)(a) has effect in England and Wales as if for “12 months” there were substituted “ 6 months ”. (7) Restricted fuel is liable to forfeiture if it is— (a) taken into the fuel supply of an engine as mentioned in section 14E(1), (b) supplied as mentioned in subsection (1)(c) or (2)(c) above, or (c) taken into the fuel supply of an engine provided for propelling a vessel at a time when it is not a private pleasure craft and remains in the vessel as part of that fuel supply at a later time when it becomes a private pleasure craft. (8) If rebated fuel is used or taken into the fuel supply of an engine in contravention of section 14E(1), the Commissioners may— (a) assess an amount equal to the rebate on like fuel at the rate in force at the time of the contravention as being excise duty due from any person who— (i) used the rebated fuel, or (ii) was liable for it being taken into the fuel supply, and (b) notify the person or the person's representative accordingly. (9) In this section— - “prohibited use” means a use that contravenes section 14E(1); - “rebated fuel” has the meaning given by section 14E(3); - “restricted fuel” has the meaning given by section 14E(2).

10

In section 20AAA(4)(a) after “vehicle” insert “ or as fuel for propelling a private pleasure craft ”.

11

In section 24 (control of use of duty-free and rebated oil) after subsection (3) insert—

(3A) Subsection (3) does not apply to heavy oil, biodiesel or bioblend used for propelling a private pleasure craft if it is proved to the satisfaction of the Commissioners that the heavy oil, biodiesel or bioblend was taken into the vessel in accordance with the laws of the place where it was taken in.

12

In section 27(1) at the appropriate place insert—

“private pleasure craft” has the meaning given by section 14E;

13

(1) Schedule 4 (regulations under section 24) is amended as follows.

(2) In paragraph 19 after “vehicle” insert “ or a vessel ”.

(3) In paragraph 20 after “vehicle” insert “ or a vessel ”.

(4) In paragraph 21—

(a) the existing provision becomes sub-paragraph (1) of that paragraph;

(b) in that sub-paragraph—

(i) after “vehicles” insert “ or vessels ”;

(ii) after “vehicle” insert “ or vessel ”;

(2) In this paragraph “premises” includes any floating structure. (3) Nothing in sub-paragraph (1) enables regulations to be made authorising the examination of the interior of part of a vessel if that part is used as a dwelling.

14

(1) Schedule 5 (sampling) is amended as follows.

(2) In paragraph 1—

(a) in sub-paragraph (a)—

(i) for “motor vehicle” substitute “ vehicle or a vessel ”;

(ii) after “the vehicle” insert “ or the vessel ”;

(b) in sub-paragraph (b) for “motor vehicle” substitute “ vehicle or a vessel ”.

(3) In paragraph 2(3) after “vehicle” insert “ or the vessel ”.

(4) In paragraph 4 after sub-paragraph (6) insert—

(6A) In sub-paragraphs (5) and (6) “land” includes any floating structure.

(5) In paragraph 7 after “vehicle” insert “ or a vessel ”.

Other amendments

15

In Schedule 7A to VATA 1994, in Group 1, in Note 1(3) omit paragraph (b) (and the “or” immediately before it).

16

In Schedule 41 to FA 2008, in the table in paragraph 3(1) for the entry relating to section 14F(2) of HODA 1979 substitute—

HODA 1979 section 14F(8)	Rebated heavy oil, biodiesel or bioblend

17

In Schedule 9 to TCTA 2018, in paragraph 6 omit sub-paragraphs (3) and (4).

General

18

Paragraphs 1 to 17 of this Schedule come into force on such day or days as the Treasury may by regulations appoint.

19

Different days may be appointed for different purposes or different areas.

20

The Treasury may by regulations make such transitional, transitory or saving provision as they consider appropriate in connection with the coming into force of any of those paragraphs (including provision conferring functions on the Commissioners for Her Majesty's Revenue and Customs).

21

The Treasury may by regulations make such amendments of any enactment , including Schedule 21 to FA 2021 and Schedule 11 to FA 2022, as they consider appropriate in consequence of the coming into force of any of paragraphs 1 to 17.

22

A statutory instrument containing regulations under paragraph 21 is subject to annulment in pursuance of a resolution of the House of Commons.

23

Any power to make regulations under this Schedule is exercisable by statutory instrument.

SCHEDULE 12

Introduction

1

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Power to set emissions allowance

2

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Power to make further provision by regulations

3

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4

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5

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6

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Interpretation

7

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Commencement and transitional provision

8

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Penalty for failure to make payments on time

9

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Commencement

10

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SCHEDULE 13

Introduction

1

(1) This Schedule provides for an individual to be jointly and severally liable to the Commissioners for Her Majesty's Revenue and Customs, in certain circumstances involving insolvency or potential insolvency, for amounts payable to the Commissioners by a company.

(2) Such liability arises where the individual is given a notice under—

(a) paragraph 2(1) (tax avoidance and tax evasion cases),

(b) paragraph 3(1) (repeated insolvency and non-payment cases), or

A notice under paragraph 2(1), 3(1) or 5(1) is referred to in this Schedule as a “joint liability notice”.

(3) In this Schedule “company” has the same meaning as in the Corporation Tax Acts (see section 1121 of CTA 2010), except that it also includes a limited liability partnership.

(4) Paragraph 18 makes provision about the application of this Schedule in relation to limited liability partnerships.

Tax avoidance and tax evasion cases

2

(1) An authorised HMRC officer may give a notice under this sub-paragraph to an individual if it appears to the officer that conditions A to E are met.

(2) Condition A is that a company has—

(a) entered into tax-avoidance arrangements, or

(b) engaged in tax-evasive conduct.

(3) Condition B is that—

(a) the company is subject to an insolvency procedure, or

(b) there is a serious possibility of the company becoming subject to an insolvency procedure.

(4) Condition C is that—

(a) the individual—

(i) was responsible (whether alone or with others) for the company entering into the tax-avoidance arrangements or engaging in the tax-evasive conduct, or

(ii) received a benefit which, to the individual's knowledge, arose (wholly or partly) from those arrangements or that conduct,

at a time when the individual was a director or shadow director of the company or a participator in it, or

(b) the individual took part in, assisted with or facilitated the tax-avoidance arrangements or the tax-evasive conduct at a time when the individual—

(i) was a director or shadow director of the company, or

(ii) was concerned, whether directly or indirectly, or was taking part, in the management of the company.

(5) For the purposes of sub-paragraph (4)(a)(ii)—

(a) an individual is treated as knowing anything that the individual could reasonably be expected to know;

(b) an individual is treated as receiving anything that is received by a person with whom the individual is connected (within the meaning given by section 993 of ITA 2007).

(6) Condition D is that there is, or is likely to be, a tax liability referable to the tax-avoidance arrangements or to the tax-evasive conduct (“the relevant tax liability”).

(7) Condition E is that there is a serious possibility that some or all of the relevant tax liability will not be paid.

(8) A notice under sub-paragraph (1) must—

(a) specify the company to which the notice relates;

(b) set out the reasons for which it appears to the officer that conditions A to E are met;

(d) offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);

(e) explain the effect of paragraph 13 (right of appeal).

(9) It must also—

(a) specify the amount of the relevant tax liability, if the existence and amount of that liability have been established;

(b) if not, indicate that the amount will be specified in a further notice.

(10) Once the existence and amount of the relevant tax liability have been established in a case to which sub-paragraph (9)(b) applies, an authorised HMRC officer must give a further notice specifying that amount.

(11) A notice under sub-paragraph (10) must—

(a) be given to the individual to whom the notice under sub-paragraph (1) was given;

(b) offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);

(12) An individual who is given a notice under sub-paragraph (1) is jointly and severally liable with the company (and with any other individual who is given such a notice) for the relevant tax liability.

This is subject to paragraph 9 (interaction with penalties).

(13) The amount of the individual's liability under sub-paragraph (12) is taken to be the amount specified under sub-paragraph (9)(a) or (10). For provision under which the amount so specified may be varied, see—

(a) paragraph 10 (modification etc),

(b) paragraphs 11 and 12 (review), and

Repeated insolvency and non-payment cases

3

(1) An authorised HMRC officer may give a notice under this sub-paragraph to an individual if it appears to the officer that conditions A to D are met.

(2) A notice under sub-paragraph (1) may not be issued after the end of the period of two years beginning with the day on which HMRC first became aware of facts sufficient for them reasonably to conclude that conditions A to D are met.

(3) Condition A is that there are at least two companies (“the old companies”) in the case of each of which—

(a) the individual had a relevant connection with the company at any time during the period of five years ending with the day on which the notice is given (“the five-year period”),

(b) the company became subject to an insolvency procedure during the five-year period, and

(i) the company had a tax liability, or

(ii) the company had failed to submit a relevant return or other document, or to make a relevant declaration or application, that it was required to submit or make, or

(iii) the company had submitted a relevant return or other document, or had made a relevant declaration or application, but an act or omission on the part of the company had prevented HMRC from dealing with it.

In sub-paragraphs (ii) and (iii) “relevant” means relevant to the question whether the company had a tax liability or how much its tax liability was.

(4) Condition B is that another company (“the new company”) is or has been carrying on a trade or activity that is the same as, or is similar to, a trade or activity previously carried on by—

(a) each of the old companies (if there are two of them), or

(b) any two of the old companies (if there are more than two).

(5) Condition C is that the individual has had a relevant connection with the new company at any time during the five-year period.

(6) Condition D is that at the time when the notice is given—

(a) at least one of the old companies referred to in sub-paragraph (4)(a) or (b) has a tax liability, and

(b) the total amount of the tax liabilities of those companies—

(i) is more than £10,000, and

(ii) is more than 50% of the total amount of those companies' liabilities to their unsecured creditors.

(7) An individual who is given a notice under sub-paragraph (1) is jointly and severally liable with the new company (and with any other individual who is given such a notice)—

(a) for any tax liability that the new company has on the day on which the notice is given, and

(b) for any tax liability of the new company that arises—

(i) during the period of five years beginning with that day, and

(ii) while the notice continues to have effect.

(8) If an old company referred to in sub-paragraph (4)(a) or (b) has a tax liability on the day on which an individual is given a notice under sub-paragraph (1), the individual is also jointly and severally liable with that company (and with any other individual who is given such a notice) for that liability.

(9) Sub-paragraphs (7) and (8) are subject to paragraph 9 (interaction with penalties).

(10) For the purposes of this paragraph—

(a) an individual has a “relevant connection” with one of the old companies if the individual—

(i) is a director or shadow director of the company, or

(ii) is a participator in the company;

(b) an individual has a “relevant connection” with the new company if the individual—

(i) is a director or shadow director of the company,

(ii) is a participator in the company, or

(iii) is concerned, whether directly or indirectly, or takes part, in the management of the company.

(11) A notice under sub-paragraph (1) must—

(a) set out the reasons for which it appears to the officer giving the notice that conditions A to D are met;

(b) state the effect of the notice;

(d) offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);

(e) explain the effect of paragraph 13 (right of appeal).

(12) The amount of the individual's liability under sub-paragraph (7)(a) or (8) is taken to be the amount specified under sub-paragraph (11)(c). For provision under which the amount so specified may be varied, see—

(a) paragraph 10 (modification etc),

(b) paragraphs 11 and 12 (review), and

4

(1) The Treasury may by regulations made by statutory instrument—

(a) amend paragraph 3(6)(b)(i) by substituting a different amount for the one that is for the time being specified there;

(b) amend paragraph 3(6)(b)(ii) by substituting a different percentage for the one that is for the time being specified there.

(2) A statutory instrument containing regulations under this paragraph—

(a) is subject to annulment in pursuance of a resolution of the House of Commons, if the regulations increase the specified amount by no more than is necessary to reflect changes in the value of money;

(b) otherwise, may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

Cases involving penalty for facilitating avoidance or evasion

5

(1) An authorised HMRC officer may give a notice under this sub-paragraph to an individual if it appears to the officer that conditions A to D are met.

(2) Condition A is that—

(a) a penalty under any of the specified provisions (see sub-paragraph (6)) has been imposed on a company by HMRC, or

(b) proceedings have been commenced before the First-tier Tribunal for a penalty under any of those provisions to be imposed on a company.

(3) Condition B is that—

(a) the company is subject to an insolvency procedure, or

(b) there is a serious possibility of the company becoming subject to an insolvency procedure.

(4) Condition C is that the individual was a director or shadow director of the company, or a participator in it, at the time of any act or omission in respect of which—

(a) the penalty was imposed, or

(b) the proceedings for the penalty were commenced.

(5) Condition D is that there is a serious possibility that some or all of the penalty will not be paid.

(6) The specified provisions are—

(a) sections 315 and 315A of FA 2004 (penalties for non-disclosure of tax avoidance schemes);

(b) paragraphs 2 and 3 of Schedule 35 to FA 2014 (promoters of tax avoidance schemes: penalties);

(d) Part 1 of Schedule 16 to F(No.2)A 2017 (penalties for enablers of defeated tax avoidance);

(e) Part 2 of Schedule 17 to that Act (penalties for breach of certain obligations relating to disclosure of tax avoidance schemes by promoters etc of schemes);

(f) Schedule 13 to FA 2022 (penalties for facilitating avoidance schemes involving non-resident promoters).

(g) section 162 of FA 2026 (prohibition of promotion of certain tax avoidance arrangements: penalties).

(h) section 171 of FA 2026 (promoter action notices: penalties).

(7) A notice under sub-paragraph (1) must—

(a) specify the company to which the notice relates;

(b) set out the reasons for which it appears to the officer that conditions A to D are met;

(d) offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);

(e) explain the effect of paragraph 13 (right of appeal).

(8) It must also—

(a) specify the amount of the penalty, if sub-paragraph (2)(a) applies;

(b) if sub-paragraph (2)(b) applies, indicate that the amount will be specified in a further notice.

(9) Once the existence and amount of the penalty have been established in a case where sub-paragraph (2)(b) applies, an authorised HMRC officer must give a further notice specifying that amount.

(10) A notice under sub-paragraph (9) must—

(a) be given to the individual to whom the notice under sub-paragraph (1) was given;

(b) offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);

(11) An individual who is given a notice under sub-paragraph (1) is jointly and severally liable with the company (and with any other individual who is given such a notice) for the amount of the penalty.

(12) The amount of the individual's liability under sub-paragraph (11) is taken to be the amount specified under sub-paragraph (8)(a) or (9). For provision under which the amount so specified may be varied, see—

(a) paragraph 10 (modification etc),

(b) paragraphs 11 and 12 (review), and

“Tax-avoidance arrangements”

6

(1) In this Schedule “tax-avoidance arrangements” means—

(a) arrangements in respect of which a notice has been given under paragraph 12 of Schedule 43 to FA 2013, paragraph 8 or 9 of Schedule 43A to that Act or paragraph 8 of Schedule 43B to that Act (notice of final decision after considering opinion of GAAR Advisory Panel) stating that a tax advantage is to be counteracted under the general anti-abuse rule;

(b) arrangements in respect of which a notice has been given under section 204 of FA 2014 (follower notice) and not withdrawn;

(c) DOTAS arrangements within the meaning given by subsection (5) of section 219 of that Act (circumstances in which an accelerated payment notice may be given);

(d) arrangements to which HMRC have allocated a reference number under paragraph 22 of Schedule 17 to F(No.2)A 2017 (disclosure of tax avoidance schemes: VAT and other indirect taxes) or in respect of which the promoter must provide prescribed information under paragraph 23 of that Schedule;

(e) arrangements in relation to which a relevant tribunal order has been made;

(f) arrangements that—

(i) are substantially the same as arrangements in relation to which a relevant tribunal order has been made (whether involving the same or different parties), and

(ii) have as their promoter the person specified as the promoter in the application for the order.

(2) For the purposes of sub-paragraph (1)(e) and (f) a relevant tribunal order is made in relation to arrangements if the tribunal—

(a) makes an order under—

(i) subsection (1)(a) of section 314A of FA 2004 (order to disclose), or

(ii) paragraph 4(1)(a) of Schedule 17 to F(No.2)A 2017 (corresponding provision for indirect taxes),

that a proposal for the arrangements is notifiable;

(b) makes an order under—

(i) subsection (1)(b) of that section, or

(ii) paragraph 4(1)(b) of that Schedule,

that the arrangements are notifiable;

(i) subsection (1)(a) of section 306A of FA 2004 (doubt as to notifiability), or

(ii) paragraph 5(1)(a) of Schedule 17 to F(No.2)A 2017,

that a proposal for the arrangements is to be treated as notifiable;

(d) makes an order under—

(i) subsection (1)(b) of that section, or

(ii) paragraph 5(1)(b) of that Schedule,

that the arrangements are to be treated as notifiable.

(3) Section 307 of FA 2004 (meaning of “promoter”) applies for the purposes of sub-paragraph (1)(f)(ii).

In that section as it so applies—

(a) references to a notifiable proposal are to be read as references to the proposal mentioned in sub-paragraph (2)(a) or (c);

(b) references to notifiable arrangements are to be read as references to the arrangements mentioned in sub-paragraph (2)(b) or (d).

“Tax-evasive conduct”

7

In this Schedule “tax-evasive conduct” means—

(a) giving to HMRC any deliberately inaccurate return, claim, document or information, or

(b) deliberately failing to comply with an obligation specified in the Table in paragraph 1 of Schedule 41 to FA 2008 (obligations to notify liability to tax, etc).

“Insolvency procedure” etc

8

(1) For the purposes of this Schedule a company is “subject to an insolvency procedure” if—

(a) it is undergoing, or has undergone, a relevant winding up (see sub-paragraphs (2) and (3)),

(b) it is in administration (see sub-paragraph (4)) or is a company to which sub-paragraph (5) applies,

(d) a relevant scheme (see sub-paragraph (7)) has effect in relation to it, or

(e) its name has been struck off the register under section 1000 or 1003 of the Companies Act 2006.

(2) A company is “undergoing a relevant winding up” for the purposes of this paragraph if—

(a) it is being wound up under—

(i) the Insolvency Act 1986 (“the 1986 Act”), or

(ii) the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (“the 1989 Order”),

otherwise than by way of a members' voluntary winding up,

(b) it is being wound up by way of a members' voluntary winding up under the 1986 Act, or the 1989 Order, and the period of 12 months beginning with the day on which that winding up commenced has expired without the company having paid its debts in full together with interest at the official rate, or

(c) a corresponding situation to a winding up under the 1986 Act or the 1989 Order exists in relation to the company under the law of a country or territory outside the United Kingdom.

(3) A company has “undergone a relevant winding up” for the purposes of this paragraph if—

(a) it has been wound up under the 1986 Act, or the 1989 Order, otherwise than by way of a members' voluntary winding up,

(b) it has been wound up by way of a members' voluntary winding up under the 1986 Act, or the 1989 Order, without having paid its debts in full together with interest at the official rate, or

(4) A company is “in administration” for the purposes of this paragraph if—

(a) it is in administration within the meaning given by paragraph 1 of Schedule B1 to the 1986 Act or paragraph 2 of Schedule B1 to the 1989 Order, or

(b) there is in force in relation to it under the law of a country or territory outside the United Kingdom any appointment corresponding to the appointment of an administrator under either of those Schedules.

(5) This sub-paragraph applies to a company in respect of which—

(a) a notice under sub-paragraph (1) of paragraph 84 of Schedule B1 to the 1986 Act (moving from administration to dissolution) has been registered under sub-paragraph (3) of that paragraph, or

(b) a notice under sub-paragraph (1) of paragraph 85 of Schedule B1 to the 1989 Order (corresponding provision for Northern Ireland) has been registered under sub-paragraph (3) of that paragraph,

unless an order has been made in relation to that notice under sub-paragraph (7)(c) of that paragraph.

(6) A company is “in receivership” for the purposes of this paragraph if—

(a) there is (or, but for a temporary vacancy, would be) a person who in relation to the company—

(i) is acting as administrative receiver in accordance with Chapter 1 of Part 3 of the 1986 Act or Part 4 of the 1989 Order, or

(ii) is acting as receiver by virtue of section 51 of the 1986 Act, or

(b) a corresponding situation under the law of a country or territory outside the United Kingdom exists in relation to the company.

(7) In this paragraph “relevant scheme” means a compromise or arrangement—

(a) under Part 1 of the 1986 Act or Part 2 of the 1989 Order (company voluntary arrangements),

(b) under Part 26 of the Companies Act 2006 (arrangements and reconstructions), or

Interaction with penalties

9

The amount for which an individual is jointly and severally liable under paragraph 2 or 3 in respect of a company's tax liability is reduced by the amount of any penalty that the individual has paid in relation to that liability under any of the following provisions—

(a) section 61 of VATA 1994 (VAT evasion: liability of directors etc);

(b) section 28 of FA 2003 (liability of directors etc where body corporate liable to penalty for evasion of customs duty etc);

(c) paragraph 19 of Schedule 24 to FA 2007 (liability of company officer where company liable to penalty under that Schedule);

(d) paragraph 22 of Schedule 41 to FA 2008 (liability of company officer where company liable to penalty under that Schedule).

Withdrawal or modification of notice

10

(1) HMRC must withdraw a joint liability notice given to an individual, by giving a further notice to the individual, if—

(a) any of the relevant conditions were not met when the joint liability notice was given, or

(b) it is not necessary for the protection of the revenue for the notice to continue to have effect.

(2) In this Schedule “relevant conditions” means—

(a) conditions A to E in paragraph 2, in the case of a notice under paragraph 2(1);

(b) conditions A to D in paragraph 3, in the case of a notice under paragraph 3(1);

(3) HMRC must withdraw a notice given to an individual under paragraph 3(1), by giving a further notice to the individual, if—

(a) at least one of the old companies (see paragraph 3(3)) is a company that—

(i) became subject to an insolvency procedure on the basis that it was being wound up by way of a members' voluntary winding up, and

(ii) pays its debts in full, together with interest at the official rate, after the end of the period of 12 months beginning with the day on which the members' voluntary winding up commenced but before the end of that winding up, and

(b) condition A in paragraph 3 would not have been met if that company, or each of them (if more than one), had not been subject to an insolvency procedure.

(4) For the purposes of sub-paragraph (3)(a)(ii), the end of a members' voluntary winding up of a company happens when—

(a) the company is dissolved in pursuance of the members' voluntary winding up, or

(b) the members' voluntary winding up becomes a creditors' voluntary winding up.

(5) HMRC may withdraw a notice given to an individual under this Schedule, by giving a further notice to the individual, if they think it appropriate to do so even though sub-paragraph (1) or (3) does not apply.

(6) Where an individual has been given a joint liability notice, HMRC may by further notice to the individual vary an amount specified—

(a) under paragraph 2(9)(a) or (10), paragraph 3(11)(c) or paragraph 5(8)(a) or (9), or

(b) under this sub-paragraph,

if it seems to them that the amount so specified is, or has become, too much or not enough.

(7) Subject to sub-paragraph (8), a joint liability notice that is withdrawn under this paragraph is of no effect.

(8) Where a joint liability notice is withdrawn under sub-paragraph (1)(b) or (3), the withdrawal of the notice does not give the individual a right to recover any amount that the individual has already paid to HMRC in response to the notice.

Right of review

11

(1) Where—

(a) an individual is given a joint liability notice or a notice under paragraph 2(10) or 5(9), and

(b) before the end of the permitted period the individual communicates to HMRC written acceptance of the offer of a review contained in the notice,

HMRC must review the decision to give the notice.

(2) For the purposes of this paragraph “the permitted period” begins with the day on which the notice mentioned in sub-paragraph (1)(a) is given, and ends—

(a) with the 30th day after that day, or

(b) if HMRC give the individual a further notice specifying a later day (an “extension notice”), with that day.

(3) An extension notice—

(a) must be given before the permitted period would (but for the notice) have expired;

(b) must specify a day that is at least 30 days after the date of the extension notice;

(4) If the individual does not accept the offer of a review within the permitted period, HMRC must nevertheless review the decision in question if—

(a) after the end of the permitted period, the individual gives HMRC a notice requesting a review out of time, and

(b) HMRC are satisfied that the individual had a reasonable excuse for not accepting the offer within the permitted period, and that the individual made the request without unreasonable delay after the excuse ceased to apply.

(5) HMRC are not required to undertake or continue a review under this paragraph if the individual appeals under paragraph 13 against the notice in question.

Reviews under paragraph 11

12

(1) This paragraph applies where HMRC are required to undertake a review under paragraph 11.

(2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

(3) HMRC must, in particular, have regard to steps taken before the beginning of the review—

(a) by HMRC in reaching the decision, and

(b) by any person in seeking to resolve disagreement about the decision.

(4) The review must take account of any representations made by the individual at a stage which gives HMRC a reasonable opportunity to consider them.

(5) But it is not open to the individual to challenge the existence or amount of any tax liability of a company to which the joint liability notice in question relates.

(6) At the conclusion of the review—

(a) HMRC must set aside the notice to which the review relates if it appears to them that—

(i) any of the relevant conditions were not met when the notice was given, or

(ii) it is not necessary for the protection of the revenue for the notice to continue to have effect;

(b) HMRC must set aside the notice or vary an amount specified under paragraph 2(9)(a), 3(11)(c) or 5(8)(a), or (as the case may be) paragraph 2(10) or 5(9), if it appears to HMRC that the amount specified is incorrect;

(7) HMRC must give the individual notice of the conclusions of the review and their reasoning—

(a) within the period of 45 days beginning with the relevant date, or

(b) within any other period that HMRC and the individual may agree.

(8) In sub-paragraph (7) “relevant date” means—

(a) the date on which HMRC received the individual's notification accepting the offer of a review (in a case falling within paragraph 11(1)), or

(b) the date on which HMRC decided to undertake the review (in a case falling within paragraph 11(4)).

(9) Where HMRC do not give notice of the conclusions within the time period specified in sub-paragraph (7)—

(a) the notice to which the review relates is treated as upheld, and

(b) HMRC must notify the individual accordingly.

(10) Where a joint liability notice is set aside under sub-paragraph (6)(a)(ii), the setting aside of the notice does not give the individual a right to recover any amount that the individual has already paid to HMRC in response to the notice.

Right of appeal

13

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Finance Act 2020

Assessment for excessive repayment etc

29

Supplementary assessments

30

Further provision about assessments under paragraphs 29 and 30

31

Time limits for assessments

32

PART 8 — Appeals against HMRC decisions on tax

Right of appeal

33

Notice of appeal

34

Late notice of appeal

35

Steps that may be taken following notice of appeal

36

Right of appellant to require review

37

Offer of review by HMRC

38

Nature of review

39

Effect of conclusions of review

40

Notifying appeal to tribunal after appellant has required review

41

Notifying appeal to tribunal after HMRC have offered review

42

Interpretation of paragraphs 36 to 42

43

Settling of appeals by agreement

44

Appeal does not postpone recovery of tax

45

Application for payment of tax to be postponed

46

Agreement to postpone payment of tax

47

Assessments and self-assessments

48

Payment of tax where appeal has been determined

49

Payment of tax where there is a further appeal

50

Tribunal determinations

51

PART 9 — Penalties

Failure to deliver return: flat-rate penalty

52

Failure to deliver return: tax-related penalty

53

Failure to deliver a return: reasonable excuse

54

Failure to keep and preserve records: penalty

55

Assessment of penalty, etc

56

Special reduction

57

Right to appeal against penalty

58

Procedure on appeal against penalty

59

Payments in respect of penalties

60

SCHEDULE 9

Introduction

1

Payment notice: effect

2

Payment notice: appeals

3

Payment notices: effect of making payment etc

4

SCHEDULE 10

Provisional Collection of Taxes Act 1968

1

FA 1989