Finance Act 2021

VAT	Return under a special accounting scheme.

(b) before sub-paragraph (5) there were inserted—
  (4A) In this paragraph “*return under a special accounting scheme*” means any of the following, so far as relating to supplies of goods treated as made in the United Kingdom—
    (a) an OSS scheme return or a relevant non-UK return under Schedule 9ZD to VATA 1994 (see paragraphs 11 and 22(3) of that Schedule);
    (b) a relevant special scheme return under Schedule 9ZE to VATA 1994 (see paragraphs 11 and 16(3) of that Schedule).

(10) FA 2009 has effect subject to the following modifications. (11) Section 101 (late payment interest on sums due to HMRC) has effect as if after subsection (9) there were inserted— (10) The reference in subsection (1) to amounts payable to HMRC includes— (a) amounts of UK VAT payable under a non-UK scheme; (b) amounts of UK VAT payable under a special scheme; and references in Schedule 53 to amounts due or payable to HMRC are to be read accordingly. (11) In subsection (10)— (a) expressions used in paragraph (a) have the same meaning as in Schedule 9ZD to VATA 1994 (the OSS scheme); (b) expressions used in paragraph (b) have the same meaning as in Schedule 9ZE to VATA 1994 (the IOSS scheme). (12) Section 108 (suspension of penalties during currency of agreement for deferred payment) has effect as if in the table in subsection (5), in the entry relating to value added tax, in the second column, after “1994” there were inserted, “ or under paragraph 28 of Schedule 9ZD or paragraph 22 of Schedule 9ZE, to that Act ”. (13) (1) Section 54 of the Taxation (Cross-border Trade) Act 2018 (prohibition on collection of certain taxes or duties on behalf of country or territory without reciprocity) does not apply in relation to VAT collected by HMRC under Schedule 9ZD or 9ZE. (2) But sub-paragraph (1) is not to be read as having any bearing on whether or not, in the absence of that sub-paragraph, accounting for VAT collected under those Schedules would otherwise have been authorised. (14) The Value Added Tax Regulations 1995 (S.I. 1995/2518) have effect subject to the following modifications. (15) In Part 5A (reimbursement arrangements), regulation 43A (interpretation of Part 5A) has effect as if, in the definition of “claim”, after paragraph (a) there were inserted— (b) a claim made under paragraph 31 of Schedule 9ZD, or paragraph 25 of Schedule 9ZE, to the Act (claims which have effect for the purpose of section 80(3) of the Act as if they were section 80 claims). (16) (1) Part 19 (bad debt relief (the new scheme)) has effect subject to the following modifications. (2) Regulation 165 (interpretation of Part 19) has effect as if— (a) in the definition of “claim”, after “regulations 166” there were inserted “ or 166A ”; (b) in the definition of “return”, after “regulation 25” there were inserted “but “relevant non-UK return” has the meaning given by paragraph 22(3) of Schedule 9ZD to the Act and “relevant special scheme return” has the meaning given by paragraph 16(3) of Schedule 9ZE to the Act”; (c) at the appropriate place there were inserted— “tax period” has the meaning given by paragraph 38 of Schedule 9ZD or paragraph 43 of Schedule 9ZE (as the case may be) to the Act (3) Regulation 166 (the making of a claim to the Commissioners) has effect as if, at the beginning of paragraph (1) there were inserted “Subject to regulation 166A, and”. (4) That Part has effect as if after regulation 166 there were inserted— (166AA) (1) This regulation applies where the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return. (2) Where this regulation applies, the claimant must make the claim by— (a) amending, in accordance with Article 61 of the Implementing Regulation, that relevant non-UK return or relevant special scheme return, or (b) (where the period during which a person is entitled to make such an amendment has expired) notifying the Commissioners of the claim in writing in English. (5) Regulation 168 (records required to be kept by the claimant) has effect as if after paragraph (3) there were inserted— (4) Where regulation 166AA applies, “prescribed accounting period” in this regulation is to be read as “tax period”. (6) Regulation 171 (repayment of a refund) has effect as if at— (a) at the beginning of paragraph (1) there were inserted “Subject to regulation 171A,”; (b) at the beginning of paragraph (2) there were inserted “Subject to regulation 171B,”; (c) at the beginning of paragraph (3) there were inserted “subject to regulation 171B and,”. (7) Those Regulations have effect as if after regulation 171 there were inserted— (171A) In a case falling within sub-paragraph (b)(iii) of regulation 171(1) where the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return, the amount to be repaid is such an amount as is equal to the amount by which the VAT chargeable on the relevant supply is reduced. (171B) (1) Where— (a) the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return, and (b) a repayment is required by regulation 171(1), that repayment must be made no later than twenty days after the end of the tax period in which the payment for the relevant supply is received or the reduction in consideration is accounted for in the claimant's business accounts. (2) Where— (a) the VAT on the relevant supply was accounted for on a relevant non-UK return or a relevant special scheme return, and (b) a repayment is required by regulation 171(3), that repayment must be made no later than twenty days after the end of the tax period in which the failure to comply first occurred. (3) In either case the repayment must be made by— (a) amending the relevant non-UK return or the relevant special scheme return for the tax period in which the VAT on the relevant supply was brought into account, or (b) (where the relevant period has expired) sending the sum due to the Commissioners. (4) In sub-paragraph (3)(b), the “relevant period” is the period of 3 years beginning with the day on which the relevant non-UK return or the relevant special scheme return for the tax period in which the VAT on the relevant supply was brought into account was required to be submitted. (17) (1) Part 20A of those Regulations (Repayments to EU traders incurring VAT on goods in Northern Ireland) has effect subject to the following modifications. (2) Regulation 184D has effect as if, in the alternative version of regulation 173B(2)(c), after “Northern Ireland” there were inserted “, unless it is a supply or importation— (a) that is a scheme supply for the purposes of Schedule 9ZD to the Act, and (b) that is made by a person who is registered under that Schedule when the supply is made”; (3) Regulation 184I has effect as if, in the alternative version of regulation 173L(2), after “Northern Ireland” there were inserted “, unless it is a supply— (a) that is a scheme supply for the purposes of Schedule 9ZD of the Act, and (b) that is made by a person who is registered under that Schedule when the supply is made”. (18) The Regulations have effect as if after regulation 213 there were inserted— (214) (1) In this Part— - “applicant” means a person making a registration request under paragraph 5 of Schedule 9ZD or paragraph 5 of Schedule 9ZE to the Act; - “principal VAT Directive” means Council Directive 2006/112/EC of 28 November on the common system of value added tax; - “relevant place” means Northern Ireland or a member State. (2) In regulations 215 and 216, references to a number allocated under Article 362 of the principal VAT Directive mean a number allocated at any time under that Article. (215) A registration request under paragraph 5 of Schedule 9ZD to the Act must contain details of— (a) any VAT identification number or tax reference number by which the applicant is identified for VAT purposes by any relevant place in accordance with Article 214, Article 239 or Article 240 of the principal VAT Directive, and the name of that relevant place, (b) any number previously allocated to the applicant by a member State or the United Kingdom under Article 362 of the principal VAT Directive, or otherwise for the purposes of Article 369d of the principal VAT Directive, and the name of that relevant place, (c) where the applicant has previously been identified under a non-UK scheme (within the meaning of Schedule 9ZD to the Act), the date the applicant ceased to be so identified, (d) whether the applicant is treated as a member of a group under any of sections 43A to 43D of the Act, and (e) the name of any relevant place in which the applicant has a fixed establishment, and the address of each such fixed establishment. (216) A registration request under paragraph 5 of Schedule 9ZE to the Act must contain details of— (a) any VAT identification number or tax reference number by which the applicant is identified for VAT purposes by any relevant place in accordance with Article 214, Article 239 or Article 240 of the principal VAT Directive, and the name of that relevant place, and (b) any number previously allocated to the applicant by a member State or the United Kingdom under Article 362 of the principal VAT Directive, or otherwise for the purposes of Article 369q of the principal VAT Directive, and the name of that relevant place. (217) A registration request under paragraph 5 of Schedule 9ZD or paragraph 5 of Schedule 9ZE to the Act must also contain a declaration by the applicant that the information the applicant has provided in the registration request is accurate and complete to the best of the applicant's knowledge. (218) The following communications must be made by using the electronic portal set up by the Commissioners for the purposes of implementing Sections 3 and 4 of Chapter 6 of Title XII to the principal VAT Directive— (a) a registration request under paragraph 5 of Schedule 9ZD or paragraph 5 of Schedule 9ZE to the Act; (b) the information required by paragraph 8 of Schedule 9ZD or paragraph 8 of Schedule 9ZE to the Act; (c) a return required under paragraph 11 of Schedule 9ZD or paragraph 11 of Schedule 9ZE to the Act. (219) In this Part, “tax period” has the meaning given by paragraph 38 of Schedule 9ZD or paragraph 43 of Schedule 9ZE (as the case may be) to the Act. (219A) (1) Any amendment to a return under a special accounting scheme for a tax period in which a relevant supply was brought into account must— (a) be made in a subsequent return under a special accounting scheme of the same type, (b) be made before the end of the period of three years beginning with the day on which the return for the tax period in which the relevant supply was brought into account was required to be submitted, and (c) include details of— (i) the member State in which the relevant supply was made; (ii) the tax period to which the amendment relates; (iii) the amount of VAT concerned. (2) In this regulation, “return under a special accounting scheme” means any of the following, so far as relating to supplies of goods treated as made in the United Kingdom— (a) an OSS scheme return or a relevant non-UK return under Schedule 9ZD to the Act (see paragraphs 11 and 22(3) of that Schedule); (b) an IOSS scheme return or a relevant special scheme return under Schedule 9ZE to VATA 1994 (see paragraphs 11 and 16(3) of that Schedule). (220) (1) In this regulation “notice” means a notice given under paragraph 25(3) of Schedule 9ZD or paragraph 19(3) of Schedule 9ZE to the Act. (2) A person giving a notice (P) must do so— (a) no later than 4 years after the end of the tax period in respect of which the return identified in the notice was required to be made; and (b) in writing in English. (3) P must also provide such documentary evidence in support of the notice as P possesses. (221) (1) A person making a claim under paragraph 31(1) of Schedule 9ZD, or paragraph 25(1) of Schedule 9ZE, to the Act must provide to the Commissioners at the time of making the claim a statement in writing in English explaining how the claim is calculated. (2) A person making a claim under any other provision of paragraph 31 of Schedule 9ZD, or paragraph 25 of Schedule 9ZE to the Act must— (a) make that claim to the Commissioners, and (b) provide to the Commissioners at the time of making the claim a statement in writing in English explaining how the claim is calculated. (222) (1) A claim or other notice made under paragraph 33(2)(b) of Schedule 9ZD or paragraph 27(2)(b) of Schedule 9ZE to the Act must be made in writing in English. (2) A person making a payment— (a) under paragraph 33(3) of Schedule 9ZD to the Act in a case falling within paragraph 33(2)(b) of that Schedule, or (b) under paragraph 27(3) of Schedule 9ZE to the Act in a case falling within paragraph 27(2)(b) of that Schedule, must do so no later than twenty days after the end of the tax period in which the increase in consideration is accounted for in the person's business accounts. (223) (1) Paragraph 19(1) of Schedule 9ZD to the Act is not to apply in the case of an input tax obligation. (2) In this regulation “input tax obligation” means an obligation imposed on a taxable person relating to a claim to deduction under section 25(2) of the Act or to payment of a VAT credit.

PART 3 — Omission of Part 2 of Schedule 9ZC to VATA 1994

7

In Schedule 9ZC to VATA 1994 (online sales by overseas persons and low value importations: modifications relating to the Northern Ireland Protocol) omit Part 2 (modifications of the Value Added Tax (Imported Goods) Relief Order 1984).

PART 4 — Amendments relating to supplies of goods by persons established outside the United Kingdom that are facilitated by online marketplaces

8

• (1) Schedule 9ZC to VATA 1994 is amended as follows.

• (2) Before paragraph 2 insert—

(1B) This Act has effect as if after section 5A there were inserted— (5B) (1) This section applies where— (a) a person (“P”) makes a taxable supply of goods in the course or furtherance of a business to another person (“R”), (b) the supply is facilitated by an online marketplace, and (c) either the IOSS scheme condition or the Union goods condition is met. (2) For the purposes of this Act— (a) P is to be treated as having supplied the goods to the operator of the online marketplace, and (b) the operator is to be treated as having supplied the goods to R in the course or furtherance of a business carried on by the operator. (3) The IOSS scheme condition is met where— (a) R belongs in Northern Ireland and is not a taxable person, (b) the supply is a qualifying supply of goods within the meaning of Schedule 9ZE, and (c) the operator of the online marketplace is registered under that Schedule. (4) But the IOSS scheme condition is not met where— (a) P is established in the United Kingdom, and (b) the supply involves the removal of goods from Great Britain to Northern Ireland. (5) The Union goods condition is met where— (a) P is not established in Northern Ireland or a member State, (b) R either— (i) belongs in Northern Ireland and is not a taxable person, or (ii) belongs in a member State and is not liable or entitled to be registered for VAT in accordance with the law of that member State, and (c) the supply is a supply of Union goods that are located in Northern Ireland at the time they are supplied. (6) But the Union goods condition is not met where— (a) P is established in Great Britain, and (b) R belongs in Northern Ireland. (7) In this section, “Union goods” has the same meaning as in Regulation (EU) 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (see Article 5(23) of that Regulation).

• (3) After paragraph 2 insert—

(2A) In Part 2 of Schedule 8 (zero-rating: the groups), Group 21 (online marketplaces: deemed supply) has effect as if after Item 1 there were inserted— (2) A supply by a person not established in Northern Ireland or a member State that is deemed to be a supply to an operator of an online marketplace by virtue of section 5B (as it has effect in accordance with paragraph 1B of this Schedule).

• (4) In paragraph 3, after sub-paragraph (1) insert—

(1A) Sub-paragraph (1) has effect as if at the start there were inserted “Subject to paragraph 6ZA,

.

• (5) After paragraph 3 insert—

(3A) Schedule 11 has effect as if after paragraph 6 there were inserted— (6ZA) (1) An operator of an online marketplace must preserve and make available records relating to a relevant taxable supply in accordance with the requirements of Article 242a of the VAT Directive and Article 54c of the Implementing Regulation. (2) In this paragraph— - “the Implementing Regulation” has the same meaning as in Schedule 9ZE; - “relevant taxable supply” means a supply of goods where that supply is deemed to be a supply by an operator of an online marketplace by virtue of section 5B (as it has effect in accordance with paragraph 1B of this Schedule); - “the VAT Directive” has the same meaning as in Schedule 9ZE. (3B) (1) Sub-paragraph (2) applies (instead of section 6) to a supply of goods deemed to have taken place by section 5B(2)(a) or (b) (as it has effect in accordance with paragraph 1B of this Schedule). (2) The supply of goods is to be treated as taking place at the time when payment for the goods has been accepted within the meaning of Article 41a of the Implementing Regulation. (3) In this paragraph, “the Implementing Regulation” has the same meaning as in Schedule 9ZE.

• (6) Before Part 3 insert—

(5A) (1) In the Value Added Tax Regulations 1995 (S.I. 1995/2518), Part 3 (VAT invoices and other invoicing requirements) has effect subject to the following modifications. (2) In regulation 13 (obligation to provide a VAT invoice), paragraph (1C) has effect as if— (a) in sub-paragraph (a), after “section 5A” there were inserted “ or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act) ”; (b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “ , or paragraph 38 of Schedule 9ZE to, ”. (3) In regulation 13A (electronic invoicing), paragraph (5) has effect as if— (a) in sub-paragraph (a), after “section 5A” there were inserted “ or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act) ”; (b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “ , or paragraph 38 of Schedule 9ZE to, ”. (4) Regulation 16B (retailers' and simplified invoices: exceptions), has effect as if— (a) in sub-paragraph (a), after “section 5A” there were inserted “ or 5B (as it has effect in accordance with paragraph 1B of Schedule 9ZC to the Act) ”; (b) in sub-paragraph (b), after “section 7(5B) of” there were inserted “ , or paragraph 38 of Schedule 9ZE to, ”.

SCHEDULE 19

Definitions

1

In this Schedule—

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

• “HMRC” means Her Majesty's Revenue and Customs;

• “relevant VAT sum” means a sum to meet all or part of a liability described in article 5 of the Finance Act 2008, Section 135 (Coronavirus) Order 2020 (S.I. 2020/934).

Power to agree to further defer payment

2

• (1) The Commissioners (having agreed that payment of relevant VAT sums may be deferred until 31 March 2021) may—

• (a) agree that payment of a relevant VAT sum may be further deferred, and

• (b) make such arrangements as they consider appropriate for persons to pay relevant VAT sums.

• (2) The period for which payment is further deferred under sub-paragraph (1) may be different for different cases.

• (3) Arrangements made under sub-paragraph (1) may, among other things—

• (a) require that, in order to participate in the arrangements, a person must meet specified conditions,

• (b) require or enable a sum to be paid in instalments, including instalments of different amounts, and

• (c) make different provision for different cases.

• (4) Nothing in sub-paragraphs (1) to (3) affects the powers otherwise available to the Commissioners in connection with the collection and management of relevant VAT sums or other sums.

No surcharge

3

No liability to a surcharge on a relevant VAT sum arises under section 59 of VATA 1994 (the default surcharge).

Penalty

4

• (1) A person who is liable to pay a relevant VAT sum is liable to a penalty if the person—

• (a) fails to pay the sum on or before 30 June 2021, and

• (b) fails to enter into payment arrangements in respect of the sum on or before that day.

• (2) In sub-paragraph (1), “payment arrangements” means arrangements with HMRC (whether general or individually tailored) under which the sum is to be paid and includes arrangements entered into before this Schedule comes into force.

• (3) A person is not liable to a penalty under this Schedule in respect of a relevant VAT sum if the person satisfies HMRC or, on appeal, a tribunal that there is a reasonable excuse for the failures described in sub-paragraph (1)(a) and (b).

• (4) In sub-paragraph (3), “tribunal” has the same meaning as in VATA 1994 (see section 82 of that Act).

Amount of penalty

5

The amount of the penalty under this Schedule is 5% of so much of the relevant VAT sum as has not been paid immediately before the day on which the amount due by way of penalty is assessed under paragraph 6(1).

Assessment of penalty

6

• (1) Where a person is liable to a penalty under this Schedule, HMRC may assess the amount due by way of penalty and notify it to the person (subject to sub-paragraph (4)).

• (2) If it appears to HMRC that the amount that ought to have been assessed in an assessment under sub-paragraph (1) exceeds the amount that was assessed, HMRC may make a supplementary assessment of the amount of the excess and notify it to the person (subject to sub-paragraph (4)).

• (3) If it appears to HMRC that the amount that was assessed in an assessment under sub-paragraph (1) exceeds the amount that ought to have been assessed, HMRC may, by notice to the person, amend the assessment so as to reduce the amount due.

• (4) An assessment under sub-paragraph (1) or (2) may not be made after the end of the period of 2 years beginning with the time when facts sufficient in the opinion of HMRC to indicate that the person had failed as described in paragraph 4(1)(a) and (b) came to HMRC's knowledge.

• (5) An amendment under sub-paragraph (3) may be made after the last day on which the assessment in question could have been made.

Payment of penalty

7

• (1) A penalty under this Schedule must be paid before the end of the period of 30 days beginning with the day on which notification of the assessment of the penalty under paragraph 6(1) is issued.

• (2) Where HMRC make a supplementary assessment under paragraph 6(2), the additional amount must be paid before the end of the period of 30 days beginning with the day on which they issue the notification of that assessment.

• (3) Where HMRC amend an assessment under paragraph 6(3) that does not affect when the penalty must be paid.

Recovery of penalty

8

• (1) If an amount is assessed and notified to a person under this Schedule then unless, or except to the extent that, the assessment is withdrawn or reduced, the amount is recoverable as if it were VAT due from the person.

• (2) In sub-paragraph (1), “VAT” has the same meaning as in VATA 1994 (see section 96 of that Act).

Reviews and appeals

9

• (1) Part 5 of VATA 1994 (reviews and appeals) has effect in relation to—

• (a) any liability to a penalty under this Schedule, and

• (b) the amount of a penalty under this Schedule,

as if those matters were listed in section 83(1) of that Act.

• (2) Section 84(3), (3B) and (3C) of that Act (requirement to deposit sum payable with HMRC) have effect in relation to appeals against decisions with respect to those matters.

Double jeopardy

10

A person is not liable to a penalty under this Schedule in respect of a failure in respect of which the person has been convicted of an offence.

Notifications etc

11

• (1) Section 98 of VATA 1994 (service of notices) applies to notices and notifications to be given under this Schedule as it applies to notices and notifications to be given under that Act.

• (2) For the purposes of this Schedule, a notice or notification given to a personal representative, trustee in bankruptcy, trustee in sequestration, receiver, liquidator or other representative of a person is to be treated as having been given to that person.

• (3) In sub-paragraph (2), “trustee in sequestration” has the same meaning as in VATA 1994 (see section 96 of that Act).

SCHEDULE 20

1

The Customs (Northern Ireland) (EU Exit) Regulations 2020 (S.I. 2020/1605) are amended in accordance with this Schedule.

Duty on certain steel products imported on or after 3 March 2021

2

• (1) After regulation 7 insert—

(7A) (1) This regulation applies to goods if— (a) they are imported into the United Kingdom as a result of their entry into Northern Ireland, (b) they are not relevant goods, (c) they are not Union goods, (d) the origin of the goods (as determined in accordance with the provisions of Union customs legislation in force relating to non-preferential origin) is neither in the United Kingdom nor in the European Union, (e) they are declared, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, (f) they would (ignoring this regulation) have been subject to the EU steel safeguarding measure, and (g) if they had instead been imported into a member State they would have benefitted from tariff-rate quota in relation to that measure. (2) For the purpose of determining the amount of duty charged under section 30A(3) of the Act in respect of goods to which this regulation applies— (a) the EU steel regulation does not apply, and (b) the steel safeguards notice applies as if references to import duty were to duty charged under section 30A(3).

• (2) In regulation 8 (determination of section 30A charge), after “7” insert “ , 7A ”.

• (3) In regulation 9 (relief from section 30A duty), in sub-paragraph (c)—

• (a) for “regulation” substitute “ regulations ”;

• (b) after “7” insert “ and 7A ”.

• (4) The amendments made by this paragraph—

• (a) have effect in relation to goods declared on or after 3 March 2021, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, and

• (b) have effect as if made under section 30B of TCTA 2018 (and may be amended or revoked accordingly).

Duty on certain steel products imported before 3 March 2021

3

• (1) Before regulation 8 insert—

(7B) (1) This regulation applies to goods if— (a) they are imported into the United Kingdom as a result of their entry into Northern Ireland, (b) they are declared before 3 March 2021, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, (c) they are not relevant goods, (d) they are not Union goods, (e) the origin of the goods (as determined in accordance with the provisions of Union customs legislation in force relating to non-preferential origin) is neither in the United Kingdom nor in the European Union, (f) they would (ignoring this regulation) have been subject to an EU steel safeguarding measure, (g) if they had instead been imported into a member State they would have benefitted from tariff-rate quota in relation to that measure, and (h) they would not have been subject to a domestic steel safeguarding measure (whether they would have benefited from a quota or were otherwise not subject to the measure) if— (i) the goods had been declared for the free-circulation procedure or the authorised use procedure in Great Britain, and (ii) that declaration had been accepted at the same time as the actual declaration was accepted. (2) Where the person declaring the goods makes a relevant claim that is accepted by HMRC, the EU steel regulation does not apply for the purpose of determining the amount of duty charged under section 30A(3) of the Act in respect of the goods. (3) In this regulation “relevant claim” means a claim made in accordance with the procedure set out in the steel notice provided all conditions in that notice are complied with.

• (2) In regulation 8 (determination of section 30A charge), before “and 9” insert “ , 7B ”.

• (3) The amendments made by this paragraph—

• (a) have effect in relation to goods declared on or after IP completion day, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, and

• (b) have effect as if made under section 30B of TCTA 2018 (and may be amended or revoked accordingly).

Duty on certain steel products removed to Northern Ireland on or after 3 March 2021

4

• (1) After regulation 13 insert—

(13A) (1) This regulation applies to goods if— (a) they are removed to Northern Ireland from Great Britain, (b) they are declared, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, (c) they are not relevant goods, (d) they are not Union goods, (e) they are not domestic goods, (f) they are not goods to which regulation 11 applies, (g) the origin of the goods (as determined in accordance with the provisions of Union customs legislation in force relating to non-preferential origin) is neither in the United Kingdom nor in the European Union, (h) they would (ignoring this regulation) have been subject to an EU steel safeguarding measure, and (i) if they had instead been imported into a member State they would have benefitted from tariff-rate quota in relation to that measure. (2) For the purpose of determining the amount of duty charged under section 40A(1) of the Act in respect of goods to which this regulation applies— (a) the EU steel regulation does not apply, and (b) the steel safeguards notice applies as if references to import duty were to duty charged under section 40A(1).

• (2) In regulation 14 (determination of section 40A charge), after “13,” insert “ 13A, ”.

• (3) In regulation 16 (relief from section 40A duty), in paragraph (1)(c)—

• (a) for “regulation” substitute “ regulations ”;

• (b) after “13” insert “ and 13A ”.

• (4) The amendments made by this paragraph—

• (a) have effect in relation to goods declared on or after 3 March 2021, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, and

• (b) have effect as if made under section 40B of TCTA 2018 (and may be amended or revoked accordingly).

Duty on certain steel products removed to Northern Ireland after IP completion day

5

• (1) Before regulation 14 insert—

(13B) (1) This regulation applies to goods if— (a) they are removed to Northern Ireland from Great Britain, (b) they are declared, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, (c) they are domestic goods, (d) they are not relevant goods, (e) they are not Union goods, (f) they are not goods to which regulation 11 applies, (g) the origin of the goods (as determined in accordance with the provisions of Union customs legislation in force relating to non-preferential origin) is neither in the United Kingdom nor in the European Union, (h) they would (ignoring this regulation) have been subject to an EU steel safeguarding measure, and (i) if they had instead been imported into a member State they would have benefitted from tariff-rate quota in relation to that measure. (2) Where the person declaring the goods makes a relevant claim that is accepted by HMRC, the EU steel regulation does not apply for the purpose of determining the amount of duty charged under section 40A(1) of the Act in respect of the goods. (3) In this regulation “relevant claim” means a claim— (a) made in accordance with a procedure specified in a notice given by HMRC Commissioners, or (b) if no such notice is in force, made in accordance with the procedure set out in the steel notice provided all conditions in that notice are complied with. (4) HMRC Commissioners may by notice provide that a person who makes a relevant claim of the type mentioned in paragraph (3)(a) must notify the Secretary of State of the making of the claim. (5) The notice may provide— (a) that specified information must be included in the notification to the Secretary of State; (b) for the form and manner in which such a notification must be given; (c) that such a notification must be given within such period as is specified in the notice. (6) A notice under paragraph (3)(a) or (4)— (a) must be published; (b) may be withdrawn; (c) may be amended from time to time. (13C) (1) This regulation applies to goods if— (a) they are removed to Northern Ireland from Great Britain, (b) they are declared before 3 March 2021, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, (c) they are not domestic goods, (d) they are not relevant goods, (e) they are not Union goods, (f) they are not goods to which regulation 11 applies, (g) the origin of the goods (as determined in accordance with the provisions of Union customs legislation in force relating to non-preferential origin) is neither in the United Kingdom nor in the European Union, (h) they would (ignoring this regulation) have been subject to an EU steel safeguarding measure, (i) if they had instead been imported into a member State they would have benefitted from tariff-rate quota in relation to that measure, and (j) they would not have been subject to a domestic steel safeguarding measure (whether they would have benefited from a quota or were otherwise not subject to the measure) if— (i) the goods had been declared for the free-circulation procedure or the authorised use procedure in Great Britain, and (ii) that declaration had been accepted at the same time as the actual declaration was accepted. (2) Where the person declaring the goods makes a relevant claim that is accepted by HMRC, the EU steel regulation does not apply for the purpose of determining the amount of duty charged under section 40A(1) of the Act in respect of the goods. (3) In this regulation “relevant claim” means a claim made in accordance with the procedure set out in the steel notice provided all conditions in that notice are complied with.

• (2) In regulation 14 (determination of section 40A charge), before “15” insert “ 13B, 13C, ”.

• (3) The amendments made by this paragraph—

• (a) have effect in relation to goods declared on or after IP completion day, in accordance with Union customs legislation, for a procedure corresponding to the free-circulation procedure or the authorised use procedure, and

• (b) have effect as if made under section 40B of TCTA 2018 (and may be amended or revoked accordingly).

Interpretation

6

• (1) In regulation 3 (interpretation of Part 2), at the appropriate places insert—

“domestic steel safeguarding measure” means an additional rate of duty payable as a result of the steel safeguards notice (and goods are subject to that measure if that additional rate is payable in respect of the goods);

;

“EU steel safeguarding measure” means an additional rate of duty payable as a result of Article 1 of the EU steel regulation (and goods are subject to that measure if that additional rate is payable in respect of the goods);

;

“EU steel regulation” means Commission Implementing Regulation (EU) 2019/159 as it may be amended, or replaced, from time to time;

;

“steel notice” means the notice on movements of steel into Northern Ireland published by HMRC on 3 March 2021;

;

“steel safeguards notice” means Taxation Notice 2020/06: safeguard measures on certain steel products – application of tariff rate quotas published on 30 September 2020 by the Secretary of State, as that notice may be amended, or replaced, from time to time;

.

• (2) The amendments made by this paragraph—

• (a) are treated as having come into force on IP completion day, and

• (b) have effect as if made under sections 30B and 40B of TCTA 2018 (and may be amended or revoked accordingly).

Power to extend application of the regulations to other goods

7

Where provision inserted by this Schedule—

• (a) relates to particular goods, and

• (b) is to have effect as if made under a power conferred by TCTA 2018,

that power may (amongst other things) be exercised to make similar provision relating to other goods, including provision having retrospective effect provided any such retrospective provision does not impose or increase taxation.

SCHEDULE 21

1

HODA 1979 is amended as follows.

2

In section 6AA (excise duty on biodiesels), in subsection (2)—

• (a) after paragraph (a) insert—

(aa) for heating,

;

• (b) in paragraph (b), for “so used” substitute “ used as mentioned in paragraph (a) or (aa) ”.

3

• (1) In section 6AB (excise duty on blends of biodiesel and heavy oils), in subsection (4A), for “other than as fuel for road vehicles” substitute “ as fuel for excepted machines ”.

• (2) If paragraph 2 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part, in sub-paragraph (1) of this paragraph, after “vehicles” insert “ etc ”.

4

In section 6A (fuel substitutes), in subsection (2)—

• (a) at the end of paragraph (a) (but before the “or”) insert—

(aa) for heating;

;

• (b) in paragraph (b), for “so used” substitute “ used as mentioned in paragraph (a) or (aa) ”.

5

• (1) In section 12 (rebate not allowed on fuel for road vehicles)—

• (a) in the heading, for “for road vehicles” substitute “ other than for excepted machines ”;

• (b) in subsection (1), for “for a road vehicle” substitute “ other than for an excepted machine ”;

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) If paragraph 3 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part—

• (a) in sub-paragraph (1)(a) of this paragraph, after “vehicles” insert “ etc ”;

• (b) in sub-paragraph (1)(b) of this paragraph, after “vehicle” insert “ or as fuel for propelling a private pleasure craft ”.

6

• (1) Section 13 (penalties for contravention of section 12) is amended as follows.

• (2) In subsection (1)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in paragraph (b)—

• (i) for “road vehicle” substitute “ vehicle, vessel, machine or appliance ”;

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In subsection (1A)—

• (a) in the words before paragraph (a)—

• (i) for “road vehicle” substitute “ vehicle, vessel, machine or appliance ”;

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in paragraph (a), for “road vehicle” substitute “ vehicle, vessel, machine or appliance ”.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) In subsection (6)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in paragraph (b), for the words from “a vehicle” to the end substitute “ a vehicle, vessel, machine or appliance at a time when it is an excepted machine and remaining in that vehicle, vessel, machine or appliance as part of its fuel supply at a later time when it ceases to be an excepted machine ”.

7

• (1) In section 13ZB (restrictions on supply of certain heavy oil for heating etc), in subsection (5), in the definition of “prohibited use”, for “for a road vehicle” substitute “ other than for an excepted machine ”.

• (2) If paragraph 4 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part, in sub-paragraph (1) of this paragraph, after “vehicle” insert “ or as fuel for a private pleasure craft ”.

8

• (1) Section 13AA (restrictions on use of rebated kerosene) is amended as follows.

• (2) In subsection (1), for paragraphs (a) and (b) substitute “ an excepted machine other than an excepted machine used for heating ”.

• (3) In subsection (2), for paragraphs (a), (b) and (c) substitute—

(a) be used as fuel for an excepted machine other than an excepted machine used for heating, or (b) be taken into the fuel supply of an excepted machine other than an excepted machine used for heating.

9

In section 13AB (penalty for contravention of section 13AA), in subsection (2), in the words before paragraph (a), omit “of an engine”.

10

• (1) Section 14A (rebate on biodiesel used other than as fuel for road vehicles etc) is amended as follows.

• (2) In the heading, for “other than as fuel for road vehicles etc” substitute “ as fuel for excepted machines ”.

• (3) In subsection (1)—

• (a) in paragraph (a), for “for a road vehicle” substitute “ other than for an excepted machine ”;

• (b) omit paragraph (aa);

• (c) in paragraph (b), for “used as mentioned in paragraph (a) or (aa)” substitute “ other than a substance used as fuel for an excepted machine ”.

• (4) Omit subsection (4).

11

• (1) Section 14B (rebate on bioblend used other than as fuel for road vehicles) is amended as follows.

• (2) In the heading, for “other than as fuel for road vehicles” substitute “ as fuel for excepted machines ”.

• (3) In subsection (1)(a)—

• (a) in sub-paragraph (i), for “for a road vehicle” substitute “ other than for an excepted machine ”;

• (b) in sub-paragraph (ii), for “so used” substitute “ other than a substance used as fuel for an excepted machine ”.

• (4) In subsection (1)(b)(i), for the words from “fuel” to “of” substitute “ mentioned in ”.

• (5) If paragraph 6 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part—

• (a) in sub-paragraph (2) of this paragraph, after “vehicles” insert “ etc ”;

• (b) after sub-paragraph (3)(a) of this paragraph insert—

(aa) omit sub-paragraph (ia);

;

• (c) in sub-paragraph (3)(b) of this paragraph, for “so used” substitute “ used as mentioned in sub-paragraph (i) or (ia) ”.

12

• (1) Section 14C (restrictions on use of rebated diesel and bioblend) is amended as follows.

• (2) In subsection (1)—

• (a) in paragraph (a), for “for a road vehicle” substitute “ other than for an excepted machine ”;

• (b) in paragraph (b), for “so used” substitute “ other than a substance used as fuel for an excepted machine ”;

• (c) for subsections (c) and (d) substitute

, or (c) taken into the fuel supply of any engine that is not the engine of an excepted machine as fuel or as an additive or extender in any substance used as fuel.

• (3) In subsection (2)—

• (a) in paragraph (a), for the words from “fuel” to “of” substitute “ mentioned in ”;

• (b) in paragraph (c), for “such an engine” substitute “ an engine used as mentioned in section 13AA(1) ”.

• (4) Omit subsection (4A).

• (5) If paragraph 7 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part, in sub-paragraph (2)(c) of this paragraph—

• (a) for “subsections (c) and (d)” substitute “ subsection (c) ”;

• (b) omit “, or”.

13

• (1) Section 14D (penalties for misuse of rebated biodiesel or bioblend) is amended as follows.

• (2) In subsection (1)—

• (a) in the words before paragraph (a), for “a road vehicle” substitute “ a fuel supply ”;

• (b) in paragraph (b), for “vehicle” substitute “ fuel supply ”.

• (3) In subsection (2)(b), for “vehicle or the fuel supply of an engine” substitute “ fuel supply ”.

• (4) In subsection (3)(b), for “vehicle or the fuel supply of an engine” substitute “ fuel supply ”.

14

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

15

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

16

• (1) Section 19 (fuel used in fishing boats etc) is amended as follows.

• (2) In the heading, for “fishing boats” substitute “ lifeboats ”.

• (3) In subsection (3), omit “less any rebate allowed in respect of the duty”.

17

• (1) In section 20AAA (mixing of rebated oil), in subsection (4)(a), for “for a road vehicle” substitute “ other than for an excepted machine ”.

• (2) If paragraph 10 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part, in sub-paragraph (1) of this paragraph, after “vehicle” insert “ or as fuel for propelling a private pleasure craft ”.

18

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

19

• (1) Section 24A (penalties for misuse of marked oil) is amended as follows.

• (2) In subsection (1), for “a road vehicle” substitute “ other than for an excepted machine ”.

• (3) In subsection (3), for “for road vehicles or for road vehicles of a particular description” substitute “ other than for excepted machines ”.

• (4) In subsection (7) for the words from “road vehicle” to “the vehicle” substitute “ vehicle, vessel, machine or appliance other than an excepted machine ”.

20

• (1) Section 27 (interpretation) is amended as follows.

• (2) In subsection (1)—

• (a) after the definition of “controlled oil” insert—

“excepted machine” means a vehicle, vessel, machine or appliance that is of a description given in Schedule 1A;

;

• (b) omit the definition of “excepted vehicle”;

• (c) in the definition of “road vehicle” for “excepted vehicle” substitute “ vehicle that is an excepted machine ”.

• (3) In subsection (1ZA)—

• (a) in the words before paragraph (a), after “vehicle” insert “ , vessel, machine or appliance ”;

• (b) in paragraph (a), after “vehicle” insert “ or vessel, or, as the case may be, for powering the machine or appliance ”;

• (c) at the end of paragraph (a) (but before the “or” at the end of that paragraph) insert—

(aa) in relation to an appliance that contains a furnace or boiler for use in a heating system, that furnace or boiler,

;

• (d) for paragraph (b) substitute—

(b) an engine, furnace or boiler which draws fuel from the same supply as an engine or, as the case may be, furnace or boiler, within paragraph (a) or (aa).

• (4) In subsection (1ZB)—

• (a) after “into a vehicle” insert “ , vessel, machine or appliance ”;

• (b) after “into the vehicle” insert “ , vessel, machine or appliance ”;

• (c) the words from “from which the engine” to the end become paragraph (a);

• (d) in that paragraph, after “propelling the vehicle” insert “ or vessel or, as the case may be, for powering the machine or appliance, ”;

• (e) after that paragraph insert

, or (b) in relation to an appliance that contains a furnace or boiler for use in a heating system, from which the furnace or boiler draws fuel.

• (5) In subsection (1ZC)—

• (a) in the words before paragraph (a)—

• (i) after “vehicle” insert “ , vessel, machine or appliance, ”;

• (ii) after “engine” insert “ , furnace or boiler ”;

• (b) in paragraph (a), for “or engine” substitute “ , vessel, machine or appliance, or of the engine, furnace or boiler ”;

• (c) in paragraph (b), for “or engine” substitute “ , vessel, machine or appliance, or of the engine, furnace or boiler ”.

• (6) In subsection (1ZD)—

• (a) omit “appliances and”;

• (b) after “vehicles” insert “ , vessels, machines or appliances ”.

21

Omit Schedule 1 (excepted vehicles).

22

Before Schedule 2 insert—

SCHEDULE 1A (1) Any vehicle, vessel, machine or appliance of one of the following descriptions is an “excepted machine” for the purposes of this Act. (2) (1) An agricultural vehicle at a time when it is used for— (a) purposes relating to agriculture, horticulture, pisciculture or forestry, (b) cutting verges bordering public roads, (c) cutting hedges or trees bordering public roads or bordering verges which border public roads, or (d) clearing or otherwise dealing with frost, ice, snow or flooding, including when it is going to or from the place where it is to be or has been used for any of those purposes. (2) An agricultural vehicle that is used for any purpose on land where it is kept and used for purposes relating to agriculture, horticulture, pisciculture or forestry. (3) An agricultural vehicle kept and used on a golf course or on land maintained by a community amateur sports club. (4) An agricultural vehicle used in any other circumstances provided— (a) it is not being used on a public road, and (b) it uses fuel gas for fuel. (5) In this paragraph, “an agricultural vehicle” means— (a) a tractor; (b) a vehicle designed and constructed primarily for use otherwise than on roads which— (i) has a revenue weight not exceeding 1,000 kilograms, and (ii) is designed and constructed to seat only the driver; (c) any vehicle that is an exempt vehicle for the purposes of paragraph 20A of Schedule 2 to that Act (vehicles used for purposes relating to agriculture, horticulture or forestry); (d) any other vehicle designed and constructed to be used for purposes relating to agriculture, horticulture, pisciculture or forestry. (3) (1) A special vehicle at a time when it is used— (a) for purposes relating to agriculture, horticulture, pisciculture or forestry, including when it is going to or from the place where it is to be or has been used for such purposes, or (b) on a golf course or on land maintained by a community amateur sports club. (2) A special vehicle used in any other circumstances provided it uses fuel gas for fuel. (3) In this paragraph, a “special vehicle” is a vehicle of any weight but otherwise designed, constructed and used as mentioned in Part 4 of Schedule 1 to the Vehicle Excise and Registration Act 1994. (4) (1) An unlicensed vehicle at a time when it is used— (a) for purposes relating to agriculture, horticulture, pisciculture or forestry, (b) on a golf course or on land maintained by a community amateur sports club, or (c) on land occupied by a travelling fair or travelling circus. (2) An unlicensed vehicle used in any other circumstances provided it uses fuel gas for fuel. (3) In this paragraph, “unlicensed vehicle” means a vehicle that is— (a) unlicensed for the purposes of section 22(1D) of the Vehicle Excise and Registration Act 1994, (b) kept by a person who has complied with such requirements relating to the vehicle as are prescribed for the time being in regulations under that section, and (c) not used or kept on a public road. (5) Any vehicle designed to be operated on a railway within the meaning of section 67(1) of the Transport and Works Act 1992. (6) (1) Any vessel other than a vessel in Northern Ireland that is a private pleasure craft. (2) Any machine or appliance that is permanently on a vessel within sub-paragraph (1). (3) Any machine or appliance that is permanently on a private pleasure craft in Northern Ireland, but that draws fuel from a supply other than the supply from which the engine provided for propelling the private pleasure craft draws fuel. (4) In this paragraph, references to Northern Ireland do not include any of the territorial sea of the United Kingdom that is adjacent to Northern Ireland. (7) A machine designed only for mowing grass at a time when it is used on— (a) land maintained for purposes relating to agriculture, horticulture, pisciculture or forestry; (b) a golf course or on land maintained by a community amateur sports club; (c) land occupied by a travelling fair or travelling circus. (8) (1) A machine or appliance that is not a vehicle or vessel at a time when it is used— (a) for purposes relating to agriculture, horticulture, pisciculture or forestry; (b) on a golf course or on land maintained by a community amateur sports club; (c) to operate or maintain equipment in a travelling fair or travelling circus; (d) for heating, or to generate electricity, for premises that are not used for commercial purposes. (2) For the purposes of sub-paragraph (1)(d), caravans used for the accommodation of those who travel with a travelling fair or travelling circus are to be treated as premises that are not used for commercial purposes. (9) (1) In this Schedule— - “caravan” has the meaning given by section 29(1) of the Caravan Sites and Control of Development Act 1960; - “community amateur sports club” has the meaning given by section 658 of the Corporation Tax Act 2010; - “fair” means a fair consisting wholly or principally of the provision of amusements; - “fuel gas” means any substance which would be road fuel gas within the meaning given by section 5(1) if it were for use as fuel in a road vehicle; - “golf course” includes driving range (whether or not on the site of a golf course). (2) In this Schedule, references to a vehicle being used— (a) on a golf course, or (b) on land maintained by a community amateur sports club, include references, when two parts of the golf course or land are on either side of a road, to the vehicle going between the two parts by the shortest practicable route. (3) In this Schedule, a fair or circus is a travelling fair or circus if— (a) it is provided or operated wholly or principally by persons who travel from place to place for the purpose of providing or operating fairs or circuses, and (b) it is held at a place no part of which has been used for the provision of that fair or (as the case may be) circus on more than 27 days in the same calendar year.

23

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

• (2) In paragraph 19, for “road vehicle” substitute “ vehicle, vessel, machine or appliance ”.

• (3) In paragraph 20, at the end insert “ , vessel, machine or appliance ”.

• (4) In paragraph 21—

• (a) for “(other” substitute “ (including places of any description, and in particular tents or movable structures, other ”;

• (b) after “vehicles” insert “ , vessels, machines or appliances ”;

• (c) after “any vehicle” insert “ , vessel, machine or appliance ”.

• (5) If paragraph 13 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part—

• (a) in sub-paragraph (2) of this paragraph, after “road vehicle” insert “ or a vessel ”;

• (b) in sub-paragraph (3) of this paragraph, for the words from “at the end” to the end substitute “for “ or a vessel ” substitute “, vessel, machine or appliance” ”;

• (c) for sub-paragraph (4)(b) of this paragraph substitute—

(b) for “or vessels” substitute “ , vessels, machines or appliances ”;

;

• (d) for sub-paragraph (4)(c) of this paragraph substitute—

(c) for “or vessel” substitute “ , vessel, machine or appliance ”

.

24

• (1) In Schedule 5 (sampling), in paragraph 7, after “vehicle” insert “ , vessel, machine or appliance ”.

• (2) If paragraph 14 of Schedule 11 to FA 2020 has come into force in relation to any part of the United Kingdom before this Schedule comes into force then, in relation to that part, in sub-paragraph (1) of this paragraph, for the words from “after” to the end substitute “for “ or a vessel ” substitute “, vessel, machine or appliance” ”.

SCHEDULE 22

PART 1 — First-year allowance for plant and machinery

1

Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

2

In section 39 (first-year allowances available for certain types of qualifying expenditure only), at the end insert—

section 45O	expenditure on plant and machinery for use in freeport tax sites.

3

After section 45N insert—

(45O) (1) Expenditure incurred by a company on the provision of plant or machinery is first-year qualifying expenditure if conditions A to E are met. (2) Condition A is that the plant or machinery is for use primarily in an area which, at the time the expenditure is incurred, is a freeport tax site. (3) Condition B is that the plant or machinery is unused and is not second-hand. (4) Condition C is that the expenditure is incurred for the purposes of a qualifying activity within section 15(1)(a) or (f). (5) Condition D is that the expenditure is incurred on or before 30 September 2026. (6) Condition E is that the company is within the charge to corporation tax. (7) This section is subject to— - regulations under section 45P, - section 45Q (exclusion of plant or machinery partly for use outside freeport tax sites), - section 45R (effect of plant or machinery subsequently being primarily for use outside freeport tax sites), and - section 46 (general exclusions). (45P) (1) The Treasury may by regulations change the conditions that must be met in order for expenditure to be first-year qualifying expenditure under section 45O (whether by adding, removing or altering conditions). (2) Regulations under this section may not remove the requirement for the plant or machinery to be for use primarily in an area which, at the time the expenditure is incurred, is a freeport tax site. (3) Regulations under this section may, among other things— (a) make provision by reference to the expenditure, the plant or machinery, the company that incurred the expenditure or a person who is or has been connected with that company; (b) impose conditions relating to accounts or other records; (c) impose other conditions requiring a person to take steps specified in the regulations; (d) make different provision for different purposes; (e) include incidental, supplementary, consequential, transitional or transitory provision. (4) Regulations under this section— (a) may amend, repeal or otherwise modify section 45O and other provisions of this Part, and (b) where made under subsection (3)(e), may amend, repeal or otherwise modify other provisions of this Act or provisions of another Act. (45Q) (1) This section applies if— (a) at the time when expenditure on plant or machinery is incurred, the company incurring it intends the plant or machinery to be used partly in an area which is not a freeport tax site, and (b) the main purpose, or one of the main purposes, for which a person is party to the relevant arrangements is the obtaining of a first-year allowance, or a greater first-year allowance, in respect of the part of the expenditure that is attributable to that intended use in an area which is not a freeport tax site (the “non-freeport part” of the expenditure). (2) The non-freeport part of the expenditure is not first-year qualifying expenditure under section 45O. (3) For the purposes of this section, the non-freeport part of the expenditure is to be determined on a just and reasonable basis. (4) In this section, “the relevant arrangements” means— (a) the transaction under which the expenditure on the plant or machinery is incurred, and (b) any scheme or arrangements of which that transaction forms part. (45R) (1) Expenditure on the provision of plant or machinery is to be treated as never having been first-year qualifying expenditure under section 45O if, at any relevant time— (a) the primary use to which the plant or machinery is put is other than in an area which, at the time the expenditure was incurred, was a freeport tax site, or (b) the plant or machinery is held for use otherwise than primarily in an area which was a freeport tax site at that time. (2) “Relevant time” means a time within the relevant period when the plant or machinery is owned by— (a) the company that incurred the expenditure, or (b) a person who is, or at any time in that period has been, connected with that company. (3) “The relevant period” means the period of 5 years beginning with— (a) the day on which the plant or machinery in question is first brought into use for the purposes of a qualifying activity carried on by the company, or (b) if earlier, the day on which it is first held for such use. (4) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (1). (5) If a person who has made a return becomes aware that, after making it, anything in it has become incorrect because of the operation of this section, that person must give notice to an officer of Revenue and Customs specifying how the return needs to be amended. (6) The notice must be given within 3 months beginning with the day on which the person first became aware that anything in the return had become incorrect because of the operation of this section.

4

In section 46(1) (general exclusions applying to first-year qualifying expenditure), at the end insert—

section 45O	(expenditure on plant and machinery for use in freeport tax sites).

5

In section 52(3) (amount of first-year allowances), in the Table, at the end insert—

Expenditure qualifying under section 45O (expenditure on plant and machinery for use in freeport tax sites)	100%

.

PART 2 — Structures and buildings allowances

6

Part 2A of CAA 2001 (structures and buildings allowances) is amended as follows.

7

• (1) Section 270AA (structures and buildings allowances) is amended as follows.

• (2) In subsection (2)(b)(ii), for “the period of 33 1/3 years” substitute “ the period of the length specified in subsection (2A), ”.

• (3) After that subsection insert—

(2A) The length of the period referred to in subsection (2)(b)(ii) is— (a) in the case of freeport qualifying expenditure, 10 years, and (b) in the case of other qualifying expenditure, 33 1/3 years.

• (4) In subsection (5), for “3% of the qualifying expenditure” substitute

— (a) in the case of freeport qualifying expenditure, 10% of the expenditure, and (b) in the case of other qualifying expenditure, 3% of the expenditure.

• (5) In subsection (6), after “section—” insert—

“freeport qualifying expenditure” has the meaning given by section 270BNA;

.

8

In section 270BJ (expenditure on renovation, conversion or incidental repairs), after subsection (2) insert—

(2A) For the purposes of subsection (1), in relation to a building or structure that has been brought into use at a time when the area in which the building or structure is situated was not a freeport tax site, section 270BNA(2) and (7) have effect as if the renovation or conversion of, or repairs to, part of the building or structure were the construction of that part for the first time.

9

In section 270BK(3) (preparation of sites), for “and 270AB” substitute “ , 270AB and 270BNA(2) and (7) ”.

10

After section 270BN insert—

(270BNA) (1) In this Part, qualifying expenditure incurred on the construction or acquisition of a building or structure is “freeport qualifying expenditure” if conditions A to E are met. (2) Condition A is that construction of the building or structure begins at a time when the area in which the building or structure is situated is a freeport tax site. (3) Condition B is that the building or structure is first brought into qualifying use by the person entitled to the allowance under this Part— (a) at a time when the area in which the building or structure is situated is a freeport tax site, and (b) on or before 30 September 2026. (4) Condition C is that the qualifying expenditure is incurred— (a) at a time when the area in which the building or structure is situated is a freeport tax site, and (b) on or before 30 September 2026. (5) Condition D is that the person who incurs the qualifying expenditure is within the charge to income tax or corporation tax when it is incurred. (6) Condition E is that an allowance statement— (a) made for the purposes of section 270IA by the person who incurred the qualifying expenditure, and (b) relied on for the purposes of the first valid claim for an allowance under this Part in respect of that expenditure, states that the person wants the expenditure to be freeport qualifying expenditure. (7) For the purposes of subsection (2), the construction of a building or structure is treated as beginning when the first contract for works to be carried out in the course of the construction of that particular building or structure (whether or not the contract also relates to the construction of other buildings or structures) is entered into. (8) This section is subject to regulations under section 270BNC. (270BNB) (1) Subsection (2) applies if, on the later of— (a) the day on which the building or structure is first brought into non-residential use, and (b) the day on which the qualifying expenditure is incurred, a building or structure is situated only partly in an area that is a freeport tax site. (2) Only so much of the qualifying expenditure as, on a just and reasonable apportionment, is attributable to the part situated in the freeport tax site is to be treated as freeport qualifying expenditure. (3) Subsection (4) applies if a building or structure is first brought into qualifying use by the person entitled to the allowance under this Part partly on or before 30 September 2026 and partly after that date. (4) Only so much of the qualifying expenditure as, on a just and reasonable apportionment, is attributable to the part first brought into qualifying use by that person on or before that date is to be treated as freeport qualifying expenditure. (270BNC) (1) The Treasury may by regulations change the conditions that must be met in order for qualifying expenditure to be “freeport qualifying expenditure” for the purposes of this Part (whether by adding, removing or altering conditions). (2) Regulations under this section— (a) may not remove the requirement for the building or structure to be situated in an area that is a freeport tax site, but (b) may alter the time when that requirement must be satisfied. (3) Regulations under this section may, among other things— (a) make provision by reference to the expenditure, the building or structure, the person who incurred the expenditure or a person who is or has been connected with that person; (b) impose conditions relating to accounts or other records; (c) impose other conditions requiring a person to take steps specified in the regulations; (d) make different provision for different purposes; (e) include incidental, supplementary, consequential, transitional or transitory provision. (4) Regulations under this section— (a) may amend, repeal or otherwise modify section 270BNA and other provisions of this Part, and (b) where made under subsection (3)(e), may amend, repeal or otherwise modify other provisions of this Act or provisions of another Act.

11

• (1) Section 270EB (multiple uses) is amended as follows.

• (2) In subsection (2), for “3%” substitute “ the relevant percentage ”.

• (3) After subsection (3) insert—

(3A) For the purposes of subsection (2), “the relevant percentage” means the percentage specified in section 270AA(5).

12

In section 270IA(4) (evidence of qualifying expenditure etc), after subsection (4) insert—