Finance (No. 3) Bill (HC Bill 200)

(4) Accordingly—

(a) TMA 1970 is to have effect as if any reference to corporation tax
included the bank levy where it is treated by paragraph 49(2) or 50(2)
as an amount of corporation tax chargeable on an entity, and

(b) 5in particular, where the bank levy is so treated, it is due and payable
as an amount of corporation tax in accordance with section 59D of
TMA 1970, subject to section 59E of that Act.

(5) Nothing in section 53 of this Act (leases and changes to accounting
standards) has effect in relation to the bank levy or any provision of this
10Schedule.

Joint and several liability

52 (1) This paragraph applies where the bank levy is charged as provided for by
paragraph 4.

(2) The entities within sub-paragraph (3) are jointly and severally liable for the
15bank levy liability of the relevant group’s responsible member (see
paragraph 53) for an accounting period; and HMRC may enforce that
liability against any of those entities accordingly.

(3) The entities within this sub-paragraph are—

(a) if the relevant group is a relevant non-banking group, all relevant
20members of the relevant group within the charge to corporation tax
as at the end of the chargeable period, or

(b) otherwise, all members of the relevant group within the charge to
corporation tax as at the end of the chargeable period.

(4) In sub-paragraph (3)(a) “relevant member” means a member of the relevant
25group which—

(a) is a member of a relevant UK banking sub-group,

(b) is a UK resident bank covered by paragraph 19(10),

(c) is an entity covered by paragraph 19(11), or

(d) is a relevant foreign bank covered by paragraph 19(17).

(5) 30An entity’s liability by virtue of sub-paragraph (2) is not affected if, after the
end of the chargeable period, it ceases to be within the charge to corporation
tax.

(6) An entity is not within sub-paragraph (3) if, as at the end of the chargeable
period, it is—

(a) 35a securitisation company,

(b) a covered bond vehicle, or

(c) an entity of a kind prescribed by an order made by the Treasury.

(7) In sub-paragraph (6)—

• “capital market arrangement” has the same meaning as in section
  4072B(1) of the Insolvency Act 1986 (see paragraph 1 of Schedule 2A of
  that Act);

• “covered bond vehicle” means a limited liability partnership—

  (a)

  which is a party to a capital market arrangement, or a
  transaction in pursuance of a capital market arrangement,

  (b)

  45whose trade or business (ignoring any incidental activities)
  consists wholly of one or both of the following—

  Finance (No. 3) BillPage 341

  (i)

  providing guarantees, and

  (ii)

  acquiring, owning and managing assets directly or
  indirectly forming the whole or part of the security for
  the capital market arrangement, and

  (c)

  5which is within the charge to corporation tax;

• “limited liability partnership” includes an entity established under the
  law of a territory outside the United Kingdom of a similar character
  to a limited liability partnership;

• “securitisation company” means a company of the kind mentioned in
  10paragraphs (a) to (e) of section 83(2) of FA 2005 or paragraphs (a) to
  (e) of regulation 4(2) of the Taxation of Securitisation Companies
  Regulations 2006 (S.I. 2006/3296S.I. 2006/3296).

(8) The responsible member’s “bank levy liability” for an accounting period—

(a) is the member’s liability for corporation tax for that period as
15calculated in accordance with paragraph 8 of Schedule 18 to FA 1998
so far as the tax calculated consists of the bank levy by virtue of
paragraph 49(2) of this Schedule, and

(b) includes any interest or penalties payable in relation to that tax so far
as it consists of the bank levy.

(9) 20An order under sub-paragraph (6) may have retrospective effect in relation
to—

(a) any chargeable period in which the order is made, or

(b) in the case of an order made on or before 31 December 2011, any
chargeable period ending on or after 1 January 2011.

(10) 25Orders under sub-paragraph (6) are to be made by statutory instrument.

(11) A statutory instrument containing an order under this paragraph is subject
to annulment in pursuance of a resolution of the House of Commons.

Meaning of “the responsible member”

53 (1) This paragraph applies where the bank levy is charged as provided for by
30paragraph 4.

(2) In this paragraph and paragraph 54 “chargeable member” means a member
of the relevant group within paragraph 52(3).

(3) The relevant group’s responsible member is the entity (“E”) in relation to
which the following requirements are met—

(a) 35E is a chargeable member of the relevant group,

(b) E has an accounting period for corporation tax purposes which is the
same as the chargeable period,

(c) during the chargeable period but no later than 45 days after it started,
the parent entity, or another entity acting on behalf of the parent
40entity, nominated E to HMRC to be the responsible member, and

(d) HMRC did not reject E’s nomination.

See paragraph 54 for further provision about nominations.

(4) If—

(a) no entity meets the requirements in sub-paragraph (3) and the
45relevant group is a UK banking group or a building society group,
and

(b) the parent entity is a chargeable member of the relevant group,

the responsible member is the parent entity.

(5) If no entity meets the requirements in sub-paragraph (3) and the relevant
group is a foreign banking group or a relevant non-banking group, the
5responsible member is the entity in relation to which the following
requirements are met—

(a) it is a chargeable member of the relevant group,

(b) it has an accounting period for corporation tax purposes which is the
same as the chargeable period, and

(c) 10it is—

(i) the relevant member with the largest amount of chargeable
equity and liabilities, or

(ii) if the relevant member with the largest amount of chargeable
equity and liabilities is a relevant UK sub-group or a relevant
15UK banking sub-group (as the case may be), the entity which
is the parent or parent undertaking for that sub-group.

(6) In sub-paragraph (5)(c) “relevant member”—

(a) has the same meaning as in paragraph 18 or 20 (as the case may be),
and

(b) 20includes a relevant foreign bank covered by paragraph 17(17) or
19(17) (as the case may be).

(7) If no entity meets the requirements of sub-paragraph (3) or sub-paragraph
(4) or (5) (as the case may be), the responsible member is the member of the
relevant group determined by HMRC within the period of 30 days after the
25end of the chargeable period.

(8) HMRC must give written notice of a determination under sub-paragraph (7)
to the member concerned within that period.

(9) HMRC cannot determine as the responsible member under sub-paragraph
(7)—

(a) 30an entity within 52(6)(a) or (b), or

(b) an entity of a kind prescribed by an order under paragraph 52(6)(c).

(10) In relation to chargeable periods arising by virtue of paragraph 40
(chargeable periods: entities which do not prepare financial statements), the
Treasury may by order modify the time limit applying to determinations
35under sub-paragraph (7) (including determinations in cases to which
paragraph 64(3) applies).

(11) An order under sub-paragraph (10) may amend paragraphs 41 to 44 of
Schedule 18 to FA 1998 (discovery assessments and determinations) in
relation to any bank levy charged by virtue of paragraph 40 of this Schedule.

(12) 40Orders under sub-paragraph (10) are to be made by statutory instrument.

(13) A statutory instrument containing an order under sub-paragraph (10) is
subject to annulment in pursuance of a resolution of the House of Commons.

(14) An order under this paragraph may have retrospective effect in relation to—

(a) any chargeable period in which the order is made, or

(b) 45in the case of an order made on or before 31 December 2011, any
chargeable period ending on or after 1 January 2011.

54 (1) This paragraph applies for the purposes of paragraph 53(3).

(2) Only one nomination may be made during the chargeable period.

(3) A nominator may nominate itself.

(4) HMRC may from time to time publish requirements as to the information to
5be included with a nomination.

(5) HMRC may reject a nomination within the period of 30 days starting with
the day on which it receives the nomination.

(6) HMRC may reject a nomination only if—

(a) the nomination contravenes sub-paragraph (2),

(b) 10information required under sub-paragraph (4) is missing from the
nomination, or

(c) HMRC has reason to believe that the nominee will turn out—

(i) not to be a chargeable member of the relevant group,

(ii) not to have an accounting period for corporation tax
15purposes which is the same as the chargeable period, or

(iii) not to have sufficient resources itself to pay the bank levy.

Consequential amendment to section 1 of PCTA 1968

55 In section 1 of the Provisional Collection of Taxes Act 1968 (temporary
statutory effect of House of Commons resolutions affecting certain taxes), in
20subsection (1) after “corporation tax” insert “, the bank levy”.

Consequential amendments to TMA 1970

56 TMA 1970 is amended as follows.

57 (1) Section 59E (provision about when corporation tax is due and payable) is
amended as follows.

(2) 25In subsection (11), after paragraph (c) insert—

“(d) to the bank levy where treated as an amount of corporation
tax chargeable on a company by paragraph 49 or 50 of
Schedule 19 to the Finance Act 2011 (the bank levy).”

(3) After that subsection insert—

“(12) 30Without prejudice to the generality of any provision above—

(a) in relation to cases where the bank levy is treated as an
amount of corporation tax chargeable on a company,
regulations under this section may make provision—

(i) for amounts of the bank levy to be treated as
35becoming due and payable on dates which fall within
the chargeable period (within the meaning of
Schedule 19 to the Finance Act 2011);

(ii) for payments in respect of any such amounts of the
bank levy as are mentioned in sub-paragraph (i) to
40become due and payable on dates which fall within
that period;

(b) in relation to cases where a company on which the bank levy
is treated as an amount of corporation tax chargeable for an

accounting period has made payments in respect of
corporation tax for that period, regulations under this section
may make provision for or in connection with determining
the extent to which those payments are to be treated as being
5payments of the bank levy;

(c) in relation to cases where a company (“the relevant
company”) has made payments in respect of corporation tax
for an accounting period wholly or partly on the assumption
that the bank levy will be treated as an amount of corporation
10tax chargeable on the relevant company for that period,
regulations under this section may make provision for or in
connection with treating those payments (wholly or partly)
to have been made by another company if it turns out that the
bank levy is not to be treated as an amount of corporation tax
15chargeable on the relevant company for that period;

(d) where regulations under this section impose a requirement
within subsection (2)(j) above to furnish information for
purposes related to the bank levy, the regulations may make
provision for or in connection with applying Part 7 of
20Schedule 36 to the Finance Act 2008 in whole or in part (with
or without modification) as if the requirement to furnish the
information were contained in an information notice within
the meaning of that Schedule.”

58 At the end of section 59F(6) (provision for paying corporation tax on behalf
25of group members) insert “, and

(c) the bank levy where treated as an amount of corporation tax
chargeable on a company by paragraph 49 or 50 of Schedule
19 to the Finance Act 2011 (the bank levy).”

Consequential amendments to Schedule 18 to FA 1998

59 30Schedule 18 to FA 1998 (company tax returns) is amended as follows.

60 At the end of paragraph 1 insert—

• “paragraphs 49 and 50 of Schedule 19 to the Finance Act 2011
  (the bank levy).”

61 After paragraph 3 insert—

“3A (1) 35Her Majesty’s Revenue and Customs may from time to time
publish requirements as to the information, accounts, statements
and reports which a company must deliver as part of its company
tax return where the company has a tax liability by virtue of
paragraph 49 or 50 of Schedule 19 to the Finance Act 2011 (the
40bank levy); and such information, accounts, statements and
reports must be delivered as if the notice to the company under
paragraph 3(1) had required them to be delivered (and paragraph
4 is to be read accordingly).

(2) The publication of any requirements under sub-paragraph (1)
45does not stop a notice under paragraph 3(1) requiring the delivery
of any additional information, accounts, statements and reports as
part of a company tax return.”

62 (1) Paragraph 8 is amended as follows.

(2) At the end of the “Third step” in sub-paragraph (1) insert—

“3. Any amount of the bank levy chargeable by virtue of
paragraph 49 or 50 of Schedule 19 to the Finance Act 2011 (the
bank levy).”

(3) 5After sub-paragraph (1) insert—

“(1A) Sub-paragraph (1B) applies if an amount of the bank levy
chargeable by virtue of paragraph 49 or 50 of Schedule 19 to the
Finance Act 2011 (the bank levy) is added at the third step.

(1B) Any deductions made at the fourth step are to be treated as made
10from all other amounts before being made from the amount of the
bank levy.”

63 (1) Paragraph 11 is amended as follows.

(2) The existing provision becomes sub-paragraph (1).

(3) After that sub-paragraph insert—

“(2) 15Sub-paragraph (1) does not affect—

(a) the power to require the delivery of accounts, information
or documents in relation to a company’s tax liability by
virtue of paragraph 49 or 50 of Schedule 19 to the Finance
Act 2011 (the bank levy), or

(b) 20the requirements which may be imposed under paragraph
3A.”

Transitional provision

64 (1) Sub-paragraphs (2) to (6) apply if the chargeable period starts on or before
the day on which this Act is passed (whether or not it ends on or before that
25day).

(2) Paragraph 53(3)(c) has effect as if for the words “during the chargeable
period but no later than 45 days after it started” there were substituted
“within the period of 7 days starting with the day on which this Act is
passed”.

(3) 30Paragraph 53(7) has effect as if for the words “30 days after the end of the
chargeable period” there were substituted “15 days starting with the day on
which this Act is passed”.

(4) Paragraph 54(5) has effect as if for “30” there were substituted “7”.

(5) Sub-paragraph (6) applies if, before the passing of this Act—

(a) 35HMRC published a statement stating that it was ready to receive
nominations for responsible members,

(b) an entity made a nomination in accordance with HMRC’s statement,
and

(c) the nomination included all information required by HMRC’s
40statement.

(6) For the purposes of paragraphs 53(3)(c) and 54(5) (as modified above) the
nomination is to be treated as if it were made by the entity and received by
HMRC immediately after the passing of this Act.

(7) The requirements covered by paragraph 54(4) include any requirements
published by HMRC before the passing of this Act which are stated to apply
for the purposes of nominations for responsible members.

(8) But such requirements are to apply only to nominations made during 2011.

(9) 5Regulations under section 59E of TMA 1970, in relation to amounts within
subsection (11)(d) of that section (amounts of bank levy), made on or before
31 December 2011 may have effect in relation to amounts of bank levy
which—

(a) are payable in respect of chargeable periods ending on or before that
10day, or

(b) treated as amounts of corporation tax for accounting periods ending
on or before that day.

Part 7 Double taxation relief

15Arrangements affording double taxation relief

65 (1) If the Treasury by order declares—

(a) that arrangements specified in the order have been made in relation
to any foreign territory with a view to affording relief from double
taxation in relation to the bank levy and any equivalent foreign levy,
20and

(b) that it is expedient that those arrangements should have effect,

those arrangements (“double taxation arrangements”) have effect so far as
they provide for relief from the bank levy.

(2) In this Part of this Schedule—

• 25“equivalent foreign levy”, in relation to a foreign territory, means any
  tax imposed by the law of that territory which corresponds to the
  bank levy;

• “foreign territory” means a territory outside the United Kingdom.

(3) For the purposes of sub-paragraph (2), tax may correspond to the bank levy
30even though—

(a) the tax is payable under the law of a province, state or other part of
a country,

(b) it is levied by or on behalf of a municipality or other local body, or

(c) its proceeds form a fund used for a particular purpose.

(4) 35Double taxation arrangements have effect under sub-paragraph (1)—

(a) subject to the following provisions of this paragraph, and

(b) despite anything in any other enactment.

(5) This paragraph gives effect to arrangements even if they provide for relief
from the bank levy for periods before the making of the arrangements or
40before the passing of this Act.

(6) Relief under this paragraph requires a claim.

(7) An order under this paragraph revoking an earlier order may contain
transitional provisions that appear to the Treasury to be necessary or
expedient.

(8) The Treasury may by regulations make provision—

(a) generally for carrying out the provisions of this paragraph or double
taxation arrangements;

(b) for removing, or reducing the amount of, relief obtained by virtue of
5double taxation arrangements in circumstances where a scheme or
arrangement of a specified description has been made or in other
specified circumstances;

(c) for restricting the amount of relief allowed against an entity’s
liability for the bank levy for a chargeable period to an amount
10calculated in a specified manner.

(9) Regulations under sub-paragraph (8)(a) may, in particular, provide that
where, under double taxation arrangements, the Commissioners arrive at a
solution to a case, or make a mutual agreement with an authority in another
territory for the resolution of a case—

(a) 15the Commissioners are to give effect to the solution or mutual
agreement despite anything in any enactment, and

(b) any adjustment as is appropriate in consequence may be made.

(10) Regulations under this paragraph may—

(a) amend any provision made by or under an Act whenever passed or
20made (including this Act), and

(b) contain transitional provisions that appear to the Treasury to be
necessary or expedient.

(11) Orders or regulations under this paragraph are to be made by statutory
instrument.

(12) 25A statutory instrument containing an order or regulations under this
paragraph is subject to annulment in pursuance of a resolution of the House
of Commons.

Power to provide for double taxation relief

66 (1) The Treasury may by regulations make provision for relief from the bank
30levy for the purpose of affording relief from double taxation in relation to the
bank levy and any equivalent foreign levy imposed by the law of a foreign
territory.

(2) Regulations under this paragraph must specify the equivalent foreign levy
or levies in respect of which they are made.

(3) 35Regulations under this paragraph may, in particular—

(a) provide for relief from the bank levy for periods before the making
of the regulations or before the passing of this Act;

(b) make provision for removing, or reducing the amount of, relief
obtained in circumstances where a scheme or arrangement of a
40specified description has been made or in other specified
circumstances;

(c) make provision for restricting the amount of relief allowed against
an entity’s liability for the bank levy for a chargeable period to an
amount calculated in a specified manner.

(4) 45Regulations under this paragraph may—

(a) make different provision for different purposes, cases or
circumstances,

(b) amend any provision made by or under an Act whenever passed or
made (including this Act), and

(c) contain transitional provisions that appear to the Treasury to be
necessary or expedient.

(5) 5Regulations under this paragraph are to be made by statutory instrument.

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

(a) in a case where the reciprocity condition is met, are subject to
annulment in pursuance of a resolution of the House of Commons,
and

(b) 10in any other case, may not be made unless a draft has been laid before
and approved by a resolution of that House.

(7) The reciprocity condition is met if the Treasury is satisfied that in relation to
the foreign territory or each of the foreign territories concerned—

(a) appropriate provision has been made under the law of the territory
15for relief from double taxation in relation to the bank levy and the
equivalent foreign levy under the law of that territory to which the
regulations apply, or