Finance (No. 4) Bill

Session 2010 - 12
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Other Bills before Parliament

Finance (No. 4) Bill

Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
569

      (3)
A “reconciliation period” is—
(a)
if P has monthly accounting periods, a period consisting of
12 consecutive accounting periods,
(b)
if P has quarterly accounting periods, a period consisting
of 4 consecutive accounting periods, and
5
(c)
if P has any other length of accounting period, a period
consisting of such number of consecutive accounting
periods as would produce a period as near as possible to
365 days.
      (4)
In relation to an accounting period, a reference to “the
10
reconciliation period” is to the reconciliation period in which that
accounting period falls.
Credit allowed
3     (1)
To determine whether credit is allowed for an accounting
period—
15
(a)
calculate the notional UK liability and the notional foreign
liability for the accounting period, and
(b)
compare the two figures.
      (2)
No credit is allowed if either figure is nil or both figures are nil.
      (3)
Subject to that, credit is allowed of an amount equal to the smaller
20
of the two figures (or, if they are the same, of an amount equal to
that figure).
Notional UK liability
4
The notional UK liability for an accounting period is calculated as
follows—
25


Step 1

If the applicable class is a class to which a provision of sections 2
to 4 applies, calculate P’s net stake receipts for the period in
accordance with section 5 but by reference to eligible bets (rather
30
than bets of the applicable class).


If the applicable class is the class to which section 5AB applies,
calculate the commission charges in accordance with that section
relating to eligible bets determined in the period (rather than bets
35
to which that section applies).


If the applicable class is dutiable pool bets, calculate P’s net pool
betting receipts for the period in accordance with section 7A but
by reference to eligible bets (rather than dutiable pool bets).
40


In calculating P’s net stake receipts or net pool betting receipts for
the purposes of this Step, do not carry forward to the period any
losses in respect of eligible bets that arose in an accounting period
before the start of the reconciliation period.
45


Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
570


Step 2

If the amount calculated under Step 1 is nil or a negative amount,
the notional UK liability for the period is nil.


Otherwise, apply the appropriate rate to the amount calculated
5
under Step 1. The result is the notional UK liability for the period.


“The appropriate rate” is the percentage specified in whichever of
section 2(3), 3(3)(a), 3(3)(b), 4(3), 5AB(4) or 7(2) applies to the
applicable class, as in force for the accounting period in question.
10

Notional foreign liability
5
The notional foreign liability for an accounting period is
calculated as follows—

15

Step 1

Calculate the amount of qualifying foreign tax that would be
payable by P for the accounting period if the tax were charged
solely in respect of eligible bets and accounted for by reference to
periods corresponding to P’s accounting periods.
20


Any apportionment needed for this calculation is to be done on a
just and reasonable basis.


If the law under which the qualifying foreign tax is imposed
25
provides for losses to be carried forward, do not carry forward to
the period any losses (in respect of eligible bets) that arose before
the start of the reconciliation period.


Step 2
30

If the amount calculated under Step 1 is nil, the notional foreign
liability for the period is nil.


Otherwise, calculate the sterling equivalent of the amount
calculated under Step 1. The result is the notional foreign liability
35
for the period.


The sterling equivalent is to be calculated using the London
closing exchange rate for the last day of the accounting period.

40
Clawback
6     (1)
This paragraph applies if in respect of the applicable class of
bets—
(a)
P receives a repayment under section 5E or 8ZA for one or
more accounting periods in a reconciliation period, and
45

Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
571

(b)
the amount calculated under Step 1 in paragraph 4 for the
final accounting period in that reconciliation period is a
negative amount.
      (2)
P is liable to repay all or part of the repayment or repayments
received.
5
      (3)
The amount that P is liable to repay is the smallest of—
(a)
the loss multiplied by the rate at which the qualifying
foreign tax is charged in respect of eligible bets,
(b)
the loss multiplied by the appropriate rate (as defined in
paragraph 4) for the applicable class of bets, and
10
(c)
the repayment (or the sum of the repayments) made to P
for the reconciliation period.
      (4)
“The loss” means the negative amount mentioned in sub-
paragraph (1)(b) but expressed as a positive number.
      (5)
If there is more than one rate at which the qualifying foreign tax is
15
charged in respect of eligible bets, each rate is to be applied to an
appropriate portion of the loss in order to arrive at the amount
under sub-paragraph (3)(a).
      (6)
If all or part of the qualifying foreign tax is calculated other than
on a net receipts basis, sub-paragraph (3) has effect as if paragraph
20
(a) were omitted.
      (7)
Any amount due from P under this paragraph is to be treated as if
it were an amount of unpaid general betting duty or, as the case
may be, pool betting duty.
Breach of return obligations
25
7
The Commissioners are not required to make a repayment under
section 5E or 8ZA if P is in breach of any obligation to deliver a
return with respect to—
(a)
general betting duty,
(b)
pool betting duty,
30
(c)
bingo duty,
(d)
remote gaming duty,
(e)
gaming duty, or
(f)
lottery duty.
Reduction etc in foreign tax paid
35
8     (1)
Sub-paragraphs (2) to (4) apply if any of the following events take
place—
(a)
the way in which a qualifying foreign tax is charged or
calculated is changed retrospectively,
(b)
a tax authority waives or refunds all or part of an amount
40
of qualifying foreign tax due from P, or
(c)
as a result of being liable to pay an amount of qualifying
foreign tax, P or a connected person is entitled to any kind
of tax deduction or relief calculated by reference to the
amount of qualifying foreign tax.
45

Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
572

      (2)
P must notify the Commissioners of the event on becoming aware
of it.
      (3)
If the event is a retrospective change in the way in which the
qualifying foreign tax is charged or calculated, the amount for
which credit is allowed under section 5E or 8ZA is to be
5
recalculated in accordance with this Schedule.
      (4)
In any other case, the amount for which credit is allowed under
section 5E or 8ZA is to be reduced by a just and reasonable sum to
reflect the amount of tax waived or refunded or the deduction or
relief given.
10
      (5)
If it transpires (on account of this paragraph or otherwise) that a
repayment or part of a repayment under section 5E or 8ZA should
not have been made, P is liable for the amount that should not
have been repaid, as if it were unpaid general betting duty or, as
the case may be, pool betting duty.
15
      (6)
Section 1122 of the Corporation Tax Act 2010 (connected persons)
applies for the purposes of sub-paragraph (1)(c).”
8     (1)
Schedule 1 (betting duties) is amended as follows.
      (2)
In paragraph 2, after sub-paragraph (4) insert—
    “(5)
Regulations under this paragraph may also in particular include
20
provision about claims for repayment under section 5E and about
the making of any such repayment, including provision about—
(a)
the time within which claims may be made,
(b)
the form, content and delivery of claims,
(c)
the evidence required to satisfy the Commissioners of the
25
validity of claims, and
(d)
the investigation and processing of claims.”
      (3)
In paragraph 2A, after sub-paragraph (3) insert—
    “(4)
Regulations under sub-paragraph (2) may also include provision
about claims for repayment under section 8ZA and about the
30
making of any such repayment, including provision about
anything mentioned in paragraph 2(5)(a) to (d).”
9
After Schedule 4A insert—
“Schedule 4B
Remote gaming duty: double taxation relief
35
Introduction
1
This Schedule sets out the rules for determining whether credit is
allowed under section 26IA for qualifying foreign tax paid by P.
Reconciliation periods
2     (1)
For the purposes of this Schedule, a “reconciliation period” is—
40
(a)
if P has quarterly accounting periods, a period consisting
of 4 consecutive accounting periods, and

Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
573

(b)
if P has any other length of accounting period, a period
consisting of such number of consecutive accounting
periods as would produce a period as near as possible to
365 days.
      (2)
In relation to an accounting period, a reference to “the
5
reconciliation period” is to the reconciliation period in which that
accounting period falls.
Credit allowed
3     (1)
To determine whether credit is allowed for an accounting
period—
10
(a)
calculate the notional UK liability and the notional foreign
liability for the accounting period, and
(b)
compare the two figures.
      (2)
No credit is allowed if either figure is nil or both figures are nil.
      (3)
Subject to that, credit is allowed of an amount equal to the smaller
15
of the two figures (or, if they are the same, of an amount equal to
that figure).
Notional UK liability
4
The notional UK liability for an accounting period is calculated as
follows—
20


Step 1

Calculate P’s remote gaming profits for the period in accordance
with section 26C(2) but by reference to the use of the facilities
provided by P for eligible gaming (rather than remote gaming
25
generally).


In calculating P’s remote gaming profits for the purposes of this
Step, do not carry forward to the period any losses (in respect of
the use of the facilities for eligible gaming) that arose in an
30
accounting period before the start of the reconciliation period.


Step 2

If the amount calculated under Step 1 is nil or a negative amount,
the notional UK liability for the period is nil.
35


Otherwise, apply the appropriate rate to the amount calculated
under Step 1. The result is the notional UK liability for the period.


“The appropriate rate” is the percentage specified in section 26C(1)
40
as in force for the accounting period in question.

Notional foreign liability
5
The notional foreign liability for an accounting period is
calculated as follows—
45

Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
574



Step 1

Calculate the amount of qualifying foreign tax that would be
payable by P for the accounting period if the tax were charged in
respect of eligible gaming and were accounted for by reference to
5
periods corresponding to P’s accounting periods.


Any apportionment needed for this calculation is to be done on a
just and reasonable basis.

10

If the law under which the qualifying foreign tax is imposed
provides for losses to be carried forward, do not carry forward to
the period any losses (in respect of eligible gaming) that arose
before the start of the reconciliation period.

15

Step 2

If the amount calculated under Step 1 is nil, the notional foreign
liability for the period is nil.


Otherwise, calculate the sterling equivalent of the amount
20
calculated under Step 1. The result is the notional foreign liability
for the period.


The sterling equivalent is to be calculated using the London
closing exchange rate for the last day of the accounting period.
25

Clawback
6     (1)
This paragraph applies if in respect of eligible gaming—
(a)
P receives a repayment under section 26IA for one or more
accounting periods in a reconciliation period, and
30
(b)
the amount calculated under Step 1 in paragraph 4 for the
final accounting period in that reconciliation period is a
negative amount.
      (2)
P is liable to repay all or part of the repayment or repayments
received.
35
      (3)
The amount that P is liable to repay is the smallest of—
(a)
the loss multiplied by the rate at which the qualifying
foreign tax is charged in respect of eligible gaming,
(b)
the loss multiplied by the appropriate rate (as defined in
paragraph 4), and
40
(c)
the repayment (or the sum of the repayments) made to P
for the reconciliation period.
      (4)
“The loss” means the negative amount mentioned in sub-
paragraph (1)(b) but expressed as a positive number.
      (5)
If there is more than one rate at which the qualifying foreign tax is
45
charged in respect of eligible gaming, each rate is to be applied to

Finance (No. 4) Bill
Schedule 25 — Remote gambling: double taxation relief
575

an appropriate portion of the loss in order to arrive at the amount
under sub-paragraph (3)(a).
      (6)
If all or part of the qualifying foreign tax is calculated other than
on a net receipts basis, sub-paragraph (3) has effect as if paragraph
(a) were omitted.
5
      (7)
Any amount due from P under this paragraph is to be treated as if
it were an amount of unpaid remote gaming duty.
Breach of return obligations
7
The Commissioners are not required to make a repayment under
section 26IA if P is in breach of any obligation to deliver a return
10
with respect to—
(a)
general betting duty,
(b)
pool betting duty,
(c)
bingo duty,
(d)
remote gaming duty,
15
(e)
gaming duty, or
(f)
lottery duty.
Reduction etc in foreign tax paid
8     (1)
Sub-paragraphs (2) to (4) apply if any of the following events take
place—
20
(a)
the way in which a qualifying foreign tax is charged or
calculated is changed retrospectively,
(b)
a tax authority waives or refunds all or part of an amount
of qualifying foreign tax due from P, or
(c)
as a result of being liable to pay an amount of qualifying
25
foreign tax, P or a connected person is entitled to any kind
of tax deduction or relief calculated by reference to the
amount of qualifying foreign tax.
      (2)
P must notify the Commissioners of the event on becoming aware
of it.
30
      (3)
If the event is a retrospective change in the way in which the
qualifying foreign tax is charged or calculated, the amount for
which credit is allowed under section 26IA is to be recalculated in
accordance with this Schedule.
      (4)
In any other case, the amount for which credit is allowed under
35
that section is to be reduced by a just and reasonable sum to reflect
the amount of tax waived or refunded or the deduction or relief
given.
      (5)
If it transpires (on account of this paragraph or otherwise) that a
repayment or part of a repayment under section 26IA should not
40
have been made, P is liable for the amount that should not have
been repaid, as if it were unpaid remote gaming duty.
      (6)
Section 1122 of the Corporation Tax Act 2010 (connected persons)
applies for the purposes of sub-paragraph (1)(c).”