Finance (No. 4) Bill (HC Bill 325)

“(ga) any decision by HMRC as to whether or not any person is entitled to any repayment under section 5E, 8ZA or 26IA of the Betting and Gaming Duties Act 1981 (double taxation relief), or the amount of the repayment to which any person is so entitled;”.

11 (1) The Table in paragraph 1 of Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing) is amended as follows.

(2) In the second column of the entry for general betting duty, for “paragraph 4(1) to (3) of Schedule 1 to BGDA 1981” substitute “paragraph 8(2) of Schedule A1 to BGDA 1981 (obligation to notify reduction etc in qualifying foreign tax) or paragraph 4(1) to (3) of Schedule 1 to that Act”.

(3) In the second column of the entry for pool betting duty, for “paragraphs 4(2) and 5(1) of Schedule 1 to BGDA 1981” substitute “paragraph 8(2) of Schedule A1 to BGDA 1981 (obligation to notify reduction etc in qualifying foreign tax) or paragraphs 4(2) and 5(1) of Schedule 1 to that Act”.

(4) In the second column of the entry for remote gaming duty, for “to register under regulations under section 26J of BGDA 1981” substitute “to notify under paragraph 8(2) of Schedule 4B to BGDA 1981 (reduction etc in qualifying foreign tax) and obligation to register under regulations under section 26J of that Act”.

Commencement

12 The amendments made by this Schedule have effect in relation to accounting periods ending on or after 1 April 2012 (and, accordingly, the first reconciliation period begins with the first accounting period in relation to which the amendments have effect).

Section 195

SCHEDULE 26 Anti-forestalling charge to VAT

Part 1 Anti-forestalling charge to VAT

Introductory

1 (1) Paragraph 2 applies where—

(a) there is a change in the descriptions of exempt or zero-rated supplies as a result of an order under section 30(4) or 31(2) of VATA 1994,

(b) the order is expressed to come into force on 1 October 2012, and

(c) the change relates to supplies of a description specified in paragraph 3.

(2) In this Schedule—

• “date of the VAT change” means 1 October 2012;

• “pre-change supply” means a supply which—

  (a)

  is treated as taking place before the date of the VAT change, and

  (b)

  if it had been treated as taking place on that date, would have been charged to VAT at the standard rate as a result of the order.

The charge

2 (1) There is an anti-forestalling charge to value added tax on any pre-change supply which—

(a) is treated as taking place on or after 21 March 2012, and

(b) is a supply linked to the post-change period (see paragraph 4).

(2) “Chargeable pre-change supply” means a supply to which sub-paragraph (1) applies.

(3) An anti-forestalling charge to value added tax under this Schedule is to be treated for all purposes as if it were value added tax charged in accordance with VATA 1994.

The supplies

3 (1) The descriptions of supplies are—

(a) the supply, in the course of an approved alteration of a protected building, of any services, other than the services of an architect, surveyor or any person acting as consultant or in a supervisory capacity,

(b) the supply of building materials to a person to whom the supplier is supplying services within paragraph (a) which include the incorporation of the materials into the building (or its site),

(c) the grant of facilities for the self storage of goods, or

(d) the grant of a right to receive a supply within paragraph (c).

(2) The Notes to Group 6 in Schedule 8 to VATA 1994 have effect for the purposes of sub-paragraph (1)(a) and (b) as they had effect for the purposes of items 1 to 3 of that Group on 21 March 2012.

(3) For the purposes of this Schedule a right to receive a supply includes—

(a) any option to receive that supply, and

(b) any interest deriving from such an option.

Supplies linked to the post-change period

4 (1) A supply of services within paragraph 3(1)(a) or (c) is linked to the post-change period if, and to the extent that, the services are carried out or provided on or after the date of the VAT change.

(2) A supply of goods within paragraph 3(1)(b) is linked to the post-change period if, and to the extent that, the goods are incorporated into the building concerned (or its site) on or after that date.

(3) A supply within paragraph 3(1)(d) is linked to the post-change period if, and to the extent that, the services to which the grant relates are carried out or provided on or after that date.

Power to modify this Schedule

5 (1) The Treasury may by order modify this Schedule for the purposes of preventing an anti-forestalling charge from arising, in the circumstances specified in the order, in relation to any description of supplies specified in the order.

(2) An order under this paragraph may contain provision having retrospective effect.

(3) An order under this paragraph is to be made by statutory instrument.

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

Part 2 Liability and amount

Liability

6 (1) An anti-forestalling charge under this Schedule on a chargeable pre-change supply—

(a) is a liability of the supplier (subject to sub-paragraph (2)), and

(b) becomes due on the date of the VAT change (rather than at the time of supply).

(2) If, on the date on which the anti-forestalling charge becomes due, the person who would be liable to pay the charge under sub-paragraph (1)—

(a) is not a taxable person, but

(b) is treated as a member of a group under sections 43A to 43D of VATA 1994,

the anti-forestalling charge is a liability of the representative member of the group.

Amount

7 (1) The amount of the anti-forestalling charge on a chargeable pre-change supply is the amount of VAT that would be chargeable on the supply if it were subject to VAT at 20%.

(2) If the chargeable pre-change supply is not wholly linked to the post-change period, the anti-forestalling charge is the relevant proportion of that amount.

(3) The relevant proportion is—

where—

Part 3 Administration and interpretation

Person ceasing to be taxable person before anti-forestalling charge due

8 (1) This paragraph applies if, on the date on which an anti-forestalling charge under this Schedule becomes due (“the due date”), the person who is liable to pay the charge under paragraph 6 is not a taxable person.

(2) The anti-forestalling charge must be accounted for by that person in accordance with VATA 1994 (and regulations made under that Act) as if it were VAT due in the last period for which the person was required to make a return by or under VATA 1994.

(3) If an amount assessed as due by way of an anti-forestalling charge under this Schedule would (in the absence of this sub-paragraph) carry interest from a date earlier than the due date, it is to be treated as only carrying interest from the due date.

Adjustment of contracts following the VAT change

9 (1) This paragraph applies where—

(a) a contract for the supply of goods or services is made before the date of the VAT change, and

(b) there is an anti-forestalling charge under this Schedule on the supply.

(2) The consideration for the supply is to be increased by an amount equal to the anti-forestalling charge, unless the contract provides otherwise.

Invoices

10 Regulations under paragraph 2A of Schedule 11 to VATA 1994 (VAT invoices) may make provision about the provision, replacement or correction of invoices in connection with an anti-forestalling charge under this Schedule.

Interpretation: general

11 (1) Expressions used in this Schedule and in VATA 1994 have the same meaning in this Schedule as in that Act.

(2) In this Schedule “treated as taking place” means treated as taking place for the purposes of the charge to VAT.

Section 201

SCHEDULE 27 Non-established taxable persons

New Schedule 1A

1 In VATA 1994, after Schedule 1 insert—

“Schedule 1A Registration in respect of taxable supplies: non-uk establishment

Liability to be registered

1 (1) A person becomes liable to be registered under this Schedule at any time if conditions A to D are met.

(2) Condition A is that—

(a) the person makes taxable supplies, or

(b) there are reasonable grounds for believing that the person will make taxable supplies in the period of 30 days then beginning.

(3) Condition B is that those supplies (or any of them) are or will be made in the course or furtherance of a business carried on by the person.

(4) Condition C is that the person has no business establishment, or other fixed establishment, in the United Kingdom in relation to any business carried on by the person.

(5) Condition D is that the person is not registered under this Act.

2 (1) A person does not become liable to be registered by virtue of paragraph 1(2)(b) if the reason for believing that taxable supplies will be made in the 30-day period mentioned there is that a business, or part of a business, carried on by a taxable person is to be transferred to the person as a going concern in that period.

(2) But if the transfer takes place, the transferee becomes liable to be registered under this Schedule at the time of the transfer if conditions A to D in paragraph 1 are met in relation to the transferee at that time.

(3) In determining for the purposes of sub-paragraph (2) whether condition B is met, the reference in paragraph 1(3) to a business is to be read as a reference to the business, or part of the business, that is transferred to the transferee.

3 A person is treated as having become liable to be registered under this Schedule at any time when the person would have become so liable under paragraph 1 or 2 but for any registration that is subsequently cancelled under—

(a) paragraph 11,

(b) paragraph 13(3) of Schedule 1,

(c) paragraph 6(2) of Schedule 2,

(d) paragraph 6(3) of Schedule 3, or

(e) paragraph 6(2) of Schedule 3A.

4 (1) A person does not cease to be liable to be registered under this Schedule except in accordance with sub-paragraph (2).

(2) A person who has become liable to be registered under this Schedule ceases to be so liable at any time if the Commissioners are satisfied that—

(a) the person has ceased to make taxable supplies in the course or furtherance of a business carried on by the person, or

(b) the person is no longer a person in relation to whom condition C in paragraph 1 is met.

Notification of liability and registration

5 (1) A person who becomes liable to be registered by virtue of paragraph 1(2)(a) or 2(2) must notify the Commissioners of the liability before the end of the period of 30 days beginning with the day on which the liability arises.

(2) The Commissioners must register any such person (whether or not the person so notifies them) with effect from the beginning of the day on which the liability arises.

6 (1) A person who becomes liable to be registered by virtue of paragraph 1(2)(b) must notify the Commissioners of the liability before the end of the period by reference to which the liability arises.

(2) The Commissioners must register any such person (whether or not the person so notifies them) with effect from the beginning of the period by reference to which the liability arises.

Notification of end of liability

7 (1) A person registered under paragraph 5 or 6 who, on any day, ceases to make or have the intention of making taxable supplies in the course or furtherance of a business carried on by that person must notify the Commissioners of that fact within 30 days beginning with that day.

(2) But the person need not notify the Commissioners if on that day the person would otherwise be liable or entitled to be registered under this Act (disregarding for this purpose the person’s registration under this Schedule and any enactment that prevents a person from being liable to be registered under different provisions at the same time).

Cancellation of registration

8 (1) The Commissioners must cancel a person’s registration under this Schedule if—

(a) the person satisfies them that the person is not liable to be registered under this Schedule, and

(b) the person requests the cancellation.

(2) The cancellation is to be made with effect from—

(a) the day on which the request is made, or

(b) such later day as may be agreed between the Commissioners and the person.

(3) But the Commissioners must not cancel the registration with effect from any time unless they are satisfied that it is not a time when the person would be subject to a requirement to be registered under this Act.

9 (1) The Commissioners may cancel a person’s registration under this Schedule if they are satisfied that the person has ceased to be liable to be registered under this Schedule.

(2) The cancellation is to be made with effect from—

(a) the day on which the person ceased to be so liable, or

(b) such later day as may be agreed between the Commissioners and the person.

(3) But the Commissioners must not cancel the registration with effect from any time unless they are satisfied that it is not a time when the person would be subject to a requirement, or entitled, to be registered under this Act.

10 In determining for the purposes of paragraphs 8 and 9 whether a time is a time when a person would be subject to a requirement, or entitled, to be registered under this Act, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when the person is already registered or when the person is so liable under any other provision must be disregarded.

11 (1) The Commissioners may cancel a person’s registration under this Schedule if they are satisfied that the person was not liable to be registered under this Schedule on the day on which the person was registered.

(2) The cancellation is to be made with effect from the day on which the person was registered.

12 Paragraphs 8 to 11 are subject to paragraph 18 of Schedule 3B (cancellation of registration under this Schedule of persons seeking to be registered under that Schedule etc).

Exemption from registration

13 (1) The Commissioners may exempt a person from registration under this Schedule if the person satisfies them that the taxable supplies that the person makes or intends to make—

(a) are all zero-rated, or

(b) would all be zero-rated if the person were a taxable person.

(2) The power in sub-paragraph (1) is exercisable only if the person so requests and the Commissioners think fit.

(3) If there is a material change in the nature of the supplies made by a person exempted under this paragraph, the person must notify the Commissioners of the change—

(a) within 30 days beginning with the day on which the change occurred, or

(b) if no particular day is identifiable as that day, within 30 days of the end of the quarter in which the change occurred.

(4) If it appears to the Commissioners that a request under this paragraph should no longer be acted upon on or after any day or has been withdrawn on any day, they must register the person who made the request with effect from that day.

(5) A reference in this paragraph to supplies is to supplies made in the course or furtherance of a business carried on by the person.

Supplementary

14 Any notification required under this Schedule must be made in such form and manner and must contain such particulars as may be specified in regulations or by the Commissioners in accordance with regulations.”

Other amendments of VATA 1994

2 VATA 1994 is amended as follows.

3 In section 7 (place of supply of goods), in subsection (4)(c)(ii), after “Schedule 1” insert “or 1A”.

4 In section 54 (farmers etc), in subsection (2), after “Schedule 1” insert “or is, has become or has ceased to be liable to be registered under Schedule 1A”.

5 In section 55 (customers to account for tax on supplies of gold etc), in subsection (1)—

(a) for “Schedule 1” substitute “Schedules 1 and 1A”, and

(b) for “that Schedule” substitute “Schedule 1”.

6 In section 55A (customers to account for tax on supplies of goods or services of a kind used in missing trader intra-community fraud), in subsection (3), for “Schedule 1” substitute “Schedules 1 and 1A”.

7 In section 69 (breaches of regulatory provisions), in subsection (1)(a), after “Schedule 1,” insert “paragraph 7 of Schedule 1A,”.

8 In section 73 (failure to make returns etc), in subsection (3)(b), after “Schedule 1,” insert “paragraph 9 or 11 of Schedule 1A,”.

9 In section 74 (interest on VAT recovered or recoverable by assessment), in subsection (1)(c), after “Schedule 1,” insert “under paragraph 13 of Schedule 1A,”.

10 In section 77 (assessments: time limits and supplementary assessments), in subsection (4C), after paragraph (a) insert—

“(aa) paragraph 5, 6 or 13(3) of Schedule 1A,”.

11 (1) Paragraph 1 of Schedule 1 (registration in respect of taxable supplies) is amended as follows.

(2) In sub-paragraph (1)—

(a) in paragraph (a), after “if” insert “the person is UK-established and”, and

(b) in paragraph (b), after “if” insert “the person is UK-established and”.

(3) In sub-paragraph (2), for “and the transferee is not registered under this Act at the time of the transfer” substitute “, the transferee is UK-established at the time of the transfer and the transferee is not registered under this Act at that time”.

(4) After sub-paragraph (2) insert—

“(2A) In determining the value of a person’s supplies for the purposes of sub-paragraph (1)(a) or (2)(a), supplies are to be taken into account (subject to sub-paragraphs (3) to (7)) whether or not the person was UK-established when they were made.”

(5) In sub-paragraph (4)(a), after “below,” insert “paragraph 11 of Schedule 1A,”.

(6) In sub-paragraph (5), after “below,” insert “paragraph 11 of Schedule 1A,”.

(7) At the end insert—

“(10) A person is “UK-established” if the person has a business establishment, or some other fixed establishment, in the United Kingdom in relation to a business carried on by the person.”

12 In paragraph 3 of that Schedule, at the end of paragraph (b) insert “; or

(c) is not at that time UK-established (see paragraph 1(10)).”

13 Accordingly, in the heading of that Schedule, at the end insert “: uk establishment”.

14 In paragraph 1 of Schedule 2 (registration in respect of supplies from other member States)—

(a) in sub-paragraph (1)(b), after “Schedule 1” insert “or 1A”, and

(b) in sub-paragraph (4), after “Schedule 1,” insert “paragraph 11 of Schedule 1A,”.

15 In paragraph 1 of Schedule 3 (registration in respect of acquisitions from other member States)—

(a) in sub-paragraph (1)(b), after “Schedule 1” insert “, 1A”, and

(b) in sub-paragraph (3), after “Schedule 1,” insert “paragraph 11 of Schedule 1A,”.

16 In paragraph 1 of Schedule 3A (registration in respect of disposals of assets for which a VAT repayment is claimed)—

(a) in sub-paragraph (1), after “Schedule 1,” insert “1A,”, and

(b) in sub-paragraph (2), after “Schedule 1,” insert “paragraph 11 of Schedule 1A,”.

17 In paragraph 18 of Schedule 3B (supply of electronic services in member States: special accounting scheme)—

(a) after “Schedule 1”, in the first place it occurs, insert “or 1A”, and

(b) after “Schedule 1”, in the second place it occurs, insert “or, as the case may be, 1A”.

Amendments of other Acts

18 In Schedule 41 to FA 2008 (penalties: failure to notify and certain VAT and excise wrongdoing), in the Table in paragraph 1, after the entry for the obligations under Schedule 1 to VATA 1994 insert the following entry—

Application

19 The amendments made by this Schedule have effect in relation to supplies made or to be made on or after 1 December 2012.

Section 202

SCHEDULE 28 Administration of VAT

1 VATA 1994 is amended as follows.

2 (1) Section 18B (fiscally warehoused goods: relief) is amended as follows.

(2) In subsection (1)(d) omit “be in such form and”.

(3) In subsection (2)(d) omit “in such form as the Commissioners may by regulations specify”.

(4) After subsection (2) insert—

“(2A) A certificate under subsection (1)(d) or (2)(d) must be in such form as may be specified by regulations or by the Commissioners in accordance with regulations.”

3 (1) Section 18C (warehouses and fiscal warehouses: services) is amended as follows.

(2) In subsection (1)(c) omit “, in such a form as the Commissioners may by regulations specify,”.

(3) After subsection (1) insert—

“(1A) A certificate under subsection (1)(c) must be in such form as may be specified by regulations or by the Commissioners in accordance with regulations.”

4 In section 35(2) (refund of VAT to persons constructing certain buildings), for the words following paragraph (c) substitute—

“as may be specified by regulations or by the Commissioners in accordance with regulations.”

5 (1) Section 39(3) (repayment of VAT to those in business overseas) is amended as follows.

(2) Before paragraph (a) insert—

“(za) for claims to be made in such form and manner as may be specified in the scheme or by the Commissioners in accordance with the scheme;”.

(3) For paragraph (c) substitute—

“(c) for generally regulating—

(i) the time by which claims must be made, and

(ii) the methods by which the amount of any repayment is to be determined and the repayment is to be made.”

6 (1) Section 48 (VAT representatives) is amended as follows.

(2) For subsection (1B)(c) substitute—

“(c) Council Regulation (EC) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax.”

(3) After subsection (4) insert—

“(4A) Regulations under subsection (4) may require a notification under that subsection to be made in such form and manner, and to contain such particulars, as may be specified in the regulations or by the Commissioners in accordance with the regulations.”

7 In section 54(6)(a) (farmers etc)—

(a) omit “the form and manner in which”, and

(b) for “is to be made” substitute “to be made in the form and manner specified in the regulations or by the Commissioners in accordance with the regulations”.

8 In Schedule 1 (registration in respect of taxable supplies), in paragraph 17 (notifications)—

(a) after “form” insert “and manner”, and

(b) for “as the Commissioners may by regulations prescribe” substitute “as may be specified in regulations or by the Commissioners in accordance with regulations.”

9 In Schedule 2 (registration in respect of supplies from other member States), in paragraph 9 (notifications)—

(a) after “form” insert “and manner”, and

(b) for “as the Commissioners may by regulations prescribe” substitute “as may be specified in regulations or by the Commissioners in accordance with regulations.”

10 In Schedule 3 (registration in respect of acquisitions from other member States), in paragraph 10 (notifications)—

(a) after “form” insert “and manner”, and

(b) for “as the Commissioners may by regulations prescribe” substitute “as may be specified in regulations or by the Commissioners in accordance with regulations.”

11 In Schedule 3A (registration in respect of disposals of assets for which a VAT repayment is claimed), in paragraph 8 (notifications)—

(a) after “form” insert “and manner”, and

(b) for “as the Commissioners may by regulations prescribe” substitute “as may be specified in regulations or by the Commissioners in accordance with regulations.”

12 (1) Paragraph 2 of Schedule 11 (accounting for VAT and payment of VAT) is amended as follows.

(2) In sub-paragraph (1) (keeping accounts and making returns), insert at the end “or by the Commissioners in accordance with the regulations.”

(3) In sub-paragraph (3) (statements containing particulars of certain transactions)—

(a) for paragraph (b) substitute—

“(b) specified by the Commissioners in accordance with the regulations,”, and

(b) for “prescribed” substitute “so specified”.

(4) In sub-paragraph (3A) (statements containing particulars of certain supplies)—

(a) for paragraph (b) substitute—

“(b) specified by the Commissioners in accordance with the regulations,”, and

(b) for “prescribed” substitute “so specified”.

(5) In sub-paragraph (3B) (notification of certain events), for “determined by the Commissioners in accordance with powers conferred by the regulations” substitute “by the Commissioners in accordance with the regulations”.

(6) In sub-paragraph (4) (notification of acquisition of certain goods), insert at the end “or (in the case of the notification requirement) by the Commissioners in accordance with the regulations”.

(7) In sub-paragraph (5)(a) (further provision about notifications), after “regulations” insert “or by the Commissioners in accordance with the regulations”.

13 In consequence of the amendments made by this Schedule—

(a) in FA 1996, omit section 30(2), and

(b) in FA 2009, omit section 77(2)(d).

Section 205

SCHEDULE 29 Climate change levy

Part 1 Reduced-rate supplies on or after 1 April 2011: deemed supply

1 (1) In paragraph 45A(2)(b) of Schedule 6 to FA 2000 (reduced-rate supplies: deemed supply) for “80” substitute “65”.

(2) The amendment made by this paragraph has effect in relation to a deemed supply if the actual supply in question was treated as taking place on or after 1 April 2011.

Part 2 Taxable supplies on or after 1 April 2012 for use in recycling processes

2 Schedule 6 to FA 2000 (climate change levy) is amended as follows.

3 In paragraph 4(2)(b) (definition of taxable supply) for “45A” substitute “43B”.

4 In paragraph 5(3) (taxable supplies: deemed supplies of electricity) for “45A” substitute “43B”.

5 In paragraph 6(2A) (taxable supplies: deemed supplies of gas) for “45A” substitute “43B”.

6 In paragraph 14(3A)(a) (use of electricity in an “exemption-retaining” way) for “, 18 and 18A” substitute “and 18”.

7 Omit paragraph 18A (exemption: supply for use in recycling processes).

8 In paragraph 34 (time of supply of commodities other than gas and electricity: deemed supplies)—

(a) in sub-paragraph (1)(b), for “45A” substitute “43B”, and

(b) in sub-paragraph (4), for “45A” substitute “43B”.

9 In paragraph 39(1)(c) (regulations as to time of supply) for “45A” substitute “43B”.

10 In paragraph 42 (amount payable by way of levy)—

(a) in sub-paragraph (1)—

(i) in paragraph (a) after “supply” (in the second place it occurs) insert “or a supply for use in scrap metal recycling”,

(ii) in paragraph (c) for “were not a reduced-rate supply.” substitute “were a supply to which paragraph (a) applies;”, and

(iii) after paragraph (c) insert—

“(d) if the supply is a supply for use in scrap metal recycling, 20 per cent of the amount that would be payable if the supply were a supply to which paragraph (a) applies.”, and

(b) after that sub-paragraph insert—

“(1ZA) If a taxable supply is both a reduced-rate supply and a supply for use in scrap metal recycling, the amount payable by way of levy on the supply under sub-paragraph (1) is the lower of the two amounts provided for that supply under that sub-paragraph.”

11 Before the cross-heading before paragraph 44 insert—

“Supplies for use in scrap metal recycling

43A (1) For the purposes of this Schedule, a taxable supply is a supply for use in scrap metal recycling if—

(a) the person to whom the taxable commodity is supplied intends to cause the commodity to be used as fuel in a process (“the recycling process”) to be carried out by that

person which is the shredding (or fragmentation), pre-treatment and melting of scrap metal for recycling, and

(b) the condition in sub-paragraph (2) is satisfied.

(2) The condition is that there is another process (“the competing process”) that—

(a) uses taxable commodities otherwise than as fuel,

(b) produces a product of the same kind as one produced by the recycling process,

(c) uses a greater amount of energy than the recycling process to produce a given quantity of that product, and

(d) involves a lesser charge to levy for a given quantity of that product than would, but for paragraph 42(1)(d), be the case for the recycling process.

(3) For the purposes of sub-paragraph (2)(a), taxable commodities are used “otherwise than as fuel” only if the supplies of those commodities to the person using them are exempted from the levy by virtue of paragraph 18.

(4) Sub-paragraphs (5) and (6) apply where the recycling process or the competing process, as well as producing a product of the same kind as one produced by the other process (“the corresponding product”), also produces one or more products that are not (“different products”).

(5) If the production of the different products is merely incidental to the production of the corresponding product, the different products are to be treated for the purposes of sub-paragraph (2)(c) and (d) as being of the same kind as the corresponding product.

(6) If the production of the different products is not merely incidental to the production of the corresponding product—

(a) the amounts of energy referred to in sub-paragraph (2)(c), and the amounts of the charge to levy referred to in sub-paragraph (2)(d), are to be determined on a just and reasonable apportionment, and

(b) in calculating the amount payable by way of levy on the taxable supply, only the proportion of the supply that is the same as the proportion of the energy used by the recycling process to produce the corresponding product (as determined for the purposes of paragraph (a)) is to be treated as being a supply for use in scrap metal recycling.

(7) In this paragraph—

• “melting” means—

  (a)

  the pre-heating and first melting of scrap metal before casting into items (“intermediates”) for further processing or re-melting, or

  (b)

  the heating of scrap metal as part of the recycling process before any solidification and re-melting,

  but excluding the melting of any metal which is not scrap but which is added at any stage to improve the quality or adjust the composition of the recycled metal or intermediates, and

• “metal” means aluminium or steel.

(8) The Commissioners may by regulations make provision for giving effect to this paragraph.

(9) Regulations under this paragraph may, in particular, include provision for determining whether or not a taxable supply is a supply for use in scrap metal recycling (to any extent).

Supplies for use in scrap metal recycling and reduced-rate supplies: deemed supply

43B (1) This paragraph applies where—

(a) a taxable supply (“the original supply”) has been made to any person (“the recipient”),

(b) the original supply was made on the basis that it was, to any extent, a supply for use in scrap metal recycling or a reduced-rate supply,

(c) it is later determined that the original supply was (or was to some extent) a different kind of supply, and

(d) the amount payable on the supply on the basis mentioned in paragraph (b) is less than the amount payable on the supply on the basis of the later determination.

(2) For the purposes of this Schedule—

(a) the recipient is deemed to make a taxable supply to itself of the taxable commodity, and

(b) the amount payable by way of levy on that deemed supply is—

(i) the amount payable on the original supply on the basis of the later determination mentioned in sub-paragraph (1)(c), less

(ii) the amount payable on the original supply on the basis mentioned in sub-paragraph (1)(b).

(3) This paragraph does not apply where a supply is treated as not being a reduced-rate supply by virtue of paragraph 45B.”

12 Omit paragraph 45A (reduced-rate supplies: deemed supply).

13 After paragraph 62(1)(c) (tax credits) insert—

“(ca) after a taxable supply has been made on the basis that it was not a supply for use in scrap metal recycling, it is determined that the supply was (to any extent) a supply for use in scrap metal recycling;

(cb) after a taxable supply has been made on the basis that it was (to any extent) a supply for use in scrap metal recycling, it is determined that the supply was such a supply to a greater extent than previously determined;”.

14 In paragraph 101(2)(a) (penalty for incorrect notification)—

(a) in sub-paragraph (ii) omit “, 18A”,

(b) omit the “or” after sub-paragraph (ii), and

(c) before sub-paragraph (iv) insert—

“(iiia) a supply (or supplies) for use in scrap metal recycling, or”.

15 In paragraph 146(3) (regulations subject to affirmative resolution procedure) omit “18A,”.

16 In paragraph 147 (interpretation)—

(a) in the definition of “prescribed”, omit “, 18A”, and

(b) insert at the appropriate place—

• ““supply for use in scrap metal recycling” has the meaning given by paragraph 43A(1);”.

17 Omit section 188 of FA 2003 (climate change levy: exemption for fuel used in recycling process).

18 (1) FA 2011 is amended as follows.

(2) In section 79 (which provides for a lower rate of climate change levy for Northern Ireland gas supplies treated as taking place before 1 November 2013), in subsection (2)—

(a) omit the “and” after paragraph (b), and

(b) after that paragraph insert—

“(ba) the supply is not a supply for use in scrap metal recycling (within the meaning of that Schedule (see paragraph 147)), and”.

(3) Omit section 80 (power to suspend exemption for supplies used in recycling process).

19 The amendments made by paragraphs 2 to 18 have effect in relation to supplies of taxable commodities so far as the commodities are actually supplied on or after 1 April 2012.

Part 3 Rates of climate change levy for supplies on or after 1 April 2013

20 In paragraph 42(1) of Schedule 6 to FA 2000 (amount payable by way of levy) (as amended by paragraph 10(a) above)—

(a) before paragraph (c) insert—

“(ba) if the supply is a reduced-rate supply of electricity, 10 per cent of the amount that would be payable if the supply were a supply to which paragraph (a) applies;”,

(b) in paragraph (c), for “a” (in the first place it occurs) substitute “any other”, and