Finance Bill

Session 2012 - 13
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Finance Bill

Finance Bill
Schedule 29 — Climate change levy
Part 1 — Reduced-rate supplies on or after 1 April 2011: deemed supply
587

(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
5
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)—
10
(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
15
supplies)—
(a)
for paragraph (b) substitute—
“(b)
specified by the Commissioners in accordance with
the regulations,”, and
(b)
for “prescribed” substitute “so specified”.
20
      (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
25
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—
30
(a)
in FA 1996, omit section 30(2), and
(b)
in FA 2009, omit section 77(2)(d).
Schedule 29
Section 205

Climate change levy
Part 1
35
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
40
1 April 2011.

Finance Bill
Schedule 29 — Climate change levy
Part 2 — Taxable supplies on or after 1 April 2012 for use in recycling processes
588

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”.
5
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)
10
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
15
(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)—
20
(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
25
(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
30
(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
35
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—
40
(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

Finance Bill
Schedule 29 — Climate change levy
Part 2 — Taxable supplies on or after 1 April 2012 for use in recycling processes
589

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—
5
(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
10
(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
15
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
20
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)
25
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-
30
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
35
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—
40
(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,
45
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

Finance Bill
Schedule 29 — Climate change levy
Part 2 — Taxable supplies on or after 1 April 2012 for use in recycling processes
590

“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
5
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”),
10
(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
15
(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
20
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-
25
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.”
30
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
35
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;”.
40
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
45
recycling, or”.

Finance Bill
Schedule 29 — Climate change levy
Part 3 — Rates of climate change levy for supplies on or after 1 April 2013
591

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—
5
““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.
10
      (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—
15
“(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).
20
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
25
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
30
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
(c)
for the table substitute—
35
“Table

Taxable commodity supplied
Rate at which levy payable if supply is

not a reduced-rate supply or a supply

for use in scrap metal recycling

Electricity
£0.00524 per kilowatt hour

40

Finance Bill
Schedule 30 — Climate change levy: climate change agreements
592

Taxable commodity supplied
Rate at which levy payable if supply is

not a reduced-rate supply or a supply

for use in scrap metal recycling

Gas supplied by a gas utility or
£0.00182 per kilowatt hour

any gas supplied in a gaseous

5

state that is of a kind supplied

by a gas utility

Any petroleum gas, or other
£0.01172 per kilogram

gaseous hydrocarbon, supplied

in a liquid state

10

Any other taxable commodity
£0.01429 per kilogram”.

21
In paragraph 43B(1) of Schedule 6 to FA 2000 (supplies for use in scrap metal
recycling and reduced-rate supplies: deemed supply) (as inserted by
paragraph 11 above), for paragraph (b) substitute—
15
“(b)
the original supply was made on the basis that it was, to
any extent—
(i)
a supply for use in scrap metal recycling,
(ii)
a reduced-rate supply of electricity, or
(iii)
a reduced-rate supply of any other taxable
20
commodity,”.
22
In section 79 of FA 2011 (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 (3)(a), for “£0.00062” substitute “£0.00064”.
23
The amendments made by paragraphs 20 to 22 have effect in relation to
25
supplies treated as taking place on or after 1 April 2013.
Schedule 30
Section 205

Climate change levy: climate change agreements
1
Schedule 6 to FA 2000 (climate change levy) is amended as follows.
2
In paragraph 44(1)(a), (2A) and (2C) (definition of “reduced-rate” supply) for
30
“Secretary of State” substitute “Administrator”.
3
In paragraph 45(1) (variation of certificates under paragraph 44) for
“Secretary of State” substitute “Administrator”.
4
In paragraph 45B(2) and (6) (removal of reduced rate) for “Secretary of State”
(wherever occurring) substitute “Administrator”.
35
5
In the cross-heading before paragraph 47 omit “with Secretary of State”.
6
In paragraph 47(1) (definition of “climate change agreement”: direct
agreements)—
(a)
in paragraph (a), for “Secretary of State” substitute “Administrator”,
(b)
omit the “and” after paragraph (f),
40

Finance Bill
Schedule 30 — Climate change levy: climate change agreements
593

(c)
in paragraph (g)—
(i)
for “five-yearly” substitute “seven-yearly”, and
(ii)
after “Secretary of State” insert “or the Administrator”, and
(d)
after paragraph (g) insert “, and
(h)
containing any terms required by regulations
5
falling within paragraph 52E.”
7     (1)
Paragraph 48 (definition of “climate change agreement”: combination of
umbrella and underlying agreements) is amended as follows.
      (2)
In sub-paragraph (3)(c)—
(a)
for “five-yearly” substitute “seven-yearly”, and
10
(b)
after “Secretary of State” insert “or the Administrator”.
      (3)
In sub-paragraph (4)—
(a)
in paragraph (a), for “Secretary of State” substitute “Administrator”,
(b)
omit the “and” after paragraph (c), and
(c)
after paragraph (d) insert “, and
15
(e)
containing any terms required by regulations
falling within paragraph 52E.”
      (4)
In sub-paragraph (5)—
(a)
for paragraph (b) substitute—
“(b)
entered into with the Administrator,”,
20
(b)
omit paragraph (c),
(c)
omit the “and” after paragraph (d), and
(d)
after paragraph (e) insert “, and
(f)
containing any terms required by regulations
falling within paragraph 52E.”
25
8     (1)
Paragraph 49 (supplemental provision relating to climate change
agreements) is amended as follows.
      (2)
In sub-paragraph (3) for “Secretary of State” (wherever occurring) substitute
“Administrator”.
      (3)
In sub-paragraph (7) for “paragraphs 47 and 48 and this paragraph”
30
substitute “this Part of this Schedule”.
      (4)
In sub-paragraph (8)—
(a)
for “Secretary of State” substitute “Administrator”,
(b)
after paragraph (a) insert “or”, and
(c)
omit paragraph (c) and the “or” before it.
35
9
After paragraph 52 insert—
“The Administrator etc
52A   (1)
In this Part of this Schedule references to “the Administrator” are
to the body appointed as such by regulations made by the
Secretary of State.
40
      (2)
The body appointed must be a body established by an enactment
(as defined in section 97 of the Climate Change Act 2008).