Finance Bill (HC Bill 49)

(6) For the table in Schedule 1 substitute—

“Schedule 1 Table of rates of duty on wine and made-wine

Part 1 5Wine or made-wine of a strength not exceeding 22 per cent

Part 2 Wine or made-wine of a strength exceeding 22 per cent

(7) The amendments made by this section are treated as having come into force on
26 March 2012.

187 Repeal of drawback on British compounds and spirits of wine

(1) 40Section 22 of ALDA 1979 (drawback on British compounds and spirits of wine)
is repealed.

(2) In consequence of the provision made by subsection (1), omit the following
provisions—

(a) in Schedule 1 to the Isle of Man Act 1979, paragraph 29;

(b) in Schedule 8 to FA 1981, paragraph 16;

(c) in Schedule 4 to FA 1994, paragraph 24;

(d) in Schedule 5 to that Act, paragraph 3(1)(ha);

(e) in Schedule 42 to FA 2008, paragraph 2(2).

5Hydrocarbon oil etc duties

188 Rebated fuel: private pleasure craft

(1) In section 14E of HODA 1979 (rebated heavy oil and bioblend: private pleasure
craft), after subsection (7) insert—

“(7A) A relevant declaration must include an acknowledgement that nothing
10in this section or done under it (including the making of the
declaration) affects any restriction or prohibition under the law of a
member State other than the United Kingdom on the use of the heavy
oil or bioblend as fuel for propelling craft outside United Kingdom
waters (as defined in section 1(1) of the Management Act).”

(2) 15The amendment made by this section has effect in relation to supplies made on
or after 1 April 2012.

Air passenger duty

189 Air passenger duty

Schedule 23 amends, and makes amendments connected with, Chapter 4 of
20Part 1 of FA 1994 (air passenger duty).

Gambling duties

190 Machine games duty

Schedule 24 contains provision replacing amusement machine licence duty
with a new excise duty and making related changes to VATA 1994.

191 25Amusement machine licence duty

(1) In section 23(2) of BGDA 1981 (amount of duty payable on amusement
machine licence), for the table substitute—

(2) The amendment made by this section has effect in relation to cases where the
65application for the amusement machine licence is received by the
Commissioners for Her Majesty’s Revenue and Customs after 4 pm on 23
March 2012.

192 Rates of gaming duty

(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—

(2) The amendment made by this section has effect in relation to accounting
85periods beginning on or after 1 April 2012.

193 Remote gambling: double taxation relief

Schedule 25 contains provision for double taxation relief in respect of remote
gambling.

Vehicle excise duty

194 VED rates for light passenger vehicles, light goods vehicles, motorcycles etc

(1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2) In paragraph 1 (general)—

(a) 5in sub-paragraph (2) (vehicle not covered elsewhere in Schedule
otherwise than with engine cylinder capacity not exceeding 1,549cc),
for “£215” substitute “£220”, and

(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with
engine cylinder capacity not exceeding 1,549cc), for “£130” substitute
10“£135”.

(3) In paragraph 1B (graduated rates of duty for light passenger vehicles)—

(a) for the tables substitute—

“Table 1

Table 2

(b) in the sentence immediately following the tables, for paragraphs (a)
130and (b) substitute—

“(a) in column (3), in the last two rows, “260” were
substituted for “450” and “465”, and

(b) in column (4), in the last two rows, “270” were
substituted for “460” and “475”.”

(4) 135In paragraph 1J (VED rates for light goods vehicles)—

(a) in paragraph (a), for “£210” substitute “£215”, and

(b) in paragraph (b), for “£130” substitute “£135”.

(5) In paragraph 2(1) (VED rates for motorcycles)—

(a) in paragraph (b), for “£35” substitute “£36”,

(b) 140in paragraph (c), for “£53” substitute “£55”, and

(c) in paragraph (d), for “£74” substitute “£76”.

(6) The amendments made by this section have effect in relation to licences taken
out on or after 1 April 2012.

Part 7 Value added tax

195 Anti-forestalling charge to value added tax

Schedule 26 contains provision for an anti-forestalling charge to value added
5tax related to changes in the descriptions of exempt or zero-rated supplies.

196 Exempt supplies

(1) In Part 1 of Schedule 9 to VATA 1994 (index to exempt supplies of goods and
services), at the appropriate place in the table insert—

(2) In Part 2 of that Schedule (the groups), at the end insert—

“GROUP 16 — SUPPLIES OF SERVICES BY GROUPS INVOLVING COST
SHARING

15Item No

1 The supply of services by an independent group of persons where
each of the following conditions is satisfied—

(a) each of those persons is a person who is carrying on an
activity (“the relevant activity”) which is exempt from VAT
20or in relation to which the person is not a taxable person
within the meaning of Article 9 of Council Directive 2006/
112/EC,

(b) the supply of services is made for the purpose of rendering
the members of the group the services directly necessary for
25the exercise of the relevant activity,

(c) the group merely claims from its members exact
reimbursement of their share of the joint expenses, and

(d) the exemption of the supply is not likely to cause distortion
of competition.”

(3) 30In section 31 of that Act (exempt supplies and acquisitions), after subsection (2)
insert—

“(3) The Treasury may by regulations make an exemption of a group 16
supply of a description specified in the regulations subject to
conditions.

(4) 35Regulations under subsection (3) may—

(a) make different provision for different cases, and

(b) make consequential or transitional provision (including
provision amending this Act).

(5) In subsection (3) “group 16 supply” means a supply falling within
40Group 16 of Schedule 9.”

197 Supply of goods or services by public bodies

(1) VATA 1994 is amended as follows.

(2) In section 41 (application to the Crown)—

(a) omit subsection (2), and

(b) 5in subsection (3)(b) for “a direction under subsection (2) above,”
substitute “section 41A,”.

(3) After that section insert—

“41A Supply of goods or services by public bodies

(1) This section applies where goods or services are supplied by a body
10mentioned in Article 13(1) of the VAT Directive (status of public bodies
as taxable persons) in the course of activities or transactions in which it
is engaged as a public authority.

(2) If the supply is in respect of an activity listed in Annex I to the VAT
Directive (activities in respect of which public bodies are to be taxable
15persons), it is to be treated for the purposes of this Act as a supply in the
course or furtherance of a business unless it is on such a small scale as
to be negligible.

(3) If the supply is not in respect of such an activity, it is to be treated for
the purposes of this Act as a supply in the course or furtherance of a
20business if (and only if) not charging VAT on the supply would lead to
a significant distortion of competition.

(4) In this section “the VAT Directive” means Council Directive 2006/112/
EC on the common system of value added tax.”

198 Relief from VAT on low value goods: restriction relating to Channel Islands

(1) 25In Schedule 2 to the Value Added Tax (Imported Goods) Relief Order 1984 (S.I.
1984/746) (reliefs for goods of certain descriptions), Group 8 (articles sent for
miscellaneous purposes) is amended as follows.

(2) The existing Note becomes Note (1) (and accordingly “Note” in Group 8
becomes “Notes”).

(3) 30After that Note insert—

“(2) Item 8 does not apply in relation to any goods sent from the Channel
Islands under a distance selling arrangement.

(3) For the purposes of Note (2)—

• “distance selling arrangement”, in relation to any goods, means
  35any transaction, or series of transactions, under which the
  person to whom the goods are sent receives them from a
  supplier without the simultaneous physical presence of the
  person and the supplier at any time during the transaction or
  series of transactions, and

• 40“supplier” means any person who is acting in a commercial or
  professional capacity.”

(4) The amendment of that Schedule by this section is without prejudice to any
power to amend that Schedule by subordinate legislation.

(5) The amendments made by this section have effect in relation to goods
imported on or after 1 April 2012.

199 Group supplies using an overseas member

(1) VATA 1994 is amended as follows.

(2) 5In section 43 (groups of companies), in subsection (2C)(c), after “above” insert
“and paragraph 8A of Schedule 6”.

(3) In section 83 (appeals), in subsection (1)(v) for “or 2” substitute “, 2 or 8A”.

(4) In section 97(4) (orders requiring Parliamentary approval within 28 days of
being made), in paragraph (f), after “1A(7)” insert “or 8A(7)”.

(5) 10Schedule 6 (valuation: special cases) is amended as follows.

(6) In paragraph 1 (cases where Commissioners may direct value is open market
value), in sub-paragraph (5), after “paragraph”, in the second place it occurs,
insert “8A or”.

(7) After paragraph 8 insert—

“8A (1) 15This paragraph applies where—

(a) a supply (“the intra-group supply”) made by a member of a
group (“the supplier”) to another member of the group is, by
virtue of section 43(2A), excluded from the supplies
disregarded under section 43(1)(a), and

(b) 20the representative member of the group satisfies the
Commissioners as to the value of each bought-in supply.

(2) “Bought-in supply”, in relation to the intra-group supply, means a
supply of services to the supplier to which section 43(2A)(c) to (e)
refers, so far as that supply is used by the supplier for making the
25intra-group supply.

(3) The value of the intra-group supply shall be taken to be the total of
the relevant amounts in relation to the bought-in supplies.

(4) The relevant amount in relation to a bought-in supply is the value of
the bought-in supply, unless a direction is made under sub-
30paragraph (5).

(5) If the value of a bought-in supply is less than its open market value,
the Commissioners may direct that the relevant amount in relation to
that supply is its open market value.

(6) A direction under this paragraph must be given by notice in writing
35to the representative member, but no direction may be given more
than 3 years after the time of the intra-group supply.

(7) The Treasury may by order vary the provision made by this
Schedule about the value of supplies of the kind mentioned in sub-
paragraph (1)(a).

(8) 40An order under sub-paragraph (7) may include incidental,
supplemental, consequential or transitional provision (including
provision amending section 43 or 83).”

(8) The amendments made by this section have effect in relation to supplies made
on or after the day on which this Act is passed.

200 Power to require notification of arrival of means of transport in UK

In Schedule 11 to VATA 1994 (administration, collection and enforcement), in
5paragraph 2 (accounting for VAT and payment of VAT), after sub-paragraph
(5) insert—

“(5A) Regulations under this paragraph may make provision—

(a) for requiring the relevant person to give to the
Commissioners such notification of the arrival in the United
10Kingdom of goods consisting of a means of transport, at such
time and in such form and manner, as may be specified in the
regulations or by the Commissioners in accordance with the
regulations, and

(b) where notification of the arrival of a means of transport
15acquired from another member State, or imported from a
place outside the member States, is required by virtue of
paragraph (a), for requiring any VAT on the acquisition or
importation to be paid at such time and in such manner as
may be specified in the regulations.

(5B) 20The provision that may be made by regulations made by virtue of
sub-paragraph (5A) includes—

(a) provision for a notification required by virtue of that sub-
paragraph to contain such particulars relating to the notified
arrival of the means of transport and any VAT chargeable on
25its acquisition or importation as may be specified in the
regulations or by the Commissioners in accordance with the
regulations,

(b) provision for such a notification to be given by a person who
is not the relevant person and is so specified, or is of a
30description so specified,

(c) provision for such a notification to contain a declaration,
given in such form and by such person as may be so specified,
as to the information contained in the notification, and

(d) supplementary, incidental, consequential or transitional
35provision (including provision amending any provision
made by or under this Act or any other enactment).

(5C) Subsection (3) of section 97 (orders subject to Commons approval)
applies to a statutory instrument containing any regulations made
by virtue of sub-paragraph (5A) which amend an enactment as it
40applies to an order within subsection (4) of that section.

(5D) For the purposes of sub-paragraph (5A)—

• “means of transport” has the same meaning as it has in this Act
  in the expression “new means of transport” (see section 95);

• “relevant person”, in relation to the arrival of a means of
  45transport in the United Kingdom, means—

  (a)

  where the means of transport has been acquired in the
  United Kingdom from another member State, the
  person who so acquires it,

  Finance BillPage 118

  (b)

  where it has been imported from a place outside the
  member States, the person liable to pay VAT on the
  importation, and

  (c)

  in any other case—

  (i)

  5the owner of the means of transport at the
  time of its arrival in the United Kingdom, or

  (ii)

  where it is subject to a lease or hire agreement,
  the lessee or hirer of the means of transport at
  that time.”

201 10Non-established taxable persons

Schedule 27 contains provision about non-established taxable persons.

202 Administration of VAT

Schedule 28 contains provision about the administration of VAT.

Part 8 15Other taxes

Landfill tax

203 Standard rate of landfill tax

(1) In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax) for “£64”
substitute “£72”.

(2) 20The amendments made by this section have effect in relation to disposals made
(or treated as made) on or after 1 April 2013.

204 Landfill sites in Scotland

The following provisions are to be treated as having come into force, in so far
as they extend to Scotland, on 21 March 2000—

(a) 25paragraph 19 of Schedule 2 to the Pollution Prevention and Control Act
1999 (which inserts paragraph (ba) into section 66 of FA 1996 (landfill
sites)), and

(b) section 6(1) of the Pollution Prevention and Control Act 1999, so far as
relating to paragraph 19 of that Schedule.

30Climate change levy

205 Climate change levy

The following Schedules amend, or make amendments connected with,
Schedule 6 to FA 2000 (climate change levy)—

(a) Schedule 29 (reduced-rate supplies, rates etc);

(b) 35Schedule 30 (climate change agreements);

(c) Schedule 31 (supplies subject to the carbon price support rates and
combined heat and power stations).

Inheritance tax

206 Indexation of rate bands

(1) Section 8 of IHTA 1984 (indexation of rate bands) is amended as follows.

(2) In subsection (1), for “retail prices index for the month of September in 1993 or
5any later year” substitute “consumer prices index for the month of September
in any year”.

(3) In subsection (2), for “retail prices index” substitute “consumer prices index”.

(4) For subsection (3) substitute—

“(3) In this section, “consumer prices index” means the all items consumer
10prices index published by the Statistics Board.”

(5) The amendments made by this section have effect for the purposes of
chargeable transfers made on or after 6 April 2015.

207 Gifts to charities etc

Schedule 32 contains provision for a lower rate of inheritance tax to be charged
15on transfers made on death that include sufficient gifts to charities or registered
clubs.

208 Settled excluded property: effect of certain arrangements

(1) IHTA 1984 is amended as follows.

(2) In section 48 (settled property: excluded property)—

(a) 20in subsection (3), for “subsection (3B)” substitute “subsections (3B) and
(3D)”, and

(b) after subsection (3C) insert—

“(3D) Where—

(a) one or more persons enter into arrangements,

(b) 25in the course of the arrangements, an individual
domiciled in the United Kingdom acquires, or becomes
able to acquire, (directly or indirectly) an interest in
property comprised in a settlement (“the relevant settled
property”),

(c) 30ignoring this subsection, the relevant settled property
would be excluded property by virtue of subsection
(3)(a), and

(d) there is a relevant reduction in the value of the
individual’s estate,

35from the time paragraphs (a) to (d) are first satisfied, the
relevant settled property is not excluded property by virtue of
subsection (3)(a).

(3E) For the purposes of subsection (3D)—

(a) an individual has an interest in property comprised in a
40settlement if—

(i) the property, or any derived property, is or will
or may become payable to, or applicable for the