Finance Bill (HC Bill 49)

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) 5In 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
10may 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
15regulations 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 20In 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
25as 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) 30For 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) 35Section 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
5Commissioners 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
10with 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
15“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) 20for “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) 25after “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
30repayment 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) 35Paragraph 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
40transactions)—

(a) for paragraph (b) substitute—

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

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

(4) 45In 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) 5In 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
10Commissioners 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) 15in 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 20Reduced-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
251 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
30“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 35In 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 5In 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)
10insert “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) 15if 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) 20If 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 25Before 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
30intends 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) 35The 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) 40uses 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) 45For 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
5product”), 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)
10and (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-
15paragraph (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
20recycling 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)

  25the 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,

  30but 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) 35The 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).

40Supplies 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
45any 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
5supply 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
10is—

(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
15basis 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) 20after 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
25was (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) 30omit 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)
35omit “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
  40meaning 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
45Northern 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
5paragraph 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
10supplied 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) 15before 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) 20in paragraph (c), for “a” (in the first place it occurs) substitute “any
other”, and

(c) for the table substitute—

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—

“(b) the original supply was made on the basis that it was, to
45any 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
commodity,”.

22 In section 79 of FA 2011 (which provides for a lower rate of climate change
5levy 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
supplies treated as taking place on or after 1 April 2013.

Section 205

SCHEDULE 30 10Climate 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
“Secretary of State” substitute “Administrator”.

3 In paragraph 45(1) (variation of certificates under paragraph 44) for
15“Secretary of State” substitute “Administrator”.

4 In paragraph 45B(2) and (6) (removal of reduced rate) for “Secretary of State”
(wherever occurring) substitute “Administrator”.

5 In the cross-heading before paragraph 47 omit “with Secretary of State”.

6 In paragraph 47(1) (definition of “climate change agreement”: direct
20agreements)—

(a) in paragraph (a), for “Secretary of State” substitute “Administrator”,

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

(c) in paragraph (g)—

(i) for “five-yearly” substitute “seven-yearly”, and

(ii) 25after “Secretary of State” insert “or the Administrator”, and

(d) after paragraph (g) insert “, and

“(h) containing any terms required by regulations
falling within paragraph 52E.”

7 (1) Paragraph 48 (definition of “climate change agreement”: combination of
30umbrella and underlying agreements) is amended as follows.

(2) In sub-paragraph (3)(c)—

(a) for “five-yearly” substitute “seven-yearly”, and

(b) after “Secretary of State” insert “or the Administrator”.

(3) In sub-paragraph (4)—

(a) 35in paragraph (a), for “Secretary of State” substitute “Administrator”,

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

(c) after paragraph (d) insert “, and

“(e) containing any terms required by regulations
falling within paragraph 52E.”

(4) 40In sub-paragraph (5)—

(a) for paragraph (b) substitute—

“(b) entered into with the Administrator,”,

(b) omit paragraph (c),

(c) omit the “and” after paragraph (d), and

(d) 5after paragraph (e) insert “, and

“(f) containing any terms required by regulations
falling within paragraph 52E.”

8 (1) Paragraph 49 (supplemental provision relating to climate change
agreements) is amended as follows.

(2) 10In sub-paragraph (3) for “Secretary of State” (wherever occurring) substitute
“Administrator”.

(3) In sub-paragraph (7) for “paragraphs 47 and 48 and this paragraph”
substitute “this Part of this Schedule”.

(4) In sub-paragraph (8)—

(a) 15for “Secretary of State” substitute “Administrator”,

(b) after paragraph (a) insert “or”, and

(c) omit paragraph (c) and the “or” before it.

9 After paragraph 52 insert—

“The Administrator etc

52A (1) 20In this Part of this Schedule references to “the Administrator” are
to the body appointed as such by regulations made by the
Secretary of State.

(2) The body appointed must be a body established by an enactment
(as defined in section 97 of the Climate Change Act 2008).

(3) 25Different bodies may be appointed in relation to facilities in
different parts of the United Kingdom.

52B (1) The Administrator is responsible for administering the scheme set
out in paragraphs 44 to 52.

(2) This covers (in particular) the administration of climate change
30agreements.

(3) In this Part of this Schedule “administrative function” means—

(a) the Administrator’s function imposed by sub-paragraph
(1), or

(b) any other power or duty of the Administrator conferred or
35imposed by or under a provision of this Part of this
Schedule.

52C (1) The Administrator may require persons falling within sub-
paragraph (2) to pay to the Administrator such charges as may
from time to time be specified to cover any costs incurred by the
40Administrator in carrying out any administrative function.

(2) The persons falling within this sub-paragraph are parties or
potential or former parties to agreements falling within paragraph

47 or to umbrella or underlying agreements within the meaning of
paragraph 48.

(3) In sub-paragraph (1) “specified” means specified in, or
determined in accordance with, a scheme made by the
Administrator for the purposes of this paragraph.

(4) 5A scheme may provide for the times at which, and the manner in
which, charges are to be paid.

(5) Paragraph 146(7) applies in relation to the Administrator’s power
to make a scheme under this paragraph as it applies in relation to
a power to make regulations under this Schedule.

(6) 10A scheme may revoke or vary any previous scheme.

(7) A scheme may be made only with the consent of the Secretary of
State.

(8) Charges received by the Administrator must be paid to the
Secretary of State who must pay them into the Consolidated Fund.

(9) 15Sub-paragraph (8) does not apply if the Administrator is the
Environment Agency.

52D (1) The Secretary of State may by regulations make provision about
the administration of the scheme set out in paragraphs 44 to 52.

(2) Sub-paragraph (1) covers (in particular)—

(a) 20provision about climate change agreements, and

(b) provision about how the Administrator is to carry out any
administrative function.

(3) Without prejudice to the generality of sub-paragraphs (1) and (2),
regulations may contain any provision falling within paragraph
2552E or 52F.

(4) Regulations may—

(a) require the Administrator to obtain the Secretary of State’s
consent to any course of action,

(b) confer or impose other powers or duties on the Secretary of
30State or the Administrator, or

(c) confer or impose powers or duties on other persons.

(5) The Secretary of State may give directions to the Administrator
about how the Administrator is to carry out any administrative
function (and this power to give directions includes power to vary
35or revoke directions previously given).

(6) The Secretary of State may issue guidance to the Administrator
about how the Administrator is to carry out any administrative
function; and the Administrator must have regard to any
guidance issued.

52E (1) 40Regulations may—

(a) specify terms which must be included in agreements
falling within paragraph 47 or in umbrella or underlying
agreements within the meaning of paragraph 48, and