Finance (No. 2) Bill (HC Bill 154)

(2) For the purposes of this section—

(a) there is a relevant declaration applying to a vehicle if the
particulars and declaration required to be furnished and made
by regulations under section 22(1D) have been furnished and
5made in relation to the vehicle in accordance with the
regulations, and

(b) the relevant declaration ceases to be in force if, after the
particulars and declaration have been furnished and made the
vehicle is used or kept on a public road (otherwise than under a
10trade licence).”

(3) In consequence of the provision made by subsections (1) and (2) omit—

(a) section 147 of FA 2008, and

(b) in regulation 6 of the Road Vehicles (Registration and Licensing)
Regulations 2002 (S.I. 2002/2742S.I. 2002/2742), paragraph (1) and, in paragraph (2),
15the words “Except where paragraph (1) applies,”.

187 Vehicles not kept or used on public road

(1) VERA 1994 is amended as follows.

(2) In section 7A (supplement payable on vehicle ceasing to be appropriately
covered), in subsection (1A)(d) omit “within the immediately preceding period
20of 12 months”.

(3) In Schedule 2A (immobilisation, removal and disposal of vehicles), in
paragraph 1(10)(b) omit “within the immediately preceding period of 12
months”.

188 Vehicle licences for disabled people

25Schedule 35 makes provision about vehicle licences for disabled people.

Value added tax

189 Repayments of value added tax to health service bodies

(1) In section 41 of VATA 1994 (application to the Crown), in subsection (7), after
“Board” insert “and a clinical commissioning group, the Health and Social Care
5Information Centre, the National Health Service Commissioning Board and
the National Institute for Health and Care Excellence”.

(2) The amendment made by this section is treated as having come into force on 1
April 2013.

190 Valuation of certain supplies of fuel

10Schedule 36 contains provision about the valuation of certain supplies of fuel
for the purposes of value added tax.

191 Reduced rate for energy-saving materials

(1) Group 2 (installation of energy-saving materials) of Part 2 of Schedule 7A to
VATA 1994 (reduced rate supplies of goods and services) is amended as
15follows.

(2) For items 1 and 2 substitute—

“1 Supplies of services of installing energy-saving materials in
residential accommodation.

2 Supplies of energy-saving materials by a person who installs those
20materials in residential accommodation.”

(3) Omit Note 3 (meaning of “use for a relevant charitable purpose”).

(4) The amendments made by this section have effect in relation to supplies made
on or after 1 August 2013.

Stamp duty land tax

192 25Pre-completion transactions: existing cases

(1) Section 45 of FA 2003 (contract and conveyance: effect of transfer of rights) has
effect subject to the amendments in subsections (2) to (6) below in relation to
transfers of rights (see subsection (1) of that section) entered into on or after 21
March 2012 but before the day on which this Act is passed.

(2) 30In subsection (3), in the second sentence, after “except” insert “in a case
excluded by subsection (3A) or”.

(3) After subsection (3) insert—

“(3A) A case is excluded by this subsection from the second sentence of
subsection (3) if—

(a) 35the secondary contract is substantially performed at the same
time as, and in connection with, the substantial performance or
completion of the original contract but is not completed at that
time (“the relevant time”),

(b) the original purchaser or a person connected with the original
purchaser is in possession of the whole, or substantially the
whole, of the subject-matter of the transfer of rights at any time
after the relevant time, and

(c) 5having regard to all the circumstances, it would be reasonable
to conclude that the obtaining of a tax advantage for the original
purchaser was the main purpose, or one of the main purposes,
of the original purchaser in entering into the transfer of rights.

(3B) In subsection (3A)—

• 10“possession” has the same meaning as in section 44(5)(a);

• “tax advantage” means—

  (a)

  a relief from tax or increased relief from tax,

  (b)

  a repayment of tax or increased repayment of tax, or

  (c)

  the avoidance or reduction of a charge to tax.

(3C) 15Nothing in subsection (3A) or (3B) affects the breadth of the application
of sections 75A to 75C.”

(4) In subsection (4), at the end insert “except in a case excluded by subsection
(4A)”.

(5) After subsection (4) insert—

“(4A) 20Subsection (3A) applies for the purposes of subsection (4) as if—

(a) the reference to subsection (3) were a reference to subsection (4),

(b) a reference to the original contract were a reference to the
secondary contract arising from the earlier transfer of rights,

(c) a reference to the original purchaser were a reference to the
25transferee under the earlier transfer of rights, and

(d) a reference to the transfer of rights were a reference to the
subsequent transfer of rights.”

(6) In subsection (5)(b)—

(a) after “subsection (3) above” insert “or in subsection (3A) above”, and

(b) 30after “subsection (4)” insert “or (4A)”.

(7) The following provisions of this section apply where—

(a) section 45 of FA 2003 applies in relation to the contract for a land
transaction (“the original contract”),

(b) as a result of subsections (1) to (6) above, the substantial performance
35or completion of the original contract (or, in a case within subsection (5)
of that section, its substantial performance or completion so far as
relating to part of the subject-matter of the original contract) is not
disregarded, and

(c) the relevant time referred to in subsection (3A)(a) of that section fell
40before the day on which this Act is passed.

(8) Section 76 of FA 2003 (duty to deliver land transaction return) is to be regarded
as requiring the purchaser under the original contract to deliver a land
transaction return relating to the land transaction not later than 30 September
2013.

(9) 45Accordingly, 30 September 2013 is for the purposes of Part 4 of FA 2003 the
filing date for the land transaction return relating to the transaction.

(10) If the purchaser under the original contract (“P”) has delivered a land
transaction return relating to the land transaction before the day on which this
Act is passed, P must not later than 30 September 2013 give notice under
paragraph 6 of Schedule 10 to FA 2003 amending the return, but this does not
5prevent P from making subsequent amendments within the time allowed by
sub-paragraph (3) of that paragraph.

193 Pre-completion transactions

Schedule 37 contains provisions about certain transactions relating to a
contract that is to be completed by a conveyance.

194 10Relief from higher rate

Schedule 38 contains provisions about relief from the higher rate of stamp duty
land tax.

195 Leases

Schedule 39 contains provision about stamp duty land tax in relation to leases.

15Landfill tax

196 Standard rate of landfill tax

(1) Section 42 of FA 1996 (amount of landfill tax) is amended as follows.

(2) In subsection (1)(a) (standard rate), for “£72” substitute “£80”.

(3) In subsection (2) (reduced rate) for “£72” substitute “£80”.

(4) 20The amendments made by this section have effect in relation to disposals made
(or treated as made) on or after 1 April 2014.

Climate change levy

197 Climate change levy: main rates

(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount
25payable by way of levy) for the table substitute—

(2) The amendment made by subsection (1) has effect in relation to supplies
15treated as taking place on or after 1 April 2014.

198 Climate change levy: supplies subject to carbon price support rates etc

Schedule 40 amends Schedule 6 to FA 2000 (climate change levy).

Insurance premium tax

199 Contracts that are not taxable

(1) 20In Schedule 7A to FA 1994 (IPT: contracts that are not taxable), paragraph 3
(contracts relating to motor vehicles for use by handicapped persons) is
amended as follows.

(2) In sub-paragraph (2)(a)—

(a) after “disability living allowance” insert “, or personal independence
25payment,” and

(b) after “component” insert “, or of an armed forces independence
payment”.

(3) In sub-paragraph (3), after “disability living allowance” insert “, personal
independence payment, armed forces independence payment”.

(4) 30After sub-paragraph (4)(b) insert—

“(ba) personal independence payment” means a personal
independence payment under Part 4 of the Welfare Reform
Act 2012 or the corresponding provision having effect in
Northern Ireland;

(bb) 35“armed forces independence payment” means an armed
forces independence payment under a scheme established
under section 1 of the Armed Forces (Pensions and
Contributions) Act 2004;”.

(5) The amendments made by this section are treated as having come into force on
408 April 2013.

Bank levy

200 Bank levy: rates from 1 January 2013

(1) Schedule 19 to FA 2011 (bank levy) is amended as follows.

(2) In paragraph 6 (steps for determining the amount of the bank levy), in sub-
5paragraph (2)—

(a) for “0.044%” substitute “0.065%”, and

(b) for “0.088%” substitute “0.130%”.

(3) In paragraph 7 (special provision for chargeable periods falling wholly or
partly before 1 January 2013), in sub-paragraph (2) (as substituted by
10paragraph 6 of Schedule 34 to FA 2012), in the table in the substituted Step 7—

(a) in the second column for “0.0525%” substitute “0.065%”, and

(b) in the third column for “0.105%” substitute “0.130%”.

(4) In Schedule 34 to FA 2012 (bank levy)—

(a) omit paragraph 5 (which substituted new rates from 1 January 2013),
15and

(b) in paragraph 7 for “paragraphs 5 and” substitute “paragraph”.

(5) The amendments made by subsections (2) to (4) are treated as having come into
force on 1 January 2013 (and accordingly the paragraph repealed by subsection
(4) is treated as never having come into force).

(6) 20Subsections (7) to (13) apply where—

(a) an amount of the bank levy is treated as if it were an amount of
corporation tax chargeable on an entity (“E”) for an accounting period
of E,

(b) the chargeable period in respect of which the amount of the bank levy
25is charged falls (or partly falls) on or after 1 January 2013, and

(c) under the Instalment Payment Regulations, one or more instalment
payments, in respect of the total liability of E for the accounting period,
were treated as becoming due and payable before the commencement
date (“pre-commencement instalment payments”).

(7) 30Subsections (1) to (5) are to be ignored for the purpose of determining the
amount of any pre-commencement instalment payment.

(8) If there is at least one instalment payment, in respect of the total liability of E
for the accounting period, which under the Instalment Payment Regulations is
treated as becoming due and payable on or after the commencement date
35(“post-commencement instalment payments”), the amount of that instalment
payment, or the first of them, is to be increased by the adjustment amount.

(9) If there are no post-commencement instalment payments, a further instalment
payment, in respect of the total liability of E for the accounting period, of an
amount equal to the adjustment amount is to be treated as becoming due and
40payable at the end of the period of 30 days beginning with the commencement
date.

(10) “The adjustment amount” is the difference between—

(a) the aggregate amount of the pre-commencement instalments
determined in accordance with subsection (7), and

(b) the aggregate amount of those instalment payments determined
ignoring subsection (7) (and so taking account of subsections (1) to (5)).

(11) In the Instalment Payment Regulations—

(a) in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13,
5references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations
are to be read as including a reference to subsections (6) to (10) (and in
regulation 7(2) “the regulation in question”, and in regulation 8(2) “that
regulation”, are to be read accordingly), and

(b) in regulation 9(3), the reference to those Regulations is to be read as
10including a reference to subsections (6) to (10).

(12) In section 59D of TMA 1970 (general rule as to when corporation tax is due and
payable), in subsection (5), the reference to section 59E is to be read as
including a reference to subsections (6) to (11).

(13) In this section—

• 15“the chargeable period” is to be construed in accordance with paragraph
  4 or (as the case may be) 5 of Schedule 19 to FA 2011;

• “the commencement date” means the day on which this Act is passed;

• “the Instalment Payment Regulations” means the Corporation Tax
  (Instalment Payments) Regulations 1998 (S.I. 1998/3175S.I. 1998/3175);

20and references to the total liability of E for an accounting period are to be
construed in accordance with regulation 2(3) of the Instalment Payment
Regulations.

201 Bank levy: rates from 1 January 2014

(1) Schedule 19 to FA 2011 (bank levy) is amended as follows.

(2) 25In paragraph 6 (steps for determining the amount of the bank levy), in sub-
paragraph (2)—

(a) for “0.065%” substitute “0.071%”, and

(b) for “0.130%” substitute “0.142%”.

(3) In paragraph 7 (special provision for chargeable periods falling wholly or
30partly before 1 January 2013).

(4) In sub-paragraph (1) for “2013” substitute “2014”.

(5) In sub-paragraph (2) (as substituted by paragraph 6 of Schedule 34 to FA 2012),
in the table in the substituted Step 7—

(a) for the final entry in the first column substitute—

• 35“1 January 2013 to 31 December 2013”, and

(b) at the end add—

(6) 40In the italic heading immediately before that paragraph for “2013” substitute
“2014”.

(7) Accordingly, in Schedule 34 to FA 2012 (bank levy), omit paragraph 6(2).

(8) The amendments made by this section come into force on 1 January 2014.

202 No deductions for UK or foreign bank levies

(1) Schedule 19 to FA 2011 (the bank levy) is amended as follows.

(2) In paragraph 46 (bank levy to be ignored for purposes of corporation tax and
5income tax), in paragraph (b), after “paid” insert “(directly or indirectly)”.

(3) In Part 7 (double taxation relief), after paragraph 69 insert—

“Foreign levies to be ignored for purposes of income tax or corporation tax

69A (1) In calculating profits or losses for the purposes of income tax or
corporation tax—

(a) 10no deduction is allowed in respect of any tax which is
imposed by the law of a territory outside the United
Kingdom and corresponds to the bank levy, and

(b) no account is to be taken of any amount which is paid
(directly or indirectly) by a member of a group to another
15member for the purposes of meeting or reimbursing the cost
of such a tax charged in relation to the group.

(2) Paragraph 66(3) applies for the purposes of sub-paragraph (1) as it
applies for the purposes of paragraph 66(2).”

(4) Accordingly—

(a) 20in paragraph 3, after “double taxation relief” insert “and with the
deduction of foreign levies for the purposes of corporation tax and
income tax”, and

(b) in the heading for Part 7, after “RELIEF” insert “ETC”

(5) The amendments made by this section have effect in relation to any period of
25account beginning on or after 1 January 2013.

(6) The amendments made by subsections (3) and (4) also have effect in relation to
any period of account beginning before that date, but only if, and to the extent
that, the tax is the subject of a claim for relief under paragraph 66 or 67 of
Schedule 19 to FA 2011 (bank levy: double taxation relief) made on or after 5
30December 2012.

(7) For the purposes of subsections (5) and (6), a period of account beginning
before, and ending on or after 1 January 2013 is to be treated as if so much of
the period as falls before that date, and so much of the period as falls on or after
that date, were separate periods of account.

35Part 5 General anti-abuse rule

203 General anti-abuse rule

(1) This Part has effect for the purpose of counteracting tax advantages arising
from tax arrangements that are abusive.

(2) 40The rules of this Part are collectively to be known as “the general anti-abuse
rule”.

(3) The general anti-abuse rule applies to the following taxes—

(a) income tax,

(b) corporation tax, including any amount chargeable as if it were
corporation tax or treated as if it were corporation tax,

(c) 5capital gains tax,

(d) petroleum revenue tax,

(e) inheritance tax,

(f) stamp duty land tax, and

(g) annual tax on enveloped dwellings.

204 10Meaning of “tax arrangements” and “abusive”

(1) Arrangements are “tax arrangements” if, having regard to all the
circumstances, it would be reasonable to conclude that the obtaining of a tax
advantage was the main purpose, or one of the main purposes, of the
arrangements.

(2) 15Tax arrangements are “abusive” if they are arrangements the entering into or
carrying out of which cannot reasonably be regarded as a reasonable course of
action in relation to the relevant tax provisions, having regard to all the
circumstances including—

(a) whether the substantive results of the arrangements are consistent with
20any principles on which those provisions are based (whether express or
implied) and the policy objectives of those provisions,

(b) whether the means of achieving those results involves one or more
contrived or abnormal steps, and

(c) whether the arrangements are intended to exploit any shortcomings in
25those provisions.

(3) Where the tax arrangements form part of any other arrangements regard must
also be had to those other arrangements.

(4) Each of the following is an example of something which might indicate that tax
arrangements are abusive—

(a) 30the arrangements result in an amount of income, profits or gains for tax
purposes that is significantly less than the amount for economic
purposes,

(b) the arrangements result in deductions or losses of an amount for tax
purposes that is significantly greater than the amount for economic
35purposes, and

(c) the arrangements result in a claim for the repayment or crediting of tax
(including foreign tax) that has not been, and is unlikely to be, paid,

but in each case only if it is reasonable to assume that such a result was not the
anticipated result when the relevant tax provisions were enacted.

(5) 40The fact that tax arrangements accord with established practice, and HMRC
had, at the time the arrangements were entered into, indicated its acceptance
of that practice, is an example of something which might indicate that the
arrangements are not abusive.

(6) The examples given in subsections (4) and (5) are not exhaustive.

205 Meaning of “tax advantage”

A “tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(c) 5avoidance or reduction of a charge to tax or an assessment to tax,

(d) avoidance of a possible assessment to tax,

(e) deferral of a payment of tax or advancement of a repayment of tax, and

(f) avoidance of an obligation to deduct or account for tax.

206 Counteracting the tax advantages

(1) 10If there are tax arrangements that are abusive, the tax advantages that would
(ignoring this Part) arise from the arrangements are to be counteracted by the
making of adjustments.

(2) The adjustments required to be made to counteract the tax advantages are such
as are just and reasonable.

(3) 15The adjustments may be made in respect of the tax in question or any other tax
to which the general anti-abuse rule applies.

(4) The adjustments that may be made include those that impose or increase a
liability to tax in any case where (ignoring this Part) there would be no liability
or a smaller liability, and tax is to be charged in accordance with any such
20adjustment.

(5) Any adjustments required to be made under this section (whether by an officer
of Revenue and Customs or the person to whom the tax advantage would
arise) may be made by way of an assessment, the modification of an
assessment, amendment or disallowance of a claim, or otherwise.

(6) 25But—

(a) no steps may be taken by an officer of Revenue and Customs by virtue
of this section unless the procedural requirements of Schedule 41 have
been complied with, and

(b) the power to make adjustments by virtue of this section is subject to any
30time limit imposed by or under any enactment other than this Part.

(7) Any adjustments made under this section have effect for all purposes.

207 Consequential relieving adjustments

(1) This section applies where—

(a) the counteraction of a tax advantage under section 206 is final, and

(b) 35if the case is not one in which notice of the counteraction was given
under paragraph 12 of Schedule 41, HMRC have been notified of the
counteraction by the taxpayer.

(2) A person has 12 months, beginning with the day on which the counteraction
becomes final, to make a claim for one or more consequential adjustments to be
40made in respect of any tax to which the general anti-abuse rule applies.

(3) On a claim under this section, an officer of Revenue and Customs must make
such of the consequential adjustments claimed (if any) as are just and
reasonable.