Previous Next

Contents page 360-369 370-378 380-389 390-399 400-409 410-419 420-428 430-439 440-449 450-459 460-469 470-479 480-488 490-499 500-509 510-519 520-536 537-537 540-556 557-559 560-569 Last page

Finance (No. 2) BillPage 460

(4) Any rent which, in the absence of this paragraph, would be
payable under the original lease in respect of that one year period
is to be treated as payable under the new lease (and paragraph 1A
of Schedule 5 does not apply to it).

(5) 5Where the fixed term of a lease has previously been extended (on
one or more occasions) under paragraph 3, this paragraph applies
as if references to the original term were references to the fixed
term as previously so extended.

4 In section 87 (interest on unpaid tax), in subsection (3)—

(a) 10after paragraph (aa) insert—

(aaa) in the case of an amount payable under paragraph
3(3) of Schedule 17A (leases that continue after a fixed
term) by reason of the continuation of a lease for a
period (or further period) under paragraph 3(2) or (6)
15of that Schedule, the final day of the period (or further
period), and

(b) in paragraph (ab) omit “3(3) or” and “leases that continue after a
fixed term and”.

5 In section 119 (meaning of “effective date” of a transaction), in subsection (2),
20at the appropriate place in the list insert—

paragraph 3(4) of Schedule 17A (leases that continue after a fixed
term),.

Agreement for lease and assignment of agreement for lease

6 (1) Schedule 17A is amended as follows.

(2) 25In paragraph 12A (agreement for lease), for sub-paragraph (3) substitute—

(3) Where a lease (“the actual lease”) is subsequently granted in
pursuance of the agreement, the notional lease is to be treated for
the purposes of this Part as if it were a lease granted—

(a) on the date the agreement was substantially performed,

(b) 30for a term which begins with that date and ends at the end
of the term of the actual lease, and

(c) in consideration of the total rent payable over that term
and any other consideration given for the notional lease or
the actual lease.

(3A) 35Where sub-paragraph (3) applies the grant of the actual lease is
disregarded for the purposes of this Part except section 81A
(return or further return in consequence of later linked
transaction).

(3B) For the purposes of section 81A—

(a) 40the grant of the notional lease and the grant of the actual
lease are linked (whether or not they would be linked by
virtue of section 108),

(b) the lessee under the actual lease (rather than the lessee
under the notional lease) is liable for any tax or additional
45tax payable in respect of the notional lease as a result of
sub-paragraph (3), and

Finance (No. 2) BillPage 461

(c) the reference in section 81A(1)(a) to “the purchaser under
the earlier transaction” is to be read, in relation to the
notional lease, as a reference to the lessee under the actual
lease.

(3) 5In paragraph 19 (missives of let)—

(a) for sub-paragraph (2) substitute—

(2) Where in Scotland there is a lease constituted by concluded
missives of let (“the first lease”) and at some later time a
lease is executed (“the second lease”), the first lease is to be
10treated for the purposes of this Part as if it were a lease
granted—

(a) on the date the missives of let were concluded,

(b) for a period which begins with that date and ends
at the end of the period of the second lease, and

(c) 15in consideration of the total rent payable over that
period and any other consideration given for the
first lease or the second lease.

(2A) Where sub-paragraph (2) applies the grant of the second
lease is disregarded for the purposes of this Part except
20section 81A (return or further return in consequence of
later linked transaction).

(2B) For the purposes of section 81A—

(a) the grant of the first lease and the grant of the
second lease are linked (whether or not they would
25be linked by virtue of section 108),

(b) the lessee under the second lease (rather than the
lessee under the first lease) is liable for any tax or
additional tax payable in respect of the first lease
lease as a result of sub-paragraph (2), and

(c) 30the reference in section 81A(1)(a) to “the purchaser
under the earlier transaction” is to be read, in
relation to the first lease, as a reference to the lessee
under the actual lease.

(b) for sub-paragraph (4) substitute—

(4) 35Where sub-paragraph (3) applies and at some later time a
lease (“the actual lease”) is executed, this Part applies as if
the notional lease were a lease granted—

(a) on the date the agreement was substantially
performed,

(b) 40for a period which begins with that date and ends
at the end of the period of the actual lease, and

(c) in consideration of the total rent payable over that
period and any other consideration given for the
agreement or the actual lease.

(4A) 45Where sub-paragraph (4) applies the grant of the second
lease is disregarded for the purposes of this Part except
section 81A (return or further return in consequence of
later linked transaction).”

(4B) For the purposes of section 81A—

Finance (No. 2) BillPage 462

(a) the grant of the notional lease and the grant of the
actual lease are linked (whether or not they would
be linked by virtue of section 108),

(b) the lessee under the actual lease (rather than the
5lessee under the notional lease) is liable for any tax
or additional tax payable in respect of the notional
lease as a result of sub-paragraph (4), and

(c) the reference in section 81A(1)(a) to “the purchaser
under the earlier transaction” is to be read, in
10relation to the notional lease, as a reference to the
lessee under the actual lease.

(4) Accordingly, in Schedule 25 to FA 2006, paragraphs 4 and 5 are omitted.

Abnormal rent increases

7 (1) In Schedule 17A, omit paragraphs 14 and 15 (abnormal increases in rent after
15fifth year).

(2) Accordingly, the following are also repealed—

(a) in Schedule 25 to FA 2006, paragraphs 7, 8 and 9(5), and

(b) in Schedule 3 to the Scotland Act 2012, paragraph 27(9).

Commencement

8 (1) 20The amendments made by paragraph 2(2), (4) and (5) have effect in relation
to any one year period for which a lease is continued, or further continued,
which begins on or after the commencement day (including any period
which would be one year but for paragraph 3(6) of Schedule 17A to FA
2003).

(2) 25The amendments made by paragraphs 2(3), 3 and 5 have effect if the one
year period mentioned in paragraph 3A(1)(b) of Schedule 17A to FA 2003
begins on or after the commencement day.

(3) The amendments made by paragraph 4 have effect in relation to amounts
payable in consequence of any period for which a lease is continued, or
30further continued, which begins on or after the commencement day.

(4) The amendments made by paragraph 6 have effect if the effective date of the
actual lease or, as the case may be, second lease falls on or after the
commencement day.

(5) The amendments made by paragraph 7 have effect in relation to any increase
35in rent that takes effect on or after the commencement day.

(6) “The commencement day” means the day on which this Act is passed.

Finance (No. 2) BillPage 463

Section 198

SCHEDULE 40 Climate change levy: supplies subject to carbon price support rates etc

Part 1 Earlier provision not to have effect

1 (1) 5On and after 26 March 2013, Schedule 6 to FA 2000 (climate change levy) has
effect as if neither—

(a) Schedule 20 to FA 2011, nor

(b) Parts 1 and 2 of Schedule 32 to FA 2012,

had ever been enacted.

(2) 10Accordingly—

(a) in FA 2011, section 78 and Schedule 20 are omitted, and

(b) in FA 2012, Parts 1 and 2 of Schedule 32 are omitted.

(3) The amendments made by sub-paragraph (2) are treated as having come
into force on 26 March 2013.

15Part 2 New provision having effect from 1 April 2013

New provision

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

3 In paragraph 4 (definition of “taxable supply”) in sub-paragraph (2)(b) after
20“24” insert “, 24A, 24B, 24C, 42D”.

4 In paragraph 5 (supplies of electricity) after sub-paragraph (2) insert—

(2A) Levy is chargeable on a supply of electricity if—

(a) the supply is made by an exempt unlicensed electricity
supplier who is an auto-generator or who is of a
25description prescribed by regulations made by the
Treasury,

(b) the electricity was produced in a generating station owned
by the supplier using commodities which were the subject
of a deemed supply under paragraph 24A or which would
30have been the subject of such a supply had the reference in
paragraph 24A(1)(a) to Great Britain been a reference to
the United Kingdom instead,

(c) the supply is not a deemed supply under paragraph 23(3),
and

(d) 35the person to whom the supply is made is not an electricity
utility.

5 In paragraph 6 (supplies of gas) in sub-paragraph (2A) after “24” insert “,
24A, 24B, 24C, 42D”.

6 (1) Paragraph 14 (exemption for supplies to electricity producers) is amended
40as follows.

Finance (No. 2) BillPage 464

(2) In sub-paragraphs (2)(b) and (3)(b) after “electricity” insert “in a small
generating station”.

(3) After sub-paragraph (3) insert—

(3ZA) Sub-paragraph (1) does not exempt a supply where the person to
5whom the supply is made—

(a) uses the commodity supplied in producing electricity in a
stand-by generator, and

(b) uses the electricity produced otherwise than in exemption-
retaining ways.

(4) 10After sub-paragraph (3A) insert—

(3B) Paragraph 24A makes provision under which carbon price
support rate commodities intended to be used in a generating
station may be the subject of a deemed taxable supply (and,
accordingly, this paragraph needs to be read subject to that
15paragraph).

(5) Omit sub-paragraphs (4) and (5).

7 In paragraph 15 (exemption for supplies to combined heat and power
stations) after sub-paragraph (4) insert—

(4A) Paragraph 24B makes provision under which carbon price
20support rate commodities intended to be used in a combined heat
and power station may be the subject of a deemed taxable supply
(and, accordingly, this paragraph needs to be read subject to that
paragraph).

8 (1) Paragraph 17 (exemption: self-supplies by electricity producers) is amended
25as follows.

(2) After sub-paragraph (1) insert—

(1A) The supply is exempt from levy if it is a supply of electricity
produced in—

(a) a fully exempt combined heat and power station,

(b) 30a partly exempt combined heat and power station,

(c) a stand-by generator, or

(d) a small generating station.

(1B) Sub-paragraph (1A)(d) applies only if the producer is—

(a) an auto-generator, or

(b) 35an exempt unlicensed electricity supplier of a description
prescribed by regulations made by the Treasury.

(3) In sub-paragraph (2) for the words from “If” to “unless—” substitute “This
paragraph does not exempt the supply if—”.

(4) Omit sub-paragraphs (3) and (4).

9 40In paragraph 21 (regulations to avoid double charges to levy) after sub-
paragraph (2) insert—

(2A) In sub-paragraph (2)(b) “taxable supply” does not include a
deemed supply under paragraph 24A, 24B, 24C or 42D.

Finance (No. 2) BillPage 465

10 In Part 2 after paragraph 24 insert—

Deemed taxable supply: commodities to be used in producing electricity

24A (1) Sub-paragraph (2) applies if—

(a) a quantity of a carbon price support rate commodity is
5brought onto, or arrives at, a site in Great Britain at which
a generating station is situated,

(b) that quantity of the commodity is intended to be used for
producing electricity in the station,

(c) the station is neither a fully exempt combined heat and
10power station nor a partly exempt combined heat and
power station, and

(d) the station is neither a small generating station nor a stand-
by generator.

(2) For the purposes of this Schedule the owner of the station is
15deemed to make a taxable supply to himself of that quantity of the
commodity.

(3) In sub-paragraph (1)(a) the reference to a commodity being
brought onto, or arriving at, a site covers (in particular) gas in a
gaseous state arriving at the site through a pipe.

(4) 20For the purposes of sub-paragraph (1) it does not matter—

(a) if the quantity of the commodity is not the subject of an
actual supply made to the owner of the station, or

(b) if the commodity’s availability for use in the station is
subject to any condition.

25Deemed taxable supply: commodities to be used in combined heat and power station

24B (1) Sub-paragraph (2) applies if—

(a) a quantity of a carbon price support rate commodity is
brought onto, or arrives at, the CHPQA site of a fully
exempt combined heat and power station or a partly
30exempt combined heat and power station in Great Britain,

(b) that quantity of the commodity is intended to be used in
the station for producing outputs of the station, and

(c) the station is not a small generating station.

(2) For the purposes of this Schedule the operator of the station is
35deemed to make a taxable supply to himself of that quantity of the
commodity so far as that quantity is referable to the production of
electricity.

(3) For the purposes of sub-paragraph (2) the extent to which a
quantity of a commodity is referable to the production of
40electricity is to be determined in accordance with regulations
under paragraph 24D(1).

(4) In sub-paragraph (1)(a) the reference to a commodity being
brought onto, or arriving at, the CHPQA site of a station covers (in
particular) gas in a gaseous state arriving at the CHPQA site
45through a pipe.

Finance (No. 2) BillPage 466

(5) In sub-paragraph (1)(b) “outputs” has the meaning given by
paragraph 148(9).

(6) For the purposes of sub-paragraph (1) it does not matter—

(a) if the quantity of the commodity is not the subject of an
5actual supply made to the operator of the station, or

(b) if the commodity’s availability for use in the station is
subject to any condition.

(7) In this paragraph “CHPQA site”, in relation to a fully exempt
combined heat and power station or a partly exempt combined
10heat and power station, means the site of the scheme in relation to
which the station’s CHPQA certificate was issued.

24C (1) This paragraph applies if—

(a) a determination (“the initial determination”) is made
under regulations falling within paragraph 24B(3) that—

(i) 15none of a quantity of a carbon price support rate
commodity is, or

(ii) a proportion of such a quantity is not,

referable to the production of electricity,

(b) as a result of the initial determination, the quantity or
20proportion of a quantity is determined not to be the subject
of a deemed supply under paragraph 24B, and

(c) it is later determined that, contrary to the initial
determination, the quantity or proportion of a quantity—

(i) was referable to the production of electricity, and

(ii) 25accordingly, should have been determined to be
the subject of a deemed supply under paragraph
24B.

(2) For the purposes of this Schedule—

(a) the operator of the station in question is deemed to make a
30taxable supply to himself of the quantity or proportion of
a quantity, and

(b) the amount payable by way of levy on the deemed supply
is the amount which would have been payable in relation
to the quantity or proportion of a quantity had it been
35determined to be the subject of a deemed supply as
mentioned in sub-paragraph (1)(c)(ii).

Power to make regulations giving effect to paragraphs 24A to 24C etc

24D (1) The Commissioners may by regulations make provision for giving
effect to paragraphs 24A to 24C and 42A to 42D.

(2) 40Regulations under sub-paragraph (1) may, in particular, include
provision—

(a) for determining whether a deemed supply under
paragraph 24A or 24B is made;

(b) for determining the quantity of any commodity which is
45the subject of such a deemed supply;

(c) for determining whether paragraph 42C(2) applies in
relation to a deemed supply under paragraph 24A or 24B

Finance (No. 2) BillPage 467

and, if it does, the reduction in the relevant carbon price
support rate.

(3) Regulations under sub-paragraph (1) may include—

(a) provision in respect of calculations, measurements, data
5and procedures to be made or used;

(b) provision that, so far as framed by reference to any
document, is framed by reference to that document as from
time to time in force.

11 After paragraph 38 insert—

10Deemed supplies under paragraph 24A, 24B, 24C or 42D

38A (1) A deemed supply under paragraph 24A or 24B is treated as taking
place when the quantity of the commodity is brought onto, or
arrives at, the site at which the station is situated or the CHPQA
site of the station (as the case may be).

(2) 15A deemed supply under paragraph 24C or 42D is treated as taking
place upon the later determination.

12 (1) Paragraph 39 (regulations as to time of supply) is amended as follows.

(2) In sub-paragraph (1)(c) after “24” insert “, 24A, 24B, 24C, 42D”.

(3) In sub-paragraph (3) after “supply)” insert “and 38A”.

13 20In paragraph 42 (amount payable by way of levy) before sub-paragraph (2)
insert—

(1B) Sub-paragraph (1) does not apply to a deemed supply under
paragraph 24A or 24B.

14 After paragraph 42 insert—

42A (1) 25This paragraph applies to a deemed supply under paragraph 24A
or 24B.

(2) The amount payable by way of levy on the deemed supply is the
amount ascertained by applying the relevant carbon price support
rate; and the levy payable on a fraction of a kilowatt hour,
30kilogram or gigajoule is that fraction of the levy payable on a
kilowatt hour, kilogram or gigajoule.

(3) The carbon price support rates are as follows.

Carbon price support
rate commodity
Carbon price support
rate
Any gas in a gaseous
state that is of a kind
supplied by a gas
utility
35£0.00091 per kilowatt
hour

Finance (No. 2) BillPage 468

Carbon price support
rate commodity
Carbon price support
rate
Any petroleum gas, or
other gaseous
hydrocarbon, in a
liquid state
£0.01460 per kilogram

5
Any commodity
falling within
paragraph 3(1)(d) to
(f)
£0.44264 per gigajoule


10

(4) Sub-paragraph (2) needs to be read with paragraphs 42B and 42C.

42B (1) This paragraph applies for the purposes of paragraph 42A(2) if the
commodity deemed to be supplied is a quantity of a commodity
falling within paragraph 3(1)(d) to (f).

(2) 15The number of gigajoules in the quantity supplied is to be
determined by reference to the total gross calorific value of that
quantity.

(3) Sub-paragraph (4) applies if there is included in that quantity any
coal slurry taken from a slurry pit situated at the site of a coal mine
20(including a disused coal mine).

(4) The gross calorific value of the coal slurry is to be left out of
account in determining the total gross calorific value of that
quantity.

42C (1) Sub-paragraph (2) applies for the purposes of paragraph 42A(2) if,
25in the calendar year in which the deemed supply is treated as
taking place, carbon capture and storage technology is operated in
relation to carbon dioxide generated by the station in question in
producing electricity.

(2) In relation to the deemed supply, only C% of the relevant carbon
30price support rate is to be applied (instead of the full rate).

(3) “C%” is 100% minus the station’s carbon capture percentage for
the calendar year.

(4) The station’s “carbon capture percentage” for the calendar year is
the percentage of the station’s generated carbon dioxide for that
35year which, through the operation of the carbon capture and
storage technology, is—

(a) captured, and

(b) then disposed of by way of permanent storage.

(5) The station’s “generated carbon dioxide” for the calendar year is
40the amount of carbon dioxide generated in the year by the station
from the use of carbon price support rate commodities in
producing electricity.

Finance (No. 2) BillPage 469

(6) In this paragraph “carbon capture and storage technology” and
“carbon dioxide” have the meaning given by section 7(3) and (4) of
the Energy Act 2010.

(7) Sub-paragraph (8) applies for the purposes of sub-paragraph (4) in
5relation to any carbon dioxide if—

(a) the carbon dioxide is captured but then leaks out and
therefore is not disposed of by way of permanent storage,
but

(b) the leak does not occur—

(i) 10on the land on which the station is situated,

(ii) on any other land under the control of the station’s
owner or a person connected with the station’s
owner, or

(iii) from any pipeline or other facility or installation
15which is operated by the station’s owner or a
person connected with the station’s owner.

Section 1122 of the Corporation Tax Act 2010 (“connected”
persons) applies for the purposes of paragraph (b).

(8) The carbon dioxide is to be treated as if it had been disposed of by
20way of permanent storage.

(9) If the percentage mentioned in sub-paragraph (4) is not a whole
number, it is to be rounded to the nearest whole number (taking
0.5% as nearest to the next whole number).

42D (1) This paragraph applies if—

(a) 25an amount is determined to be payable by way of levy on
a deemed supply of a quantity of a commodity under
paragraph 24A or 24B, but

(b) it is later determined that that amount is too low.

(2) For the purposes of this Schedule—

(a) 30the person who made the deemed supply is deemed to
make a further taxable supply to himself of the quantity of
the commodity, and

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

(i) 35the total amount payable on the first deemed
supply on the basis of the later determination
mentioned in sub-paragraph (1)(b), less

(ii) the amount previously determined to be payable
on the first deemed supply.

15 40In paragraph 55 (notification of registrability) in sub-paragraph (1) after
paragraph (a) insert—

(aa) expects to be deemed to make a taxable supply to himself
under paragraph 24A or 24B, or.

16 In paragraph 62 (tax credits) in sub-paragraph (1) after paragraph (b)
45insert—

(ba) a quantity of a carbon price support rate commodity is the
subject of a deemed supply under paragraph 24A or 24B
but afterwards the quantity—

Previous Next

Contents page 360-369 370-378 380-389 390-399 400-409 410-419 420-428 430-439 440-449 450-459 460-469 470-479 480-488 490-499 500-509 510-519 520-536 537-537 540-556 557-559 560-569 Last page