Finance Bill

House of Commons

Session 2013 - 14
Internet Publications
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Finance Bill

Finance Bill
Part 4 — Excise duties and other taxes
118

Climate change levy
197
Climate change levy: main rates
(1)
In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount
payable by way of levy) for the table substitute—

Taxable commodity supplied
Rate at which levy payable if

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supply is not a reduced-rate

supply or a supply for use in

scrap metal recycling

Electricity
£0.00541 per kilowatt hour

Gas supplied by a gas utility
£0.00188 per kilowatt hour

10

or any gas supplied in a

gaseous state that is of a kind

supplied by a gas utility

Any petroleum gas, or other
£0.01210 per kilogram

gaseous hydrocarbon,

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supplied in a liquid state

Any other taxable
£0.01476 per kilogram”.

commodity

(2)
The amendment made by subsection (1) has effect in relation to supplies
treated as taking place on or after 1 April 2014.
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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)
In Schedule 7A to FA 1994 (IPT: contracts that are not taxable), paragraph 3
25
(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
payment,” and
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(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”.

Finance Bill
Part 4 — Excise duties and other taxes
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(4)
After 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;
5
(bb)
“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
10
8 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-
15
paragraph (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
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paragraph 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),
25
and
(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).
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(6)
Subsections (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
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is 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”).
40
(7)
Subsections (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

Finance Bill
Part 4 — Excise duties and other taxes
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treated as becoming due and payable on or after the commencement date
(“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
5
amount equal to the adjustment amount is to be treated as becoming due and
payable 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
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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,
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references 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
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including 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—
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“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. 1998/3175);
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and 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.
35
(2)
In 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
40
partly 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—

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Part 4 — Excise duties and other taxes
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(a)
for the final entry in the first column substitute—
“1 January 2013 to 31 December 2013”, and
(b)
at the end add—

“Any time on
0.071%
0.142%”.

or after 1

5

January 2014

(6)
In 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.
10
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
income tax), in paragraph (b), after “paid” insert “(directly or indirectly)”.
(3)
In Part 7 (double taxation relief), after paragraph 69 insert—
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“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)
no deduction is allowed in respect of any tax which is
imposed by the law of a territory outside the United
20
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
member for the purposes of meeting or reimbursing the cost
of such a tax charged in relation to the group.
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      (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)
in paragraph 3, after “double taxation relief” insert “and with the
deduction of foreign levies for the purposes of corporation tax and
30
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
account beginning on or after 1 January 2013.
(6)
The amendments made by subsections (3) and (4) also have effect in relation to
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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
December 2012.
(7)
For the purposes of subsections (5) and (6), a period of account beginning
40
before, and ending on or after 1 January 2013 is to be treated as if so much of

Finance Bill
Part 5 — General anti-abuse rule
122

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.
Part 5
General anti-abuse rule
203
General anti-abuse rule
5
(1)
This Part has effect for the purpose of counteracting tax advantages arising
from tax arrangements that are abusive.
(2)
The 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—
10
(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)
capital gains tax,
(d)
petroleum revenue tax,
15
(e)
inheritance tax,
(f)
stamp duty land tax, and
(g)
annual tax on enveloped dwellings.
204
Meaning of “tax arrangements” and “abusive”
(1)
Arrangements are “tax arrangements” if, having regard to all the
20
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)
Tax arrangements are “abusive” if they are arrangements the entering into or
carrying out of which cannot reasonably be regarded as a reasonable course of
25
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
any principles on which those provisions are based (whether express or
implied) and the policy objectives of those provisions,
30
(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
those provisions.
(3)
Where the tax arrangements form part of any other arrangements regard must
35
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)
the arrangements result in an amount of income, profits or gains for tax
purposes that is significantly less than the amount for economic
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purposes,

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(b)
the arrangements result in deductions or losses of an amount for tax
purposes that is significantly greater than the amount for economic
purposes, 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,
5

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)
The 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
10
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,
15
(b)
repayment or increased repayment of tax,
(c)
avoidance 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.
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206
Counteracting the tax advantages
(1)
If 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
25
as are just and reasonable.
(3)
The 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
30
or a smaller liability, and tax is to be charged in accordance with any such
adjustment.
(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
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assessment, amendment or disallowance of a claim, or otherwise.
(6)
But—
(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
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(b)
the power to make adjustments by virtue of this section is subject to any
time limit imposed by or under any enactment other than this Part.
(7)
Any adjustments made under this section have effect for all purposes.