Finance (No. 2) Bill (HC Bill 190)

(5) Section 18 (exempt processes) is amended as follows.

(6) In subsection (1)—

(a) in paragraph (a), for the words from “references” to “but” substitute
“references to—

(i) 5the spoil, waste, off-cuts and other by-products resulting from
the application of any exempt process to any aggregate, and

(ii) any relevant substance extracted or otherwise separated as a
result of the application of any exempt process within
subsection (2)(b) to any aggregate; but”, and

(b) 10in paragraph (b), for “such” substitute “exempt”.

(7) In subsection (2), after paragraph (c) insert—

“(d) the use of clay or shale in the production of ceramic
construction products;

(e) the use of gypsum or anhydrite in the production of plaster,
15plasterboard or related products.”

(8) Section 19 (commercial exploitation) is amended as follows.

(9) In subsection (1), after “aggregate” insert “not falling within subsection (1B)”.

(10) After that subsection insert—

“(1A) For the purposes of this Part a quantity of aggregate falling within
20subsection (1B) is subjected to exploitation if, and only if—

(a) it is removed from a site falling within subsection (2) in a case
where the person removing it intends that it should be used (by
any person) for construction purposes;

(b) it becomes subject to an agreement to supply it to a person who
25intends that it should be used (by any person) for construction
purposes;

(c) it is used for construction purposes; or

(d) it is mixed, otherwise than in permitted circumstances, with any
material other than water for the purpose of its use for
30construction purposes.

(1B) A quantity of aggregate falls within this subsection if—

(a) it consists wholly of a relevant substance listed in section 18(3)
which results from the application to any aggregate of an
exempt process within section 18(2)(b);

(b) 35it consists mainly of the spoil or waste from, or other by-
products of—

(i) any industrial combustion process, or

(ii) the smelting or refining of metal; or

(c) it consists wholly or mainly of clay, coal, lignite, slate or shale.”

(11) 40In section 22 (responsibility for exploitation of aggregate), in subsection (1) for
paragraphs (c) and (d) substitute—

“(c) in the case of the exploitation of a quantity of aggregate not
falling within section 19(1B) by its being subjected, at a time
when it is not on its originating site or a connected site, to any
45agreement, the person agreeing to supply it;

(ca) in the case of the exploitation of a quantity of aggregate falling
within section 19(1B) by its being subjected, at a time when it is

not on its originating site or a connected site, to any agreement,
the person agreeing to supply it and the person to whom it is
agreed to be supplied;

(cb) in the case of the exploitation of a quantity of aggregate by its
being used, at a time when it is not on its originating site or a
5connected site, for construction purposes, the person using it for
construction purposes;

(cc) in the case of the exploitation of a quantity of aggregate not
falling within section 19(1B) by its being subjected, at a time
when it is on its originating site or a connected site, to any
10agreement, the person mentioned in paragraph (c) and (if
different) the operator of that site;

(cd) in the case of the exploitation of a quantity of aggregate falling
within section 19(1B) by its being subjected, at a time when it is
on its originating site or a connected site, to any agreement, the
15persons mentioned in paragraph (ca) and (if different) the
operator of that site;

(ce) in the case of the exploitation of a quantity of aggregate by its
being used, at a time when it is on its originating site or a
connected site, for construction purposes, the person
20mentioned in paragraph (cb) and (if different) the operator of
that site;”.

(12) The amendments made by subsections (1) to (11) are treated as having come
into force on 1 April 2014.

89 Aggregates levy: power to restore exemptions

(1) 25The Treasury may by order provide that Part 2 of FA 2001 (the aggregates levy)
is to have effect subject to such amendments as the Treasury consider
necessary to secure that any of the exemptions that are removed as a result of
the amendments made by section 88 is to any extent restored.

(2) An order under this section—

(a) 30may provide for the restoration of an exemption to have effect in
relation to commercial exploitation to which a quantity of aggregate is
subjected on or after a day which is earlier than the day on which the
order is made;

(b) may make such supplementary, incidental, consequential or
35transitional provision as the Treasury think fit.

(3) An order under this section is to be made by statutory instrument.

(4) A statutory instrument containing an order under this section is subject to
annulment in pursuance of a resolution of the House of Commons.

Climate change levy

90 40Climate change levy: main rates for 2015-16

(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount

payable by way of levy) for the table substitute—

(2) The amendment made by this section has effect in relation to supplies treated
20as taking place on or after 1 April 2015.

91 Climate change levy: carbon price support rates for 2014-15 and 2015-16

(1) Paragraph 42A of Schedule 6 to FA 2000 (climate change levy: carbon price
support rates) is amended as follows.

(2) In the table in sub-paragraph (3), as substituted by paragraph 23 of Schedule
2542 to FA 2013, for “£0.85489 per gigajoule” substitute “£0.81906 per gigajoule”.

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

(4) In the table in sub-paragraph (3), as substituted by paragraph 24 of Schedule
42 to FA 2013, for “£1.62534 per gigajoule” substitute “£1.56860 per gigajoule”.

(5) 30The amendment made by subsection (4) has effect in relation to supplies
treated as taking place on or after 1 April 2015.

92 Climate change levy: carbon price support rates for 2016-17

(1) In paragraph 42A of Schedule 6 to FA 2000 (climate change levy: carbon price
support rates) for sub-paragraph (3) substitute—

“(3) 35The carbon price support rates are as follows.

(2) The amendment made by this section has effect in relation to supplies treated
as taking place on or after 1 April 2016.

93 Climate change levy: exemptions: mineralogical & metallurgical processes etc

25Schedule 16 makes provision in relation to climate change levy.

Landfill tax

94 Rates 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 “£80” substitute “£82.60”.

(3) 30In subsection (2) (reduced rate for disposal of qualifying material)—

(a) for “£80” substitute “£82.60”, and

(b) for “£2.50” substitute “£2.60”.

(4) The amendments made by this section have effect in relation to disposals made
(or treated as made) on or after 1 April 2015.

35Excise and customs duties: general

95 Goods carried as stores

Schedule 17 contains provision about goods shipped or carried as stores on
ships or aircraft.

96 Penalties under section 26 of FA 2003: extension to excise duty

(1) 40In this section—

• “dutiable excise goods” means goods of a class or description subject to
  any duty of excise, whether or not those goods are in fact chargeable

  Finance (No. 2) BillPage 84

  with that duty, and whether or not that duty has been paid on the
  goods;

• “relevant excise rule” means any duty, obligation, requirement or
  condition imposed by section 78 of CEMA 1979 (customs and excise
  control of persons entering or leaving the United Kingdom), so far as
  5that section relates to—

  (a)

  dutiable excise goods a person has obtained outside the United
  Kingdom, or

  (b)

  dutiable excise goods a person has obtained in the United
  Kingdom without payment of excise duty,

  10and in respect of which the person is not entitled to exemption from
  excise duty by virtue of any order under section 13 of the Customs and
  Excise Duties (General Reliefs) Act 1979 (personal reliefs).

(2) Sections 26 and 27 and 29 to 41 of FA 2003 (taxes and duties on importation and
exportation: penalties) apply in relation to excise duty as they apply in relation
15to a relevant tax or duty (as defined by section 24(2) of that Act) except that, for
this purpose, “relevant rule” in sections 26 and 33 means a relevant excise rule.

Value added tax

97 VAT: special schemes

Schedule 18 contains provision about the supply of electronic services,
20broadcasting services and telecommunication services.

98 VAT: place of belonging

(1) Section 9 of VATA 1994 (place where supplier or recipient of services belongs)
is amended as follows.

(2) In subsection (3)(c), after “usual place of residence” insert “or permanent
25address”.

(3) In subsection (5), for the words from “belonging” to the end substitute
“belonging—

“(a) in the country in which the person’s usual place of residence or
permanent address is (except in the case of a body corporate or
30other legal person);

(b) in the case of a body corporate or other legal person, in the
country in which the place where it is established is.”

(4) For subsection (6) substitute—

“(6) The reference in subsection (5)(b) to the place where a body corporate
35or other legal person “is established” is to be read in accordance with
Article 13a of Implementing Regulation (EU) No 282/2011 (which is
inserted by Council Implementing Regulation (EU) No 1042/2013).”

(5) The amendments made by this section have effect in relation to supplies made
on or after 1 January 2015.

99 VAT: place of supply orders: disapplication of transitional provision

(1) Section 97A of VATA 1994 (place of supply orders: transitional provision) is to
be ignored for the purpose of giving effect to any new order under section
7A(6) of that Act which—

(a) 5is expressed as having effect in relation to supplies made on or after 1
January 2015, and

(b) makes provision about the place of supply of electronically supplied
services, telecommunication services and radio and television
broadcasting services.

(2) 10In subsection (1) “new order” means an order made on or after the day on
which this Act is passed.

(3) Subsection (1) applies only so far as the order makes provision about supplies
to which Article 2 of Council Implementing Regulation (EU) No 1042/2013
(transitional provision for changes in the law affecting electronically supplied,
15telecommunication and radio and television broadcasting services) applies.

100 VAT: supply of services through agents

(1) Section 47 of VATA 1994 (agents) is amended as follows.

(2) In subsection (3), after “services” insert “, other than electronically supplied
services and telecommunication services,”.

(3) 20After subsection (3) insert—

“(4) Where electronically supplied services or telecommunication services
are supplied through an agent, the supply is to be treated both as a
supply to the agent and as a supply by the agent.

(5) For the purposes of subsection (4) “agent” means a person (“A”) who
25acts in A’s own name but on behalf of another person within the
meaning of Article 28 of Council Directive 2006/112/EC on the
common system of value added tax.

(6) In this section “electronically supplied services” and
“telecommunication services” have the same meaning as in Schedule
304A (see paragraph 9(3) and (4) and paragraph 8(2) of that Schedule).”

(4) The amendments made by this section have effect in relation to supplies made
on or after 1 January 2015.

101 VAT: refunds to health service bodies

(1) In section 41(7) of VATA 1994 (application to the Crown: list of bodies
35regarded as Government departments) after “Excellence” insert “, Health
Education England (established by the Care Act 2014), and the Health Research
Authority (also established by that Act),”.

(2) In section 41(7) of VATA 1994 as amended by subsection (1)—

(a) for “above,” substitute “—

“(a)”,

(b)”,

(c) after “1978” insert “,

“(c)”,

(d) for the “and” after “foundation trust” substitute “,

“(d)”,

(e) 5for the “and” after “Care Trust” substitute “,

“(e)”,

(f) for the “and” after “Health Board” substitute “,

“(f)”,

(g) after “group,” insert—

“(g)”,

(h) after “Centre,” insert—

“(h)”,

(i) for the “and” after “Commissioning Board” substitute “,

“(i)”,

(j) 15before “Health Education England” insert—

“(j)”,

(k) before “the Health Research Authority” insert—

“(k)”,

(l) the words from “shall be regarded” to the end are to follow, rather than
20form part of, the paragraph (k) so formed, and

(m) in those words, for “shall” substitute “are each to”.

102 VAT: prompt payment discounts

(1) In Part 2 of Schedule 6 to VATA 1994 (valuation: special cases), for paragraph
4 (prompt payment discounts), substitute—

“4 (1) 25Sub-paragraph (2) applies where—

(a) goods or services are supplied for a consideration which is a
price in money,

(b) the terms on which those goods or services are so supplied
allow a discount for prompt payment of that price,

(c) 30payment of that price is not made by instalments, and

(d) payment of that price is made in accordance with those terms
so that the discount is realised in relation to that payment.

(2) For the purposes of section 19 (value of supply of goods or services)
the consideration is the discounted price paid.”

(2) 35The amendment made by this section has effect in relation to relevant supplies
made on or after 1 May 2014.

(3) The Treasury may by order made by statutory instrument provide that the
amendment has effect in relation to supplies of a description specified in the
order made on or after a date so specified (being a date before 1 April 2015).

(4) 40Subject to that, the amendment has effect in relation to supplies made on or
after 1 April 2015.

(5) In this section—

• “relevant supply” means a supply of radio or television broadcasting
  services or telecommunication services made by a taxable person who

  Finance (No. 2) BillPage 87

  is not required by or under any enactment to provide a VAT invoice to
  the person supplied;

• “telecommunication services” has the same meaning as in paragraph 8(2)
  of Schedule 4A to VATA 1994.

Stamp duty land tax and annual tax on enveloped dwellings

103 5ATED: reduction in threshold from 1 April 2015

(1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2) In section 94(2)(a) (charge to tax), for “£2 million” substitute “£1 million”.

(3) In section 99 (amount of tax chargeable), in the table in subsection (4), before
the first entry insert—

(4) The amendments made by subsections (1) to (3) have effect for chargeable
periods beginning on or after 1 April 2015.

(5) 15In a case where tax is charged for the chargeable period beginning with 1 April
2015 with respect to a single-dwelling interest the taxable value of which on the
relevant day (see section 99(5) of FA 2013) is not more than £2 million, sections
159 and 163 of FA 2013 have effect with the following modifications.

(6) Section 159 (annual tax on enveloped dwellings return) has effect as if for
20subsections (2) and (3) there were substituted—

“(2) A return under subsection (1) must be delivered by the end of 1 October
2015 if the days on which the person is within the charge with respect
to the interest include 1 April 2015.

(3) If the days on which the person is within the charge with respect to the
25interest do not include 1 April 2015, the return must be delivered—

(a) by the end of 1 October 2015, or

(b) by the end of the period of 30 days beginning with the first day
in the chargeable period on which the person is within the
charge with respect to the interest,

30whichever is the later.”

(7) Section 163 (payment of tax) has effect as if for subsection (1) there were
substituted—

“(1) Tax charged on a person under section 99 with respect to a single-
dwelling interest must be paid—

(a) 35by the end of 31 October 2015, or

(b) if later, by the end of the filing date for the return.”

104 ATED: further reduction in threshold from 1 April 2016

(1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is amended as follows.

(2) In section 94(2)(a) (charge to tax), for “£1 million” substitute “£500,000”.

(3) In section 99 (amount of tax chargeable), in the table in subsection (4), before
the first entry insert—

(4) The amendments made by this section have effect for chargeable periods
beginning on or after 1 April 2016.

105 SDLT: threshold for higher rate applying to certain transactions

(1) Schedule 4A to FA 2003 (SDLT: higher rate for certain transactions) is amended
10as follows.

(2) In paragraph 1(2) (meaning of “higher threshold interest”) for “£2,000,000”
substitute “£500,000”.

(3) In consequence of the amendment made by subsection (2), in the following
provisions, for “£2,000,000” substitute “£500,000”—

(a) 15paragraph 4(1)(c);

(b) paragraph 6(2);

(c) paragraph 6(3)(b).

(4) The amendments made by this section have effect in relation to any chargeable
transaction of which the effective date is on or after 20 March 2014.

(5) 20But the amendments do not have effect in relation to a transaction—

(a) effected in pursuance of a contract entered into and substantially
performed before 20 March 2014,

(b) effected in pursuance of a contract entered into before that date and not
excluded by subsection (6), or

(c) 25excepted by subsection (7).

(6) A transaction effected in pursuance of a contract entered into before 20 March
2014 is excluded by this subsection if—

(a) there is any variation of the contract, or assignment (or assignation) of
rights under the contract, on or after 20 March 2014,

(b) 30the transaction is effected in consequence of the exercise on or after that
date of any option, right of pre-emption or similar right, or

(c) on or after that date there is an assignment (or assignation), subsale or
other transaction relating to the whole or part of the subject-matter of
the contract as a result of which a person other than the purchaser
35under the contract becomes entitled to call for a conveyance.

(7) A transaction treated as occurring under paragraph 17(2) or 17A(4) of Schedule
15 to FA 2003 (partnerships) is excepted by this subsection if the effective date
of the land transfer referred to in sub-paragraph (1)(a) of the paragraph
concerned is before 20 March 2014.

106 40SDLT: charities relief

Schedule 19 amends Schedule 8 to FA 2003 (stamp duty land tax: charities
relief).

Stamp duty reserve tax and stamp duty

107 Abolition of SDRT on certain dealings in collective investment schemes

(1) Part 2 of Schedule 19 to FA 1999 (which provides for a charge to stamp duty
reserve tax on certain dealings with units in unit trusts) is omitted.

(2) 5In section 90(1B) of FA 1986 (exception to charge to stamp duty reserve tax on
certain agreements to transfer property from a unit trust)—

(a) after “unit trust scheme” insert “if the unit holder is to receive only such
part of each description of asset in the trust property as is proportionate
to, or as nearly as practicable proportionate to, the unit holder’s share.”,
10and

(b) for the second sentence substitute “For these purposes there is a
surrender of a unit where—

“(a) a person (“P”) authorises or requires the trustees or managers of
a unit trust scheme to treat P as no longer interested in a unit
15under the scheme, or

(b) a unit under the unit trust scheme is transferred to the managers
of the scheme,”

and the unit is a chargeable security.”

(3) Accordingly—

(a) 20in FA 1999, in section 123(3), for “Parts I to III” substitute “Parts I and
III”,

(b) in FA 2001, omit sections 93 and 94,

(c) in FA 2004, in Schedule 35, omit paragraph 46 and the italic heading
before that paragraph,

(d) 25in FA 2005, omit section 97(3), (4) and (6), and

(e) in FA 2010, in Schedule 6, omit paragraph 15(2).

(4) The amendments made by this section have effect in relation to surrenders
made or effected on or after 30 March 2014.

(5) Provision made by regulations under section 98 of FA 1986, section 152 of FA
301995 or section 17 of F(No.2)A 2005 in connection with the coming into force of
this section may be made so as to have effect in relation to surrenders made or
effected on or after 30 March 2014 (even if the regulations are made after that
date).

(6) In subsections (4) and (5) a reference to surrenders is to be read in accordance
35with paragraph 2 of Schedule 19 to FA 1999.

108 Abolition of stamp duty and SDRT: securities on recognised growth markets

Schedule 20 contains provision abolishing stamp duty and stamp duty reserve
tax on instruments and transfers of securities traded on recognised growth
markets.

109 40Temporary statutory effect of House of Commons resolution

(1) Section 50 of FA 1973 (temporary statutory effect of House of Commons
resolution affecting stamp duties) is amended as follows.