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Finance (No. 2) BillPage 140

(3) Condition B is that the return or claim or, as the case may be, appeal is made
on the basis that a particular tax advantage (“the asserted advantage”) results
from particular tax arrangements (“the chosen arrangements”).

(4) Condition C is that one or more of the following requirements are met—

(a) 5HMRC has given (or, at the same time as giving the accelerated
payment notice, gives) P a follower notice under Chapter 2—

(i) in relation to the same return or claim or, as the case may be,
appeal, and

(ii) by reason of the same tax advantage resulting from the same tax
10arrangements;

(b) the chosen arrangements are DOTAS arrangements;

(c) a GAAR counteraction notice has been given in relation to the asserted
advantage or part of it (or is so given at the same time as the accelerated
payment notice) in a case where the stated opinion of at least two of the
15members of the sub-panel of the GAAR Advisory Panel which
considered the matter under paragraph 10 of Schedule 43 to FA 2013
was as set out in paragraph 11(3)(b) of that Schedule (entering into tax
arrangements not reasonable course of action etc).

(5) “DOTAS arrangements” means—

(a) 20notifiable arrangements to which HMRC has allocated a reference
number under section 311 of FA 2004,

(b) notifiable arrangements implementing a notifiable proposal where
HMRC has allocated a reference number under that section to the
proposed notifiable arrangements, or

(c) 25arrangements in respect of which the promoter must provide
prescribed information under section 312(2) of that Act by reason of the
arrangements being substantially the same as notifiable arrangements
within paragraph (a) or (b).

(6) But the notifiable arrangements within subsection (5) do not include
30arrangements in relation to which HMRC has given notice under section 312(6)
of FA 2004 (notice that promoters not under duty imposed to notify client of
reference number).

(7) “GAAR counteraction notice” means a notice under paragraph 12 of Schedule
43 to FA 2013 (notice of final decision to counteract under the general anti-
35abuse rule).

213 Content of notice given while a tax enquiry is in progress

(1) This section applies where an accelerated payment notice is given by virtue of
section 212(2)(a) (notice given while a tax enquiry is in progress).

(2) The notice must—

(a) 40specify the paragraph or paragraphs of section 212(4) by virtue of
which the notice is given,

(b) specify the payment required to be made under section 216 and the
requirements of that section, and

(c) explain the effect of sections 215 and 219, and of the amendments made
45by sections 217 and 218 (so far as relating to the relevant tax in relation
to which the accelerated payment notice is given).

Finance (No. 2) BillPage 141

(3) The payment required to be made under section 216 is an amount equal to the
amount which a designated HMRC officer determines, to the best of that
officer’s information and belief, as the understated tax.

(4) “The understated tax” means the additional amount that would be due and
5payable in respect of tax if—

(a) in the case of a notice given by virtue of section 212(4)(a) (cases where
a follower notice is given)—

(i) it were assumed that the explanation given in the follower
notice in question under section 199(b) is correct, and

(ii) 10the necessary corrective action were taken under section 201 in
respect of what the designated HMRC officer determines, to the
best of that officer’s information and belief, as the denied
advantage;

(b) in the case of a notice given by virtue of section 212(4)(b) (cases where
15the DOTAS requirements are met), such adjustments were made as are
required to counteract what the designated HMRC officer determines,
to the best of that officer’s information and belief, as the denied
advantage;

(c) in the case of a notice given by virtue of section 212(4)(c) (cases
20involving counteraction under the general anti-abuse rule), such of the
adjustments set out in the GAAR counteraction notice as have effect to
counteract the denied advantage were made.

(5) “The denied advantage”—

(a) in the case of a notice given by virtue of section 212(4)(a), has the
25meaning given by section 201(3),

(b) in the case of a notice given by virtue of section 212(4)(b), means so
much of the asserted advantage as is not a tax advantage which results
from the chosen arrangements or otherwise, and

(c) in the case of a notice given by virtue of section 212(4)(c), means so
30much of the asserted advantage as would be counteracted by making
the adjustments set out in the GAAR counteraction notice.

(6) If a notice is given by reason of two or all of the requirements in section 212(4)
being met, the payment specified under subsection (2)(b) is to be determined
as if the notice were given by virtue of such one of them as is stated in the notice
35as being used for this purpose.

(7) “The GAAR counteraction notice” means the notice under paragraph 12 of
Schedule 43 to FA 2013 (notice of final decision to counteract under the general
anti-abuse rule).

214 Content of notice given pending an appeal

(1) 40This section applies where an accelerated payment notice is given by virtue of
section 212(2)(b) (notice given pending an appeal).

(2) The notice must—

(a) specify the paragraph or paragraphs of section 212(4) by virtue of
which the notice is given,

(b) 45specify the disputed tax, and

(c) explain the effect of section 215 and of the amendments made by
sections 217 and 218 so far as relating to the relevant tax in relation to
which the accelerated payment notice is given.

(3)

Finance (No. 2) BillPage 142

“The disputed tax” means so much of the amount of the charge to tax arising
in consequence of—

(a) the amendment or assessment to tax appealed against, or

(b) where the appeal is against a conclusion stated by a closure notice, that
conclusion,

5as a designated HMRC officer determines, to the best of the officer’s
information and belief, as the amount required to ensure the counteraction of
what that officer so determines as the denied advantage.

(4) “The denied advantage” has the same meaning as in section 213(5).

(5) If a notice is given by reason of two or all of the requirements in section 212(4)
10being met, the denied advantage is to be determined as if the notice were given
by virtue of such one of them as is stated in the notice as being used for this
purpose.

(6) In this section a reference to an assessment to tax, in relation to inheritance tax,
is to a determination.

215 15Representations about a notice

(1) This section applies where an accelerated payment notice has been given under
section 212 (and not withdrawn).

(2) P has 90 days beginning with the day that notice is given to send written
representations to HMRC

(a) 20objecting to the notice on the grounds that Condition A, B or C in
section 212 was not met, or

(b) objecting to the amount specified in the notice under section 213(2)(b)
or section 214(2)(b).

(3) HMRC must consider any representations made in accordance with subsection
25(2).

(4) Having considered the representations, HMRC must—

(a) if representations were made under subsection (2)(a), determine
whether—

(i) to confirm the accelerated payment notice (with or without
30amendment), or

(ii) to withdraw the accelerated payment notice, and

(b) if representations were made under subsection (2)(b) (and the notice is
not withdrawn under paragraph (a)), determine whether a different
amount ought to have been specified under section 213(2)(b) or section
35214(2)(b), and then—

(i) confirm the amount specified in the notice, or

(ii) amend the notice to specify a different amount,

and notify P accordingly.

Finance (No. 2) BillPage 143

Forms of accelerated payment

216 Effect of notice given while tax enquiry is in progress

(1) This section applies where an accelerated payment notice is given by virtue of
section 212(2)(a) (notice given while a tax enquiry is in progress) (and not
5withdrawn).

(2) P must make a payment (“the accelerated payment”) to HMRC of the amount
specified in the notice in accordance with section 213(2)(b).

(3) The accelerated payment is to be treated as a payment on account of the
understated tax (see section 213).

(4) 10The accelerated payment must be made before the end of the payment period.

(5) “The payment period” means—

(a) if P made no representations under section 215, the period of 90 days
beginning with the day on which the accelerated payment notice is
given, and

(b) 15if P made such representations, whichever of the following periods
ends later—

(i) the 90 day period mentioned in paragraph (a);

(ii) the period of 30 days beginning with the day on which P is
notified under section 215 of HMRC’s determination.

(6) 20But where the understated tax would be payable by instalments by virtue of an
election made under section 227 of IHTA 1984, to the extent that the accelerated
payment relates to tax payable by an instalment which falls to be paid at a time
after the payment period, the accelerated payment must be made no later than
that time.

(7) 25If P pays any part of the understated tax before the accelerated payment in
respect of it, the accelerated payment is treated to that extent as having been
paid at the same time.

(8) Any tax enactment which relates to the recovery of a relevant tax applies to an
amount to be paid on account of the relevant tax under this section in the same
30manner as it applies to an amount of the relevant tax.

(9) “Tax enactment” means provisions of or made under—

(a) the Tax Acts,

(b) any enactment relating to capital gains tax,

(c) IHTA 1984 or any other enactment relating to inheritance tax,

(d) 35Part 4 of FA 2003 or any other enactment relating to stamp duty land
tax, or

(e) Part 3 of FA 2013 or any other enactment relating to annual tax on
enveloped dwellings.

217 Restriction on powers to postpone tax payments pending initial appeal

(1) 40In section 55 of TMA 1970 (recovery of tax not postponed), after subsection
(8A) insert—

(8B) Subsections (8C) and (8D) apply where a person has been given an
accelerated payment notice or partner payment notice under Chapter 3

Finance (No. 2) BillPage 144

of Part 4 of the Finance Act 2014 and that notice has not been
withdrawn.

(8C) Nothing in this section enables the postponement of the payment of (as
the case may be)—

(a) the understated tax to which the payment specified in the notice
5under section 213(2)(b) of that Act relates,

(b) the disputed tax specified in the notice under section 214(2)(b)
of that Act, or

(c) the understated partner tax to which the payment specified in
the notice under paragraph 4(1)(b) of Schedule 28 to that Act
10relates.

(8D) Accordingly, if the payment of an amount of tax within subsection
(8C)(b) is postponed by virtue of this section immediately before the
accelerated payment notice is given, it ceases to be so postponed with
effect from the time that notice is given, and the tax is due and
15payable—

(a) if no representations were made under section 215 of that Act in
respect of the notice, on or before the last day of the period of 90
days beginning with the day the notice or partner payment
notice is given, and

(b) 20if representations were so made, on or before whichever is later
of—

(i) the last day of the 90 day period mentioned in
paragraph (a), and

(ii) the last day of the period of 30 days beginning with the
25day on which HMRC’s determination in respect of those
representations is notified under section 215 of that
Act.

(2) In section 242 of IHTA 1984 (recovery of tax), after subsection (3) insert—

(4) Where a person has been given an accelerated payment notice under
30Chapter 3 of Part 4 of the Finance Act 2014 and that notice has not been
withdrawn, nothing in this section prevents legal proceedings being
taken for the recovery of (as the case may be)—

(a) the understated tax to which the payment specified in the notice
under section 213(2)(b) of that Act relates, or

(b) 35the disputed tax specified in the notice under section 214(2)(b)
of that Act.

(3) In Schedule 10 to FA 2003 (SDLT: returns, enquiries, assessments and appeals),
in paragraph 39 (direction by the tribunal to postpone payment), after sub-
paragraph (8) insert—

(9) 40Sub-paragraphs (10) and (11) apply where a person has been given
an accelerated payment notice under Chapter 3 of Part 4 of the
Finance Act 2014 and that notice has not been withdrawn.

(10) Nothing in this paragraph enables the postponement of the payment
of (as the case may be)—

(a) 45the understated tax to which the payment specified in the
notice under section 213(2)(b) of that Act relates, or

(b) the disputed tax specified in the notice under section
214(2)(b) of that Act.

Finance (No. 2) BillPage 145

(11) Accordingly, if the payment of an amount of tax within sub-
paragraph (10)(b) is postponed by virtue of this paragraph
immediately before the accelerated payment notice is given, it ceases
to be so postponed with effect from the time that notice is given, and
5the tax is due and payable—

(a) if no representations were made under section 215 of that Act
in respect of the notice, on or before the last day of the period
of 90 days beginning with the day the notice is given, and

(b) if representations were so made, on or before whichever is
10later of—

(i) the last day of the 90 day period mentioned in
paragraph (a), and

(ii) the last day of the period of 30 days beginning with
the day on which HMRC’s determination in respect
15of those representations is notified under section 215
of that Act.

(4) In paragraph 40 of that Schedule (agreement to postpone payment of tax), after
sub-paragraph (3) insert—

(4) Sub-paragraphs (9) to (11) of paragraph 39 apply for the purposes of
20this paragraph as they apply for the purposes of paragraph 39.

(5) In Schedule 33 to FA 2013 (annual tax on enveloped dwellings: returns,
enquiries, assessments and appeals), in paragraph 48 (application for payment
of tax to be postponed), after sub-paragraph (8) insert—

(8A) Sub-paragraphs (8B) and (8C) apply where a person has been given
25an accelerated payment notice under Chapter 3 of Part 4 of FA 2014
and that notice has not been withdrawn.

(8B) Nothing in this paragraph enables the postponement of the payment
of (as the case may be)—

(a) the understated tax to which the payment specified in the
30notice under section 213(2)(b) of that Act relates, or

(b) the disputed tax specified in the notice under section
214(2)(b) of that Act.

(8C) Accordingly, if the payment of an amount of tax within sub-
paragraph (8B)(b) is postponed by virtue of this paragraph
35immediately before the accelerated payment notice is given, it ceases
to be so postponed with effect from the time that notice is given, and
the tax is due and payable—

(a) if no representations were made under section 215 of that Act
in respect of the notice, on or before the last day of the period
40of 90 days beginning with the day the notice is given, and

(b) if representations were so made, on or before whichever is
later of—

(i) the last day of the 90 day period mentioned in
paragraph (a), and

(ii) 45the last day of the period of 30 days beginning with
the day on which HMRC’s determination in respect
of those representations is notified under section 215
of that Act.

(6) In paragraph 49 of that Schedule (agreement to postpone payment of tax), after

Finance (No. 2) BillPage 146

sub-paragraph (3) insert—

(4) Sub-paragraphs (8A) to (8C) of paragraph 48 apply for the purposes
of this paragraph as they apply for the purposes of paragraph 48.

218 Protection of the revenue pending further appeals

(1) In section 56 of TMA 1970 (payment of tax where there is a further appeal),
5after subsection (3) insert—

(4) Subsection (5) applies where—

(a) an accelerated payment notice or partner payment notice has
been given to a party to the appeal under Chapter 3 of Part 4 of
the Finance Act 2014 (and not withdrawn), and

(b) 10the assessment has effect, or partly has effect, to counteract the
whole or part of the asserted advantage (within the meaning of
section 212(3) of that Act) by reason of which the notice was
given.

(5) If, on the application of HMRC, the relevant court or tribunal considers
15it necessary for the protection of the revenue, it may direct that
subsection (2) does not apply so far as the tax relates to the
counteraction of the whole or part of the asserted advantage, and—

(a) give permission to withhold all or part of any repayment, or

(b) require the provision of adequate security before repayment is
20made.

(6) “Relevant court or tribunal” means the tribunal or court from which
permission or leave to appeal is sought.

(2) In Schedule 10 to FA 2003 (SDLT: returns, enquiries, assessments and appeals),
in paragraph 43 (payment of stamp duty land tax where there is a further
25appeal), after sub-paragraph (2) insert—

(3) Sub-paragraph (4) applies where—

(a) an accelerated payment notice has been given to a party to
the appeal under Chapter 3 of Part 4 of the Finance Act 2014
(and not withdrawn), and

(b) 30the assessment to which the appeal relates has effect, or
partly has effect, to counteract the whole or part of the
asserted advantage (within the meaning of section 212(3) of
that Act) by reason of which the notice was given.

(4) If, on the application of HMRC, the relevant court or tribunal
35considers it necessary for the protection of the revenue, it may direct
that sub-paragraph (1) does not apply so far as the stamp duty land
tax relates to the counteraction of the whole or part of the asserted
advantage, and—

(a) give permission to withhold all or part of any repayment, or

(b) 40require the provision of adequate security before repayment
is made.

(5) “Relevant court or tribunal” means the tribunal or court from which
permission or leave to appeal is sought.

(3) In Schedule 33 to FA 2013 (annual tax on enveloped dwellings: returns,
45enquiries, assessments and appeals), in paragraph 53 (payment of tax where

Finance (No. 2) BillPage 147

there is a further appeal), after sub-paragraph (2) insert—

(3) Sub-paragraph (4) applies where—

(a) an accelerated payment notice has been given to a party to
the appeal under Chapter 3 of Part 4 of FA 2014 (and not
withdrawn), and

(b) 5the assessment to which the appeal relates has effect, or
partly has effect, to counteract the whole or part of the
asserted advantage (within the meaning of section 212(3) of
that Act) by reason of which the notice was given.

(4) If, on the application of HMRC, the relevant court or tribunal
10considers it necessary for the protection of the revenue, it may direct
that sub-paragraph (1) does not apply so far as the tax relates to the
counteraction of the whole or part of the asserted advantage, and—

(a) give permission to withhold all or part of any repayment, or

(b) require the provision of adequate security before repayment
15is made.

(5) “Relevant court or tribunal” means the tribunal or court from which
permission or leave to appeal is sought.

Penalties

219 Penalty for failure to pay accelerated payment

(1) 20This section applies where an accelerated payment notice is given by virtue of
section 212(2)(a) (notice given while tax enquiry is in progress) (and not
withdrawn).

(2) If any amount of the accelerated payment is unpaid at the end of the payment
period, P is liable to a penalty of 5% of that amount.

(3) 25If any amount of the accelerated payment is unpaid after the end of the period
of 5 months beginning with the penalty day, P is liable to a penalty of 5% of that
amount.

(4) If any amount of the accelerated payment is unpaid after the end of the period
of 11 months beginning with the penalty day, P is liable to a penalty of 5% of
30that amount.

(5) “The penalty day” means the day immediately following the end of the
payment period.

(6) Where section 216(6) (accelerated payment payable by instalments when it
relates to inheritance tax payable by instalments) applies to require an amount
35of the accelerated payment to be paid before a later time than the end of the
payment period, references in subsections (2) and (5) to the end of that period
are to be read, in relation to that amount, as references to that later time.

(7) Paragraphs 9 to 18 (other than paragraph 11(5)) of Schedule 56 to FA 2009
(provisions which apply to penalties for failures to make payments of tax on
40time) apply, with any necessary modifications, to a penalty under this section
in relation to a failure by P to pay an amount of the accelerated payment as they
apply to a penalty under that Schedule in relation to a failure by a person to
pay an amount of tax.

Finance (No. 2) BillPage 148

Withdrawal etc of accelerated payment notice

220 Withdrawal, modification or suspension of accelerated payment notice

(1) In this section a “Condition C requirement” means one of the requirements set
out in Condition C in section 212.

(2) 5Where an accelerated payment notice has been given, HMRC may, at any time,
by notice given to P—

(a) withdraw the notice,

(b) where the notice is given by virtue of more than one Condition C
requirement being met, withdraw it to the extent it is given by virtue of
10one of those requirements (leaving the notice effective to the extent that
it was also given by virtue of any other Condition C requirement and
has not been withdrawn), or

(c) reduce the amount specified in the accelerated payment notice under
section 213(2)(b) or 214(2)(b).

(3) 15Where—

(a) an accelerated payment notice is given by virtue of the Condition C
requirement in section 212(4)(a), and

(b) the follower notice to which it relates is withdrawn,

HMRC must withdraw the accelerated payment notice to the extent it was
20given by virtue of that requirement.

(4) Where—

(a) an accelerated payment notice is given by virtue of the Condition C
requirement in section 212(4)(a), and

(b) the follower notice to which it relates is amended under section
25209(7)(b) (cases where there is a new relevant final judicial ruling
following a late appeal),

HMRC may by notice given to P make consequential amendments (whether
under subsection (2)(c) or otherwise) to the accelerated payment notice.

(5) Where—

(a) 30an accelerated payment notice is given by virtue of the Condition C
requirement in section 212(4)(b), and

(b) HMRC give notice under section 312(6) of FA 2004 with the result that
promoters are no longer under the duty in section 312(2) of that Act in
relation to the chosen arrangements,

35HMRC must withdraw the notice to the extent it was given by virtue of that
requirement.

(6) Subsection (7) applies where—

(a) an accelerated payment notice is withdrawn to the extent that it was
given by virtue of a Condition C requirement,

(b) 40that requirement is the one stated in the notice for the purposes of
section 213(6) or 214(5) (calculation of amount of the accelerated
payment or of the denied advantage), and

(c) the notice remains effective to the extent that it was also given by virtue
of any other Condition C requirement.

(7) 45HMRC must, by notice given to P—

Finance (No. 2) BillPage 149

(a) modify the accelerated payment notice so as to state the remaining, or
one of the remaining, Condition C requirements for the purposes of
section 213(6) or 214(5), and

(b) if the amount of the accelerated payment or (as the case may be) the
5amount of the disputed tax determined on the basis of the substituted
Condition C requirement is less than the amount specified in the notice,
amend that notice under subsection (2)(c) to substitute the lower
amount.

(8) If a follower notice is suspended under section 209 (appeals against final
10rulings made out of time) for any period, an accelerated payment notice in
respect of the follower notice is also suspended for that period.

(9) Accordingly, the period during which the accelerated payment notice is
suspended does not count towards the periods mentioned in the following
provisions—

(a) 15section 216;

(b) section 55(8D) of TMA 1970;

(c) paragraph 39(11) of Schedule 10 to FA 2003;

(d) paragraph 48(8C) of Schedule 33 to FA 2013.

(10) But the accelerated payment notice is not suspended under subsection (8) if it
20was also given by virtue of section 212(4)(b) or (c) and has not, to that extent,
been withdrawn.

(11) In a case within subsection (10), subsections (6) and (7) apply as they would
apply were the notice withdrawn to the extent that it was given by virtue of
section 212(4)(a), except that any change made to the notice under subsection
25(7) has effect during the period of suspension only.

(12) Where an accelerated payment notice is withdrawn, it is to be treated as never
having had effect (and any accelerated payment made in accordance with, or
penalties paid by virtue of, the notice are to be repaid).

(13) If, as a result of a modification made under subsection (2)(c), more than the
30resulting amount of the accelerated payment has already been paid by P, the
excess must be repaid.

Partners and partnerships

221 Accelerated partner payments

Schedule 28 makes provision for accelerated partner payments and modifies
35this Chapter in relation to partnerships.

Defined terms

222 Defined terms used in Chapter 3

In this Chapter—

CHAPTER 4 20Miscellaneous and general provision

Stamp duty land tax and annual tax on enveloped dwellings

223 Special case: stamp duty land tax

(1) This section applies to modify the application of this Part in the case of—

(a) a return or claim in respect of stamp duty land tax, or

(b) 25a tax appeal within section 196(g), or any appeal within section 196(i)
which derives from such an appeal.

(2) If two or more persons acting jointly are the purchasers in respect of the land
transaction—

(a) anything required or authorised by this Part to be done in relation to P
30must be done in relation to all of those persons, and

(b) any liability of P in respect of an accelerated payment, or a penalty
under this Part, is a joint and several liability of all of those persons.

(3)
Subsection (2) is subject to subsections (4) to (8).

(4) If the land transaction was entered into by or on behalf of the members of a
35partnership—

(a) anything required or authorised to be done under this Part in relation
to P is required or authorised to be done in relation to all the
responsible partners, and

(b) any liability of P in respect of an accelerated payment, or a penalty
40under this Part, is a joint and several liability of the responsible
partners.

(5) But nothing in subsection (4) enables—

Finance (No. 2) BillPage 151

(a) an accelerated payment to be recovered from a person who did not
become a responsible partner until after the effective date of the
transaction in respect of which the tax to which the accelerated
payment relates is payable, or

(b) 5a penalty under this Part to be recovered from a person who did not
become a responsible partner until after the time when the omission
occurred that caused the penalty to become payable.

(6) Where the trustees of a settlement are liable to pay an accelerated payment or
a penalty under this Part, the payment or penalty may be recovered (but only
10once) from any one or more of the responsible trustees.

(7) But nothing in subsection (6) enables a penalty to be recovered from a person
who did not become a responsible trustee until after the time when the
omission occurred that caused the penalty to become payable.

(8) Where a follower notice or accelerated payment notice is given to more than
15one person, the power conferred on P by section 200 or 215 is exercisable by
each of those persons separately or by two or more of them jointly.

(9) In this section—

224 Special case: annual tax on enveloped dwellings

(1) This section applies to modify the application of this Part in the case of—

(a) a return or claim in respect of annual tax on enveloped dwellings, or

(b) a tax appeal within section 196(h), or any appeal within section 196(i)
35which derives from such an appeal.

(2) If the responsible partners of a partnership are the chargeable person in
relation to the tax to which the return or claim or appeal relates—

(a) anything required or authorised by this Part to be done in relation to P
must be done in relation to all of those partners, and

(b) 40any liability of P in respect of an accelerated payment, or a penalty
under this Part, is a joint and several liability of all of those persons.

(3) Where—

(a) a follower notice is given by virtue of a tax enquiry into the return or
claim or the appeal, and

(b) 45by virtue of section 97 or 98 of FA 2013, two or more persons would
have been jointly and severally liable for an additional amount of tax

Finance (No. 2) BillPage 152

had the necessary corrective action been taken before the specified time
for the purposes of section 201,

any liability of P in respect of a penalty under that section is a joint and several
liability of all of them.

(4) Where—

(a) 5an accelerated payment notice is given by virtue of a tax enquiry into
the return or claim or the appeal, and

(b) two or more persons would, by virtue of section 97 or 98 of FA 2013, be
jointly and severally liable for the understated tax relating to the
accelerated payment specified in the notice or (as the case may be) the
10disputed tax specified in the notice,

any liability of P in respect of the accelerated payment or a penalty under
section 219 is a joint and several liability of all of them.

(5) Accordingly—

(a) where a follower notice is given in a case where subsection (3) applies,
15or

(b) an accelerated payment notice is given in a case to which subsection (4)
applies,

HMRC must also give a copy of the notice to any other person who would be
jointly and severally liable for a penalty or payment, in relation to the notice,
20by virtue of this section.

(6) Where a follower notice or accelerated payment notice is given to more than
one person, the power conferred on P by section 200 or 215 is exercisable by
each of those persons separately or by two or more of them jointly.

(7) In this section—

Extension of Part by order

225 Extension of this Part by order

(1) The Treasury may by order amend section 193 (definition of “relevant tax”) so
as to extend this Part to any other tax.

(2) 40An order under this section may include—

(a) provision in respect of that other tax corresponding to the provision
made by sections 217 and 218,

(b) consequential and supplemental provision, and

(c) transitional and transitory provision and savings.

Finance (No. 2) BillPage 153

(3) For the purposes of subsection (1) or (2) an order under this section may amend
this Part (other than this section) or any other enactment whenever passed or
made.

(4) The power to make orders under this section is exercisable by statutory
5instrument.

(5) An order under this section may only be made if a draft of the instrument
containing the order has been laid before and approved by a resolution of the
House of Commons.

(6) In this section “tax” includes duty.

10Consequential amendments

226 Consequential amendments

Schedule 29 contains consequential amendments.

Part 5 Promoters of tax avoidance schemes

15Introduction

227 Meaning of “relevant proposal” and “relevant arrangements”

(1) “Relevant proposal” means a proposal for arrangements which (if entered into)
would be relevant arrangements (whether the proposal relates to a particular
person or to any person who may seek to take advantage of it).

(2) 20Arrangements are “relevant arrangements” if—

(a) they enable, or might be expected to enable, any person to obtain a tax
advantage, and

(b) the main benefit, or one of the main benefits, that might be expected to
arise from the arrangements is the obtaining of that advantage.

(3) 25“Tax advantage” includes—

(a) relief or increased relief from tax,

(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) 30deferral of a payment of tax or advancement of a repayment of tax, and

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

(4) “Arrangements” includes any agreement, scheme, arrangement or
understanding of any kind, whether or not legally enforceable, involving a
single transaction or two or more transactions.

228 35Carrying on a business “as a promoter”

(1) A person carrying on a business in the course of which the person is, or has
been, a promoter in relation to a relevant proposal or relevant arrangements
carries on that business “as a promoter”.

Finance (No. 2) BillPage 154

(2) A person is a “promoter” in relation to a relevant proposal if the person—

(a) is to any extent responsible for the design of the proposed
arrangements,

(b) makes a firm approach to another person in relation to the relevant
5proposal with a view to making the proposal available for
implementation by that person or any other person, or

(c) makes the relevant proposal available for implementation by other
persons.

(3) A person is a “promoter” in relation to relevant arrangements if the person—

(a) 10is by virtue of subsection (2)(b) or (c), a promoter in relation to a
relevant proposal which is implemented by the arrangements, or

(b) is responsible to any extent for the design, organisation or management
of the arrangements.

(4) For the purposes of this Part a person makes a firm approach to another person
15in relation to a relevant proposal if—

(a) the person communicates information about the relevant proposal to
the other person at a time when the proposed arrangements have been
substantially designed,

(b) the communication is made with a view to that other person or any
20other person entering into transactions forming part of the proposed
arrangements, and

(c) the information communicated includes an explanation of the tax
advantage that might be expected to be obtained from the proposed
arrangements.

(5) 25For the purposes of subsection (4) proposed arrangements have been
substantially designed at any time if by that time the nature of the transactions
to form them (or part of them) has been sufficiently developed for it to be
reasonable to believe that a person who wished to obtain the tax advantage
mentioned in subsection (4)(c) might enter into—

(a) 30transactions of the nature developed, or

(b) transactions not substantially different from transactions of that nature.

(6) A person is not a promoter in relation to a relevant proposal or relevant
arrangements by reason of anything done in prescribed circumstances.

(7) Regulations under subsection (6) may contain provision having retrospective
35effect.

229 Meaning of “intermediary”

For the purposes of this Part a person (“A”) is an intermediary in relation to a
relevant proposal if—

(a) A communicates information about the relevant proposal to another
40person in the course of a business,

(b) the communication is made with a view to that other person, or any
other person, entering into transactions forming part of the proposed
arrangements, and

(c) A is not a promoter in relation to the relevant proposal.

Finance (No. 2) BillPage 155

Conduct notices

230 Duty to give conduct notice

(1) Subsections (5) to (9) apply if an authorised officer becomes aware at any time
that a person (“P”) who is carrying on a business as a promoter—

(a) 5has, in the period of 3 years ending with that time, met one or more
threshold conditions, and

(b) was carrying on a business as a promoter when P met that condition.

(2) Part 1 of Schedule 30 sets out the threshold conditions and describes how they
are met.

(3) 10Part 2 of that Schedule contains provision about the meeting of threshold
conditions by bodies corporate.

(4) See also Schedule 32 (which contains provision about the meeting of threshold
conditions and other conditions by partnerships).

(5) The authorised officer must determine whether or not P’s meeting of the
15condition mentioned in subsection (1)(a) (or, as the case requires, P’s meeting
of all those conditions, taken together) should be regarded as significant in
view of the purposes of this Part.

(6) Subsection (5) does not apply if a conduct notice or a monitoring notice already
has effect in relation to P.

(7) 20If the authorised officer determines under subsection (5) that P’s meeting of the
condition or conditions in question should be regarded as significant, the
officer must give P a conduct notice, unless subsection (8) applies.

(8) This subsection applies if the authorised officer determines that, having regard
to the extent of the impact that P’s activities as a promoter are likely to have on
25the collection of tax, it is inappropriate to give P a conduct notice.

(9) The authorised officer must determine under subsection (5) that the meeting of
the condition (or all the conditions) mentioned in subsection (1)(a) should be
regarded as significant if the condition (or any of the conditions) is in any of the
following paragraphs of Schedule 30—

(a) 30paragraph 2 (deliberate tax defaulters);

(b) paragraph 3 (breach of Banking Code of Practice);

(c) paragraph 4 (dishonest tax agents);

(d) paragraph 6 (persons charged with certain offences);

(e) paragraph 7 (opinion notice of GAAR Advisory Panel).

231 35Contents of a conduct notice

(1) A conduct notice is a notice requiring the person to whom it has been given
(“the recipient”) to comply with conditions specified in the notice.

(2) Before deciding on the terms of a conduct notice, the authorised officer must
give the person to whom the notice is to be given an opportunity to comment
40on the proposed terms of the notice.

(3) A notice may include only conditions that it is reasonable to impose for any of
the following purposes—

Finance (No. 2) BillPage 156

(a) to ensure that the recipient provides adequate information to its clients
about relevant proposals, and relevant arrangements, in relation to
which the recipient is a promoter;

(b) to ensure that the recipient provides adequate information about
5relevant proposals in relation to which it is a promoter to persons who
are intermediaries in relation to those proposals;

(c) to ensure that the recipient does not fail to comply with any duty under
a specified disclosure provision;

(d) to ensure that the recipient does not discourage others from complying
10with any obligation to disclose to HMRC information of a description
specified in the notice;

(e) to ensure that the recipient does not enter into an agreement with
another person (“C”) which relates to a relevant proposal or relevant
arrangements in relation to which the recipient is a promoter, on terms
15which—

(i) impose a contractual obligation on C which falls within
paragraph 11(2) or (3) of Schedule 30 (contractual terms
restricting disclosure), or

(ii) impose on C obligations within both paragraph 11(4) and (5) of
20that Schedule (contractual terms requiring contribution to
fighting funds and restricting settlement of proceedings);

(f) to ensure that the recipient does not promote relevant proposals or
relevant arrangements which rely on, or involve a proposal to rely on,
one or more contrived or abnormal steps to produce a tax advantage;

(g) 25to ensure that the recipient does not fail to comply with any stop notice
which has effect under paragraph 12 of Schedule 30.

(4) References in subsection (3) to ensuring that adequate information is provided
about proposals or arrangements include—

(a) ensuring the adequacy of the description of the arrangements or
30proposed arrangements;

(b) ensuring that the information includes an adequate assessment of the
risk that the arrangements or proposed arrangements will fail;

(c) ensuring that the information does not falsely state, and is not likely to
create a false impression, that HMRC have (formally or informally)
35considered, approved or expressed a particular opinion in relation to
the proposal or arrangements.

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