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

Finance (No. 2) BillPage 20

(3) The interest specified in the personal liability notice—

(a) is to be at the rate applicable under section 178 of the Finance
Act 1989 for the purposes of section 86 of TMA, and

(b) is to run from the date the notice is served.

(4) 5A director who is served with a personal liability notice is liable to pay
to HMRC the specified amount and the interest specified in the notice
within 30 days beginning with the day the notice is served.

(5) If HMRC serve personal liability notices on more than one director of
the company in respect of the same amount of relevant PAYE debt, the
10directors are jointly and severally liable to pay to HMRC the specified
amount and the interest specified in the notices.

97ZC Appeals in relation to personal liability notices

(1) A person who is served with a personal liability notice in relation to an
amount of relevant PAYE debt of a company may appeal against the
15notice.

(2) A notice of appeal must—

(a) be given to HMRC within 30 days beginning with the day the
personal liability notice is served, and

(b) specify the grounds of the appeal.

(3) 20The grounds of appeal are —

(a) that all or part of the specified amount does not represent an
amount of relevant PAYE debt, of the company, to which
regulation 97ZB applies, or

(b) that the person was not a director of the company on the
25relevant date.

(4) But a person may not appeal on the ground mentioned in paragraph
(3)(a) if it has already been determined, on an appeal by the company,
that—

(a) the specified amount is a relevant PAYE debt of the company,
30and

(b) the company did not deduct, account for, or (as the case may be)
pay the debt by the time by which the company was required to
do so.

(5) Subject to paragraph (6), on an appeal that is notified to the tribunal, the
35tribunal is to uphold or quash the personal liability notice.

(6) In a case in which the ground of appeal mentioned in paragraph (3)(a)
is raised, the tribunal may also reduce or increase the specified amount
so that it does represent an amount of relevant PAYE debt, of the
company, to which regulation 97ZB applies.

97ZD 40Withdrawal of personal liability notices

(1) A personal liability notice is withdrawn if the tribunal quashes it.

(2) An officer of Revenue and Customs may withdraw a personal liability
notice if the officer considers it appropriate to do so.

(3) If a personal liability notice is withdrawn, HMRC must give notice of
45that fact to the person upon whom the notice was served.

Finance (No. 2) BillPage 21

97ZE Recovery of sums due under personal liability notice: application of
Part 6 of TMA

(1) For the purposes of this Chapter, Part 6 of TMA (collection and
recovery) applies as if—

(a) 5the personal liability notice were an assessment, and

(b) the specified amount, and any interest on that amount under
regulation 97ZB(2)(b)(ii), were income tax charged on the
director upon whom the notice is served,

and that Part of that Act applies with the modification in paragraph (2)
10and any other necessary modifications.

(2) Summary proceedings for the recovery of the specified amount, and
any interest on that amount under regulation 97ZB(2)(b)(ii), may be
brought in England and Wales or Northern Ireland at any time before
the end of the period of 12 months beginning with the day after the day
15on which personal liability notice is served.

97ZF Repayment of surplus amounts

(1) This regulation applies if—

(a) one or more personal liability notices are served in respect of an
amount of relevant PAYE debt of a company, and

(b) 20the amounts paid to HMRC (whether by directors upon whom
notices are served or the company) exceed the aggregate of the
specified amount and any interest on it under regulation
97ZB(2)(b)(ii).

(2) HMRC is to repay the difference on a just and equitable basis and
25without unreasonable delay.

(3) HMRC is to pay interest on any sum repaid.

(4) The interest—

(a) is to be at the rate applicable under section 178 of the Finance
Act 1989 for the purposes of section 824 of ICTA, and

(b) 30is to run from the date the amounts paid to HMRC come to
exceed the aggregate mentioned in subsection (1)(b).

(2) In Chapter 3 of Part 11 of ITEPA 2003 (PAYE: special types of payer or payee),
section 688 (agency workers) (as amended by section 16) is amended as
follows.

(3) 35After subsection (2) insert—

(2A) PAYE regulations may make provision for, or in connection with, the
recovery from a director or officer of a company, in such circumstances
as may be specified in the regulations, of—

(a) any amount the company is, by virtue of section 44(4) to (6) or
4046A, to deduct, or account for, in accordance with PAYE
regulations, and

(b) any interest or penalty, in respect of an amount within
paragraph (a), for which the company is liable.

(4) In subsection (3)—

(a) 45after the definition of “the client” insert—

  • “company” includes a limited liability partnership;, and

Finance (No. 2) BillPage 22

(b) after the definition of “the deemed employer” insert—

  • “director” has the meaning given by section 67;

  • “officer”, in relation to a company, means any manager,
    secretary or other similar officer of the company, or any
    5person acting or purporting to act as such;.

(5) The amendment made by subsection (1) is to be treated as having been made
by the Commissioners for Her Majesty’s Revenue and Customs in exercise of
the power conferred by subsection (2A) of section 688 of ITEPA 2003 (inserted
by subsection (3)).

(6) 10Chapter 3A of Part 4 of the Income Tax (Pay As You Earn) Regulations 2003
(inserted by subsection (1)) has effect in relation to relevant PAYE debts that
are to be deducted, accounted for or paid on or after 6 April 2014.

18 Employment intermediaries: information powers and related penalties

(1) After section 716A of ITEPA 2003 insert—

Employment intermediaries: information powers
716B 15Employment intermediaries to keep, preserve and provide
information etc

(1) For purposes connected with Chapter 7 of Part 2 (treatment of workers
supplied by agencies) or Part 11 (PAYE), the Commissioners for Her
Majesty’s Revenue and Customs may by regulations make provision
20for, or in connection with, requiring a specified employment
intermediary—

(a) to keep and preserve specified information, records or
documents for a specified period;

(b) to provide Her Majesty’s Revenue and Customs with specified
25information, records or documents within a specified period or
at specified times.

(2) An “employment intermediary” is a person who makes arrangements
under or in consequence of which—

(a) an individual works, or is to work, for a third person, or

(b) 30an individual is, or is to be, remunerated for work done for a
third person.

(3) For the purposes of subsection (2), an individual works for a person if—

(a) the individual performs any duties of an employment for that
person (whether or not the individual is employed by that
35person), or

(b) the individual provides, or is involved in the provision of, a
service to that person.

(4) In subsection (1) “specified” means specified or described in
regulations made under this section.

(5) 40Regulations under this section may—

(a) make different provision for different cases or different
purposes, and

(b) make incidental, consequential, supplementary or transitional
provision or savings.

Finance (No. 2) BillPage 23

(2) Section 98 of TMA 1970 (penalties: special returns etc) is amended as follows.

(3) After subsection (4E) insert—

(4F) If a person fails to furnish any information or produce any document or
record in accordance with regulations under section 716B of ITEPA
52003, subsection (1) has effect as if—

(a) for “£300” there were substituted “£3,000”, and

(b) for “£60” there were substituted “£600”.

(4) In the second column of the Table, at the appropriate place insert “Regulations
under section 716B of ITEPA 2003.”.

(5) 10The amendments made subsections (2) to (4) have effect from such day as the
Treasury may appoint by order made by statutory instrument.

19 Payments by employer on account of tax where deduction not possible

(1) In section 222 of ITEPA 2003 (payments by employer on account of tax where
deduction not possible), in subsection (1)(c), for “beginning with the relevant
15date” substitute “after the end of the tax year in which the relevant date falls”.

(2) The amendment made by this section has effect in relation to payments of
income treated as made on or after 6 April 2014.

20 PAYE obligations of UK intermediary in cases involving non-UK employer

(1) Section 689 of ITEPA 2003 (PAYE: employee of non-UK employer) is amended
20as follows.

(2) After subsection (1A) insert—

(1B) Subsection (1C) applies if—

(a) the employee worked for the relevant person during the period
under or in consequence of arrangements made between the
25relevant person and a third person,

(b) the third person did not make the payment of, or on account of,
PAYE income of the employee, and

(c) PAYE regulations would apply to the third person if the third
person were to make a payment of, or on account of, PAYE
30income of the employee.

(1C) The third person is to be treated, for the purposes of PAYE regulations,
as making a payment of PAYE income of the employee of an amount
equal to the amount given by subsection (3).

(3) In subsection (2), for “The” substitute “If subsection (1C) does not apply, the”.

(4) 35The amendments made by this section are treated as having come into force on
6 April 2014.

21 Oil and gas workers on the continental shelf: operation of PAYE

(1) ITEPA 2003 is amended as follows.

(2) In section 222 (payments by employer on account of tax where deduction not
40possible)—

Finance (No. 2) BillPage 24

(a) in subsection (1)(a), after “689” insert “, 689A”, and

(b) in subsection (3), after “employer)” insert “or section 689A(3) (deemed
payments of PAYE income of continental shelf workers by person other
than employer)”.

(3) 5In section 421L (persons to whom certain duties to provide information and
returns apply)—

(a) in subsection (3), after paragraph (b) insert—

(ba) if the employee in question is a continental shelf worker
and PAYE regulations do not apply to the employer in
10question, any person who is a relevant person in relation
to the employee in question,, and

(b) after subsection (5) insert—

(5A) In subsection (3)(ba) “continental shelf worker” and “relevant
person” have the meaning given by section 689A(11) (PAYE: oil
15and gas workers on the continental shelf).

(4) In section 689 (provision about PAYE for employees of non-UK employers),
after subsection (1) insert—

(1ZA) But this section does not apply if section 689A applies or would apply
but for a certificate issued under regulations made under subsection (7)
20of that section.

(5) After that section insert—

689A Oil and gas workers on the continental shelf

(1) This section applies if—

(a) any payment of, or on account of, PAYE income of a continental
25shelf worker in respect of a period is made by a person who is
the employer or an intermediary of the employer or of the
relevant person,

(b) PAYE regulations do not apply to the person making the
payment or, if that person makes the payment as an
30intermediary of the employer or of the relevant person, to the
employer, and

(c) income tax and any relevant debts are not deducted, or not
accounted for, in accordance with PAYE regulations by the
person making the payment or, if that person makes the
35payment as an intermediary of the employer or of the relevant
person, by the employer.

(2) Subject to subsection (5), subsection (1)(a) does not apply in relation to
a payment so far as the sum paid is employment income under Chapter
2 of Part 7A.

(3) 40The relevant person is to be treated, for the purposes of PAYE
regulations, as making a payment of PAYE income of the continental
shelf worker of an amount equal to the amount given by subsection (4).

(4) The amount referred to is—

(a) if the amount of the payment actually made is an amount to
45which the recipient is entitled after deduction of income tax and
any relevant debts under PAYE regulations, the aggregate of

Finance (No. 2) BillPage 25

the amount of the payment and the amount of any income tax
due and any relevant debts deductible, and

(b) in any other case, the amount of the payment.

(5) If, by virtue of any of sections 687A and 693 to 700, an employer would
be treated for the purposes of PAYE regulations (if they applied to the
5employer) as making a payment of any amount to a continental shelf
worker, this section has effect as if—

(a) the employer were also to be treated for the purposes of this
section as making an actual payment of that amount, and

(b) paragraph (a) of subsection (4) were omitted.

(6) 10For the purposes of this section a payment of, or on account of, PAYE
income of a continental shelf worker is made by an intermediary of the
employer or of the relevant person if it is made—

(a) by a person acting on behalf of the employer or the relevant
person and at the expense of the employer or the relevant
15person or a person connected with the employer or the relevant
person, or

(b) by trustees holding property for any persons who include, or a
class of persons which includes, the continental shelf worker.

(7) PAYE regulations may make provision for, or in connection with, the
20issue by Her Majesty’s Revenue and Customs of a certificate to a
relevant person in respect of one or more continental shelf workers—

(a) confirming that, in respect of payments of, or on account of,
PAYE income of the continental shelf workers specified or
described in the certificate, income tax and any relevant debts
25are being deducted, or accounted for, as mentioned in
subsection (1)(c), and

(b) disapplying this section in relation to payments of, or on
account of, PAYE income of those workers while the certificate
is in force.

(8) 30Regulations under subsection (7) may, in particular, make provision
about—

(a) applying for a certificate;

(b) the circumstances in which a certificate may, or must, be issued
or cancelled;

(c) 35the form and content of a certificate;

(d) the effect of a certificate (including provision modifying the
effect mentioned in subsection (7)(b) or specifying further
effects);

(e) the effect of cancelling a certificate.

(9) 40Subsection (10) applies if—

(a) there is more than one relevant person in relation to a
continental shelf worker, and

(b) in consequence of the same payment within subsection (1)(a),
each of them is treated under subsection (3) as making a
45payment of PAYE income of the worker.

(10) If one of the relevant persons complies with section 710 (notional
payments: accounting for tax) in respect of the payment that person is

Finance (No. 2) BillPage 26

treated as making, the other relevant persons do not have to comply
with that section in respect of the payments they are treated as making.

(11) In this section—

  • “continental shelf worker” means a person in an employment
    some or all of the duties of which are performed—

    (a)

    5in the UK sector of the continental shelf (as defined in
    section 41), and

    (b)

    in connection with exploration or exploitation activities
    (as so defined);

  • “employer” means the employer of the continental shelf worker;

  • 10“relevant person”, in relation to a continental shelf worker,
    means—

    (a)

    if the employer has an associated company (as defined
    in section 449 of CTA 2010) with a place of business or
    registered office in the United Kingdom, the associated
    15company, or

    (b)

    in any other case, the person who holds the licence
    under Part 1 of the Petroleum Act 1998 in respect of the
    area of the UK sector of the continental shelf where some
    or all of the duties of the continental shelf worker’s
    20employment are performed.

(6) In section 690 (employee non-resident etc), in subsection (10)—

(a) after “689”, in the first place it appears, insert “or 689A”, and

(b) after “689”, in the second place it appears, insert “or (as the case may be)
689A”.

(7) 25In section 710 (notional payments: accounting for tax), in subsection (2)—

(a) in paragraph (a)—

(i) after “689” insert “, 689A”, and

(ii) for “or 689(3)(a)” substitute “, 689(3)(a) or 689A(4)(a)”, and

(b) in paragraph (b), after “689(2)” insert “or 689A(3)”.

(8) 30In section 689A (inserted by subsection (5)), at the end insert—

(12) The Treasury may by regulations modify the definitions of “continental
shelf worker” and “relevant person”, as the Treasury thinks
appropriate.

(13) Regulations under subsection (12) may—

(a) 35make different provision for different cases or different
purposes,

(b) make incidental, consequential, supplementary or transitional
provision or savings, and

(c) amend this section.

(9) 40The amendment made by subsection (5) is treated as having come into force—

(a) on 26 March 2014 for the purposes of making regulations under section
689A(7) of ITEPA 2003, and

(b) on 6 April 2014 for remaining purposes.

(10) The amendments made by subsections (2), (4), (6) and (7) are treated as having
45come into force on 6 April 2014.

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22 Threshold for benefit of loan to be treated as earnings

(1) In section 180 of ITEPA 2003 (threshold for benefit of a loan to be treated as
earnings), in subsections (1)(a) and (b), (2) and (3), for “£5,000” (wherever
occurring) substitute “£10,000”.

(2) 5The amendments made by this section have effect for the tax year 2014-15 and
subsequent tax years (and apply to loans made at any time).

23 Taxable benefits: cars, vans and related benefits

(1) In section 114 of ITEPA 2003 (cars, vans and related benefits), omit subsection
(3) (which prevents a charge by virtue of Chapter 6 of Part 3 of that Act where
10an amount constitutes earnings by virtue of any other provision).

(2) The amendment made by this section has effect for the tax year 2014-15 and
subsequent tax years.

24 Cars: the appropriate percentage

(1) Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars, vans and related
15benefits) is amended as follows.

(2) In section 133 (how to determine the appropriate percentage), in subsection
(2)—

(a) at the end of paragraph (a) insert “or”,

(b) omit paragraph (c) and the “or” before it, and

(c) 20for “to 141” substitute “and 140”.

(3) Section 139 (cars with a C02 figure: the appropriate percentage) is amended in
accordance with subsections (4) to (6).

(4) In subsection (2) —

(a) in paragraph (a) for “5%” substitute “7%”,

(b) 25in paragraph (aa) for “9%” substitute “11%”, and

(c) in paragraph (b) for “13%” substitute “15%”.

(5) In subsection (3), for “14%” substitute “16%”.

(6) In subsection (7), omit paragraph (a) and the “and” after it.

(7) Section 140 (cars without a C02 figure: the appropriate percentage) is amended
30in accordance with subsections (8) to (10).

(8) In subsection (2), in the Table —

(a) for “15%” substitute “16%”, and

(b) for “25%” substitute “27%”.

(9) In subsection (3)(a), for “5%” substitute “7%”.

(10) 35In subsection (5), omit paragraph (a) and the “and” after it.

(11) Omit section 141 (diesel cars: the appropriate percentage).

(12) Section 142 (car first registered before 1st January 1998: the appropriate
percentage) is amended in accordance with subsections (13) and (14).

(13) In subsection (2), in the Table —

Finance (No. 2) BillPage 28

(a) for “15%” substitute “16%”,

(b) for “22%” substitute “27%”, and

(c) for “32%” substitute “37%”.

(14) In subsection (3), for “32%” substitute “37%”.

(15) 5In section 170(4) (power to reduce value of appropriate percentage by
regulations), for the words “to 141” substitute “and 140”.

(16) In consequence, section 23(4) and (5)(b) of FA 2013 is repealed.

(17) The amendments made by this section have effect for the tax year 2016-17 and
subsequent tax years.

25 10Cars and vans: payments for private use

(1) In section 144 of ITEPA 2003 (deduction for payments for private use: cars), for
subsection (1)(b) substitute—

(b) pays that amount in that year.

(2) In section 158 of that Act (reduction for payments for private use: vans), for
15subsection (1)(b) substitute—

(b) pays that amount in that year.

(3) The amendments made by this section have effect for the tax year 2014-15 and
subsequent tax years.

CHAPTER 3 Corporation tax: general

26 20Release of debts: stabilisation powers under Banking Act 2009

(1) Section 322 of CTA 2009 (release of debts: cases where credits not required to
be brought into account) is amended as follows.

(2) In subsection (2), for “condition A, B or C” substitute “any of conditions A to
D”.

(3) 25After subsection (5) insert—

(5A) Condition D is that the liability is released in consequence of the
exercise of a stabilisation power under Part 1 of the Banking Act 2009.

(4) The amendments made by this section have effect in relation to releases of
liabilities on or after 26 November 2013.

27 30Holdings treated as rights under loan relationships

(1) CTA 2009 is amended as follows.

(2) In section 465(3) (list of provisions under which certain distributions are not
excluded from Part 5) before paragraph (a) insert—

(za) section 490(2) (holdings in OEICs, unit trusts and offshore funds
35treated as rights under creditor relationships),.

(3) In section 490 (holding in an OEIC, unit trust or offshore fund treated as rights

Finance (No. 2) BillPage 29

under a creditor relationship) for subsection (2) substitute—

(2) The Corporation Tax Acts have effect for the accounting period in
accordance with subsection (3) as if—

(a) the relevant holding were rights under a creditor relationship of
the company, and

(b) 5any distribution in respect of the relevant holding were not a
distribution (and accordingly is within Part 5).

(4) Omit section 490(4) and (5) (which are superseded by the new section
490(2)(b)).

(5) For section 492 (rules about tax calculations in avoidance cases where holding
10comes within section 490) substitute—

492 Holding coming within section 490: calculation to undo avoidance

(1) Subsection (2) applies if—

(a) section 490 applies for an accounting period of a company to a
relevant holding held by the company,

(b) 15a relevant fund enters into any arrangements, or arrangements
are entered into that in whole or part relate to a relevant fund,
and

(c) the main purpose or one of the main purposes of the
arrangements is to obtain a tax advantage for a person.

(2) 20The company must make adjustments to counteract any tax advantage
connected in any way with the relevant holding that would (ignoring
this section) be obtained by the company, or any other person, directly
or indirectly in consequence of the arrangements or their being entered
into.

(3) 25The arrangements may be ones entered into at a time when the
company does not hold the relevant holding; and any person referred
to in subsection (1)(c) need not be identified when the arrangements are
entered into.

(4) The adjustments required by subsection (2) are such as are just and
30reasonable.

(5) In this section—

  • “arrangements” includes any scheme, arrangement or
    understanding of any kind, whether or not legally enforceable,
    involving a single transaction or two or more transactions, and

  • 35“relevant fund” means—

    (a)

    the open-ended investment company, unit trust scheme
    or offshore fund in which the relevant holding is held, or

    (b)

    an open-ended investment company, unit trust scheme
    or offshore fund in which a relevant fund has a
    40holding.

(6) In section 495 (meaning of “qualifying holdings”)—

(a) in subsection (1)—

(i) for “would itself fail” substitute “itself fails”, and

(ii) omit “, even on the assumption in subsection (2)”, and

(b) 45omit subsection (2).