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

(4) After subsection (5) insert—

“(5A) But subsection (5) above does not apply where the goods are entered
for warehousing in accordance with section 39.”

(5) In subsection (6), omit “for use”.

(6) 5The heading of section 61 becomes “Supplementary provision relating to
stores”.

5 In consequence of the provision made by paragraph 4, in section 103 of
F(No.2)A 1987 (consumption in port of goods transhipped for use as stores
etc), omit subsections (1), (2) and (4) to (7).

10Penalties and enforcement

6 In CEMA 1979, after section 60A (inserted by paragraph 3 above) insert—

“60B Failure to comply with regulations under section 60A

(1) This section applies if a person fails to comply with—

(a) any provision made by or under regulations under section
1560A; or

(b) any condition or restriction imposed under such regulations.

(2) The person’s failure to comply shall attract a penalty under section 9
of the Finance Act 1994 (civil penalties) (but see subsection (4)).

(3) Any goods in respect of which the person fails to comply with the
20provision, condition or restriction are liable to forfeiture.

(4) Subsection (2) does not apply if, as a result of the failure, the person
is liable to pay a penalty under Schedule 55 to the Finance Act 2009
(penalty for failure to make returns etc) or Schedule 56 to that Act
(penalty for failure to make payments on time).”

7 25In Schedule 55 to FA 2009 (penalty for failure to make returns etc), in the
Table in paragraph 1, after item 20 insert—

8 In Schedule 56 to FA 2009 (penalty for failure to make payments on time), in

the Table in paragraph 1, after item 11G insert—

Review and appeal

9 20In paragraph 2 of Schedule 5 to FA 1994 (decisions under CEMA 1979 subject
to review and appeal), after sub-paragraph (3) insert—

“(3A) Any decision which is made under or for the purposes of any
regulations under section 60A of the Management Act (power to
make regulations about stores) and is a decision about granting or
25withdrawing authorisation for goods to be shipped or carried as
stores without payment of duty or on drawback.”

Commencement

10 (1) Any power to make regulations conferred by virtue of this Schedule comes
into force on the day on which this Act is passed.

(2) 30So far as not already brought into force by virtue of sub-paragraph (1), the
amendments made by this Schedule come into force in accordance with
provision contained in an order made by statutory instrument by the
Commissioners for Her Majesty’s Revenue and Customs.

11 (1) Schedule 55 to FA 2009 (including the amendments of that Schedule made
35by Schedule 10 to F(No.3)A 2010) is taken to have come into force for the
purposes of section 60A of CEMA 1979 on the date on which paragraph 7 of
this Schedule comes into force.

(2) Schedule 56 to FA 2009 (including the amendments of that Schedule made
by Schedule 11 to F(No.3)A 2010) is taken to have come into force for the
40purposes of section 60A of CEMA 1979 on the date on which paragraph 8 of
this Schedule comes into force.

Section 100

SCHEDULE 18 Supplies of electronic, broadcasting and telecommunication services: special
accounting schemes

Part 1 5Union scheme

New Union scheme for accounting for VAT on certain supplies

1 After Schedule 3B to VATA 1994 insert—

“ Schedule 3BA Electronic, telecommunication and broadcasting services: Union
scheme

10Part 1 Introduction

Overview

1 In this Schedule—

(a) Parts 2 and 3 establish a special accounting scheme (called
15the “Union scheme”) which may be used by certain
persons established in the United Kingdom who make
supplies of electronically supplied, telecommunication or
broadcasting services that are treated as made in other
member States;

(b) 20Part 4 is about persons participating in schemes in other
member States that correspond to the Union scheme;

(c) Part 5 is about appeals;

(d) Part 6 contains definitions for the Schedule.

Meaning of “scheme services”

2 (1) 25In this Schedule “scheme services” means electronically supplied
services, broadcasting services or telecommunication services.

(2) In sub-paragraph (1)—

• “broadcasting services” means radio and television
  broadcasting services;

• 30“electronically supplied services” has the same meaning as in
  Schedule 4A (see paragraph 9(3) and (4) of that Schedule);

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

Part 2 Union scheme: registration

The register

3 Persons registered under the scheme provided for by this
5Schedule (“the Union scheme”) are to be registered in a single
register kept by the Commissioners for the purposes of the
scheme.

Persons who may be registered

4 (1) A person may register under the Union scheme if all the following
10conditions are met—

(a) the person makes or intends to make one or more
qualifying supplies of scheme services in the course of a
business that the person carries on;

(b) either the person’s business is established in the United
15Kingdom or (if the person’s business is not established in
any member State) the person has a fixed establishment in
the United Kingdom;

(c) the person is not barred from registering by sub-paragraph
(3), by the second paragraph of Article 369a(2) of Directive
202006/112/EC or by any provision of the Implementing
Regulation;

(d) the person is registered under Schedule 1.

(2) A supply of scheme services is a “qualifying supply of scheme
services” if the following conditions are met.

251. The recipient of the services must belong in a member State
other than the United Kingdom and must not be a relevant
business person.

(3) A person may not be registered under the Union scheme if the
person is a participant in a non-UK special scheme (see paragraph
3038(1)).

Becoming registered

5 (1) The Commissioners must register under the Union scheme any
person who—

(a) satisfies them that the requirements for registration are
35met, and

(b) makes a request in accordance with this paragraph (a
“registration request”).

(2) A registration request made by a person must state the person’s—

(a) name and postal address, and

(b) 40electronic addresses (including any websites).

(3) A registration request made by a person must also state—

(a) whether or not the person has begun to make qualifying
supplies of scheme services, and

(b) (if applicable) the date on which the person began to do so.

(4) A registration request made by a person must also state—

(a) 5whether or not the person has previously been identified
under a non-UK special scheme, and

(b) (if applicable) the date on which the person was first
identified under the scheme concerned.

(5) A registration request—

(a) 10must contain any further information, and any declaration
about its contents, that the Commissioners may by
regulations require;

(b) must be made by such electronic means, and in such
manner, as the Commissioners may direct or may by
15regulations require.

Notification of changes etc

6 (1) A person registered under the Union scheme must inform the
Commissioners of the date when the person first makes qualifying
supplies of scheme services (unless the person has already given
20the Commissioners the information mentioned in paragraph
5(3)(b)).

(2) That information, and any information a person is required to give
under Article 57h of the Implementing Regulation (notification of
certain changes), must be communicated by such electronic
25means, and in such manner, as the Commissioners may direct or
may by regulations require.

Cancellation of registration

7 The Commissioners must cancel the registration under the Union
scheme of a person if—

(a) 30the person has ceased to make, or no longer intends to
make, supplies of scheme services and has notified them of
that fact;

(b) they otherwise determine that the person has ceased to
make, or no longer intends to make, supplies of scheme
35services;

(c) the person has ceased to satisfy any of the other conditions
for registration in paragraph 4(1) and has notified them of
that fact,

(d) they otherwise determine that the person has ceased to
40satisfy any of those conditions, or

(e) they determine that the person has persistently failed to
comply with the person’s obligations under this Schedule
or the Implementing Regulation.

Part 3 Union scheme: liability, returns, payment etc

Liability to pay non-UK VAT to Commissioners

8 (1) This paragraph applies where a person—

(a) 5makes a qualifying supply of scheme services, and

(b) is registered under the Union scheme when the supply is
made.

(2) The person is liable to pay to the Commissioners the gross amount
of VAT on the supply.

(3) 10The reference in sub-paragraph (2) to the gross amount of VAT on
the supply is to the amount of VAT charged on the supply in
accordance with the law of the member State in which the supply
is treated as made, without any deduction of VAT pursuant to
Article 168 of Directive 2006/112/EC.

15Union scheme returns

9 (1) A person who is or has been registered under the Union scheme
must submit a return (a “Union scheme return”) to the
Commissioners for each reporting period.

(2) Each quarter for the whole or part of which a person is registered
20under the Union scheme is a “reporting period” for that person.

Union scheme returns: further requirements

10 (1) A Union scheme return is to be made out in sterling.

(2) Any conversion from one currency into another for the purposes
of sub-paragraph (1) is to be made using the exchange rates
25published by the European Central Bank—

(a) for the last day of the reporting period to which the Union
scheme return relates, or

(b) if no such rate is published for that day, for the next day for
which such a rate is published.

(3) 30A Union scheme return—

(a) must be submitted to the Commissioners within the 20
days after the last day of the reporting period to which it
relates;

(b) must be submitted by such electronic means, and in such
35manner, as the Commissioners may direct or may by
regulations require.

Payment

11 (1) A person who is required to submit a Union scheme return must
pay, by the deadline for submitting the return, the amounts
40required in accordance with paragraph 8 in respect of qualifying
supplies of scheme services made in the reporting period to which
the return relates.

(2) A payment under this paragraph must be made in such manner as
the Commissioners may direct or may by regulations require.

Availability of records

12 (1) A person who is registered under the Union scheme must make
5available to the Commissioners, on request, any obligatory
records the person is keeping of transactions entered into by the
person while registered under the scheme.

(2) The records must be made available by electronic means.

(3) In sub-paragraph (1) “obligatory records” means records kept in
10accordance with an obligation imposed in accordance with Article
369k of Directive 2006/112/EC.

Amounts required to be paid to other member States

13 Section 44 of the Commissioners for Revenue and Customs Act
2005 (requirement to pay receipts into the Consolidated Fund)
15does not apply to any money received for or on account of VAT
that is required to be paid to another member State under Article
46 of Council Regulation (EU) No 904/2010.

Part 4 Persons registered under non-UK special schemes

20Meaning of “non-UK special scheme”

14 (1) In this Schedule “non-UK special scheme” means any provision of
the law of a member State other than the United Kingdom which
implements Section 3 of Chapter 6 of Title XII of Directive 2006/
112/EC.

(2) 25In relation to a non-UK special scheme, references to the
“administering member State” are to the member State under
whose law the scheme is established.

Exemption from requirement to register under this Act

15 (1) A participant in a non-UK special scheme is not required to be
30registered under this Act by virtue of making supplies of scheme
services in respect of which the participant is required to make
returns under that scheme.

(2) Sub-paragraph (1) overrides any contrary provision in this Act.

(3) Where a participant in a non-UK special scheme who is not
35registered under this Act (“the unregistered person”) makes
relevant supplies, it is to be assumed for all purposes of this Act
relating to the determination of—

(a) whether or not VAT is chargeable under this Act on those
supplies,

(b) 40how much VAT is chargeable under this Act on those
supplies,

(c) the time at which those supplies are treated as taking place,
and

(d) any other matter that the Commissioners may specify by
regulations,

5that the unregistered person is registered under this Act.

(4) Supplies of scheme services made by the unregistered person are
“relevant supplies” if—

(a) the value of the supplies must be accounted for in a return
required to be made by the unregistered person under the
10non-UK special scheme, and

(b) the supplies are treated as made in the United Kingdom.

De-registration

16 (1) Sub-paragraph (2) applies where a person who is registered under
Schedule 1A—

(a) 15satisfies the Commissioners that the person intends to
apply for identification under a non-UK special scheme,
and

(b) asks the Commissioners to cancel the person’s registration
under Schedule 1A.

(2) 20The Commissioners may cancel the person’s registration under
Schedule 1A with effect from—

(a) the day on which the request is made, or

(b) a later date agreed between the person and the
Commissioners.

25Scheme participants who are also registered under this Act

17 (1) A person who—

(a) is a participant in a non-UK special scheme, and

(b) is also registered, or required to be registered, under this
Act,

30is not required to discharge any obligation placed on the person as
a taxable person, so far as the obligation relates to relevant
supplies.

(2) The reference in sub-paragraph (1) to an obligation placed on the
person as a taxable person is to an obligation—

(a) 35to which the person is subject under or by virtue of this
Act, and

(b) to which the person would not be subject if the person
were neither registered nor required to be registered under
this Act.

(3) 40A supply made by a participant in a non-UK special scheme is a
“relevant supply” if—

(a) the value of the supply must be accounted for in a return
required to be made by the participant under the non-UK
special scheme, and

(b) 45the supply is treated as made in the United Kingdom.

(4) The Commissioners may by regulations specify cases in relation to
which sub-paragraph (1) is not to apply.

(5) In section 25(2) (deduction of input tax from output tax by taxable
person) the reference to output tax that is due from the taxable
5person does not include any VAT that the taxable person is liable
under a non-UK special scheme to pay to the tax authorities for the
administering member State.

Value of supplies to connected persons

18 In paragraph 1 of Schedule 6 (valuation: supply to connected
10person at less than market value) the reference to a supply made
by a taxable person is to be read as including a supply of scheme
services that is made by a participant in a non-UK special scheme
(and is treated as made in the United Kingdom).

Refund of VAT on supplies of goods and services supplied to scheme participant

19 15The power of the Commissioners to make regulations under
section 39 (repayment of VAT to those in business overseas)
includes power to make provision for giving effect to the second
sentence of Article 369j of Directive 2006/112/EC (which provides
for VAT on certain supplies to participants in special accounting
20schemes to be refunded in accordance with Directive 2008/9/EC).

Assessments: general modifications of section 73

20 (1) For the purposes of this Schedule, section 73 (assessments:
incorrect returns etc) is to be read as if—

(a) the reference in subsection (1) of that section to returns
25required under this Act included relevant non-UK returns,
and

(b) references in that section to a prescribed accounting period
included a tax period.

(2) See also the modifications in paragraph 21.

(3) 30In this Schedule “relevant non-UK return” means a non-UK return
(see paragraph 38(1)) that is required to be made (wholly or partly)
in respect of supplies of scheme services that are treated as made
in the United Kingdom.

Assessment in connection with increase in consideration

21 (1) 35Sub-paragraphs (2) to (4) make modifications of sections 73 and 76
which—

(a) have effect for the purposes of this Schedule, and

(b) are in addition to any other modifications of those sections
made by this Schedule.

(2) 40Section 73 has effect as if the following were inserted after
subsection (3) of that section—

“(3A) Where a person has failed to make an amendment or notification
that the person is required to make under paragraph 31 of

Schedule 3BA in respect of an increase in the consideration for a
UK supply (as defined in paragraph 31(7)), the Commissioners
may assess the amount of VAT due from the person as a result of
the increase to the best of their judgement and notify it to the
person.

(3B) 5An assessment under subsection (3A)—

(a) is of VAT due for the tax period mentioned in paragraph
31(1)(a) of Schedule 3BA;

(b) must be made within the time limits provided for in
section 77, and must not be made after the later of—

(i) 102 years after the end of the tax period referred to in
paragraph 31(1)(a);

(ii) one year after evidence of facts sufficient in the
opinion of the Commissioners to justify making the
assessment comes to their knowledge.

(3C) 15Subject to section 77, where further evidence such as is mentioned
in subsection (3B)(b)(ii) comes to the Commissioners’ knowledge
after they have made an assessment under subsection (3A),
another assessment may be made under that subsection, in
addition to any earlier assessment.”

(3) 20The reference in section 73(9) to subsection (1) of that section is
taken to include a reference to section 73(3A) (as inserted by sub-
paragraph (2)).

(4) Section 76 (assessment of amounts due by way of interest etc) is to
be read as if the reference in subsection (5) of that section to section
2573(1) included a reference to section 73(3A) (as inserted by sub-
paragraph (2)).

Assessments: consequential modifications

22 References to prescribed accounting periods in the following
provisions are to be read in accordance with the modifications
30made by paragraphs 20 and 21—

(a) section 74 (interest on VAT recovered or recoverable by
assessment);

(b) section 76 (assessment of amounts due by way of penalty,
interest or surcharge);

(c) 35section 77 (assessment: time limits).

Deemed amendments of relevant non-UK returns

23 (1) Where a person who has made a relevant non-UK return makes a
claim under paragraph 29(7)(b) (overpayments) in relation to an
error in the return, the relevant non-UK return is taken for the
40purposes of this Act to have been amended by the information in
the claim.

(2) Where a person who has made a relevant non-UK return gives the
Commissioners a notice relating to the return under paragraph
31(2)(b) (increase or decrease in consideration), the relevant non-
45UK return is taken for the purposes of this Act to have been
amended by that information.