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

(2) Cash collateral is provided as “QCP margin” if, and to the extent
that—

(a) it exceeds the fair value of the instrument to which the
trade relates, and

(b) 5it corresponds to either—

(i) an asset held in respect of the qualifying central
counterparty which represents cash collateral
provided to that qualifying central counterparty, or

(ii) cash collateral provided to the qualifying central
10counterparty which has the effect of reducing a
liability of the clearing member to the qualifying
central counterparty.

(3) In this paragraph—

• “clearing member”, in relation to a recognised central
  15counterparty, has the meaning given by Article 2(14) of the
  EMIR Regulation,

• “client” has the meaning given by Article 2(15) of the EMIR
  Regulation,

• “client clearing agreement” means a contract between a
  20clearing member of a qualifying central counterparty and
  a client, relating to the clearing of transactions with the
  qualifying central counterparty,

• “derivative contract” has the meaning given by international
  accounting standards,

• 25“the EMIR Regulation” means Regulation (EU) No 648/2012
  of the European Parliament and of the Council of 4 July
  2012 on OTC derivatives, central counterparties and trade
  repositories,

• “qualifying central counterparty” means a central
  30counterparty that has been either authorised or recognised
  under the EMIR Regulation,

• “trade” means a transaction relating to the sale and purchase
  of a financial instrument or to the entering into of a
  derivative contract.”

(2) 35The amendment made by this paragraph has effect in relation to chargeable
periods ending on or after 1 January 2014.

Certain liabilities deemed short term liabilities

11 (1) After paragraph 76 insert—

“76A (1) Liabilities under derivative contracts are never “long term” (and
40are therefore always short term).

(2) In this paragraph “derivative contract” has the meaning given by
international accounting standards.”

(2) In paragraph 75 (liabilities not required to be repaid within 12 months etc are
long term liabilities), after sub-paragraph (2) insert—

“(3) 45This paragraph is subject to paragraph 76A.”

(3) In paragraph 77 (which relates to the calculation of “UK allocated equity and
liabilities”), for “76” substitute “76A”.

(4) The amendments made by this paragraph have effect for chargeable periods
ending on or after 1 January 2015.

Amendments consequential on regulatory changes

12 In paragraph 81 (power to make consequential amendments), in sub-
5paragraph (1), omit the “or” at the end of paragraph (b), and after paragraph
(c) insert “, or

“(d) any regulatory requirement, or change to any regulatory
requirement, imposed by EU legislation, or by or under any
Act (whenever adopted, enacted or made).”

10Transitional provision

13 (1) This paragraph applies where—

(a) an amount of the bank levy is treated as if it were an amount of
corporation tax chargeable on an entity (“E”) for an accounting
period of E,

(b) 15the chargeable period in respect of which the amount of the bank
levy is charged falls (or partly falls) on or after 1 January 2014, and

(c) under the Instalment Payment Regulations, one or more instalment
payments, in respect of the total liability of E for the accounting
period, were treated as becoming due and payable before the
20commencement date (“pre-commencement instalment payments”).

(2) Paragraphs 9 and 10 of this Schedule are to be ignored for the purpose of
determining the amount of any pre-commencement instalment payment.

(3) If there is at least one instalment payment, in respect of the total liability of
E for the accounting period, which under the Instalment Payment
25Regulations is treated as becoming due and payable on or after the
commencement date (“post-commencement instalment payments”), the
amount of that instalment payment, or the first of them, is to be increased by
the adjustment amount.

(4) If there are no post-commencement instalment payments, a further
30instalment payment, in respect of the total liability of E for the accounting
period, of an amount equal to the adjustment amount is to be treated as
becoming due and payable at the end of the period of 30 days beginning
with the commencement date.

(5) “The adjustment amount” is the difference between—

(a) 35the aggregate amount of the pre-commencement instalments
determined in accordance with sub-paragraph (2), and

(b) the aggregate amount of those instalment payments determined
ignoring sub-paragraph (2) (and so taking account of paragraphs 9
and 10).

(6) 40In the Instalment Payment Regulations—

(a) in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13,
references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those
Regulations are to be read as including a reference to sub-paragraphs
(1) to (5) above (and in regulation 7(2) “the regulation in question”,
45and in regulation 8(2) “that regulation”, are to be read accordingly),
and

(b) in regulation 9(3), the reference to those Regulations is to be read as
including a reference to sub-paragraphs (1) to (5) above.

(7) In section 59D of TMA 1970 (general rule as to when corporation tax is due
and payable), in subsection (5), the reference to section 59E is to be read as
5including a reference to sub-paragraphs (1) to (6) above.

(8) In this paragraph—

• “the chargeable period” is to be construed in accordance with
  paragraph 4 or (as the case may be) 5 of Schedule 19 to FA 2011;

• “the commencement date” means the day on which this Act is passed;

• 10“the Instalment Payment Regulations” means the Corporation Tax
  (Instalment Payments) Regulations 1998 (S.I. 1998/3175);

and references to the total liability of E for an accounting period are to be
construed in accordance with regulation 2(3) of the Instalment Payment
Regulations.

Section 170

15SCHEDULE 23 Suspension and revocation of remote operating licences

Breach notice

1 (1) The Commissioners may give a breach notice to the holder of a remote
operating licence if it appears to them that there has been a breach of—

(a) 20a requirement to be registered under this Part in respect of an activity
authorised by the licence,

(b) any conditions or requirements relating to registration under this
Part in respect of such an activity,

(c) a requirement to pay general betting duty, pool betting duty or
25remote gaming duty in respect of such an activity, or

(d) a requirement imposed in respect of such an activity by a notice
given under section 163 (requirement to provide security or further
security) or 164 (requirement to appoint UK representative).

(2) The breach notice must specify—

(a) 30the breach,

(b) the action that must be taken in order to remedy the breach, and

(c) the period (which must be at least 90 days) within which the action
must be taken.

(3) The Commissioners may by regulations—

(a) 35make provision as to cases in which a breach notice may or may not
be given (including provision amending this paragraph);

(b) amend sub-paragraph (2)(c) by substituting for the period for the
time being specified there a different period.

Final notice

2 (1) 40If it appears to the Commissioners that the breach has not been remedied in
full within the period specified in the breach notice, they may give the
holder of the remote operating licence a final notice.

(2) The final notice must—

(a) specify the breach and the extent to which it has not been remedied
since the breach notice was given,

(b) specify the period within which a review may be required or appeal
5brought, and

(c) state that (unless the breach is remedied and subject to the outcome
of any review, appeal or further appeal) the Commissioners will
direct the Gambling Commission to suspend the remote operating
licence after the end of the period.

(3) 10The decision to give the final notice is to be treated as a relevant decision for
the purposes of sections 15A and 15C to 16 of FA 1994 (customs and excise
reviews and appeals) and, accordingly, the final notice must include an offer
of a review of the decision under section 15A of that Act.

(4) Only the holder of the remote operating licence may bring an appeal under
15section 16 of FA 1994 as applied by sub-paragraph (3).

Direction to suspend remote operating licence

3 (1) After the review request period has ended, the Commissioners may direct
the Gambling Commission to suspend the remote operating licence if the
breach specified in the final notice has not been remedied in full to the
20satisfaction of the Commissioners.

(2) But if the Commissioners have been required to review the decision, or an
appeal has been brought against the decision, a direction may be given
under sub-paragraph (1) only if—

(a) the decision to give the final notice has been upheld (in whole or in
25part) and the period within which any appeal or further appeal may
ordinarily be brought has ended,

(b) the proceedings on the review, appeal or any further appeal have
been abandoned, withdrawn or discontinued, or

(c) the proceedings on the review, appeal or any further appeal are in
30progress and—

(i) the Commissioners consider that the holder of the remote
operating licence usually lives in or, if a body corporate, is
legally constituted in a country or territory with which the
United Kingdom does not have satisfactory arrangements for
35the enforcement of liabilities,

(ii) the breach was a failure to pay an amount of general betting
duty, pool betting duty or remote gaming duty, and

(iii) the holder of the licence has not given to the Commissioners
such security as appears to them adequate for the payment of
40the amount of duty that remains due.

(3) A direction under this paragraph may include provision directing the
Gambling Commission as to how it is to exercise its powers under section
118(4) of the Gambling Act 2005 (time and duration of suspension and
saving and transitional provision).

(4) 45In this paragraph “the review request period” means the period of 30 days
beginning with the date of the final notice, subject to any extension given
under section 15D of FA 1994.

Reinstatement of remote operating licence

4 (1) The Commissioners may direct the Gambling Commission to reinstate a
remote operating licence suspended pursuant to a direction under
paragraph 3 if the Commissioners are satisfied that—

(a) 5the breach specified in the final notice has been remedied in full,

(b) there are no other grounds on which a breach notice could be given
in respect of the licence, and

(c) the holder of the licence has given to the Commissioners any security
requested by them for the payment of amounts of general betting
10duty, pool betting duty and remote gaming duty likely to be due in
future in respect of any activity authorised by the licence.

(2) Where the holder of a suspended licence requests the Commissioners to give
a direction under this paragraph and the Commissioners refuse to give the
direction, they must notify the holder of their decision.

(3) 15That decision is to be treated as a relevant decision for the purposes of
sections 15A and 15C to 16 of FA 1994 (customs and excise reviews and
appeals) and, accordingly, the notice under sub-paragraph (2) must include
an offer of a review of the decision under section 15A of that Act.

(4) Only the holder of the suspended licence may bring an appeal under section
2016 of FA 1994 as applied by sub-paragraph (3).

5 (1) An appeal tribunal may direct the Gambling Commission to reinstate a
remote operating licence suspended pursuant to a direction under
paragraph 3 if the tribunal gives permission to appeal against a decision to
give a final notice under section 16(1F) of FA 1994 (appeal out of time).

(2) 25The reinstatement of a remote operating licence pursuant to a direction
given under sub-paragraph (1) does not prevent the Commissioners from
giving a further direction under paragraph 3(1) in reliance on the final notice
if—

(a) the decision to give the notice is upheld (in whole or in part) in the
30proceedings on the appeal or any further appeal, or the proceedings
on the appeal or any further appeal have been abandoned,
withdrawn or discontinued, and

(b) the period during which any further appeal may ordinarily be
brought has ended without an appeal being brought.

(3) 35In this paragraph “appeal tribunal” has the same meaning as in Chapter 2 of
Part 1 of FA 1994.

Revocation of remote operating licence

6 (1) The Commissioners may direct the Gambling Commission to revoke a
remote operating licence suspended pursuant to a direction under
40paragraph 3 if the breach specified in the final notice has not been remedied
in full to the satisfaction of the Commissioners within the period of 6 months
beginning with the day on which the direction under paragraph 3 was given.

(2) A direction under this paragraph may include provision directing the
Gambling Commission as to how it is to exercise its powers under section
45119(4) of the Gambling Act 2005 (time of revocation and saving and
transitional provision).

(3) The Commissioners must notify the holder of the suspended licence of their
decision to give the direction.

(4) That decision is to be treated as a relevant decision for the purposes of
sections 15A and 15C to 16 of FA 1994 (customs and excise reviews and
5appeals) and, accordingly, the notice must include an offer of a review of the
decision under section 15A of that Act.

(5) Only the holder of the suspended licence may bring an appeal under section
16 of FA 1994 as applied by sub-paragraph (4).

Consent requirement for grant of new remote operating licence

7 (1) 10The Gambling Commission requires the consent of the Commissioners to
issue a remote operating licence to the holder of a licence—

(a) which is suspended pursuant to a direction under paragraph 3, or

(b) which has been revoked pursuant to a direction under paragraph 6.

(2) The Commissioners must notify the holder of the suspended or revoked
15licence of any decision—

(a) not to give their consent under this paragraph, or

(b) to give it subject to conditions.

(3) That decision is to be treated as a relevant decision for the purposes of
sections 15A and 15C to 16 of FA 1994 (customs and excise reviews and
20appeals) and, accordingly, the notice under sub-paragraph (2) must include
an offer of a review of the decision under section 15A of that Act.

(4) Only the holder of the suspended or revoked licence may bring an appeal
under section 16 of FA 1994 as applied by sub-paragraph (3).

Supplementary

8 (1) 25A notice under this Schedule—

(a) must be in writing, and

(b) may specify more than one breach.

(2) The fact that a breach notice specifying one or more breaches has been given
to the holder of a remote operating licence does not prevent a breach notice
30specifying other breaches being given to the holder of the licence.

9 References in this Schedule to the holder of a remote operating licence are to
the person to whom the licence is or was issued.

Section 189

SCHEDULE 24 Part 3: Consequential amendments and repeals

35Part 1 Betting and Gaming Duties Act 1981

1 BGDA 1981 is amended as follows.

2 Omit sections 1 to 12 (general betting duty and pool betting duty).

3 In section 17 (bingo duty) for subsection (2A) substitute—

“(2A) Bingo duty is not charged on the playing of a game of bingo which is
not licensed bingo if every person playing the game participates by
the use of—

(a) 5the internet,

(b) telephone,

(c) television,

(d) radio, or

(e) any other kind of electronic or other technology for
10facilitating communication.”

4 Omit sections 26A to 26M (remote gaming duty).

5 In section 27 (offences by bodies corporate), omit “paragraph 13(1) or (3) or
14(1) of Schedule 1 or”.

6 In section 31 (protection of officers), for “general betting duty, bingo duty or
15remote gaming duty” substitute “bingo duty”.

7 Omit Schedule A1 (general betting duty and pool betting duty: double
taxation relief).

8 Omit Schedule 1 (administration of general betting duty and pool betting
duty).

9 20Omit Schedule 4B (remote gaming duty: double taxation relief).

Part 2 Other amendments and repeals

Customs and Excise Management Act 1979

10 CEMA 1979 is amended as follows

11 (1) 25Section 1(1) (interpretation) is amended as follows.

(2) In the definition of “the revenue trade provisions of the customs and excise
Acts”, after paragraph (f) insert—

• “( g)

  the provisions of Part 3 of the Finance Act 2014;”.

(3) In the definition of “revenue trader”—

(a) 30in paragraph (a)(ic), for “gaming within the meaning of the Betting
and Gaming Duties Act 1981 (see section 33(1))” substitute “any
activity that constitutes betting or gaming for the purposes of Part 3
of the Finance Act 2014 (see sections 143, 176 and 181)”,

(b) after paragraph (a)(id) insert—

• “( ie)

  35the management or administration of any
  Chapter 1 stake fund, Chapter 2 stake fund or
  gaming prize fund within the meaning of Part
  3 of the Finance Act 2014 (see sections 127, 136
  and 147);”, and

(c) 40in paragraph (ii) for “or (id)” insert “, (id) or (ie)”.

12 After section 118BC insert—

“118BCA Inspection powers: betting duties and remote gaming duty

(1) Subsection (2) applies to premises if an officer has reasonable cause
to believe that—

(a) 5betting facilities are being provided, have been provided or
are to be provided there,

(b) a totalisator is being operated, has been operated or is to be
operated there, or

(c) any business in respect of which a person is or may become
10liable to remote gaming duty is being carried on, has been
carried on or is to be carried on there.

(2) The officer may at any reasonable time enter and inspect the
premises and inspect—

(a) accounts, records and other documents in the custody or
15control of a relevant person, and

(b) any relevant equipment.

(3) Subsection (1) does not permit an officer to enter or inspect a
particular part of premises if—

(a) the officer has no reasonable cause to believe that paragraph
20(a), (b) or (as the case may be) (c) of that subsection is satisfied
with respect to that particular part, and

(b) that part is used only as a dwelling.

(4) An officer may at any reasonable time (whether or not as part of an
inspection under subsection (2)) require a relevant person or anyone
25acting on such a person’s behalf—

(a) to open any relevant equipment, and

(b) to carry out any other operation that may be necessary to
enable the officer to ascertain whether any general betting
duty, pool betting duty or remote gaming duty is payable in
30respect of it and, if so, how much.

(5) A “relevant person” is a person—

(a) who by virtue of being a bookmaker, being treated by section
126 of the Finance Act 2014 as a bookmaker or providing
facilities for making bets is liable to general betting duty,

(b) 35who by virtue of being a bookmaker is liable to pool betting
duty,

(c) who by virtue of entering into arrangements for chargeable
persons to participate in remote gaming is liable to remote
gaming duty, or

(d) 40who is reasonably suspected by the officer of being, having
been or being about to become liable as mentioned in
paragraph (a), (b) or (c).

(6) “Relevant equipment” is equipment that is being, or that the officer
reasonably suspects of having been or of being intended to be, used
45on the premises for or in connection with any activity that constitutes
betting or gaming for the purposes of Part 3 of the Finance Act 2014
(see sections 143, 176 and 181).

(7) Expressions used in this section and Part 3 of the Finance Act 2014
have the same meanings in this section as in that Part.”

13 (1) Section 118BD (inspection powers: supplementary provision) is amended as
follows.

(2) 5In subsections (1) and (2), for “or 118BC,” substitute “, 118BC or 118BCA,”.

(3) In subsection (3), for “and 118BC” substitute “, 118BC and 118BCA”.

14 In section 118G(1) (offence of failing comply with requirements imposed
under Part 9A), for “or 118BC(4)” substitute “, 118BC(4) or 118BCA(4)”.

Finance Act 1994

15 10FA 1994 is amended as follows.

16 In section 12 (assessments to excise duty), in subsection (2)(c)—

(a) omit “1 or”, and

(b) after “2012” insert “or Part 3 of the Finance Act 2014”.

17 Omit section 13A(2)(ga) (relevant decision: double taxation relief
15repayment).

18 (1) Paragraph 6 of Schedule 5 (decisions subject to review and appeal) is
amended as follows.

(2) Omit sub-paragraph (1)(a).

(3) In sub-paragraph (2)—

(a) 20omit paragraph (a), and

(b) in paragraph (b), for “that Act” substitute “the Betting and Gaming
Duties Act 1981”.

(4) Omit sub-paragraph (3).

Value Added Tax Act 1994

19 (1) 25Section 23A (meaning of “relevant machine game”) is amended as follows.

(2) In subsection (2)(f), for “section 26A of the Betting and Gaming Duties Act
1981 (remote gaming duty: interpretation)” substitute “section 147(1) of the
Finance Act 2014 (meaning of remote gaming)”.

(3) In subsection (3), in the definition of “real game of chance”, for “the Betting
30and Gaming Duties Act 1981” substitute “Part 3 of the Finance Act 2014 (see
section 181(1)(b))”.

Finance Act 1997

20 (1) Schedule 1 to FA 1997 (gaming duty: administration and enforcement) is
amended as follows.

(2) 35In paragraph 12(4), for “the offences” substitute “the offence”.

(3) In paragraph 16, for “general betting duty” substitute “bingo duty”.

Criminal Justice and Police Act 2001

21 Omit paragraph 27 of Schedule 1 to the Criminal Justice and Police Act 2001
(application of section 50 to power of seizure under paragraph 16(2) of
Schedule 1 to BGDA 1981).

5Gambling Act 2005

22 The Gambling Act 2005 is amended as follows.

23 In section 67 (remote operating licence), at the end insert—

“(4) The power of the Commission to issue a remote operating licence to
the holder of a licence suspended or revoked pursuant to a direction
10given under Schedule 23 to the Finance Act 2014 is subject to
paragraph 7 of that Schedule (requirement for HMRC’s consent).”

24 In section 118 (suspension of operating licence), after subsection (3) insert—

“(3A) The Commission must suspend an operating licence if directed to do
so under paragraph 3 of Schedule 23 to the Finance Act 2014.”

25 15After that section insert—

“118A Reinstatement

(1) If an operating licence has been suspended in accordance with
section 118(3A), the Commission must reinstate the licence if
directed to do so under paragraph 4 or 5 of Schedule 23 to the
20Finance Act 2014.

(2) Where the Commission reinstate an operating licence it—

(a) must specify the time when the reinstatement takes effect,
and

(b) may make the reinstatement subject to conditions.”

26 25In section 119 (revocation of operating licence), after subsection (3) insert—

“(3A) The Commission must revoke an operating licence if directed to do
so under paragraph 6 of Schedule 23 to the Finance Act 2014.”

Finance Act 2008

27 (1) The Table in paragraph 1 of Schedule 41 to FA 2008 (penalties: failure to
30notify and certain VAT and excise wrongdoing) is amended as follows.

(2) For the entries relating to general betting duty and pool betting duty
substitute—

(3) For the entry relating to remote gaming duty substitute—

50Finance Act 2009

28 FA 2009 is amended as follows.

29 The Table in paragraph 1 of Schedule 55 (penalty for failure to make returns
etc) is amended as follows—

(a) in item 23 (general betting duty), for “paragraph 2 of Schedule 1 to
55BGDA 1981” substitute “section 159 of FA 2014”,

(b) in item 24 (pool betting duty), for “paragraph 2A of Schedule 1 to
BGDA 1981” substitute “section 159 of FA 2014”, and

(c) in item 28 (remote gaming duty), for “26K of BGDA 1981” substitute
“159 of FA 2014”.

30 (1) 60The Table in paragraph 1 of Schedule 56 (penalty for failure to make
payments on time) is amended as follows.

(2) For items 11H and 11I substitute—

(3) For item 11M substitute—

Finance Act 2012

31 (1) Schedule 24 to FA 2012 (machine games duty) is amended as follows.

(2) In paragraph 3(2), for “BGDA 1981” substitute “Part 3 of FA 2014”.

(3) 110In paragraph 37(5), for “the offences” substitute “the offence”.

(4) In paragraph 38, for “remote gaming duty” substitute “bingo duty”.

Section 190

SCHEDULE 25 Part 3: Transitional and saving provisions

Final accounting periods under BGDA 1981

1 (1) 115The final accounting period for the purposes of a person’s liability to general
betting duty, pool betting duty or remote gaming duty under BGDA 1981
ends with 30 November 2014 (whether or not it would otherwise have ended
with that day).

(2) The Commissioners may by direction make transitional arrangements for
120the purposes of the final accounting period, and those arrangements may (in
particular)—

(a) make provision about the date on which the period begins, and

(b) combine what would otherwise be more than one accounting period.

(3) A direction under this paragraph—

(a) 125may apply generally or only to a particular case or class of case, and

(b) must be published unless it applies only to a particular case.

Withdrawal of double taxation relief

2 (1) The final reconciliation period for the purposes of a person’s entitlement to
a credit under section 5E, 8ZA or 26IA of BGDA 1981 (double taxation relief)
130ends with 30 November 2014 (whether or not it would otherwise have ended
with that day).

(2) The Commissioners are not required to entertain a claim for a repayment
made under section 5E, 8ZA or 26IA of BGDA 1981 after 30 November 2015.