Finance Bill (HC Bill 1)

“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
5conclusion,

as 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) 10If a notice is given by reason of two or all of the requirements in section 212(4)
being 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,
15is to a determination.

215 Representations 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section 212 (and not withdrawn).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
20representations to HMRC—

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

(4) Having considered the representations, HMRC must—

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

(i) 30to confirm the accelerated payment notice (with or without
amendment), 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not withdrawn under paragraph (a)), determine whether a different
35amount ought to have been specified under section 213(2)(b) or section
214(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.

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

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) 5the understated tax to which the payment specified in the notice
under 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
10the notice under paragraph 4(1)(b) of Schedule 28 to that Act
relates.

(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
15effect 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 of 90
days beginning with the day the notice or partner payment
20notice 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) 25the 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.”

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

“(4) 30Where 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, 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
35under 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.”

(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-
40paragraph (8) insert—

“(9) Sub-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
45of (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) the disputed tax specified in the notice under section
214(2)(b) of that Act.

(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

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) 5In section 56 of TMA 1970 (payment of tax where there is a further appeal),
after 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
10the Finance Act 2014 (and not withdrawn), and

(b) the 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) 15If, on the application of HMRC, the relevant court or tribunal considers
it 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) 20require the provision of adequate security before repayment is
made.

(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),
25in paragraph 43 (payment of stamp duty land tax where 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 the Finance Act 2014
30(and not withdrawn), and

(b) the 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) 35If, on the application of HMRC, the relevant court or tribunal
considers 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) 40give permission to withhold all or part of any repayment, or

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

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
5withdrawn), and

(b) the 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) 10If, on the application of HMRC, the relevant court or tribunal
considers 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) 15require 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.”

Penalties

219 20Penalty for failure to pay accelerated payment

(1) This 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
25period, P is liable to a penalty of 5% of that amount.

(3) If 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
30of 11 months beginning with the penalty day, P is liable to a penalty of 5% of
that 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
35relates to inheritance tax payable by instalments) applies to require an amount
of 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
40(provisions which apply to penalties for failures to make payments of tax on
time) 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.

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—

(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—

• “the accelerated payment” has the meaning given by section 216(2);

• 40“accelerated payment notice” has the meaning given by section 212(1);

• “arrangements” has the meaning given by section 194(4);

• “the asserted advantage” has the meaning given by section 212(3);

Finance BillPage 148

• “the chosen arrangements” has the meaning given by section 212(3),
  except in Schedule 28 where it has the meaning given by paragraph 3(3)
  of that Schedule;

• “the denied advantage” has the meaning given by section 213(5), except in
  5paragraph 4 of Schedule 28 where it has the meaning given by
  paragraph 4(4) of that Schedule;

• “designated HMRC officer” means an officer of Revenue and Customs
  who has been designated by the Commissioners for the purposes of this
  Part;

• 10“follower notice” has the meaning given by section 197(1);

• “HMRC” means Her Majesty’s Revenue and Customs;

• “P” has the meaning given by section 212(1);

• “partner payment notice” has the meaning given by paragraph 3 of
  Schedule 28;

• 15“relevant tax” has the meaning given by section 193;

• “tax advantage” has the meaning given by section 194(2);

• “tax appeal” has the meaning given by section 196;

• “tax arrangements” has the meaning given by section 194(3);

• “tax enquiry” has the meaning given by section 195(2).

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—

(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—

• “the accelerated payment” has the meaning given by section 216(2);

• “accelerated payment notice” has the meaning given by section 212(1);

• 20“effective date”, in relation to a land transaction, has the meaning given
  by section 119 of FA 2003;

• “follower notice” has the meaning given by section 197(1);

• “the responsible partners”, in relation to a land transaction, has the
  meaning given by paragraph 6(2) of Schedule 15 to that Act;

• 25“the responsible trustees” has the meaning given by paragraph 5(3) of
  Schedule 16 to that Act;

• “P”—

  (a)

  in relation to Chapter 2, has the meaning given by section
  197(1);

  (b)

  30in relation to Chapter 3, has the meaning given by section 212.

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