Finance Bill (HC Bill 1)

Section 190

SCHEDULE 25 Part 3: Transitional and saving provisions

Final accounting periods under BGDA 1981

1 (1) The final accounting period for the purposes of a person’s liability to general
5betting 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
the purposes of the final accounting period, and those arrangements may (in
10particular)—

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

(b) 15must 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)
ends with 30 November 2014 (whether or not it would otherwise have ended
20with 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.

Post-commencement receipts etc from pre-commencement general or pool betting

3 (1) In this paragraph “new accounting period” means an accounting period
25beginning on or after 1 December 2014.

(2) Where a bet to which section 2(1) of BGDA 1981 (general bets with
bookmaker in the United Kingdom) applies is made with a bookmaker
before 1 December 2014, amounts in respect of the bet which fall due to the
bookmaker in a new accounting period are to be included among the
30amounts aggregated at Step 1 in section 124 of this Act in calculating the
bookmaker’s ordinary profits in respect of general bets for that period.

(3) Where—

(a) a bet to which section 3(1) of BGDA 1981 (spread bets with
bookmaker in the United Kingdom) applies is made with a
35bookmaker before 1 December 2014, and

(b) the bet is a financial spread bet for the purposes of section 3 of BGDA
1981,

amounts in respect of the bet which fall due to the bookmaker in a new
accounting period are to be included among the amounts aggregated at Step
401 in section 124 of this Act in calculating the bookmaker’s ordinary profits in
respect of financial spread bets for that period.

(4) Where—

(a) a bet to which section 3(1) of BGDA 1981 (spread bets with
bookmaker in the United Kingdom) applies is made with a
bookmaker before 1 December 2014, and

(b) the bet is not a financial spread bet for the purposes of section 3 of
5BGDA 1981,

amounts in respect of the bet which fall due to the bookmaker in a new
accounting period are to be included among the amounts aggregated at Step
1 in section 124 of this Act in calculating the bookmaker’s ordinary profits in
respect of non-financial spread bets for that period.

(5) 10Where a bet by way of pool betting to which section 4(1) of BGDA 1981
applies is made before 1 December 2014 by means of facilities provided by a
person, amounts in respect of the bet which fall due to the person in a new
accounting period are to be included among the amounts aggregated under
section 130(a) of this Act in calculating the person’s profits for that period in
15respect of ordinary Chapter 1 pool bets.

(6) Where a dutiable pool bet (as defined by section 7B of BGDA 1981) is made
before 1 December 2014, amounts in respect of the bet which in accordance
with section 7D of BGDA 1981 fall due—

(a) to the operator of the totalisator by means of which the bet is made,
20or

(b) to the promoter,

in a new accounting period are to be included among the amounts
aggregated under section 139(a) of this Act in calculating that person’s
profits for that period in respect of ordinary Chapter 2 pool bets.

(7) 25Section 5(2), (4) and (5) of BGDA 1981 (amounts due: timing and calculation)
apply for the purposes of sub-paragraphs (2) to (5).

Post-commencement winnings paid on pre-commencement general or pool betting

4 (1) In this paragraph “transitional accounting period” means an accounting
period—

(a) 30beginning on or after 1 December 2014, and

(b) ending on or before 30 November 2018.

(2) Where a bet to which section 2(1) of BGDA 1981 (general bets with
bookmaker in the United Kingdom) applies is made with a bookmaker
before 1 December 2014, amounts paid by the bookmaker in a transitional
35accounting period by way of winnings to the person who made the bet are
to be included among the amounts aggregated at Step 2 in section 124 of this
Act in calculating the bookmaker’s ordinary profits in respect of general bets
for that period.

(3) Where—

(a) 40a bet to which section 3(1) of BGDA 1981 (spread bets with
bookmaker in the United Kingdom) applies is made with a
bookmaker before 1 December 2014, and

(b) the bet is a financial spread bet for the purposes of section 3 of BGDA
1981,

45amounts paid by the bookmaker in a transitional accounting period by way
of winnings to the person who made the bet are to be included among the
amounts aggregated at Step 2 in section 124 of this Act in calculating the

bookmaker’s ordinary profits in respect of financial spread bets for that
period.

(4) Where—

(a) a bet to which section 3(1) of BGDA 1981 (spread bets with
5bookmaker in the United Kingdom) applies is made with a
bookmaker before 1 December 2014, and

(b) the bet is not a financial spread bet for the purposes of section 3 of
BGDA 1981,

amounts paid by the bookmaker in a transitional accounting period by way
10of winnings to the person who made the bet are to be included among the
amounts aggregated at Step 2 in section 124 of this Act in calculating the
bookmaker’s ordinary profits in respect of non-financial spread bets for that
period.

(5) Where a bet by way of pool betting to which section 4(1) of BGDA 1981
15applies is made before 1 December 2014 by means of facilities provided by a
person (“the provider”), amounts paid by the provider in a transitional
accounting period by way of winnings to the person who made the bet are
to be included among the amounts aggregated under section 130(b) of this
Act in calculating the provider’s profits for that period in respect of ordinary
20Chapter 1 pool bets.

(6) Where a dutiable pool bet (as defined by section 7B of BGDA 1981) is made
before 1 December 2014, amounts paid—

(a) by the operator of the totalisator by means of which the bet is made,
or

(b) 25by the promoter,

in a transitional accounting period by way of winnings to the person who
made the bet are to be included among the amounts aggregated under
section 139(b) of this Act in calculating the profits of the operator, or (as the
case may be) the promoter, for that period in respect of ordinary Chapter 2
30pool bets.

(7) Section 5(6) of BGDA 1981 (meaning of “paid”) applies for the purposes of
sub-paragraphs (2) to (5).

(8) Section 7F of BGDA 1981 (meaning of “paid”) applies for the purposes of
sub-paragraph (6).

35Post-commencement receipts & winnings etc in the case of pre-commencement remote gaming

5 (1) This paragraph applies where—

(a) a person (“the provider”) provides facilities for playing a game of
chance,

(b) the playing of the game is remote gaming for the purposes of remote
40gaming duty charged by BGDA 1981,

(c) the provision of the facilities by the provider is not exempt by virtue
of section 26H of BGDA 1981, and

(d) the game is begun to be played before 1 December 2014.

(2) In this paragraph—

• 45“new accounting period” means any accounting period beginning on or
  after 1 December 2014;

• “transitional accounting period” means an accounting period—

  Finance BillPage 523

  (a)

  beginning on or after 1 December 2014, and

  (b)

  ending on or before 30 November 2018.

(3) Amounts due to the provider in a new accounting period in respect of
entitlement to use the facilities to play the game are to be included among
5the amounts aggregated under section 150(1)(a) of this Act in calculating the
provider’s profits in respect of ordinary gaming.

(4) Amounts in respect of the game that—

(a) are within section 26E(1)(b) of BGDA 1981 as it applies in relation to
the provider, and

(b) 10are staked, or fall due to be paid, in a new accounting period,

are also to be included among the amounts aggregated under section
150(1)(a) of this Act in calculating the provider’s profits in respect of
ordinary gaming.

(5) In the case of each prize in the game that is a prize—

(a) 15provided in a transitional accounting period by the provider, and

(b) won by a person using the facilities to play the game,

the value of the prize is to be included among the amounts aggregated under
section 150(2) of this Act in calculating the provider’s profits for the period
in respect of ordinary gaming.

(6) 20Section 26F(2) to (7) of BGDA 1981 (provision and value of prizes) apply for
the purposes of sub-paragraph (5).

Post-commencement relief for unrelieved pre-commencement losses

6 (1) In this paragraph “new accounting period” means an accounting period
beginning on or after 1 December 2014.

(2) 25Where under section 5 or 5AA(3) of BGDA 1981 a person has a negative
amount of net stake receipts for an accounting period ending on 30
November 2014 in respect of bets to which section 2(1) of BGDA 1981
applies, the amount may be carried forward in reduction of the person’s
profits on general bets for one or more new accounting periods.

(3) 30Where under section 5 or 5AA(3) of BGDA 1981 a person has a negative
amount of net stake receipts for an accounting period ending on 30
November 2014 in respect of bets—

(a) to which section 3(1) of BGDA 1981 applies, and

(b) which are financial spread bets for the purposes of section 3 of BGDA
351981,

the amount may be carried forward in reduction of the person’s profits on
financial spread bets for one or more new accounting periods.

(4) Where under section 5 or 5AA(3) of BGDA 1981 a person has a negative
amount of net stake receipts for an accounting period ending on 30
40November 2014 in respect of bets—

(a) to which section 3(1) of BGDA 1981 applies, and

(b) which are not financial spread bets for the purposes of section 3 of
BGDA 1981,

the amount may be carried forward in reduction of the person’s profits on
45non-financial spread bets for one or more new accounting periods.

(5) Where under section 5 or 5AA(3) of BGDA 1981 a person has a negative
amount of net stake receipts for an accounting period ending on 30
November 2014 in respect of bets by way of pool betting to which section
4(1) of BGDA 1981 applies, the amount may be carried forward in reduction
5of the person’s profits on Chapter 1 pool bets for one or more new
accounting periods.

(6) Where under section 7ZA(3) or 7A of BGDA 1981 a person has a negative
amount of net pool betting receipts for an accounting period ending on 30
November 2014, the amount may be carried forward in reduction of the
10person’s profits on Chapter 2 pool bets for one or more new accounting
periods.

(7) Where the amount of a person’s remote gaming profits (see section 26C(2) of
BGDA 1981) for an accounting period ending on or before 30 November
2014 is a negative amount then that amount, so far as it has not been carried
15forward under section 26G of BGDA 1981 in reduction of the profits of one
or more later accounting periods ending on or before 30 November 2014,
may be carried forward in reduction of the person’s profits on remote
gaming (see section 148(4) of this Act) for one or more new accounting
periods.

20Post-commencement winnings on non-dutiable pre-commencement general or pool betting

7 (1) In this paragraph “transitional accounting period” means an accounting
period—

(a) beginning on or after 1 December 2014, and

(b) ending on or before 30 November 2018.

(2) 25For the purposes of this paragraph, a bet is “non-dutiable” if—

(a) neither of sections 2(1) and 3(1) of BGDA 1981 applies to it,

(b) it is not a bet by way of pool betting on which general betting duty is
charged under section 4(1) of BGDA 1981, and

(c) it is not a dutiable pool bet as defined by section 7B of BGDA 1981.

(3) 30Where—

(a) a non-dutiable bet is made with a bookmaker before 1 December
2014, and

(b) the bet is a general bet as defined by section 119 of this Act,

amounts paid by the bookmaker in a transitional accounting period by way
35of winnings to the person who made the bet may be included among the
amounts aggregated at Step 2 in section 124 of this Act in calculating the
bookmaker’s ordinary profits in respect of general bets for that period.

(4) Where—

(a) a non-dutiable bet is made with a bookmaker before 1 December
402014, and

(b) the bet is a financial spread bet as defined by section 121 of this Act,

amounts paid by the bookmaker in a transitional accounting period by way
of winnings to the person who made the bet may be included among the
amounts aggregated at Step 2 in section 124 of this Act in calculating the
45bookmaker’s ordinary profits in respect of financial spread bets for that
period.

(5) Where—

(a) a non-dutiable bet is made with a bookmaker before 1 December
2014, and

(b) the bet is a non-financial spread bet as defined by section 121 of this
Act,

5amounts paid by the bookmaker in a transitional accounting period by way
of winnings to the person who made the bet may be included among the
amounts aggregated at Step 2 in section 124 of this Act in calculating the
bookmaker’s ordinary profits in respect of non-financial spread bets for that
period.

(6) 10Where—

(a) a non-dutiable bet is made with a bookmaker before 1 December
2014, and

(b) the bet is a Chapter 1 pool bet as defined by section 127 of this Act,

amounts paid by the bookmaker in a transitional accounting period by way
15of winnings in respect of the bet may be included among the amounts
aggregated under section 130(b) of this Act in calculating the bookmaker’s
profits for that period in respect of ordinary Chapter 1 pool bets.

(7) Where—

(a) a non-dutiable bet is made with a bookmaker before 1 December
202014, and

(b) the bet is a Chapter 2 pool bet as defined by section 136 of this Act,

amounts paid by or on behalf of the bookmaker in a transitional accounting
period by way of winnings in respect of the bet may be included among the
amounts aggregated under section 139(b) of this Act in calculating the
25bookmaker’s profits for that period in respect of ordinary Chapter 2 pool
bets.

(8) Section 133 of this Act (meaning of “winnings”) applies for the purposes of
sub-paragraphs (3) to (6).

(9) Section 142 of this Act (meaning of “winnings”) applies for the purposes of
30sub-paragraph (7).

Post-commencement winnings on non-dutiable pre-commencement remote gaming

8 (1) In this paragraph “transitional accounting period” means an accounting
period—

(a) beginning on or after 1 December 2014, and

(b) 35ending on or before 30 November 2018.

(2) Sub-paragraph (3) applies where—

(a) under arrangements between a chargeable person (as defined by
section 148(2)) and another person (“the provider”), the chargeable
person participates in playing a game of chance,

(b) 40the game is begun to be played before 1 December 2014,

(c) the chargeable person’s participation in playing the game under the
arrangements is remote gaming (as defined by section 147(1)) which
is ordinary gaming (as defined by section 147(3)),

(d) remote gaming duty under section 26B of BGDA 1981 is not charged
45on the provision of any facilities—

(i) used by the chargeable person to play the game, and

(ii) provided by the provider, and

(e) the condition in paragraph (d) is not met only by virtue of section
26H of BGDA 1981 (exemptions).

(3) The value of any prize—

(a) provided by or on behalf of the provider in a transitional accounting
5period, and

(b) won by the chargeable person as a result of participating in playing
the game under the arrangements,

may be included among the values aggregated under section 150(2) in
calculating the provider’s expenditure for the period on prizes in respect of
10ordinary gaming.

(4) Section 153 (provision and value of prizes) applies for the purposes of sub-
paragraph (3).

Saving for amendments and repeals made by Schedule 24

9 (1) The amendments and repeals made by Schedule 24 do not affect—

(a) 15the operation on and after 1 December 2014 of any enactment
amended or repealed by that Schedule, as the enactment stood
immediately before that date, for the purposes of accounting periods
for general betting duty, pool betting duty or remote gaming duty
that end before that date, or for the purposes of entitlement to double
20taxation relief for such accounting periods,

(b) the operation on and after that date of any regulations or orders
made, directions given or notices published under BGDA 1981
before that date so far as they relate to any of those duties (but see
paragraph (c)),

(c) 25the exercise on and after that date of any power of the
Commissioners or the Treasury under BGDA 1981 as saved by
paragraph (a), including (in particular) any such power to make,
amend, revoke, publish, revise or replace regulations, orders,
directions or notices,

(d) 30the charges under sections 2(1), 3(1) and 4(1) of BGDA 1981 on bets
made before that date,

(e) the charge under section 5AB of BGDA 1981 so far as relating to bets
determined before that date,

(f) the charge under section 7 of BGDA 1981 so far as relating to net pool
35betting receipts for accounting periods ending before that date, or

(g) the charges under sections 17 and 26B of BGDA 1981 so far as
relating to games of chance that began to be played before that date.

(2) Sub-paragraph (1)—

(a) has effect subject to the preceding provisions of this Schedule, and

(b) 40does not prejudice the generality of section 16(1) of the Interpretation
Act 1978.

Section 202

SCHEDULE 26 Section 201 penalty: value of the denied advantage

Introduction

1 This Schedule applies for the purposes of calculating penalties under section
5202.

Value of denied advantage: normal rule

2 (1) The value of the denied advantage is the additional amount due or payable
in respect of tax as a result of counteracting the denied advantage.

(2) The reference in sub-paragraph (1) to the additional amount due or payable
10includes a reference to—

(a) an amount payable to HMRC having erroneously been paid by way
of repayment of tax, and

(b) an amount which would be repayable by HMRC if the denied
advantage were not counteracted.

(3) 15The following are ignored in calculating the value of the denied advantage—

(a) group relief, and

(b) any relief under section 458 of CTA 2010 (relief in respect of
repayment etc of loan) which is deferred under subsection (5) of that
section.

(4) 20This paragraph is subject to paragraphs 3 and 4.

Value of denied advantage: losses

3 (1) To the extent that the denied advantage has the result that a loss is wrongly
recorded for purposes of direct tax and the loss has been wholly used to
reduce the amount due or payable in respect of tax, the value of the denied
25advantage is determined in accordance with paragraph 2.

(2) To the extent that the denied advantage has the result that a loss is wrongly
recorded for purposes of direct tax and the loss has not been wholly used to
reduce the amount due or payable in respect of tax, the value of the denied
advantage is—

(a) 30the value under paragraph 2 of so much of the denied advantage as
results from the part (if any) of the loss which is used to reduce the
amount due or payable in respect of tax, plus

(b) 10% of the part of the loss not so used.

(3) Sub-paragraphs (1) and (2) apply both—

(a) 35to a case where no loss would have been recorded but for the denied
advantage, and

(b) to a case where a loss of a different amount would have been
recorded (but in that case sub-paragraphs (1) and (2) apply only to
the difference between the amount recorded and the true amount).

(4)
40To the extent that a denied advantage creates or increases an aggregate loss
recorded for a group of companies—

(a) the value of the denied advantage is calculated in accordance with
this paragraph, and

(b) in applying paragraph 2 in accordance with sub-paragraphs (1) and
(2), group relief may be taken into account (despite paragraph 2(3)).

(5) To the extent that the denied advantage results in a loss, the value of it is nil
where, because of the nature of the loss or P’s circumstances, there is no
5reasonable prospect of the loss being used to support a claim to reduce a tax
liability (of any person).

Value of denied advantage: deferred tax

4 (1) To the extent that the denied advantage is a deferral of tax, the value of that
advantage is—

(a) 1025% of the amount of the deferred tax for each year of the deferral, or

(b) a percentage of the amount of the deferred tax, for each separate
period of deferral of less than a year, equating to 25% per year,

or, if less, 100% of the amount of the deferred tax.

(2) This paragraph does not apply to a case to the extent that paragraph 3
15applies.

Section 208

SCHEDULE 27 Follower notices and partnerships

Introduction

1 This Schedule makes special provision about the application of Chapter 2 to
20partners and partnerships.

Interpretation

2 (1) This paragraph applies for the purposes of this Schedule.

(2) “Partnership follower notice” means a follower notice given by reason of—

(a) a tax enquiry being in progress into a partnership return, or

(b) 25an appeal having been made in relation to an amendment of a
partnership return or against a conclusion stated by a closure notice
in relation to a tax enquiry into a partnership return.

(3)
“Partnership return” means a return in pursuance of a notice under section
12AA(2) or (3) of TMA 1970.

(4) 30“The representative partner”, in relation to a partnership return, means the
person who was required by a notice served under or for the purposes of
section 12AA(2) or (3) of TMA 1970 to deliver the return.

(5) “Relevant partner”, in relation to a partnership return, means a person who
was a partner in the partnership to which the return relates at any time
35during the period in respect of which the return was required.

(6) References to a “successor”, in relation to the representative partner are to be
construed in accordance with section 12AA(11) of TMA 1970.

Giving of follower notices in relation to partnership returns

3 (1) If the representative partner in relation to a partnership return is no longer
available, then, for the purposes of section 197 the return, or an appeal in
respect of the return, is to be regarded as made by the person who is for the
5time being the successor of that partner (if that would not otherwise be the
case).

(2) Where, at any time after a partnership follower notice is given to P, P is no
longer available, any reference in this Chapter (other than section 197 and
this sub-paragraph) to P is to be read as a reference to the person who is, for
10the time being, the successor of the representative partner.

(3) For the purposes of Condition B in section 197 a partnership return, or
appeal in respect of a partnership return, is made on the basis that a
particular tax advantage results from particular tax arrangements if—

(a) it is made on the basis that an increase or reduction in one or more of
15the amounts mentioned in section 12AB(1) of TMA 1970 (amounts in
the partnership statement in a partnership return) results from those
tax arrangements, and

(b) that increase or reduction results in that tax advantage for one or
more of the relevant partners.

(4) 20For the purposes of Condition D in section 197—

(a) a notice given to a person in the person’s capacity as the
representative partner of a partnership, or a successor of that
partner, and a notice given to that person otherwise than in that
capacity are not to be treated as given to the same person, and

(b) 25all notices given to the representative partner and successors of that
partner, in that capacity, are to be treated as given to the same
person.

(5) In this paragraph references to a person being “no longer available” have the
same meaning as in section 12AA(11) of TMA 1970.

30Penalty if corrective action not taken in response to partnership follower notice

4 (1) Section 201 applies, in relation to a partnership follower notice, in
accordance with this paragraph.

(2) Subsection (2) applies as if the reference to P were to each relevant partner.

(3) References to the denied advantage are to be read as references to the
35increase or reduction in an amount in the partnership statement mentioned
in paragraph 3(3) which is denied by the application of the principles laid
down or the reasoning given in the judicial ruling identified in the
partnership follower notice under section 199(a) or, if only part of any
increase or reduction is so denied, that part.

(4) 40In subsection (6)(b) the words from “and (where different)” to the end are to
be ignored, and accordingly subsection (7) does not apply.

Calculation of penalty etc

5 (1) This paragraph applies in relation to a partnership follower notice.

(2) Section 202 applies subject to the following modifications—