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Finance (No. 2) Bill (HC Bill 193)

Finance (No. 2) BillPage 310

6 In section 313 of that Act (duty of parties to notifiable arrangements to notify
Board of number, etc), after subsection (5) insert—

(6) The duty under subsection (1) does not apply in prescribed
circumstances.

7 5In section 316 of that Act (information to be provided in form and manner
specified by HMRC), in subsection (2), after “312A(2)” insert “and (2A)”.

8 In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in
subsection (2), in paragraph (da), after “312A(2)” insert “and (2A)”.

Employers’ duty of disclosure

9 10After section 313ZB of FA 2004 insert—

313ZC Duty of employer to notify HMRC of details of employees etc

(1) This section applies if conditions A, B and C are met.

(2) Condition A is that a person who is a promoter in relation to
notifiable arrangements or a notifiable proposal is providing (or has
15provided) services in connection with the notifiable arrangements or
notifiable proposal to a person (“the client”).

(3) Condition B is that the client receives information under section
312(2) or as mentioned in section 312(5).

(4) Condition C is that the client is an employer in circumstances where,
20as a result of the notifiable arrangement or proposed notifiable
arrangement—

(a) one or more of the client’s employees receive, or might
reasonably be expected to receive, in relation to their
employment, an advantage in relation to any relevant tax, or

(b) 25the client receives or might reasonably be expected to receive
such an advantage in relation to the employment of one or
more of the client’s employees.

(5) Where an employee is within subsection (4)(a), or is an employee
mentioned in subsection (4)(b), the client must provide HMRC with
30prescribed information relating to the employee at the prescribed
time or times.

(6) The client need not comply with subsection (5) in relation to any
notifiable arrangements at any time after HMRC have given notice
under section 312(6) or 313(5) in relation to the notifiable
35arrangements.

(7) The duty under subsection (5) does not apply in prescribed
circumstances.

(8) Section 312A(3) applies for the purposes of this section as it applies
for the purposes of that section.

10 40In section 316 of that Act (information to be provided in form and manner
specified by HMRC), in subsection (2), for “and 313ZA(3)” substitute “,
313ZA(3) and 313ZC(5)”.

11 In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in

Finance (No. 2) BillPage 311

subsection (2), after paragraph (dc) insert—

(dca) section 313ZC (duty of employer to provide details of
employees etc),.

Identifying scheme users

12 (1) 5Section 313C of FA 2004 (information provided to introducers) is amended
as follows.

(2) For subsection (1) substitute—

(1) This section applies where HMRC suspect—

(a) that a person (“P”) is an introducer in relation to a proposal,
10and

(b) that the proposal may be notifiable.

(1A) HMRC may by written notice require P to provide HMRC with one
or both of the following—

(a) prescribed information in relation to each person who has
15provided P with any information relating to the proposal;

(b) prescribed information in relation to each person with whom
P has made a marketing contact in relation to the proposal.

(3) In subsection (3), for “or by virtue of subsection (1)” substitute “subsection
(1A)”.

(4) 20For the heading substitute “Provision of information to HMRC by
introducers”.

13 In section 98C of TMA 1970 (notification under Part 7 of FA 2004: penalties),
in subsection (2)(f) after “information” insert “or have been provided with
information”.

25Additional information

316A Duty to provide additional information

(1) This section applies where a person is required to provide
information under section 312(2) or 312A(2) or (2A).

(2) 30HMRC may specify additional information which must be provided
by that person to the recipients under section 312(2) or 312A(2) or
(2A) at the same time as the information referred to in subsection (1).

(3) HMRC may specify the form and manner in which the additional
information is to be provided.

(4) 35For the purposes of this section “additional information” means
information supplied by HMRC which relates to notifiable proposals
or notifiable arrangements in general.

15 In section 98C of TMA 1970 (notification under Part 7 of FA 2004), in
subsection (2), omit the “and” at the end of paragraph (e) and after
40paragraph (f) insert , and

(g) section 316A (duty to provide additional information).

Finance (No. 2) BillPage 312

Protection of persons making voluntary disclosures

316B Confidentiality

No duty of confidentiality or other restriction on disclosure
5(however imposed) prevents the voluntary disclosure by any person
to HMRC of information or documents which the person has
reasonable grounds for suspecting will assist HMRC in determining
whether there has been a breach of any requirement imposed by or
under this Part.

10Publication of DOTAS information

17 After section 316B of FA 2004 insert—

316C Publication by HMRC

(1) HMRC may publish information about—

(a) any notifiable arrangements, or proposed notifiable
15arrangements, to which a reference number is allocated
under section 311;

(b) any person who is a promoter in relation to the notifiable
arrangements or, in the case of proposed notifiable
arrangements, the notifiable proposal.

(2) 20The information that may be published is (subject to subsection
(4))—

(a) any information relating to arrangements within subsection
(1)(a), or a person within subsection (1)(b), that is prescribed
information for the purposes of section 308, 309 or 310;

(b) 25any ruling of a court or tribunal relating to any such
arrangements or person (in that person’s capacity as a
promoter in relation to a notifiable proposal or
arrangements);

(c) the number of persons in any period who enter into
30transactions forming part of notifiable arrangements within
subsection (1)(a);

(d) whether arrangements within subsection (1)(a) are APN
relevant (see subsection (7));

(e) any other information that HMRC considers it appropriate to
35publish for the purpose of identifying arrangements within
subsection (1)(a) or a person within subsection (1)(b).

(3) The information may be published in any manner that HMRC
considers appropriate.

(4) No information may be published under this section that identifies a
40person who enters into a transaction forming part of notifiable
arrangements within subsection (1)(a).

(5) But where a person who is a promoter within subsection (1)(b) is also
a person mentioned in subsection (4), nothing in subsection (4) is to
be taken as preventing the publication under this section of
45information so far as relating to the person’s activities as a promoter.

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(6) Before publishing any information under this section that identifies
a person as a promoter within subsection (1)(b), HMRC must—

(a) inform the person that they are considering doing so, and

(b) give the person reasonable opportunity to make
5representations about whether it should be published.

(7) Arrangements are “APN relevant” for the purposes of subsection
(2)(d) if HMRC has indicated in a publication that it may exercise (or
has exercised) its power under section 219 of the Finance Act 2014
(accelerated payment notices) by virtue of the arrangements being
10DOTAS arrangements within the meaning of that section.

316D Section 316C: subsequent judicial rulings

(1) This section applies if—

(a) information about notifiable arrangements, or proposed
notifiable arrangements, is published under section 316C,

(b) 15at any time after the information is published, a ruling of a
court or tribunal is made in relation to tax arrangements, and

(c) HMRC is of the opinion that the ruling is relevant to the
arrangements mentioned in paragraph (a).

(2) A ruling is “relevant” to the arrangements if—

(a) 20the principles laid down, or reasoning given, in the ruling
would, if applied to the arrangements, allow the purported
advantage arising from the arrangements in relation to tax,
and

(b) the ruling is final.

(3) 25HMRC must publish information about the ruling.

(4) The information must be published in the same manner as HMRC
published the information mentioned in subsection (1)(a) (and may
also be published in any other manner that HMRC considers
appropriate).

(5) 30A ruling is “final” if it is—

(a) a ruling of the Supreme Court, or

(b) a ruling of any other court or tribunal in circumstances
where—

(i) no appeal may be made against the ruling,

(ii) 35if an appeal may be made against the ruling with
permission, the time limit for applications has expired
and either no application has been made or
permission has been refused,

(iii) if such permission to appeal against the ruling has
40been granted or is not required, no appeal has been
made within the time limit for appeals, or

(iv) if an appeal was made, it was abandoned or otherwise
disposed of before it was determined by the court or
tribunal to which it was addressed.

(6) 45Where a ruling is final by virtue of sub-paragraph (ii), (iii) or (iv) of
subsection (5)(b), the ruling is to be treated as made at the time when
the sub-paragraph in question is first satisfied.

Finance (No. 2) BillPage 314

(7) In this section “tax arrangements” means arrangements in respect of
which it would be reasonable to conclude (having regard to all the
circumstances) that the obtaining of an advantage in relation to tax
was the main purpose, or one of the main purposes.

5Increase in penalties for failure to comply with section 313 of FA 2004

18 In section 98C of TMA 1970 (notification under Part 7 of FA 2004)—

(a) in subsection (3) for “penalty of the relevant sum” substitute “penalty
not exceeding the relevant sum”, and

(b) in subsection (4)—

(i) 10in paragraph (a) for “£100” substitute “£5,000”,

(ii) in paragraph (b) for “£500” substitute “£7,500”, and

(iii) in paragraph (c) for “£1,000” substitute “£10,000”.

Transitional provisions

19 (1) Section 310C of FA 2004 applies in relation to notifiable arrangements, or
15proposed notifiable arrangements, only if a reference number under section
311 of that Act is allocated to the arrangements on or after the day on which
this Act is passed.

(2) But section 310C of FA 2004 does not apply in relation to notifiable
arrangements, or proposed notifiable arrangements, where prescribed
20information relating to the arrangements was provided to HMRC before
that day in compliance with section 308 of that Act.

20 Any notice given by HMRC under section 312A(4) of FA 2004 (notice that
section 312A(2) duty does not apply) before the day on which this Act is
passed is treated on and after that day as given also in relation to the duty
25under section 312A(2A) of that Act.

21 (1) Section 316C of FA 2004 applies in relation to notifiable arrangements, or
proposed notifiable arrangements, only if a reference number under section
311 of that Act is allocated to the arrangements on or after the day on which
this Act is passed.

(2) 30But section 316C of FA 2004 does not apply in relation to notifiable
arrangements, or proposed notifiable arrangements, where prescribed
information relating to the arrangements was provided to HMRC before
that day in compliance with section 308, 309 or 310 of that Act.

(3) Section 316C(2)(b) of FA 2004 applies in relation to a ruling of a court or
35tribunal only if the ruling is given on or after the day on which this Act is
passed.

Section 118

SCHEDULE 18 Accelerated payments: group relief

Amendments of Part 4 of FA 2014

1 40Part 4 of FA 2014 (accelerated payments etc) is amended as follows.

Finance (No. 2) BillPage 315

2 In section 199 (overview of Part 4), in paragraph (c) omit the “and” at the end
of sub-paragraph (ii), and after sub-paragraph (iii) insert , and

(iv) provision restricting the surrender of losses and other
amounts for the purposes of group relief.

3 (1) 5Section 220 (content of notice given while a tax enquiry is in progress) is
amended as follows.

(2) In subsection (2)—

(a) in paragraph (b), after “the payment” insert “(if any)”, and

(b) omit the “and” at the end of that paragraph, and after paragraph (c)
10insert , and

(d) if the denied advantage consists of or includes an
asserted surrenderable amount, specify that amount
and any action which is required to be taken in
respect of it under section 225A.

(3) 15After subsection (4) insert—

(4A) Asserted surrenderable amount” means so much of a surrenderable
loss as a designated HMRC officer determines, to the best of that
officer’s information and belief, to be an amount—

(a) which would not be a surrenderable loss of P if the position
20were as stated in paragraphs (a), (b) or (c) of subsection (4),
and

(b) which is not the subject of a claim by P for relief from
corporation tax reflected in the understated tax amount (and
hence in the payment required to be made under section 223).

(4B) 25“Surrenderable loss” means a loss or other amount within section
99(1) of CTA 2010 (or part of such a loss or other amount).

(4) In subsection (6), for “the payment specified under subsection (2)(b)”
substitute “any payment specified under subsection (2)(b) or amount
specified under subsection (2)(d)”.

4 (1) 30Section 221 (content of notice given pending an appeal) is amended as
follows.

(2) In subsection (2)—

(a) in paragraph (b), after “the disputed tax” insert “(if any)”, and

(b) omit the “and” at the end of paragraph (b) and after paragraph (c)
35insert , and

(d) if the denied advantage consists of or includes an
asserted surrenderable amount (within the meaning
of section 220(4A)), specify that amount and any
action which is required to be taken in respect of it
40under section 225A.

5 (1) Section 222 (representations about a notice) is amended as follows.

(2) In subsection (2) omit the “or” at the end of paragraph (a), and after
paragraph (b) insert , or

(c) objecting to the amount specified in the notice under section
45220(2)(d) or section 221(2)(d).

(3) In subsection (4)—

Finance (No. 2) BillPage 316

(a) omit the “and” at the end of paragraph (a),

(b) in paragraph (b), after “different amount” insert “(or no amount)”,
and

(c) omit the “or” after sub-paragraph (i) of that paragraph and after sub-
5paragraph (ii) insert , or

remove from the notice the provision made
under section 220(2)(b) or section 221(2)(b),
and

(c) if representations were made under subsection (2)(c)
10(and the notice is not withdrawn under paragraph
(a)), determine whether a different amount (or no
amount) ought to have been specified under section
220(2)(d) or 221(2)(d), and then—

(i) confirm the amount specified in the notice,

(ii) 15amend the notice to specify a different
amount, or

(iii) remove from the notice the provision made
under section 220(2)(d) or section 221(2)(d),.

6 (1) Section 223 (effect of notice given while tax enquiry is in progress) is
20amended as follows.

(2) For subsection (1) substitute—

(1) This section applies where—

(a) an accelerated payment notice is given by virtue of section
219(2)(a) (notice given while a tax enquiry is in progress) (and
25not withdrawn), and

(b) an amount is stated in the notice in accordance with section
220(2)(b).

(3) In subsection (2), for “the amount specified in the notice in accordance with
section 220(2)(b)” substitute “that amount”.

(4) 30Accordingly, in the heading for that section after “progress” insert “:
accelerated payment”.

7 After section 225 insert—

Prevention of surrender of losses

225A Effect of notice: surrender of losses ineffective, etc

(1) 35This section applies where—

(a) an accelerated payment notice is given (and not withdrawn),
and

(b) an amount is specified in the notice in accordance with
section 220(2)(d) or 221(2)(d).

(2)
40P may not consent to any claim for group relief in respect of the
amount so specified.

(3) Subject to subsection (2), paragraph 75 (other than sub-paragraphs
(7) and (8)) of Schedule 18 to FA 1998 (reduction in amount available
for surrender) has effect as if the amount so specified ceased to be an
45amount available for surrender at the time the notice was given to P.

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(4) For the purposes of subsection (3), paragraph 75 of that Schedule has
effect as if, in sub-paragraph (2) of that paragraph for “within 30
days” there were substituted “before the end of the payment period
(within the meaning of section 223(5) of the Finance Act 2014)”.

(5) 5The time limits otherwise applicable to amendment of a company tax
return do not prevent an amendment being made in accordance with
paragraph 75(6) of Schedule 18 to FA 1998 where, pursuant to
subsection (3), a claimant company receives—

(a) notice of the withdrawal of consent under paragraph 75(3) of
10that Schedule, or

(b) a copy of a notice containing directions under paragraph
75(4) of that Schedule.

(6) Subsection (7) applies where—

(a) a company makes such an amendment to its company tax
15return at a time when an enquiry is in progress into the
return, and

(b) paragraph 31(3) of that Schedule prevents the amendment
from taking effect until the enquiry is completed.

(7) Section 219 (circumstances in which an accelerated payment notice
20may be given) has effect, in its application to that company in a case
where section 219(2)(a) applies (tax enquiry in progress), as if—

(a) for the purposes of section 219(3), that amendment to the
return had not been made,

(b) in section 219(4), after paragraph (c) there were inserted—

(d) 25P has amended its company tax return, in accordance
with paragraph 75(6) of Schedule 18 to FA 1998, in
circumstances where pursuant to section 225A(3), P has
received—

(i) notice of the withdrawal of consent under
30paragraph 75(3) of that Schedule, or

(ii) a copy of a notice containing directions under
paragraph 75(4) of that Schedule,

but paragraph 31(3) of that Schedule prevents that
amendment having effect.,

(c) 35in section 220(4), after paragraph (c) there were inserted—

(d) in the case of a notice given by virtue of section 219(4)(d)
(cases involving withdrawal of consent for losses
claimed), it were assumed that P had never made the
claim to group relief to which the amendment to its
40company tax return relates., and

(d) in section 227(10), for “or (c)” there were substituted “, (c) or
(d)”.

(8) Subsections (2) and (3) are subject to—

(a) section 227(14) to (16) (provision about claims for group
45relief, and consents to claims, following amendment or
withdrawal of an accelerated payment notice), and

(b) section 227A (provision about claims for group relief, and
consents to claims, once tax position finally determined).

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8 (1) Section 227 (withdrawal, modification or suspension of accelerated payment
notice) is amended as follows.

(2) In subsection (2) omit the “or” after paragraph (b) and after paragraph (c)
insert , or

(d) 5reduce the amount specified in the accelerated payment
notice under section 220(2)(d) or 221(2)(d).

(3) In subsection (4), after “(2)(c)” insert “or (d)”.

(4) In subsection (6)(b), after “advantage” insert “etc”.

(5) In subsection (7), omit the “and” after paragraph (a) and after paragraph (b)
10insert , and

(c) if the amount of the asserted surrenderable amount is less
than the amount specified in the notice, amend the notice
under subsection (2)(d) to substitute the lower amount.

(6) After subsection (12) insert—

(12A) 15Where, as a result of an accelerated payment notice specifying an
amount under section 220(2)(d) or 221(2)(d), a notice of consent by P
to a claim for group relief in respect of the amount specified (or part
of it) became ineffective by virtue of section 225A(3), nothing in
subsection (12) operates to revive that notice.

(7) 20After subsection (13) insert—

(14) If the accelerated payment notice is amended under subsection (2)(d)
or withdrawn—

(a) section 225A(2) and (3) (which prevents consent being given
to group relief claims) cease to apply in relation to the
25released amount, and

(b) a claim for group relief may be made in respect of any part of
the released amount within the period of 30 days after the
day on which the notice is amended or withdrawn.

(15) The time limits otherwise applicable to amendment of a company tax
30return do not apply to the extent that it makes a claim for group relief
within the time allowed by subsection (14).

(16) “The released amount” means—

(a) in a case where the accelerated payment notice is amended
under subsection (2)(d), the amount represented by the
35reduction, and

(b) in a case where the accelerated payment notice is withdrawn,
the amount specified under section 220(2)(d) or 221(2)(d).

9 After section 227 insert—

Group relief claims after accelerated payment notices

227A 40Group relief claims after accelerated payment notices

(1) This section applies where as a result of an accelerated payment
notice given to P—

(a) P was prevented from consenting to a claim for group relief
in respect of an amount under section 225A(2), or

Finance (No. 2) BillPage 319

(b) pursuant to section 225A(3), a consent given by P to a claim
for group relief in respect of an amount was ineffective.

(2) If a final determination establishes that the amount P has available to
surrender consists of or includes the amount referred to in
5subsection (1)(a) or (b) or a part of it (“the allowed amount”)—

(a) section 225A(2) and (3) (which prevents consent being given
to group relief claims) ceases to apply in relation to the
allowed amount, and

(b) a claim for group relief in respect of any part of the allowed
10amount may be made within the period of 30 days after the
relevant time.

(3) The time limits otherwise applicable to amendment of a company tax
return do not apply to an amendment to the extent that it makes a
claim for group relief in respect of any part of the allowed amount
15within the time limit allowed by subsection (2)(b).

(4) In this section—

  • “final determination” means—

    (a)

    a conclusion stated in a closure notice under
    paragraph 34 of Schedule 18 to FA 1998 against which
    20no appeal is made;

    (b)

    the final determination of a tax appeal within
    paragraph (d) or (e) of section 203;

  • “relevant time” means—

    (a)

    in a case within paragraph (a) above, the end of the
    25period during which the appeal could have been
    made;

    (b)

    in the case within paragraph (b) above, the end of the
    day on which the final determination occurs.

10 (1) Schedule 32 (accelerated payments and partnerships) is amended as follows.

(2) 30In paragraph 4 (content of partner payment notice)—

(a) in sub-paragraph (1), in paragraph (b), after “the payment” insert “(if
any)”,

(b) in that sub-paragraph omit the “and” at the end of paragraph (b) and
after paragraph (c) insert , and

(d) 35if the denied advantage consists of or includes an
asserted surrenderable amount, specify that amount
and any action which is required to be taken in
respect of it under paragraph 6A.,

(c) after sub-paragraph (4) insert—

(4A) 40Asserted surrenderable amount” means so much of a
surrenderable loss which the relevant partner asserts to
have as a designated HMRC officer determines, to the best
of that officer’s information and belief, to be an amount—

(a) which would not be a surrenderable loss of that
45partner if the position were as stated in paragraphs
(a), (b) or (c) of sub-paragraph (3), and

(b) which is not the subject of a claim by the relevant
partner to relief from corporation tax which is
reflected in the amount of the understated partner