Finance Bill (HC Bill 57)

(d) 5in the italic heading before paragraph 7, for “1 April 2015” substitute
“1 January 2016”.

(3) The amendments made by sub-paragraphs (1) and (2) come into force on 1
January 2016.

(4) Sub-paragraphs (5) to (10) apply where—

(a) 10an 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) the chargeable period in respect of which the amount of the bank
levy is charged begins before but ends on or after 1 January 2016, and

(c) 15under 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 1 January
2016 (“pre-commencement instalment payments”).

(5) Sub-paragraphs (1) to (3) are to be ignored for the purpose of determining
20the amount of any pre-commencement instalment payment.

(6) 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
Regulations is treated as becoming due and payable on or after 1 January
2016, the amount of that instalment payment, or the first of them, is to be
25reduced by the adjustment amount.

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

(a) the aggregate amount of the pre-commencement instalment
payments determined in accordance with sub-paragraph (5), and

(b) the aggregate amount of those instalment payments determined
30ignoring sub-paragraph (5) (and so taking account of sub-
paragraphs (1) to (3)).

(8) In 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
35Regulations are to be read as including a reference to sub-paragraphs
(4) to (7) (and in regulation 8(2) “that regulation” is 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 (4) to (7).

(9) 40In 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
including a reference to sub-paragraphs (4) to (8).

(10) In this paragraph—

• “the chargeable period” is to be construed in accordance with
  45paragraph 4 or (as the case may be) 5 of Schedule 19 to FA 2011;

Finance BillPage 71

• “the Instalment Payment Regulations” means the Corporation Tax
  (Instalment Payments) Regulations 1998 (S.I. 1998/3175S.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
5Regulations.

Bank levy rate for 2017

2 (1) In paragraph 6 of Schedule 19 to FA 2011 (steps for determining the amount
of the bank levy), in sub-paragraph (2)—

(a) for “0.09%” substitute “0.085%”, and

(b) 10for “0.18%” substitute “0.17%”.

(2) In paragraph 7 of that Schedule (special provision for chargeable periods
falling wholly or partly before 1 January 2016)—

(a) in sub-paragraph (1) for “2016” substitute “2017”;

(b) at the end of that table add—

(c) in the italic heading before paragraph 7, for “2016” substitute “2017”.

(3) 20The amendments made by this paragraph come into force on 1 January 2017.

Bank levy rate for 2018

3 (1) In paragraph 6 of Schedule 19 to FA 2011 (steps for determining the amount
of the bank levy), in sub-paragraph (2)—

(a) for “0.085%” substitute “0.08%”, and

(b) 25for “0.17%” substitute “0.16%”.

(2) In paragraph 7 of that Schedule (special provision for chargeable periods
falling wholly or partly before 1 January 2017)—

(a) in sub-paragraph (1) for “2017” substitute “2018”;

(b) at the end of that table add—

(c) in the italic heading before paragraph 7, for “2017” substitute “2018”.

(3) 35The amendments made by this paragraph come into force on 1 January 2018.

Bank levy rate for 2019

4 (1) In paragraph 6 of Schedule 19 to FA 2011 (steps for determining the amount
of the bank levy), in sub-paragraph (2)—

(a) for “0.08%” substitute “0.075%”, and

(b) for “0.16%” substitute “0.15%”.

(2) In paragraph 7 of that Schedule (special provision for chargeable periods
falling wholly or partly before 1 January 2018)—

(a) in sub-paragraph (1) for “2018” substitute “2019”;

(b) 5at the end of that table add—

(c) 10in the italic heading before paragraph 7, for “2018” substitute “2019”.

(3) The amendments made by this paragraph come into force on 1 January 2019.

Bank levy rate for 2020

5 (1) In paragraph 6 of Schedule 19 to FA 2011 (steps for determining the amount
of the bank levy), in sub-paragraph (2)—

(a) 15for “0.075%” substitute “0.07%”, and

(b) for “0.15%” substitute “0.14%”.

(2) In paragraph 7 of that Schedule (special provision for chargeable periods
falling wholly or partly before 1 January 2019)—

(a) in sub-paragraph (1) for “2019” substitute “2020”;

(b) 20at the end of that table add—

(c) 25in the italic heading before paragraph 7, for “2019” substitute “2020”.

(3) The amendments made by this paragraph come into force on 1 January 2020.

Bank levy rate for 2021

6 (1) In paragraph 6 of Schedule 19 to FA 2011 (steps for determining the amount
of the bank levy), in sub-paragraph (2)—

(a) 30for “0.07%” substitute “0.05%”, and

(b) for “0.14%” substitute “0.1%”.

(2) In paragraph 7 of that Schedule (special provision for chargeable periods
falling wholly or partly before 1 January 2020)—

(a) in sub-paragraph (1) for “2020” substitute “2021”;

(b) 35at the end of that table add—

(c) in the italic heading before paragraph 7, for “2020” substitute “2021”.

(3) The amendments made by this paragraph come into force on 1 January 2021.

Section 17

SCHEDULE 3 Banking companies: surcharge

5Part 1 Main provisions

1 In Part 7A of CTA 2010 (banking companies), after Chapter 3 insert—

““CHAPTER 4 Surcharge on banking companies

Overview

269D 10Overview of Chapter

(1) This Chapter contains provision for, and in connection with, a
surcharge on the profits of banking companies.

(2) Section 269DA provides for a sum to be charged on the surcharge
profits of a banking company, in excess of the company’s surcharge
15allowance, as if it were an amount of corporation tax.

(3) Section 269DB defines “non-banking group relief” for the purposes
of calculating a company’s surcharge profits.

(4) Section 269DC defines “non-banking or pre-2016 loss relief” for the
purposes of calculating a company’s surcharge profits.

(5) 20Sections 269DD to 269DJ contain provision for, and in connection
with, determining a company’s surcharge allowance.

(6) Sections 269DK and 269DL apply enactments relating to corporation
tax to sums charged under section 269DA, modify those enactments
and make other provision about administration and double taxation.

(7) 25Section 269DM contains anti-avoidance provision.

(8) Section 269DN contains provision about the interpretation of this
Chapter.

(9) Chapter 2 (key definitions) contains provision about the
interpretation of this Part that is relevant to this Chapter (see, in
30particular, section 269B for the meaning of “banking company” and
section 269BD for the meaning of “group”).

The surcharge

269DA Surcharge on banking companies

(1) If a company is a banking company in relation to an accounting
period (a “chargeable accounting period”), a sum equal to 8% of its
5surcharge profits for the period, so far as they exceed its surcharge
allowance for the period, is to be charged on the company as if it
were an amount of corporation tax chargeable on the company.

(2) For the purposes of this Chapter, a company’s “surcharge profits” for
a chargeable accounting period are—

10

(3) A company’s “surcharge allowance” for a chargeable accounting
20period is to be determined in accordance with section 269DD where,
at any time in that period—

(a) the company is a member of a group, and

(b) one or more other banking companies are members of that
group.

(4) 25Otherwise, a company’s “surcharge allowance” for a chargeable
accounting period is to be determined in accordance with section
269DI.

Non-banking group relief

269DB Meaning of “non-banking group relief”

(1) 30In section 269DA(2), “non-banking group relief” means group relief
that relates to losses or other amounts that the surrendering
company has for a surrender period in relation to which it is not—

(a) a banking company, or

(b) an EEA banking company.

(2) 35The surrendering company is an “EEA banking company”, in
relation to the surrender period, if—

(a) the group relief relates to surrenderable amounts under
Chapter 3 of Part 5 (surrenders made by non-UK resident
company resident or trading in the EEA), and

(b) 40condition A or B is met.

(3) Condition A is that the surrendering company would be a banking
company in relation to the surrender period if—

(a) it were UK resident,

(b) any activities carried on by the surrendering company in an
45EEA territory were carried on in the United Kingdom,

(c) where it would be required to be an authorised person for the
purposes of FISMA 2000 in order to carry on those activities,
it were an authorised person with permission to carry on
those activities, and

(d) 5where those activities consist wholly or mainly of any of the
relevant regulated activities described in the provisions
mentioned in section 269BB(b) to (f), as a result of carrying on
those activities and having such permission it would be an
IFPRU 730k firm and a full scope IFPRU investment firm.

(4) 10Condition B is that the surrendering company is a member of a
partnership and the surrendering company would be a banking
company if—

(a) the surrendering company and the partnership were UK
resident,

(b) 15any activities carried on by the partnership in an EEA
territory were carried on in the United Kingdom,

(c) where the partnership would be required to be an authorised
person for the purposes of FISMA 2000 in order to carry on
those activities, the partnership were an authorised person
20with permission to carry on those activities, and

(d) where those activities consist wholly or mainly of any of the
relevant regulated activities described in the provisions
mentioned in section 269BB(b) to (f), as a result of carrying on
those activities and having such permission the partnership
25would be an IFPRU 730k firm and a full scope IFPRU
investment firm.

(5) For the purposes of determining whether condition A or B is met,
references in section 269B to an accounting period are to be read as
references to the surrender period.

(6) 30The Treasury may by regulations make provision for, or in
connection with, treating companies specified or described in the
regulations as being, or as not being, EEA banking companies for the
purposes of this section.

(7) In this section—

• 35“EEA territory” has the same meaning as in Chapter 3 of Part 5
  (see section 112);

• “surrenderable amounts”, “surrendering company” and
  “surrender period” have the same meaning as in Part 5 (see
  section 188(1)).

(8) 40Section 269BC (banking companies: supplementary definitions) has
effect for the purposes of this section.

Non-banking or pre-2016 loss relief

269DC Meaning of “non-banking or pre-2016 loss relief”

(1) In section 269DA(2), “non-banking or pre-2016 loss relief” means the
45aggregate of—

(a) any amounts that are deducted in determining the taxable
total profits of the company of the chargeable accounting
period, in respect of—

(i) a non-banking or pre-2016 carried-forward trading
loss,

(ii) a non-banking or pre-2016 carried-forward non-
trading deficit,

(iii) 5non-banking or pre-2016 carried-forward
management expenses,

(iv) a non-banking or pre-2016 carried-forward UK
property loss,

(v) a non-banking or pre-2016 carried-forward overseas
10property loss,

(vi) a non-banking or pre-2016 carried-forward excess
capital allowance on special leasing,

(vii) a non-banking or pre-2016 carried-forward
miscellaneous loss, or

(viii) 15a non-banking or pre-2016 carried-forward capital
loss, and

(b) any used amount, for the chargeable accounting period, in
respect of a non-banking or pre-2016 non-trading loss on
intangible fixed assets.

(2) 20For the purposes of this section—

(a) a “non-banking” accounting period is an accounting period
in relation to which the company was not a banking
company, and

(b)
a “pre-2016” accounting period is an accounting period of the
25company ending before 1 January 2016.

(3) “A non-banking or pre-2016 carried-forward trading loss” means a
loss which—

(a) was made in a trade of the company in a non-banking or pre-
2016 accounting period, and

(b) 30is carried forward to the chargeable accounting period under
section 45 (carry forward of trade loss against subsequent
trade profits).

(4) “A non-banking or pre-2016 carried-forward non-trading deficit”
means a non-trading deficit—

(a) 35which the company had from its loan relationships under
section 301(6) of CTA 2009 for a non-banking or pre-2016
accounting period, and

(b) which is carried forward under section 457 of that Act (carry
forward of deficits to accounting periods after deficit period)
40to be set off against non-trading profits of the chargeable
accounting period.

(5) In subsection (4), “non-trading profits” has the same meaning as in
section 457 of CTA 2009.

(6) “Non-banking or pre-2016 management expenses” means amounts
45that fall within subsection (7) or (8).

(7) The amounts within this subsection are amounts—

(a) which fall within subsection (2) of section 1223 of CTA 2009
(carry forward of expenses of management and other
amounts),

(b) which—

(i) for the purposes of Chapter 2 of Part 16 of CTA 2009
are referable to a non-banking or pre-2016 accounting
period, or

(ii) 5in the case of qualifying charitable donations, were
made in such an accounting period, and

(c) which are treated by section 1223(3) of CTA 2009 as expenses
of management deductible for the chargeable accounting
period.

(8) 10The amounts within this subsection are amounts of loss which—

(a) were made in a non-banking or pre-2016 accounting period,
and

(b) are treated by section 63(3) (carry forward of certain losses
made by company with investment business which ceases to
15carry on UK property business) as expenses of management
deductible for the chargeable accounting period for the
purposes of Chapter 2 of Part 16 of CTA 2009.

(9) “A non-banking or pre-2016 carried-forward UK property loss”
means a loss which—

(a) 20was made by the company in a UK property business in a
non-banking or pre-2016 accounting period, and

(b) is carried forward to the chargeable accounting period under
section 62(5) (carry forward of UK property business loss to
be treated as loss of subsequent accounting period).

(10) 25“A non-banking or pre-2016 carried-forward overseas property loss”
means a loss which—

(a) was made by the company in an overseas property business
in a non-banking or pre-2016 accounting period, and

(b) is carried forward to the chargeable accounting period under
30section 66(3) (carry forward of overseas property business
loss against subsequent losses of that kind).

(11) “A non-banking or pre-2016 carried-forward excess capital
allowance on special leasing” means an amount of capital
allowance—

(a) 35to which the company was entitled for a non-banking or pre-
2016 accounting period, and

(b) which must be deducted under section 260 of CAA 2001
(special leasing: corporation tax, excess allowance) from
income of the company for the chargeable accounting period.

(12) 40“A non-banking or pre-2016 carried-forward miscellaneous loss”
means a loss which—

(a) was made by the company in a transaction within subsection
(2) of section 91 (relief for losses from miscellaneous
transactions) in a non-banking or pre-2016 accounting
45period, and

(b) is carried forward to the chargeable accounting period under
subsection (6) of that section (carry forward of miscellaneous
losses against miscellaneous income).

(13) “A non-banking or pre-2016 carried-forward capital loss” means an
allowable loss which—

(a) accrued to the company in a non-banking or pre-2016
accounting period, and

(b) 5is to be deducted under section 8(1)(b) of TCGA 1992
(deduction of allowable losses from previous accounting
periods) from the total amount of chargeable gains accruing
to the company in the chargeable accounting period.

(14) The company has “a non-banking or pre-2016 non-trading loss on
10intangible fixed assets” if it had a non-trading loss under section 751
of CTA 2009 (non-trading gains and losses) on intangible fixed assets
in the relevant accounting period.

(15) The “relevant accounting period” is—

(a) if in relation to any accounting period beginning on or after 1
15January 2016 the company was not a banking company, its
most recent non-banking accounting period, and

(b) in any other case, the company’s last pre-2016 accounting
period (if any).

(16) If all or part of the non-banking or pre-2016 non-trading loss on
20intangible fixed assets is carried forward as a non-trading debit to the
accounting period following the relevant accounting period under
section 753(3) of CTA 2009 (“the initially carried-forward debit”),
there is a “used amount”, for the chargeable accounting period, in
respect of that loss if—

(a) 25the initially carried-forward debit exceeds the aggregate of
any used amounts, for any previous chargeable accounting
periods, in respect of that loss, and

(b) there are any non-trading credits for the chargeable
accounting period or a non-trading loss on intangible fixed
30assets is to be set off against the company’s total profits for
that period under section 753(1) of that Act.

(17) If there is a used amount for the chargeable accounting period in
respect of the non-banking or pre-2016 non-trading loss on
intangible fixed assets it is to be calculated in accordance with
35subsections (18) and (19).

(18) If the remaining carried-forward debit for the chargeable accounting
period (see subsection (20)) does not exceed the aggregate of—

(a) any non-trading credits for that period, and

(b) any amount of non-trading loss on intangible fixed assets that
40is to be set off against the profits of the company for that
period under section 753(1) of CTA 2009,

the used amount, for that period, in respect of the non-banking or
pre-2016 non-trading loss on intangible fixed assets is equal to the
remaining carried-forward debit for that period.

(19) 45If the remaining carried-forward debit for the chargeable accounting
period exceeds the aggregate of any amounts within paragraph (a) or
(b) of subsection (18), the used amount, for that period, in respect of
the non-banking or pre-2016 non-trading loss on intangible fixed
assets is equal to the aggregate of those amounts.

(20) In subsections (16) to (19)—

• “non-trading credit” means a non-trading credit in respect of
  intangible fixed assets for the purposes of Part 8 of CTA 2009;

• “the remaining carried-forward debit”, in relation to the
  5chargeable accounting period, means the amount of the
  excess referred to in subsection (16)(a).

The surcharge allowance

269DD Surcharge allowance for banking company in a group containing
other banking companies

(1) 10This section makes provision as to the surcharge allowance of a
banking company for a chargeable accounting period where, at any
time in the period—

(a) the banking company is a member of a group, and

(b) one or more other banking companies are members of that
15group.

(2) The banking company’s surcharge allowance for the chargeable
accounting period is so much of its available surcharge allowance for
the period as it specifies in its company tax return as its surcharge
allowance for the period.

(3) 20The banking company’s “available surcharge allowance” for the
chargeable accounting period is the sum of—

(a) any amounts of group surcharge allowance allocated to the
company for the period in accordance with sections 269DE to
269DH, and

(b) 25the appropriate amount of non-group surcharge allowance of
the company for the period,

up to a limit of £25,000,000.

(4) The “appropriate amount of non-group surcharge allowance” of the
company, for the chargeable accounting period, is—

30

(5) If the chargeable accounting period is less than 12 months—

(a) the appropriate amount of non-group surcharge allowance,
and

(b) the limit in subsection (3),

40are proportionally reduced.

(6) The sum of—

(a) any amount specified under subsection (2) for the chargeable
accounting period, and