Finance (No. 2) Bill (HC Bill 155)

(d) for conferring power on the Commissioners to specify by directions
circumstances in which provision made by virtue of paragraph (a) or
(b) is not to apply in relation to a payment;

(e) for requiring relevant service providers to take steps for facilitating the
5meeting by clients of obligations imposed under paragraph (b);

(f) for requiring compliance with any directions the Commissioners may
give—

(i) specifying, or further specifying, steps for the purposes of
paragraph (e), or

(ii) 10specifying information that a person making payments of
apprenticeship levy must provide about the method by which
the payments are made.

(2) Directions made under the regulations may make different provision for
different cases or different classes of case.

(3) 15In this section—

• “client”, in relation to a relevant service provider, means a person to
  whom that relevant service provider provides or is to provide a service
  with respect to a payment of apprenticeship levy;

• “payment of apprenticeship levy” includes a payment on account of
  20apprenticeship levy;

• “relevant service provider” means a person who provides or is to provide
  with respect to payments of apprenticeship levy a service that is
  specified, or of a description specified, by the regulations.

97 Time limits for assessment

(1) 25The general rule is that no assessment under regulations under section 94 may
be made more than 4 years after the end of the tax year to which it relates.

(2) An assessment on a person in a case of loss of apprenticeship levy brought
about carelessly by the person may be made at any time not more than 6 years
after the end of the tax year to which it relates.

(3) 30An assessment on a person in a case falling within subsection (4) may be made
at any time not more than 20 years after the end of the tax year to which it
relates.

(4) A case falls within this subsection if it involves a loss of apprenticeship levy—

(a) brought about deliberately by the person,

(b) 35attributable to arrangements in respect of which the person has failed
to comply with an obligation under section 309, 310 or 313 of FA 2004
(obligation of parties to tax avoidance schemes to provide information
to HMRC), or

(c) attributable to arrangements which were expected to give rise to a tax
40advantage in respect of which the person was under an obligation to
notify the Commissioners under section 253 of FA 2014 (duty to notify
Commissioners of promoter reference number) but failed to do so.

(5) An assessment made by virtue of section 94(6) (amounts of levy etc repaid
which ought not to have been repaid) is not out of time as a result of subsection
45(1) if it is made before the end of the tax year following that in which the
amount assessed was repaid or paid (as the case may be).

(6) Subsections (2), (3) and (5) do not limit one another’s application.

(7) An objection to the making of an assessment on the ground that the time limit
for making it has expired may only be made on an appeal against the
assessment.

(8) In subsections (2) and (4) references to a loss brought about by a person include
5a loss brought about by another person acting on behalf of that person.

98 No deduction in respect of levy to be made from earnings

(1) A person (“P”) must not—

(a) make from any payment of earnings any deduction in respect of
apprenticeship levy for which P (or any other person) is liable,

(b) 10otherwise recover the cost, or any part of the cost, of P’s (or any other
person’s) liability to apprenticeship levy from any person who is or has
been a relevant earner, or

(c) enter into any agreement with any person to do anything prohibited by
paragraph (a) or (b).

(2) 15In this section “relevant earner” means an earner in respect of whom P is or has
been liable to pay any secondary Class 1 contributions under Part 1 of the
Contributions and Benefits Act.

99 Collectors and court proceedings

(1) The following provisions of Part 6 of TMA 1970 apply in relation to
20apprenticeship levy as they apply in relation to income tax—

(a) section 60 (issue of demand notes and receipts);

(b) section 61 (distraint by collectors: Northern Ireland);

(c) sections 65 to 68 (court proceedings).

(2) See also Chapter 5 of Part 7 of FA 2008 (which makes general provision about
25payment and enforcement).

Information and penalties

100 Records

(1) The Commissioners may by regulations require persons—

(a) to keep for purposes connected with apprenticeship levy records of
30specified matters, and

(b) to preserve the records for a specified period.

(2) A duty under regulations under this section to preserve records may be
discharged—

(a) by preserving them in any form and by any means, or

(b) 35by preserving the information contained in them in any form and by
any means, subject to any conditions or exceptions specified in writing
by the Commissioners.

(3) In this section “specified” means specified or described in the regulations.

101 Information and inspection powers

40In Schedule 36 to FA 2008 (information and inspection powers), in paragraph

63(1), after paragraph (ca) insert—

“(cb) apprenticeship levy,”.

102 Penalties

(1) Schedule 24 to FA 2007 (penalties for errors) is amended in accordance with
5subsections (2) to (4).

(2) In the Table in paragraph 1, after the entry relating to accounts in connection
with a partnership return insert—

(3) In paragraph 13—

(a) in sub-paragraph (1ZA), after “CIS returns,” insert “or for two or more
penalties relating to apprenticeship levy returns,”;

(b) in sub-paragraph (1ZD), after the entry relating to “a CIS return”
15insert—

• “““an apprenticeship levy return” means a return
  under regulations under section 94 of FA
  2016;”.

(4) In paragraph 21C, after “capital gains tax)” insert “and amounts payable on
20account of apprenticeship levy”.

(5) Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended in
accordance with subsections (6) to (8).

(6) In the Table in paragraph 1, after item 4 insert—

(7) In paragraph 6B, after “item 4” insert “or 4A”.

(8) In the italic heading before paragraph 6B, at the end insert “and apprenticeship
levy”.

(9) 30Schedule 56 to FA 2009 (penalty for failure to make payments on time) is
amended in accordance with subsections (10) to (15).

(10) In the Table in paragraph 1, after item 4 insert—

(11) In paragraph 3(1)—

(a) in paragraph (b) after “within” insert “item 4A or”;

(b) after paragraph (c) insert—

“(ca) an amount in respect of apprenticeship levy falling
within item 4A which is payable by virtue of
5regulations under section 95 of FA 2016 (recovery
from third parties).”

(12) In paragraph 5(1), for “or 4” substitute “, 4 or 4A”.

(13) In paragraph 5(2), for “or (c)” substitute “, (c) or (d).”

(14) In paragraph 6(2), after paragraph (b) insert—

“(ba) 10a payment under regulations under section 94 of FA 2016 of
an amount in respect of apprenticeship levy payable in
relation to the tax year;”.

(15) In the italic heading before paragraph 5, at the end insert “etc.”.

(16) The amendments made by subsections (1) to (4) of this section come into force
15in accordance with provision made by the Treasury by regulations.

(17) In subsections (2) and (4) of section 106 of FA 2009 (penalties for failure to make
returns: commencement etc) references to Schedule 55 to that Act have effect
as references to that Schedule as amended by subsections (5) to (8) of this
section.

(18) 20Schedule 56 to FA 2009, as amended by this section, is taken to come into force
for the purposes of apprenticeship levy on the date on which this Act is passed.

Appeals

103 Appeals

(1) An appeal may be brought against an assessment of apprenticeship levy or
25other amounts under regulations under section 94.

(2) Notice of appeal must be given—

(a) in writing,

(b) within the period of 30 days beginning with the date on which notice of
the assessment was given,

(c) 30to the officer of Revenue and Customs by whom notice of the
assessment was given.

(3) Part 5 of TMA 1970 (appeals and other proceedings) applies in relation to an
appeal under this section as it applies in relation to an appeal against an
assessment to income tax.

35General

104 Tax agents: dishonest conduct

In Schedule 38 to FA 2012 (tax agents: dishonest conduct), in paragraph 37(1),
after paragraph (l) insert—

“(la) apprenticeship levy,”.

105 Provisional collection of apprenticeship levy

In section 1 of the Provisional Collection of Taxes Act 1968 (temporary
statutory effect of House of Commons resolutions), in subsection (1), after
“diverted profits tax,” insert “the apprenticeship levy,”.

106 5Crown application

This Part binds the Crown.

107 Charities which are “connected” with one another

(1) Two charities are connected with one another for the purposes of section 91(1)
if—

(a) 10they are connected with one another in accordance with section 993 of
ITA 2007 (meaning of “connected persons”), and

(b) their purposes and activities are the same or substantially similar.

(2) In the application of section 993 of ITA 2007 for the purposes of subsection
(1)(a)—

(a) 15a charity which is a trust is to be treated as if it were a company (and
accordingly a person), including in this subsection;

(b) a charity which is a trust has “control” of another person if the trustees
(in their capacity as trustees of the charity) have, or any of them has,
control of the person;

(c) 20a person (other than a charity regulator) has “control” of a charity
which is a trust if—

(i) the person is a trustee of the charity and some or all of the
powers of the trustees of the charity could be exercised by the
person acting alone or by the person acting together with any
25other persons who are trustees of the charity and who are
connected with the person,

(ii) the person, alone or together with other persons, has power to
appoint or remove a trustee of the charity, or

(iii) the person, alone or together with other persons, has any power
30of approval or direction in relation to the carrying out by the
trustees of any of their functions.

(3) For the purposes of section 91(1) a charity which is a trust is also connected
with another charity which is a trust if at least half of the trustees of one of the
charities are—

(a) 35trustees of the other charity,

(b) persons who are connected with persons who are trustees of the other
charity, or

(c) a combination of both,

and the charities’ purposes and activities are the same or substantially similar.

(4) 40In determining if a person is connected with another person for the purposes
of subsection (2)(c)(i) or (3)(b), apply section 993 of ITA 2007 with the omission
of subsection (3) of that section (and without the modifications in subsection (2)
above).

(5) If a charity (“A”) controls a company (“B”) which, apart from this subsection,
45would not be a charity—

(a) B is to be treated as if it were a charity for the purposes of this Part, and

(b) A and B are connected with one another for the purposes of section
91(1).

(6) In subsection (5) “control” has the same meaning as in Part 10 of CTA 2010 (see
5sections 450 and 451 of that Act) (and a limited liability partnership is to be
treated as a company for the purposes of that Part as applied by this
subsection).

(7) For this purpose, where under section 450 of that Act “C” is a limited liability
partnership, subsection (3) of that section has effect as if before (a) there were
10inserted—

“(za) rights to a share of more than half the assets, or of more than
half the income, of C,”.

108 Connection between charities: further provision

(1) This section applies if—

(a) 15a charity (“A”) is connected with another charity (“B”) for the purposes
of section 91(1), and

(b) B is connected with another charity (“C”) for the purposes of section
91(1).

(2) A and C are also connected with one another for the purposes of section 91(1)
20(if that would not otherwise be the case).

(3) In subsection (1)—

(a) in paragraph (a) the reference to a charity being connected with another
charity for the purposes of section 91(1) is to that charity being so
connected by virtue of section 107 or this section, and

(b) 25in paragraph (b) the reference to a charity being connected with another
charity for the purposes of section 91(1) is to that charity being so
connected by virtue of section 107.

109 General interpretation

(1) In this Part (except where the contrary is indicated, expressly or by
30implication), expressions which are also used in Part 1 of the Contributions and
Benefits Act have the same meaning as in that Part.

(2) In this Part—

• “charity” has the meaning given by section 91(4) and (5);

• “the Commissioners” means the Commissioners for Her Majesty’s
  35Revenue and Customs;

• “the Contributions and Benefits Act” means the Social Security
  Contributions and Benefits Act 1992 or (as the case requires) the Social
  Security Contributions and Benefits (Northern Ireland) Act 1992;

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

• 40“tax year” means the 12 months beginning with 6 April in 2017 or any
  subsequent year;

• “tribunal” means the First-tier Tribunal or, where determined by or under
  Tribunal Procedure Rules, the Upper Tribunal.

110 Regulations

(1) Regulations under this Part—

(a) may make different provision for different purposes,

(b) may include incidental, consequential, supplementary or transitional
5provision.

(2) Regulations under this Part are to be made by statutory instrument.

(3) A statutory instrument containing regulations under this Part is subject to
annulment in pursuance of a resolution of the House of Commons.

(4) Subsection (3) does not apply to a statutory instrument containing only
10regulations under section 102(16).

Part 7 VAT

111 VAT: power to provide for persons to be eligible for refunds

In Part 2 of VATA 1994 (reliefs, exemptions and repayments), after section 33D
15insert—

“33E Power to extend refunds of VAT to other persons

(1) This section applies where—

(a) VAT is chargeable on—

(i) the supply of goods or services to a specified person,

(ii) 20the acquisition of any goods from another member State
by a specified person, or

(iii) the importation of any goods from a place outside the
member States by a specified person, and

(b) the supply, acquisition or importation is not for the purpose
25of—

(i) any business carried on by the person, or

(ii) a supply by the person which, by virtue of section 41A,
is treated as a supply in the course or furtherance of a
business.

(2) 30If and to the extent that the Treasury so direct, the Commissioners shall,
on a claim made by the specified person at such time and in such form
and manner as the Commissioners may determine, refund to the
person the amount of the VAT so chargeable.

This is subject to subsection (3) below.

(3) 35A specified person may not make a claim under subsection (2) above
unless it has been agreed with the Treasury that, in the circumstances
specified in the agreement, the amount of the person’s funding is to be
reduced by all or part of the amount of the VAT so chargeable.

(4) A claim under subsection (2) above in respect of a supply, acquisition
40or importation must be made on or before the relevant day.

(5) The “relevant day” is—

(a) in the case of a person who is registered, the last day on which
the person may make a return under this Act for the prescribed
accounting period containing the last day of the financial year
in which the supply is made or the acquisition or importation
5takes place;

(b) in the case of a person who is not registered, the last day of the
period of 3 months beginning immediately after the end of the
financial year in which the supply is made or the acquisition or
importation takes place.

(6) 10Subsection (7) applies where goods or services supplied to, or acquired
or imported by, a specified person otherwise than for the purpose of—

(a) any business carried on by the person, or

(b) a supply falling within subsection (1)(b)(ii) above,

cannot be conveniently distinguished from goods or services supplied
15to, or acquired or imported by, the person for such a purpose.

(7) The amount to be refunded under this section is such amount as
remains after deducting from the whole of the VAT chargeable on any
supply to, or acquisition or importation by, the specified person such
proportion of that VAT as appears to the Commissioners to be
20attributable to the carrying on of the business or (as the case may be) the
making of the supply.

(8) In this section, “specified person” means a person specified in an order
made by the Treasury.

(9) An order under subsection (8) may make transitional provision or
25savings.

(10) References in this section to VAT do not include any VAT which, by
virtue of an order under section 25(7), is excluded from credit under
section 25.”

112 VAT: representatives and security

(1) 30Section 48 of VATA 1994 (VAT representatives) is amended in accordance with
subsections (2) to (11).

(2) In the heading, at the end insert “and security”.

(3) In subsection (1)—

(a) for “Where” substitute “Subsection (1ZA) applies where”,

(b) 35in paragraph (c) after “residence” insert “or permanent address”, and

(c) omit the words after paragraph (c).

(4) After subsection (1) insert—

“(1ZA) The Commissioners may direct the person to secure that there is a UK-
established person who is—

(a) 40appointed to act on the person’s behalf in relation to VAT, and

(b) registered against the name of the person in accordance with
any regulations under subsection (4).”

(5) In subsection (1B) for paragraphs (a) and (b) substitute—

“(a) section 87 of the Finance Act 2011 (mutual assistance for
45recovery of taxes etc) and Schedule 25 to that Act;

(b) section 173 of the Finance Act 2006 (international tax
enforcement arrangements);”.

(6) In subsection (2)—

(a) in paragraph (a), for the words from “required” to “VAT” substitute
5“given a direction under subsection (1ZA)”,

(b) in paragraph (b) for “that subsection” substitute “subsection (1)”, and

(c) in the words after paragraph (b), for “another” substitute “a UK-
established”.

(7) In subsection (2A) for “(1)” substitute “(1ZA)”.

(8) 10In subsection (4)—

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

(b) after paragraph (b) insert—

“(c) give the Commissioners power to refuse to register a
person as a VAT representative, or to cancel a person’s
15registration as a VAT representative, in such
circumstances as may be specified in the regulations.”

(9) In subsection (7) for the words from the beginning to the first “him” substitute
“The Commissioners may require a person in relation to whom the conditions
specified in paragraphs (a), (b) and (c) of subsection (1) are satisfied”.

(10) 20After subsection (7A) insert—

“(7B) A direction under subsection (1ZA)—

(a) may specify a time by which it (or any part of it) must be
complied with;

(b) may be varied;

(c) 25continues to have effect (subject to any variation) until it is
withdrawn or the conditions specified in subsection (1) are no
longer satisfied.

(7C) A requirement under subsection (7)—

(a) may specify a time by which it (or any part of it) must be
30complied with;

(b) may be varied;

(c) continues to have effect (subject to any variation) until it is
withdrawn.”

(11) After subsection (8) insert—

“(8A) 35For the purposes of subsections (1ZA) and (2)—

(a) a person is UK-established if the person is established, or has a
fixed establishment, in the United Kingdom, and

(b) an individual is also UK-established if the person’s usual place
of residence or permanent address is in the United Kingdom.”

(12) 40In paragraph 19 of Schedule 3B to VATA 1994 for “(1)” substitute “(1ZA)”.

113 VAT: joint and several liability of operators of online marketplaces

(1) VATA 1994 is amended in accordance with subsections (2) to (4).

(2) After section 77A insert—

“77B Joint and several liability: operators of online marketplaces

(1) This section applies where a person (“P”) who is not UK-established—

(a) makes taxable supplies of goods through an online
5marketplace, and

(b) fails to comply with any requirement imposed on P by or under
this Act (whether or not it relates to those supplies).

(2) The Commissioners may give the person who is the operator of the
online marketplace (“the operator”) a notice—

(a) 10stating that, unless the operator secures the result mentioned in
subsection (3), subsection (5) will apply, and

(b) explaining the effect of subsection (5).

(3) The result referred to in subsection (2)(a) is that P does not offer goods
for sale through the online marketplace at any time between—

(a) 15the end of such period as may be specified in the notice, and

(b) the notice ceasing to have effect.

(4) If the operator does not secure the result mentioned in subsection (3),
subsection (5) applies.

(5) The operator is jointly and severally liable to the Commissioners for the
20amount of VAT payable by P in respect of all taxable supplies of goods
made by P through the online marketplace in the period for which the
notice has effect.

(6) A notice under subsection (2) (“the liability notice”) has effect for the
period beginning with the day after the day on which it is given, and
25ending—

(a) with the day specified in a notice given by the Commissioners
under subsection (7), or

(b) in accordance with subsection (8).

(7) The Commissioners may at any time give the operator a notice stating
30that the period for which the liability notice has effect ends with the day
specified in the notice.

(8) If the person to whom the liability notice is given ceases to be the
operator of the online marketplace, the liability notice ceases to have
effect at the end of—

(a) 35the day on which the person ceases to be the operator, or

(b) (if later) the day on which the person notifies the
Commissioners that the person is no longer the operator.

(9) In this section—

• “online marketplace” means a website, or any other means by
  40which information is made available over the internet, through
  which persons other than the operator are able to offer goods for
  sale (whether or not the operator also does so);

• “operator”, in relation to an online marketplace, means the person
  who controls access to, and the contents of, the online
  45marketplace.