Finance Bill (HC Bill 47)

Anti-avoidance

102 Anti-avoidance

(1) For the purposes of this section “avoidance arrangements” are arrangements
the main purpose, or one of the main purposes, of which is to secure that a
5person—

(a) benefits, or further benefits, from an entitlement to a levy allowance for
a tax year, or

(b) otherwise obtains an advantage in relation to apprenticeship levy.

(2) Subsection (3) applies where, in consequence of avoidance arrangements
10within subsection (1)(a) or (b), a person incurs a liability to pay secondary Class
1 contributions in a particular tax year (as opposed to another tax year).

(3) If the person would (apart from this subsection) obtain an advantage in
relation to apprenticeship levy as a result of incurring the liability at the time
mentioned in subsection (2), section 99 has effect as if the liability had been
15incurred when it would have been incurred but for the avoidance
arrangements.

(4) Subsection (6) applies where (apart from this section) a person (“P”)—

(a) would be in a position to use or make greater use of a levy allowance
for a tax year, in consequence of avoidance arrangements within
20subsection (1)(a), or

(b) would otherwise obtain an advantage in relation to apprenticeship levy
in consequence of avoidance arrangements within subsection (1)(a).

(5) But subsection (6) only applies so far as the advantage in relation to
apprenticeship levy cannot be counteracted under subsection (3).

(6) 25P is not entitled to a levy allowance for the tax year.

(7) In this section “arrangements” includes any agreement, understanding,
scheme, transaction or series of transactions (whether or not legally
enforceable).

(8) In this section a reference to “an advantage in relation to apprenticeship levy”
30includes a reference to—

(a) repayment or increased repayment of apprenticeship levy,

(b) avoidance or reduction of a charge, or an assessment, to the levy,

(c) avoidance of a possible assessment to the levy,

(d) deferral of a payment of, or advancement of a repayment of, the levy,
35and

(e) avoidance of an obligation to account for the levy.

(9) Sections 100 and 101 are to be ignored for the purpose of determining under
subsection (4) what the position would be apart from this section.

(10) In subsection (2) the reference to “a particular tax year” is to be read as
40including a reference to the period of 12 months beginning with 6 April 2016.

103 Application of other regimes to apprenticeship levy

(1) In section 318(1) of FA 2004 (disclosure of tax avoidance schemes:

interpretation), in the definition of “tax”, after paragraph (d) insert—

“(da) apprenticeship levy,”.”

(2) In section 206(3) of FA 2013 (taxes to which the general anti-abuse rule applies),
after paragraph (da) insert—

“(db) 5apprenticeship levy,”.”

(3) Part 4 of FA 2014 (follower notices and accelerated payments) is amended in
accordance with subsections (4) and (5).

(4) In section 200 (meaning of “relevant tax”), after paragraph (c) insert—

“(ca) apprenticeship levy,”.”

(5) 10In section 203 (meaning of “tax appeal”), after paragraph (e) insert—

“(ea) an appeal under section 113 of FA 2016 (apprenticeship levy:
appeal against an assessment),”.”

(6) Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended in
accordance with subsections (7) and (8).

(7) 15In section 253(6) (duty to notify the Commissioners: meaning of “tax return”),
after paragraph (d) insert—

“(da) a return under regulations made under section 104 of FA 2016
(apprenticeship levy);”.”

(8) In section 283(1) (interpretation), in the definition of “tax”, after paragraph (d)
20insert—

“(da) apprenticeship levy,”.”

Payment, collection and recovery

104 Assessment, payment etc

(1) The Commissioners may by regulations make provision about the assessment,
25payment, collection and recovery of apprenticeship levy.

(2) Regulations under subsection (1) may include—

(a) provision which applies, with or without modifications, provisions of
PAYE regulations;

(b) provision for combining any arrangements under the regulations with
30arrangements under PAYE regulations.

(3) Regulations under subsection (1) may—

(a) require payments to be made on account of apprenticeship levy;

(b) determine periods (“tax periods”) by reference to which payments are
to be made;

(c) 35make provision about the times at which payments are to be made and
methods of payment;

(d) require the amounts payable by reference to tax periods to be calculated
(and levy allowance to be taken into account) in the manner and on the
basis determined by or under the regulations;

(e) 40make provision for dealing with cases where such calculations lead to
overpayment of levy (by repayment or otherwise);

(f) make other provision about the recovery of overpayments of levy.

(4) Regulations under subsection (1) may make provision requiring persons to
make returns, including provision about—

(a) the periods by reference to which returns are to be made,

(b) the information to be included in returns,

(c) 5timing, and

(d) the form of, and method of making, returns.

(5) Regulations under subsection (1) may—

(a) authorise HMRC to assess to the best of their judgement amounts
payable by a person in respect of apprenticeship levy;

(b) 10make provision about the treatment of amounts so assessed, including
provision for treating such amounts as apprenticeship levy payable by
the person;

(c) make provision about the process of assessments.

(6) Regulations under subsection (1) may make, in relation to amounts of
15apprenticeship levy which have been repaid to a person and ought not to have
been repaid, any provision which may be made in relation to apprenticeship
levy payable by a person.

(7) Where—

(a) a repayment of apprenticeship levy has been increased in accordance
20with section 102 of FA 2009 (repayment interest), and

(b) the whole or part of the repayment has been paid to any person but
ought not to have been paid to the person,

any amount by which the repayment paid to the person ought not to have been
increased is to be treated for the purposes of regulations made by virtue of
25subsection (6) as if it were an amount of apprenticeship levy repaid to the
person which ought not to have been repaid.

(8) Regulations under subsection (1) may make provision for enabling the
repayment or remission of interest under section 101 of FA 2009.

(9) The provision that may be made under subsection (1) includes—

(a) 30provision for the making of decisions (other than relevant assessments)
by HMRC as to any matter required to be decided for the purposes of
the regulations and for appeals against such decisions;

(b) provision for appeals with respect to matters arising under the
regulations which would otherwise not be the subject of an appeal;

(c) 35provision for the way in which any matters provided for by the
regulations are to be proved.

(10) In subsection (9) “relevant assessment” means an assessment of amounts
payable by a person in respect of apprenticeship levy.

(11) Regulations under subsection (1) must not affect any right of appeal to the
40tribunal which a person would have apart from the regulations.

(12) In this section (except where the context requires otherwise) references to
payments are to payments of, or on account of, apprenticeship levy.

105 Recovery from third parties

(1) Regulations under section 104(1) may make corresponding provision for the
recovery of amounts in respect of apprenticeship levy from persons other than
the person liable to pay the amounts by virtue of section 98(3).

(2) 5In subsection (1) “corresponding provision” means provision which
corresponds to provision made by regulations under the Contributions and
Benefits Act for secondary Class 1 contributions in respect of any earnings to
be recovered from a person other than the secondary contributor.

106 Real time information

(1) 10Regulations under section 104(1) may make provision—

(a) for authorising or requiring relevant service providers to supply to
HMRC information about payments of apprenticeship levy with
respect to which their service is provided, or any information the
Commissioners may request about features of the service provided or
15to be provided with respect to particular payments of apprenticeship
levy;

(b) for requiring clients to provide relevant service providers with
information about payments of apprenticeship levy;

(c) for prohibiting or restricting the disclosure, otherwise than to HMRC,
20of information by a person to whom it was supplied pursuant to a
requirement imposed under paragraph (b);

(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) 25for requiring relevant service providers to take steps for facilitating the
meeting 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
30paragraph (e), or

(ii) specifying 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
35different cases or different classes of case.

(3) In 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;

• 40“payment of apprenticeship levy” includes a payment on account of
  apprenticeship 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.

107 Time limits for assessment

(1) The general rule is that no assessment under regulations under section 104 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
5about 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) An 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) 10A case falls within this subsection if it involves a loss of apprenticeship levy—

(a) brought about deliberately by the person,

(b) attributable 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
15to HMRC), or

(c) attributable to arrangements which were expected to give rise to a tax
advantage 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) 20An assessment made by virtue of section 104(6) (amounts of levy repaid which
ought not to have been repaid etc) is not out of time as a result of subsection (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) 25An 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
a loss brought about by another person acting on behalf of that person.

108 30No 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) otherwise recover the cost, or any part of the cost, of P’s (or any other
35person’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) In this section “relevant earner” means an earner in respect of whom P is or has
40been liable to pay any secondary Class 1 contributions under Part 1 of the
Contributions and Benefits Act.

109 Collectors and court proceedings

(1) The following provisions of Part 6 of TMA 1970 apply in relation to
apprenticeship 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
5payment and enforcement).

Information and penalties

110 Records

(1) The Commissioners may by regulations require persons—

(a) to keep for purposes connected with apprenticeship levy records of
10specified 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) 15by 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.

111 Information and inspection powers

20In Schedule 36 to FA 2008 (information and inspection powers), in paragraph
63(1), after paragraph (ca) insert—

“(cb) apprenticeship levy,”.”

112 Penalties

(1) Schedule 24 to FA 2007 (penalties for errors) is amended in accordance with
25subsections (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”
35insert—

• “““an apprenticeship levy return” means a return
  under regulations under section 104 of FA
  2016;”.”

(4) In paragraph 21C, after “capital gains tax)” insert “and amounts payable on
account 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) 5In the Table in paragraph 1, after item 4 insert—

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

(8) 10In the italic heading before paragraph 6B, at the end insert “and apprenticeship
levy”.

(9) Schedule 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) 20In 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
25regulations under section 105 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 (ca).”

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

“(ba) 30a payment under regulations under section 104 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
35in 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) Schedule 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

113 Appeals

(1) 5An appeal may be brought against an assessment of apprenticeship levy or
other amounts under regulations under section 104.

(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
10the assessment was given,

(c) to 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
15assessment to income tax.

General

114 Tax agents: dishonest conduct

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

“(la) 20apprenticeship levy,”.”

115 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,”.

116 25Crown application

This Part binds the Crown.

117 Charities which are “connected” with one another

(1) Two charities are connected with one another for the purposes of section 101(1)
if—

(a) 30they 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) 35a 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) a person (other than a charity regulator) has “control” of a charity
5which 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
other persons who are trustees of the charity and who are
10connected 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
of approval or direction in relation to the carrying out by the
15trustees of any of their functions.

(3) For the purposes of section 101(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) trustees of the other charity,

(b) 20persons 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) In determining if a person is connected with another person for the purposes
25of 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,
would not be a charity—

(a) 30B 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
101(1).

(6) In subsection (5) “control” has the same meaning as in Part 10 of CTA 2010 (see
sections 450 and 451 of that Act) (and a limited liability partnership is to be
35treated 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
inserted—

“(za) 40rights to a share of more than half the assets, or of more than
half the income, of C,”.”

118 Connection between charities: further provision

(1) This section applies if—

(a) a charity (“A”) is connected with another charity (“B”) for the purposes
45of section 101(1), and

(b) B is connected with another charity (“C”) for the purposes of section
101(1).

(2) A and C are also connected with one another for the purposes of section 101(1)
(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
5charity for the purposes of section 101(1) is to that charity being so
connected by virtue of section 117 or this section, and

(b) in paragraph (b) the reference to a charity being connected with another
charity for the purposes of section 101(1) is to that charity being so
connected by virtue of section 117.

119 10General interpretation

(1) In this Part (except where the contrary is indicated, expressly or by
implication), 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—

• 15“charity” has the meaning given by section 101(4) and (5);

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

• “company” has the meaning given by section 100(5);

• “the Contributions and Benefits Act” means the Social Security
  20Contributions 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;

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

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

120 Regulations

(1) Regulations under this Part—

(a) may make different provision for different purposes;

(b) 30may include incidental, consequential, supplementary or transitional
provision.

(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) 35Subsection (3) does not apply to a statutory instrument containing only
regulations under section 112(16).

Part 7 VAT

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

40In Part 2 of VATA 1994 (reliefs, exemptions and repayments), after section 33D