Finance Bill (HC Bill 47)

insert—

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

(1) This section applies where—

(a) VAT is chargeable on—

(i) 5the supply of goods or services to a specified person,

(ii) the 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) 10the supply, acquisition or importation is not for the purpose
of—

(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
15business.

(2) If 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.

20This is subject to subsection (3) below.

(3) A 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) 25A claim under subsection (2) above in respect of a supply, acquisition
or 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
30accounting period containing the last day of the financial year
in which the supply is made or the acquisition or importation
takes 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
35financial year in which the supply is made or the acquisition or
importation takes place.

(6) Subsection (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) 40a supply falling within subsection (1)(b)(ii) above,

cannot be conveniently distinguished from goods or services supplied
to, 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
45supply to, or acquisition or importation by, the specified person such
proportion of that VAT as appears to the Commissioners to be
attributable 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
savings.

(10) 5References 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.””

122 VAT: representatives and security

(1) Section 48 of VATA 1994 (VAT representatives) is amended in accordance with
10subsections (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) in paragraph (c) after “residence” insert “or permanent address”, and

(c) 15omit 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) appointed to act on the person’s behalf in relation to VAT, and

(b) 20registered 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
recovery of taxes etc) and Schedule 25 to that Act;

(b) 25section 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
“given a direction under subsection (1ZA)”,

(b) 30in 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) In subsection (4)—

(a) 35omit 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
registration as a VAT representative, in such
40circumstances 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) After 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) 5may be varied;

(c) continues 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) 10may specify a time by which it (or any part of it) must be
complied with;

(b) may be varied;

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

(11) 15After subsection (8) insert—

“(8A) For 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
20of residence or permanent address is in the United Kingdom.””

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

123 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 25Joint 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
marketplace, and

(b) fails to comply with any requirement imposed on P by or under
30this 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) stating that, unless the operator secures the result mentioned in
subsection (3), subsection (5) will apply, and

(b) 35explaining 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) the end of such period as may be specified in the notice, and

(b) the notice ceasing to have effect.

(4) 40If 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
amount 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
5ending—

(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
10that 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) 15the 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
  20which 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
  25marketplace.

(10) For the purposes of this section a person is “UK-established” if the
person is established in the United Kingdom within the meaning of
Article 10 of Implementing Regulation (EU) No 282/2011.

(11) The Treasury may by regulations provide that supplies made or goods
30offered for sale in circumstances specified in the regulations are, or are
not, to be treated for the purposes of this section as having been made
or offered through an online marketplace.

(12) The Treasury may by regulations amend this section so as to alter the
meaning of—

• 35“online marketplace”,

• “operator”, and

• “UK-established”.

77C Joint and several liability under section 77B: assessments

(1) The Commissioners may assess the amount of VAT due from the
40operator of an online marketplace by virtue of section 77B to the best of
their judgment and notify it to the operator.

(2) Subject to subsections (3) to (6), an assessment may be made for such
period or periods as the Commissioners consider appropriate.

(3) An assessment for any month may not be made after the end of—

(a) 452 years after the end of that month, or

(b) (if later) one year after evidence of facts, sufficient in the opinion
of the Commissioners to justify the making of an assessment for
that month, comes to their knowledge.

(4) Subsection (5) applies if, after the Commissioners have made an
5assessment for a period, evidence of facts sufficient in the opinion of the
Commissioners to justify the making of a further assessment for that
period comes to their knowledge.

(5) The Commissioners may, no later than one year after that evidence
comes to their knowledge, make a further assessment for that period
10(subject to subsection (6)).

(6) An assessment or further assessment for a month may not be made
more than 4 years after the end of the month.

(7) An amount which has been assessed and notified to a person under this
section is deemed to be an amount of VAT due from the person and
15may be recovered accordingly (unless, or except to the extent that, the
assessment is subsequently withdrawn or reduced).

(8) Subsection (7) is subject to the provisions of this Act as to appeals.

(9) Expressions used in this section and in section 77B have the same
meaning in this section as in section 77B.

77D 20Joint and several liability under section 77B: interest

(1) If an amount assessed under section 77C is not paid before the end of
the period of 30 days beginning with the day on which notice of the
assessment is given, the amount assessed carries interest from the day
on which the notice of assessment is given until payment.

(2) 25Interest under this section is payable at the rate applicable under
section 197 of the Finance Act 1996.

(3) Where the operator of an online marketplace is liable for interest under
this section the Commissioners may assess the amount due and notify
it to the operator.

(4) 30A notice of assessment under this section must specify a date (not later
than the date of the notice) to which the interest is calculated.

(5) A further assessment or assessments may be made under this section in
respect of any interest accrued after that date.

(6) An amount of interest assessed and notified to the operator of an online
35marketplace under this section is recoverable as if it were VAT due
from the operator (unless, or except to the extent that, the assessment is
withdrawn or reduced).

(7) Interest under this section is to be paid without any deduction of
income tax.

(8) 40Expressions used in this section and in section 77B have the same
meaning in this section as in section 77B.””

(3) In section 83(1) (appeals) after paragraph (ra) insert—

“(rb) an assessment under section 77C or the amount of such an
assessment;”.”

(4) In section 84 (further provision relating to appeals)—

(a) in subsection (3) after “(ra)” insert “, (rb)”, and

(b) in subsection (5) after “83(1)(p)” insert “or (rb)”.

124 VAT: Isle of Man charities

5In Schedule 6 to FA 2010 (charities etc), in paragraph 2(2) (jurisdiction
condition: meaning of “a relevant UK court”), after paragraph (c) (and on a new
line) insert “(and, for enactments relating to value added tax, includes the High
Court of the Isle of Man).”

125 VAT: women’s sanitary products

(1) 10VATA 1994 is amended as follows.

(2) In Schedule 7A (reduced rate)—

(a) in Part 1 (index), omit the entry relating to women’s sanitary products;

(b) in Part 2 (the Groups), omit Group 4 (women’s sanitary products).

(3) In Schedule 8 (zero-rating), in Part 1 (index), at the end insert—

(4) In Schedule 8, in Part 2 (the Groups), after Group 18 insert—

““Group 19 - women’s sanitary products

Item No.

The supply of women’s sanitary products.

20NOTES

(1) In this Group “women’s sanitary products” means women’s sanitary
products of any of the following descriptions—

(a) subject to Note (2), products that are designed, and marketed,
as being solely for use for absorbing, or otherwise collecting,
25lochia or menstrual flow;

(b) panty liners, other than panty liners that are designed as
being primarily for use as incontinence products;

(c) sanitary belts.

(2) Note (1)(a) does not include protective briefs or any other form of
30clothing.””

(5) The amendments made by this section have effect in relation to supplies made,
and acquisitions and importations taking place, on or after such day as the
Treasury may by regulations made by statutory instrument appoint.

Part 8 SDLT and ATED

Stamp duty land tax

126 SDLT: calculating tax on non-residential and mixed transactions

(1) 5Section 55 of FA 2003 (general rules on calculating the amount of stamp duty
land tax chargeable) is amended in accordance with subsections (2) to (7).

(2) In subsection (1) for “, (1C) and (2)” substitute “and (1C)”.

(3) In subsection (1B)—

(a) omit the words from “the relevant land” to “and”,

(b) 10in Step 1—

(i) for “Table A” substitute “the appropriate table”,

(ii) for “that Table” substitute “the appropriate table”,

(iii) at the end insert—

“The “appropriate table” is—

• 15Table A, if the relevant land consists entirely of
  residential property, and

• Table B, if the relevant land consists of or includes land
  that is not residential property.”, and

(c) after Table A insert—

20“Table B: Non-residential or mixed

(4) In subsection (1C)—

(a) omit the words from “the relevant land” to “and” (in the first place it
occurs),

(b) in Step 1—

(i) 30for “Table A” substitute “the appropriate table”,

(ii) for “that Table” substitute “the appropriate table”,

(iii) at the end insert—

“The “appropriate table” is—

• Table A, if the relevant land consists entirely of
  35residential property, and

• Table B, if the relevant land consists of or includes land
  that is not residential property.”

(5) Omit subsection (2).

(6) In subsection (3)—

(a) in the words before paragraph (a), for “subsections (1B) and (2)”
substitute “subsection (1B)”, and

(b) in paragraph (b) omit “, subject as follows”.

(7) In subsection (4)—

(a) 5in the words before paragraph (a), for the words from “subsections
(1C)” to “linked transactions” substitute “subsection (1C)”, and

(b) in paragraph (a) for “those” substitute “the linked”.

(8) Schedule 5 to FA 2003 (rules on calculating the amount of stamp duty land tax
chargeable in respect of transactions for which the consideration consists of or
10includes rent) is amended in accordance with subsections (9) to (11).

(9) In paragraph 2(3) (calculation of tax chargeable in respect of rent) in Table B
(bands and percentages for non-residential or mixed property) for the final
entry substitute—

(10) 20In paragraph 9 (tax chargeable in respect of consideration other than rent:
general), in sub-paragraph (1), omit “(but see paragraph 9A)”.

(11) Omit paragraph 9A (calculation of tax chargeable in respect of consideration
other than rent: 0% band) and the cross-heading preceding it.

(12) The amendments made by this section have effect in relation to any land
25transaction of which the effective date is, or is after, 17 March 2016.

(13) But those amendments do not have effect in relation to a transaction if the
purchaser so elects and either—

(a) the transaction is effected in pursuance of a contract entered into and
substantially performed before 17 March 2016, or

(b) 30the transaction is effected in pursuance of a contract entered into before
that date and is not excluded by subsection (15).

(14) An election under subsection (13)—

(a) must be included in the land transaction return made in respect of the
transaction or in an amendment of that return, and

(b) 35must comply with any requirements specified by the Commissioners
for Her Majesty’s Revenue and Customs as to its form or the manner of
its inclusion.

(15) A transaction effected in pursuance of a contract entered into before 17 March
2016 is excluded by this subsection if—

(a) 40there is any variation of the contract, or assignment of rights under the
contract, on or after 17 March 2016,

(b) the transaction is effected in consequence of the exercise on or after that
date of any option, right of pre-emption or similar right, or

(c) on or after that date there is an assignment, subsale or other transaction
relating to the whole or part of the subject-matter of the contract as a
result of which a person other than the purchaser under the contract
becomes entitled to call for a conveyance.

(16) 5In this section—

• “land transaction return”, in relation to a transaction, means the return
  under section 76 of FA 2003 in respect of that transaction;

• “purchaser” has the same meaning as in Part 4 of that Act (see section
  43(4) of that Act);

• 10“substantially performed”, in relation to a contract, has the same meaning
  as in that Part (see section 44(5) of that Act).

127 SDLT: higher rates for additional dwellings etc

(1) FA 2003 is amended in accordance with subsections (2) to (4).

(2) In section 55 (amount of tax chargeable: general) after subsection (4) insert—

“(4A) 15Schedule 4ZA (higher rates for additional dwellings and dwellings
purchased by companies) modifies this section as it applies for the
purpose of determining the amount of tax chargeable in respect of
certain transactions involving major interests in dwellings.””

(3) After Schedule 4 insert—

“20“Schedule 4ZA Stamp duty land tax: higher rates for additional dwellings and
dwellings purchased by companies

Part 1 Higher rates

1 (1) 25In its application for the purpose of determining the amount of tax
chargeable in respect of a chargeable transaction which is a higher
rates transaction, section 55 (amount of tax chargeable: general) has
effect with the modification in sub-paragraph (2).

(2) In subsection (1B) of section 55, for Table A substitute—

“30Table A: Residential

Part 2 Meaning of “higher rates transaction”

Meaning of “higher rates transaction” etc

2 (1) This paragraph explains how to determine whether a chargeable
10transaction is a “higher rates transaction” for the purposes of
paragraph 1.

(2) In the case of a transaction where there is only one purchaser,
determine whether the transaction falls within any of paragraphs 3
to 7; if it does fall within any of those paragraphs it is a “higher rates
15transaction” (otherwise it is not).

(3) In the case of a transaction where there are two or more purchasers—

(a) take one of the purchasers and determine, having regard to
that purchaser only, whether the transaction falls within any
of paragraphs 3 to 7, and

(b) 20do the same with each of the other purchasers.

If the transaction falls within any of those paragraphs when having
regard to any one of the purchasers it is a “higher rates transaction”
(otherwise it is not).

(4) For the purposes of this Schedule any term of years absolute or
25leasehold estate is not a “major interest” if its term does not exceed 7
years on the date of its grant.

Single dwelling transactions

3 (1) A chargeable transaction falls within this paragraph if—

(a) the purchaser is an individual,

(b) 30the main subject-matter of the transaction consists of a major
interest in a single dwelling (“the purchased dwelling”), and

(c) Conditions A to D are met.

(2) Condition A is that the chargeable consideration for the transaction
is £40,000 or more.

(3) 35Condition B is that on the effective date of the transaction the
purchased dwelling—

(a) is not subject to a lease upon which the main subject-matter
of the transaction is reversionary, or

(b) is subject to such a lease but the lease has an unexpired term
40of no more than 21 years.