Case C-273/11 (b)Mecsek-Gabona Kft v Nemzeti Adó- és Vámhivatal
Dél-dunántúli Regionális Adó Főigazgatósága (denial of right to
zero rate),

as developed or extended by that Court (whether before or after the
5coming into force of this section) in other cases relating to the denial or
refusal of a VAT right in order to prevent abuses of the VAT system.

(7) The penalty payable under this section is 30% of the potential lost VAT.

(8) The potential lost VAT is—

(a) the additional VAT which becomes payable by T as a result of
10the denial decision,

(b) the VAT which is not repaid to T as a result of that decision, or

(c) in a case where as a result of that decision VAT is not repaid to
T and additional VAT becomes payable by T, the aggregate of
the VAT that is not repaid and the additional VAT.

(9) 15Where T is liable to a penalty under this section the Commissioners
may assess the amount of the penalty and notify it to T accordingly.

(10) No assessment of a penalty under this section may be made more than
two years after the denial decision is issued.

(11) The assessment of a penalty under this section may be made
20immediately after the denial decision is made (and notice of the
assessment may be given to T in the same document as the notice of the
decision).

(12) Where by reason of actions involved in making a claim to exercise or
rely on a VAT right in relation to a supply T—

(a) 25is liable to a penalty for an inaccuracy under paragraph 1 of
Schedule 24 to the Finance Act 2007 for which T has been
assessed (and the assessment has not been successfully
appealed against by T or withdrawn), or

(b) is convicted of an offence (whether under this Act or otherwise),

30those actions do not give rise to liability to a penalty under this section.

69D Penalties under section 69C: officers’ liability

(1) Where—

(a) a company is liable to a penalty under section 69C, and

(b) the actions of the company which give rise to that liability were
35attributable to an officer of the company (“the officer”),

the officer is liable to pay such portion of the penalty (which may be
equal to or less than 100%) as HMRC may specify in a notice given to
the officer (a “decision notice”).

(2) Before giving the officer a decision notice HMRC must—

(a) 40inform the officer that they are considering doing so, and

(b) afford the officer the opportunity to make representations about
whether a decision notice should be given or the portion that
should be specified.

(3) A decision notice—

(a) may not be given before the amount of the penalty due from the
company has been assessed (but it may be given immediately
after that has happened), and

(b) may not be given more than two years after the denial decision
5relevant to that penalty was issued.

(4) Where the Commissioners have specified a portion of the penalty in a
decision notice given to the officer—

(a) section 70 applies to the specified portion as to a penalty under
section 69C,

(b) 10the officer must pay the specified portion before the end of the
period of 30 days beginning with the day on which the notice is
given,

(c) section 76(9) applies as if the decision notice were an assessment
notified under section 76, and

(d) 15a further decision notice may be given in respect of a portion of
any additional amount assessed in an additional assessment.

(5) HMRC may not recover more than 100% of the penalty through issuing
decision notices in relation to two or more persons.

(6) A person is not liable to pay an amount by virtue of this section if the
20actions of the company concerned are attributable to the person by
reference to conduct for which the person has been convicted of an
offence.

In this subsection “conduct” includes omissions.

(7) In this section “company” means a body corporate or unincorporated
25association but does not include a partnership, a local authority or a
local authority association.

(8) In its application to a body corporate other than a limited liability
partnership “officer” means—

(a) a director (including a shadow director within the meaning of
30section 251 of the Companies Act 2006),

(b) a manager, or

(c) a secretary.

(9) In in its application to a limited liability partnership “officer” means a
member.

(10) 35In its application in any other case, “officer” means—

(a) a director,

(b) a manager,

(c) a secretary, or

(d) any other person managing or purporting to manage any of the
40company’s affairs.

69E Publication of details of persons liable to penalties under section 69C

(1) The Commissioners may publish information about a person if—

(a) in consequence of an investigation the person has been found
liable to one or more penalties under section 69C (the amount of
45which has been assessed), and

(b) the potential lost VAT in relation to the penalty (or the
aggregate of the potential lost VAT in relation to each of the
penalties) exceeds £50,000.

(2) The information that may be published under subsection (1) is—

(a) 5the person’s name (including any trading name, previous name
or pseudonym),

(b) the person’s address (or registered office),

(c) the nature of any business carried on by the person,

(d) the amount of the penalty or penalties in question,

(e) 10the periods or times to which the actions giving rise to the
penalty or penalties relate,

(f) any other information that the Commissioners consider it
appropriate to publish in order to make clear the person’s
identity.

(3) 15In a case where—

(a) the requirements in subsection (1)(a) and (b) are met in relation
to a penalty or penalties for which a company is liable,

(b) information about the company is published by virtue of this
section,

(c) 20a person (“the officer”) has been given a decision notice under
section 69D specifying a portion of the penalty (or, if there is
more than one penalty, of any of the penalties) payable by the
company as a portion which the officer is liable to pay, and

(d) the amount (or, if the decision notice specifies portions of more
25than one penalty, the aggregate amount) which the officer is
liable to pay under the decision notice exceeds £25, 000,

the Commissioners may publish information about the officer.

(4) The information that may be published under subsection (3) is—

(a) the officer’s name,

(b) 30the officer’s address,

(c) the officer’s position (or former position) in the company,

(d) the amount of any penalty imposed on the company of which a
portion is payable by the officer under the decision notice and
the portion so payable,

(e) 35the periods or times to which the actions giving rise to any such
penalty relate,

(f) any other information that the Commissioners consider it
appropriate to publish in order to make clear the officer’s
identity.

(5) 40Information published under this section may be published in any
manner that the Commissioners consider appropriate.

(6) Before publishing any information under this section the
Commissioners must—

(a) inform the person or officer to which it relates that they are
45considering doing so (in the case of an officer, on the
assumption that they publish information about the company),
and

(b) afford the person or officer the opportunity to make
representations about whether it should be published.

(7) No information may be published under subsection (1) before the day
on which the penalty becomes final or, where more than one penalty is
involved, the latest day on which any of the penalties becomes final.

(8) No information may be published under subsection (1) for the first time
5after the end of the period of one year beginning with that day.

(9) No information may be published under subsection (3) before
whichever is the later of—

(a) the day mentioned in subsection (7), and

(b) the day on which the decision notice given to the officer
10becomes final.

(10) No information may be published under subsection (3) for the first time
after the end of the period of one year beginning with the later of the
two days mentioned in subsection (9).

(11) No information may be published (or continue to be published) under
15subsection (1) or (3) after the end of the period of three years beginning
with the day mentioned in subsection (7).

(12) For the purposes of this section a penalty or a decision notice becomes
final when the time for any appeal or further appeal relating to it
expires or, if later, any appeal or final appeal relating to it is finally
20determined.

(13) The Treasury may by regulations made by statutory instrument—

(a) amend subsection (1) to vary the amount for the time being
specified in paragraph (b), or

(b) amend subsection (3) to vary the amount for the time being
25specified in paragraph (d).

(14) A statutory instrument containing regulations under subsection (13) is
subject to annulment in pursuance of a resolution of the House of
Commons.””

(3) In section 70 (mitigation of penalties)—

(a) 30in the heading, for “and 67” substitute “67, 69A and 69C”,

(b) in subsection (1) for “or 69A” substitute “69A or 69C”, and

(c) after subsection (4) insert—

“(5) In the application of subsections (3) and (4) in relation to a
penalty under section 69C, subsection (4) has effect with the
35omission of paragraphs (b) and (c).””

(4) In section 76 (assessment of amounts due by way of penalty etc), in subsection
(1)(b) for “to 69B” (in both places) substitute “to 69C”.

(5) In section 83(1) (appeals), after paragraph (n) insert—

“(na) any liability to a penalty under section 69C, any assessment of a
40penalty under that section or the amount of such an assessment;

(nb) the giving of a decision notice under section 69D or the portion
of a penalty assessed under section 69C which is specified in
such a notice;”.”

(6) After paragraph 21 of Schedule 24 to FA 2007 (penalties for errors: double

jeopardy) insert—

“21ZA (1) A person is not liable to a penalty under paragraph 1 in respect of
an inaccuracy if—

(a) the inaccuracy involves a claim by the person to exercise or
5rely on a VAT right (in relation to a supply) that has been
denied or refused by HMRC as mentioned in subsection (4)
of section 69C of VATA 1994, and

(b) the person has been assessed to a penalty under that section
(and the assessment has not been successfully appealed
10against or withdrawn).

(2) In sub-paragraph (1)(a) “VAT right” has the same meaning as in
section 69C of VATA 1994.””

(7) Section 69C does not apply in relation to transactions entered into before this
section comes into force.

15Customs enforcement powers

130 Power to enter premises and inspect goods

(1) Section 24 of FA 1994 (power to enter premises and inspect goods) is amended
as follows.

(2) The existing text becomes subsection (1).

(3) 20In that subsection—

(a) at the beginning insert “This section applies”;

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

(4) After that subsection insert—

“(2) The officer may at any reasonable time enter and inspect the premises.

(3) 25The officer may inspect, examine and take account of any goods found
on the premises.

(4) The officer may require a relevant person to provide any assistance that
is reasonable for the purpose of exercising the power in subsection (3).

(5) For example, the officer may require a relevant person to move, open
30or unpack goods and containers.

(6) The officer may, for the purpose of exercising the power in subsection
(3)—

(a) move, open, or unpack goods and containers;

(b) search containers and anything in them;

(c) 35mark goods and containers.

(7) The Commissioners are not to bear any costs incurred by a relevant
person in complying with a requirement under subsection (4).

(8) But the Commissioners are to bear the costs of anything done by the
officer under subsection (6).

(9) 40In this section “relevant person” means—

(a) the person to whom this Chapter applies;

(b) the occupier of the premises;

(c) a person who has (or appears to have) possession or control of
the goods;

(d) a person who is (or appears to be) acting on behalf of a person
5within any of paragraphs (a) to (c).

(10) Section 159(2) of the Customs and Excise Management Act 1979
(examinations of goods to be at a place appointed by the
Commissioners) does not apply to an examination under subsection
(3).””

131 10Power to search vehicles or vessels

In section 163 of CEMA 1979 (power to search vehicles or vessels), after
subsection (1) insert—

“(1A) The officer, constable or member may use reasonable force if necessary
for the purpose of exercising the power in subsection (1).””

15Information

132 Data-gathering from money service businesses

(1) In Part 2 of Schedule 23 to FA 2011 (data-gathering powers: relevant data-
holders), after paragraph 13C insert—

““Money service businesses

13D (1) 20A person is a relevant data-holder if the person—

(a) carries on any of the activities in sub-paragraph (2) by way of
business,

(b) is a person to whom the Money Laundering Regulations 2007
(S.I. 2007/2157S.I. 2007/2157) apply, and

(c) 25is not an excluded credit institution.

(2) The activities referred to in sub-paragraph (1)(a) are—

(a) operating a currency exchange office;

(b) transmitting money (or any representation of monetary
value) by any means;

(c) 30cashing cheques which are made payable to customers.

(3) An excluded credit institution is a credit institution which has
permission to carry on the regulated activity of accepting deposits—

(a) under Part 4A of the Financial Services and Markets Act 2000
(permission to carry on regulated activities), or

(b) 35resulting from Part 2 of Schedule 3 to that Act (exercise of
passport rights by EEA firms).

(4) Sub-paragraph (3) is to be read with section 22 of and Schedule 2 to
the Financial Services and Markets Act 2000, and any order under
that section (classes of regulated activities).

(5) 40In this paragraph “credit institution” has the meaning given by
Article 4.1(1) of Regulation (EU) No 575/2013 of the European

Parliament and of the Council of 26 June 2013 on prudential
requirements for credit institutions and investment firms.””

(2) This section applies in relation to relevant data with a bearing on any period
(whether before, on or after the day on which this Act is passed).

5Part 6 Final

133 Northern Ireland welfare payments: updating statutory reference

In section 44(2) of FA 2016 (tax treatment of supplementary welfare payments:
Northern Ireland) for “the Housing Benefit (Amendment) Regulations
10(Northern Ireland) 2016 (S.R. (N.I.) 2016 No. 258(N.I.) 2016 No. 258)” substitute “the Housing
Benefit (Amendment No. 2) Regulations (Northern Ireland) 2016 (S.R. (N.I.)
2016 No. 3262016 No. 326)”.

134 Interpretation

In this Act the following abbreviations are references to the following Acts.

135 Short title

This Act may be cited as the Finance Act 2017.

SCHEDULES

Section 7

SCHEDULE 1 Workers’ services provided to public sector through intermediaries

Part 1 5Preliminary amendments

1 ITEPA 2003 is amended as follows.

2 In section 48 (scope of Chapter 8 of Part 2: workers’ services provided
through intermediaries)—

(a) in subsection (1), after “through an intermediary” insert “, but not
10where the services are provided to a public authority”, and

(b) after subsection (2) insert—

“(3) In this Chapter “public authority” has the same meaning as in
Chapter 10 of this Part (see section 61L).””

3 In section 49(1) (engagements to which Chapter applies), after paragraph (a)
15insert—

“(aa) the client is not a public authority,”.”

4 In section 52(2)(b) and (c) (conditions of liability under Chapter 8 where
intermediary is a partnership), for “this Chapter” substitute “one or other of
this Chapter and Chapter 10”.

5 20In section 61(1) (interpretation of Chapter 8), before the definition of
“engagement to which this Chapter applies” insert—

• “““engagement to which Chapter 10 applies” has the meaning
  given by section 61M(5);”.”

6 In section 61A (scope of Chapter 9 of Part 2: workers’ services provided by
25managed service companies), after subsection (2) insert—

“(3) See also section 61D(4A)(disapplication of this Chapter if Chapter 10
applies).””

7 In section 61D (deemed earnings where worker’s services provided by
managed service company), after subsection (4) insert—

“(4A) 30This section does not apply where the provision of the relevant
services gives rise (directly or indirectly) to an engagement to which
Chapter 10 applies, and for this purpose it does not matter whether
the client is also “the client” for the purposes of section 61M(1).””

8 In section 61J(1) (interpretation of Chapter 9), before the definition of

“managed service company” insert—

• “““engagement to which Chapter 10 applies” has the meaning
  given by section 61M(5),”.”

Part 2 5New Chapter 10 of Part 2 of ITEPA 2003

9 In Part 2 of ITEPA 2003 (employment income: charge to tax), after Chapter 9
insert—

““Chapter 10

Workers’ services provided to public sector through intermediaries

61K Scope of this Chapter

(1) This Chapter has effect with respect to the provision of services to a
10public authority through an intermediary.

(2) Nothing in this Chapter—

(a) affects the operation of Chapter 7 of this Part (agency
workers), or

(b) applies to payments or transfers to which section 966(3) or (4)
15of ITA 2007 applies (visiting performers: duty to deduct and
account for sums representing income tax).

61L Meaning of “public authority”

(1) In this Chapter “public authority” means—

(a) a public authority as defined by the Freedom of Information
20Act 2000,

(b) a Scottish public authority as defined by the Freedom of
Information (Scotland) Act 2002 (asp 13)2002 (asp 13),

(c) the Corporate Officer of the House of Commons,

(d) the Corporate Officer of the House of Lords,

(e) 25the National Assembly for Wales Commission, or

(f) the Northern Ireland Assembly Commission.

(2) An authority within paragraph (a) or (b) of subsection (1) is a public
authority for the purposes of this Chapter in relation to all its
activities even if provisions of the Act mentioned in that paragraph
30do not apply to all information held by the authority.

61M Engagements to which Chapter applies

(1) Sections 61N to 61R apply where—

(a) an individual (“the worker”) personally performs, or is under
an obligation personally to perform, services for another
35person (“the client”),

(b) the client is a public authority,

(c) the services are provided not under a contract directly
between the client and the worker but under arrangements
involving a third party (“the intermediary”), and

(d) 40the circumstances are such that—