Finance (No. 2) Bill (HL Bill 156)

(b) sub-paragraphs (2) to (5) apply for the purposes of calculating the
amount of the quasi-loan that is outstanding at the relevant time (as
defined in paragraph 11(4)).

(2) The initial debt amount, in relation to the quasi-loan, is an amount equal to
5the total of—

(a) the value in sterling, at the reference date, of the acquired debt, and

(b) the value in sterling, at the reference date, of any additional debt.

(3) The “reference date”, in relation to a right within sub-paragraph (2)(a) or
(2)(b), means the date on which P acquires it.

(4) 10The repayment amount, in relation to the quasi-loan, is an amount equal to
the total of—

(a) the amount of the initial debt amount that has been repaid in sterling,
and

(b) where payments are made, in a currency other than sterling, by way
15of repayment of the initial debt amount, the amount equal to the
sterling value of the payments.

(5) The “sterling value” of a payment is its value in sterling on the date it is
made.

Meaning of “approved fixed term loan”

15 (1) 20A loan is an “approved fixed term loan” on 5 April 2019 if, at any time on
that day, it is a qualifying loan which has been approved by an officer of
Revenue and Customs in accordance with paragraph 16.

(2) A loan is a “qualifying loan” if—

(a) the loan was made before 9 December 2010,

(b) 25the term of the loan cannot exceed 10 years, and

(c) it is not an excluded loan under sub-paragraph (3).

(3) A loan is an excluded loan if, at any time after the loan was made—

(a) the loan has been replaced, directly or indirectly, by another loan, or

(b) the terms of the loan have been altered so as—

(i) 30to meet the condition in sub-paragraph (2)(b), or

(ii) to postpone the date by which, under the terms of the loan,
the whole of the loan must be repaid.

Approval: application to HMRC

16 (1) A person may make an application to the Commissioners for Her Majesty’s
35Revenue and Customs for approval of a qualifying loan made to T.

(2) An officer of Revenue and Customs may grant such an application if
satisfied that, in relation to the loan—

(a) the qualifying payments condition is met (see paragraph 17), or

(b) the commercial terms condition is met (see paragraph 18).

(3) 40Subject to sub-paragraph (4), an application may be made in 2018.

(4) An application may be made after 2018 if an officer of Revenue and Customs
considers it reasonable in all the circumstances for a late application to be
made.

(5) An application for an approval must be made in such form and manner, and
contain such information, as may be specified by, or on behalf of, the
Commissioners for Her Majesty’s Revenue and Customs.

(6) An officer of Revenue and Customs must notify the applicant of the decision
5on an application.

Approval: qualifying payments condition

17 (1) The qualifying payments condition is met in relation to a qualifying loan if,
during the relevant period—

(a) payments have been made in respect of the repayment of the
10principal of the loan, and

(b) the payments have been made at intervals not exceeding 53 weeks.

(2) The “relevant period” in relation to a loan is the period beginning with the
making of the loan and ending with the making of the application.

Approval: commercial terms condition

18 (1) 15The commercial terms condition is met in relation to a qualifying loan if—

(a) either—

(i) it is reasonable to assume that, had the qualifying loan been
made in the ordinary course of a lending business, loans on
terms comparable to those of the qualifying loan would have
20been available to members of the public, or

(ii) the qualifying loan was made in the ordinary course of a
lending business; and

(b) the borrower has, in all material respects, complied with the terms of
the loan.

(2) 25For the purposes of sub-paragraph (1), a loan is made in the ordinary course
of a lending business if it is made by a person in the ordinary course of a
business carried on by the person which includes—

(a) the lending of money, or

(b) the supplying of goods or services on credit.

30Accelerated payments

19 (1) Paragraph 20(1) applies where—

(a) section 23E of ITTOIA 2005 would (ignoring paragraph 20) apply in
relation to a relevant benefit arising to T,

(b) the relevant benefit is a loan or quasi-loan in relation to which
35paragraph 1(2) applies,

(c) an accelerated payment notice, or a partner payment notice, relating
to a relevant charge (the “accelerated payment notice”) has been
given under Chapter 3 of Part 4 of FA 2014,

(d) T makes a payment (the “accelerated payment”) in respect of the
40understated or disputed tax to which the notice relates,

(e) the accelerated payment is made on or before the relevant date, and

(f) the amount of the loan or quasi-loan that, at the end of the relevant
date, is outstanding for the purposes of paragraph 1 (see paragraphs
3 to 14) is equal to or less than the amount of the accelerated
45payment.

(2) In sub-paragraph (1)(c), “relevant charge” means a charge to tax under
section 23E of ITTOIA 2005 arising by reason of a relevant benefit which
arises to T in pursuance of the relevant arrangement in pursuance of which
the relevant benefit mentioned in sub-paragraph (1)(a) and (b) arises.

(3) 5In sub-paragraph (1)(e) and (f), “the relevant date” means—

(a) the approved repayment date, if the relevant benefit is an approved
fixed term loan on 5 April 2019, or

(b) 5 April 2019, in any other case.

20 (1) T may make an application to the Commissioners for Her Majesty’s Revenue
10and Customs to be treated—

(a) as if the relevant benefit mentioned in paragraph 19(1)(a) and (b)
arises only if the condition in sub-paragraph (2) is met, and

(b) as if it arises immediately before the end of the 30 days beginning
with the date on which the condition in sub-paragraph (2) becomes
15met.

(2) The condition is that, on the withdrawal of the accelerated payment notice
or on the determination of an appeal, any part of the accelerated payment is
repaid.

(3) Subject to sub-paragraph (4), an application under sub-paragraph (1) may be
20made in 2018.

(4) An application may be made after 2018 if an officer of Revenue and Customs
considers it reasonable in all the circumstances for a late application to be
made.

(5) An application must be made in such form and manner, and contain such
25information, as may be specified by, or on behalf of, the Commissioners for
Her Majesty’s Revenue and Customs.

(6) An officer of Revenue and Customs must notify the applicant of the decision
on an application under this paragraph.

Section 57

SCHEDULE 19 30VAT: zero-rating of adapted motor vehicles etc

Adaptation of a qualifying motor vehicle

1 (1) In Schedule 8 to VATA 1994 (zero-rating), Group 12 (drugs, medicines, aids
for the handicapped etc) is amended as follows.

(2) For item 2A substitute—

“2A (1) 35The supply of a motor vehicle (other than a motor vehicle capable
of carrying more than 12 persons including the driver) to a person
(“P”) if—

(a) the motor vehicle is a qualifying motor vehicle by virtue of
paragraph (2) or (3),

(b) 40P is a disabled person to whom paragraph (4) applies, and

(c) the vehicle is supplied for domestic or P’s personal use.

(2) A motor vehicle is a “qualifying motor vehicle” by virtue of this
paragraph if it is designed to enable a person to whom paragraph
(4) applies to travel in it.

(3) A motor vehicle is a “qualifying motor vehicle” by virtue of this
5paragraph if—

(a) it has been substantially and permanently adapted to
enable a person to whom paragraph (4) applies to travel in
it, and

(b) the adaptation is necessary to enable P to travel in it.

(4) 10This paragraph applies to a disabled person—

(a) who usually uses a wheelchair, or

(b) who is usually carried on a stretcher.

2B (1) The supply of a qualifying motor vehicle (other than a motor
vehicle capable of carrying more than 12 persons including the
15driver) to a charity for making available, by sale or otherwise to a
person to whom paragraph (3) applies, for domestic or the
person’s personal use.

(2) A motor vehicle is a “qualifying motor vehicle” for the purposes of
this item if it is designed or substantially and permanently
20adapted to enable a disabled person to whom paragraph (3)
applies to travel in it.

(3) This paragraph applies to a disabled person—

(a) who usually uses a wheelchair, or

(b) who is usually carried on a stretcher.””

25Three year rule, reporting and certification

2 In Schedule 8 to VATA 1994, in Group 12—

(a) omit Note (5L), and

(b) before Note (6) insert—

“(5M) For the purposes of Notes (5N) to (5S), the supply of a
30motor vehicle is a “relevant supply” if it is a supply of
goods (which is made in the United Kingdom).

(5N) In the case of a relevant supply of a motor vehicle to a
disabled person (“the new supply”), items 2(f) and 2A do
not apply if, in the period of 3 years ending with the day
35on which the motor vehicle is made available to the
disabled person—

(a) a reckonable zero-rated supply of another motor
vehicle has been made to that person, or

(b) that person has made a reckonable zero-rated
40acquisition, or reckonable zero-rated importation,
of another motor vehicle.

(5O) If a relevant supply of a motor vehicle is made to a disabled
person and—

(a) any reckonable zero-rated supply of another motor
45vehicle has previously been made to the person, or

(b) any reckonable zero-rated acquisition or
importation of another motor vehicle has
previously been made by the person,

the reckonable zero-rated supply or (as the case may be)
5reckonable zero-rated importation or acquisition is treated
for the purposes of Note (5N) as not having been made if
either of the conditions in Note (5P) is met.

(5P) The conditions mentioned in Note (5O) are that—

(a) at the time of the new supply (see Note (5N)) the
10motor vehicle mentioned in Note (5O)(a) or (b) is
unavailable for the disabled person’s use
because—

(i) it has been stolen, or

(ii) it has been destroyed, or damaged beyond
15repair (accidentally, or otherwise in
circumstances beyond the disabled
person’s control), or

(b) the Commissioners are satisfied that (at the time of
the new supply) the motor vehicle mentioned in
20Note (5O)(a) or (b) has ceased to be suitable for the
disabled person’s use because of changes in the
person’s condition.

(5Q) In the case of a relevant supply of a motor vehicle to a
disabled person, items 2(f) and 2A cannot apply unless the
25supplier—

(a) gives to the Commissioners, before the end of the
period of 12 months beginning with the day on
which the supply is made, any information and
supporting documentary evidence that may be
30specified in a notice published by them, and

(b) in doing so complies with any requirements as to
method set out in the notice.

(5R) In the case of a relevant supply of a motor vehicle to a
disabled person, items 2(f) and 2A cannot apply unless,
35before the supply is made, the person making the supply
has been given a certificate in the required form which—

(a) states that the supply will not fall within Note (5N),
and

(b) sets out any other matters, and is accompanied by
40any supporting documentary evidence, that may
be required under a notice published by the
Commissioners for the purposes of this Note.

(5S) The information that may be required under Note (5Q)(a)
includes—

(a) 45the name and address of the disabled person and
details of the person’s disability, and

(b) any other information that may be relevant for the
purposes of that Note,

(and the matters that may be required under Note (5R)(b)
include any information that may be required for the
purposes of Note (5Q)).

(5T) In Notes (5N) to (5S)—

• 5“in the required form” means complying with any
  requirements as to form that may be specified in a
  notice published by the Commissioners;

• “reckonable zero-rated acquisition”, in relation to a
  motor vehicle, means an acquisition of the vehicle
  10from another member State in a case where—

  (a)

  VAT is not chargeable on the acquisition as
  a result of item 2(f) or 2A, and

  (b)

  the acquisition takes place on or after 1
  April 2017;

• 15“reckonable zero-rated importation”, in relation to a
  motor vehicle, means an importation of the vehicle
  from a place outside the member States in a case
  where—

  (a)

  VAT is not chargeable on the importation as
  20a result of item 2(f) or 2A, and

  (b)

  the importation takes place on or after 1
  April 2017;

• “reckonable zero-rated supply”, in relation to a motor
  vehicle, means a supply of the vehicle which—

  (a)

  25is a supply of goods,

  (b)

  is zero-rated as a result of item 2(f) or 2A,
  and

  (c)

  is made on or after 1 April 2017.

(5U) In items 2A and 2B references to design, or adaptation, of
30a motor vehicle to enable a person (or a person of any
description) to travel in it are to be read as including a
reference to design or, as the case may be, adaptation of the
motor vehicle to enable the person (or persons of that
description) to drive it.””

35Penalty

3 (1) Section 62 of VATA 1994 (incorrect certificates as to zero-rating etc) is
amended as follows.

(2) After subsection (1A) insert—

“(1B) Where—

(a) 40a person gives a certificate for the purposes of Note (5R) to
Group 12 of Schedule 8 with respect to a supply of a motor
vehicle, and

(b) the certificate is incorrect,

the person giving the certificate is to be liable to a penalty.””

(3)
45In subsection (2), at the end insert—

“(c) in a case where it is imposed by virtue of subsection (1B), the
difference between—

(i) the amount of the VAT which would have been
chargeable on the supply if the certificate had been
correct, and

(ii) the amount of VAT actually chargeable.””

5Minor amendments

4 Schedule 8 to VATA 1994 is amended as follows.

5 In Part 1 (index to zero-rated supplies of goods and services)—

(a) in the entry relating to Group 12, for “handicapped” substitute
“disabled”;

(b) 10in the entry relating to Group 4, for “handicapped” substitute
“disabled”.

6 In Group 4 (talking books for the blind and handicapped and wireless sets
for the blind)—

(a) in item 1, for each occurrence of “handicapped” substitute
15“disabled”;

(b) in the heading, for “handicapped” substitute “disabled”.

7 In Group 12 (drugs, medicines, aids for the handicapped etc)—

(a) in items 2 to 19 and Notes (1) and (5B) to (9), for each occurrence of
“handicapped” substitute “disabled”;

(b) 20for Note (3) substitute—

“(3) Any person who is chronically sick or disabled is
“disabled” for the purposes of this Group.”;”

(c) in the heading, for “handicapped” substitute “disabled”.

8 In Group 15 (charities etc)—

(a) 25in item 5 and Notes (1C) to (4A), (5A) and (5B), for “handicapped”
substitute “disabled”;

(b) for Note (5) substitute—

“(5) Any person who is chronically sick or disabled is
“disabled” for the purposes of this Group.””

30Commencement

9 The amendments made by this Schedule have effect in relation to supplies
made, and acquisitions and importations taking place, on or after 1 April
2017.

Section 98

SCHEDULE 20 Soft drinks industry levy: recovery and overpayments

Part 1 Recovery

5Recovery as debt due

1 Soft drinks industry levy is recoverable as a debt due to the Crown.

Assessments

2 (1) Sub-paragraph (2) applies where it appears to the Commissioners—

(a) that any period is an accounting period by reference to which a
10person is liable to account for soft drinks industry levy,

(b) that an amount of soft drinks industry levy for which that person is
liable to account by reference to that period has become due (but the
amount due cannot be ascertained), and

(c) that there has been a relevant default by the person (see sub-
15paragraph (3)).

(2) The Commissioners may—

(a) assess the amount of soft drinks industry levy due from the person
to the best of their judgment, and

(b) notify the amount to the person.

(3) 20The following are “relevant defaults”—

(a) a failure to comply with a requirement of section 90 (notification of
liability to register) or of regulations under section 94 (correction of
the register);

(b) a failure to make a return required by regulations under section 98;

(c) 25a failure to keep documents, or provide facilities, necessary to verify
returns required by those regulations;

(d) the making, in purported compliance with a requirement of the
regulations, of an incomplete or incorrect return;

(e) a failure to comply with a requirement of regulations under section
3099(1) (keeping and preserving records);

(f) an unreasonable delay in complying with a requirement, where the
failure to comply would be a default within any of paragraphs (a) to
(e).

3 (1) Sub-paragraph (2) applies where—

(a) 35the Commissioners have made an assessment for an accounting
period as a result of a person’s failure to make a return for that
period,

(b) the levy assessed has been paid but no proper return has been made
for that period, and

(c) 40as a result of a failure to make a return for a later accounting period,
the Commissioners make another assessment (the “later
assessment”) under paragraph 2 in relation to the later period.

(2) The Commissioners may, if they consider it appropriate in the light of the
absence of a return for the earlier period, specify in the later assessment an
amount of soft drinks industry levy due that is greater than the amount that
they would have considered to be appropriate had they had regard only to
5the later period.

4 (1) Sub-paragraph (2) applies where it appears to the Commissioners that—

(a) any period is an accounting period by reference to which a person is
liable to account for soft drinks industry levy,

(b) an amount of soft drinks industry levy for which that person is liable
10to account by reference to that period has become due, and

(c) the amount due can be ascertained by the Commissioners.

(2) The Commissioners may—

(a) assess the amount of soft drinks industry levy due from the person,
and

(b) 15notify the amount to the person.

Supplementary assessments

5 (1) Sub-paragraph (2) applies where—

(a) an assessment has been notified to a person under paragraph 2(2) or
4(2), and

(b) 20it appears to the Commissioners that the amount which ought to
have been assessed as due exceeds the amount that has already been
assessed.

(2) The Commissioners may—

(a) make a supplementary assessment of the amount of soft drinks
25industry levy due from the person to the best of their judgment, and

(b) notify the amount to that person.

Further provision about assessments under paragraphs 2, 4 and 5

6 (1) Where an amount has been assessed and notified to a person under
paragraph 2, 4 or 5, it is recoverable on the basis that it is an amount of soft
30drinks industry levy due from that person.

(2) But sub-paragraph (1) does not have effect if, or to the extent that, the
assessment has been withdrawn or reduced.

Time limits for assessments

7 (1) An assessment under paragraph 2, 4 or 5 may not be made after the end of
35the relevant period.

(2) Except in a case within sub-paragraph (3), the relevant period is the period
of 4 years from the end of the accounting period to which the assessment
relates.

(3) Where an assessment of an amount due from a person is made in a case
40involving loss of soft drinks industry levy—

(a) brought about deliberately by the person, or

(b) attributable to a failure by the person to comply with a requirement
of section 90 (notification of liability to be registered) or a

requirement of regulations under section 94 (correction of the
register),

the relevant period is the period of 20 years from the end of the accounting
period to which the assessment relates.

(4) 5In sub-paragraph (3)(a) the reference to loss brought about deliberately by a
person includes a reference to a loss brought about as a result of the
deliberate inaccuracy in a document given to HMRC by the person.

(5) In sub-paragraphs (3) and (4) references to a loss brought about by a person
include references to a loss brought about by another person acting on behalf
10of that person.

Part 2 Overpayments

Repayments of overpaid levy

8 (1) This paragraph applies where a person (P) has paid an amount to the
15Commissioners by way of soft drinks industry levy which was not levy due.

(2) The Commissioners are liable, on the making of a claim by P, to repay the
amount.

(3) The Commissioners may by regulations make provision about—

(a) the form and manner of a claim;

(b) 20the information required in support of a claim.

(4) Except as provided by this paragraph, the Commissioners are not liable to
repay any amount paid by way of soft drinks industry levy by reason of the
fact that it was not levy due.

(5) This paragraph is subject to paragraph 9.

25Supplementary provisions about repayment etc.

9 (1) The Commissioners are not liable, on a claim for a repayment of soft drinks
industry levy, to repay any amount paid more than 4 years before the
making of the claim.

(2) It is a defence to any claim for repayment of an amount of soft drinks
30industry levy that the repayment of that amount would unjustly enrich the
claimant.

10 (1) This paragraph applies where—

(a) an amount has been paid by way of soft drinks industry levy which
(apart from paragraph 9(2)) would fall to be repaid to a person (P),
35and

(b) the whole or a part of the cost of the payment of that amount to the
Commissioners has, for practical purposes, been borne by a person
other than P.

(2) Where loss or damage has been, or may be, incurred by P as a result of
40mistaken assumptions made in P’s case about the operation of any provision
relating to soft drinks industry levy, that loss or damage is to be disregarded,