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

Part 3 40Consequential amendments

VATA 1994

51 In section 77(4A) of VATA 1994 (cases in which the time allowed for
assessment is 20 years), in paragraph (d) after “11A” insert “or an obligation
under paragraph 17(2) or 18(2) of Schedule 28 to FA 2017”.

Promoters of tax avoidance schemes

52 Part 5 of FA 2014 (promoters of tax avoidance schemes) is amended as
follows.

53 (1) Section 281A (VAT: meaning of “tax advantage”) is amended as follows.

(2) 5In the heading after “VAT” insert “and other indirect taxes”.

(3) In subsection (1)—

(a) in paragraph (a) after “VAT” insert “and other indirect taxes”, and

(b) in paragraph (b) for the words from “in paragraph 1” to the end
substitute “for VAT in paragraph 6, and for other indirect taxes in
10paragraph 7, of Schedule 28 to FA 2017 (disclosure of tax avoidance
schemes: VAT and other indirect taxes).”

(4) In subsection (3) after “value added tax” (in both places) insert “or other
indirect taxes”.

(5) After subsection (3) insert—

“(4) 15In this section “indirect tax” has the same meaning as in Schedule 28
to FA 2017.””

54 (1) Schedule 34A (defeated arrangements) is amended as follows.

(2) In paragraph 2(4) after “”schemes)” insert “or paragraph 22 of Schedule 28
to FA 2017 (disclosure of avoidance schemes: VAT and other indirect taxes).

(3) 20In paragraph 14—

(a) in sub-paragraph (1)(a) after “VAT” insert “or other indirect tax”, and

(b) in sub-paragraphs (1)(a) and (b), (2) and (3) omit “taxable”.

(4) After paragraph 26 insert—

““Disclosable VAT or other indirect tax arrangements”

26A (1) 25For the purposes of this Schedule arrangements are “disclosable
VAT or other indirect tax arrangements” at any time if at that
time—

(a) the arrangements are disclosable Schedule 11A
arrangements, or

(b) 30sub-paragraph (2) applies.

(2) This sub-paragraph applies if a person—

(a) has provided information in relation to the arrangements
under paragraph 12(1), 17(2) or 18(2) of Schedule 28 to FA
2017, or

(b) 35has failed to comply with any of those provisions in
relation to the arrangements.

(3) But for the purposes of this Schedule arrangements in respect of
which HMRC have given notice under paragraph 23(6) of that
Schedule (notice that promoters not under duty to notify client of
40reference number) are not to be regarded as disclosable VAT or
other indirect tax arrangements.

(4) For the purposes of sub-paragraph (2) a person who would be
required to provide information under paragraph 12(1) of that
Schedule—

(a) but for the fact that the arrangements implement a
5proposal in respect of which notice has been given under
paragraph 11(1) of that Schedule, or

(b) but for paragraph 13, 14 or 15 of that Schedule,

is treated as providing the information at the end of the period
referred to in paragraph 12(1).””

(5) 10In the heading before paragraph 27, after ““disclosable” insert “Schedule
11A”.

(6) In paragraph 27—

(a) for “this Schedule” substitute “paragraph 26A”, and

(b) after ““disclosable” insert “Schedule 11A”.

(7) 15In the heading before paragraph 28 for “and 27” substitute “to 27”.

(8) In paragraph 28(1) after “26(1)(a)” insert “26A(2)(a)

Serial tax avoidance

55 (1) Schedule 18 to FA 2016 (serial tax avoidance) is amended as follows.

(2) In paragraph 4 (meaning of “tax”)—

(a) 20number the current text as sub-paragraph (1) of that paragraph,

(b) in that sub-paragraph (1), in paragraph (j) after “VAT” insert” “and
indirect taxes”, and

(c) after that sub-paragraph (1) insert—

“(2) For the purposes of this Schedule “indirect tax” means any
25of the following—

• insurance premium tax

• general betting duty

• pool betting duty

• remote gaming duty

• 30machine games duty

• gaming duty

• lottery duty

• bingo duty

• air passenger duty

• 35hydrocarbon oils duty

• tobacco products duty

• duties on spirits, beer, wine, made-wine and cider

• soft drinks industry levy

• aggregates levy

• 40landfill tax

• climate change levy

• customs duties.”

(3) Before paragraph 9 (meaning of “disclosable VAT arrangements”) insert—

“8A (1) For the purposes of this Schedule arrangements are “disclosable
VAT arrangements” at any time if at that time sub-paragraph (2)
or (3) applies.

(2) 5This sub-paragraph applies if the arrangements are disclosable
Schedule 11A VAT arrangements (see paragraph 9).

(3) This paragraph applies if—

(a) the arrangements are notifiable arrangements for the
purposes of Schedule 28 to FA 2017,

(b) 10the main benefit, or one of the main benefits that might be
expected to arise from the arrangements is the obtaining of
a tax advantage in relation to VAT (within the meaning of
paragraph 6 of that Schedule), and

(c) a person—

(i) 15has provided information about the arrangements
under paragraph 12(1), 17(2) or 18(2) of that
Schedule, or

(ii) has failed to comply with any of those provisions in
relation to the arrangements.

(4) 20But for the purposes of this Schedule arrangements in respect of
which HMRC have given notice under paragraph 23(6) of
Schedule 28 (notice that promoters not under duty to notify client
of reference number) are not to be regarded as “disclosable VAT
arrangements”.

(5) 25For the purposes of sub-paragraph (3)(c) a person who would be
required to provide information under paragraph 12(1) of
Schedule 28 to FA 2017—

(a) but for the fact that the arrangements implement a
proposal in respect of which notice has been given under
30paragraph 11(1) of that Schedule, or

(b) but for paragraph 13, 14 or 15 of that Schedule,

is treated as providing the information at the end of the period
referred to in paragraph 12(1).””

(4) In the heading before paragraph 9 after ““Disclosable” insert “Schedule
3511A”.

(5) In paragraph 9—

(a) for “this Schedule” substitute “paragraph 8A”, and

(b) after ““disclosable” insert “Schedule 11A”.

(6) After paragraph 9 insert—

40““Disclosable indirect tax arrangements”

9A (1) For the purposes of this Schedule arrangements are “disclosable
indirect tax arrangements” at any time if at that time—

(a) the arrangements are notifiable arrangements for the
purposes of Schedule 28 to FA 2017,

(b) 45the main benefit, or one of the main benefits that might be
expected to arise from the arrangements is the obtaining of

a tax advantage in relation to an indirect tax other than
VAT (within the meaning of paragraph 7 of that Schedule),
and

(c) a person—

(i) 5has provided information about the arrangements
under paragraph 12(1), 17(2) or 18(2) of that
Schedule, or

(ii) has failed to comply with any of those provisions in
relation to the arrangements.

(2) 10But for the purposes of this Schedule arrangements in respect of
which HMRC have given notice under paragraph 23(6) of
Schedule 28 to FA 2016 (notice that promoters not under duty to
notify client of reference number) are not to be regarded as
“disclosable indirect tax arrangements”.

(3) 15For the purposes of sub-paragraph (1)(c) a person who would be
required to provide information under paragraph 12(1) of
Schedule 28—

(a) but for the fact that the arrangements implement a
proposal in respect of which notice has been given under
20paragraph 11(1) of that Schedule, or

(b) but for paragraph 13, 14 or 15 of that Schedule,

is treated as providing the information at the end of the period
referred to in paragraph 12(1).””

(7) In the heading before paragraph 10 (meaning of “failure to comply”) for
25“and 9” substitute “to 9A”.

(8) In paragraph 10(1) for “or 9(a)” substitute “, 8A(2)(c), 9(a) or 9A(1)(c)”.

(9) In paragraph 11(1) (meaning of “relevant defeat”) for “E” substitute “F”.

(10) After paragraph 16 (condition E) insert—

““Condition F

16A (1) 30Condition F is that—

(a) the arrangements are indirect tax arrangements,

(b) P has relied on the arrangements (see sub-paragraph (2),

(c) the arrangements have been counteracted, and

(d) the counteraction is final.

(2) 35For the purpose of sub-paragraph (1) P relies on the arrangements
if—

(a) P makes a return, claim, declaration or application for
approval on the basis that a relevant tax advantage arises,
or

(b) 40P fails to discharge a relevant obligation (“the disputed
obligation”) and there is reason to believe that P’s failure to
discharge that obligation is connected with the
arrangements.

(3) For the purposes of sub-paragraph (2) “relevant tax advantage”
45means a tax advantage which the arrangements might be expected
to enable P to obtain.