Finance (No. 3) Bill (HC Bill 282)

8 (1) Where a multi-purpose voucher is accepted as consideration for
the provision of relevant goods or services, for the purposes of this
Act—

(a) the provision of the relevant goods or services is to be
5treated as a supply, and

(b) the value of the supply treated as having been made by
paragraph (a) is determined as follows.

(2) If the consideration for the most recent transfer of the voucher for
consideration is known to the supplier, the value of the supply is
10such amount as, with the addition of the VAT chargeable on the
supply, is equal to that consideration.

(3) If the consideration for the most recent transfer of the voucher for
consideration is not known to the supplier, the value of the supply
is such amount as, with the addition of the VAT chargeable on the
15supply, is equal to the face value of the voucher.

(4) The “face value” of a voucher is the monetary value stated on or
recorded in—

(a) the voucher, or

(b) the terms and conditions governing the use of the voucher.

20Intermediaries

9 (1) This paragraph applies where—

(a) a voucher is issued or transferred by an agent who acts in
their own name, and

(b) the paragraph 3 supply is a supply of services to which
25section 47(3) would apply (apart from this paragraph).

(2) Section 47(3) does not apply.

(3) The paragraph 3 supply is treated as both a supply to the agent
and a supply by the agent.

10 Nothing in this Schedule affects the application of this Act to any
30services provided, by a person who issues or transfers a voucher,
in addition to the issue or transfer of the voucher.

Composite transactions

11 (1) This paragraph applies where, as part of a composite
transaction—

(a) 35goods or services are supplied to a person, and

(b) a voucher is issued or transferred to that person.

(2) If the total consideration for the transaction is not different, or not
significantly different, from what it would be if the voucher were
not issued or transferred, the paragraph 3 supply is to be treated
40as being made for no consideration.”

6 In regulation 38ZA(2) of the Value Added Tax Regulations 1995 (S.I. 1995/
2518), in the definition of “cash refund”, after “Act” insert “or a voucher
falling within Schedule 10B to the Act”.

Section 52

SCHEDULE 17 VAT groups: eligibility

Part 1 Eligibility of individuals and partnerships

1 (1) 5Section 43A of VATA 1994 (groups: eligibility) is amended as follows.

(2) In subsection (1), in the opening words—

(a) for “bodies corporate” substitute “UK bodies corporate”;

(b) omit “each is established or has a fixed establishment in the United
Kingdom and”.

(3) 10Omit subsections (2) and (3).

(4) At the end insert—

“(4) An individual carrying on a business and one or more UK bodies
corporate are eligible to be treated as members of a group if the
individual—

(a) 15controls the UK body corporate or all of the UK bodies
corporate, and

(b) is established, or has a fixed establishment, in the United
Kingdom in relation to the business.

(5) Two or more relevant persons carrying on a business in partnership
20(“the partnership”) and one or more UK bodies corporate are eligible
to be treated as members of a group if the partnership—

(a) controls the UK body corporate or all of the UK bodies
corporate, and

(b) is established, or has a fixed establishment, in the United
25Kingdom in relation to the business.

(6) In this section—

(a) “UK body corporate” means a body corporate which is
established or has a fixed establishment in the United
Kingdom;

(b) 30“relevant person” means an individual, a body corporate or a
Scottish partnership.

(7) Section 43AZA contains provision for determining for the purposes
of this section whether a body corporate, individual or partnership
controls a UK body corporate.”

2 35In that Act, after section 43A insert—

“43AZA Section 43A: control test

(1) This section applies for the purposes of section 43A (and expressions
used in this section have the same meaning as in that section).

(2) A body corporate (“X”) controls a UK body corporate if—

(a) 40X is empowered by statute to control the UK body
corporate’s activities, or

(b) X is the UK body corporate’s holding company.

(3) An individual (“Y”) controls a UK body corporate if Y would, were
Y a company, be the UK body corporate’s holding company.

(4) Two or more relevant persons carrying on a business in partnership
(“the partnership”) control a UK body corporate if the partnership
5would, were it a company, be the UK body corporate’s holding
company.

(5) In this section “holding company” has the meaning given by section
1159 of, and Schedule 6 to, the Companies Act 2006.”

Part 2 10Consequential amendments

VATA 1994

3 VATA 1994 is amended as follows.

4 In section 18A (fiscal warehousing), in subsection (9), for “body corporate
which” substitute “person who”.

5 (1) 15Section 43 (groups of companies) is amended in accordance with this
paragraph.

(2) In subsection (1), for “bodies corporate” substitute “persons”.

(3) In subsection (1AA)—

(a) in paragraph (c)(ii), for “body which” substitute “person who”;

(b) 20in the closing words, for “body” substitute “person”.

6 In section 43AA (power to alter eligibility for grouping), in subsection (1), for
“section 43A” substitute “sections 43A and 43AZA”.

7 (1) Section 43B (groups: applications) is amended in accordance with this
paragraph.

(2) 25In subsection (1), for “bodies corporate, which” substitute “persons, who”.

(3) In subsection (2)—

(a) in the opening words, for “bodies corporate” substitute “persons”;

(b) in paragraph (a), for “body corporate, which” substitute “person,
who”;

(c) 30in paragraph (b), for “body corporate” substitute “person”;

(d) in paragraph (d), for “bodies corporate” substitute “persons”;

(4) In subsection (3)—

(a) in the opening words, for “bodies corporate” substitute “persons”;

(b) in paragraph (b), for “bodies” substitute “persons”;

(5) 35In subsection (5)—

(a) in paragraph (a), for “bodies corporate” substitute “persons”;

(b) in paragraph (b), for “body corporate” substitute “person”.

8 (1) Section 43C (groups: termination of membership) is amended in accordance
with this paragraph.

(2) 40In subsection (1), for “body corporate” substitute “person”.

(3) In subsection (3)(a) and (b) and in the closing words, for “body” substitute
“person”.

(4) In subsection (4)(a) and (b), for “body” substitute “person”.

9 (1) Section 43D (groups: duplication) is amended in accordance with this
5paragraph.

(2) In subsection (1), for “body corporate” substitute “person”.

(3) In subsection (2), for “body which” substitute “person who”.

(4) In subsection (3)—

(a) in paragraph (b), for “bodies” substitute “persons”;

(b) 10in the closing words, for “body or bodies” substitute “person or
persons”.

(5) In subsection (4)(b), for “body” substitute “person”.

(6) In subsection (5), for “body” substitute “person”.

10 In section 44 (supplies to groups), in subsection (1)(a) and (b), for “body
15corporate” substitute “person”.

11 In section 53 (tour operators), in subsection (2)(d), for “body corporate”
substitute “person”.

12 In section 97 (orders, rules and regulations), in subsection (4)(ca), for
“bodies” substitute “persons”.

13 (1) 20Schedule 9 (exemptions) is amended in accordance with this paragraph.

(2) In Group 14, in Note (13)—

(a) in the opening words, for “body corporate” substitute “person”;

(b) in paragraph (a) for “body” substitute “person”;

(c) in paragraph (b)—

(i) 25for “body corporate, or of any other body corporate which”,
substitute “person, or of any other person who”;

(ii) for “body, at a time when that body” substitute “person, at a
time when that person”.

(d) in paragraph (c), for “body corporate” substitute “person”.

(3) 30In that Group, in Note (14), for “body corporate’s” substitute “person’s”.

14 (1) Schedule 9A (anti-avoidance provisions: groups) is amended in accordance
with this paragraph.

(2) In paragraph 1(2), for “body corporate” substitute “person”.

(3) In paragraph 2—

(a) 35in sub-paragraph (1)(a), for “body corporate” substitute “person”;

(b) in sub-paragraph (2), for “body corporate’s” substitute “person’s”.

(4) In paragraph 3—

(a) in sub-paragraph (1)(a) and (b), for “body corporate” substitute
“person”;

(b) 40in sub-paragraph (3), for “body corporate” (in both places) substitute
“person”;

(c) in sub-paragraph (5), for “body corporate which” substitute “person
who”.

(5) In paragraph 5—

(a) in sub-paragraph (1)(b)—

(i) 5for “body corporate which” substitute “person who”;

(ii) for “that person” substitute “the person mentioned in
paragraph (a)”;

(b) in sub-paragraph (2)—

(i) for “body corporate (“the relevant body”)” substitute “person
10(“the relevant person”)”;

(ii) for “that body or to any body corporate which” substitute
“that person or to any person who”;

(iii) for “the relevant body” substitute “the relevant person”.

(6) In paragraph 6—

(a) 15in sub-paragraph (7)(b), for “body corporate that” substitute “person
who”;

(b) in sub-paragraph (11)(b)—

(i) for “body corporate which” substitute “person who”;

(ii) for “that person” substitute “the person mentioned in
20paragraph (a)”;

(c) in sub-paragraph (11)(c), for “body corporate which” substitute
“person who”.

15 (1) Schedule 10 (buildings and land) is amended in accordance with this
paragraph.

(2) 25In paragraph 3—

(a) in sub-paragraph (1), for “body corporate” substitute “person”;

(b) in sub-paragraph (2)—

(i) in the opening words (in both places) and paragraph (c), for
“body corporate” substitute “person”;

(ii) 30in paragraph (c), for “that body” substitute “that person”;

(c) in sub-paragraph (3), for “body corporate” substitute “person (“P”)”;

(d) in sub-paragraph (4)—

(i) in the opening words, for “The body corporate” substitute
“P”;

(ii) 35in paragraphs (a), (aa), (b) and (c), for “the body corporate”
substitute “P”;

(e) in sub-paragraph (5)—

(i) in the opening words, for “The body corporate” substitute
“P” and for “the body corporate” substitute “P”;

(ii) 40in the closing words, for “the body corporate” substitute “P”.

(3) In paragraph 4—

(a) in sub-paragraph (1), for “body corporate which” substitute “person
(“P”) who”;

(b) in sub-paragraph (2), for “the body corporate, it” substitute “P, P”;

(c) 45in sub-paragraph (3)(b), for “the body corporate” substitute “P”;

(d) in sub-paragraph (3)(c)—

(i) for “the body corporate” substitute “P”;

(ii) for “it” substitute “P”;

(e) in sub-paragraph (4)(b)—

(i) for “the body corporate” substitute “P”;

(ii) for “it” substitute “P”;

(f) 5in sub-paragraph (5), in the opening words—

(i) for “the body corporate” substitute “P”;

(ii) for “it” substitute “P”;

(g) in sub-paragraph (6)(a)—

(i) for “the body corporate” substitute “P”;

(ii) 10for “its” substitute “P’s”;

(h) in sub-paragraph (6)(b), for “the body corporate” substitute “P”;

(i) in sub-paragraph (7), for “the body corporate” substitute “P”.

(4) In paragraph 21—

(a) in sub-paragraph (1)(b)—

(i) 15for “body corporate” substitute “person”;

(ii) for “the body” substitute “the person”;

(b) in sub-paragraph (3)(a), for “body corporate which” substitute
“person who”;

(c) in sub-paragraph (9)(b), for “body corporate which” substitute
20“person who”;

(d) in sub-paragraph (11)(b), for “body corporate which” substitute
“person who”;

(e) in sub-paragraph (12), in the definition of “relevant group
member”—

(i) 25after “any person” insert “(“P”)”;

(ii) for “body corporate which” substitute “person who”;

(iii) for “that person” substitute “P”.

(5) In paragraph 35(3), for “body corporate” substitute “person”.

Section 62

SCHEDULE 18 30Gaming duty

Accounting periods

1 (1) Section 11 of FA 1997 (rate of gaming duty) is amended as follows.

(2) In subsection (2), for “subsection (3)” substitute “subsections (3), (4A) and
(4B)”.

(3) 35After subsection (4) insert—

“(4A) Where the gaming duty provisions of this Act have effect in relation
to any premises as if accounting periods were periods longer or
shorter than six months (“alternative accounting periods”) as a result
of—

(a) 40a direction under paragraph 9(1A) of Schedule 1, or

(b) a direction or agreement under paragraph 9(1C) of Schedule
1,

then for the purposes of determining the amount of gaming duty
which is to be charged on those premises for that period, the Table in
subsection (2) is modified in accordance with subsection (4B).

(4B) Each amount specified in column 1 of the Table is multiplied by—

5

2 (1) Paragraph 9 of Schedule 1 to FA 1997 (accounting periods) is amended as
follows.

(2) 15For sub-paragraph (1) substitute—

“(1) Where the Commissioners and every relevant person so agree, the
gaming duty provisions of this Act shall have effect in relation to any
premises as if accounting periods for the purposes of those
provisions were the periods specified in the agreement, which may
20be—

(a) periods of six months (beginning on any date);

(b) periods (beginning on any date) which are longer or shorter
than six months, but which must be the approximate
equivalent of periods of six months in weeks.

(1A) 25If the Commissioners have reason to believe that the liability in
relation to any premises may not be discharged as it falls due from
time to time, the Commissioners may direct that periods shorter than
six months are to be treated as accounting periods for the purposes
of the gaming duty provisions of this Act.

(1B) 30The Commissioners may direct in relation to any premises that
periods beginning on dates other than 1st April and 1st October are
to be treated as accounting periods for the purposes of the gaming
duty provisions of this Act.

(1C) The Commissioners may by direction or by agreement with every
35relevant person make transitional arrangements in relation to any
premises for periods (whether of six months or otherwise) to be
treated as accounting periods for the purposes of the gaming duty
provisions of this Act where—

(a) those premises cease to be specified in an entry on the gaming
40register for any person, or

(b) an agreement under sub-paragraph (1) or a direction under
sub-paragraph (1A) or (1B) begins or ceases to have effect.

(1D) The Commissioners must not enter into an agreement under sub-
paragraph (1) or give a direction under sub-paragraph (1B) unless
45they are satisfied that any transitional arrangements which are
appropriate for the protection of the revenue have been agreed or
directed.

(1E) Any direction under this paragraph continues to have effect until it
is withdrawn by the Commissioners (unless otherwise specified in
the direction).

(1F) Withdrawal of a direction under this paragraph in relation to any
5premises does not prevent the giving of further directions in relation
to those premises.”.

(3) In sub-paragraph (2), for “sub-paragraph (1) above” substitute “this
paragraph”.

(4) Omit sub-paragraphs (3) and (4).

(5) 10For sub-paragraph (5) substitute—

“(5) The decisions mentioned in sub-paragraph (6) are to be treated as if
they were listed in subsection (2) of section 13A of FA 1994 (customs
and excise reviews and appeals: meaning of “relevant decision”) and
accordingly are to be treated—

(a) 15as if they were relevant decisions for the purposes mentioned
in subsection (1) of that section, and

(b) as if they were ancillary matters for the purposes of section 16
FA 1994 (appeals to a tribunal).

(6) The decisions are—

(a) 20a decision of the Commissioners to refuse a request for an
agreement under sub-paragraph (1) or (1C), or to refuse a
request for such an agreement on particular terms,

(b) a decision of the Commissioners to give a direction under
sub-paragraph (1A), (1B) or (1C), or to give such a direction
25in particular terms, or

(c) a decision of the Commissioners not to give a direction under
sub-paragraph (1A), (1B) or (1C).”

3 In paragraph 11(2) of Schedule 1 to FA 1997 (regulations), after “of this Act”
insert “or paragraph 9 of this Schedule”.

30Carrying forward of losses

4 In section 11 of FA 1997, for subsection (10) substitute—

“(10) In subsection (8) above the banker’s profits from any gaming are—

(a) the value, in money or money’s worth, of the stakes staked
with the banker in any such gaming, less

(b) 35the value of the prizes provided by the banker to those taking
part in such gaming otherwise than on behalf of a provider of
the premises.

(10ZA) Where the gross gaming yield from any premises in an accounting
period is a negative amount (“amount X”)—

(a) 40the gross gaming yield for those premises in that accounting
period is treated as nil, and

(b) amount X may be carried forward in reduction of the gross
gaming yield for those premises for one or more later
accounting periods.”

Removal of obligation to make payments on account

5 In section 12 of FA 1997 (liability to pay gaming duty) omit subsections (4)
and (6).

6 (1) The Gaming Duty Regulations 1997 (S.I. 1997/2196S.I. 1997/2196) are amended as follows.

(2) 5In regulation 2 (interpretation) omit the definition of “quarter”.

(3) Omit regulations 3 to 6 (Part II: payments on account) and the heading
before them.

Commencement

7 The amendments made by this Schedule come into force on 1 October 2019.

8 (1) 10Where there is an agreement under paragraph 9(1) of Schedule 1 to FA 1997
and as a result the period to be treated as the accounting period for any
premises is a period beginning on or before 30 September 2019 and ending
after 30 September 2019 (a “paragraph 9(1) accounting period”), sub-
paragraph (2) applies.

(2) 15The period to be treated as the accounting period for those premises is
instead a period (a “transitional accounting period”) beginning on the date
specified in the agreement and ending on 30 September 2019.

(3) For the purposes of determining the amount of gaming duty which is to be
charged on those premises for the transitional accounting period, the Table
20in section 11(2) of FA 1997 is modified in accordance with sub-paragraph (4).

(4) Each amount specified in column 1 of the Table is multiplied by—

Section 88

SCHEDULE 19 Taxation of hybrid capital instruments

Part 1 Revocation of special rules for regulatory capital securities

1 (1) 30The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/
3209) are revoked.

(2) In consequence of the revocation made by sub-paragraph (1), the Taxation
of Regulatory Capital Securities (Amendment) Regulations 2015 (S.I. 2015/
2056) are revoked.

Part 2 Corporation tax, income tax and capital gains tax

Distributions in respect of hybrid capital instruments

2 At the end of Chapter 12 of Part 5 of CTA 2009 insert—

5““Hybrid capital instruments

420A Amounts payable in respect of hybrid capital instruments

(1) This section applies if a loan relationship is a hybrid capital
instrument for an accounting period of the debtor.

(2) The Corporation Tax Acts have effect in relation to any person in
10respect of times in the accounting period as if any qualifying amount
payable in respect of the hybrid capital instrument were not a
distribution.

(3) An amount is a “qualifying amount” so far as it would not be
regarded as a distribution if it is assumed that any provision made
15by the loan relationship under which the debtor is entitled to defer
or cancel a payment of interest under the loan relationship had not
been made.

(4) This section also needs to be read together with section 1015(1A) of
CTA 2010 (which prevents hybrid capital instruments from being
20“special securities” as a result of being equity notes).”

3 (1) After section 475B of CTA 2009 insert—

““Meaning of “hybrid capital instrument”

475C Meaning of “hybrid capital instrument”

(1) For the purposes of this Part, a loan relationship is a “hybrid capital
25instrument” for an accounting period of the debtor if—

(a) the loan relationship makes provision under which the
debtor is entitled to defer or cancel a payment of interest
under the loan relationship,

(b) the loan relationship has no other significant equity features,
30and

(c) the debtor has made an election in respect of the loan
relationship which has effect for the period.

(2) For the purposes of this section a loan relationship “has no other
significant equity features” if under the loan relationship—

(a) 35there are neither voting rights in the debtor (ignoring
insignificant voting rights in the debtor) nor a right to
exercise a dominant influence over the debtor,

(b) any provision for altering the amount of the debt is limited to
write-down or conversion events in qualifying cases, and

(c) 40any provision for the creditor to receive anything other than
interest or repayment of the debt is limited to conversion
events in qualifying cases.