Finance (No. 3) Bill (HL Bill 304)

Finance (No. 3) BillPage 60

(5) Regulations under this section are to be made by statutory instrument.

(6) A statutory instrument containing regulations under this section which amend
or repeal an enactment contained in an Act may not be made unless a draft of
the instrument has been laid before, and approved by resolution of, the House
5of Commons.

(7) A statutory instrument containing any other regulations under this section is
subject to annulment in pursuance of a resolution of the House of Commons.

(8) No regulations may be made under this section unless the Chancellor of the
Exchequer has laid before the House of Commons a report on how the powers
10in this section are to be exercised in each of the scenarios in subsection (9).

(9) The scenarios to be considered in the report under subsection (8) are—

(a) if either—

(i) a negotiated withdrawal agreement, or

(ii) a framework for the future relationship with the European
15Union,

has not been ratified under section 13 of the European Union
(Withdrawal) Act 2018 at the time of the United Kingdom ceasing to be
a member of the European Union, and

(b) if both—

(i) 20a negotiated withdrawal agreement, and

(ii) a framework for the future relationship with the European
Union,

have been ratified under section 13 of the European Union
(Withdrawal) Act 2018 at the time of the United Kingdom ceasing to be
25a member of the European Union.

Payment of unlawful advance corporation tax

84 Interest in respect of unlawful ACT

(1) This section applies where—

(a) on any date before 12 December 2012, a person started proceedings
30against the Commissioners in the High Court or the Court of Session,

(b) the proceedings include a claim arising out of a relevant payment, and

(c) the claim has not been settled, discontinued or finally determined.

(2) “Relevant payment” means a payment of unlawful ACT that—

(a) was made by the person on or after 1 January 1996 or in the period of 6
35years ending immediately before the date the proceedings were started,
and

(b) was set off or repaid (wholly or in part) before the proceedings were
started.

(3) The person is entitled to an order requiring the Commissioners to pay to the
40person—

(a) an amount (“the principal amount”) equal to the amount of interest that
would have accrued if simple interest had accrued on the relevant
payment at the appropriate rate for the period beginning with the date
the payment was made and ending with—

(i) 45the date as regards which the unlawful ACT was set off, or

Finance (No. 3) BillPage 61

(ii) the date the unlawful ACT was repaid, and

(b) simple interest at the appropriate rate on the principal amount for the
period beginning with the day after the date mentioned in paragraph
(a)(i) or (ii) and ending with the date the principal amount is paid.

(4) 5“The appropriate rate” is, in relation to any day, the rate specified in the
following table in respect of that day.

Period Rate per year (%)
1 October 1993 to 31 March 1997 8
1 April 1997 to 5 January 1999 6
6 January 1999 to 5 March 1999 105
6 March 1999 to 5 February 2000 4
6 February 2000 to 5 May 2001 5
6 May 2001 to 5 November 2001 4
6 November 2001 to 5 August 2003 3
6 August 2003 to 5 December 2003 152
6 December 2003 to 5 September 2004 3
6 September 2004 to 5 September 2005 4
6 September 2005 to 5 September 2006 3
6 September 2006 to 5 August 2007 4
6 August 2007 to 5 January 2008 205
6 January 2008 to 5 November 2008 4
6 November 2008 to 5 December 2008 3
6 December 2008 to 5 January 2009 2
6 January 2009 to 26 January 2009 1
27 January 2009 to 29 October 2018 250.5
30 October 2018 onwards 0.5 or such other rate as the
Treasury may by regulations
specify in respect of a period
specified in the regulations

(5) 30Where the unlawful ACT was repaid, any amount of interest or repayment
supplement paid by the Commissioners on the making of the repayment is to
be deducted from the principal amount (and subsection (3)(b) has effect
accordingly).

Finance (No. 3) BillPage 62

(6) Where part of the unlawful ACT has been set off or repaid at one time, and part
of it has been set off or repaid at another time or has not been set off or repaid,
for the purposes of this section treat each part as a separate payment.

(7) In this section—

  • 5“the Commissioners” means the Commissioners for Her Majesty’s
    Revenue and Customs (or, in relation to any time before the
    commencement of section 5 of the Commissioners for Revenue and
    Customs Act 2005, the Commissioners of Inland Revenue);

  • “set off or repaid”: references to a payment of unlawful ACT being set off
    10or repaid are—

    (a)

    to it being set against a liability to corporation tax of any person,
    or

    (b)

    to it being repaid by the Commissioners;

  • “settled” means settled by agreement;

  • 15“unlawful ACT” means advance corporation tax that was unlawfully
    levied.

(8) The Treasury may by regulations substitute for the date for the time being
specified in subsection (1)(a) such later date as they consider appropriate.

(9) Regulations under this section are to be made by statutory instrument.

(10) 20A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of the House of Commons.

85 Section 84: supplementary

(1) This section supplements section 84.

(2) Nothing in section 84 limits the remedies that a court may award in respect of
25the claim.

(3) However—

(a) a person is not entitled to an order under section 84 in respect of a
relevant payment if the person has obtained any other relevant remedy
in respect of the relevant payment, and

(b) 30a person who has obtained an order under section 84 in respect of a
relevant payment is not entitled to any other relevant remedy in respect
of the relevant payment.

(4) In subsection (3) “relevant remedy” means a remedy for the loss of use of the
amount of the relevant payment during the period mentioned in section
3584(3)(a) (or during some similar period).

(5) Any interest or repayment supplement paid by the Commissioners on the
making of—

(a) a repayment of a relevant payment, or

(b) a repayment of corporation tax occurring as a result of a relevant
40payment,

is not regarded as a relevant remedy in respect of the relevant payment.

(6) Where the right to bring a claim arising out of a payment of unlawful ACT has
been transferred from the person who made the payment (“the payor”) to
another person (“the successor”)—

Finance (No. 3) BillPage 63

(a) in section 84(1) the reference to “a person” is to the payor or the
successor;

(b) in section 84(2) the reference to “the person” is to the payor;

(c) in section 84(3) the reference to “the person” is to the successor.

(7) 5Any amount paid by the Commissioners to a person on a day by virtue of
section 84 is to be brought into account when calculating, for tax purposes, the
profits (or income) of the person for any period which includes that day.

Voluntary returns

86 Voluntary returns

(1) 10In Part 2 of TMA 1970 (returns of income and gains), after section 12C insert—

“Voluntary returns
12D Returns made otherwise than pursuant to a notice

(1) This section applies where—

(a) a person delivers a purported return (“the relevant return”)
15under section 8, 8A or 12AA (“the relevant section”) for a year
of assessment or other period (“the relevant period”),

(b) no notice under the relevant section has been given to the
person in respect of the relevant period, and

(c) HMRC treats the relevant return as a return made and delivered
20in pursuance of such a notice.

(2) For the purposes of the Taxes Acts—

(a) treat a relevant notice as having been given to the person on the
day the relevant return was delivered, and

(b) treat the relevant return as having been made and delivered in
25pursuance of that notice (and, accordingly, treat it as if it were a
return under the relevant section).

(3) “Relevant notice” means—

(a) in relation to section 8 or 8A, a notice under that section in
respect of the relevant period;

(b) 30in relation to section 12AA, a notice under section 12AA(3)
requiring the person to deliver a return in respect of the relevant
period, on or before the day the relevant return was delivered
(or, if later, the earliest day that could be specified under section
12AA).

(4) 35In subsection (1)(a) “purported return” means anything that—

(a) is in a form, and is delivered in a way, that a corresponding
return could have been made and delivered had a relevant
notice been given, and

(b) purports to be a return under the relevant section.

(5) 40Nothing in this section affects sections 34 to 36 or any other provisions
of the Taxes Acts specifying a period for the making or delivering of
any assessment (including self-assessment) to income tax or capital
gains tax.”

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(2) In Schedule 18 to FA 1998 (company tax returns etc) at the end of Part 2 insert—

“Voluntary returns

20A (1) This paragraph applies where—

(a) a company delivers a purported return (“the relevant
5return”) for a period (“the relevant period”),

(b) no notice under paragraph 3 has been given to the company
in respect of the relevant period, and

(c) Her Majesty’s Revenue and Customs treats the relevant
return as a return made and delivered in pursuance of such a
10notice.

(2) For the purposes of the Taxes Acts—

(a) treat a relevant notice as having been given to the company
on the day the relevant return was delivered, and

(b) treat the relevant return as having been made and delivered
15in pursuance of that notice (and, accordingly, treat it as if it
were a company tax return under paragraph 3).

(3) “Relevant notice” means a notice under paragraph 3 requiring the
company to deliver a return for the relevant period.

(4) In sub-paragraph (1)(a) “purported return” means anything that—

(a) 20is in a form, and is delivered in a way, that a corresponding
return could have been made and delivered had a relevant
notice been given, and

(b) purports to be a company tax return.

(5) Nothing in this paragraph affects paragraph 46 or any other
25provisions of the Taxes Acts specifying a time limit for the making of
an assessment.”

(3) The amendments made by this section are treated as always having been in
force.

(4) However, those amendments do not apply in relation to a purported return
30delivered by a person if, before 29 October 2018—

(a) the person made an appeal under the Taxes Acts, or a claim for judicial
review, and

(b) the ground (or one of the grounds) for the making of the appeal or claim
was that the purported return was not a return under section 8, 8A or
3512AA of TMA 1970 or paragraph 3 of Schedule 18 to FA 1998 because
no relevant notice was given.

(5) The Treasury may by regulations—

(a) make such amendments of relevant tax legislation as they consider
appropriate in consequence of subsection (1) or (2);

(b) 40make such amendments of section 12D of TMA 1970 (inserted by
subsection (1) of this section) as they consider appropriate in
connection with the coming into force of section 61 of, and Schedule 14
to, F(No.2)A 2017 (digital reporting and record keeping for income tax
etc).

(6) 45In subsection (5)(a) “relevant tax legislation” means—

(a) TMA 1970,

Finance (No. 3) BillPage 65

(b) Schedule 18 to FA 1998, or

(c) any other enactment relating to income tax, corporation tax or capital
gains tax.

(7) Regulations under this section are to be made by statutory instrument.

(8) 5A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of the House of Commons.

Interest

87 Interest under section 178 of FA 1989 and section 101 of FA 2009

(1) Where, before the day on which this Act is passed—

(a) 10regulations under subsection (1) of section 178 of FA 1989 provide for a
rate of interest for the purposes of an enactment to which that section
applies, but

(b) no order was made under subsection (7) of that section appointing a
day for that enactment,

15the rate has effect for any period of time beginning on or after the day on which
the regulations came into force even though no such order was made.

(2) In section 178 of FA 1989 (setting of rates of interest)—

(a) in subsection (2), omit paragraph (u);

(b) in subsection (3)(f), after “provide that” insert “rates or”;

(c) 20omit subsection (7) (but this repeal does not affect any order already
made under that subsection).

(3) In Schedule 35 to FA 2014 (promoters of tax avoidance schemes), in paragraph
11 (interest on penalties)—

(a) in sub-paragraph (1), for the words from “at the rate” to the end
25substitute “in accordance with section 101 of FA 2009”;

(b) omit sub-paragraph (2).

(4) In the Taxes (Interest Rate) Regulations 1989 (S.I. 1989/1297S.I. 1989/1297)—

(a) in regulation 3(1), after paragraph (e) insert—

(f) section 14(4) of the Ports Act 1991 (for any period of time
30beginning on or after the day on which the Finance Act
2019 is passed), and

(g) paragraph 8 of Schedule 1 to the Employment Act 2002
(for any period of time beginning on or after the day on
which the Finance Act 2019 is passed),”;

(b) 35after regulation 5 insert—

5A Applicable rate of interest for diverted profits tax

For the purposes of section 79 of the Finance Act 2015, the rate
applicable under section 178 of the Finance Act 1989 is—

(a) 3% per annum for the period beginning with 1 October
402015 and ending with 5 April 2017, and

(b) 2.5% per annum thereafter.”

(5) Regulations under section 178(1) of FA 1989 may revoke or amend the
provision made in the Taxes (Interest Rate) Regulations 1989 by subsection (4).

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(6) Section 101 of FA 2009 is to be regarded as having come into force on 6 May
2014 for the purposes of—

(a) penalties under paragraphs 6B to 6D of Schedule 55 to FA 2009, in the
case of returns falling within item 4 in the Table in paragraph 1 of that
5Schedule (real time information for PAYE);

(b) penalties under paragraphs 5 to 8 of Schedule 56 to FA 2009, in the case
of payments of tax falling within item 2 or 4 of the Table in paragraph
1 of that Schedule (PAYE and CIS amounts);

(c) a penalty under section 208 or 226 of FA 2014 (penalties relating to
10follower notices, accelerated payment notices and partner payment
notices), where the penalty relates to income tax payable under PAYE
regulations.

Part 5 Miscellaneous and final

15Regulatory capital securities

88 Regulatory capital securities and hybrid capital instruments

Schedule 19—

(a) makes provision revoking the previous rules that applied in relation to
regulatory capital securities, and

(b) 20makes new provision in relation to hybrid capital instruments.

EU withdrawal

89 Minor amendments in consequence of EU withdrawal

(1) The Treasury may by regulations make such provision as they consider
appropriate—

(a) 25for the purpose of maintaining the effect of any relevant tax legislation
on the withdrawal of the United Kingdom from the EU (and,
accordingly, on the United Kingdom ceasing to be an EEA state);

(b) for the purposes of any relevant tax, in connection with any provision
made by regulations under section 8 of the European Union
30(Withdrawal) Act 2018 (power to remedy deficiencies);

(c) in connection with any reference in relevant tax legislation to euros;

(d) amending paragraph 2(4) of Schedule 5 to FA 1997 (indirect taxes:
overpayments etc) for the purposes of removing the reference to EU
legislation;

(e) 35amending section 173 of FA 2006 (international tax enforcement) to
permit the disclosure of information to the Commissioners by other
public authorities and by the Commissioners (subject to conditions
about its use) to persons outside the United Kingdom.

(2) The regulations may—

(a) 40amend any enactment;

(b) contain incidental, transitional or saving provision;

(c) make different provision for different purposes.

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(3) Where—

(a) regulations under this section are made after exit day, and

(b) a provision of the regulations is made by virtue of any of paragraphs (a)
to (d) of subsection (1),

5the regulations may provide that the provision has effect from exit day.

(4) Regulations under this section are to be made by statutory instrument.

(5) A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of the House of Commons.

(6) In this section—

  • 10“the Commissioners” means the Commissioners for Her Majesty’s
    Revenue and Customs;

  • “enactment” includes an enactment comprised in subordinate legislation;

  • “relevant tax” means any tax (including stamp duty) except—

    (a)

    value added tax,

    (b)

    15any duty of customs, or

    (c)

    any excise duty under the Alcoholic Liquor Duties Act 1979, the
    Hydrocarbon Oil Duties Act 1979 or the Tobacco Products Duty
    Act 1979;

  • “relevant tax legislation” means any enactment relating to a relevant tax.

20Preparatory expenditure

90 Emissions reduction trading scheme: preparatory expenditure

(1) The Secretary of State may incur expenditure in preparing for the introduction
of a scheme for charges to be imposed for the allocation of emissions
allowances.

(2) 25In subsection (1), “emissions allowance” means an allowance under paragraph
5 of Schedule 2 to the Climate Change Act 2008 relating to a trading scheme
dealt with under Part 1 of that Schedule (schemes limiting activities relating to
emissions of greenhouse gas).

Reviews

91 30Impact analyses of the anti-avoidance provisions of this Act

(1) The Chancellor of the Exchequer must review the impact of—

(a) section 15 and Schedule 3,

(b) section 16 and Schedule 4,

(c) sections 19 and 20,

(d) 35section 22 and Schedule 7,

(e) section 23 and Schedule 8,

(f) sections 46 and 47, and

(g) section 83,

of this Act in accordance with this section and lay a report of that review before
40the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider the impact of those provisions on—

Finance (No. 3) BillPage 68

(a) child poverty,

(b) households at different levels of income,

(c) people with protected characteristics (within the meaning of the
Equality Act 2010), and

(d) 5different parts of the United Kingdom and different regions of
England.

(3) In this section—

  • “parts of the United Kingdom” means—

    (a)

    England,

    (b)

    10Scotland,

    (c)

    Wales, and

    (d)

    Northern Ireland;

  • “regions of England” has the same meaning as that used by the Office for
    National Statistics.

92 15Review of effectiveness of provisions on tax avoidance

(1) The Chancellor of the Exchequer must review the effectiveness of the
provisions of this Act relating to tax avoidance and lay a report of that review
before the House of Commons within six months of the passing of this Act.

(2) In this section, “the provisions of this Act relating to tax avoidance” means—

(a) 20section 15 and Schedule 3,

(b) section 16 and Schedule 4,

(c) sections 19 and 20,

(d) section 22 and Schedule 7,

(e) section 23 and Schedule 8,

(f) 25sections 46 and 47,

(g) section 83.

(3) A review under this section must consider in particular—

(a) the effects of those provisions in reducing tax avoidance and evasion,

(b) the effect of those provisions in inducing new tax avoidance measures
30unanticipated by the Act, and

(c) estimates of the efficacy of the provisions in reducing the tax gap in
each tax year from 2018-19 to 2028-29.

93 Review of public health effects of gaming provisions

(1) The Chancellor of the Exchequer must review the public health effects of the
35provisions of section 61 of and Schedule 18 to this Act and lay a report of that
review before the House of Commons within six months of the passing of this
Act.

(2) A review under this section must consider—

(a) the effects of those provisions in reducing the negative public health
40effects of gambling, and

(b) the implications for the public finances of the public health effects of—

(i) those provisions,

(ii) the operation of the law relating to remote gaming duty and
gaming duty if those provisions were not given effect.

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Other

94 Interpretation

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

ALDA 1979 Alcoholic Liquor Duties Act 1979
CAA 2001 5Capital Allowances Act 2001
CTA 2009 Corporation Tax Act 2009
CTA 2010 Corporation Tax Act 2010
FA, followed by a year Finance Act of that year
F(No.2)A, followed by a year Finance (No.2) Act of that year
F(No.3)A, followed by a year 10Finance (No.3) Act of that year
IHTA 1984 Inheritance Tax Act 1984
ITA 2007 Income Tax Act 2007
ITEPA 2003 Income Tax (Earnings and Pensions)
Act 2003
ITTOIA 2005 15Income Tax (Trading and Other
Income) Act 2005
OTA 1975 Oil Taxation Act 1975
TCGA 1992 Taxation of Chargeable Gains Act 1992
TIOPA 2010 Taxation (International and Other
20Provisions) Act 2010
TMA 1970 Taxes Management Act 1970
TPDA 1979 Tobacco Products Duty Act 1979
VATA 1994 Value Added Tax Act 1994
VERA 1994 Vehicle Excise and Registration Act
251994

95 Short title

This Act may be cited as the Finance Act 2019.