Finance Bill (HC Bill 114)

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Compensation schemes etc

99 Tax relief for scheme payments etc

Schedule 14 makes provision for tax relief in respect of—

(a)payments made under or otherwise referable to the Windrush
5Compensation Scheme,

(b)payments under the Troubles Permanent Disablement Payment
Scheme, and

(c)other compensation payments made by or on behalf of a government,
public authority or local authority.

10Administration

100 HMRC: exercise of officer functions

(1)Anything capable of being done by an officer of Revenue and Customs by
virtue of a function conferred by or under an enactment relating to taxation
may be done by HMRC (whether by means involving the use of a computer or
15otherwise).

(2)Accordingly, it follows that HMRC may (among other things)—

(a)give a notice under section 8, 8A or 12AA of TMA 1970 (notice to file
personal, trustee or partnership return);

(b)amend a return under section 9ZB of that Act (correction of personal or
20trustee return);

(c)make an assessment to tax in accordance with section 30A of that Act
(assessing procedure);

(d)make a determination under section 100 of that Act (determination of
penalties);

(e)25give a notice under paragraph 3 of Schedule 18 to FA 1998 (notice to file
company tax return);

(f)make a determination under paragraph 2 or 3 of Schedule 14 to FA 2003
(SDLT: determination of penalties).

(3)Anything done by HMRC in accordance with subsection (1) has the same effect
30as it would have if done by an officer of Revenue and Customs (or, where the
function is conferred on an officer of a particular kind, an officer of that kind).

(4)In this section—

  • HMRC” means Her Majesty’s Revenue and Customs;

  • references to an officer of Revenue and Customs include an officer of a
    35particular kind, such as an officer authorised for the purposes of an
    enactment.

(5)This section is treated as always having been in force.

(6)However, this section does not apply in relation to anything mentioned in
subsection (1) done by HMRC if—

(a)40before 11 March 2020, a court or tribunal determined that the relevant
act was of no effect because it was not done by an officer of Revenue
and Customs (or an officer of a particular kind), and

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(b)at the beginning of 11 March 2020, the order of the court or tribunal
giving effect to that determination had not been set aside or overturned
on appeal.

101 Returns relating to LLP not carrying on business etc with view to profit

(1)5In TMA 1970 after section 12ABZA insert—

12ABZAA  Returns relating to LLP not carrying on business etc with view
to profit

(1)This section applies where—

(a)a person delivers a purported partnership return (“the relevant
10return”) in respect of a period (“the relevant period”),

(b)the relevant return—

(i)is made on the basis that the activities of a limited
liability partnership (“the LLP”) are treated, under
section 863 of ITTOIA 2005 or section 1273 of CTA 2009,
15as carried on in partnership by its members (“the
purported partnership”), and

(ii)relates to the purported partnership, but

(c)the LLP does not carry on a business with a view to profit in the
relevant period (and, accordingly, its activities are not treated as
20mentioned in paragraph (b)(i)).

(2)For the purposes of the relevant enactments, treat the relevant return as
a partnership return (and, accordingly, anything done under a relevant
enactment in connection with the relevant return has the same effect as
it would have if done in connection with a partnership return in a
25corresponding partnership case).

(3)“Relevant enactment” means—

(a)any of the following—

(i)sections 12AC and 28B (enquiries into partnership
returns),

(ii)30Part 4 of FA 2014 (follower notices and accelerated
payment notices), and

(b)any enactment relating to, or applying for the purposes of, an
enactment within paragraph (a).

(4)In relation to the relevant return, the relevant enactments apply with
35the necessary modifications, including in particular the following—

(a)“partner” includes purported partner, and

(b)“partnership” includes the purported partnership.

(5)In this section—

  • “business” includes trade or profession;

  • 40“corresponding partnership case” means a corresponding case in
    which the limited liability partnership in question carries on a
    business with a view to profit in the relevant period;

  • “purported partner” means any person who was a member of the
    LLP in the relevant period;

  • 45“purported partnership return” means anything that—

    (a)

    purports to be a partnership return, and

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    (b)

    is in a form, and is delivered in a way, that a partnership
    return could have been made and delivered in a
    corresponding partnership case.”

(2)The amendment made by subsection (1) is treated as always having been in
5force.

(3)However, that amendment does not apply in relation to a purported
partnership return if—

(a)before 11 March 2020, a court or tribunal determined, in proceedings to
which a limited liability partnership was a party, that the purported
10partnership return was not a return under section 12AA of TMA 1970,
and

(b)at the beginning of 11 March 2020, the order of the court or tribunal
giving effect to that determination had not been set aside or overturned
on appeal.

(4)15In Part 1 of Schedule 14 to F(No.2)A 2017 (digital reporting and record-keeping
for income tax etc: amendments of TMA 1970), after paragraph 10B insert—

(1) Section 12ABZAA (returns relating to LLP not carrying on business
etc with view to profit) is amended as follows.

(2)For subsection (2) substitute—

(2)20For the purposes of the relevant enactments—

(a)(a)where the relevant return purports to be a
section 12AA partnership return, treat it as a
section 12AA partnership return;

(b)where the relevant return purports to be a
25Schedule A1 partnership return, treat it as a
Schedule A1 partnership return,

(and, accordingly, anything done under a relevant
enactment in connection with the relevant return has the
same effect as it would have if done in connection with a
30section 12AA or Schedule A1 partnership return (as the
case may be) in a corresponding partnership case).”

(3)In subsection (5), in the definition of “purported partnership
return”—

(a)in paragraph (a), for “partnership return” substitute “section
3512AA or Schedule A1 partnership return”;

(b)in paragraph (b), for “partnership return” substitute “section
12AA or Schedule A1 partnership return (as the case may
be)”.”

(5)The reference in section 61(6) of F(No.2)A 2017 (commencement) to Schedule
4014 to that Act is to be read as a reference to that Schedule as amended by
subsection (4) of this section.

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Preparing for new tax

102 Preparing for a new tax in respect of certain plastic packaging

The Commissioners for Her Majesty’s Revenue and Customs may make
preparations for the introduction of a new tax to be charged in respect of
5certain plastic packaging.

Local loans

103 Limits on local loans

(1)In section 4(1) of the National Loans Act 1968 (which sets a limit on local loans
made in pursuance of section 3 of that Act)—

(a)10for “£85 billion” substitute “£115 billion”, and

(b)for “£95 billion” substitute “£135 billion”.

(2)The Local Loans (Increase of Limit) Order 2019 (SI 2019/1317) is revoked.

(3)This section comes into force on such day as the Treasury may by regulations
made by statutory instrument appoint.

15Other

104 Interpretation

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

ALDA 1979Alcoholic Liquor Duties Act 1979
CAA 2001Capital Allowances Act 2001
20CTA 200920Corporation Tax Act 2009
CTA 2010Corporation Tax Act 2010
FA, followed by a yearFinance Act of that year
F(No.2)A, followed by a yearFinance (No.2) Act of that year
HODA 1979Hydrocarbon Oil Duties Act 1979
25IHTA 198425Inheritance Tax Act 1984
ITA 2007Income Tax Act 2007
ITEPA 2003Income Tax (Earnings and Pensions)
Act 2003
ITTOIA 2005Income Tax (Trading and Other
30Income) Act 2005
TCGA 1992Taxation of Chargeable Gains Act 1992
TCTA 2018Taxation (Cross-border Trade) Act 2018

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TMA 1970Taxes Management Act 1970
TPDA 1979Tobacco Products Duty Act 1979
VATA 1994Value Added Tax Act 1994
VERA 1994Vehicle Excise and Registration Act
51994

105 Short title

This Act may be cited as the Finance Act 2020.

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Schedules

Sections 14 and 15

Schedule 1 The loan charge: consequential amendments

Part 1 5Amendments to F(No.2)A 2017 in consequence of section 14

1Schedule 11 to F(No.2)A 2017 (employment income provided through third
parties: loans etc outstanding on 5 April 2019) is amended as follows.

2In paragraph 1 (application of Part 7A of ITEPA 2003: relevant step) in sub-
paragraph (2) for the words from “before” to the end substitute “before the
10end of 5 April 2019.”

3For the italic heading before paragraph 2 substitute “Meaning of “loan” and
“quasi loan””.

4In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment
date”) omit sub-paragraph (6).

5(1)15Paragraph 4 (when an amount of a loan is outstanding: certain repayments
to be disregarded) is amended as follows.

(2)In sub-paragraph (1)(b)(ii) for “the relevant date” substitute “5 April 2019”.

(3)In sub-paragraph (2) for “the relevant date” substitute “5 April 2019”.

(4)Omit sub-paragraph (4).

620In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a
right to payment of the loan) in sub-paragraph (1)(b) for “6 April 1999”
substitute “9 December 2010”.

7In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B
acquires a right to the payment or transfer of assets) in sub-paragraph (1)(b)
25for “6 April 1999” substitute “9 December 2010”.

8Omit paragraph 19 (meaning of “approved fixed term loan”) and the italic
heading before that paragraph.

9For the heading of Part 2 substitute “Accelerated payments”.

10Omit paragraphs 20 to 22 and the italic headings before each of those
30paragraphs.

11Omit the italic heading before paragraph 23.

12(1)Paragraph 23 (accelerated payments) is amended as follows.

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(2)In sub-paragraph (1)—

(a)in paragraph (d) for “the relevant date” substitute “5 April 2019”, and

(b)in paragraph (e) for “the relevant date” substitute “5 April 2019”.

(3)Omit sub-paragraph (4).

13(1)5Paragraph 35A (when the duty to provide loan charge information arises) is
amended as follows.

(2)Omit sub-paragraph (3).

(3)In sub-paragraph (4) in the words before paragraph (a) for “third” substitute
“second”.

(4)10In sub-paragraph (5)—

(a)in the words before paragraph (a) for “fourth” substitute “third”,

(b)in paragraph (a) for the words from the beginning to “conditions”
substitute “neither the first nor the second condition”, and

(c)in paragraph (b)—

(i)15for “and (2)(b)” substitute “and (2)”, and

(ii)omit the words from “(and if paragraph” to “omitted)”.

(5)In sub-paragraph (6) in the words before paragraph (a) for “fourth”
substitute “third”.

(6)In sub-paragraph (7) omit paragraph (b).

1420In paragraph 35B (duty of appropriate third party to provide information to
A) in sub-paragraph (1) omit “Q,”.

15(1)Paragraph 35D (meaning of “loan charge information”) is amended as
follows.

(2)In sub-paragraph (1)—

(a)25in paragraph (e) omit “, or the loan mentioned in paragraph
35A(3)(a),”,

(b)in paragraph (j) omit “, Q”, and

(c)in paragraph (k) omit “, or in a case within paragraph 35A(3)(a),”.

(3)In sub-paragraph (2) omit paragraph (a).

16(1)30Paragraph 36 (duty to provide loan charge information to B) is amended as
follows.

(2)In sub-paragraph (1)(b) for “6 April 1999” substitute “9 December 2010”.

(3)In sub-paragraph (2) for the words from “the period” to the end substitute
“15 April 2019”.

(4)35Omit sub-paragraph (4).

17Schedule 12 to F(No.2)A 2017 (trading income provided through third
parties: loans etc outstanding on 5 April 2019) is amended as follows.

18For the italic heading before paragraph 2 substitute “Meaning of “loan” and
“quasi loan””.

1940In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment
date”) omit sub-paragraph (6).

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20Omit paragraphs 15 to 18 and the italic heading before each of those
paragraphs.

21(1)Paragraph 19 (accelerated payments: application of paragraph 20) is
amended as follows.

(2)5In sub-paragraph (1)—

(a)in paragraph (e) for “the relevant date” substitute “5 April 2019”, and

(b)in paragraph (f) for “the relevant date” substitute “5 April 2019”.

(3)Omit sub-paragraph (3).

22In paragraph 23 (meaning of “loan charge information”) in sub-paragraph
10(2) omit paragraph (a).

Part 2 Amendments in consequence of section 15

ITEPA 2003

23ITEPA 2003 is amended as follows.

24(1)15Section 554A (application of Chapter 2 of Part 7A: the main case) is amended
as follows.

(2)In subsection (2) after “paragraph 1” insert “or 1A”.

(3)For subsection (4) substitute—

(4)Chapter 2 does not apply by reason of—

(a)20a relevant step taken on or after A’s death if—

(i)the relevant step is within section 554B, or

(ii)the relevant step is within section 554C by virtue of
subsection (1)(ab) of that section,

(b)a relevant step within paragraph 1 of Schedule 11 to F(No.2)A
252017 which is treated as being taken on or after A’s death, or

(c)a relevant step within paragraph 1A of Schedule 11 to
F(No.2)A 2017 in a case where the initial step (within the
meaning given by sub-paragraph (1)(a) of that paragraph) is
treated as being taken on or after A’s death.”

2530In section 554Z (interpretation: general) in subsection (10)(d) after
“paragraph 1” insert “or 1A”.

F(No.2)A 2017

26Schedule 11 to F(No.2)A 2017 (employment income provided through third
parties: loans etc outstanding on 5 April 2019) is amended as follows.

2735In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment
date”)—

(a)in sub-paragraph (2), in the words before paragraph (a), for
“paragraph 1” substitute “paragraphs 1 and 1A”,

(b)in sub-paragraph (4) for “paragraph 1” substitute “paragraphs 1 and
401A”, and

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(c)in sub-paragraph (5) for “paragraph 1” substitute “paragraphs 1 and
1A”.

28In paragraph 3(1) (meaning of “outstanding”: loans) for “paragraph 1”
substitute “paragraphs 1 and 1A”.

295In paragraph 4 (when an amount of a loan is outstanding: certain
repayments to be disregarded) in sub-paragraph (6) for “the relevant step
treated as taken by paragraph 1” substitute “a relevant step treated as taken
by paragraph 1 or 1A”.

30In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a
10right to payment of the loan) in sub-paragraph (2)(b) for “paragraph 1(4)”
substitute “paragraphs 1(4) and 1A(5)”.

31In paragraph 7 (meaning of “outstanding”: loans in currencies other than
stirling) in sub-paragraph (3) after “relevant step” insert “within paragraph
1”.

3215In paragraph 10 (meaning of “outstanding”: loans made in a depreciating
currency) in sub-paragraph (1)(b) after “relevant step” insert “within
paragraph 1”.

33In paragraph 11(1) (meaning of “outstanding”: quasi-loans) for “paragraph
1” substitute “paragraphs 1 and 1A”.

3420In paragraph 12 (certain payments or transfers to be disregarded for the
purposes of paragraph 11) in sub-paragraph (5) for “the relevant step treated
as taken by paragraph 1” substitute “a relevant step treated as taken by
paragraph 1 or 1A”.

35In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B
25acquires a right to the payment or transfer of assets) in sub-paragraph (2)(b)
for “paragraph 1(4)” substitute “paragraphs 1(4) and 1A(5)”.

36In paragraph 15 (meaning of “outstanding”: quasi-loans in currencies other
than sterling) in sub-paragraph (3) after “relevant step” insert “within
paragraph 1”.

3730In paragraph 18 (meaning of “outstanding”: quasi-loans made in a
depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert
“within paragraph 1”.

38After paragraph 35 insert—

“Exclusion for relevant step within paragraph 1A where initial step excluded

35ZA35Chapter 2 of Part 7A of ITEPA 2003 does not apply by reason of a
relevant step within paragraph 1A if that Chapter does not apply
by reason of the initial step (within the meaning given by sub-
paragraph (1)(a) of paragraph 1A).”

Social Security (Contributions) Regulations 2001

39(1)40The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) are
amended as follows.

(2)In regulation 22B (amounts to be treated as earnings: Part 7A of ITEPA 2003)
in paragraph (3A)(a) after “paragraph 1” insert “or 1A”.

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(3)In regulation 22C (amounts to be treated as earnings paid to or for the benefit
of the earner: Schedule 11 to F(No.2)A 2017) in paragraph (1)—

(a)after “paragraph 1” insert “or 1A”, and

(b)after “paragraph 1(2)” insert “or 1A(3) or (4)”.

Section 22

5Schedule 2 Entrepreneurs’ relief

Part 1 Reduction in lifetime limit

Reduction in lifetime limit

110In section 169N of TCGA 1992 (entrepreneurs’ relief: amount of relief)—

(a)in subsection (4), for “£10 million” substitute “£1 million”;

(b)in subsection (4A), for “£10 million” substitute “£1 million”.

Commencement

2The amendments made by paragraph 1 have effect in relation to disposals
15made on or after 11 March 2020.

Anti-forestalling: unconditional contracts

3(1)This paragraph applies where an asset is conveyed or transferred on or after
11 March 2020 under a contract made before that date that is not conditional.

(2)Despite section 28(1) of TCGA 1992 (disposal under unconditional contract
20made at time of contract and not at time of later conveyance or transfer), the
disposal is to be treated for the purposes of paragraph 2 as taking place at
the time the asset is conveyed or transferred, and not at the time the contract
is made, unless the condition in sub-paragraph (3) or (4) is met.

(3)The condition in this sub-paragraph is that—

(a)25the parties to the contract are not connected persons,

(b)no purpose of entering into the contract was obtaining an advantage
by reason of the application of section 28(1) of TCGA 1992, and

(c)the person making the conveyance or transfer makes a claim which
includes a statement that the condition in paragraph (b) is met.

(4)30The condition in this sub-paragraph is that—

(a)the parties to the contract are connected persons,

(b)the contract was entered into wholly for commercial reasons,

(c)no purpose of entering into the contract was obtaining an advantage
by reason of the application of section 28(1) of TCGA 1992, and

(d)35the person making the conveyance or transfer makes a claim which
includes a statement that the conditions in paragraphs (b) and (c) are
met.

(5)Section 169M(2) and (3) of TCGA 1992 apply to a claim under sub-paragraph
(3)(c) or (4)(d) as if it were a claim under that section.