Finance Bill

House of Lords

Session 2013 - 14
Internet Publications
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Finance Bill

Finance Bill
Part 4 — Excise duties and other taxes
115

Value added tax
191
Repayments of value added tax to health service bodies
(1)
In section 41 of VATA 1994 (application to the Crown), in subsection (7), after
“Board” insert “and a clinical commissioning group, the Health and Social Care
Information Centre, the National Health Service Commissioning Board and
5
the National Institute for Health and Care Excellence”.
(2)
The amendment made by this section is treated as having come into force on 1
April 2013.
192
Valuation of certain supplies of fuel
Schedule 38 contains provision about the valuation of certain supplies of fuel
10
for the purposes of value added tax.
193
Reduced rate for energy-saving materials
(1)
Group 2 (installation of energy-saving materials) of Part 2 of Schedule 7A to
VATA 1994 (reduced rate supplies of goods and services) is amended as
follows.
15
(2)
For items 1 and 2 substitute—
“1.
Supplies of services of installing energy-saving materials in
residential accommodation.
2.
Supplies of energy-saving materials by a person who installs those
materials in residential accommodation.”
20
(3)
Omit Note 3 (meaning of “use for a relevant charitable purpose”).
(4)
The amendments made by this section have effect in relation to supplies made
on or after 1 August 2013.
Stamp duty land tax
194
Pre-completion transactions: existing cases
25
(1)
Section 45 of FA 2003 (contract and conveyance: effect of transfer of rights)—
(a)
has effect subject to the amendment in subsection (2) below in relation
to agreements for the grant or assignment of an option that are entered
into during the period beginning with 21 March 2012 and ending
immediately before the day on which this Act is passed, and
30
(b)
has effect subject to the amendments in subsections (3) to (7) below in
relation to transfers of rights (see subsection (1) of that section) entered
into during that period.
(2)
At the end of subsection (2) insert “or an agreement for the future grant or
assignment of an option”.
35
(3)
In subsection (3), in the second sentence, after “except” insert “in a case
excluded by subsection (3A) or”.

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(4)
After subsection (3) insert—
“(3A)
A case is excluded by this subsection from the second sentence of
subsection (3) if—
(a)
the secondary contract is substantially performed at the same
time as, and in connection with, the substantial performance or
5
completion of the original contract but is not completed at that
time (“the relevant time”),
(b)
the original purchaser or a person connected with the original
purchaser is in possession of the whole, or substantially the
whole, of the subject-matter of the transfer of rights at any time
10
after the relevant time, and
(c)
having regard to all the circumstances, it would be reasonable
to conclude that the obtaining of a tax advantage for the original
purchaser was the main purpose, or one of the main purposes,
of the original purchaser in entering into the transfer of rights.
15
(3B)
In subsection (3A)—
“possession” has the same meaning as in section 44(5)(a);
“tax advantage” means—
(a)
a relief from tax or increased relief from tax,
(b)
a repayment of tax or increased repayment of tax, or
20
(c)
the avoidance or reduction of a charge to tax.
(3C)
Nothing in subsection (3A) or (3B) affects the breadth of the application
of sections 75A to 75C.”
(5)
In subsection (4), at the end insert “except in a case excluded by subsection
(4A)”.
25
(6)
After subsection (4) insert—
“(4A)
Subsection (3A) applies for the purposes of subsection (4) as if—
(a)
the reference to subsection (3) were a reference to subsection (4),
(b)
a reference to the original contract were a reference to the
secondary contract arising from the earlier transfer of rights,
30
(c)
a reference to the original purchaser were a reference to the
transferee under the earlier transfer of rights, and
(d)
a reference to the transfer of rights were a reference to the
subsequent transfer of rights.”
(7)
In subsection (5)(b)—
35
(a)
after “subsection (3) above” insert “or in subsection (3A) above”, and
(b)
after “subsection (4)” insert “or (4A)”.
(8)
Subsections (10) to (12) apply where—
(a)
as a result of subsection (2) of this section, section 45 of FA 2003 does
not apply in relation to a contract of the kind mentioned in subsection
40
(1)(a) of that section (“the original contract”),
(b)
the original contract was substantially performed or completed (or, in
a case that would have fallen within subsection (5) of that section,
substantially performed or completed so far as relating to the relevant
part of the subject-matter of the original contract) at the same time as,
45
and in connection with, the substantial performance or completion of
an agreement for the grant or assignment of an option, and

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(c)
that time fell before the day on which this Act is passed.
(9)
Subsections (10) to (12) also apply where—
(a)
section 45 of FA 2003 applies in relation to the contract for a land
transaction (“the original contract”),
(b)
as a result of subsections (1) to (7) above, the substantial performance
5
or completion of the original contract (or, in a case within subsection (5)
of that section, its substantial performance or completion so far as
relating to part of the subject-matter of the original contract) is not
disregarded, and
(c)
the relevant time referred to in subsection (3A)(a) of that section fell
10
before the day on which this Act is passed.
(10)
Section 76 of FA 2003 (duty to deliver land transaction return) is to be regarded
as requiring the purchaser under the original contract to deliver a land
transaction return relating to the land transaction not later than 30 September
2013.
15
(11)
Accordingly, 30 September 2013 is for the purposes of Part 4 of FA 2003 the
filing date for the land transaction return relating to the transaction.
(12)
If the purchaser under the original contract (“P”) has delivered a land
transaction return relating to the land transaction before the day on which this
Act is passed, P must not later than 30 September 2013 give notice under
20
paragraph 6 of Schedule 10 to FA 2003 amending the return, but this does not
prevent P from making subsequent amendments within the time allowed by
sub-paragraph (3) of that paragraph.
195
Pre-completion transactions
Schedule 39 contains provisions about certain transactions relating to a
25
contract that is to be completed by a conveyance.
196
Relief from higher rate
Schedule 40 contains provisions about relief from the higher rate of stamp duty
land tax.
197
Leases
30
Schedule 41 contains provision about stamp duty land tax in relation to leases.
Landfill tax
198
Standard rate of landfill tax
(1)
Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
(2)
In subsection (1)(a) (standard rate), for “£72” substitute “£80”.
35
(3)
In subsection (2) (reduced rate) for “£72” substitute “£80”.
(4)
The amendments made by this section have effect in relation to disposals made
(or treated as made) on or after 1 April 2014.

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Climate change levy
199
Climate change levy: main rates
(1)
In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount
payable by way of levy) for the table substitute—

Taxable commodity supplied
Rate at which levy payable if

5

supply is not a reduced-rate

supply or a supply for use in

scrap metal recycling

Electricity
£0.00541 per kilowatt hour

Gas supplied by a gas utility
£0.00188 per kilowatt hour

10

or any gas supplied in a

gaseous state that is of a kind

supplied by a gas utility

Any petroleum gas, or other
£0.01210 per kilogram

gaseous hydrocarbon,

15

supplied in a liquid state

Any other taxable
£0.01476 per kilogram”.

commodity

(2)
The amendment made by subsection (1) has effect in relation to supplies
treated as taking place on or after 1 April 2014.
20
200
Climate change levy: supplies subject to carbon price support rates etc
Schedule 42 amends Schedule 6 to FA 2000 (climate change levy).
Insurance premium tax
201
Contracts that are not taxable
(1)
In Schedule 7A to FA 1994 (IPT: contracts that are not taxable), paragraph 3
25
(contracts relating to motor vehicles for use by handicapped persons) is
amended as follows.
(2)
In sub-paragraph (2)(a)—
(a)
after “disability living allowance” insert “, or personal independence
payment,” and
30
(b)
after “component” insert “, or of an armed forces independence
payment”.
(3)
In sub-paragraph (3), after “disability living allowance” insert “, personal
independence payment, armed forces independence payment”.

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(4)
After sub-paragraph (4)(b) insert—
“(ba)
“personal independence payment” means a personal
independence payment under Part 4 of the Welfare Reform
Act 2012 or the corresponding provision having effect in
Northern Ireland;
5
(bb)
“armed forces independence payment” means an armed
forces independence payment under a scheme established
under section 1 of the Armed Forces (Pensions and
Contributions) Act 2004;”.
(5)
The amendments made by this section are treated as having come into force on
10
8 April 2013.
Bank levy
202
Bank levy: rates from 1 January 2013
(1)
Schedule 19 to FA 2011 (bank levy) is amended as follows.
(2)
In paragraph 6 (steps for determining the amount of the bank levy), in sub-
15
paragraph (2)—
(a)
for “0.044%” substitute “0.065%”, and
(b)
for “0.088%” substitute “0.130%”.
(3)
In paragraph 7 (special provision for chargeable periods falling wholly or
partly before 1 January 2013), in sub-paragraph (2) (as substituted by
20
paragraph 6 of Schedule 34 to FA 2012), in the table in the substituted Step 7—
(a)
in the second column for “0.0525%” substitute “0.065%”, and
(b)
in the third column for “0.105%” substitute “0.130%”.
(4)
In Schedule 34 to FA 2012 (bank levy)—
(a)
omit paragraph 5 (which substituted new rates from 1 January 2013),
25
and
(b)
in paragraph 7 for “paragraphs 5 and” substitute “paragraph”.
(5)
The amendments made by subsections (2) to (4) are treated as having come into
force on 1 January 2013 (and accordingly the paragraph repealed by subsection
(4) is treated as never having come into force).
30
(6)
Subsections (7) to (13) apply where—
(a)
an amount of the bank levy is treated as if it were an amount of
corporation tax chargeable on an entity (“E”) for an accounting period
of E,
(b)
the chargeable period in respect of which the amount of the bank levy
35
is charged falls (or partly falls) on or after 1 January 2013, and
(c)
under the Instalment Payment Regulations, one or more instalment
payments, in respect of the total liability of E for the accounting period,
were treated as becoming due and payable before the commencement
date (“pre-commencement instalment payments”).
40
(7)
Subsections (1) to (5) are to be ignored for the purpose of determining the
amount of any pre-commencement instalment payment.
(8)
If there is at least one instalment payment, in respect of the total liability of E
for the accounting period, which under the Instalment Payment Regulations is

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treated as becoming due and payable on or after the commencement date
(“post-commencement instalment payments”), the amount of that instalment
payment, or the first of them, is to be increased by the adjustment amount.
(9)
If there are no post-commencement instalment payments, a further instalment
payment, in respect of the total liability of E for the accounting period, of an
5
amount equal to the adjustment amount is to be treated as becoming due and
payable at the end of the period of 30 days beginning with the commencement
date.
(10)
“The adjustment amount” is the difference between—
(a)
the aggregate amount of the pre-commencement instalments
10
determined in accordance with subsection (7), and
(b)
the aggregate amount of those instalment payments determined
ignoring subsection (7) (and so taking account of subsections (1) to (5)).
(11)
In the Instalment Payment Regulations—
(a)
in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13,
15
references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations
are to be read as including a reference to subsections (6) to (10) (and in
regulation 7(2) “the regulation in question”, and in regulation 8(2) “that
regulation”, are to be read accordingly), and
(b)
in regulation 9(3), the reference to those Regulations is to be read as
20
including a reference to subsections (6) to (10).
(12)
In section 59D of TMA 1970 (general rule as to when corporation tax is due and
payable), in subsection (5), the reference to section 59E is to be read as
including a reference to subsections (6) to (11).
(13)
In this section—
25
“the chargeable period” is to be construed in accordance with paragraph
4 or (as the case may be) 5 of Schedule 19 to FA 2011;
“the commencement date” means the day on which this Act is passed;
“the Instalment Payment Regulations” means the Corporation Tax
(Instalment Payments) Regulations 1998 (S.I. 1998/3175);
30

and references to the total liability of E for an accounting period are to be
construed in accordance with regulation 2(3) of the Instalment Payment
Regulations.
203
Bank levy: rates from 1 January 2014
(1)
Schedule 19 to FA 2011 (bank levy) is amended as follows.
35
(2)
In paragraph 6 (steps for determining the amount of the bank levy), in sub-
paragraph (2)—
(a)
for “0.065%” substitute “0.071%”, and
(b)
for “0.130%” substitute “0.142%”.
(3)
In paragraph 7 (special provision for chargeable periods falling wholly or
40
partly before 1 January 2013).
(4)
In sub-paragraph (1) for “2013” substitute “2014”.
(5)
In sub-paragraph (2) (as substituted by paragraph 6 of Schedule 34 to FA 2012),
in the table in the substituted Step 7—

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(a)
for the final entry in the first column substitute—
“1 January 2013 to 31 December 2013”, and
(b)
at the end add—

“Any time on
0.071%
0.142%”.

or after 1

5

January 2014

(6)
In the italic heading immediately before that paragraph for “2013” substitute
“2014”.
(7)
Accordingly, in Schedule 34 to FA 2012 (bank levy), omit paragraph 6(2).
(8)
The amendments made by this section come into force on 1 January 2014.
10
204
No deductions for UK or foreign bank levies
(1)
Schedule 19 to FA 2011 (the bank levy) is amended as follows.
(2)
In paragraph 46 (bank levy to be ignored for purposes of corporation tax and
income tax), in paragraph (b), after “paid” insert “(directly or indirectly)”.
(3)
In Part 7 (double taxation relief), after paragraph 69 insert—
15
“Foreign levies to be ignored for purposes of income tax or corporation tax
69A   (1)
In calculating profits or losses for the purposes of income tax or
corporation tax—
(a)
no deduction is allowed in respect of any tax which is
imposed by the law of a territory outside the United
20
Kingdom and corresponds to the bank levy, and
(b)
no account is to be taken of any amount which is paid
(directly or indirectly) by a member of a group to another
member for the purposes of meeting or reimbursing the cost
of such a tax charged in relation to the group.
25
      (2)
Paragraph 66(3) applies for the purposes of sub-paragraph (1) as it
applies for the purposes of paragraph 66(2).”
(4)
Accordingly—
(a)
in paragraph 3, after “double taxation relief” insert “and with the
deduction of foreign levies for the purposes of corporation tax and
30
income tax”, and
(b)
in the heading for Part 7, after “RELIEF” insert “ETC”
(5)
The amendments made by this section have effect in relation to any period of
account beginning on or after 1 January 2013.
(6)
The amendments made by subsections (3) and (4) also have effect in relation to
35
any period of account beginning before that date, but only if, and to the extent
that, the tax is the subject of a claim for relief under paragraph 66 or 67 of
Schedule 19 to FA 2011 (bank levy: double taxation relief) made on or after 5
December 2012.
(7)
For the purposes of subsections (5) and (6), a period of account beginning
40
before, and ending on or after 1 January 2013 is to be treated as if so much of