Part 4 continued    

inserted—

“(4)For the purposes of sub-paragraph (3), P is to be treated as not being
present in the UK at the end of a day that would fall within the third
case in paragraph 22(7) (if P were present in the UK at the end of that
5day).”

(13)Paragraph 145 (interpretation) has effect as if at the appropriate place there
were inserted—

• ““coronavirus disease” has the same meaning as in the
  Coronavirus Act 2020 (see section 1(1) of that Act);”.

110 10Future Fund: EIS and SEIS relief

(1)This section applies if an individual to whom shares in a company have been
issued—

(a)enters into a convertible loan agreement with the company under the
Future Fund on or after 20 May 2020, and

(b)15subsequently receives value from the company under the terms of the
agreement.

(2)If, as a result of the receipt of value, any EIS relief attributable to shares issued
before the relevant time would (apart from this subsection) be withdrawn or
reduced under section 213 of ITA 2007, the value received is to be ignored for
20the purposes of that section.

(3)If, as a result of the receipt of value, any SEIS relief attributable to shares issued
before the relevant time would (apart from this subsection) be withdrawn or
reduced under section 257FE of ITA 2007, the value received is to be ignored
for the purposes of that section.

(4)25If, as a result of the receipt of value, shares issued before the relevant time
would (apart from this subsection) cease to be eligible shares by reason of
paragraph 13(1)(b) of Schedule 5B to TCGA 1992, the value received is to be
ignored for the purposes of that paragraph.

(5)In this section—

• 30“the Future Fund” means the scheme of that name operated from 20 May
  2020 by the British Business Bank plc on behalf of the Secretary of State;

• “the relevant time” means the time when the individual enters into the
  convertible loan agreement.

Preparing for new tax

111 35Preparing 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
certain plastic packaging.

Local loans

112 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)5for “£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.

10Other

113 Interpretation

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

114 Short title

This Act may be cited as the Finance Act 2020.

SCHEDULES

Section 7

Schedule 1 Workers’ services provided through intermediaries

Part 1 5Amendments to Chapter 8 of Part 2 of ITEPA 2003

1Chapter 8 of Part 2 of ITEPA 2003 (application of provisions to workers
under arrangements made by intermediaries) is amended as follows.

2For the heading of the Chapter substitute “Workers’ services provided
through intermediaries to small clients”.

3(1)10Section 48 (scope of Chapter) is amended as follows.

(2)In subsection (1) for the words from “, but” to the end substitute “in a case
where the services are provided to a person who is not a public authority
and who either—

(a)qualifies as small for a tax year, or

(b)15does not have a UK connection for a tax year.”

(3)After subsection (3) insert—

“(4)For provisions determining when a person qualifies as small for a tax
year, see sections 60A to 60G.

(5)For provision determining when a person has a UK connection for a
20tax year, see section 60I.”

4(1)Section 50 (worker treated as receiving earnings from employment) is
amended as follows.

(2)In subsection (1) before paragraph (a) insert—

“(za)the client qualifies as small or does not have a UK
25connection,”.

(3)After subsection (4) insert—

“(5)The condition in paragraph (za) of subsection (1) is to be ignored if—

(a)the client concerned is an individual, and

(b)the services concerned are performed otherwise than for the
30purposes of the client’s business.

(6)For the purposes of paragraph (za) of subsection (1) the client is to be
treated as not qualifying as small for the tax year concerned if the
client is treated as medium or large for that tax year by reason of
section 61TA(3)(a).”

5After section 60 insert—

“When a person qualifies as small for a tax year

60A When a company qualifies as small for a tax year

(1)For the purposes of this Chapter, a company qualifies as small for a
5tax year if one of the following conditions is met (but this is subject
to section 60C).

(2)The first condition is that the company’s first financial year is not
relevant to the tax year.

(3)The second condition is that the small companies regime applies to
10the company for its last financial year that is relevant to the tax year.

(4)For the purposes of this section, a financial year of a company is
“relevant to” a tax year if the period for filing the company’s
accounts and reports for the financial year ends before the beginning
of the tax year.

(5)15Expressions used in this section and in the Companies Act 2006 have
the same meaning in this section as in that Act.

60B When a company qualifies as small for a tax year: joint ventures

(1)This section applies when determining for the purposes of section
60A(3) whether the small companies regime applies to a company
20for a financial year in a case where—

(a)at the end of the financial year the company is jointly
controlled by two or more other persons, and

(b)one or more of those other persons are undertakings (“the
joint venturer undertakings”).

(2)25If the company is a parent company, the joint venturer undertakings
are to be treated as members of the group headed by the company.

(3)If the company is not a parent company, the company and the joint
venturer undertakings are to be treated as constituting a group of
which the company is the parent company.

(4)30In this section the expression “jointly controlled” is to be read in
accordance with those provisions of international accounting
standards which relate to joint ventures.

(5)Expressions used in this section and in the Companies Act 2006 have
the same meaning in this section as in that Act.

60C 35 When a company qualifies as small for a tax year: subsidiaries

(1)A company does not qualify as small for a tax year by reason of the
condition in section 60A(3) being met if—

(a)the company is a member of a group at the end of its last
financial year that is relevant to the tax year,

(b)40the company is not the parent undertaking of that group at
the end of that financial year, and

(c)the undertaking that is the parent undertaking of that group
at that time does not qualify as small in relation to its last
financial year that is relevant to the tax year.

(2)Where the parent undertaking mentioned in subsection (1)(c) is not
5a company, sections 382 and 383 of the Companies Act 2006 have
effect for determining whether the parent undertaking qualifies as
small in relation to its last financial year that is relevant to the tax
year as if references in those sections to a company and a parent
company included references to an undertaking and a parent
10undertaking.

(3)For the purposes of subsections (1)(c) and (2) a financial year of an
undertaking that is not a company is “relevant to” a tax year if it ends
at least 9 months before the beginning of the tax year.

(4)For the purposes of this section, a financial year of a company is
15“relevant to” a tax year if the period for filing the company’s
accounts and reports for the financial year ends before the beginning
of the tax year.

(5)Expressions used in this section and in the Companies Act 2006 have
the same meaning in this section as in that Act.

60D 20 When a relevant undertaking qualifies as small for a tax year

(1)Sections 60A to 60C apply in relation to a relevant undertaking as
they apply in relation to a company, subject to any necessary
modifications.

(2)In this section “relevant undertaking” means an undertaking in
25respect of which regulations have effect under—

(a)section 15(a) of the Limited Liability Partnerships Act 2000,

(b)section 1043 of the Companies Act 2006 (unregistered
companies), or

(c)section 1049 of the Companies Act 2006 (overseas
30companies).

(3)Expressions used in this section and in the Companies Act 2006 have
the same meaning in this section as in that Act.

60E When other undertakings qualify as small for a tax year

(1)An undertaking that is not a company or a relevant undertaking
35qualifies as small for a tax year if one of the following conditions is
met.

(2)The first condition is that the undertaking’s first financial year is not
relevant to the tax year.

(3)The second condition is that the undertaking’s turnover for its last
40financial year that is relevant to the tax year is not more than the
amount for the time being specified in the second column of item 1
of the Table in section 382(3) of the Companies Act 2006.

(4)For the purposes of this section a financial year of an undertaking is
“relevant to” a tax year if it ends at least 9 months before the
45beginning of the tax year.

(5)In this section—

• “relevant undertaking” has the meaning given by section 60D,
  and

• “turnover”, in relation to an undertaking, means the amounts
  5derived from the provision of goods or services after the
  deduction of trade discounts, value added tax and any other
  taxes based on the amounts so derived.

(6)Expressions used in this section and in the Companies Act 2006 have
the same meaning in this section as in that Act.

60F 10When other persons qualify as small for a tax year

(1)For the purposes of this Chapter, a person who is not a company,
relevant undertaking or other undertaking qualifies as small for a tax
year if the person’s turnover for the last calendar year before the tax
year is not more than the amount for the time being specified in the
15second column of item 1 of the Table in section 382(3) of the
Companies Act 2006.

(2)In this section—

• “company” and “undertaking” have the same meaning as in the
  Companies Act 2006,

• 20“relevant undertaking” has the meaning given by section 60D,
  and

• “turnover”, in relation to a person, means the amounts derived
  from the provision of goods or services after the deduction of
  trade discounts, value added tax and any other taxes based
  25on the amounts so derived.

60G Sections 60A to 60F: connected persons

(1)This section applies where—

(a)it is necessary for the purposes of determining whether a
person qualifies as small for a tax year (“the tax year
30concerned”) to first determine the person’s turnover for a
financial year or calendar year (“the assessment year”), and

(b)at the end of the assessment year the person is connected with
one or more other persons (“the connected persons”).

(2)For the purposes of determining whether the person qualifies as
35small for the tax year concerned the person’s turnover for the
assessment year is to be taken to be the sum of—

(a)the person’s turnover for the assessment year, and

(b)the relevant turnover of each of the connected persons.

(3)In subsection (2)(b) “the relevant turnover” of a connected person
40means—

(a)in a case where the connected person is a company, relevant
undertaking or other undertaking, its turnover for its last
financial year that is relevant to the tax year concerned, and

(b)in a case where the connected person is not a company,
45relevant undertaking or other undertaking, the turnover of
the connected person for the last calendar year ending before
the tax year concerned.

(4)For the purposes of subsection (3)(a)—

(a)a financial year of a company or relevant undertaking is
relevant to the tax year concerned if the period for filing
accounts and reports for the financial year ends before the
5beginning of the tax year concerned, and

(b)a financial year of any other undertaking is relevant to the tax
year concerned if it ends more than 9 months before the
beginning of the tax year concerned.

(5)In a case where—

(a)10the person mentioned in subsection (1)(a) is a company or
relevant undertaking, and

(b)at the end of the assessment period the person is a member of
a group,

the person is to be treated for the purposes of this section as not being
15connected with any person that is a member of that group.

(6)In this section—

• “turnover”, in relation to a person, means the amounts derived
  from the provision of goods or services after the deduction of
  trade discounts, value added tax and any other taxes based
  20on the amounts so derived, and

• “relevant undertaking” has the meaning given by section 60D.

(7)For provision determining whether one person is connected with
another, see section 718 (connected persons).

(8)Expressions used in this section and in the Companies Act 2006 have
25the same meaning in this section as in that Act.

60H Duty on client to state whether it qualifies as small for a tax year

(1)This section applies if, in the case of an engagement that meets
conditions (a) to (b) in section 49(1), the client receives from the
client’s agent or the worker a request to state whether in the client’s
30opinion the client qualifies as small for a tax year specified in the
request.

(2)The client must provide to the person who made the request a
statement as to whether in the client’s opinion the client qualifies as
small for the tax year specified in the request.

(3)35If the client fails to provide the statement by the time mentioned in
subsection (4) the duty to do so is enforceable by an injunction or, in
Scotland, by an order for specific performance under section 45 of the
Court of Session Act 1988.

(4)The time is whichever is the later of—

(a)40the end of the period of 45 days beginning with the date the
client receives the request, and

(b)the beginning of the period of 45 days ending with the start
of the tax year specified in the request.

(5)In this section “the client’s agent” means a person with whom the
45client entered into a contract as part of the arrangements mentioned
in paragraph (b) of section 49(1).

When a person has a UK connection

60I When a person has a UK connection for a tax year

(1)For the purposes of this Chapter, a person has a UK connection for a
tax year if (and only if) immediately before the beginning of that tax
5year the person—

(a)is resident in the United Kingdom, or

(b)has a permanent establishment in the United Kingdom.

(2)In this section “permanent establishment”—

(a)in relation to a company, is to be read (by virtue of section
101007A of ITA 2007) in accordance with Chapter 2 of Part 24 of
CTA 2010, and

(b)in relation to any other person, is to be read in accordance
with that Chapter but as if references in that Chapter to a
company were references to that person.

15Interpretation”

6In section 61(1) (interpretation), in the definition of company, before
“means” insert “(except in sections 60A to 60G)”.

Part 2 Amendments to Chapter 10 of Part 2 of ITEPA 2003

720Chapter 10 of Part 2 of ITEPA 2003 (workers’ services provided to public
sector through intermediaries) is amended as follows.

8For the heading of the Chapter substitute “Workers’ services provided
through intermediaries to public authorities or medium or large clients”.

9(1)Section 61K (scope of Chapter) is amended as follows.

(2)25In subsection (1) for the words “to a public authority through an
intermediary” substitute “through an intermediary in a case where the
services are provided to a person who—

(a)is a public authority, or

(b)qualifies as medium or large and has a UK connection for a
30tax year”.

(3)After subsection (2) insert—

“(3)For the purposes of this Chapter a person qualifies as medium or
large for a tax year if the person does not qualify as small for the tax
year for the purposes of Chapter 8 of this Part (see sections 60A to
3560G).

(4)Section 60I (when a person has a UK connection for a tax year)
applies for the purposes of this Chapter.”

10In section 61L (meaning of “public authority”) in subsection (1)—

(a)after paragraph (a) insert—

“(aa)40a body specified in section 23(3) of the Freedom of
Information Act 2000,”,

(b)omit the “or” at the end of paragraph (e), and

(c)after paragraph (f) insert “, or

(g)a company connected with any person mentioned in
paragraphs (a) to (f)”.

11(1)Section 61M (engagements to which the Chapter applies) is amended as
5follows.

(2)In subsection (1)—

(a)omit paragraph (b),

(b)omit the “and” at the end of paragraph (c), and

(c)after paragraph (c) insert—

“(ca)10the client—

(i)is a public authority, or

(ii)is a person who qualifies as medium or large
and has a UK connection for one or more tax
years during which the arrangements
15mentioned in paragraph (c) have effect, and”.

(3)After subsection (1) insert—

“(1A)But sections 61N to 61R do not apply if —

(a)the client is an individual, and

(b)the services are provided otherwise than for the purposes of
20the client’s trade or business.”

12(1)Section 61N (worker treated as receiving earnings from employment) is
amended as follows.

(2)In subsection (3)—

(a)after “subsections (5) to (7)” insert “and (8A)”, and

(b)25after “61T” insert “, 61TA”.

(3)For subsection (5) substitute—

“(5)Unless and until the client gives a status determination statement to
the worker (see section 61NA), subsections (3) and (4) have effect as
if for any reference to the fee-payer there were substituted a
30reference to the client; but this is subject to section 61V.

(5A)Subsections (6) and (7) apply, subject to sections 61T, 61TA and 61V,
if—

(a)the client has given a status determination statement to the
worker,

(b)35the client is not the fee-payer, and

(c)the fee-payer is not a qualifying person.”

(4)In subsection (8) (meaning of “qualifying person”) before paragraph (a)
insert—

“(za)has been given by the person immediately above them in the
40chain the status determination statement given by the client
to the worker,”.

(5)After subsection (8) insert—

“(8A)If the client is not a public authority, a person is to be treated by
subsection (3) as making a deemed direct payment to the worker
45only if the chain payment made by the person is made in a tax year