Finance Bill (HL Bill 123)

continued    Part 4 continued    

Direction to complete enquiry

15(1)The responsible member may apply to the tribunal for a direction that an
officer of Revenue and Customs give a closure notice under paragraph 14
within a specified period.

(2)5The tribunal hearing the application must give a direction unless satisfied
that HMRC have reasonable grounds for not giving an enquiry closure
notice within a specified period.

(3)Paragraphs 44 (settling of appeals by agreement) and 51 (tribunal
determinations) apply to an application under sub-paragraph (1) as they
10apply to an appeal under paragraph 33, subject to any necessary
modifications.

Part 5 HMRC determinations

Determination of tax chargeable if no return delivered

16(1)15An officer of Revenue and Customs may determine to the best of the officer’s
information and belief the total amount of tax payable by relevant persons
for an accounting period (“an HMRC determination”) if the conditions in
sub-paragraph (2) are met.

(2)The conditions in this sub-paragraph are met if—

(a)20no DST return for the accounting period has been delivered by the
end of the filing date, and

(b)the officer has reasonable grounds for believing the responsible
member is under a duty to deliver a DST return for the accounting
period.

(3)25Notice of an HMRC determination—

(a)must state the date on which it is issued, and

(b)must be served on the responsible member.

(4)No HMRC determination may be made more than 3 years after the filing
date.

30Determination to have effect as a self-assessment

17(1)An HMRC determination has effect for enforcement purposes as if it were a
self-assessment (within the meaning of paragraph 2(2)).

(2)In sub-paragraph (1) “for enforcement purposes” means for the purposes of
provisions providing for—

(a)35tax-related penalties,

(b)collection and recovery of tax, and

(c)interest on overdue tax.

(3)Nothing in this paragraph affects any liability to a penalty for failure to
deliver a return.

Determination superseded by actual self-assessment

18(1)If, after an HMRC determination has been made, a DST return is delivered
for the accounting period, the self-assessment included in the return
supersedes the determination.

(2)5Sub-paragraph (1) does not apply to a return delivered—

(a)more than 3 years after the day on which the power to make the
determination first became exercisable, or

(b)more than 12 months after the date of the determination,

whichever is the later.

(3)10Where—

(a)proceedings have been begun for the recovery of any tax charged by
an HMRC determination, and

(b)before the proceedings are concluded the determination is
superseded by a self-assessment,

15the proceedings may be continued as if they were proceedings for the
recovery of so much of the tax charged by the self-assessment as is due and
payable and has not been paid.

(4)Where—

(a)action is being taken under Part 1 of Schedule 8 to F(No.2)A 2015
20(enforcement of deduction from accounts) for the recovery of an
amount (“the original amount”) of tax charged by an HMRC
determination, and

(b)before that action is concluded, the determination is superseded by a
self-assessment,

25that action may be continued as if it were an action for the recovery of so
much of the tax charged by the self-assessment as is due and payable, has
not been paid and does not exceed the original amount.

Part 6 HMRC assessments

30Assessments where loss of tax discovered

19(1)If, in respect of an accounting period of a group, an officer of Revenue and
Customs discovers that—

(a)an amount of tax that ought to have been assessed has not been
assessed, or

(b)35an assessment to tax is or has become insufficient,

the officer may make an assessment (a “discovery assessment”) in the
amount or further amount which ought in the officer’s opinion to be charged
in order to make good to the Crown the loss of tax.

(2)This is subject to the restrictions in paragraph 20.

40Restrictions on assessments

20(1)If a DST return has been delivered in respect of the accounting period, the
power to make a discovery assessment—

(a)may only be made in the two cases specified in sub-paragraphs (2)
and (3), and

(b)may not be made in the circumstances specified in sub-paragraph
(5).

(2)5The first case is where the situation mentioned in paragraph 19(1) was
brought about carelessly or deliberately on the part of—

(a)a relevant person, or

(b)a person acting on behalf of a relevant person.

(3)The second case is where an officer of Revenue and Customs, at the time the
10officer—

(a)ceased to be entitled to give a notice of enquiry into the return, or

(b)completed an enquiry into the return,

could not have been reasonably expected, on the basis of the information
made available to the officer before that time, to be aware of the situation
15mentioned in paragraph 19(1).

(4)For this purpose information is regarded as made available to the officer of
Revenue and Customs if—

(a)it is contained in the DST return for the accounting period in question
or either of the two immediately preceding accounting periods,

(b)20it is contained in any documents produced or information provided
by the responsible member for the purposes of an enquiry into any
such return, or

(c)it is information the existence of which, and the relevance of which
as regards the situation mentioned in paragraph 19(1)—

(i)25could reasonably be expected to be inferred by the officer of
Revenue and Customs from information falling within
paragraph (a) or (b), or

(ii)are notified in writing to an officer of Revenue and Customs
by the responsible member or another person acting on the
30responsible member’s behalf.

(5)No discovery assessment may be made if—

(a)the situation mentioned in paragraph 19(1) is attributable to a
mistake in the return as to the basis on which the tax liability ought
to have been calculated, and

(b)35the return was in fact made on the basis or in accordance with the
practice generally prevailing at the time it was made.

Time limits for discovery assessments

21(1)The general rule is that no discovery assessment may be made more than 4
years after the end of the accounting period to which it relates.

(2)40An assessment in a case involving a loss of tax brought about carelessly by a
relevant person (or a person acting on their behalf) may be made at any time
not more than 6 years after the end of the accounting period to which it
relates.

(3)An assessment in a case involving a loss of tax—

(a)45brought about deliberately by a relevant person (or a person acting
on their behalf), or

(b)attributable to a failure by the responsible member to comply with an
obligation under section 54,

may be made at any time not more than 20 years after the end of the
accounting period to which it relates.

5Assessment procedure etc

22(1)Where notice of a discovery assessment is issued, the notice must be served
on the responsible member.

(2)The notice must state—

(a)the tax due,

(b)10the date on which the notice is issued, and

(c)the time within which any appeal against the assessment must be
made.

(3)After notice of the assessment has been served under this paragraph, the
assessment may not be altered except as provided for by or under this Part
15of this Act.

(4)Where an officer of Revenue and Customs has—

(a)decided to make an assessment to tax, and

(b)taken all other decisions needed for arriving at the amount of the
assessment,

20the officer may entrust to some other officer of Revenue and Customs the
responsibility for completing the assessing procedure, whether by means
involving the use of a computer or otherwise, including responsibility for
serving notice of the assessment.

Liability to amounts charged by way of discovery assessment

23(1)25This paragraph applies where—

(a)notice of a discovery assessment has been issued under paragraph
22, and

(b)no appeal has been brought against the assessment under paragraph
33(1)(c).

(2)30The responsible member is liable to the tax due, subject as follows.

(3)The responsible member may make a request to an officer of Revenue and
Customs for one or more other relevant persons to be liable to the tax due (or
any part of it).

(4)The request must be made within 30 days of the date of issue of the notice of
35assessment.

(5)Within 30 days of receiving the request, the officer must—

(a)either agree to the request or refuse it,

(b)notify the responsible member of the decision, and

(c)if the officer agrees to the request, give effect to it by making all
40necessary adjustments.

(6)An officer may not agree to the request unless satisfied it is reasonable in all
the circumstances.

(7)A request or notification under this paragraph must be in writing.

Part 7 Relief in case of overpaid tax

Claim for relief for overpaid tax

24(1)This paragraph applies where, in relation to a group, an amount has been
5paid by way of tax for an accounting period which was not tax due.

(2)The responsible member may make a claim to the Commissioners for
repayment of the amount.

(3)The Commissioners must give effect to such a claim; but this is subject to—

(a)paragraph 26 (cases where no liability to give effect to claim), and

(b)10paragraph 27 (power to enquire into claims).

(4)Except as provided for by or under this Part of this Act, the Commissioners
are not liable to repay any amount paid by way of tax by reason of the fact it
was not tax due.

(5)This paragraph is to be read with paragraph 25.

15Making a claim

25(1)A claim under paragraph 24 may not be made—

(a)if the amount paid is excessive by reason of a mistake in a DST return
or returns, more than 4 years after the end of the accounting period
to which the return (or, if more than one, the first return) relates, and

(b)20otherwise, more than 4 years after the end of the accounting period
in respect of which the amount was paid.

(2)A claim must—

(a)be in the specified form, and

(b)contain specified information.

(3)25A claim may not be made by being included in a DST return.

(4)In this paragraph “specified” means specified in a notice published by
HMRC.

Cases in which Commissioners not liable to give effect to claim

26(1)If, or to the extent that, a claim under paragraph 24 falls within any of Cases
30A to D, the Commissioners are not liable to give effect to the claim.

(2)Case A is where, in relation to the group, there is unpaid DST liability for the
accounting period.

(3)Case B is where the responsible member is or will be able to seek relief by
taking other steps under this Part of this Act.

(4)35Case C is where the responsible member—

(a)could have sought relief by taking such steps within a period that has
now expired, and

(b)knew, or ought reasonably to have known, before the end of that
period that such relief was available.

(5)Case D is where—

(a)the amount paid is excessive by reason of a mistake in calculating the
amount of tax payable by the group for the accounting period, and

(b)the amount was calculated in accordance with the practice generally
5prevailing at the time.

(6)In this paragraph “DST liability” has the same meaning as in section 66.

Power to enquire into claims

27(1)An officer of Revenue and Customs may enquire into a claim under
paragraph 24 if the officer gives notice to the responsible member of the
10officer’s intention to do within the time allowed.

(2)The time allowed is the period ending with the quarter day next following
the first anniversary of the day on which the claim was made.

The quarter days are the 31 January, 30 April, 31 July and 31 October.

(3)A claim enquired into under sub-paragraph (1) may not be the subject of a
15further notice under that sub-paragraph.

Completion of enquiry into claim etc

28(1)An enquiry under paragraph 27 is completed when the officer by notice (a
“closure notice”) informs the responsible member that the enquiry is
complete and states the conclusions reached in the enquiry.

(2)20A closure notice must either—

(a)state that in the opinion of an officer of Revenue and Customs no
amendment of the claim is required, or

(b)make the amendments of the claim required to give effect to the
conclusions stated in the notice.

(3)25A closure notice takes effect when it is issued.

(4)The officer must give effect to any amendments made by the closure notice
by making such adjustments as may be necessary whether—

(a)by way of assessment, or

(b)by discharge or repayment of tax.

(5)30The adjustments must be made within 30 days of the date of issue of the
closure notice.

(6)Paragraph 15 (direction to complete enquiry) applies in relation to an
enquiry under paragraph 27 as it applies in relation to an enquiry under
paragraph 6.

35Assessment for excessive repayment etc

29(1)This paragraph applies where—

(a)an amount has been paid by way of a repayment of tax, and

(b)the amount paid exceeded the amount which the Commissioners
were liable at that time to repay.

(2)40The Commissioners may—

(a)to the best of their judgment, assess the amount of the excess, and

(b)notify the amount to the responsible member.

Supplementary assessments

30(1)This paragraph applies where—

(a)an assessment has been notified under paragraph 29, and

(b)5it appears to the Commissioners that the amount which ought to
have been assessed as due exceeds the amount that has already been
assessed.

(2)The Commissioners may—

(a)on or before the last day on which the assessment under paragraph
1029 could have been made, make a supplementary assessment of the
amount of tax due, and

(b)notify the amount to the responsible member.

Further provision about assessments under paragraph 29 and 30

31(1)An amount assessed and notified under paragraph 29 or 30 counts as a
15liability to digital services tax for the purposes of this Part of this Act.

(2)But sub-paragraph (1) does not have effect if, or to the extent that, the
assessment has been withdrawn or reduced.

Time limits for assessments

32An assessment under paragraph 29 or 30 may not be made more than 4 years
20after the end of the accounting period in which evidence of facts sufficient in
the opinion of the Commissioners to justify making the assessment comes to
their knowledge.

Part 8 Appeals against HMRC decisions on tax

25Right of appeal

33(1)An appeal may be brought against—

(a)an amendment of a DST return under paragraph 8 (amendment
during enquiry to prevent loss of tax);

(b)an amendment made by a closure notice under paragraph 14;

(c)30a discovery assessment (under paragraph 19);

(d)an amendment made by a closure notice under paragraph 28;

(e)an assessment made under paragraph 29 or 30.

(2)Any such appeal is to be brought by the responsible member (“the
appellant”).

(3)35If an appeal under sub-paragraph (1)(a) against an amendment of a self-
assessment is made while an enquiry into the return is in progress none of
the steps mentioned in paragraph 36(2)(a) to (c) may be taken in relation to
the appeal until the enquiry is completed.

Notice of appeal

34(1)Notice of appeal under paragraph 33 must be given to HMRC—

(a)in writing,

(b)within 30 days after the specified date.

(2)5In sub-paragraph (1) “specified date” means—

(a)in relation to an appeal under paragraph 33(1)(a), the date on which
the notice of amendment was issued;

(b)in relation to an appeal under paragraph 33(1)(b) or (d), the date on
which the closure notice was issued;

(c)10in relation to an appeal under paragraph 33(1)(c) or (e), the date on
which the notice of assessment was issued.

(3)The notice of appeal must specify the grounds of appeal.

Late notice of appeal

35(1)This paragraph applies in a case where—

(a)15notice of appeal may be given to HMRC under this Schedule, but

(b)no notice is given before the relevant time limit.

(2)Notice may be given after the relevant time limit if—

(a)HMRC agree, or

(b)where HMRC do not agree, the tribunal gives permission.

(3)20HMRC must agree to notice being given after the relevant time limit if the
appellant has requested in writing that HMRC do so and HMRC are
satisfied—

(a)that there was a reasonable excuse for not giving the notice before the
relevant time limit, and

(b)25that the request has been made without unreasonable delay.

(4)If a request of the kind mentioned in sub-paragraph (3) is made, HMRC
must notify the appellant whether or not HMRC agree to the request.

(5)In this paragraph “relevant time limit”, in relation to notice of appeal, means
the time before which the notice must be given (disregarding this
30paragraph).

Steps that may be taken following notice of appeal

36(1)This paragraph applies if notice of appeal has been given to HMRC.

(2)In such a case—

(a)the appellant may notify HMRC that the appellant requires HMRC
35to review the matter in question (see paragraph 37),

(b)HMRC may notify the appellant of an offer to review the matter in
question (see paragraph 38), or

(c)the appellant may notify the appeal to the tribunal.

(3)This paragraph does not prevent the matter in question from being dealt
40with in accordance with paragraph 44(1) and (2) (settling of appeals by
agreement).

Right of appellant to require review

37(1)If the appellant notifies HMRC that it requires them to review the matter in
question, HMRC must—

(a)notify the appellant of HMRC’s view of the matter in question within
5the relevant period, and

(b)review the matter in question in accordance with paragraph 39.

(2) Sub-paragraph (1) does not apply if—

(a)the appellant has already given a notification under this paragraph
in relation to the matter in question,

(b)10HMRC have given a notification under paragraph 40 in relation to
the matter in question, or

(c)the appellant has notified the appeal to the tribunal.

(3)In this paragraph “the relevant period” means—

(a)the period of 30 days beginning with the day on which HMRC
15receive the notification from the appellant, or

(b)such longer period as is reasonable.

Offer of review by HMRC

38(1)Sub-paragraphs (2) to (5) apply if HMRC notify the appellant of an offer to
review the matter in question.

(2)20The notification must include a statement of HMRC’s view of the matter in
question.

(3)If the appellant notifies HMRC within the acceptance period that it accepts
the offer, HMRC must review the matter in question in accordance with
paragraph 39.

(4)25If the appellant does not accept the offer in accordance with sub-paragraph
(3)—

(a)HMRC’s view of the matter in question is treated as if it were
contained in a settlement agreement (see paragraph 44(1)), but

(b)paragraph 44(3) (right to withdraw from agreement) does not apply
30in relation to that notional agreement.

(5)Sub-paragraph (4) does not apply to the matter in question if, or to the extent
that, the appellant notifies the appeal to the tribunal under paragraph 42.

(6)HMRC may not take the action mentioned in sub-paragraph (1) at any time
if before that time—

(a)35HMRC have given a notification under this paragraph in relation to
the matter in question,

(b)the appellant has given a notification under paragraph 37 in relation
to the matter in question, or

(c)the appellant has notified the appeal to the tribunal.

(7)40In this paragraph “acceptance period” means the period of 30 days
beginning with the date of the document by which HMRC notify the
appellant of the offer to review the matter in question.

Nature of review

39(1)This paragraph applies if HMRC are required by paragraph 37 or 38 to
review the matter in question.

(2)The nature and extent of the review are to be such as appear appropriate to
5HMRC in the circumstances.

(3)For the purpose of sub-paragraph (2), HMRC must, in particular, have
regard to steps taken before the beginning of the review—

(a)by HMRC in deciding the matter in question, and

(b)by any person in seeking to resolve disagreement about the matter in
10question.

(4)The review must take account of any representations made by the appellant
at a stage which gives HMRC a reasonable opportunity to consider them.

(5)The review may conclude that HMRC’s view of the matter in question is to
be—

(a)15upheld,

(b)varied, or

(c)cancelled.

(6)HMRC must notify the appellant of the conclusions of the review and their
reasoning within—

(a)20the period of 45 days beginning with the relevant day, or

(b)such other period as may be agreed.

(7)In sub-paragraph (6) “relevant day” means—

(a)in a case where the appellant required the review, the day when
HMRC notified the appellant of HMRC’s view of the matter in
25question;

(b)in a case where HMRC offered the review, the day when HMRC
received notification of the appellant’s acceptance of the offer.

(8)If HMRC do not give notice of the conclusions of the review within the
period specified in sub-paragraph (6), the review is treated as having
30concluded that HMRC’s view of the matter in question is upheld.

(9)If sub-paragraph (8) applies, HMRC must notify the appellant of the
conclusions which the review is treated as having reached.

Effect of conclusions of review

40(1)If HMRC give notice of the conclusions of a review (see paragraph 39)—

(a)35the conclusions are to be treated as if they were contained in a
settlement agreement (see paragraph 44(1)), but

(b)paragraph 44(3) (withdrawal from agreement) does not apply in
relation to that notional agreement.

(2)Sub-paragraph (1) does not apply to the matter in question if, or to the extent
40that, the appellant notifies the appeal to the tribunal (see paragraphs 41 and
42).