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Construction industry workers |
| Construction workers supplied by agencies. |
55. - (1) In section 134 of the Taxes Act 1988, subsection (5)(c) (which excepts from charge by virtue of that section the remuneration of construction workers who are sub-contractors supplied by agencies) shall cease to have effect.
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(2) In section 559 of the Taxes Act 1988 (deductions on account of tax etc. from payments to certain sub-contractors), in subsection (1), for "subsection (2) below" there shall be substituted "the following provisions of this section"; and after subsection (1) there shall be inserted the following subsection-
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"(1A) Subsection (1) above shall not apply to any payment made under the contract in question that is chargeable to income tax under Schedule E by virtue of section 134(1)."
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(3) Subsections (1) and (2) above have effect in relation to-
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(a) any payments made on or after 6th April 1998 other than any made in respect of services rendered before that date; and |
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(b) any payments made before 6th April 1998 in respect of services to be rendered on or after that date. |
| Transitional provisions in connection with section 55. |
56. - (1) Subject to subsection (6) below, subsection (2) below applies if-
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(a) a construction trade is being carried on by a person ("the sub-contractor") at the end of the year 1997-98; and |
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(b) there are receipts of that trade which, but for section 134(5)(c) of the Taxes Act 1988, would have fallen to be treated for the year 1997-98 as the emoluments of an office or employment. |
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(2) Where this subsection applies, then, subject to subsections (4) and (5) below-
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(a) the trade shall be deemed to have been permanently discontinued at the end of the year 1997-98; and |
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(b) to the extent (if any) that the trade includes activities in addition to the rendering of services falling by virtue of section 55 to be treated as the duties of an office or employment, a new trade shall be deemed to have been set up and commenced on 6th April 1998. |
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(3) Subsection (4) below applies if-
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(a) a construction trade ("the old trade") is deemed by virtue of subsection (2)(a) above to have been permanently discontinued; and |
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(b) a construction trade ("the new trade")- |
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(i) is deemed by virtue of subsection (2)(b) above to have been set up and commenced; or
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(ii) (where sub-paragraph (i) above does not apply) is actually set up and commenced in the year 1998-99.
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(4) Where this subsection applies then, notwithstanding the deemed discontinuance, the old trade and the new trade shall be treated as the same for the purposes of section 385 of the Taxes Act 1988 (carry-forward of losses against subsequent profits).
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(5) An officer of the Board shall not become entitled by virtue of anything in this section to give a direction under paragraph 3(2) of Schedule 20 to the Finance Act 1994 (power to revise assessment so that made on the actual basis) in the case of a person whose trade is deemed under subsection (2) above to cease on 5th April 1998.
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(6) Subsection (2) above does not apply if the sub-contractor by notice to an officer of the Board otherwise elects.
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(7) An election under subsection (6) above-
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(a) if it relates to a trade carried on by an individual, must be included in a return under section 8 of the Taxes Management Act 1970 which is made and delivered in that individual's case on or before the day on which it is required to be made and delivered under that section; and |
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(b) if it relates to a trade carried on by persons in partnership, must be included in a return under section 12AA of that Act which is made and delivered in the partners' case, or in the case of any one or more of them, on or before the day specified in relation to that return under subsection (2) or (3) of that section. |
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(8) In this section "construction trade" means a trade consisting in or including the rendering of services under contracts relating to construction operations (within the meaning of Chapter IV of Part XIII of the Taxes Act 1988).
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(9) Where at any time on or after 17th March 1998 and before the day on which this Act is passed any election corresponding to an election under subsection (6) above has been made under a resolution of the House of Commons having effect in accordance with the provisions of the Provisional Collection of Taxes Act 1968, this section has effect, on and after the day on which this Act is passed, as if that election were an election under subsection (6) above.
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| Sub-contractors in the construction industry. |
57. Schedule 8 to this Act (which makes provision in relation to sub-contractors in the construction industry) shall have effect.
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Payments and other benefits in connection with termination of employment etc. |
| Payments and other benefits in connection with termination of employment etc. |
58. - (1) For section 148 of the Taxes Act 1988 (payments on retirement or removal from office or employment) substitute-
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| "Payments and other benefits in connection with termination of employment, etc. |
148. - (1) Payments and other benefits not otherwise chargeable to tax which are received in connection with-
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(a) the termination of a person's employment, or |
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(b) any change in the duties of or emoluments from a person's employment, |
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are chargeable to tax under this section if and to the extent that their amount exceeds £30,000.
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(2) For the purposes of this section a "benefit" includes anything which, if received for performance of the duties of the employment-
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(a) would be an emolument of the employment, or |
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(b) would be chargeable to tax as an emolument of the employment, |
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or which would be such an emolument, or so chargeable, apart from any exemption.
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(3) An amount chargeable to tax under this section is income chargeable under Schedule E for the year of assessment in which the payment or other benefit is received.
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The right to receive the payments or other benefits is not itself regarded as a benefit for this purpose.
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(4) For the purposes of this section-
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(a) a cash benefit is treated as received- |
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(i) when payment is made of or on account of the benefit, or
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(ii) the recipient becomes entitled to require payment of or on account of the benefit; and
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(b) a non-cash benefit is treated as received when it is used or enjoyed. |
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(5) This section applies-
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(a) whether the payment or other benefit is provided by the employer or former employer or by another person, and |
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(b) whether or not the payment or other benefit is provided in pursuance of a legal obligation. |
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(6) This section has effect subject to Schedule 11, which contains provisions extending, restricting and otherwise supplementing the provisions of this section.
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(7) In this section and that Schedule "employment" includes an office and related expressions have a corresponding meaning.".
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(2) In the Taxes Act 1988, for Schedule 11 (relief as respects tax on payments on retirement or removal from office or employment) substitute the Schedule set out in Part I of Schedule 9 to this Act.
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(3) The enactments mentioned in Part II of Schedule 9 to this Act have effect with the amendments specified there which are consequential on this section.
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(4) This section applies to payments or other benefits received (within the meaning of section 148 of the Taxes Act 1988 as substituted by subsection (1) above) on or after 6th April 1998, except where the payment or other benefit or the right to receive it has been brought into charge to tax before that date.
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