Tax treatment of levies and repayments
Mr Chancellor of the Exchequer
NC11
To move the following Clause:—
'.—(1) In the Income and Corporation Taxes Act 1988 ("the 1988 Act"), in section 76 (expenses of management: insurance companies), for subsections (7) and (7A) substitute—
"(7) For the purposes of this section any sums paid by a company by way of a levy shall be treated as part of its expenses of management.
(7A) "Levy" means—
(a) a payment required under rules made under section (Funding of the legal assistance scheme)(2) of the Financial Services and Markets Act 2000 ("the Act of 2000");
(b) a levy imposed under the Financial Services Compensation Scheme;
(c) a payment required under rules made under section 209 of the Act of 2000;
(d) a payment required in accordance with the standard terms fixed under paragraph 18 of Schedule 14 to the Act of 2000."
(2) After section 76 of the 1988 Act insert—
"Levies and
repayments under the Financial Services and Markets Act 2000. | 76A.—(1) In computing the amount of the profits to be charged under Case I of Schedule D arising from a trade carried on by an authorised person (other than an investment company)—
(2) "Levy" has the meaning given in section 76(7A).
(3) "Repayment provision" means any provision made by virtue of—
(a) section (Funding of the legal assistance scheme)(7) of the Financial Services and Markets Act 2000 ("the Act of 2000");
(b) section 188(1)(e) of the Act of 2000.
(4) "Authorised person" has the same meaning as in the Act of 2000.
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Levies and
repayments under the Financial Services and Markets Act 2000: investment companies. | 76B.—(1) For the purposes of section 75 any sums paid by an investment company—
(a) by way of a levy, or
(b) as a result of an award of costs under costs rules,
shall be treated as part of its expenses of management.
(2) If a payment is made to an investment company as a result of a repayment provision, the company shall be charged to tax under Case VI of Schedule D on the amount of that payment.
(3) "Levy" has the meaning given in section 76(7A).
(4) "Costs rules" means—
(a) rules made under section 205 of the Financial Services and Markets Act 2000;
(b) provision relating to costs contained in the standard terms fixed under paragraph 18 of Schedule 14 to that Act.
(5) "Repayment provision" has the meaning given in section 76A(3)." '.
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NEW CLAUSES RELATING TO REPORTS BY THE DIRECTOR GENERAL OF FAIR TRADING
Reports by Director General of Fair Trading
Mr Chancellor of the Exchequer
NC27
To move the following Clause:—
'.—(1) The Director must keep the regulating provisions and the Authority's practices under review.
(2) If at any time the Director considers that—
(a) a regulating provision or practice has a significant anti-competitive effect, or
(b) two or more regulating provisions or practices taken together, or a particular combination of regulating provisions and practices, have such an effect,
he must make a report to that effect.
(3) If at any time the Director considers that—
(a) a regulating provision or practice does not have any significant anti-competitive effect, or
(b) two or more regulating provisions or practices taken together, or a particular combination of regulating provisions and practices, do not have any such effect,
he may make a report to that effect.
(4) A report under subsection (2) must include details of the anti-competitive effect.
(5) If the Director makes a report under subsection (2) he must—
(a) send a copy of it to the Treasury, the Competition Commission and the Authority; and
(b) publish it in the way appearing to him to be best calculated to bring it to the attention of the public.
(6) If the Director makes a report under subsection (3)—
(a) he must send a copy of it to the Treasury, the Competition Commission and the Authority; and
(7) Before publishing a report under this section the Director must, so far as practicable, exclude any matter which relates to the private affairs of a particular individual the publication of which, in the opinion of the Director, would or might seriously and prejudicially affect his interests.
(8) Before publishing such a report the Director must, so far as practicable, exclude any matter which relates to the affairs of a particular body the publication of which, in the opinion of the Director, would or might seriously and prejudicially affect its interests.
(9) Subsections (7) and (8) do not apply in relation to copies of a report which the Director is required to send under subsection (5)(a) or (6)(a).
(10) For the purposes of the law of defamation, absolute privilege attaches to any report of the Director under this section.'.
Consideration by Competition Commission
Mr Chancellor of the Exchequer
NC28
To move the following Clause:—
'.—(1) If the Director—
(a) makes a report under section (Reports by Director General of Fair Trading)(2), or
(b) asks the Commission to consider a report that he has made under section (Reports by Director General of Fair Trading)(3),
the Commission must consider the matter.
(2) The Commission must then make its own report on the matter unless it considers that, as a result of a change of circumstances, no useful purpose would be served by a report.
(3) If the Commission decides in accordance with subsection (2) not to make a report, it must make a statement setting out the change of circumstances which resulted in that decision.
(4) A report made under this section must state whether, in the opinion of the Commission—
(a) the regulating provision or practice which is the subject of the report has a significant anti-competitive effect, or
(b) the regulating provisions or practices, or combination of regulating provisions and practices, which are the subject of the report have such an effect.
(5) A report under this section which states that, in the opinion of the Commission, there is a significant anti-competitive effect must also—
(a) state whether the Commission considers that that effect is justified; and
(b) if it states that the Commission considers that it is not justified, state its opinion as to the action, if any, that ought to be taken by the Authority.
(6) Subsection (7) applies whenever the Commission is considering, for the purposes of this section, whether a particular anti-competitive effect is justified.
(7) The Commission must ensure, so far as that is reasonably possible, that the conclusion it reaches is compatible with the functions conferred, and obligations imposed, on the Authority by or under this Act.
(8) A report under this section must contain such an account of the Commission's reasons for—
(a) any opinion which it has expressed in the report, and
(b) if it has reached a conclusion on whether a particular anti-competitive effect is justified, that conclusion,
as is expedient, in the opinion of the Commission, for facilitating proper understanding of that conclusion or opinion.
(9) Schedule (Role of Competition Commission) supplements this section.
(10) If the Commission makes a report under this section it must send a copy to the Treasury, the Authority and the Director.'.
Role of the Treasury
Mr Chancellor of the Exchequer
NC29
To move the following Clause:—
'.—(1) This section applies if the Competition Commission makes a report under section (Consideration by Competition Commission)(3) which states that in the opinion of the Commission there is a significant anti-competitive effect.
(2) If the Commission's opinion, as stated in the report, is that the anti-competitive effect is not justified, the Treasury must give a direction to the Authority requiring it to take such action as may be specified in the direction.
(3) But subsection (2) does not apply if the Treasury consider—
(a) that, as a result of action taken by the Authority in response to the Commission's report, it is unnecessary for them to give a direction; or
(b) that the exceptional circumstances of the case make it inappropriate or unnecessary for them to do so.
(4) In considering the action to be specified in a direction under subsection (2), the Treasury must have regard to any opinion expressed by the Commission when it complied with section (Consideration by Competition Commission)(5)(b).
(5) Subsection (6) applies if—
(a) the Commission's conclusion, as stated in its report, is that the anti-competitive effect is justified; but
(b) the Treasury consider that the exceptional circumstances of the case require them to act.
(6) The Treasury may give a direction to the Authority requiring it to take such action—
(a) as they consider to be necessary in the light of the exceptional circumstances of the case; and
(b) as may be specified in the direction.
(7) The Authority may not be required as a result of this section to take any action—
(a) that it would not have power to take in the absence of a direction under this section; or
(b) that would otherwise be incompatible with any of the functions conferred, or obligations imposed, on it by or under this Act.
(8) Subsection (9) applies if the Treasury are considering—
(a) whether subsection (2) applies and, if so, what action is to be specified in a direction under that subsection; or
(b) whether to give a direction under subsection (6).
(9) The Treasury must—
(a) do what they consider appropriate to allow the Authority, and any other person appearing to the Treasury to be affected, an opportunity to make representations; and
(b) have regard to any such representations.
(10) If, in reliance on subsection (3)(a) or (b), the Treasury decline to act under subsection (2), they must make a statement to that effect, giving their reasons.
(11) If the Treasury give a direction under this section they must make a statement giving—
(a) details of the direction; and
(b) if the direction is given under subsection (6), their reasons for giving it.
(12) The Treasury must—
(a) publish any statement made under this section in the way appearing to them best calculated to bring it to the attention of the public; and
(b) lay a copy of it before Parliament.'.
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