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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    529

 

State Pension Credit Act 2002 (c. 16)

  263     (1)      Section 17(1) of the State Pension Credit Act 2002 (other interpretation

provisions) is amended as follows.

          (2)      In paragraph (b) of the definition of “foreign war disablement pension” for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

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(c. 1)” substitute “section 641 of the Income Tax (Earnings and Pensions) Act

2003”.

          (3)      In paragraph (b) of the definition of “foreign war widow’s or widower’s

pension” for “section 315(2)(e) of the Income and Corporation Taxes Act

1988” substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and

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Pensions) Act 2003”.

          (4)      In paragraph (b) of the definition of “war disablement pension”, for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

(c. 1)” substitute “any of paragraphs (a) to (f) of section 641(1) of the Income

Tax (Earnings and Pensions) Act 2003”.

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          (5)      In paragraph (b) of the definition of “war widow’s or widower’s pension”

for “section 315(2)(e) of the Income and Corporation Taxes Act 1988”

substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions)

Act 2003”.

Tax Credits Act 2002 (c. 21)

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  264      The Tax Credits Act 2002 is amended as follows.

  265     (1)      Amend section 25 (payments of working tax credit by employers) as follows.

          (2)      In subsection (1) for “Schedule E payments” substitute “payments of, or on

account of, PAYE income”.

          (3)      In subsection (5) for “Schedule E payments” substitute “payments of, or on

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account of, PAYE income”.

          (4)      Omit subsection (6).

  266      In section 29(5) (recovery of overpayments) for “regulations under section

203 of the Income and Corporation Taxes Act 1988 (PAYE)” substitute

“PAYE regulations”.

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State Pension Credit Act (Northern Ireland) 2002 (c. 14 (N.I.))

  267     (1)      Section 17(1) of the State Pension Credit Act (Northern Ireland) 2002 (other

interpretation provisions) is amended as follows.

          (2)      In paragraph (b) of the definition of “foreign war disablement pension” for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

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(c. 1)” substitute “section 641 of the Income Tax (Earnings and Pensions) Act

2003”.

          (3)      In paragraph (b) of the definition of “foreign war widow’s or widower’s

pension” for “section 315(2)(e) of the Income and Corporation Taxes Act

1988” substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and

40

Pensions) Act 2003”.

          (4)      In paragraph (b) of the definition of “war disablement pension”, for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 1 — Continuity of the law

    530

 

          (4)      (c. 1)” substitute “any of paragraphs (a) to (f) of section 641(1) of the Income

Tax (Earnings and Pensions) Act 2003”.

          (5)      In paragraph (b) of the definition of “war widow’s or widower’s pension”

for “section 315(2)(e) of the Income and Corporation Taxes Act 1988”

substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions)

5

Act 2003”.

Certain corresponding Northern Ireland provision

  268     (1)      This paragraph applies if provision is made for Northern Ireland which

corresponds to section 171ZJ of the Social Security Contributions and

Benefits Act 1992 (c. 4) (Part 12ZA — statutory paternity pay:

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supplementary) (which was inserted by section 2 of the Employment Act

2002 (c. 22)).

          (2)      In the Northern Ireland provision any reference to emoluments chargeable

to income tax under Schedule E is to be construed as a reference to general

earnings (as defined by section 7 of this Act).

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  269     (1)      This paragraph applies if provision is made for Northern Ireland which

corresponds to section 171ZS of the Social Security Contributions and

Benefits Act 1992 (Part 12ZA — statutory adoption pay: supplementary)

(which was inserted by section 4 of the Employment Act 2002).

          (2)      In the Northern Ireland provision any reference to emoluments chargeable

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to income tax under Schedule E is to be construed as a reference to general

earnings (as defined by section 7 of this Act).

Schedule 7

Section 723

 

Transitionals and savings

Part 1

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Continuity of the law

  1        The repeal of provisions and their enactment in a rewritten form in this Act

does not affect the continuity of the law.

  2        Paragraph 1 does not apply to any change in the law made by this Act.

  3        Any subordinate legislation or other thing which—

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              (a)             has been made or done, or has effect as if made or done, under or for

the purposes of a repealed provision, and

              (b)             is in force or effective immediately before the commencement of the

corresponding rewritten provision,

           has effect after that commencement as if made or done under or for the

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purposes of the rewritten provision.

  4        Any reference (express or implied) in any enactment, instrument or

document to—

              (a)             a rewritten provision, or

              (b)             things done or falling to be done under or for the purposes of a

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rewritten provision,

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 2 — Employment income: charge to tax

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           is to be read as including, in relation to times, circumstances or purposes in

relation to which any corresponding repealed provision had effect, a

reference to the repealed provision or (as the case may be) things done or

falling to be done under or for the purposes of the repealed provision.

  5        Any reference (express or implied) in any enactment, instrument or

5

document to—

              (a)             a repealed provision, or

              (b)             things done or falling to be done under or for the purposes of a

repealed provision,

           is to be read as including, in relation to times, circumstances or purposes in

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relation to which any corresponding rewritten provision has effect, a

reference to the rewritten provision or (as the case may be) things done or

falling to be done under or for the purposes of the rewritten provision.

  6        Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act

1978 (c. 30) (but are without prejudice to any other provision of that Act).

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  7        Paragraphs 4 and 5 apply only in so far as the context permits.

Part 2

Employment income: charge to tax

Taxable earnings

  8       (1)      The charging provisions of Chapters 4 and 5 of Part 2—

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              (a)             apply for the purpose of determining taxable earnings from an

employment in the tax year 2003-04 or any later tax year, and

              (b)             accordingly apply where (for the purposes of those Chapters)

general earnings are received, or remitted to the United Kingdom, in

that or any later tax year.

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          (2)      But they apply to general earnings for a tax year before the tax year 2003-04,

as well as to those for that or any later year.

                   This is subject to sub-paragraph (3).

          (3)      If—

              (a)             any general earnings within subsection (1) of section 22 (chargeable

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overseas earnings) or 26 (foreign earnings of resident employee) are

for a tax year before 1989-90,

              (b)             the earnings are remitted to the United Kingdom in the tax year 2003-

04 or any later tax year (“the remittance year”), and

              (c)             the employee is not resident in the United Kingdom in the remittance

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year,

                   subsection (2) of section 22 or 26 does not apply to the earnings.

Relief for delayed remittances

  9       (1)      This paragraph applies where one or more of the earlier tax years referred to

in section 35(3)(b) (treatment of delayed remittances as taxable earnings in

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earlier tax years) is a tax year before the tax year 2003-04.

          (2)      References (whether express or implied) in sections 35 and 36 to earnings

constituting or being treated as taxable earnings from the employment

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 2 — Employment income: charge to tax

    532

 

          (2)      under section 22(2) or 26(2) in such an earlier tax year are to be construed for

the purposes of the charging of income tax under Case III of Schedule E in

that year as references to earnings constituting or being treated as

emoluments of the employment falling within that Case and received in the

United Kingdom in that year.

5

          (3)      For the purposes of this paragraph the reference in sub-paragraph (2) to the

receipt of income in the United Kingdom is to be construed in accordance

with section 132(5) of ICTA (meaning of emoluments received in the United

Kingdom).

  10       Section 36(2) (the definition of “blocked earnings”) applies in relation to

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emoluments of the employment received in a country or territory outside

the United Kingdom in a tax year before the tax year 2003-04 with the

substitution of—

              (a)             “Emoluments” for “General earnings”, and

              (b)             the following paragraph for paragraph (c)—

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                             “(c)                               would have constituted emoluments of the

employment on which income tax would have

been charged under Case III of Schedule E in that

year if they had been so transferred.”.

  11      (1)      This paragraph applies where a claimant—

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              (a)             makes an election under section 36 for the purposes of a claim for

relief under section 35, and

              (b)             has made a previous claim for relief under section 585 of ICTA (relief

from tax on delayed remittances) in respect of delayed remittances

from the same employment.

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          (2)      Section 36(6) (limit on amount of remittances allocated to a previous tax

year) applies as if, in the definition of “PC”, the reference to the amount of

remittances treated as taxable earnings from the employment in the tax year

in question as a result of a previous claim by the claimant under section 35

includes a reference to the amount of remittances treated as income from the

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employment received in the United Kingdom in that year as a result of a

previous claim by the claimant under section 585 of ICTA.

          (3)      For the purposes of this paragraph the reference in sub-paragraph (2) to the

receipt of income in the United Kingdom is to be construed in accordance

with section 132(5) of ICTA (meaning of emoluments received in the United

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Kingdom).

Disputes as to domicile or ordinary residence

  12      (1)      Nothing in sections 42 and 43 (disputes as to domicile or ordinary residence)

has effect where the dispute relates to the amount of income charged to tax

for the tax year 2002-03 or any earlier tax year.

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          (2)      Nothing in those sections—

              (a)             as applied by section 645(4C) of ICTA (earnings from pensionable

employment) or section 76(6E) of FA 1989 (non-approved retirement

benefits schemes) has effect where the dispute relates to the amount

of income charged to tax for the tax year 2002-03 or any earlier tax

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year, or

              (b)             as applied by section 9(2) of TCGA 1992 (residence, including

temporary residence) has effect where the dispute relates to the

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 3 — Employment income: earnings and benefits etc. treated as earnings

    533

 

              (b)             amount of capital gains tax charged for the tax year 2002-03 or any

earlier tax year.

          (3)      Accordingly, section 207 of ICTA (disputes as to domicile or ordinary

residence) continues to apply to the disputes mentioned in sub-paragraphs

(1) and (2) whether they arise before or after 6th April 2003.

5

Application of provisions to agency workers

  13       In relation to times before 6th April 2003, Chapter 7 of Part 2 applies with the

following modifications—

              (a)             references to “employment income of the worker” are to be read as

references to “income of the worker chargeable to tax under

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Schedule E”,

              (b)             references to “earnings” are to be read as references to

“emoluments”, and

              (c)             references to “this Chapter” are to be read as references to “section

134 of ICTA”.

15

  14       Section 44(2) does not apply in relation to—

              (a)             payments made before 6th April 1998 other than payments made in

respect of services provided on or after that date, or

              (b)             payments made on or after that date in respect of services provided

before that date,

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           if in providing the services the worker is or would be a sub-contractor within

the meaning of section 560 of ICTA (sub-contractors in the construction

industry).

Part 3

Employment income: earnings and benefits etc. treated as earnings

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Taxable benefits: dispensations relating to benefits within provisions not applicable to lower-

paid employments

  15      (1)      An existing notification—

              (a)             is not affected by any of the repeals made by this Act, but

              (b)             continues in force as if it were a dispensation given under section 65

30

(dispensations relating to benefits within provisions not applicable

to lower-paid employment),

                   and accordingly, where an existing notification is revoked under that section

for any period before 6th April 2003, subsection (8) or (9) of that section

extends to tax years before the tax year 2003-04.

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          (2)      In this paragraph an “existing notification”—

              (a)             means a notification which, immediately before 6th April 2003, was

in force under section 166(1) of ICTA (notice of nil liability in respect

of payments, benefits or facilities); and

              (b)             includes a notification whose validity was preserved by subsection

40

(4) of that section (notifications given under section 199 of FA 1970);

                   but a notification within paragraph (b) only continues to have effect under

this paragraph in respect of any liability to tax arising by virtue of Chapter 3

(expenses) or 10 (residual liability to charge) of Part 3.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 3 — Employment income: earnings and benefits etc. treated as earnings

    534

 

  16      (1)      This paragraph applies if—

              (a)             mileage allowance payments are made to an employee in respect of

the use of a vehicle that is not a company vehicle, or

              (b)             mileage allowance relief is available in respect of the use by an

employee of a vehicle.

5

          (2)      Any notification under section 166(1) of ICTA (notice of nil liability in

respect of payments, benefits or facilities) which—

              (a)             was in force immediately before 6th April 2002, and

              (b)             has effect as a dispensation under section 65 (dispensations relating

to benefits within provisions not applicable to lower-paid

10

employment),

                   does not apply in relation to payments made, or benefits or facilities

provided, in respect of expenses incurred in connection with the use of the

vehicle by the employee for business travel.

          (3)      In this paragraph “business travel”, “company vehicle” and “mileage

15

allowance payment” have the same meanings as in Chapter 2 of Part 4.

Taxable benefits: the benefits code

  17      (1)      In relation to times before 6th April 2003, references in the benefits code to

“employment”, “employed”, “employee” and “employer” are to be read in

accordance with this paragraph.

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          (2)      In relation to the Chapters of the benefits code listed in section 216(4)

(provisions not applicable to lower-paid employments), the references

mentioned in sub-paragraph (1) are to be read in accordance with section 66

(meaning of employment and related expressions) but as if in subsection

(1)(a) there were substituted “an employment to which Chapter 2 of Part 5

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of ICTA applies” for “a taxable employment under Part 2”.

          (3)      In relation to any other Chapters of the benefits code, the references

mentioned in sub-paragraph (1) are to be read in accordance with section 66

but as if in subsection (1)(a) there were substituted “an employment the

emoluments of which fall to be assessed under Schedule E” for “a taxable

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employment under Part 2”.

          (4)      Where this paragraph applies, Chapter 11 of Part 3 (exclusion of lower-paid

employments from parts of benefits code) does not apply.

          (5)      This paragraph is subject to paragraphs 18(2), 24, 27(3), 29(4) and 31(2) of this

Schedule.

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Taxable benefits: vouchers and credit-tokens

  18      (1)      For the purpose of applying sections 82 to 89 (non-cash vouchers) in relation

to times before 6th April 2003, Chapter 4 of Part 3 applies with the following

modification.

          (2)      In section 89(1)(c) (reduction for meal vouchers) substitute “an employment

40

which is not an employment within the meaning of section 167(1)(b) of

ICTA” for “lower-paid employment within the meaning of Chapter 11 of this

Part (see section 217)”.

  19      (1)      This paragraph applies to a notification which, immediately before 6th April

2003, was in force under section 144(1) of ICTA (notice of nil liabilities in

45

respect of vouchers or credit-tokens).

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 7 — Transitionals and savings
Part 3 — Employment income: earnings and benefits etc. treated as earnings

    535

 

          (2)      The notification—

              (a)             is not affected by any repeals made by this Act, but

              (b)             continues in force as if it were a dispensation given under section 96

(dispensations relating to vouchers or credit-tokens),

                   and accordingly, where the notification is revoked under that section for any

5

period before 6th April 2003, subsection (7) or (8) of that section extends to

tax years before the tax year 2003-04.

  20      (1)      This paragraph applies if—

              (a)             mileage allowance payments are made to an employee in respect of

the use of a vehicle that is not a company vehicle, or

10

              (b)             mileage allowance relief is available in respect of the use by an

employee of a vehicle.

          (2)      Any notification under section 144(1) of ICTA (notice of nil liability in

respect of vouchers or credit-tokens) which—

              (a)             was in force immediately before 6th April 2002, and

15

              (b)             has effect as a dispensation under section 96 (dispensations relating

to vouchers or credit-tokens),

                   does not apply in relation to cash vouchers, non-cash vouchers or credit-

tokens provided in respect of expenses incurred in connection with the use

of the vehicle by the employee for business travel.

20

          (3)      In this paragraph “business travel”, “company vehicle” and “mileage

allowance payment” have the same meanings as in Chapter 2 of Part 4.

Taxable benefits: living accommodation

  21      (1)      Section 107 (special rule for calculating cost of providing accommodation)

does not apply if the employee first occupied the living accommodation

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before 31st March 1983.

          (2)      Nothing in this paragraph affects the operation of section 107 as applied by

section 398(2)(b) or 415(2)(b).

Taxable benefits: cars, vans and related benefits

  22      (1)      In relation to a capital sum contributed by the employee before 6th April

30

2003, section 132 (cars: capital contributions by employee) applies with the

following modifications.

          (2)      In subsection (1)(b) substitute “under sections 168A to 168C of ICTA in

determining the price of the car as regards a year” for “in calculating the cash

equivalent of the benefit of the car”.

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          (3)      In subsection (2)—

              (a)             omit paragraph (a), and

              (b)             in paragraph (b) substitute “the tax years after the tax year in which

the contribution was made which are” for “subsequent”.

  23      (1)      In relation to a capital sum contributed by the employee before 6th April

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2003, section 147 (classic cars: 15 years of age or more) applies with the

following modifications.

          (2)      In subsection (5)(b) substitute “under section 168F(3) of ICTA in determining

the price of the car as regards a year” for “in determining the market value

of the car”.

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