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Finance Bill
Part 9 — Miscellaneous and supplementary provisions

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     (9)    After section 468P insert—

       “468PA             Section 468O(1A): consequences of reasonable but incorrect belief

Where—

                  (a)                 an interest distribution is made to a unit holder by the trustees

of an authorised unit trust,

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                  (b)                 the trustees, in reliance on the reputable intermediary condition

being fulfilled with respect to the unit holder, do not comply

with the obligation under section 349(2) to make a deduction

from the interest distribution,

                  (c)                 that obligation would apply but for that condition being so

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fulfilled, and

                  (d)                 (contrary to the belief of the trustees) the unit holder is in fact

ordinarily resident in the United Kingdom,

section 350 and Schedule 16 have effect as if that obligation applied.

       468PB                         Regulations supplementing sections 468M to 468PA

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           (1)           The Board may by regulations make provision for giving effect to

sections 468M to 468PA.

           (2)           The regulations may, in particular, include provision modifying the

application of those sections in relation to interest distributions made to

or received under a trust.

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           (3)           The regulations may, in particular, include provision for the giving by

officers of the Board of notices requiring trustees of authorised unit

trusts to supply information and make available books, documents and

other records for inspection on behalf of the Board.

           (4)           The regulations may—

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                  (a)                 make provision in relation to times before they are made,

                  (b)                 make different provision for different cases, and

                  (c)                 make such supplementary, incidental, consequential or

transitional provision as appears to the Board to be

appropriate.”.

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     (10)   Section 98 of the Taxes Management Act 1970 (c. 9) (penalties: provisions

requiring information etc in response to notices) is amended as follows.

     (11)   In subsection (4A)(b), for “or (4D)” substitute “, (4D) or (4E)”.

     (12)   After subsection (4D) insert—

           “(4E)              A payment is within this subsection if—

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                  (a)                 it is an interest distribution made to a unit holder by the trustees

of an authorised unit trust,

                  (b)                 the trustees, in purported reliance on the reputable

intermediary condition being fulfilled with respect to the unit

holder, do not comply with the obligation under section 349(2)

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of the principal Act to make a deduction from the interest

distribution,

                  (c)                 that obligation would apply if that condition were not so

fulfilled, and

 

 

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Part 9 — Miscellaneous and supplementary provisions

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                  (d)                 the trustees did not believe that the unit holder was not

ordinarily resident in the United Kingdom or could not

reasonably have so believed (so that that condition was not so

fulfilled).

                         Expressions used in this subsection have the same meaning as in

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Chapter 3 of Part 12 of the principal Act.”.

     (13)   In the first column of the Table, after the entry relating to regulations under

section 431E(1) or 441A(3) of the principal Act, insert—

                    “section 468P(6);

                    regulations under section 468PB(3);”.

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     (14)   This section has effect in relation to interest distributions made on or after 16th

October 2002.

 201   Mandatory electronic payment by large employers

     (1)    The Commissioners of Inland Revenue (“the Commissioners”) may make

regulations requiring large employers, subject to such exceptions as may be

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specified, to use electronic means for the making of specified payments under

legislation relating to any tax under the care and management of the

Commissioners.

     (2)    In subsection (1) “large employer” means a person paying PAYE income to 250

or more recipients.

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            Regulations under this section may make provision as to the date or period by

reference to which this is to be determined and the circumstances in which a

person is to be treated as paying PAYE income to a recipient.

     (3)    Regulations under this section may make provision—

           (a)           as to conditions that must be complied with in connection with the use

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of electronic means for the making of any payment;

           (b)           for treating a payment as not having been made unless conditions

imposed by any of the regulations are satisfied;

           (c)           for determining the time when payment is to be taken to have been

made.

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     (4)    Regulations under this section may also make provision (which may include

provision for the application of conclusive or other presumptions) as to the

manner of proving for any purpose—

           (a)           whether any use of electronic means for making a payment is to be

taken as having resulted in the payment being made;

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           (b)           the time of the making of any payment for the making of which

electronic means have been used;

           (c)           any other matter for which provision may be made by regulations

under this section.

     (5)    Regulations under this section may—

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           (a)           allow any authorisation or requirement for which the regulations may

provide to be given or imposed by means of a specific or general

direction given by the Commissioners;

           (b)           provide that the conditions of any such authorisation or requirement

are to be taken to be satisfied only where the Inland Revenue are

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satisfied as to specified matters.

 

 

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Part 9 — Miscellaneous and supplementary provisions

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     (6)    Regulations under this section may contain provision—

           (a)           requiring the Inland Revenue to notify persons appearing to them to be,

or to have become, a person required to use electronic means for the

making of any payments in accordance with the regulations;

           (b)           enabling a person so notified to have the question whether he is such a

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person determined in the same way as an appeal.

     (7)    Regulations under this section may confer power on the Commissioners to

give specific or general directions—

           (a)           suspending, for any period during which the use of electronic means

for the making of payments is impossible or impractical, any

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requirements imposed by the regulations relating to the use of such

means;

           (b)           substituting alternative requirements for the suspended ones;

           (c)           making any provision that is necessary in consequence of the

imposition of the substituted requirements.

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     (8)    The power to make provision by regulations under this section includes

power—

           (a)           to provide for a contravention of, or any failure to comply with, the

regulations (a “default”) to attract a surcharge of a specified amount;

           (b)           to provide that specified enactments relating to penalties imposed for

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the purposes of any taxation matter within the care and management of

the Commissioners (including enactments relating to assessments,

review and appeal) apply, with or without modifications, in relation to

surcharges under the regulations.

     (9)    The regulations may specify the surcharge for each default as—

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           (a)           a specified percentage, depending on the circumstances but not

exceeding 10%, of the amount of the payment to which the default

relates, or

           (b)           a specified percentage, depending on the circumstances but not

exceeding 0.83%, of the total amount of tax due for the accounting

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period, year of assessment or other specified period of twelve months

during which the default occurred;

            but, in either case, they may specify £30 if it is more.

     (10)   Regulations under this section may—

           (a)           make different provision for different cases;

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           (b)           make such incidental, supplemental, consequential and transitional

provision in connection with any provision contained in any of the

regulations as the Commissioners think fit.

     (11)   Regulations under this section shall be made by statutory instrument subject to

annulment in pursuance of a resolution of the House of Commons.

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     (12)   In this section—

                    “the Inland Revenue” means—

                  (a)                 the Commissioners,

                  (b)                 any officer of the Commissioners, or

                  (c)                 any other person who for the purposes of electronic means of

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payment is acting under the authority of the Commissioners;

                    “legislation” means any enactment, Community legislation or

subordinate legislation;

 

 

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Part 9 — Miscellaneous and supplementary provisions

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                    “specified” means specified by or under regulations under this section;

                    “subordinate legislation” has the same meaning as in the Interpretation

Act 1978 (c. 30).

 202   Use of electronic means of payment under other provisions

     (1)    Any power to make subordinate legislation for or in connection with the

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making of payments conferred in relation to a taxation matter on—

           (a)           the Commissioners of Inland Revenue, or

           (b)           the Treasury,

            includes power to make any such provision in relation to the making of those

payments as could be made in exercise of the power conferred by section 201.

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     (2)    Provision as to means of payment made in exercise of the powers conferred by

section 201 or subsection (1) above has effect notwithstanding so much of any

enactment or subordinate legislation as would otherwise allow payment to be

made by any other means.

     (3)    Expressions used in this section and section 201 have the same meaning in this

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section as in that section.

     (4)    Nothing in this section shall be read as restricting the generality of the power

conferred by section 201.

 203   Admissibility of evidence not affected by offer of settlement etc

     (1)    In section 105(1) of the Taxes Management Act 1970 (c. 9) (evidence in cases of

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fraudulent conduct), for paragraphs (a) and (b) and the word “that” preceding

them substitute—

                  “(a)                    that where serious tax fraud has been committed the Board may

accept a money settlement and that the Board will accept such a

settlement, and will not pursue a criminal prosecution, if he

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makes a full confession of all tax irregularities, or

                  (b)                    that the extent to which he is helpful and volunteers

information is a factor that will be taken into account in

determining the amount of any penalty,”.

     (2)    For the heading to that section substitute “Admissibility of evidence not

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affected by offer of settlement etc”.

     (3)    In paragraph 3(1) of Schedule 18 to the Finance Act 1999 (c. 16) (which makes

corresponding provision in relation to stamp duty), for paragraphs (a) and (b)

substitute—

                  “(a)                    that where serious stamp duty fraud has been committed the

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Board may accept a money settlement and that the Board will

accept such a settlement, and will not pursue a criminal

prosecution, if he makes a full confession of all stamp duty

irregularities, or

                  (b)                    that the extent to which he is helpful and volunteers

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information is a factor that will be taken into account in

determining the amount of any penalty,”.

     (4)    For the heading before that paragraph substitute “Admissibility of evidence not

affected by offer of settlement etc”.

 

 

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     (5)    The above amendments have effect in relation to statements made, or

documents produced, after the passing of this Act.

 204   Consequential claims etc

     (1)    In Part 4 of the Taxes Management Act 1970 (c. 9) (assessment and claims), after

section 43B insert—

5

       “43C   Consequential claims etc

           (1)           Where—

                  (a)                 a return is amended under section 28A(2)(b), 28B(2)(b) or

28B(4), and

                  (b)                 the amendment is made for the purpose of making good to the

10

Crown any loss of tax attributable to fraudulent or negligent

conduct on the part of the taxpayer or a person acting on his

behalf,

                         sections 36(3) and 43(2) apply in relation to the amendment as they

apply in relation to any assessment under section 29.

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           (2)           Where—

                  (a)                 a return is amended under section 28A(2)(b), 28B(2)(b) or

28B(4), and

                  (b)                 the amendment is not made for the purpose mentioned in

subsection (1)(b) above,

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                         sections 43(2), 43A and 43B apply in relation to the amendment as they

apply in relation to any assessment under section 29.

           (3)           References to an assessment in sections 36(3), 43(2), 43A and 43B, as

they apply by virtue of subsection (1) or (2) above, shall accordingly be

read as references to the amendment of the return.

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           (4)           Where it is necessary to make any adjustment by way of an assessment

on any person—

                  (a)                 in order to give effect to a consequential claim, or

                  (b)                 as a result of allowing a consequential claim,

                         the assessment is not out of time if it is made within one year of the final

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determination of the claim.

                         For this purpose a claim is not taken to be finally determined until it, or

the amount to which it relates, can no longer be varied, on appeal or

otherwise.

           (5)           In subsection (4) above “consequential claim” means any claim,

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supplementary claim, election, application or notice that may be made

or given under section 36(3), 43(2) or 43A (as it applies by virtue of

subsection (1) or (2) above or otherwise).”.

     (2)    In section 43A of that Act (further assessments: claims etc), in subsection (2A)

(elections to which extension of time limit does not apply) for the words from

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“an election under” to the end substitute “an election under—

                  (a)                    section 257BA of the principal Act (election as to transfer of

married couple’s allowance),

                  (b)                    Schedule 13B to that Act (elections as to transfer of children’s

tax credit), or

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                  (c)                    section 35(5) of the Taxation of Chargeable Gains Act 1992

(election for assets to be re-based to 1982).”.

     (3)    So far as it applies in relation to an amendment of a return, this section applies

only where the notice of the amendment is issued after the day on which this

Act is passed.

5

National Savings

 205   Ordinary accounts and investment accounts

     (1)    The National Savings Bank Act 1971 (c. 29) is amended as follows.

     (2)    In section 3 (ordinary and investment deposits), after subsection (1) insert—

           “(1A)              But subsection (1) is subject to any provision made in relation to

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ordinary accounts or ordinary deposits by regulations under section 2

of this Act made by virtue of section 8(3) of this Act.”.

     (3)    Section 6 (interest on investment deposits) is amended as follows.

     (4)    In subsection (2), for “Director of Savings may from time to time determine

with the consent of the Treasury” substitute “Treasury may from time to time

15

determine”.

     (5)    After that subsection insert—

           “(2ZA)              The Treasury may determine that a rate of interest payable on

investment deposits, or investment deposits of a particular description,

is to be a rate produced by the operation of a formula involving the

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movement of an index or indices or any other factor.”.

     (6)    In subsection (3), after “description” insert “(other than one occasioned by the

operation of a formula)”.

     (7)    After that subsection insert—

           “(4)              In the case of an alteration in a rate of interest not affecting deposits

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received before it is made, any notice of the alteration required to be

given by subsection (3) above may be given after the alteration is

made.”.

     (8)    Section 8 (regulations as to particular matters) is amended as follows.

     (9)    In subsection (1), after paragraph (b) insert—

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                  “(ba)                    for the issuing of cards for use in making investment deposits or

in withdrawing cash from investment accounts (or both) and

regulating the use of such cards;”.

     (10)    After subsection (2) insert—

           “(3)              Regulations under subsection (2) of this Act may also make provision—

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                  (a)                 prohibiting the opening of ordinary accounts after a prescribed

date;

                  (b)                 prohibiting the opening of investment accounts of a prescribed

description after a date prescribed in relation to that description

of accounts;

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Part 9 — Miscellaneous and supplementary provisions

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                  (c)                 prohibiting the making of ordinary deposits after a prescribed

date;

                  (d)                 prohibiting the making of deposits in investment accounts of a

prescribed description after a date prescribed in relation to that

description of accounts;

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                  (e)                 requiring the withdrawal of all of the money deposited in any

dormant account of a prescribed description if any of the money

deposited in it is withdrawn after a date prescribed in relation

to that description of account;

                  (f)                 for the transfer to investment accounts of a prescribed

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description of deposits in dormant accounts of a prescribed

description;

                  (g)                 for the transfer to a special Director’s account of deposits in

dormant accounts of a prescribed description or in accounts to

which deposits have been transferred pursuant to provision

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made by virtue of paragraph (f) above.

           (4)              In subsection (3) above—

                                  “dormant account” means an account in which deposits may not

be made because of provision made by virtue of paragraph (c)

or (d) of that subsection; and

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                                  “special Director’s account” means an investment account in the

name of the Director of Savings in which deposits are held on

behalf of the persons entitled to them.”.

     (11)   After section 9 insert—

       “9A            Investment account terms and conditions

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           (1)                         Any provision which may be made in relation to investment deposits

by regulations under section 2 of this Act may, in the case of deposits in

investment accounts of any description first made available after the

passing of the Finance Act 2003, be included instead in the terms and

conditions of the accounts.

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           (2)                         Any provision included in the terms and conditions of investment

accounts under subsection (1) above has effect subject to regulations

under section 2 of this Act and orders under section 4 of this Act.

           (3)                         In this section “terms and conditions” means terms and conditions set

by the Treasury and published by Director of Savings in a manner

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approved by the Treasury.”.

 206   Abolition of accounting requirements relating to investment deposits

In section 120 of the Finance Act 1980 (c. 48) (investment deposits with

National Savings Bank: accounting provisions etc), omit subsections (4) and (5)

(which require the Director of Savings to keep an account of investment

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deposits etc and transmit annual statements to Comptroller and Auditor

General for examination etc).

 

 

 
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