House of Commons portcullis
House of Commons
Session 2002 - 03
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Part 1 — Excise duties

    14

 
 

CO2 emissions figure

Rate

 
 

(1)

(2)

(3)

(4)

(5)

 
 

Exceeding

Not

Reduced

Standard

Premium

 
  

exceeding

rate

Rate

rate

 
 

g/km

g/km

£

£

£

 

5

 

100

55

65

75

 
 

100

120

65

75

85

 
 

120

150

95

105

115

 
 

150

165

115

125

135

 
 

165

185

135

145

155

 

10

 

185

155

160

165

 

     (3)    In paragraph 1J of that Schedule (rates of duty applicable to light goods

vehicles first registered on or after 1st March 2001)—

           (a)           in paragraph (a) (vehicle which is not a lower-emission van) for “£160”

substitute “£165”;

15

           (b)           in paragraph (b) (vehicle which is a lower-emission van) for “£105”

substitute “£110”.

     (4)    This section applies to any licence taken out on or after 17th April 2003 for a

period beginning on or after 1st May 2003.

 15    Disclosure for exemptions: Northern Ireland

20

In section 22ZA of the Vehicle Excise and Registration Act 1994 (c. 22) (nil

licences for vehicles for disabled persons: disclosure of information) in

subsection (1)(a) (which provides that the section applies to certain

information held by the Secretary of State or a person providing services to

him) in sub-paragraphs (i) and (ii), after “the Secretary of State” insert “or a

25

Northern Ireland department”.

 16    Duty at higher rate: exception for tractive units

     (1)    After section 15 of the Vehicle Excise and Registration Act 1994 insert—

       “15A            Exception for tractive units from charge at higher rate

           (1)           Where—

30

                  (a)                 a vehicle licence has been taken out for a tractive unit, and

                  (b)                 the licence was taken out at a rate of vehicle excise duty

applicable to a tractive unit which is to be used with semi-

trailers with a minimum number of axles,

                         duty at a higher rate does not become chargeable under section 15 by

35

reason only that while the licence is in force the tractive unit is used

 

 

Finance Bill
Part 2 — Value added tax

    15

 

with a semi-trailer with fewer axles than that minimum number, if the

condition in subsection (2) is satisfied.

           (2)           The condition is that the rate of duty at which the licence was taken out

is equal to or exceeds the rate which would have been applicable if the

revenue weight of the tractive unit had been a weight equal to the

5

actual laden weight, at the time of the use, of the articulated vehicle

consisting of the tractive unit and the semi-trailer.”.

     (2)    Section 16 of that Act (which makes provision, in the case of tractive units, for

exemptions from the charge to vehicle excise duty at a higher rate on a basis

different from that set out in new section 15A) shall cease to have effect.

10

     (3)    This section has effect in relation to the use of a tractive unit on or after 9th

April 2003.

Part 2

Value added tax

 17    Requirement of evidence or security

15

     (1)    The Value Added Tax Act 1994 (c. 23) is amended as follows.

     (2)    In section 24(6)(a) (regulations about input tax etc: requirement of document-

ary evidence) after “documents” insert “or other information”.

     (3)    In paragraph 4 of Schedule 11 (power to require security and production of

documents) for sub-paragraph (1) substitute—

20

                       “(1)                The Commissioners may, as a condition of allowing or repaying

input tax to any person, require the production of such evidence

relating to VAT as they may specify.

                       (1A)                If they think it necessary for the protection of the revenue, the

Commissioners may require, as a condition of making any VAT

25

credit, the giving of such security for the amount of the payment as

appears to them appropriate.”.

     (4)    For sub-paragraph (2) of that paragraph substitute—

                       “(2)                If they think it necessary for the protection of the revenue, the

Commissioners may require a taxable person, as a condition of his

30

supplying or being supplied with goods or services under a taxable

supply, to give security, or further security, for the payment of any

VAT that is or may become due from—

                    (a)                   the taxable person, or

                    (b)                   any person by or to whom relevant goods or services are

35

supplied.

                       (3)                In sub-paragraph (2) above “relevant goods or services” means

goods or services supplied by or to the taxable person.

                       (4)                Security under sub-paragraph (2) above shall be of such amount, and

shall be given in such manner, as the Commissioners may determine.

40

                       (5)                The powers conferred on the Commissioners by sub-paragraph (2)

above are without prejudice to their powers under section 48(7).”.

 

 

Finance Bill
Part 2 — Value added tax

    16

 

     (5)    In section 72(11) (penalty for supplying goods in contravention of paragraph

4(2) of Schedule 11) after “supplies” insert “or is supplied with”.

     (6)    In section 83(l) (right of appeal against requirement of security under

paragraph 4(2) of Schedule 11 etc) for “paragraph 4(2)” substitute “paragraph

4(1A) or (2)”.

5

     (7)    In section 84 (further provisions relating to appeals) after subsection (4D)

insert—

           “(4E)              Where an appeal is brought against a requirement imposed under

paragraph 4(2)(b) of Schedule 11 that a person give security, the

tribunal shall allow the appeal unless the Commissioners satisfy the

10

tribunal that—

                  (a)                 there has been an evasion of, or an attempt to evade, VAT in

relation to goods or services supplied to or by that person, or

                  (b)                 it is likely, or without the requirement for security it is likely,

that VAT in relation to such goods or services will be evaded.

15

           (4F)              A reference in subsection (4E) above to evading VAT includes a

reference to obtaining a VAT credit that is not due or a VAT credit in

excess of what is due.”.

     (8)    This section shall be deemed to have come into force on 10th April 2003.

 18    Joint and several liability for unpaid VAT of another trader

20

     (1)    In Part 4 of the Value Added Tax Act 1994 (c. 23) (administration, collection

and enforcement), after section 77 insert—

“Liability for unpaid VAT of another

       77A            Joint and several liability of traders in supply chain where tax unpaid

           (1)           This section applies to goods of any of the following descriptions—

25

                  (a)                 telephones and any other equipment, including parts and

accessories, made or adapted for use in connection with

telephones or telecommunication;

                  (b)                 computers and any other equipment, including parts,

accessories and software, made or adapted for use in connection

30

with computers or computer systems.

           (2)           Where—

                  (a)                 a taxable supply of goods to which this section applies has been

made to a taxable person, and

                  (b)                 at the time of the supply the person knew or had reasonable

35

grounds to suspect that some or all of the VAT payable in

respect of that supply, or on any previous or subsequent supply

of those goods, would go unpaid,

                         the Commissioners may serve on him a notice specifying the amount of

the VAT so payable that is unpaid, and stating the effect of the notice.

40

           (3)           The effect of a notice under this section is that—

                  (a)                 the person served with the notice, and

                  (b)                 the person liable, apart from this section, for the amount

specified in the notice,

 

 

Finance Bill
Part 2 — Value added tax

    17

 

                         are jointly and severally liable to the Commissioners for that amount.

           (4)           For the purposes of subsection (2) above the amount of VAT that is

payable in respect of a supply is the lesser of—

                  (a)                 the amount chargeable on the supply, and

                  (b)                 the amount shown as due on the supplier’s return for the

5

prescribed accounting period in question (if he has made one)

together with any amount assessed as due from him for that

period (subject to any appeal by him).

           (5)           The reference in subsection (4)(b) above to assessing an amount as due

from a person includes a reference to the case where, because it is

10

impracticable to do so, the amount is not notified to him.

           (6)           For the purposes of subsection (2) above, a person shall be presumed to

have reasonable grounds for suspecting matters to be as mentioned in

paragraph (b) of that subsection if the price payable by him for the

goods in question—

15

                  (a)                 was less than the lowest price that might reasonably be

expected to be payable for them on the open market, or

                  (b)                 was less than the price payable on any previous supply of those

goods.

           (7)           The presumption provided for by subsection (6) above is rebuttable on

20

proof that the low price payable for the goods was due to circumstances

unconnected with failure to pay VAT.

           (8)           Subsection (6) above is without prejudice to any other way of

establishing reasonable grounds for suspicion.

           (9)           The Treasury may by order amend subsection (1) above; and any such

25

order may make such incidental, supplemental, consequential or

transitional provision as the Treasury think fit.

           (10)          For the purposes of this section—

                  (a)                 “goods” includes services;

                  (b)                 an amount of VAT counts as unpaid only to the extent that it

30

exceeds the amount of any refund due.”.

     (2)    In section 83 of that Act (appeals) after paragraph (r) insert—

                  “(ra)                    any liability arising by virtue of section 77A;”.

     (3)    This section shall be deemed to have come into force on 10th April 2003.

 19    Face-value vouchers

35

Schedule 1 to this Act (VAT: face-value vouchers) has effect.

 20    Supplies arising from prior grant of fee simple

     (1)    In section 96 of the Value Added Tax Act 1994 (c. 23) (interpretative

provisions), after subsection (10A) (time for determining status of supplies

arising from prior grant of interest etc) insert—

40

           “(10B)              Notwithstanding subsection (10A) above—

                  (a)                 item 1 of Group 1 of Schedule 9 does not make exempt any

supply that arises for the purposes of this Act from the prior

 

 

Finance Bill
Part 2 — Value added tax

    18

 

grant of a fee simple falling within paragraph (a) of that item;

and

                  (b)                 that paragraph does not prevent the exemption of a supply that

arises for the purposes of this Act from the prior grant of a fee

simple not falling within that paragraph.”.

5

     (2)    This section applies in relation to any supply that arises for the purposes of the

Value Added Tax Act 1994 (c. 23) from the prior grant of a fee simple made on

or after 9th April 2003.

 21    Business gifts

     (1)    In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply

10

of goods or services), paragraph 5 (business gifts etc) is amended as follows.

     (2)    In sub-paragraph (2) (cases where sub-paragraph (1) does not apply), for

paragraph (a) substitute—

                    “(a)                      a business gift the cost of which, together with the cost of any

other business gifts made to the same person in the same

15

year, was not more than £50.”.

     (3)    After that sub-paragraph insert—

                       “(2ZA)                In sub-paragraph (2) above—

                     “business gift” means a gift of goods that is made in the course

or furtherance of the business in question;

20

                     “cost”, in relation to a gift of goods, means the cost to the donor

of acquiring or, as the case may be, producing the goods;

                     “the same year”, in relation to a gift, means any period of

twelve months that includes the day on which the gift is

made.”.

25

     (4)    This section applies in relation to gifts made on or after 1st October 2003.

 22    Non-business use of business property

     (1)    In paragraph 5 of Schedule 4 to the Value Added Tax Act 1994 (matters to be

treated as supply of goods or services), after sub-paragraph (4) (non-business

use of business asset treated as supply of services) insert—

30

                       “(4A)                Notwithstanding paragraph 9(1) below, sub-paragraph (4) above

does not apply to—

                    (a)                   any interest in land,

                    (b)                                         any building or part of a building,

                    (c)                                         any civil engineering work or part of such a work, or

35

                    (d)                                         any goods incorporated or to be incorporated in a building or

civil engineering work (whether by being installed as fixtures

or fittings or otherwise).”.

     (2)    This section shall be deemed to have come into force on 9th April 2003.

     (3)    This section does not apply in relation to any asset in respect of which the

40

person in question or any of his predecessors became entitled before that date

to a credit or repayment as mentioned in paragraph 5(5)(a) or 5(5)(b) of

Schedule 4 to the Value Added Tax Act 1994.

     (4)    In subsection (3)—

 

 

Finance Bill
Part 3 — Taxes and duties on importation and exportation: penalties

    19

 

           (a)           “the person in question” means the person carrying on the business

referred to in sub-paragraph (4) of paragraph 5 of that Schedule;

           (b)           “predecessor” has the same meaning as in that paragraph;

           (c)           the reference to an “asset” is to anything falling within any of

paragraphs (a) to (d) of the sub-paragraph (4A) inserted into that

5

paragraph by subsection (1).

 23    Supply of electronic services in member States: special accounting scheme

     (1)    Schedule 2 to this Act (scheme enabling persons who supply certain electronic

services in any member State, but who are not established in a member State,

to account for and pay VAT in the United Kingdom on those supplies) has

10

effect.

     (2)    The amendments made by that Schedule have effect in relation to qualifying

supplies made on or after 1st July 2003.

            

Part 3

15

Taxes and duties on importation and exportation: penalties

Preliminary

 24    Introductory

     (1)    This Part makes provision for and in connection with the imposition of liability

to a penalty where a person—

20

           (a)           engages in any conduct for the purpose of evading any relevant tax or

duty, or

           (b)           engages in any conduct by which he contravenes a duty, obligation,

requirement or condition imposed by or under legislation relating to

any relevant tax or duty.

25

     (2)    For the purposes of this Part “relevant tax or duty” means any of the

following—

           (a)           customs duty;

           (b)           Community export duty;

           (c)           Community import duty;

30

           (d)           import VAT;

           (e)           customs duty of a preferential tariff country.

     (3)    In this Part—

                    “appeal tribunal” means a VAT and duties tribunal;

                    “the Commissioners” means the Commissioners of Customs and Excise;

35

                    “the Community Customs Code” means Council Regulation 2913/92/

EEC establishing the Community Customs Code;

                    “Community export duty” means any of the duties, charges or levies

which are export duties within the meaning of the Community

Customs Code (as at 9th April 2003, see the definition of “export duties”

40

in Article 4(11) of that Code);

                    “Community import duty” means any of the duties, charges or levies

which are import duties within the meaning of the Community

 

 

Finance Bill
Part 3 — Taxes and duties on importation and exportation: penalties

    20

 

Customs Code (as at 9th April 2003, see the definition of “import

duties” in Article 4(10) of that Code);

                    “contravene” includes fail to comply with;

                    “customs duty of a preferential tariff country” includes a reference to any

charge imposed by a preferential tariff country and having an

5

equivalent effect to customs duty payable on the importation of goods

into the territory of that country;

                    “demand notice” means a demand notice within the meaning of section

30;

                    “import VAT” means value added tax chargeable by virtue of section

10

1(1)(c) of the Value Added Tax Act 1994 (c. 23) (importation of goods

from places outside the member States);

                    “notice” means notice in writing;

                    “preferential tariff country” means a country outside the European

Community which is, or is a member of a group of countries which is,

15

party to an agreement falling within Article 20(3)(d) of the Community

Customs Code (preferential tariff agreements with the Community);

                    “prescribed” means specified in, or determined in accordance with,

regulations made by the Treasury;

                    “relevant rule”, in relation to any relevant tax or duty, has the meaning

20

given by subsection (8) of section 26 (as read with subsection (9) of that

section);

                    “representative”, in relation to any person, means—

                  (a)                 his personal representative,

                  (b)                 his trustee in bankruptcy or interim or permanent trustee,

25

                  (c)                 any receiver or liquidator appointed in relation to that person or

any of his property,

                         or any other person acting in a representative capacity in relation to that

person.

     (4)    References in this Part to the Community Customs Code are references to that

30

Code as from time to time amended, whether before or after the coming into

force of this Part.

     (5)    The Treasury may by order amend this Part for the purpose of replacing any

reference to, or to a provision of,—

           (a)           the Community Customs Code, or

35

           (b)           any instrument referred to in this Part by virtue of an order under this

subsection,

            with a reference to, or (as the case may be) to a provision of, a different

instrument.

     (6)    A statutory instrument containing an order under subsection (5) may not be

40

made unless a draft of the instrument has been laid before, and approved by a

resolution of, the House of Commons.

     (7)    Except for this subsection and section 41 (which accordingly come into force on

the passing of this Act), this Part comes into force on such day as the Treasury

may by order appoint.

45

 

 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2003
Revised 16 April 2003