Finance Bill

House of Commons

Session 2003 - 04
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Finance Bill

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
198

239
Notices requiring documents or particulars
(1)
The Inland Revenue may by notice require any person of a description
prescribed by regulations made by the Board of Inland Revenue—
(a)
to produce to the Inland Revenue, or to make available for inspection
by the Inland Revenue, any documents within the person’s possession
5
or power relating to any of the matters mentioned in subsection (3)
which the Inland Revenue may reasonably require, and
(b)
to provide to the Inland Revenue any particulars relating to any of
those matters which the Inland Revenue may reasonably require.
(2)
The Inland Revenue may by notice require any other person to produce to the
10
Inland Revenue, or to make available for inspection by the Inland Revenue,
any documents within the person’s possession or power which—
(a)
relate to any of the matters mentioned in subsection (3), and
(b)
were created not more than six years before the day on which the notice
is given,
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and which the Inland Revenue may reasonably require.
(3)
The matters referred to in subsections (1) and (2) are—
(a)
any matter relating to a registered pension scheme,
(b)
any matter relating to a pension scheme which has ceased to be a
registered pension scheme,
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(c)
any matter relating to a pension scheme in relation to which an
application for registration has been made,
(d)
any matter relating to an annuity purchased with sums or assets held
for the purposes of a registered pension scheme,
(e)
the coming into operation of an employer-financed retirement benefits
25
scheme, and
(f)
the payment of relevant benefits under an employer-financed
retirement benefits scheme.
(4)
In subsection (3)—

“employer-financed retirement benefits scheme”, and
30

“relevant benefits”,

have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections
393A and 393B of that Act).
(5)
A notice under this section must specify the period within which it is to be
complied with; and that period may not end earlier than the period of 30 days
35
beginning with the day on which the notice is given.
(6)
A notice under subsection (2) must specify the pension scheme or employer-
financed retirement benefits scheme to which it relates.
(7)
The Inland Revenue must notify the scheme administrator of the pension
scheme, or the responsible person in relation to the employer-financed
40
retirement benefits scheme, to which such a notice relates that the notice has
been given no later than the end of the period of 30 days beginning with the
day on which it is given.
(8)
A person may comply with a notice under this section requiring the production
of a document by producing a copy of the document.
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(9)
But where a person produces a copy of a document in compliance with a notice
under this section the Inland Revenue may by notice require the production of

Finance Bill
Part 4 — Pension schemes etc
Chapter 7 — Compliance
199

the original for inspection within a period specified in the notice; and that
period may not end earlier than the period of 30 days beginning with the day
on which the notice is given.
(10)
The Inland Revenue may take copies of, or make extracts from, any document
produced in compliance with a notice under this section.
5
(11)
A notice under this section does not require a person—
(a)
to produce or make available for inspection any document, or
(b)
to provide any particulars,

relating to any pending appeal by the person relating to tax.
240
Appeal against notices
10
(1)
The person to whom a notice under section 239(1) or (2) (notices requiring
documents or particulars) is given may appeal against any requirement
imposed by the notice.
(2)
The appeal must be brought within the period of 30 days beginning with the
date on which the notice is given.
15
(3)
The appeal is to the General Commissioners, except that the appellant may
elect (in accordance with section 46(1) of TMA 1970) to bring the appeal before
the Special Commissioners instead of the General Commissioners.
(4)
Paragraphs 1, 2, 8 and 9 of Schedule 3 to TMA 1970 (rules for assigning
proceedings to General Commissioners) have effect to identify the General
20
Commissioners before whom an appeal under this section is to be brought, but
subject to modifications specified in an order made by the Board of Inland
Revenue.
(5)
An appeal under this section against a requirement imposed by a notice must
be brought within the period of 30 days beginning with the day on which the
25
notice was given.
(6)
The Commissioners before whom an appeal under this section is brought must
consider whether the production of the document, or provision of the
particulars, to which the appeal relates was reasonably required by the Inland
Revenue.
30
(7)
If they decide that it was, they must confirm the notice so far as relating to that
requirement.
(8)
If they decide that it was not, they must set aside the notice so far as relating to
that requirement.
(9)
If the notice is confirmed it has effect in relation to the requirement to which
35
the appeal relates as if it specified as the period within which it must be
complied with the period of 30 days beginning with the day on which the
appeal was determined.
(10)
The determination of the Commissioners is final and conclusive.

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Chapter 7 — Compliance
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Accounting and assessment
241
Accounting for tax by scheme administrators
(1)
A scheme administrator of a registered pension scheme must make returns to
the Inland Revenue of the income tax to which the scheme administrator is
liable under this Part.
5
(2)
A return is to be made for each period of three months ending with 31st March,
30th June, 30th September or 31st December if tax has been charged on the
scheme administrator by virtue of this Part in that period.
(3)
A return for any period must be made before the end of the period of 45 days
beginning with the day immediately following the end of that period.
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(4)
A return must—
(a)
show the income tax to which the scheme administrator is liable, and
(b)
include such particulars of the events or other circumstances giving rise
to the liability (including particulars as to the persons to whom the
events or other circumstances relate) as are required to be included in
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returns under this section by regulations made by the Board of Inland
Revenue.
(5)
The income tax required to be shown in a return is due at the time by which the
return is to be made and is payable without the making of an assessment.
(6)
The Board of Inland Revenue may by regulations make provision for and in
20
connection with—
(a)
the charging of interest on tax due under this section which is not paid
on or before the due date,
(b)
the making of amended returns by scheme administrators in the event
of error in a return under this section,
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(c)
the making of assessments, repayments or adjustments in cases where
the correct tax due under this section has not been paid on or before the
due date, and
(d)
otherwise for supplementing this section.
(7)
The regulations may, in particular—
30
(a)
modify the operation of any provision of the Tax Acts, or
(b)
provide for the application of any provision of the Tax Acts (with or
without modifications).
(8)
References in this section to the income tax to which a scheme administrator is
liable under this Part do not include any to which the scheme administrator is
35
liable under section 228 (scheme sanction charge).
(9)
Where the registration of a registered pension scheme has been withdrawn,
this section has effect as if references to the scheme administrator were to the
person who was, or each of the persons who were, the scheme administrator
immediately before the registration was withdrawn.
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242
Assessments under this Part
(1)
The Board of Inland Revenue may by regulations make provision in
connection with assessments to tax which may be made by virtue of this Part.

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Part 4 — Pension schemes etc
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(2)
The provision that may be made by the regulations includes (in particular)
provision for the charging of interest on tax due under such assessments which
remains unpaid.
(3)
The regulations may, in particular—
(a)
modify the operation of any provision of the Tax Acts, or
5
(b)
provide for the application of any provision of the Tax Acts (with or
without modification).
Registration regulations
243
Enhanced lifetime allowance regulations
(1)
This section applies to regulations made by the Board of Inland Revenue
10
under—
(a)
section 209(5) (lifetime allowance enhancement: registration of pension
credits),
(b)
section 210(6) (lifetime allowance enhancement: individuals who are
not always relevant UK individuals),
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(c)
section 213(9) (lifetime allowance enhancement: transfers from
recognised overseas pension scheme),
(d)
paragraph 7(1)(b) of Schedule 34 (lifetime allowance enhancement:
“primary protection”),
(e)
paragraph 12(2) of that Schedule (lifetime allowance: “enhanced
20
protection”), and
(f)
paragraph 17(6) of that Schedule (lifetime allowance enhancement: pre-
commencement pension credits).
(2)
The regulations to which this section applies are referred to in this Part as
“enhanced lifetime allowance regulations”.
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(3)
Enhanced lifetime allowance regulations may include any provision that
appears appropriate for securing that the correct tax is charged—
(a)
by way of the lifetime allowance charge in respect of amounts
crystallised by benefit crystallisation events, and
(b)
in respect of the payment of lump sums by registered pension schemes.
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(4)
Enhanced lifetime allowance regulations may, for that purpose, in particular
contain provision—
(a)
requiring any person to produce or make available documents,
produce certificates or provide information, and
(b)
for the review from time to time of any matter registered in accordance
35
with the regulations.
Penalties
244
Registered pension scheme return
(1)
If the scheme administrator of a registered pension scheme fails to comply with
a notice under section 237 (registered pension scheme return), the scheme
40
administrator is liable to a penalty of £300.

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(2)
If the failure continues after a penalty is imposed under subsection (1), the
scheme administrator is liable to a further penalty not exceeding £60 for each
day on which the failure continues after the day on which that penalty was
imposed (but excluding any day for which a penalty under this subsection has
already been imposed).
5
(3)
No penalty may be imposed under subsection (1) or (2) in respect of a failure
after it has been remedied.
(4)
If the scheme administrator of a registered pension scheme fraudulently or
negligently—
(a)
makes an incorrect return required by a notice under section 237, or
10
(b)
delivers any incorrect accounts, statements or other documents with
such a return,

the scheme administrator is liable to a penalty not exceeding £3,000.
245
Information required by regulations
(1)
In section 98 of TMA 1970 (penalties for failure to provide information and
15
providing false information), in the second column of the Table, insert at the
appropriate place—

“regulations under section 238(1)(a) or (4) of the

Finance Act 2004;”.

(2)
A person who fails to comply with regulations under section 238(1)(b)
20
(preservation of documents) is liable to a penalty not exceeding £3,000.
246
Documents and particulars required by notice
(1)
A person who fails to comply with a notice under section 239 (notice requiring
documents or particulars) is liable to a penalty of £300.
(2)
If the failure continues after a penalty is imposed under subsection (1), the
25
person is liable to a further penalty not exceeding £60 for each day on which
the failure continues after the day on which that penalty was imposed (but
excluding any day for which a penalty under this subsection has already been
imposed).
(3)
No penalty may be imposed under subsection (1) or (2) in respect of a failure
30
after it has been remedied.
(4)
If person fraudulently or negligently—
(a)
produces or makes available for inspection any incorrect documents, or
(b)
provides any incorrect particulars,

in response to a notice under section 239, the person is liable to a penalty not
35
exceeding £3,000.
247
Accounting return
(1)
If the scheme administrator of a registered pension scheme fails to make a
return for a quarter in accordance with section 241 (return of tax charged), the
scheme administrator is liable—
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(a)
to a penalty or penalties of the relevant quarterly amount for each
quarter (or part of a quarter) for which the failure continues, excluding
any quarter after the fourth or for which a penalty under this paragraph
has already been imposed, and
(b)
if the failure continues beyond the fourth quarter, (whether or not any
5
penalty under paragraph (a) is imposed) to a penalty not exceeding the
amount of income tax to which the scheme administrator is liable
(otherwise than under section 228: scheme sanction charge) for the
quarter for which the return is not made.
(2)
In subsection (1)—
10

“quarter” means a period of three months ending with 31st March, 30th
June, 30th September or 31st December, and

“the relevant quarterly amount”—
(a)
if the number of persons in respect of whom particulars should
be included in the return by virtue of section 241(4)(b) is ten or
15
less, is £100, and
(b)
if that number is greater than ten, is £100 for each ten such
persons and an additional £100 where that number is not a
multiple of ten.
(3)
The Treasury may from time to time by order amend the amounts specified in
20
the definition of “the relevant quarterly amount” in subsection (2).
(4)
No penalty under subsection (1)(b) may be imposed unless—
(a)
the amount of income tax to which the scheme administrator is liable
(otherwise than under section 228) for the quarter concerned has been
determined by the Inland Revenue, and
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(b)
the scheme administrator has been notified of that amount.
(5)
In section 100(6)(a) of TMA 1970 (excessive penalty), after “1998” insert “or
section 247(1)(b) of the Finance Act 2004”.
(6)
If the scheme administrator of a registered pension scheme fraudulently or
negligently makes an incorrect return under section 241, the scheme
30
administrator is liable to a penalty not exceeding the difference between—
(a)
the amount of the tax shown in the return, and
(b)
the amount of the tax which should have been shown in the return,

or, if no tax is shown in the return, the amount of the tax which should have
been shown in the return.
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(7)
Where the registration of a registered pension scheme has been withdrawn,
this section has effect as if references to the scheme administrator were to the
person who was or the persons who were the scheme administrator
immediately before the registration was withdrawn.
248
Enhanced lifetime allowance regulations: documents and information
40
(1)
This section applies where an individual fraudulently or negligently—
(a)
produces or makes available an incorrect document, or produces an
incorrect certificate, in connection with any matter registered in
accordance with enhanced lifetime allowance regulations, or
(b)
provides false information in connection with any such matter,
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and the condition in subsection (2) is met.

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(2)
The condition is that—
(a)
the amount of the individual’s lifetime allowance at the time which is
relevant for the purposes of this paragraph, or
(b)
the amount of the pension commencement lump sums to which the
individual may be entitled at the time which is relevant for the
5
purposes of this paragraph,

would be greater than it actually is were the document or certificate correct or
the information true.
(3)
The individual is liable to a penalty not exceeding 25% of the relevant excess.
(4)
In a case within paragraph (a) of subsection (2), the relevant excess is the
10
difference between what would be the amount of the individual’s lifetime
allowance at the time which is relevant for the purposes of that paragraph
(were the document or certificate correct or the information true) and
whichever is the higher of—
(a)
the actual amount of the individual’s lifetime allowance at that time,
15
and
(b)
the standard lifetime allowance at that time.
(5)
The time which is relevant for the purposes of paragraph (a) of subsection (2)—
(a)
where a benefit crystallisation event has occurred in relation to the
individual since the document was produced or made available, the
20
certificate produced or the information provided (but before a penalty
under this section is imposed), is the time when the benefit
crystallisation event occurred, and
(b)
otherwise, is the time when the document was produced or made
available, the certificate produced or the information provided.
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(6)
In a case within paragraph (b) of subsection (2), the relevant excess is the
difference between—
(a)
what would be the amount of the pension commencement lump sums
to which the individual may be entitled at the time which is relevant for
the purposes of that paragraph (were the document or certificate
30
correct or the information true), and
(b)
the actual amount at that time of the pension commencement lump
sums to which the individual may be entitled.
(7)
The time which is relevant for the purposes of paragraph (a) of subsection (2)
is the time when the document was produced or made available, the certificate
35
produced or the information provided.
249
Enhanced lifetime allowance regulations: failures to comply
An individual who fails—
(a)
to produce or make available any document required to be produced
by enhanced lifetime allowance regulations,
40
(b)
to produce any certificate required to be produced by enhanced lifetime
allowance regulations, or
(c)
to provide any information required to be provided by enhanced
lifetime allowance regulations,
is liable to a penalty not exceeding £3,000.
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