Finance Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Finance Bill

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Part 1 — Excise duties
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insert—
“2AB
    Bioethanol
(1)
In this Act “bioethanol” means a liquid fuel—
(a)
consisting of ethanol produced from biomass, and
(b)
capable of being used for the same purposes as light oil.
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(2)
In subsection (1)—
(a)
“liquid” does not include any substance that is gaseous at a
temperature of 15oC and under a pressure of 1013.25 millibars,
and
(b)
“biomass” means vegetable and animal substances constituting
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the biodegradable fraction of—
(i)
products, wastes and residues from agriculture, forestry
and related activities, or
(ii)
industrial and municipal waste.
(3)
A substance shall be treated as falling within subsection (1)(a) if it—
15
(a)
is denatured alcohol for the purposes of section 5 of the Finance
Act 1995 (c. 4), and
(b)
would fall within subsection (1)(a) above (without reliance on
this subsection) but for the presence of a component
introduced—
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(i)
for the purpose of rendering the substance denatured
alcohol, and
(ii)
in the minimum proportion necessary for that purpose.”
(2)
After section 2A(1A) of that Act (power to amend definitions: biodiesel)
insert—
25
“(1B)
The Treasury may by order made by statutory instrument amend the
definition for the purposes of this Act of “bioethanol”.”
(3)
After section 6AC of that Act (biodiesel: application of provisions relating to
hydrocarbon oil) insert—
“6AD
    Excise duty on bioethanol
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(1)
A duty of excise shall be charged on the setting aside for a chargeable
use by any person, or (where it has not already been charged under this
section) on the chargeable use by any person, of bioethanol.
(2)
In subsection (1) “chargeable use” means use—
(a)
as fuel for any engine, motor or other machinery,
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(b)
as an additive or extender in any substance so used, or
(c)
for the production of bioethanol blend.
(3)
The rate of duty under this section shall be £0.2852 a litre.
6AE
    Excise duty on blends of bioethanol and hydrocarbon oil
(1)
A duty of excise shall be charged on bioethanol blend—
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(a)
imported into the United Kingdom, or
(b)
produced in the United Kingdom and delivered for home use
from a refinery or other premises used for the production of
hydrocarbon oil or from any bonded storage for hydrocarbon

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oil, not being bioethanol blend chargeable with duty under
paragraph (a) above.
(2)
In this Act “bioethanol blend” means any mixture that is produced by
mixing—
(a)
bioethanol, and
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(b)
hydrocarbon oil not charged with excise duty.
(3)
The rate at which the duty shall be charged on any bioethanol blend
shall be a composite rate representing—
(a)
in respect of the proportion of the blend that is hydrocarbon oil,
the rate that would be applicable to the blend if it consisted
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entirely of hydrocarbon oil of the description that went into
producing the blend, and
(b)
in respect of the proportion of the blend that is bioethanol, the
rate that would be applicable to the blend if it consisted entirely
of bioethanol.
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(4)
A reference in subsection (3) to a proportion is to a proportion by
volume to the nearest 0.001%.
(5)
If the Commissioners are not satisfied as to the proportion of bioethanol
in any bioethanol blend, the rate of duty chargeable shall be the rate
that would be applicable to the blend if it consisted entirely of
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hydrocarbon oil of the description that went into producing the blend.
(6)
Where imported bioethanol blend is removed to a refinery, the duty
chargeable under subsection (1) above shall, instead of being charged
at the time of the importation of the blend, be charged on the delivery
of any goods from the refinery for home use and shall be the same as
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that which would be payable on the importation of like goods.
6AF
     Application to bioethanol and bioethanol blend of provisions
relating to hydrocarbon oil
(1)
The Commissioners may by regulations provide for—
(a)
references in this Act, or specified references in this Act, to
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hydrocarbon oil to be construed as including references to—
(i)
bioethanol;
(ii)
bioethanol blend;
(b)
references in this Act, or specified references in this Act, to duty
on hydrocarbon oil to be construed as including references to
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duty under—
(i)
section 6AD above;
(ii)
section 6AE above;
(c)
bioethanol, or bioethanol blend, to be treated for the purposes
of such of the following provisions of this Act as may be
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specified as if it fell within a specified description of
hydrocarbon oil.
(2)
Where the effect of provision made under subsection (1) above is to
extend any power to make regulations, provision made in exercise of
the power as extended may be contained in the same statutory
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instrument as the provision extending the power.

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(3)
In this section “specified” means specified by regulations under this
section.
(4)
Regulations under this section may make different provision for
different cases.
(5)
Paragraph (b) of subsection (1) above shall not be taken as prejudicing
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the generality of paragraph (a) of that subsection.”
(4)
In section 6A(1) of that Act (fuel substitutes) for “which is not hydrocarbon oil,
biodiesel or bioblend” substitute “which is not—
(a)
hydrocarbon oil,
(b)
biodiesel,
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(c)
bioblend,
(d)
bioethanol, or
(e)
bioethanol blend.”
(5)
At the end of section 11(6) of that Act (rebate on heavy oil: exception) add “or
bioethanol blend”.
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(6)
At the end of section 13AA of that Act (restrictions on use of rebated kerosene)
add—
“(7)
Nothing in this section has the effect of allowing a rebate on bioblend
or bioethanol blend.”
(7)
In section 14 of that Act (rebate on light oil for use as furnace fuel) after
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subsection (1) insert—
“(1A)
No rebate shall be allowed under this section in respect of bioethanol
blend.”
(8)
In section 22 of that Act (prohibition on use of petrol substitutes on which duty
has not been paid)—
25
(a)
after subsection (1AA) insert—
“(1AB)
Where any person—
(a)
puts any bioethanol to a chargeable use (within the
meaning of section 6AD above), and
(b)
knows or has reasonable cause to believe that there is
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duty charged under section 6AD above on that
bioethanol which has not been paid and is not lawfully
deferred,

his putting the bioethanol to that use shall attract a penalty
under section 9 of the Finance Act 1994 (c. 9) (civil penalties),
35
and any goods in respect of which a person contravenes this
section shall be liable to forfeiture.”, and
(b)
in subsection (1A) for “subsection (1) or (1AA) above.” substitute
“subsection (1), (1AA) or (1AB) above.”
(9)
In section 27(1) of that Act (interpretation) after the definition of “biodiesel”
40
insert—

““bioethanol” has the meaning given by section 2AB above;

“bioethanol blend” has the meaning given by section 6AE(2) above;”.
(10)
This section shall come into force on 1st January 2005.

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(11)
But no duty shall be charged under section 6AD or 6AE of that Act (inserted by
subsection (3) above) in respect of the chargeable use of any goods, or the
setting aside of any goods for a chargeable use, if before 1st January 2005—
(a)
the goods were used or set aside for a chargeable use within the
meaning of section 6A of that Act, and
5
(b)
a duty of excise was charged under that section on that use or setting
aside.
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Biodiesel
(1)
In section 6AA(2) of the Hydrocarbon Oil Duties Act 1979 (c. 5) (excise duty on
biodiesel) after paragraph (b) add—
10
“(c)
for the production of bioblend.”
(2)
This section shall come into force on 1st January 2005.
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Fuel substitutes
(1)
For section 6A(2)(b) of the Hydrocarbon Oil Duties Act 1979 (fuel substitutes:
additives and extenders) substitute—
15
“(b)
as an additive or extender in any substance so used.”
(2)
This section shall have effect in relation to anything done on or after the date
on which this Act is passed.
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Warehousing
After section 23B of the Hydrocarbon Oil Duties Act 1979 (regulation of traders
20
in controlled oil) insert—
“23C
    Warehousing
(1)
For the purposes of Part VIII of the Customs and Excise Management
Act 1979 (c. 2) (warehousing) the substances specified in subsection (4)
shall be treated as if they were chargeable with duty (and therefore
25
within the scope of section 92(1)(a) or (c) of that Act) whether or not
duty is in fact chargeable.
(2)
The Commissioners may make regulations under section 93 of that Act
(warehousing regulations) that relate to a substance specified in
subsection (4).
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(3)
In respect of a substance specified in subsection (4) which has been or
is to be deposited in an excise warehouse by virtue of subsection (2), the
Commissioners may—
(a)
treat the substance, or make provision by regulations for
treating the substance, as if duty were chargeable in relation to
35
it by virtue of a specified enactment;
(b)
make any regulations, or do any other thing, of a kind that they
could make or do (whether or not by virtue of a provision of
Part VIII of that Act) in respect of a substance deposited in an
excise warehouse under Part VIII of that Act.
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(4)
The substances referred to in subsection (1) are—
(a)
petroleum gas,
(b)
animal fat set aside for use as motor fuel or heating fuel,

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(c)
vegetable fat set aside for use as motor fuel or heating fuel,
(d)
non-synthetic methanol set aside for use as motor fuel or
heating fuel,
(e)
biodiesel,
(f)
a mixture of two or more substances specified in paragraphs (a)
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to (e), and
(g)
any other substance specified for the purposes of this section in
regulations made by the Commissioners.
(5)
In subsection (4)—
(a)
“petroleum gas” means any hydrocarbon which—
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(i)
is gaseous at a temperature of 15oC and under a
pressure of 1013.25 millibars, and
(ii)
is not natural gas (as defined in paragraph (b) below),
(b)
“natural gas” means gas with a methane content of not less than
80%,
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(c)
“animal fat” means a triglyceride of animal origin,
(d)
“vegetable fat” means a triglyceride of vegetable origin, and
(e)
“non-synthetic methanol” means methyl alcohol of non-
synthetic origin.
(6)
Regulations under subsection (4)(g)—
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(a)
may make provision only if the Commissioners think it
necessary or expedient for a purpose connected with Council
Directive 92/12/EEC on the general arrangements for products
subject to excise duty and on the holding, movement and
monitoring of such products,
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(b)
may, in particular, make provision by reference to that Directive
or any other Community instrument, and
(c)
may, in particular, make provision by reference to the purpose
for which a substance is intended to be used.”
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Treatment of certain energy products
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(1)
Section 10 of the Finance Act 1993 (c. 34) (application of Hydrocarbon Oil
Duties Act 1979 to certain substances) shall be amended as follows.
(2)
In subsection (1) for “mineral oil” substitute “energy product”.
(3)
In subsection (2)—
(a)
after “as the equivalent of hydrocarbon oil” insert “or road fuel gas”,
35
and
(b)
for “as if it fell within such description of hydrocarbon oil” substitute
“as if it fell within such class or description of substance”.
(4)
In subsection (3)—
(a)
for “a mineral oil” substitute “an energy product”, and
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(b)
for “hydrocarbon oil of the description” substitute “the substance”.
(5)
For subsection (4) substitute—
“(4)
In this section “energy product” means a substance which—

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(a)
is an energy product for the purposes of Council Directive
2003/96/EC restructuring the Community framework for the
taxation of energy products and electricity, and
(b)
is not (apart from as a result of this section) hydrocarbon oil or
road fuel gas within the meaning of the 1979 Act.”
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(6)
For subsection (6) substitute—
“(6)
Where a duty of excise is charged on a substance under a provision of
the 1979 Act by virtue of an order under this section, no duty shall be
charged on the substance under any other provision of that Act.”
(7)
For the heading substitute “Extension of Hydrocarbon Oil Duties Act 1979 to
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energy products”.
Betting and gaming duties
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General betting duty: pool betting
(1)
The Betting and Gaming Duties Act 1981 (c. 63) shall be amended as follows.
(2)
For section 4 (pool betting, the Tote, &c.) substitute—
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“4  Pool betting on horse and dog races
(1)
General betting duty shall be charged on pool betting which—
(a)
relates only to horse racing or dog racing, and
(b)
is not on-course betting.
(2)
But subsection (1) does not apply to pool betting if—
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(a)
the promoter is outside the United Kingdom, and
(b)
it is conducted otherwise than by means of a totalisator situated
in the United Kingdom.
(3)
The amount of duty charged under subsection (1) in respect of bets
made by means of facilities provided by a person in an accounting
25
period shall be 15 per cent. of the amount of his net stake receipts for
the period.”
(3)
In section 5(7) (net stake receipts) and section 5B(4) (liability to pay) for “section
4(1) to (3)” substitute “section 4(1)”.
(4)
In section 7B (conditions for charging pool betting duty)—
30
(a)
in subsection (2)(b) omit “the bet is made otherwise than by means of a
totalisator and”, and
(b)
for subsection (3)(a) and (b) substitute—
“(a)
made wholly in relation to horse racing or dog racing,”.
(5)
In section 9(2)(a) (prohibitions for protection of revenue)—
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(a)
at the end of sub-paragraph (i) add “or”, and
(b)
in sub-paragraph (ii) for “in the case of bets made otherwise than by
means of a totalisator,” substitute “in any case,”.
(6)
In section 10(2) (definition of pool betting) for the definition of “totalisator
odds” substitute—
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““totalisator odds” means the odds paid on bets made—

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(a)
by means of a totalisator, and
(b)
at the scene of the event to which the bets relate.”
(7)
In section 12(4) (interpretation)—
(a)
for the definition of “bookmaker” substitute—

““bookmaker” means a person who—
5
(a)
carries on the business of receiving or negotiating bets or
conducting pool betting operations (whether as
principal or agent and whether regularly or not), or
(b)
holds himself out or permits himself to be held out, in
the course of a business, as a person within paragraph
10
(a);”,
(b)
for the definition of “on-course bet” substitute—

““on-course bet” has the meaning given by subsection (4A);”, and
(c)
omit the definition of “sponsored pool betting”.
(8)
After section 12(4) insert—
15
“(4A)
A bet is an on-course bet for the purposes of this Part of this Act if it—
(a)
is made by a person present at a horse or dog race meeting or by
a bookmaker,
(b)
is not made through an agent of an individual making the bet or
though an intermediary, and
20
(c)
is made—
(i)
with a bookmaker present at the meeting, or
(ii)
by means of a totalisator situated in the United
Kingdom, using facilities provided at the meeting by or
by arrangement with the person operating the
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totalisator.”
(9)
In paragraph 10(1) of Schedule 1 (betting duties: power of entry) omit the
words “, or that facilities for sponsored pool betting on those events are being
or are to be provided,”.
(10)
The amendments made by this section have effect in relation to accounting
30
periods ending on or after the date of the passing of this Act.
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Rates of gaming duty
(1)
For the Table in section 11(2) of the Finance Act 1997 (c. 16) (rates of gaming
duty) substitute—

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Table

Part of gross gaming yield
Rate

The first £516,500
2.5 per cent.

The next £1,146,500
12.5 per cent.

The next £1,146,500
20 per cent.

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The next £2,007,500
30 per cent.