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

Finance Bill


Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax
Chapter 2 — Corporation tax: general

61

 

Miscellaneous

55      

Duty of company to give notice of coming within charge to corporation tax

(1)   

A company must give notice to the Board—

(a)   

of the beginning of its first accounting period, and

(b)   

of the beginning of any subsequent accounting period that does not

5

immediately follow the end of a previous accounting period.

(2)   

The notice required by this section—

(a)   

must be in writing;

(b)   

must state when the accounting period began;

(c)   

must contain such other information as may be prescribed;

10

(d)   

may be given to any officer of the Board; and

(e)   

must be given not later than three months after the beginning of the

accounting period.

(3)   

“Prescribed” in subsection (2)(c) means prescribed by regulations made by the

Board.

15

(4)   

A company that has a reasonable excuse for failing to give notice as required

by this section—

(a)   

is not to be regarded as having failed to comply with this section until

the excuse ceases, and

(b)   

after the excuse ceases is not to be regarded as having failed to comply

20

with this section if the required notice is given without unreasonable

delay after the excuse ceases.

(5)   

In this section—

(a)   

“accounting period” means an accounting period for the purposes of

corporation tax;

25

(b)   

“company” means a body corporate and does not include an

unincorporated association or a partnership; and

(c)   

“the Board” means the Commissioners of Inland Revenue.

(6)   

In the second column of the Table in section 98 of the Taxes Management Act

1970 (c. 9) (penalty for failure to provide information), at the appropriate place

30

insert—

   

“section 55 of the Finance Act 2004”.

(7)   

This section applies in relation to accounting periods beginning on or after the

day on which this Act is passed.

56      

Relief for community amateur sports clubs

35

(1)   

Schedule 18 to the Finance Act 2002 (c. 23) (relief for community amateur

sports clubs) is amended as follows.

(2)   

In paragraph 4(1)(b) (exemption for trading income not exceeding £15,000 etc)

for “£15,000” substitute “£30,000”.

(3)   

In paragraph 6(1)(b) (exemption for property income not exceeding £10,000

40

etc) for “£10,000” substitute “£20,000”.

 

 

Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax
Chapter 3 — Construction industry scheme

62

 

(4)   

The amendments made by this section have effect in relation to accounting

periods ending on or after 1st April 2004.

(5)   

Where an accounting period begins before, and ends on or after, 1st April 2004,

the amendments made by subsections (2) and (3) have effect as if—

(a)   

the part falling before that date and the part falling on or after it were

5

two separate accounting periods, and

(b)   

the club’s trading income and property income for each of those parts

were the proportionally reduced amount of its trading income and

property income for the actual accounting period.

(6)   

In this section—

10

   

“property income” has the same meaning as in paragraph 6 of Schedule

18 to the Finance Act 2002 (c. 23);

   

“trading income” has the same meaning as in paragraph 4 of that

Schedule.

Chapter 3

15

Construction industry scheme

Introduction

57      

Introduction

(1)   

This Chapter provides for certain payments (see section 60) under construction

contracts to be made under deduction of sums on account of tax (see sections

20

61 and 62).

(2)   

In this Chapter “construction contract” means a contract relating to

construction operations (see section 74) which is not a contract of employment

but where—

(a)   

one party to the contract is a sub-contractor (see section 58); and

25

(b)   

another party to the contract (“the contractor”) either—

(i)   

is a sub-contractor under another such contract relating to all or

any of the construction operations, or

(ii)   

is a person to whom section 59 applies.

(3)   

In sections 60 and 61 “the contractor” has the meaning given by this section.

30

(4)   

In this Chapter—

(a)   

references to registration for gross payment are to registration under

section 63(2),

(b)   

references to registration for payment under deduction are to

registration under section 63(3), and

35

(c)   

references to registration under section 63 are to registration for gross

payment or registration for payment under deduction.

(5)   

To the extent that any provision of this Chapter would not, apart from this

subsection, form part of the Tax Acts, it shall be taken to form part of those

Acts.

40

 

 

Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax
Chapter 3 — Construction industry scheme

63

 

58      

Sub-contractors

For the purposes of this Chapter a party to a contract relating to construction

operations is a sub-contractor if, under the contract—

(a)   

he is under a duty to the contractor to carry out the operations, or to

furnish his own labour (in the case of a company, the labour of

5

employees or officers of the company) or the labour of others in the

carrying out of the operations or to arrange for the labour of others to

be furnished in the carrying out of the operations; or

(b)   

he is answerable to the contractor for the carrying out of the operations

by others, whether under a contract or under other arrangements made

10

or to be made by him.

59      

Contractors

(1)   

This section applies to the following bodies or persons—

(a)   

any person carrying on a business which includes construction

operations;

15

(b)   

any public office or department of the Crown (including any Northern

Ireland department and any part of the Scottish Administration);

(c)   

the Corporate Officer of the House of Lords, the Corporate Officer of

the House of Commons and the Scottish Parliamentary Corporate

Body;

20

(d)   

any local authority;

(e)   

any development corporation or new town commission;

(f)   

the Commission for the New Towns;

(g)   

the Secretary of State if the contract is made by him under section 89 of

the Housing Associations Act 1985 (c. 69);

25

(h)   

the Housing Corporation, a housing association, a housing trust,

Scottish Homes, and the Northern Ireland Housing Executive;

(i)   

any NHS trust;

(j)   

any HSS trust;

(k)   

any such body or person, being a body or person (in addition to those

30

falling within paragraphs (b) to (j)) which has been established for the

purpose of carrying out functions conferred on it by or under any

enactment, as may be designated as a body or person to which this

section applies in regulations made by the Board of Inland Revenue;

(l)   

a person carrying on a business at any time if—

35

(i)   

his average annual expenditure on construction operations in

the period of three years ending with the end of the last period

of account before that time exceeds £1,000,000, or

(ii)   

where he was not carrying on the business at the beginning of

that period of three years, one-third of his total expenditure on

40

construction operations for the part of that period during which

he has been carrying on the business exceeds £1,000,000.

(2)   

But this section only applies to a body or person falling within subsection (1)(b)

to (f) or (h) to (k) if—

(a)   

in any period of three years, that body or person has had an average

45

annual expenditure on construction operations of more than

£1,000,000, and

 

 

Finance Bill
Part 3 — Income tax, corporation tax and capital gains tax
Chapter 3 — Construction industry scheme

64

 

(b)   

since the condition in paragraph (a) was last satisfied, there have not

been three successive years in each of which the body or person has had

expenditure on construction operations of less than £1,000,000.

   

In this subsection “year” means a year ending with 31st March.

(3)   

Where section 57(2)(b) begins to apply to a person in any period of account by

5

virtue of his falling within subsection (1)(l), it shall continue to apply to him

until he satisfies the Board of Inland Revenue that his expenditure on

construction operations has been less than £1,000,000 in each of three

successive years beginning in or after that period of account.

(4)   

Where the whole or part of a trade is transferred by a company (“the

10

transferor”) to another company (“the transferee”) and section 343 of the Taxes

Act 1988 has effect in relation to the transfer, then in determining for the

purposes of this section the amount of expenditure incurred by the

transferee—

(a)   

the whole or, as the case may be, a proportionate part of any

15

expenditure incurred by the transferor at a time before the transfer is to

be treated as if it had been incurred at that time by the transferee; and

(b)   

where only a part of the trade is transferred, the expenditure is to be

apportioned in such manner as appears to the Board of Inland Revenue,

or on appeal to the Commissioners, to be just and reasonable.

20

(5)   

In this section—

   

“development corporation” has the same meaning as in—

(a)   

the New Towns Act 1981 (c. 64), or

(b)   

the New Towns (Scotland) Act 1968 (c. 16);

   

“enactment” includes an enactment comprised in an Act of the Scottish

25

Parliament and a provision comprised in Northern Ireland legislation;

   

“housing association” has the same meaning as in—

(a)   

the Housing Associations Act 1985 (c. 69), or

(b)   

Part 2 of the Housing (Northern Ireland) Order 1992 (S.I. 1992/

1725 (N.I. 15));

30

   

“housing trust” has the same meaning as in the Housing Associations Act

1985;

   

“HSS trust” means a Health and Social Services trust established under

the Health and Personal Social Services (Northern Ireland) Order 1991

(S.I. 1991/194 (N.I. 1));

35

   

“new town commission” has the same meaning as in the New Towns Act

(Northern Ireland) 1965 (c. 13 (N.I.));

   

“NHS trust” means a National Health Service trust—

(a)   

established under Part 1 of the National Health Service and

Community Care Act 1990 (c. 19), or

40

(b)   

constituted under section 12A of the National Health Service

(Scotland) Act 1978 (c. 29).

(6)   

In this section references to a body or person include references to an office or

department.

(7)   

The Board of Inland Revenue may make regulations amending this section for

45

the purpose of removing references to bodies which have ceased to exist.

 

 

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

© Parliamentary copyright 2004
Revised 29 June 2004