Finance Bill

House of Commons

Session 2006 - 07
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Finance Bill

Finance Bill
Part 6 — Investigation, administration etc
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(a)
in subsection (2)—
(i)
the reference to subsections (2) to (8) of section 14 of the
Criminal Procedure (Scotland) Act 1995 (c. 46) (“the 1995
Procedure Act”) shall be treated as a reference to subsections (2)
to (7) of section 24 of the Criminal Law (Consolidation)
5
(Scotland) Act 1995 (c. 39) (“the 1995 Consolidation Act”), and
(ii)
the reference to subsections (1), (2) and (4) to (6) of section 15 of
the 1995 Procedure Act shall be treated as a reference to
subsections (1) to (4) of section 25 of the 1995 Consolidation Act,
and
10
(b)
in subsection (6)—
(i)
the references to section 14 of the 1995 Procedure Act shall be
treated as references to section 24 of the 1995 Consolidation Act,
(ii)
the references to section 15 of the 1995 Procedure Act shall be
treated as references to section 25 of the 1995 Consolidation Act,
15
(iii)
in paragraph (a), sub-paragraph (ii) shall not apply, and
(iv)
paragraph (b) shall not apply.
(4)
An officer of Revenue and Customs may exercise a power under sections 136
to 139 only in the exercise of a function relating to tax (including duties and tax
credits).
20
(5)
In subsection (2)—
“office of Revenue and Customs” means premises wholly or partly
occupied by Her Majesty’s Revenue and Customs, and
“designated office of Revenue and Customs” has the meaning given by an
order under section 114 of the Police and Criminal Evidence Act 1984
25
(c. 60) (power to extend provisions to HMRC) or, in Northern Ireland,
by an order under Article 85 of the Police and Criminal Evidence
(Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)) (power to
extend Order to HMRC).
(6)
In section 136, after subsection (8) insert—
30
“(9)
Powers under this section and sections 137 to 139 may be exercised by
an officer of Revenue and Customs in accordance with section 86 of the
Finance Act 2007.”
Filing dates
87
Personal tax returns
35
(1)
Section 8 of TMA 1970 (personal tax return) is amended as follows.
(2)
In subsection (1)(a), omit “, on or before the day mentioned in subsection (1A)
below”.
(3)
Omit subsection (1A).
(4)
After subsection (1C) insert—
40
“(1D)
A return under this section for a year of assessment (Year 1) must be
delivered—
(a)
in the case of a non-electronic return, on or before 31st October
in Year 2, and

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(b)
in the case of an electronic return, on or before 31st January in
Year 2.
(1E)
But subsection (1D) is subject to the following two exceptions.
(1F)
Exception 1 is that if a notice in respect of Year 1 is given after 31st July
in Year 2 (but on or before 31st October), a return must be delivered—
5
(a)
during the period of 3 months beginning with the date of the
notice (for a non-electronic return), or
(b)
on or before 31st January (for an electronic return).
(1G)
Exception 2 is that if a notice in respect of Year 1 is given after 31st
October in Year 2, a return (whether electronic or not) must be
10
delivered during the period of 3 months beginning with the date of the
notice.
(1H)
The Commissioners—
(a)
shall prescribe what constitutes an electronic return, and
(b)
may make different provision for different cases or
15
circumstances.”
88
Trustee’s tax return
(1)
Section 8A of TMA 1970 (trustee’s tax return) is amended as follows.
(2)
In subsection (1)(a), omit “, on or before the day mentioned in subsection (1A)
below”.
20
(3)
Omit subsection (1A).
(4)
After subsection (1AA) insert—
“(1B)
A return under this section for a year of assessment (Year 1) must be
delivered—
(a)
in the case of a non-electronic return, on or before 31st October
25
in Year 2, and
(b)
in the case of an electronic return, on or before 31st January in
Year 2.
(1C)
But subsection (1B) is subject to the following two exceptions.
(1D)
Exception 1 is that if a notice in respect of Year 1 is given after 31st July
30
in Year 2 (but on or before 31st October), a return must be delivered—
(a)
during the period of 3 months beginning with the date of the
notice (for a non-electronic return), or
(b)
on or before 31st January (for an electronic return).
(1E)
Exception 2 is that if a notice in respect of Year 1 is given after 31st
35
October in Year 2, a return (whether electronic or not) must be
delivered during the period of 3 months beginning with the date of the
notice.
(1F)
The Commissioners—
(a)
shall prescribe what constitutes an electronic return, and
40
(b)
may make different provision for different cases or
circumstances.”

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89
Partnership tax returns
(1)
In section 12AA of TMA 1970, for subsection (4) (partnership return: filing
date) substitute—
“(4)
In the case of a partnership which includes one or more individuals, a
notice under subsection (2) or (3) above may specify different days
5
depending on whether a return in respect of a year of assessment (Year
1) is electronic or non-electronic.
(4A)
The day specified for a non-electronic return must not be earlier than
31st October of Year 2.
(4B)
The day specified for an electronic return must not be earlier than 31st
10
January of Year 2.
(4C)
But subsections (4A) and (4B) are subject to the following two
exceptions.
(4D)
Exception 1 is that if the notice is given after 31st July in Year 2 (but on
or before 31st October)—
15
(a)
the day specified for a non-electronic return must be after the
end of the period of three months beginning with the date of the
notice, and
(b)
the day specified for an electronic return must not be earlier
than 31st January.
20
(4E)
Exception 2 is that if the notice is given after 31st October in Year 2, the
day specified for a return (whether or not electronic) must be after the
end of the period of three months beginning with the date of the
notice.”
(2)
For subsection (5) of that section (partnership return where a company is a
25
partner: filing date) substitute—
“(5)
In the case of a partnership which includes one or more companies, a
notice may specify different dates depending on whether a notice in
respect of a relevant period is electronic or non-electronic.
(5A)
The day specified for a non-electronic return must not be earlier than
30
the end of the period of nine months beginning at the end of the
relevant period.
(5B)
The day specified for an electronic return must not be earlier than the
first anniversary of the end of the relevant period.
(5C)
But where the notice is given more than nine months after the end of
35
the relevant period, the day specified for a return (whether or not
electronic) must be after the end of the period of three months
beginning with the date of the notice.
(5D)
For the purposes of this section “relevant period” means the period in
respect of which the return is required.
40
(5E)
The Commissioners—
(a)
shall prescribe what constitutes an electronic return for the
purposes of this section, and
(b)
may make different provision for different cases or
circumstances.”
45

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90
Consequential amendments
(1)
In section 9(2)(a) of TMA 1970 (returns to include self-assessment), for “30th
September” substitute “31st October”.
(2)
In section 9ZA of TMA 1970 (amendment of personal or trustee return), for
subsection (3) substitute—
5
“(3)
In this section “the filing date”, in respect of a return for a year of
assessment (Year 1), means—
(a)
31st January of Year 2, or
(b)
if the notice under section 8 or 8A is given after 31st October of
Year 2, the last day of the period of three months beginning with
10
the date of the notice.”
(3)
In section 12ABA of TMA 1970 (amendment of partnership return by
taxpayer), for subsection (4) substitute—
“(4)
In this section “the filing date” means—
(a)
in the case of a partnership which includes one or more
15
individuals, in respect of a return for a year of assessment (Year
1)—
(i)
31st January of Year 2, or
(ii)
if the notice under section 12AA is given after 31st
October of Year 2, the last day of the period of three
20
months beginning with the date of the notice, and
(b)
in the case of a partnership which includes one or more
companies, the end of the period specified in section 12AA(5B)
or (5C).”
(4)
In section 28C of TMA 1970 (determination of tax where no return delivered),
25
for subsection (6) substitute—
“(6)
In this section “the filing date” in respect of a return for a year of
assessment (Year 1) means either—
(a)
31st January of Year 2, or
(b)
if the notice under section 8 or 8A was given after 31st October
30
of Year 2, the last day of the period of three months beginning
with the day on which the notice is given.”
(5)
In section 33A of TMA 1970 (error in partnership return)—
(a)
in subsection (1), insert at the end “for a year of assessment (Year 1), or
for a relevant period which ends in Year 1”,
35
(b)
in subsection (2), for “five years after the filing date” substitute “31st
January of Year 6”,
(c)
in subsection (9), omit the definition of “filing date”, and
(d)
in that subsection, after the definition of “relevant partner” insert—
““relevant period” means a period in respect of which a
40
return is required.”
(6)
In section 93(10) of TMA 1970 (penalty for failure to make individual or trustee
return), for the definition of “filing date” substitute—
““the filing date” in respect of a return for a year of assessment
(Year 1) means—
45
(a)
31st January of Year 2, or

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(b)
if the notice under section 8 or 8A was given after 31st
October of Year 2, the last day of the period of three
months beginning with the day on which the notice is
given.”
(7)
In section 93A of TMA 1970 (failure to make partnership return), after
5
subsection (7) insert—
“(7A)
For the purposes of this section the filing date for a year of assessment
(Year 1) in the case of a partnership which includes one or more
individuals is—
(a)
31st January of Year 2, or
10
(b)
if the notice under section 12AA was given after 31st October of
Year 2, the last day of the period of three months beginning with
the date of the notice.
(7B)
For the purposes of this section the filing date for a year of assessment
(Year 1) in the case of a partnership which includes one or more
15
companies is—
(a)
the first anniversary of the period for which the return is
required, or
(b)
where the notice is given more than nine months after the end
of the period for which the return is required, the last day of the
20
period of three months beginning with the date of the notice.”
(8)
In subsection (8) of section 93A, omit the definition of “the filing date”.
(9)
In paragraph 4 of Schedule 15 to FA 2006 (accountancy change: spreading of
adjustment)—
(a)
in sub-paragraph (1), after “a tax year” insert “(Year 1)”, and
25
(b)
in sub-paragraph (2), for “normal self-assessment filing date for the tax
year.” substitute “31st January of Year 2.”
91
Commencement
(1)
Sections 87 to 90 have effect—
(a)
in relation to a return under section 8 or 8A of TMA 1970, or a return
30
under section 12AA of that Act for a partnership which includes one or
more individuals, in respect of a return for a year of assessment
beginning on or after 6th April 2007, and
(b)
in relation to a return under section 12AA of that Act for a partnership
which includes one or more companies, in respect of a return for a
35
relevant period beginning on or after 6th April 2007.
(2)
In subsection (1)(b) “relevant period” means a period in respect of which a
return is required.
Other administration
92
Mandatory electronic filing of returns
40
(1)
In section 135 of FA 2002 (mandatory electronic filing) is amended as follows.

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(2)
In subsection (7), after paragraph (b) insert—
“(ba)
to specify other consequences of contravention of, or failure to
comply with, the regulations (which may include disregarding
a return delivered otherwise than by the use of electronic
communications);”.
5
(3)
In subsection (10), for the definition of “taxation matter” substitute—
““taxation matter” means any matter relating to a tax (or duty) for which
the Commissioners are responsible.”
(4)
Section 76 of VATA 1994 (assessment) is amended as follows.
(5)
In subsection (1), after paragraph (c) insert—
10

“or
(d)
a penalty under regulations made under section 135 of the
Finance Act 2002 (mandatory electronic filing of returns) in
connection with VAT,”.
(6)
In that subsection, before “may have ceased” insert “or the regulations”.
15
(7)
In subsection (3), insert at the end—

“; and
(f)
in the case of a penalty under regulations made under section
135 of the Finance Act 2002, the relevant period is the prescribed
accounting period in respect of which the contravention of, or
20
failure to comply with, the regulations occurred.”
(8)
In section 83 of VATA 1994 (appeals), after paragraph (zb) insert—
“(zc)
a decision of the Commissioners about the application of
regulations under section 135 of the Finance Act 2002
(mandatory electronic filing of returns) in connection with VAT
25
(including, in particular, a decision as to whether a requirement
of the regulations applies and a decision to impose a penalty);”.
(9)
In section 84 of VATA 1994 (appeals), after subsection (6A) insert—
“(6B)
Nothing in section 83(zc) shall be taken to confer on a tribunal any
power to vary an amount assessed by way of penalty except in so far as
30
it is necessary to reduce it to the amount which is appropriate under
regulations made under section 135 of the Finance Act 2002.”
93
Mandatory electronic payment
(1)
Section 204 of FA 2003 (mandatory electronic payment by large employers) is
amended as follows.
35
(2)
For subsections (1) and (2) substitute—
“(1)
The Commissioners for Her Majesty’s Revenue and Customs may
make regulations requiring a person to use electronic means in making
specified payments under legislation relating to a tax (or duty) for
which the Commissioners are responsible.
40
(2)
The regulations may provide for exceptions.”
(3)
In subsection (5)(b), for “the Inland Revenue” substitute “Her Majesty’s
Revenue and Customs”.

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(4)
In subsection (6)(a), for “the Inland Revenue” substitute “Her Majesty’s
Revenue and Customs”.
(5)
In subsection (8)—
(a)
in paragraph (a), for “a contravention of, or any failure to comply with,”
substitute “a contravention by a large employer of, or any failure by a
5
large employer to comply with,”, and
(b)
in paragraph (b), for “taxation matter within the care and management
of the Commissioners” substitute “matter relating to a tax (or duty) for
which the Commissioners are responsible”.
(6)
In subsection (12)—
10
(a)
for the definition of “the Inland Revenue” substitute—
““Her Majesty’s Revenue and Customs” includes a person acting
under the authority of the Commissioners in relation to
payment by electronic means;”, and
(b)
after that definition insert—
15
““large employer” means a person paying PAYE income to 250 or
more recipients (and 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);”.
20
(7)
The heading accordingly becomes “Mandatory electronic payment”.
(8)
In section 205(1) of FA 2003 (application of section 204 for other purposes)—
(a)
after “taxation” insert “(or duty)”, and
(b)
for “the Commissioners of Inland Revenue” substitute “the
Commissioners for Her Majesty’s Revenue and Customs”.
25
94
Payment by cheque
(1)
The Commissioners may make regulations providing for a payment to HMRC
made by cheque to be treated as made when the cheque clears, as defined in
the regulations.
(2)
Section 70A of TMA 1970 (payment by cheque treated as made on receipt by
30
HMRC) is subject to regulations under subsection (1).
(3)
Regulations under subsection (1)—
(a)
may make provision generally or only for specified purposes,
(b)
may make different provision for different purposes, and
(c)
may include incidental, consequential or transitional provision.
35
(4)
Regulations under subsection (1)—
(a)
shall be made by statutory instrument, and
(b)
shall be subject to annulment in pursuance of a resolution of the House
of Commons.
(5)
In this section—
40
(a)
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs, and
(b)
“HMRC” means Her Majesty’s Revenue and Customs.