Finance Bill

House of Commons

Session 2006 - 07
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Finance Bill

Finance Bill
Part 1 — Charges, rates, thresholds etc
7

11
Rates of vehicle excise duty
(1)
Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.
(2)
In paragraph 1 (general)—
(a)
in sub-paragraph (2) (vehicle not covered elsewhere in Schedule
otherwise than with engine cylinder capacity not exceeding 1,549cc),
5
for “£175” substitute “£180”, and
(b)
in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with
engine cylinder capacity not exceeding 1,549cc), for “£110” substitute
“£115”.
(3)
Paragraph 1B (graduated rates for light passenger vehicles) is amended as
10
follows.
(4)
For the words from “Table A” to “date,” substitute “the following table”.
(5)
For “, or is liable to the standard rate or the premium” substitute “or is liable to
the standard”.
(6)
For Tables A and B substitute—
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“Table

CO2 emissions figure
Rate

        (1)
        (2)
        (3)
        (4)

   Exceeding
Not exceeding
  Reduced rate
Standard rate

      g/km
     g/km
          £
          £

20

        100
       120
         15
         35

        120
       150
         95
        115

        150
       165
        120
        140

        165
       185
        145
        165

        185
       225
        190
        205

25

        225
          —
        285
        300

   The table has effect in relation to vehicles first registered before 23rd March
2006 as if—
(a)
in column (3), in the last row, “190” were substituted for “285”, and
(b)
in column (4), in the last row, “205” were substituted for “300”.”
30
(7)
For paragraphs 1D and 1E substitute—
“The standard rate
1D
A vehicle is liable to the standard rate of duty if it does not qualify
for the reduced rate of duty.”
(8)
In paragraph 1J (light goods vehicles)—
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Finance Bill
Part 1 — Charges, rates, thresholds etc
8

(a)
in sub-paragraph (a) (vehicle which is not lower-emission van), for
“£170” substitute “£175”, and
(b)
in sub-paragraph (b) (lower-emission van), for “£110” substitute
“£115”.
(9)
In paragraph 2(1) (motorcycles)—
5
(a)
in paragraph (b) (motorbicycle and engine’s cylinder capacity more
than 150cc but not more than 400cc), for “£31” substitute “£32”,
(b)
in paragraph (c) (motorbicycle and engine’s cylinder capacity more
than 400cc but not more than 600cc), for “£46” substitute “£47”, and
(c)
in paragraph (d) (any other case), for “£62” substitute “£64”.
10
(10)
The amendments made by this section have effect in relation to licences taken
out on or after 22nd March 2007.
12
Rates of air passenger duty
(1)
Section 30 of FA 1994 (rates of air passenger duty) is amended as follows.
(2)
In subsection (3A) (destinations in EEA States and qualifying territories etc)—
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(a)
in paragraph (a) (standard class travel), for “£5” substitute “£10”, and
(b)
in paragraph (b) (any other case), for “£10” substitute “£20”.
(3)
In subsection (4) (other destinations)—
(a)
in paragraph (a) (standard class travel), for “£20” substitute “£40”, and
(b)
in paragraph (b) (any other case), for “£40” substitute “£80”.
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(4)
The amendments made by this section have effect in relation to any carriage of
a passenger on an aircraft which begins on or after 1st February 2007.
(5)
But if the amount of duty due from any operator in the accounting period
ending before 21st March 2007 increased as a result of those amendments, the
operator is to pay the amount of that increase as if it became due in the first
25
accounting period ending after that day.
(6)
Expressions which are used in subsection (5) and in the Air Passenger Duty
Regulations 1994 (S.I. 1994/1738) have the same meaning in that subsection as
in those regulations.
13
Rates of climate change levy
30
(1)
For the Table in paragraph 42(1) of Schedule 6 to FA 2000 substitute—
“Table

Taxable commodity supplied
Rate at which levy payable if

supply is not a reduced-rate supply

Electricity
£0.00456 per kilowatt hour

35

Gas supplied by a gas utility or
£0.00159 per kilowatt hour

any gas supplied in a gaseous

state that is of a kind supplied

by a gas utility

Finance Bill
Part 1 — Charges, rates, thresholds etc
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Taxable commodity supplied
Rate at which levy payable if

supply is not a reduced-rate supply

Any petroleum gas, or other
£0.01018 per kilogram

gaseous hydrocarbon, supplied

in a liquid state

5

Any other taxable commodity
£0.01242 per kilogram”.

(2)
The amendment made by subsection (1) has effect in relation to supplies
treated as taking place on or after 1st April 2008.
14
Rate of aggregates levy
(1)
In section 16(4) of FA 2001 (rate of aggregates levy), for “£1.60” substitute
10
“£1.95”.
(2)
The amendment made by subsection (1) has effect in relation to aggregate
subjected to commercial exploitation on or after 1st April 2008.
15
Rates of landfill tax
(1)
Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
15
(2)
In—
(a)
subsection (1)(a) (the standard rate), and
(b)
subsection (2) (reference to the standard rate taken to be £2 in cases of
disposals of qualifying material),

for “£21” substitute “£24”.
20
(3)
The amendments made by subsection (2) have effect in relation to disposals
made (or treated as made) on or after 1st April 2007 (but before 1st April 2008).
(4)
In subsection (1)(a), for “£24” substitute “£32” and, in subsection (2), for “£24
were to £2” substitute “£32 were to £2.50”.
(5)
The amendments made by subsection (4) come into force on 1st April 2008 and
25
have effect in relation to disposals made (or treated as made) on or after that
date.
16
Emissions trading: charges for allocations
(1)
The Treasury may impose charges by providing for Community tradeable
emissions allowances to be allocated in return for payment.
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(2)
The Treasury must by regulations make provision for and in connection with
allocations of allowances in return for payment.
(3)
The regulations must provide for allocations to be overseen by an independent
person appointed by the Treasury.
(4)
The regulations may make any other provision about allocations which the
35
Treasury consider appropriate, including (in particular)—
(a)
provision as to the imposition of fees, and as to the making and
forfeiting of deposits, in connection with participation in allocations,
(b)
provision as to the persons by whom allocations are to be conducted,

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Part 2 — Environment
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(c)
provision for the imposition and recovery of penalties for failure to
comply with the terms of a scheme made under subsection (5),
(d)
provision for and in connection with the recovery of payments due in
respect of allowances allocated (including provision as to the
imposition and recovery of interest and penalties), and
5
(e)
provision conferring rights of appeal against decisions made in
allocations, the forfeiting of deposits and the imposition of penalties
(including provision specifying the person, court or tribunal to hear
and determine appeals).
(5)
The Treasury may make schemes about the conduct and terms of allocations
10
(to have effect subject to any regulations under this section); and schemes may
in particular include provision about—
(a)
who may participate in allocations,
(b)
the allowances to be allocated, and
(c)
where and when allocations are to take place.
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(6)
“Community tradeable emissions allowances” are transferable allowances
which—
(a)
relate to the making of emissions of greenhouse gases, and
(b)
are allocated as part of a system made for the purpose of implementing
any Community obligation of the United Kingdom relating to such
20
emissions;

and “greenhouse gases” means carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.
(7)
Regulations under this section are to be made by statutory instrument.
(8)
A statutory instrument containing regulations under this section is subject to
25
annulment in pursuance of a resolution of the House of Commons unless a
draft of the regulations has been laid before, and approved by a resolution of,
that House.
Part 2
Environment
30
Energy-saving: houses
17
Corporation tax deduction for expenditure on energy-saving items
(1)
In ICTA, after section 31 insert—
“31ZA
Deduction for expenditure on energy-saving items
(1)
This section applies if—
35
(a)
a company carries on a Schedule A business in relation to land
which consists of or includes a dwelling-house,
(b)
the company incurs expenditure in acquiring and installing an
energy-saving item in the dwelling-house or in a building
containing the dwelling-house (see subsections (5) to (7)),
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(c)
the expenditure is incurred before 1st April 2015,

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(d)
a deduction for the expenditure is not prohibited by the wholly
and exclusively rule but would otherwise be prohibited by the
capital prohibition rule (see subsection (8)), and
(e)
no allowance under the Capital Allowances Act may be claimed
in respect of the expenditure.
5
(2)
In calculating the profits of the Schedule A business, a deduction for the
expenditure is allowed.
(3)
But any deduction is subject to—
(a)
section 31ZB (restrictions on the relief), and
(b)
any provision made by regulations under section 31ZC.
10
(4)
If, on a just and reasonable apportionment of any expenditure, part of
the expenditure would qualify for the relief (but the remainder would
not), a deduction is allowed for that part.
(5)
“Energy-saving item” means an item of an energy-saving nature of
such description as is for the time being specified in regulations made
15
by the Treasury.
(6)
The Treasury may by regulations provide for an item to be an energy-
saving item only if it satisfies such conditions as may be—
(a)
specified in, or
(b)
determined in accordance with,
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the regulations.
(7)
The conditions may include conditions imposed by reference to
information or documents issued by any body, person or organisation.
(8)
In this section—
“the capital prohibition rule” means the rule in section 74(1)(f) or
25
(g) (capital expenditure), as applied by section 21A, and
“the wholly and exclusively rule” means the rule in section
74(1)(a) or (e) (expenses not wholly and exclusively for trade
and unconnected losses), as applied by section 21A.
31ZB
Restrictions on relief
30
(1)
This section restricts deductions that would otherwise be allowable
under section 31ZA.
(2)
No deduction is allowed if, when the energy-saving item is installed,
the dwelling-house—
(a)
is in the course of construction, or
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(b)
is comprised in land in which the company does not have an
interest or is in the course of acquiring an interest or further
interest.
(3)
No deduction is allowed in respect of expenditure in an accounting
period if—
40
(a)
the Schedule A business consists of or includes the commercial
letting of furnished holiday accommodation for the purposes of
section 503, and
(b)
the dwelling-house constitutes some or all of that
accommodation for the accounting period.
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(4)
No deduction is allowed in respect of expenditure treated by section
401 (as applied by section 21B) as incurred on the date on which the
company starts to carry on the Schedule A business unless the
expenditure was incurred not more than 6 months before that date.
(5)
No deduction is allowed in respect of expenditure incurred in
5
acquiring and installing the energy-saving item in a building
containing the dwelling-house in so far as the expenditure is not for the
benefit of the dwelling-house.
31ZC
Regulations
(1)
In relation to any deduction under section 31ZA, the Treasury may
10
make regulations for—
(a)
restricting or reducing the amount of expenditure for which the
deduction is allowable,
(b)
excluding entitlement to the deduction in such cases as may be
specified in, or determined in accordance with, the regulations,
15
(c)
determining who is (and is not) entitled to the deduction if
different persons have different interests in land that consists of
or includes the whole or part of a building containing one or
more dwelling-houses,
(d)
making apportionments if the Schedule A business is carried on
20
by persons in partnership or an interest in land is beneficially
owned by persons jointly or in common.
(2)
The apportionments that may be made include apportionments to
persons within the charge to income tax.
(3)
Regulations under this section may—
25
(a)
make different provision for different cases, and
(b)
contain incidental, supplemental, consequential and
transitional provision and savings (including provision as to
appeals in relation to apportionments mentioned in subsection
(1)(d)).”
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(2)
The amendment made by subsection (1) has effect in relation to expenditure
incurred on or after such day as the Treasury may by order appoint.
18
Extension of income tax deduction for expenditure on energy-saving items
(1)
Section 312 of ITTOIA 2005 (deduction for expenditure on energy-saving
items) is amended as follows.
35
(2)
In subsection (1)(b) (expenditure incurred in acquiring and installing energy-
saving item in dwelling-house), for “in the dwelling-house an energy-saving
item” substitute “an energy-saving item in the dwelling-house or in a building
containing the dwelling-house”.
(3)
In subsection (1)(c) (expenditure incurred before 6th April 2009), for “2009”
40
substitute “2015”.
(4)
In section 313 of that Act (restrictions on relief), insert at the end—
“(6)
No deduction is allowed in respect of expenditure incurred in
acquiring and installing the energy-saving item in a building

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Part 2 — Environment
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containing the dwelling-house in so far as the expenditure is not for the
benefit of the dwelling-house.”
(5)
In section 314 of that Act (regulations), insert at the end—
“(3)
Regulations under this section may—
(a)
make different provision for different cases, and
5
(b)
contain incidental, supplemental, consequential and
transitional provision and savings (including provision as to
appeals in relation to apportionments mentioned in subsection
(1)(d)).”
(6)
The amendments made by subsections (2) and (4) have effect in relation to
10
expenditure incurred on or after 6th April 2007.
(7)
The amendment made by subsection (5) is deemed always to have had effect.
(8)
Regulations under section 314 of ITTOIA 2005 made on or after the day on
which this Act is passed but before 31st December 2007 may include provision
having effect in relation to expenditure incurred on or after 6th April 2007.
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19
SDLT relief for new zero-carbon homes
(1)
In FA 2003, after section 58A insert—
“58B
Relief for new zero-carbon homes
(1)
The Treasury may make regulations granting relief on the first
acquisition of a dwelling which is a “zero-carbon home”.
20
(2)
In subsection (1) “first acquisition of a dwelling” means the acquisition
of a building which—
(a)
has been constructed for use as a single dwelling, and
(b)
has not previously been occupied.
(3)
For the purpose of subsection (2) land occupied or enjoyed with a
25
dwelling as a garden or grounds is part of the dwelling.
(4)
The regulations shall define “zero-carbon home” by reference to
specified aspects of the energy efficiency of a building; for which
purpose “energy efficiency” includes—
(a)
consumption of energy,
30
(b)
conservation of energy, and
(c)
generation of energy.
(5)
The relief may take the form of—
(a)
exemption from charge, or
(b)
a reduction in the amount of tax chargeable.
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(6)
Regulations under this section shall not have effect in relation to
acquisitions on or after 1st October 2012.
(7)
The Treasury may by order—
(a)
substitute a later date for the date in subsection (6);
(b)
make transitional provision, or provide savings, in connection
40
with the effect of subsection (6).