House of Commons portcullis
House of Commons
Session 2007 - 08
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Schedule 39 — Time limits for assessments, claims etc.

386

 

(a)   

in paragraph (a), for “at any time after the fifth anniversary of the

31st January next following” substitute “more than 4 years after the

end of”, and

(b)   

in paragraph (b), for “6 years” substitute “4 years”.

VATA 1994

5

31         

VATA 1994 is amended as follows.

32         

In section 33A(4) (refunds of VAT to museums and galleries), for “3 years”

substitute “4 years”.

33    (1)  

Section 77 (assessments: time limits and supplementary assessments) is

amended as follows.

10

      (2)  

In subsection (1)(a) and (b), for “3 years” substitute “4 years”.

      (3)  

For subsection (4) substitute—

“(4)   

In any case falling within subsection (4A), an assessment of a person

(“P”), or of an amount payable by P, may be made at any time not

more than 20 years after the end of the prescribed accounting period

15

or the importation, acquisition or event giving rise to the penalty, as

appropriate (subject to subsection (5)).

(4A)   

Those cases are—

(a)   

a case involving a loss of VAT brought about deliberately by

P (or by another person acting on P’s behalf),

20

(b)   

a case in which P has participated in a transaction knowing

that it was part of arrangements of any kind (whether or not

legally enforceable) intended to bring about a loss of VAT,

(c)   

a case involving a loss of VAT attributable to a failure by P to

comply with a notification obligation, and

25

(d)   

a case involving a loss of VAT attributable to a scheme in

respect of which P has failed to comply with an obligation

under paragraph 6 of Schedule 11A.

(4B)   

In subsection (4A) the references to a loss of tax brought about

deliberately by P or another person include a loss that arises as a

30

result of a deliberate inaccuracy in a document given to Her

Majesty’s Revenue and Customs by that person.

(4C)   

In subsection (4A)(c) “notification obligation” means an obligation

under—

(a)   

paragraph 5, 6, 7 or 14(2) or (3) of Schedule 1,

35

(b)   

paragraph 3 of Schedule 2,

(c)   

paragraph 3 or 8(2) of Schedule 3,

(d)   

paragraph 3, 4 or 7(2) or (3) of Schedule 3A, or

(e)   

regulations under paragraph 2(4) of Schedule 11.”

      (4)  

In subsection (5)—

40

(a)   

in paragraph (a), for “3 years” substitute “4 years”, and

(b)   

omit paragraph (b) and the “and” before it.

34         

In section 78(11) (interest in certain cases of official error), for “three years”

substitute “4 years”.

 
 

Finance Bill
Schedule 39 — Time limits for assessments, claims etc.

387

 

35         

In section 80(4) (credit for, or repayment of, overstated or overpaid VAT), for

“3 years” substitute “4 years”.

FA 1998

36         

Schedule 18 to FA 1998 (company tax returns) is amended as follows.

37         

In paragraph 36(5) (determination of tax payable if no return delivered), for

5

“five years” substitute “3 years”.

38         

In paragraph 37(4) (determination of tax payable if notice complied with in

part), for “five years” substitute “3 years”.

39         

In paragraph 40(3) (time limit for self-assessment superseding

determination), for “five years” substitute “3 years”.

10

40    (1)  

Paragraph 43 (fraudulent or negligent conduct) is amended as follows.

      (2)  

For “is attributable to fraudulent or negligent conduct on the part of”

substitute “was brought about carelessly or deliberately by”.

      (3)  

Accordingly, for the heading before the paragraph substitute “Loss of tax

brought about carelessly or deliberately”.

15

41    (1)  

Paragraph 46 (general time limits for assessments) is amended as follows.

      (2)  

In sub-paragraph (1), for “six years” substitute “4 years”.

      (3)  

For sub-paragraph (2) substitute—

    “(2)  

An assessment in a case involving a loss of tax brought about

carelessly by the company (or a related person) may be made at

20

any time not more than 6 years after the end of the accounting

period to which it relates (subject to sub-paragraph (2A) and to

any other provision of the Taxes Acts allowing a longer period).

     (2A)  

An assessment in a case involving a loss of tax—

(a)   

brought about deliberately by the company (or a related

25

person),

(b)   

attributable to a failure by the company to comply with an

obligation under paragraph 2, or

(c)   

attributable to arrangements in respect of which the

company has failed to comply with an obligation under

30

section 309, 310 or 313 of the Finance Act 2004 (obligation

of parties to tax avoidance schemes to provide information

to Her Majesty’s Revenue and Customs),

           

may be made at any time not more than 20 years after the end of

the accounting period to which it relates (subject to any provision

35

of the Taxes Acts allowing a longer period).

     (2B)  

In this paragraph, “related person”, in relation to a company,

means—

(a)   

a person acting on behalf of the company, or

(b)   

a person who was a partner of the company at the relevant

40

time.”

42         

In paragraph 51(1)(c) (relief in case of mistake in return), for “six years”

substitute “4 years”.

 
 

Finance Bill
Schedule 39 — Time limits for assessments, claims etc.

388

 

43    (1)  

Paragraph 53 (time limit for recovery of excessive payments etc) is amended

as follows.

      (2)  

In sub-paragraph (1), for “six year” substitute “4 year”.

      (3)  

In sub-paragraph (2), for “paragraph 46(2) (time limit for assessment in case

of fraud or negligence)” substitute “paragraph 46(2) and (2A) (time limit for

5

assessment in case of loss of tax brought about carelessly or deliberately)”.

44         

In paragraph 55 (general time limit for making claims), for “six years”

substitute “4 years”.

45         

In paragraph 61(2) (consequential claims etc arising out of certain Revenue

amendments or assessments), for “fraudulent or negligent conduct on the

10

part of” substitute “a loss of tax brought about carelessly or deliberately by”.

46    (1)  

Paragraph 65 (consequential claims) is amended as follows.

      (2)  

In sub-paragraph (1), for “fraudulent or negligent conduct on the part of”

substitute “a loss of tax brought about carelessly or deliberately by”.

      (3)  

Accordingly, in the heading before the paragraph, for “fraud or negligence

15

substitute “loss of tax brought about carelessly or deliberately”.

FA 2002

47         

In paragraph 27 of Schedule 16 (withdrawal or reduction of community

investment tax relief), insert at the end—

    “(5)  

An assessment under this paragraph may be made at any time not

20

more than 6 years after the end of the accounting period for which

the relief was obtained.

      (6)  

Sub-paragraph (5) is without prejudice to paragraph 46(2A) of

Schedule 18 to the Finance Act 1998 (loss of tax brought about

deliberately).”

25

ITEPA 2003

48         

In section 711(2) (notice requiring officer of Revenue and Customs to give

notice requiring tax return), for “5 years” substitute “3 years”.

ITTOIA 2005

49         

ITTOIA 2005 is amended as follows.

30

50         

In section 301(3) (claims for repayment of tax payable in connection with sale

with right to reconveyance), for “6 years” substitute “4 years”.

51         

In section 302(3) (claims for repayment of tax payable in connection with sale

and leaseback transactions), for “6 years” substitute “4 years”.

ITA 2007

35

52         

ITA 2007 is amended as follows.

53         

In section 40(1)(a) (election for transfer of blind person’s allowance), for “on

or before the fifth anniversary of the normal self-assessment filing date for”

substitute “not more than 4 years after the end of”.

 
 

Finance Bill
Schedule 39 — Time limits for assessments, claims etc.

389

 

54         

In section 46(6)(b) (marriages and civil partnerships on or after 5 December

2005: election specifying person entitled to relief), for “on or before the fifth

anniversary of the normal self-assessment filing date for” substitute “not

more than 4 years after the end of”.

55         

In section 53(4)(a) (notice in respect of transfer of unused relief), for “on or

5

before the fifth anniversary of the normal self-assessment filing date for”

substitute “not more than 4 years after the end of”.

56         

In section 155 (claim for loss relief against miscellaneous income), in each of

subsections (1) and (2), for “on or before the fifth anniversary of the normal

self-assessment filing date for” substitute “not more than 4 years after the

10

end of”.

57    (1)  

Section 237 (EIS relief: time limits for assessments) is amended as follows.

      (2)  

In subsection (1)—

(a)   

omit “not”, and

(b)   

for “more than” substitute “at any time not more than”.

15

      (3)  

In subsection (3)—

(a)   

for “36” substitute “36(1A)”, and

(b)   

for “(fraudulent or negligent conduct)” substitute “(loss of tax

brought about deliberately etc)”.

58         

In section 372 (withdrawal or reduction of community investment tax relief),

20

insert at the end—

“(4)   

An assessment under this paragraph may be made at any time not

more than 6 years after the end of the tax year for which the relief was

obtained.

(5)   

Subsection (4) is without prejudice to section 36(1A) of TMA 1970

25

(loss of tax brought about deliberately etc).”

59         

In section 668(7) (claim for relief for unremittable transfer proceeds), for “on

or before the fifth anniversary of the normal self-assessment filing date for”

substitute “not more than 4 years after the end of”.

60         

In section 669(4) (claim for relief for unremittable transfer proceeds: section

30

630 profits), for “on or before the fifth anniversary of the normal self-

assessment filing date for” substitute “not more than 4 years after the end

of”.

Consequential amendments

61         

In section 178(3) of FA 1993 (stop-loss and quota share insurance)—

35

(a)   

in paragraph (a), for “six years” substitute “4 years”, and

(b)   

in paragraph (b), for “fraudulent or negligent conduct” substitute

“loss of tax brought about carelessly or deliberately”.

62         

In section 225(3)(b) of FA 1994 (stop-loss and quota share insurance), for

“fraudulent or negligent conduct” substitute “loss of tax brought about

40

carelessly or deliberately”.

63         

In consequence of the preceding provisions of this Schedule, omit—

(a)   

section 149(4)(a)(i) and (ii) of FA 1989,

(b)   

paragraphs 4 and 6 of Schedule 21 to FA 1996,

 
 

Finance Bill
Schedule 40 — Penalties: amendments of Schedule 24 to FA 2007

390

 

(c)   

section 47(10) of FA 1997,

(d)   

paragraph 18 of Schedule 19 to FA 1998, and

(e)   

section 91(6)(b) of FA 2007.

Saving

64         

The amendments of sections 33, 34 and 36 of TMA 1970 made by this

5

Schedule do not have effect for the purposes of those sections as applied by

paragraph 1 of Schedule 1 to OTA 1975 (management and collection of

petroleum revenue tax).

Schedule 40

Section 117

 

Penalties: amendments of Schedule 24 to FA 2007

10

1          

Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

2     (1)  

Paragraph 1 (error in taxpayer’s document) is amended as follows.

      (2)  

In sub-paragraph (2)—

(a)   

for “P’s” substitute “a”, and

(b)   

omit “by P”.

15

      (3)  

In sub-paragraph (3), for careless or deliberate (within the meaning of

paragraph 3)” substitute “careless (within the meaning of paragraph 3) or

deliberate on P’s part”.

      (4)  

In the Table, after the entry relating to income tax and capital gains tax:

accounts in connection with a partnership return insert—

20

 

“Income tax

Return under section 254 of FA

 
  

2004.”

 

      (5)  

In the Table, after the entries relating to VAT insert—

 

“Insurance premium tax

Return under regulations under

 
  

section 54 of FA 1994.

 

25

 

Insurance premium tax

Return, statement or declaration in

 
  

connection with a claim.

 
 

Inheritance tax

Account under section 216 or 217 of

 
  

IHTA 1984.

 
 

Inheritance tax

Information or document under

 

30

  

regulations under section 256 of

 
  

IHTA 1984.

 
 

Inheritance tax

Statement or declaration in

 
  

connection with a deduction,

 
  

exemption or relief.

 

35

 

Stamp duty land tax

Return under section 76 of FA 2003.

 
 

Stamp duty reserve tax

Return under regulations under

 
  

section 98 of FA 1986.

 
 
 

Finance Bill
Schedule 40 — Penalties: amendments of Schedule 24 to FA 2007

391

 
 

Petroleum revenue tax

Return under paragraph 2 of

 
  

Schedule 2 to the Oil Taxation Act

 
  

1975.

 
 

Petroleum revenue tax

Statement or declaration in

 
  

connection with a claim under

 

5

  

Schedule 5, 6, 7 or 8 to the Oil

 
  

Taxation Act 1975.

 
 

Petroleum revenue tax

Statement under section 1(1)(a) of

 
  

the Petroleum Revenue Tax Act

 
  

1980.

 

10

 

Aggregates levy

Return under regulations under

 
  

section 25 of FA 2001.

 
 

Climate change levy

Return under regulations under

 
  

paragraph 41 of Schedule 6 to FA

 
  

2000.

 

15

 

Landfill tax

Return under regulations under

 
  

section 49 of FA 1996.

 
 

Air passenger duty

Return under section 38 of FA 1994.

 
 

Alcoholic liquor duties

Return under regulations under

 
  

section 13, 49, 56 or 62 of the

 

20

  

Alcoholic Liquor Duties Act 1979.

 
 

Alcoholic liquor duties

Statement or declaration in

 
  

connection with a claim for

 
  

repayment of duty under section

 
  

4(4) of FA 1995.

 

25

 

Tobacco products duty

Return under regulations under

 
  

section 7 of the Tobacco Products

 
  

Duties Act 1979.

 
 

Hydrocarbon oil duties

Return under regulations under

 
  

section 21 of the Hydrocarbon Oil

 

30

  

Duties Act 1979.

 
 

Excise duties

Return under regulations under

 
  

section 93 of CEMA 1979.

 
 

Excise duties

Return under regulations under

 
  

section 100G or 100H of CEMA

 

35

  

1979.

 
 

Excise duties

Statement or declaration in

 
  

connection with a claim.

 
 

General betting duty

Return under regulations under

 
  

paragraph 2 of Schedule 1 to BGDA

 

40

  

1981.

 
 

Pool betting duty

Return under regulations under

 
  

paragraph 2A of Schedule 1 to

 
  

BGDA 1981.

 
 

Bingo duty

Return under regulations under

 

45

  

paragraph 9 of Schedule 3 to BGDA

 
  

1981.

 
 

Lottery duty

Return under regulations under

 
  

section 28(2) of FA 1993.

 
 

Gaming duty

Return under directions under

 

50

  

paragraph 10 of Schedule 1 to FA

 
  

1997.

 
 
 

Finance Bill
Schedule 40 — Penalties: amendments of Schedule 24 to FA 2007

392

 
 

Remote gaming duty

Return under regulations under

 
  

section 26K of BGDA 1981.”

 
 

      (6)  

In the Table, in the last entry, in column 1, for “Income tax, capital gains tax,

corporation tax or VAT” substitute “Any of the taxes mentioned above”.

      (7)  

Insert at the end—

5

    “(5)  

In relation to a return under paragraph 2 of Schedule 2 to the Oil

Taxation Act 1975, references in this Schedule to P include any

person who, after the giving of the return for a taxable field

(within the meaning of that Act), becomes the responsible person

for the field (within the meaning of that Act).”

10

3          

After that paragraph insert—

“Error in taxpayer’s document attributable to another person

1A    (1)  

A penalty is payable by a person (T) where—

(a)   

another person (P) gives HMRC a document of a kind

listed in the Table in paragraph 1,

15

(b)   

the document contains a relevant inaccuracy, and

(c)   

the inaccuracy was attributable to T supplying false

information to P (whether directly or indirectly), or to T

deliberately withholding information from P, with the

intention of the document containing the inaccuracy.

20

      (2)  

A “relevant inaccuracy” is an inaccuracy which amounts to, or

leads to—

(a)   

an understatement of a liability to tax,

(b)   

a false or inflated statement of a loss, or

(c)   

a false or inflated claim to repayment of tax.

25

      (3)  

A penalty is payable under this paragraph in respect of an

inaccuracy whether or not P is liable to a penalty under paragraph

1 in respect of the same inaccuracy.”

4     (1)  

Paragraph 2 (under-assessment by HMRC) is amended as follows.

      (2)  

In sub-paragraph (1), for “tax” substitute “a relevant tax”.

30

      (3)  

For sub-paragraph (3) substitute—

    “(3)  

In sub-paragraph (1) “relevant tax” means any tax mentioned in

the Table in paragraph 1.”

5     (1)  

Paragraph 3 (degrees of culpability) is amended as follows

      (2)  

In sub-paragraph (1)—

35

(a)   

for “Inaccuracy in” substitute “For the purposes of a penalty under

paragraph 1, inaccuracy in”, and

(b)   

after “is deliberate” (in both places) insert “on P’s part”.

      (3)  

In sub-paragraph (2), after “deliberate” insert “on P’s part”.

 
 

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

© Parliamentary copyright 2008
Revised 27 March 2008