Finance Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Finance Bill

Finance Bill (Volume I)
Part 7 — Administration
Chapter 1 — Information etc
71

Part 7
Administration
Chapter 1
Information etc
New information etc powers
5
111
Information and inspection powers
(1)
Schedule 36 contains provision about the powers of officers of Revenue and
Customs to obtain information and to inspect businesses.
(2)
That Schedule comes into force on such day as the Treasury may by order
made by statutory instrument appoint.
10
(3)
An order under subsection (2) may contain transitional provision and savings.
112
Computer records etc
(1)
This section applies to any enactment that, in connection with an HMRC
matter—
(a)
requires a person to produce a document or cause a document to be
15
produced,
(b)
requires a person to permit the Commissioners or an officer of Revenue
and Customs—
(i)
to inspect a document, or
(ii)
to make or take copies of or extracts from or remove a
20
document,
(c)
makes provision about penalties or offences in connection with the
production or inspection of documents, including in connection with
the falsification of or failure to produce or permit the inspection of
documents, or
25
(d)
makes any other provision in connection with a requirement
mentioned in paragraph (a) or (b).
(2)
An enactment to which this section applies has effect as if—
(a)
any reference in the enactment to a document were a reference to
anything in which information of any description is recorded, and
30
(b)
any reference in the enactment to a copy of a document were a reference
to anything onto which information recorded in the document has been
copied, by whatever means and whether directly or indirectly.
(3)
An authorised person may, at any reasonable time, obtain access to, and
inspect and check the operation of, any computer and any associated
35
apparatus or material which is or has been used in connection with a relevant
document.
(4)
In subsection (3), “relevant document” means a document that a person has
been, or may be, required pursuant to an enactment to which this section
applies—
40
(a)
to produce or cause to be produced, or

Finance Bill (Volume I)
Part 7 — Administration
Chapter 1 — Information etc
72

(b)
to permit the Commissioners or an officer of Revenue and Customs to
inspect, to make or take copies of or extracts from or to remove.
(5)
An authorised person may require—
(a)
the person by whom or on whose behalf the computer is or has been so
used, or
5
(b)
any person having charge of, or otherwise concerned with the
operation of, the computer, apparatus or material,

to provide the authorised person with such reasonable assistance as may be
required for the purposes of subsection (3).
(6)
Any person who—
10
(a)
obstructs the exercise of a power conferred by this section, or
(b)
fails to comply within a reasonable time with a requirement under
subsection (5),

is liable to a penalty of £300.
(7)
Paragraphs 45 to 49 and 52 of Schedule 36 (assessment of and appeals against
15
penalties) apply in relation to a penalty under this section as they apply in
relation to a penalty under paragraph 39 of that Schedule.
(8)
Omit the following—
(a)
section 10 of FA 1985 (production of computer records etc in connection
with assigned matters),
20
(b)
section 127 of FA 1988 (production of computer records etc in
connection with the Taxes Acts), and
(c)
paragraphs 11(2) to (4) and 13(2) and (3) of Schedule 1 to the Civil
Evidence Act 1995 (c. 38).
(9)
In this section—
25
“authorised person” means a person who is, or is a member of a class of
persons who are, authorised by the Commissioners to exercise the
powers under subsection (3),
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs,
30
“enactment” includes an enactment contained in subordinate legislation
(within the meaning of the Interpretation Act 1978 (c. 30)),
“HMRC matter” means a matter in relation to which the Commissioners,
or officers of Revenue and Customs, have a power or duty, and
“produce”, in relation to a document, includes furnish, deliver and any
35
other equivalent expression.
Other measures
113
Record-keeping
(1)
Schedule 37 contains provision about the obligations to keep records for the
purposes of income tax, capital gains tax, corporation tax and value added tax.
40
(2)
The amendments made by that Schedule come into force on such day as the
Treasury may by order made by statutory instrument appoint.

Finance Bill (Volume I)
Part 7 — Administration
Chapter 2 — Time limits for claims and assessments etc
73

114
Disclosure of tax avoidance schemes
(1)
Schedule 38 contains amendments relating to the disclosure of tax avoidance
schemes.
(2)
The amendments made by that Schedule come into force on such day as the
Treasury may by order made by statutory instrument appoint; and different
5
days may be appointed for different purposes.
115
Power to open or unpack containers
(1)
CEMA 1979 is amended as follows.
(2)
In section 1(1) (interpretation), in the definition of “container”, after “and any”
insert “baggage,”.
10
(3)
Section 159 (power to examine and take account of goods) is amended as
follows.
(4)
In subsection (1)—
(a)
after “for that purpose” insert “open or unpack any container or”, and
(b)
insert at the end “and search it or anything in it.”
15
(5)
In subsection (4), insert at the end “; but if an officer opens or unpacks any
container, or searches it or anything in it, the Commissioners are to bear the
expense of doing so.”
Chapter 2
Time limits for claims and assessments etc
20
General
116
Time limits for assessments, claims etc
(1)
Schedule 39 contains provision about time limits for assessments, claims etc.
(2)
The amendments and saving made by that Schedule come into force on such
day as the Treasury may by order made by statutory instrument appoint.
25
(3)
An order under subsection (2)—
(a)
may make different provision for different purposes, and
(b)
may include transitional provision and further savings.
Income tax and corporation tax
117
Correction and amendment of tax returns
30
(1)
In section 9ZB(1) of TMA 1970 (correction of personal or trustee return by
HMRC)—
(a)
after “correct” insert “—
(a)
”, and

Finance Bill (Volume I)
Part 7 — Administration
Chapter 2 — Time limits for claims and assessments etc
74

(b)
insert at the end “, and
(b)
anything else in the return that the officer has reason to
believe is incorrect in the light of information available
to the officer.”
(2)
In section 12ABB(1) of that Act (correction of partnership return by HMRC)—
5
(a)
after “correct” insert “—
(a)
”, and
(b)
insert at the end “, and
(b)
anything else in the return that the officer has reason to
believe is incorrect in the light of information available
10
to the officer.”
(3)
Schedule 18 to FA 1998 (company tax returns) is amended as follows.
(4)
In paragraph 16(1) (correction of company tax return by HMRC)—
(a)
after “correct” insert “—
(a)
”, and
15
(b)
insert at the end “, and
(b)
anything else in the return that the officer has reason
to believe is incorrect in the light of information
available to the officer.”
(5)
In paragraph 31 (amendment of return by company during enquiry), in sub-
20
paragraph (4), for paragraph (b) substitute—
“(b)
in any other case, the amendment takes effect as part of the
amendments made by the closure notice.”
(6)
In paragraph 34 (amendment of company tax return after enquiry), for sub-
paragraphs (1) and (2) substitute—
25
    “(1)
This paragraph applies where a closure notice is given to a company
by an officer.
      (2)
The closure notice must—
(a)
state that, in the officer’s opinion, no amendment is required
of the return that was the subject of the enquiry, or
30
(b)
make the amendments of that return that are required—
(i)
to give effect to the conclusions stated in the notice,
and
(ii)
in the case of a return for the wrong period, to make
it a return appropriate to the designated period.
35
     (2A)
The officer may by further notice to the company make any
amendments of other company tax returns delivered by the
company that are required to give effect to the conclusions stated in
the closure notice.”
(7)
In sub-paragraph (3) of that paragraph, for “any such amendment of a
40
company’s return” substitute “an amendment of a company’s return under
sub-paragraph (2) or (2A)”.
(8)
In sub-paragraph (4)(c) of that paragraph, for “notice of amendment”
substitute “closure notice”.

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Part 7 — Administration
Chapter 2 — Time limits for claims and assessments etc
75

(9)
In paragraph 61(1)(a) and (3)(a) (consequential claims etc), for “34(2)(b)”
substitute “34(2A)”.
(10)
In paragraph 88 (conclusiveness of amounts stated in return)—
(a)
in sub-paragraph (3)(b), omit the words from “and” to the end,
(b)
in sub-paragraph (3)(c), for “34(2)” substitute “34”,
5
(c)
in sub-paragraph (4)(b), for “the end of the period specified in
paragraph 34(1)” substitute “the completion of the enquiry”, and
(d)
in sub-paragraph (4)(c), for “34(2)” substitute “34”.
(11)
In paragraph 93(1)(b) (general jurisdiction of Special or General
Commissioners), for “34(2)” substitute “34”.
10
(12)
In the following provisions, for “34(2)” substitute “34”—
(a)
in TMA 1970—
(i)
section 46B(2)(aa) (questions to be determined by Special
Commissioners),
(ii)
section 46C(2)(b) (jurisdiction of Special Commissioners over
15
certain claims included in returns),
(iii)
section 46D(2)(aa) (questions to be determined by Land
Tribunal), and
(iv)
section 55(1)(a)(ii) (recovery of tax not postponed), and
(b)
in ICTA, section 754(2E) (assessment, recovery and postponement of
20
tax).
(13)
The amendments made by this section come into force on such day as the
Treasury may by order appoint.
VAT
118
VAT: time limits for assessments of excess credits etc
25
(1)
In section 73 of VATA 1994 (assessment of overpaid VAT credits etc), after
subsection (6) insert—
“(6A)
In the case of an assessment under subsection (2), the prescribed
accounting period referred to in subsection (6)(a) and in section 77(1)(a)
is the prescribed accounting period in which the repayment or refund
30
of VAT, or the VAT credit, was paid or credited.”
(2)
Section 80 of that Act (credit for, or repayment of, overstated or overpaid VAT)
is amended as follows.
(3)
After subsection (4A) insert—
“(4AA)
An assessment under subsection (4A) shall not be made more than 2
35
years after the later of—
(a)
the end of the prescribed accounting period in which the
amount was credited to the person, and
(b)
the time when evidence of facts sufficient in the opinion of the
Commissioners to justify the making of the assessment comes to
40
the knowledge of the Commissioners.”
(4)
In subsection (4C), for “(2)” substitute “(3)”.

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Part 7 — Administration
Chapter 3 — Penalties
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(5)
The amendments made by this section are treated as having come into force on
19 March 2008.
119
Old VAT claims: extended time limits
(1)
The requirement in section 80(4) of VATA 1994 that a claim under that section
be made within 3 years of the relevant date does not apply to a claim in respect
5
of an amount brought into account, or paid, for a prescribed accounting period
ending before 4 December 1996 if the claim is made before 1 April 2009.
(2)
The requirement in section 25(6) of VATA 1994 that a claim for deduction of
input tax be made at such time as may be determined by or under regulations
does not apply to a claim for deduction of input tax that became chargeable,
10
and in respect of which the claimant held the required evidence, in a prescribed
accounting period ending before 1 May 1997 if the claim is made before 1 April
2009.
(3)
In this section—
“input tax” and “prescribed accounting period” have the same meaning as
15
in VATA 1994 (see section 96 of that Act), and
“the required evidence” means the evidence of the charge to value added
tax specified in or under regulation 29(2) of the Value Added Tax
Regulations 1995 (S.I. 1995/2518).
(4)
This section is treated as having come into force on 19 March 2008.
20
Chapter 3
Penalties
120
Penalties for errors
(1)
Schedule 40 contains provisions amending Schedule 24 to FA 2007 (penalties
for errors in returns etc).
25
(2)
That Schedule comes into force on such day as the Treasury may by order
appoint.
(3)
An order under subsection (2)—
(a)
may commence a provision generally or only for specified purposes,
and
30
(b)
may appoint different days for different provisions or for different
purposes.
(4)
The Treasury may by order make any incidental, supplemental, consequential,
transitional, transitory or saving provision which may appear appropriate in
consequence of, or otherwise in connection with, Schedule 24 to FA 2007 or
35
Schedule 40.
(5)
An order under subsection (4) may include provision amending, repealing or
revoking any provision of any Act or subordinate legislation whenever passed
or made (including this Act and any Act amended by it).
(6)
An order under subsection (4) may make different provision for different
40
purposes.

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Part 7 — Administration
Chapter 4 — Appeals etc
77

(7)
The power to make an order under this section is exercisable by statutory
instrument.
(8)
A statutory instrument containing an order under subsection (4) which
includes provision amending or repealing any provision of an Act is subject to
annulment in pursuance of a resolution of the House of Commons.
5
121
Penalties for failure to notify etc
(1)
Schedule 41 contains provisions for imposing penalties on persons in respect
of failures to notify HMRC that they are chargeable to tax etc and certain
wrongdoings relating to invoices showing VAT and excise duties.
(2)
That Schedule comes into force on such day as the Treasury may by order
10
appoint.
(3)
An order under subsection (2)—
(a)
may commence a provision generally or only for specified purposes,
and
(b)
may appoint different days for different provisions or for different
15
purposes.
(4)
The Treasury may by order make any incidental, supplemental, consequential,
transitional, transitory or saving provision which may appear appropriate in
consequence of, or otherwise in connection with, Schedule 41.
(5)
An order under subsection (4) may include provision amending, repealing or
20
revoking any provision of any Act or subordinate legislation whenever passed
or made (including this Act and any Act amended by it).
(6)
An order under subsection (4) may make different provision for different
purposes.
(7)
The power to make an order under this section is exercisable by statutory
25
instrument.
(8)
A statutory instrument containing an order under subsection (4) which
includes provision amending or repealing any provision of an Act is subject to
annulment in pursuance of a resolution of the House of Commons.
Chapter 4
30
Appeals etc
Reviews and appeals etc: general
122
HMRC decisions etc: reviews and appeals
(1)
The Treasury may by order made by statutory instrument make provision—
(a)
for and in connection with reviews by the Commissioners, or by an
35
officer of Revenue and Customs, of HMRC decisions, and
(b)
in connection with appeals against HMRC decisions.
(2)
An order under subsection (1) may, in particular, contain provision about—
(a)
the circumstances in which, or the time within which—
(i)
a right to a review may be exercised, or
40