Finance Bill

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc
8

CO2 emissions figure
Rate

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

   Exceeding
Not exceeding
  Reduced rate
Standard rate

g/km
g/km
£
£

           225
          —
           385
           400

5

   The table has effect in relation to vehicles first registered before 23 March 2006
as if—
(a)
in column (3), in the last row, “195” were substituted for “385”, and
(b)
in column (4), in the last row, “210” were substituted for “400”.”
(4)
In paragraph 1J (light goods vehicles)—
10
(a)
in sub-paragraph (a) (vehicle which is not lower-emission van), for
“£175” substitute “£180”, and
(b)
in sub-paragraph (b) (lower-emission van), for “£115” substitute
“£120”.
(5)
In paragraph 2(1) (motorcycles)—
15
(a)
in paragraph (b) (motorbicycle and engine’s cylinder capacity more
than 150cc but not more than 400cc), for “£32” substitute “£33”,
(b)
in paragraph (c) (motorbicycle and engine’s cylinder capacity more
than 400cc but not more than 600cc), for “£47” substitute “£48”, and
(c)
in paragraph (d) (any other case), for “£64” substitute “£66”.
20
(6)
The amendments made by this section have effect in relation to licences taken
out on or after 13 March 2008.
16
Standard rate of landfill tax
(1)
In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax), for “£32”
substitute “£40”.
25
(2)
The amendments made by subsection (1) come into force on 1 April 2009 and
have effect in relation to disposals made (or treated as made) on or after that
date.
17
Rates of climate change levy
(1)
In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1)
30
substitute—
“Table

Taxable commodity supplied
Rate at which levy payable if supply is

not a reduced-rate supply

Electricity
£0.00470 per kilowatt hour

35

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc
9

Taxable commodity supplied
Rate at which levy payable if supply is

not a reduced-rate supply

Gas supplied by a gas utility or
£0.00164 per kilowatt hour

any gas supplied in a gaseous

state that is of a kind supplied

5

by a gas utility

Any petroleum gas, or other
£0.01050 per kilogram

gaseous hydrocarbon, supplied

in a liquid state

Any other taxable commodity
£0.01281 per kilogram”.

10

(2)
The amendment made by subsection (1) has effect in relation to supplies
treated as taking place on or after 1 April 2009.
18
Rate of aggregates levy
(1)
In section 16(4) of FA 2001 (rate of aggregates levy), for “£1.95” substitute “£2”.
(2)
The amendment made by subsection (1) has effect in relation to aggregate
15
subjected to commercial exploitation on or after 1 April 2009.
19
Carbon reduction trading scheme: charges for allocations
(1)
The Treasury may impose charges by providing for carbon reduction trading
scheme allowances to be allocated in return for payment.
(2)
The charges may only be imposed by regulations.
20
(3)
The regulations may make any other provision about allocations of allowances
which the 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 the
allocations,
25
(b)
provision as to the persons by whom allocations are to be conducted,
(c)
provision for allocations to be overseen by an independent person
appointed by the Treasury,
(d)
provision for the imposition and recovery of penalties for failure to
comply with the terms of a scheme made under subsection (4),
30
(e)
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
(f)
provision conferring rights of appeal against decisions made in
allocations, the forfeiting of deposits and the imposition of penalties
35
(including provision specifying the person, court or tribunal to hear
and determine appeals).
(4)
The Treasury may make schemes about the conduct and terms of allocations
(to have effect subject to any regulations under this section); and schemes may
in particular include provision about—
40
(a)
who may participate in allocations,
(b)
the allowances to be allocated, and

Finance Bill (Volume I)
Part 1 — Charges, rates, allowances, reliefs etc
10

(c)
where and when allocations are to take place.
(5)
In this section—
“carbon reduction trading scheme allowances” means tradeable
allowances that—
(a)
are provided for in a relevant trading scheme, and
5
(b)
represent the right to carry on a specified amount of activities
that consist of the emission of greenhouse gas or that cause or
contribute, directly or indirectly, to such emissions;
“relevant trading scheme” means a trading scheme that—
(a)
is made under Part 3 of the Climate Change Act 2008,
10
(b)
applies to persons by reference to their consumption of
electricity (whether or not by reference to other matters as well),
and
(c)
applies only to persons who consume electricity—
(i)
for business or charitable purposes, or
15
(ii)
for the performance of functions of a public nature,

(whether or not they also consume electricity for other
purposes);
“specified” means specified in the relevant trading scheme.
(6)
Regulations under this section are to be made by statutory instrument.
20
(7)
A statutory instrument containing the first regulations under this section may
not be made unless a draft of the regulations has been laid before, and
approved by a resolution of, the House of Commons.
(8)
Any other statutory instrument containing regulations under this section is
subject to annulment in pursuance of a resolution of the House of Commons
25
unless a draft of the regulations has been laid before, and approved by a
resolution of, that House.
Gambling duties
20
Rates of gaming duty
(1)
For the table in section 11(2) of FA 1997 substitute—
30

“Table

Part of gross gaming yield
Rate

The first £1,911,000
15 per cent

The next £1,317,000
20 per cent

35

The next £2,307,000
30 per cent

The next £4,869,500
40 per cent

The remainder
50 per cent”.

(2)
The amendment made by subsection (1) has effect in relation to accounting
periods beginning on or after 1 April 2008.
40

Finance Bill (Volume I)
Part 2 — Income tax, corporation tax and capital gains tax - general
11

21
Amusement machine licence duty
(1)
In section 23(2) of BGDA 1981 (amount of duty payable on amusement
machine licence), for the table substitute—
“Table

Months for
Category
Category
Category
Category
Category
Category

5

which licence
A
B1
B2
B3
B4
C

granted

£
£
£
£
£
£

          1
     455
     230
     180
     180
     165
      70

          2
     905
     450
     355
     355
     320
     135

10

          3
   1355
     675
     535
     535
     485
     200

          4
   1805
     905
     710
     710
     645
     265

          5
   2260
   1130
     890
     890
     805
     335

          6
   2710
   1355
   1065
   1065
     965
     400

          7
   3160
   1580
   1245
   1245
   1125
     465

15

          8
   3610
   1805
   1420
   1420
   1290
     530

          9
   4065
   2030
   1600
   1600
   1450
     600

         10
   4515
   2260
   1775
   1775
   1610
     665

         11
   4965
   2485
   1955
   1955
   1770
     730

         12
   5160
   2580
   2030
   2030
   1840
     760”.

20
(2)
The amendment made by subsection (1) has effect in relation to cases where the
application for the amusement machine licence is received by the
Commissioners for Her Majesty’s Revenue and Customs after 4pm on 14
March 2008.
Part 2
25
Income tax, corporation tax and capital gains tax - general
Residence and domicile
22
Periods of residence
(1)
Section 831 of ITA 2007 (foreign income of individuals in United Kingdom for
temporary purpose) is amended as follows.
30
(2)
In subsection (1), for paragraph (b) substitute—
“(b)
during the tax year in question the individual spends (in total)
less than 183 days in the United Kingdom.”

Finance Bill (Volume I)
Part 2 — Income tax, corporation tax and capital gains tax - general
12

(3)
After that subsection insert—
“(1A)
In determining whether an individual is within subsection (1)(b) treat a
day as a day spent by the individual in the United Kingdom if (and only
if) the individual is present in the United Kingdom at the end of the
day.
5
(1B)
But in determining that issue do not treat as a day spent by the
individual in the United Kingdom any day on which the individual
arrives in the United Kingdom as a passenger if—
(a)
the individual departs from the United Kingdom on the next
day, and
10
(b)
during the time between arrival and departure the individual
does not engage in activities that are to a substantial extent
unrelated to the individual’s passage through the United
Kingdom.”
(4)
In section 832 of that Act (employment income of individuals in United
15
Kingdom for temporary purpose), after subsection (1) insert—
“(1A)
In determining whether an individual is within subsection (1)(b) treat a
day as a day spent by the individual in the United Kingdom if (and only
if) the individual is present in the United Kingdom at the end of the
day.
20
(1B)
But in determining that issue do not treat as a day spent by the
individual in the United Kingdom any day on which the individual
arrives in the United Kingdom as a passenger if—
(a)
the individual departs from the United Kingdom on the next
day, and
25
(b)
during the time between arrival and departure the individual
does not engage in activities that are to a substantial extent
unrelated to the individual’s passage through the United
Kingdom.”
(5)
Section 9 of TCGA 1992 (residence, including temporary residence) is amended
30
as follows.
(6)
In subsection (3), for the words after “if and only if” substitute “the individual
spends (in total) at least 183 days in the United Kingdom.”
(7)
Insert at the end—
“(5)
In determining for the purposes of subsection (3) above whether an
35
individual spends (in total) at least 183 days in the United Kingdom
treat a day as a day spent by the individual in the United Kingdom if
(and only if) the individual is present in the United Kingdom at the end
of the day.
(6)
But in determining that issue for those purposes do not treat as a day
40
spent by the individual in the United Kingdom any day on which the
individual arrives in the United Kingdom as a passenger if—
(a)
the individual departs from the United Kingdom on the next
day, and
(b)
during the time between arrival and departure the individual
45
does not engage in activities that are to a substantial extent

Finance Bill (Volume I)
Part 2 — Income tax, corporation tax and capital gains tax - general
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unrelated to the individual’s passage through the United
Kingdom.”
(8)
The amendments made by this section have effect for the tax year 2008-09 and
subsequent tax years.
23
Remittance basis
5
Schedule 7 contains provision for and in connection with the revision of the
remittance basis.
Research and development
24
Rates of R&D relief and vaccine research relief
Schedule 8 contains provision about the rates of research and development
10
relief and vaccine research relief.
25
Qualifying expenditure: R&D relief and vaccine research relief
(1)
Paragraph 5 of Schedule 20 to FA 2000 (R&D tax relief: staffing costs) is
amended as follows.
(2)
In sub-paragraph (1)(b), after “company;” insert—
15
“(ba)
the compulsory contributions paid by the company in respect
of benefits for directors or employees of the company under
the social security legislation of an EEA State (other than the
United Kingdom) or Switzerland;”.
(3)
Before sub-paragraph (1A) insert—
20
  “(1ZB)
In sub-paragraph (1)(ba) “social security legislation” means
legislation relating to any of the branches of social security listed in
Article 3(1) of Regulation (EC) No 883/2004 of the European
Parliament and of the Council of 29 April 2004 on the co-ordination
of social security systems (as amended from time to time).”
25
(4)
Schedule 13 to FA 2002 (vaccine research relief) is amended as follows.
(5)
In paragraph 2 (qualifying expenditure)—
(a)
in sub-paragraph (1)(a), at the end insert “or”,
(b)
omit sub-paragraph (1)(c) (and the “or” before it), and
(c)
omit sub-paragraph (4).
30
(6)
In paragraph 6 (qualifying expenditure on sub-contracted research and
development), omit—
(a)
in sub-paragraph (1), the second sentence, and
(b)
sub-paragraph (3) (expenditure on research sub-contracted to a charity,
a university or a scientific research organisation).
35
(7)
Omit paragraph 12 (qualifying expenditure on contributions to independent
research and development).
(8)
Omit paragraph 25 (refunds of qualifying expenditure on contributions to
independent research and development).

Finance Bill (Volume I)
Part 2 — Income tax, corporation tax and capital gains tax - general
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(9)
Accordingly, in paragraph 3 of Schedule 8 to this Act (changes to rates of
vaccine research relief), omit sub-paragraphs (2)(e) and (3)(d).
(10)
The amendments made by this section have effect in relation to expenditure
incurred on or after such day as the Treasury may by order appoint.
(11)
Paragraph 10(4) of Schedule 13 to FA 2002 (time limit for giving notice of
5
election for connected persons treatment) does not apply to a notice of an
election under that paragraph in relation to sub-contractor payments if—
(a)
the sub-contractor falls within paragraph 6(3) of that Schedule
(repealed by this section) (charity, university or scientific research
organisation), and
10
(b)
the notice is given before the end of the period of 12 months beginning
with the day appointed under subsection (10).
26
Companies in difficulty: SME R&D relief and vaccine research relief
Schedule 9 contains provision preventing a company from claiming research
and development relief and vaccine research relief if it is not a going concern.
15
27
Cap on R&D aid
(1)
A company is only entitled to R&D relief in respect of expenditure attributable
to a research and development project if, or to the extent that, at that time, the
total R&D aid in respect of expenditure by the company attributable to the
project would not exceed 7.5 million euros.
20
(2)
In subsection (1)—
“R&D relief” means any relief or tax credit under—
(a)
Schedule 20 to FA 2000 (tax relief for expenditure by SMEs on
research and development), or
(b)
Schedule 13 to FA 2002 (tax relief for expenditure on vaccine
25
research etc), and
“total R&D aid” means the total R&D aid calculated—
(a)
in accordance with Part 1 of Schedule 10, and
(b)
as if a claim or election had been made for the R&D relief
mentioned in subsection (1).
30
(3)
The Treasury may by regulations—
(a)
increase the amount specified in subsection (1), and
(b)
amend Part 1 of Schedule 10.
(4)
Part 2 of Schedule 10 contains amendments consequential on this section.
(5)
Subsections (1) to (4) and that Schedule come into force on such day as the
35
Treasury may by order appoint.
28
Vaccine research relief: declaration about effect of relief
(1)
In paragraph 21 of Schedule 13 to FA 2002 (tax relief for expenditure by large
companies on vaccine research etc), after sub-paragraph (3) insert—
   “(3A)
A claim under this paragraph must include a declaration that the
40
availability of the relief claimed has resulted in an increase in—