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Finance Bill (Volume II)
Schedule 37 — Record-keeping

406

 

VATA 1994

4          

Schedule 11 to VATA 1994 (administration, collection and enforcement) is

amended as follows.

5     (1)  

Paragraph 6 (duty to keep records) is amended as follows.

      (2)  

In sub-paragraph (3), for the second “require” substitute “specify in writing

(and different periods may be specified for different cases)”.

      (3)  

For sub-paragraphs (4) to (6) substitute—

    “(4)  

The duty under this paragraph to preserve records may be

discharged—

(a)   

by preserving them in any form and by any means, or

(b)   

by preserving the information contained in them in any

form and by any means,

           

subject to any conditions or exceptions specified in writing by the

Commissioners for Her Majesty’s Revenue and Customs.”

6          

In paragraph 6A(7) (application of provisions of paragraph 6 where

directions under paragraph 6A require records to be kept)—

(a)   

for “Sub-paragraphs (4) to (6) of paragraph 6 (preservation of

information by means approved by the Commissioners) apply”

substitute “Sub-paragraph (4) of paragraph 6 (preservation of

information) applies”, and

(b)   

for “they apply” substitute “it applies”.

FA 1998

7          

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

8     (1)  

Paragraph 21 (duty to keep and preserve records) is amended as follows.

      (2)  

In sub-paragraph (2), for the words from “for six years” to the end substitute

“until the end of the relevant day.”

      (3)  

After that sub-paragraph insert—

   “(2A)  

In this paragraph “relevant day” means—

(a)   

the sixth anniversary of the end of the period for which the

company may be required to deliver a company tax return,

or

(b)   

such earlier day as may be specified in writing by the

Commissioners for Her Majesty’s Revenue and Customs

(and different days may be specified for different cases).”

      (4)  

In sub-paragraph (3), for “that six year period” substitute “the relevant day”.

      (5)  

In sub-paragraph (4), for “that six year period” substitute “the relevant day”.

      (6)  

After sub-paragraph (5) insert—

   “(5A)  

The Commissioners for Her Majesty’s Revenue and Customs may

by regulations—

(a)   

provide that the records required to be kept and preserved

under this paragraph include, or do not include, records

specified in the regulations, and

 
 

Finance Bill (Volume II)
Schedule 37 — Record-keeping

407

 

(b)   

provide that those records include supporting documents

so specified.

     (5B)  

Regulations under this paragraph may—

(a)   

make different provision for different cases, and

(b)   

make provision by reference to things specified in a notice

published by the Commissioners for Her Majesty’s

Revenue and Customs in accordance with the regulations

(and not withdrawn by a subsequent notice).”

      (7)  

In sub-paragraph (6), omit the first sentence.

9     (1)  

Paragraph 22 (preservation of information instead of original records) is

amended as follows.

      (2)  

For sub-paragraph (1) substitute—

    “(1)  

The duty under paragraph 21 to preserve records may be

discharged—

(a)   

by preserving them in any form and by any means, or

(b)   

by preserving the information contained in them in any

form and by any means,

           

subject to sub-paragraph (3) and any conditions or exceptions

specified in writing by the Commissioners for Her Majesty’s

Revenue and Customs.”

      (3)  

Omit sub-paragraph (2).

      (4)  

In sub-paragraph (3), for “The records excluded from sub-paragraph (1) are”

substitute “Sub-paragraph (1)(b) does not apply in the case of the following

kinds of records”.

      (5)  

Accordingly, in the heading before that paragraph, for “instead of original

records” substitute “etc”.

Consequential provisions

10         

In section 13(6) of FA 1999 (VAT and gold)—

(a)   

for “(6)” substitute “(4)”,

(b)   

after “above” insert “, and to records kept in pursuance of such

regulations,”, and

(c)   

insert at the end “and to records kept in pursuance of that

paragraph”.

11         

In consequence of the amendments made by paragraph 2 omit—

(a)   

section 105(4)(b) of FA 1995, and

(b)   

section 124(2) and (6) of FA 1996.

 
 

Finance Bill (Volume II)
Schedule 38 — Disclosure of tax avoidance schemes

408

 

Schedule 38

Section 114

 

Disclosure of tax avoidance schemes

Amendments of Part 7 of FA 2004

1          

Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended as

follows.

2     (1)  

Section 308 (duties of promoter) is amended as follows.

      (2)  

In subsection (1)—

(a)   

for “The promoter” substitute “A person who is a promoter in

relation to a notifiable proposal”, and

(b)   

for “any” substitute “the”.

      (3)  

In subsection (2)(a), for “a” substitute “the”.

      (4)  

In subsection (3)—

(a)   

for “The promoter” substitute “A person who is a promoter in

relation to notifiable arrangements”, and

(b)   

for “any notifiable” substitute “the notifiable”.

      (5)  

For subsection (4) substitute—

“(4)   

Subsection (4A) applies where a person complies with subsection (1)

in relation to a notifiable proposal for arrangements and another

person is—

(a)   

also a promoter in relation to the notifiable proposal or is a

promoter in relation to a notifiable proposal for

arrangements which are substantially the same as the

proposed arrangements (whether they relate to the same or

different parties), or

(b)   

a promoter in relation to notifiable arrangements

implementing the notifiable proposal or notifiable

arrangements which are substantially the same as notifiable

arrangements implementing the notifiable proposal

(whether they relate to the same or different parties).

(4A)   

Any duty of the other person under subsection (1) or (3) in relation

to the notifiable proposal or notifiable arrangements is discharged

if—

(a)   

the person who complied with subsection (1) has notified the

identity and address of the other person to HMRC or the

other person holds the reference number allocated to the

proposed notifiable arrangements under section 311, and

(b)   

the other person holds the information provided to HMRC in

compliance with subsection (1).

(4B)   

Subsection (4C) applies where a person complies with subsection (3)

in relation to notifiable arrangements and another person is—

(a)   

a promoter in relation to a notifiable proposal for

arrangements which are substantially the same as the

notifiable arrangements (whether they relate to the same or

different parties), or

 
 

Finance Bill (Volume II)
Schedule 38 — Disclosure of tax avoidance schemes

409

 

(b)   

also a promoter in relation to the notifiable arrangements or

notifiable arrangements which are substantially the same

(whether they relate to the same or different parties).

(4C)   

Any duty of the other person under subsection (1) or (3) in relation

to the notifiable proposal or notifiable arrangements is discharged

if—

(a)   

the person who complied with subsection (3) has notified the

identity and address of the other person to HMRC or the

other person holds the reference number allocated to the

notifiable arrangements under section 311, and

(b)   

the other person holds the information provided to HMRC in

compliance with subsection (3).”

3          

In section 311(1) (arrangements to be given reference number)—

(a)   

after “complies” insert “or purports to comply”,

(b)   

omit “may within 30 days”,

(c)   

before “allocate” insert “may within 30 days”, and

(d)   

for “notify the person of that number” substitute “must notify that

number to the person and (where the person is one who has

complied or purported to comply with section 308(1) or (3)) to any

other person—

(i)   

who is a promoter in relation to the notifiable

proposal (or arrangements implementing the

notifiable proposal) or the notifiable

arrangements (or proposal implemented by

the notifiable arrangements), and

(ii)   

whose identity and address has been notified

to HMRC by the person.”

4          

For section 312 substitute—

“312    

Duty of promoter to notify client of number

(1)   

This section applies where a person who is a promoter in relation to

notifiable arrangements is providing (or has provided) services to

any person (“the client”) in connection with the notifiable

arrangements.

(2)   

The promoter must, within 30 days after the relevant date, provide

the client with prescribed information relating to any reference

number (or, if more than one, any one reference number) that has

been notified to the promoter (whether by HMRC or any other

person) in relation to—

(a)   

the notifiable arrangements, or

(b)   

any arrangements substantially the same as the notifiable

arrangements (whether involving the same or different

parties).

(3)   

In subsection (2) “the relevant date” means the later of—

(a)   

the date on which the promoter becomes aware of any

transaction which forms part of the notifiable arrangements,

and

(b)   

the date on which the reference number is notified to the

promoter.

 
 

Finance Bill (Volume II)
Schedule 38 — Disclosure of tax avoidance schemes

410

 

(4)   

But where the conditions in subsection (5) are met the duty imposed

on the promoter under subsection (2) to provide the client with

information in relation to notifiable arrangements is discharged.

(5)   

Those conditions are—

(a)   

that the promoter is also a promoter in relation to a notifiable

proposal and provides services to the client in connection

with them both,

(b)   

the notifiable proposal and the notifiable arrangements are

substantially the same, and

(c)   

the promoter has provided to the client, in a form and

manner specified by HMRC, prescribed information relating

to the reference number that has been notified to the

promoter in relation to the proposed notifiable

arrangements.

(6)   

HMRC may give notice that, in relation to notifiable arrangements

specified in the notice, promoters are not under the duty under

subsection (2) after the date specified in the notice.

312A    

Duty of client to notify parties of number

(1)   

This section applies where a person (a “client”) to whom a person

who is a promoter in relation to notifiable arrangements or a

notifiable proposal is providing (or has provided) services in

connection with the notifiable arrangements or notifiable proposal

receives prescribed information relating to the reference number

allocated to the notifiable arrangements or proposed notifiable

arrangements.

(2)   

The client must, within the prescribed period, provide prescribed

information relating to the reference number to any other person—

(a)   

who the client might reasonably be expected to know is or is

likely to be a party to the arrangements or proposed

arrangements, and

(b)   

who might reasonably be expected to gain a tax advantage in

relation to any relevant tax by reason of the arrangements or

proposed arrangements.

(3)   

For the purposes of subsection (1) a tax is a “relevant tax” in relation

to arrangements or arrangements proposed in a proposal of any

description if it is prescribed in relation to arrangements or proposals

of that description by regulations under section 306.

(4)   

HMRC may give notice that, in relation to notifiable arrangements or

a notifiable proposal specified in the notice, persons are not under

the duty under subsection (2) after the date specified in the notice.

(5)   

The duty under subsection (2) does not apply in prescribed

circumstances.”

5     (1)  

Section 313 (duty of parties to notifiable arrangements to notify HMRC of

number etc) is amended as follows.

      (2)  

In subsection (1)(a), omit “under section 311 by the Board or under section

312 by the promoter”.

      (3)  

In subsection (3)—

 
 

Finance Bill (Volume II)
Schedule 39 — Time limits for assessments, claims etc.

411

 

(a)   

for “under subsection (1)” substitute “made by HMRC”,

(b)   

in paragraph (a), for “number and other information” substitute

“information prescribed under subsection (1)”, and

(c)   

in paragraph (b), for “number and other information” substitute

“information prescribed under subsection (1) and such other

information as is prescribed”.

      (4)  

Insert at the end—

“(5)   

HMRC may give notice that, in relation to notifiable arrangements

specified in the notice, persons are not under the duty under

subsection (1) after the date specified in the notice.”

6          

For section 316 substitute—

“316    

Information to be provided in form and manner specified by HMRC

(1)   

HMRC may specify the form and manner in which information

required to be provided by any of the information provisions must

be provided if the provision is to be complied with.

(2)   

The “information provisions” are sections 308(1) and (3), 309(1), 310,

312(2), 312A(2) and 313(1) and (3).”

Amendments of TMA 1970

7     (1)  

Section 98C of TMA 1970 (penalties for failure to comply with duties under

Part 7 of FA 2004) is amended as follows.

      (2)  

In subsection (2)—

(a)   

in paragraph (d), for “312(1)” substitute “312(2)”, and

(b)   

after that paragraph (but before the “and”) insert—

“(da)   

section 312A(2) (duty of client to notify parties of

reference number),”.

      (3)  

In subsection (3)—

(a)   

for “section 313(1)” substitute “subsection (1) of section 313”, and

(b)   

after “etc.)” insert “or regulations under subsection (3) of that

section”.

      (4)  

In subsection (4), for “313(1)” (in both places) substitute “subsection (1) of

section 313 or regulations under subsection (3) of that section”.

Schedule 39

Section 116

 

Time limits for assessments, claims etc.

TMA 1970

1          

TMA 1970 is amended as follows.

2          

In section 28C(5)(a) (time limit for determination of tax where no return

delivered and self-assessment superseding determination), for “five years”

substitute “3 years”.

 
 

Finance Bill (Volume II)
Schedule 39 — Time limits for assessments, claims etc.

412

 

3          

In section 29(4) (assessment where loss of tax discovered), for “is attributable

to fraudulent or negligent conduct on the part of” substitute “was brought

about carelessly or deliberately by”.

4          

In section 30B(5) (amendment of partnership statement where loss of tax

discovered), for “is attributable to fraudulent or negligent conduct on the

part of” substitute “was brought about carelessly or deliberately by”.

5          

In section 33(1) (claim for error or mistake), for “not later than five years after

the 31st January next following” substitute “not more than 4 years after the

end of”.

6          

In section 33A(2) (error or mistake in partnership return), for “not later than

31st January of Year 6” substitute “not more than 4 years after the end of the

year of assessment in question, or in which the relevant period ends,”.

7     (1)  

Section 34 (ordinary time limit for assessments) is amended as follows.

      (2)  

In subsection (1), for “not later than five years after the 31st January next

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

      (3)  

Accordingly, in the heading, for “six years” substitute “4 years”.

8          

In section 35 (time limit: income received after year for which it is

assessable), for “within six years after” substitute “not more than 4 years

after the end of”.

9     (1)  

Section 36 (fraudulent or negligent conduct) is amended as follows.

      (2)  

For subsection (1) substitute—

“(1)   

An assessment on a person in a case involving a loss of income tax or

capital gains tax brought about carelessly by the person may be

made at any time not more than 6 years after the end of the year of

assessment to which it relates (subject to subsection (1A) and any

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

(1A)   

An assessment on a person in a case involving a loss of income tax or

capital gains tax —

(a)   

brought about deliberately by the person,

(b)   

attributable to a failure by the person to comply with an

obligation under section 7, or

(c)   

attributable to arrangements in respect of which the person

has failed to comply with an obligation under 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

year of assessment to which it relates (subject to any provision of the

Taxes Acts allowing a longer period).

(1B)   

In subsections (1) and (1A), references to a loss brought about by the

person who is the subject of the assessment include a loss brought

about by another person acting on behalf of that person.”

      (3)  

In subsection (2)—

(a)   

for “Where the person in default” substitute “Where the person

mentioned in subsection (1) or (1A) (“the person in default”)”, and

 
 

 
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