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Interaction with other penalties and late payment surcharges |
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15 (1) | The amount of a penalty for which P is liable under any of paragraphs 1 to 4 |
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shall be reduced by the amount of any other penalty incurred by P, or any |
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surcharge for late payment of tax imposed on P, if the amount of the penalty |
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or surcharge is determined by reference to the same tax liability. |
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(2) | If P is liable to a penalty under section 9 of FA 1994 in respect of a failure to |
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comply with a relevant obligation, the amount of any penalty payable under |
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paragraph 1 in respect of the failure is to be reduced by the amount of the |
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penalty under that section. |
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(3) | Where penalties are imposed under paragraph 3(1) and (2) in respect of the |
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same act or use, the aggregate of the amounts of the penalties must not |
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exceed 100% of the potential lost revenue. |
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16 (1) | Where P becomes liable for a penalty under any of paragraphs 1 to 4 HMRC |
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(c) | state in the notice the period in respect of which the penalty is |
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(2) | A penalty under any of paragraphs 1 to 4 must be paid before the end of the |
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period of 30 days beginning with the day on which notification of the |
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| |
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(a) | shall be treated for procedural purposes in the same way as an |
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assessment to tax (except in respect of a matter expressly provided |
| |
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(b) | may be enforced as if it were an assessment to tax, and |
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(c) | may be combined with an assessment to tax. |
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(4) | An assessment of a penalty under any of paragraphs 1 to 4 must be made |
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before the end of the period of 12 months beginning with— |
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(a) | the end of the appeal period for the assessment of tax unpaid by |
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reason of the relevant act or failure in respect of which the penalty is |
| |
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(b) | if there is no such assessment, the date on which the amount of tax |
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unpaid by reason of the relevant act or failure is ascertained. |
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(5) | In sub-paragraph (4)(a) “appeal period” means the period during which— |
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(a) | an appeal could be brought, or |
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(b) | an appeal that has been brought has not been determined or |
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(6) | Subject to sub-paragraph (4), a supplementary assessment may be made in |
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respect of a penalty if an earlier assessment operated by reference to an |
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underestimate of potential lost revenue. |
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(7) | The references in this paragraph to “an assessment to tax” are, in relation to |
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a penalty under paragraph 2, a demand for recovery. |
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|
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|
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|
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17 (1) | P may appeal against a decision of HMRC that a penalty is payable by P. |
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(2) | P may appeal against a decision of HMRC as to the amount of a penalty |
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18 (1) | An appeal is to be brought to the First-tier tribunal. |
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(2) | An appeal shall be treated for procedural purposes in the same way as an |
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appeal against an assessment to the tax concerned (except in respect of a |
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matter expressly provided for by this Act). |
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19 (1) | On an appeal under paragraph 17(1) the First-tier tribunal may affirm or |
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(2) | On an appeal under paragraph 17(2) the First-tier Tribunal may— |
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(a) | affirm HMRC’s decision, or |
| |
(b) | substitute for HMRC’s decision another decision that HMRC had |
| |
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(3) | If the First-tier tribunal substitutes its decision for HMRC’s, the tribunal may |
| |
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(a) | to the same extent as HMRC (which may mean applying the same |
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percentage reduction as HMRC to a different starting point), or |
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(b) | to a different extent, but only if the Tribunal thinks that HMRC’s |
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decision in respect of the application of paragraph 14 was flawed. |
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(4) | In sub-paragraph (3)(b) “flawed” means flawed when considered in the light |
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of the principles applicable in proceedings for judicial review. |
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20 (1) | Liability to a penalty under any of paragraphs 1, 2, 3(1) and 4 does not arise |
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in relation to an act or failure which is not deliberate if P satisfies HMRC or |
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(on appeal) the First-tier Tribunal that there is a reasonable excuse for the act |
| |
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(2) | For the purposes of sub-paragraph (1)— |
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(a) | an insufficiency of funds is not a reasonable excuse unless |
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attributable to events outside P’s control, |
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(b) | where P relies on any other person to do anything, that is not a |
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reasonable excuse unless P took reasonable care to avoid the relevant |
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(c) | where P had a reasonable excuse for the relevant act or failure but the |
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excuse has ceased, P is to be treated as having continued to have the |
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excuse if the relevant act or failure is remedied without unreasonable |
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delay after the excuse ceased. |
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21 (1) | In paragraph 1 the reference to a failure by P includes a failure by a person |
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who acts on P’s behalf; but P is not liable to a penalty in respect of any failure |
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by P’s agent where P satisfies HMRC or (on appeal) the First-tier Tribunal |
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that P took reasonable care to avoid the failure. |
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|
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|
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(2) | In paragraph 2 the reference to the making by P of an unauthorised issue of |
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an invoice showing VAT includes the making of such an unauthorised issue |
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by a person who acts on P’s behalf; but P is not liable to a penalty in respect |
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of any action by P’s agent where P satisfies HMRC or (on appeal) the First- |
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tier Tribunal that P took reasonable care to avoid it. |
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(3) | In paragraph 3(1) the reference to the doing by P of an act which enables |
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HMRC to assess an amount as duty due from P under a relevant excise |
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provision includes the doing of such an act by a person who acts on P’s |
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behalf; but P is not liable to a penalty in respect of any action by P’s agent |
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where P satisfies HMRC or (on appeal) the First-tier Tribunal that P took |
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reasonable care to avoid it. |
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(4) | In paragraph 4 the reference to P acquiring possession of, or being concerned |
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in dealing with, goods the payment of duty on which is outstanding and has |
| |
not been deferred includes a person who acts on P’s behalf doing so; but P |
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is not liable to a penalty in respect of any action by P’s agent where P satisfies |
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HMRC or (on appeal) the First-tier Tribunal that P took reasonable care to |
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Companies: officers’ liability |
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22 (1) | Where a penalty under any of paragraphs 1, 2, 3(1) and 4 is payable by a |
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company for a deliberate act or failure which was attributable to an officer |
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of the company, the officer is liable to pay such portion of the penalty (which |
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may be 100%) as HMRC may specify by written notice to the officer. |
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(2) | Sub-paragraph (1) does not allow HMRC to recover more than 100% of a |
| |
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(3) | In the application of sub-paragraph (1) to a body corporate “officer” |
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(a) | a director (including a shadow director within the meaning of |
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section 251 of the Companies Act 2006 (c. 46)), or |
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(4) | In the application of sub-paragraph (1) in any other case “officer” means— |
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(d) | any other person managing or purporting to manage any of the |
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(5) | Where HMRC have specified a portion of a penalty in a notice given to an |
| |
officer under sub-paragraph (1)— |
| |
(a) | paragraph 14 applies to the specified portion as to a penalty, |
| |
(b) | the officer must pay the specified portion before the end of the period |
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of 30 days beginning with the day on which the notice is given, |
| |
(c) | paragraph 16(3) to (5) and (7) apply as if the notice were an |
| |
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(d) | a further notice may be given in respect of a portion of any additional |
| |
amount assessed in a supplementary assessment in respect of the |
| |
penalty under paragraph 16(6), |
| |
(e) | paragraphs 17 to 19 apply as if HMRC had decided that a penalty of |
| |
the amount of the specified portion is payable by the officer, and |
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|
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|
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|
(f) | paragraph 23 applies as if the officer were liable to a penalty. |
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23 | P is not liable to a penalty under any of paragraphs 1 to 4 in respect of a |
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failure or action in respect of which P has been convicted of an offence. |
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24 (1) | This paragraph applies for the construction of this Schedule |
| |
(2) | “HMRC” means Her Majesty’s Revenue and Customs. |
| |
(3) | “Tax”, without more, includes duty. |
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(4) | An expression used in relation to value added tax has the same meaning as |
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25 | In consequence of this Schedule the following provisions are omitted— |
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(ii) | in the table in section 98, in the second column, the entry |
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relating to section 55 of FA 2004, |
| |
(b) | section 170A of CEMA 1979, |
| |
| |
(i) | in section 47(5), “which shall be calculated by reference to the |
| |
amount of duty charged on the beer produced”, |
| |
(ii) | in section 54(5), “which shall be calculated by reference to the |
| |
amount of duty charged on the wine produced”, |
| |
(iii) | in section 55(6), “which shall be calculated by reference to the |
| |
amount of duty charged on the made-wine produced”, and |
| |
(iv) | in section 62(4), “which shall be calculated by reference to the |
| |
amount of duty charged on the cider made”, |
| |
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(i) | section 13AD(4)(a) and (b), and |
| |
(ii) | section 14F(4)(a) and (b), |
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(ii) | paragraph 13 of Schedule 4, and |
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(iii) | paragraph 14 of Schedule 7, |
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(f) | section 67 of VATA 1994, |
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(g) | section 32 of FA 1995, |
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(ii) | paragraph 21(1), (2) and (4) of Schedule 5, |
| |
(i) | section 27(11) of FA 1997, |
| |
(j) | paragraph 2(3) and (4) of Schedule 18 to FA 1998, |
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(ii) | paragraph 55(2) to (6) of Schedule 6, and |
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|
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|
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(l) | paragraph 1(2) to (6) of Schedule 4 to FA 2001. |
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Alcoholic liquor duties: decisions subject to review and appeal |
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1 | Schedule 5 to FA 1994 (customs and excise decisions subject to review and |
| |
appeal) is amended as follows. |
| |
2 (1) | Sub-paragraph (1) of paragraph 3 (decisions under or for the purposes of |
| |
ALDA 1979) is amended as follows. |
| |
(2) | After paragraph (h) insert— |
| |
“(ha) | any decision as to whether or not drawback is to be allowed |
| |
under section 22 (drawback on British compounds and spirits |
| |
of wine) or the amount of drawback to be allowed under that |
| |
| |
(3) | After paragraph (k) insert— |
| |
“(ka) | any decision by the Commissioners as to whether or not to |
| |
remit or repay duty under section 46 of the Alcoholic Liquor |
| |
Duties Act 1979 (remission or repayment of duty on spoilt |
| |
beer) or the amount of duty to be so remitted or repaid;”. |
| |
(4) | After paragraph (m) insert— |
| |
“(ma) | any decision by the Commissioners as to whether or not to |
| |
remit or repay duty under section 61 of the Alcoholic Liquor |
| |
Duties Act 1979 (remission or repayment of duty on spoilt |
| |
wine or made-wine) or the amount of duty to be so remitted |
| |
| |
(mb) | any decision by the Commissioners as to whether or not to |
| |
remit or repay duty under section 64 of the Alcoholic Liquor |
| |
Duties Act 1979 (remission or repayment of duty on spoilt |
| |
cider) or the amount of duty to be so remitted or repaid;”. |
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3 (1) | Sub-paragraph (2) of paragraph 3 (decisions under regulations under |
| |
section 13 or 77 of ALDA 1979) is amended as follows. |
| |
(2) | After “a decision” insert “— |
| |
| |
(3) | Insert at the end “; or |
| |
(b) | as to whether or not a person is to be required to give |
| |
security for the fulfilment of an obligation or as to the form |
| |
or amount of, or the conditions of, any such security.” |
| |
4 | After sub-paragraph (2) of paragraph 3 insert— |
| |
“(2A) | Any decision which is made under or for the purposes of any |
| |
regulations under section 15 of the Alcoholic Liquor Duties Act |
| |
1979 (distillers’ warehouses) and is a decision as to whether or not |
| |
a person is to be required to give security for the fulfilment of an |
| |
obligation or as to the form or amount of, or the conditions of, any |
| |
| |
|
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|
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|
(2B) | Any decision which is made under or for the purposes of section |
| |
41A or 47, or any regulations under section 49, of the Alcoholic |
| |
Liquor Duties Act 1979 (regulation of the making of beer) and is a |
| |
| |
(a) | as to whether or not to register a person or premises under |
| |
| |
(b) | as to the conditions subject to which a person is, or |
| |
premises are, so registered; |
| |
(c) | as to the revocation of such a registration; |
| |
(d) | as to whether or not a person is to be required to give |
| |
security for the fulfilment of an obligation or as to the form |
| |
or amount of, or the conditions of, any such security; or |
| |
(e) | as to whether or not to restrict or prohibit the movement of |
| |
beer from one place to another without payment of duty.” |
| |
5 (1) | Sub-paragraph (3) of paragraph 3 (decisions under section 55, and |
| |
regulations under section 56, of ALDA 1979) is amended as follows. |
| |
(2) | For “section 55” substitute “section 54 or 55”. |
| |
(3) | After “a decision” insert “— |
| |
| |
(4) | For “that section” substitute “section 54 or 55”. |
| |
| |
“(b) | as to whether or not a person is to be required to give |
| |
security for the fulfilment of an obligation or as to the form |
| |
or amount of, or the conditions of, any such security; or |
| |
(c) | as to the conditions subject to which, or the purposes for |
| |
which, wine or made-wine may be moved from one place |
| |
to another without payment of duty.” |
| |
6 | After sub-paragraph (3) of paragraph 3 insert— |
| |
“(3A) | Any decision which is made under or for the purposes of section |
| |
62 of the Alcoholic Liquor Duties Act 1979 (regulation of the |
| |
making of cider), or any regulations under that section, and is a |
| |
| |
(a) | as to whether or not to register, or to cancel the registration |
| |
| |
(b) | as to whether or not a person is to be required to give |
| |
security for the fulfilment of an obligation or as to the form |
| |
or amount of, or the conditions of, any such security; or |
| |
(c) | as to the conditions subject to which, or the purposes for |
| |
which, cider may be moved from one place to another |
| |
without payment of duty.” |
| |
7 | After paragraph 9 insert— |
| |
| |
9ZA | Any decision by the Commissioners— |
| |
(a) | on a claim under section 4 of the Finance Act 1995 for |
| |
repayment of duty (alcoholic ingredients relief); or |
| |
(b) | as to whether or not to remit duty under that section.” |
| |
|
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|