Finance Bill

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Finance Bill

Finance Bill
Schedule 46 — Duties of senior accounting officers of qualifying companies
357

(h)
customs duties, and
(i)
excise duties.
Meaning of “qualifying company”
15    (1)
A company is a qualifying company in relation to a financial year if the
qualification test was satisfied in the previous financial year (subject to any
5
regulations under sub-paragraph (8)).
      (2)
The qualification test is that the company satisfied either or both of the
following requirements—

1. Relevant turnover
More than £200 million

2. Relevant balance sheet total
More than £2 billion.

10
      (3)
If the company was not a member of a group at the end of the previous
financial year—
(a)
“relevant turnover” means the company’s turnover, and
(b)
“relevant balance sheet total” means the company’s balance sheet
total.
15
      (4)
If the company was a member of a group at the end of the previous financial
year—
(a)
“relevant turnover” means the aggregate turnover of the company
(“C”) and any other company that was a member of the same group
as C at the end of C’s previous financial year, and
20
(b)
“relevant balance sheet total” means the aggregate balance sheet
totals of C and any such company.
      (5)
If the financial year of a company that was a member of the same group as
C does not end on the same day as C’s previous financial year, the figures
for that company that are to be included in the aggregate figures are the
25
figures for that company’s financial year ending last before the end of C’s
previous financial year.
      (6)
“Turnover”, in relation to a company, has the same meaning as in Part 15 of
the Companies Act 2006 (see section 474 of that Act).
      (7)
“Balance sheet total”, in relation to a company and a financial year, means
30
the aggregate of the amounts shown as assets in the company’s balance
sheet as at the end of the financial year.
      (8)
The Treasury may by regulations provide that a company of a description
specified in the regulations is not a qualifying company for the purposes of
this Schedule.
35
Meaning of “senior accounting officer”
16    (1)
“Senior accounting officer”, in relation to a company that is not a member of
a group, means the director or officer who, in the company’s reasonable
opinion, has overall responsibility for the company’s financial accounting
arrangements.
40
      (2)
“Senior accounting officer”, in relation to a company that is a member of a
group, means the group director or officer who, in the company’s reasonable

Finance Bill
Schedule 46 — Duties of senior accounting officers of qualifying companies
358

opinion, has overall responsibility for the company’s financial accounting
arrangements.
      (3)
“Group director or officer”, in relation to a company, means a director or
officer of the company or of a relevant body that is a member of the same
group as the company.
5
      (4)
A person may be the senior accounting officer of more than one company.
Regulations
17    (1)
Regulations under this Schedule are to be made by statutory instrument.
      (2)
A statutory instrument containing regulations under this Schedule is subject
to annulment in pursuance of a resolution of the House of Commons.
10
Other definitions
18    (1)
In this Schedule—
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs;
“company” has the same meaning as in the Companies Acts (see section
15
1(1) of the Companies Act 2006) but does not include a company that
is an open-ended investment company (within the meaning of
section 468A of ICTA) or an investment trust (within the meaning of
section 842 of ICTA);
“financial year”, in relation to a company, has the same meaning as in
20
the Companies Act 2006 (see section 390 of that Act);
“HMRC” means Her Majesty’s Revenue and Customs;
“period for filing”, in relation to accounts, has the same meaning as in
the Companies Acts (see section 442 of the Companies Act 2006);
“relevant body” means a company or other body corporate but does not
25
include a limited liability partnership;
“tribunal” means the First-tier Tribunal or, where determined by or
under Tribunal Procedure Rules, the Upper Tribunal.
      (2)
For the purposes of this Schedule—
(a)
a relevant body is a member of a group if—
30
(i)
another relevant body is its 51 per cent subsidiary, or
(ii)
it is a 51 per cent subsidiary of another relevant body, and
(b)
two relevant bodies are members of the same group if—
(i)
one is a 51 per cent subsidiary of the other, or
(ii)
both are 51 per cent subsidiaries of a third relevant body.
35
      (3)
Section 838 of ICTA (meaning of “51 per cent subsidiary”) applies for the
purposes of this Schedule as it applies for the purposes of the Corporation
Tax Acts (subject to the modification in sub-paragraph (4)).
      (4)
It applies as if references in that section to a body corporate were to a
relevant body.
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Finance Bill
Schedule 47 — Amendment of information and inspection powers
359

Schedule 47
Section 94

Amendment of information and inspection powers
1
Schedule 36 to FA 2008 (information and inspection powers) is amended as
follows.
2     (1)
Paragraph 3 (approval etc of taxpayer notices and third party notices) is
5
amended as follows.
      (2)
After sub-paragraph (2) insert—
   “(2A)
An application for approval under this paragraph may be made
without notice (except as required under sub-paragraph (3)).”
      (3)
In sub-paragraph (3)(c), after “is” insert “to be”.
10
3     (1)
Paragraph 5 (power to obtain information and documents about persons
whose identity is not known) is amended as follows.
      (2)
After sub-paragraph (3) insert—
   “(3A)
An application for approval under this paragraph may be made
without notice.”
15
      (3)
In sub-paragraph (4), for “give its approval for the purpose of” substitute
“approve the giving of a notice under”.
4
In paragraph 6 (notices), insert at the end—
    “(4)
A decision of the tribunal under paragraph 3, 4 or 5 is final (despite
the provisions of sections 11 and 13 of the Tribunals, Courts and
20
Enforcement Act 2007).”
5     (1)
Paragraph 10 (power to inspect business premises etc) is amended as
follows.
      (2)
In sub-paragraph (3), in the definition of “business assets”, for “, excluding
documents” substitute “(but see sub-paragraph (4))”.
25
      (3)
After that sub-paragraph insert—
    “(4)
For the purposes of this Schedule, “business assets” does not
include documents, other than—
(a)
documents that are trading stock for the purposes of
Chapter 11A of Part 2 of ITTOIA 2005 (see section 172A of
30
that Act), and
(b)
documents that are plant for the purposes of Part 2 of CAA
2001.”
6     (1)
Paragraph 11 (power to inspect premises used in connection with taxable
supplies etc) is amended as follows.
35
      (2)
In sub-paragraph (1)—
(a)
in paragraph (a), after “supplied” insert “or documents relating to
such goods”,
(b)
in paragraph (b), after “acquired” insert “or documents relating to
such goods”, and
40
(c)
in paragraph (c), after “as” insert “or in connection with”.

Finance Bill
Schedule 47 — Amendment of information and inspection powers
360

      (3)
In sub-paragraph (2)(c), for “such goods” substitute “the supply of goods
under taxable supplies, the acquisition of goods from other member States
under taxable acquisitions or fiscal warehousing”.
      (4)
In sub-paragraph (4)—
(a)
for “sub-paragraph (1)” substitute “this paragraph”, and
5
(b)
for “in that sub-paragraph” substitute “here”.
7
In paragraph 12(5) (carrying out inspections)—
(a)
for “with the approval of” substitute “in respect of an inspection
approved by”, and
(b)
for “it is given with that approval” substitute “the inspection has
10
been so approved”.
8     (1)
Paragraph 13 (approval of inspections) is amended as follows.
      (2)
After sub-paragraph (1) insert—
   “(1A)
An application for approval under this paragraph may be made
without notice.”
15
      (3)
Insert at the end—
    “(3)
A decision of the tribunal under this paragraph is final (despite the
provisions of sections 11 and 13 of the Tribunals, Courts and
Enforcement Act 2007).”
9     (1)
Paragraph 21 (taxpayer notices) is amended as follows.
20
      (2)
In sub-paragraph (6), after “that” (in the first place) insert “, as regards the
person,”.
      (3)
In sub-paragraph (7), for “that” (in the third place) substitute “the”.
      (4)
In sub-paragraph (8)—
(a)
after “repayments” insert “of tax or withholding of income”, and
25
(b)
after “64(2)” insert “or (2A)”.
      (5)
After sub-paragraph (8) insert—
    “(9)
In this paragraph, references to the person who made the return
are only to that person in the capacity in which the return was
made.”
30
10    (1)
Paragraph 35 (special cases: groups of undertakings) is amended as follows.
      (2)
In sub-paragraph (2)—
(a)
for “paragraph 2” substitute “—
(a)
paragraph 2(2)”, and
(b)
insert at the end “, and
35
(b)
the references in paragraph 3(5) to naming the
taxpayer are to making that statement and naming
the parent undertaking.”
      (3)
For sub-paragraph (4) substitute—
    “(4)
Where a third party notice is given to the parent undertaking for
40
the purpose of checking the tax position of more than one
subsidiary undertaking—

Finance Bill
Schedule 47 — Amendment of information and inspection powers
361

(a)
paragraph 2(2) only requires the notice to state this, and
(b)
the references in paragraph 3(5) to naming the taxpayer are
to making that statement.
     (4A)
In relation to such a notice—
(a)
in paragraph 3 (approval etc of notices), sub-paragraphs
5
(1) and (3)(e) do not apply,
(b)
paragraph 4(1) (copying third party notices to taxpayer)
does not apply,
(c)
paragraph 21 (restrictions on giving taxpayer notice where
taxpayer has made return) applies as if the notice was a
10
taxpayer notice or taxpayer notices given to each
subsidiary undertaking (or, if the notice names the
subsidiary undertakings to which it relates, to each of
those undertakings),
(d)
paragraph 30(1) (appeal) has effect as if it permitted an
15
appeal on any grounds, and
(e)
in paragraph 30(2) (no appeal in relation to taxpayer’s
statutory records), the reference to the taxpayer has effect
as if it were a reference to the parent undertaking or any of
its subsidiary undertakings.”
20
      (4)
In sub-paragraph (5), for the words after “the notice” substitute “—
(a)
sub-paragraphs (3) and (4) of that paragraph (approval of
tribunal) have effect as if they permitted, but did not
require, the officer to obtain the approval of the tribunal,
and
25
(b)
paragraph 31 (appeal) has effect as if it permitted an appeal
on any grounds, but the parent undertaking may not
appeal against a requirement in the notice to produce any
document that forms part of the statutory records of the
parent undertaking or any of its subsidiary undertakings.”
30
      (5)
Omit sub-paragraph (6).
11    (1)
Paragraph 37 (special cases: partnerships) is amended as follows.
      (2)
For sub-paragraph (2) substitute—
    “(2)
Where, in respect of a chargeable period, any of the partners has—
(a)
made a tax return under section 12AA of TMA 1970
35
(partnership returns), or
(b)
made a claim or election in accordance with section
42(6)(b) of TMA 1970 (partnership claims and elections),

paragraph 21 (restrictions where taxpayer has made tax return)
has effect as if that return, claim or election had been made by each
40
of the partners.”
      (3)
In sub-paragraph (3)—
(a)
omit “to any person (other than one of the partners)”,
(b)
for “paragraph 2” substitute “—
(a)
paragraph 2(2)”, and
45

Finance Bill
Schedule 47 — Amendment of information and inspection powers
362

(c)
insert at the end “, and
(b)
the references in paragraph 3(5) to naming the
taxpayer are to making that statement and naming
the partnership.”
      (4)
In sub-paragraph (4)—
5
(a)
after “notice” insert “given to a person other than one of the
partners”, and
(b)
in paragraph (b), for “each of the partners” substitute “any of the
partners in the partnership”.
      (5)
For sub-paragraph (5) substitute—
10
    “(5)
In relation to a third party notice given to one of the partners for
the purpose of checking the tax position of one or more of the
other partners (in their capacity as such)—
(a)
in paragraph 3 (approval etc of notices), sub-paragraphs
(1) and (3)(e) do not apply,
15
(b)
paragraph 4(1) (copying third party notices to taxpayer)
does not apply,
(c)
paragraph 30(1) (appeal) has effect as if it permitted an
appeal on any grounds, and
(d)
in paragraph 30(2) (no appeal in relation to taxpayer’s
20
statutory records), the reference to the taxpayer has effect
as if it were a reference to any of the partners in the
partnership.”
      (6)
In sub-paragraph (6) for the words after “the notice” substitute “—
(a)
sub-paragraphs (3) and (4) of that paragraph (approval of
25
tribunal) have effect as if they permitted, but did not
require, the officer to obtain the approval of the tribunal,
and
(b)
paragraph 31 (appeal) has effect as if it permitted an appeal
on any grounds, but the partner to whom the notice is
30
given may not appeal against a requirement in the notice
to produce any document that forms part of that partner’s
statutory records.”
      (7)
Omit sub-paragraph (7).
12
After paragraph 37 insert—
35
“Information in connection with herd basis election
37A   (1)
This paragraph applies to a taxpayer notice given to a person
carrying on a trade in relation to which a herd basis election is
made if the notice refers only to information or documents that
relate to—
40
(a)
the animals kept for the purposes of the trade, or
(b)
the products of those animals.
      (2)
Paragraph 21 (restrictions on giving taxpayer notice where
taxpayer has made tax return) does not apply in relation to the
notice.
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Finance Bill
Schedule 47 — Amendment of information and inspection powers
363

      (3)
“Herd basis election” means an election under Chapter 8 of Part 2
of ITTOIA 2005 or Chapter 8 of Part 3 of CTA 2009.
Information from persons liable to counteraction of tax advantage
37B   (1)
This paragraph applies to a taxpayer notice given to a person if—
(a)
it appears to an officer of Revenue and Customs that a
5
counteraction provision may apply to the person by reason
of one or more transactions, and
(b)
the notice refers only to information or documents relating
to the transaction (or, if there are two or more transactions,
any of them).
10
      (2)
Paragraph 21 (restrictions on giving taxpayer notice where
taxpayer has made tax return) does not apply in relation to the
notice.
      (3)
“Counteraction provision” means—
(a)
section 703 of ICTA (company liable to counteraction of
15
corporation tax advantage), or
(b)
section 684 of ITA 2007 (person liable to counteraction of
income tax advantage).”
13    (1)
Paragraph 39 (standard penalties) is amended as follows.
      (2)
In sub-paragraph (2), for “A person to whom this paragraph applies”
20
substitute “The person”.
      (3)
In the heading—
(a)
omit “Standard”, and
(b)
insert at the end “for failure to comply or obstruction”.
14
In the heading before paragraph 40 (daily default penalties), insert at the end
25
“for failure to comply or obstruction”.
15
After that paragraph insert—
“Penalties for inaccurate information and documents
40A   (1)
This paragraph applies if—
(a)
in complying with an information notice, a person
30
provides inaccurate information or produces a document
that contains an inaccuracy, and
(b)
condition A or B is met.
      (2)
Condition A is that the inaccuracy is careless or deliberate.
      (3)
An inaccuracy is careless if it is due to a failure by the person to
35
take reasonable care.
      (4)
Condition B is that the person—
(a)
discovers the inaccuracy some time later, and
(b)
fails to take reasonable steps to inform HMRC.
      (5)
The person is liable to a penalty not exceeding £3,000.
40