Finance Bill

House of Commons

Session 2008 - 09
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Finance Bill

Finance Bill
Schedule 47 — Amendment of information and inspection powers
364

      (6)
Where the information or document contains more than one
inaccuracy, a penalty is payable for each inaccuracy.”
16    (1)
Paragraph 41 (power to change amount of penalties) is amended as follows.
      (2)
In sub-paragraph (1), for “and 40(2)” substitute “, 40(2) and 40A(5)”.
      (3)
In sub-paragraph (2)—
5
(a)
after “(1)” insert “, in relation to a specified sum,”, and
(b)
in paragraph (b), insert at the end “in relation to that sum”.
      (4)
In sub-paragraph (3)—
(a)
after “to” insert “—
(a)
”, and
10
(b)
insert at the end “, or
(b)
an inaccuracy in any information or document
provided to HMRC before that date.”
      (5)
Accordingly, in the heading omit “standard and daily default”.
17    (1)
Paragraph 46 (assessment of penalty) is amended as follows.
15
      (2)
In sub-paragraph (1)—
(a)
for “or 40” substitute “, 40 or 40A”,
(b)
omit “HMRC may”,
(c)
at the beginning of paragraph (a), insert “HMRC may”, and
(d)
at the beginning of paragraph (b), insert “if they do so, they must”.
20
      (3)
In sub-paragraph (2), for “within 12 months of the relevant date” substitute
“within the period of 12 months beginning with the date on which the
person became liable to the penalty, subject to sub-paragraph (3)”.
      (4)
For sub-paragraph (3) substitute—
    “(3)
In a case involving an information notice against which a person
25
may appeal, an assessment of a penalty under paragraph 39 or 40
must be made within the period of 12 months beginning with the
latest of the following—
(a)
the date on which the person became liable to the penalty,
(b)
the end of the period in which notice of an appeal against
30
the information notice could have been given, and
(c)
if notice of such an appeal is given, the date on which the
appeal is determined or withdrawn.
      (4)
An assessment of a penalty under paragraph 40A must be made—
(a)
within the period of 12 months beginning with the date on
35
which the inaccuracy first came to the attention of an
officer of Revenue and Customs, and
(b)
within the period of 6 years beginning with the date on
which the person became liable to the penalty.”
      (5)
Accordingly, in the heading omit “standard penalty or daily default”.
40
18    (1)
Paragraph 47 (right to appeal) is amended as follows.
      (2)
In paragraph (a), for “or 40” substitute “, 40 or 40A”.
      (3)
Accordingly, in the heading, omit “standard penalty or daily default”.

Finance Bill
Schedule 48 — Extension of information and inspection powers
365

19
In the heading before paragraph 48 (procedure on appeal), omit “standard or
daily default”.
20    (1)
Paragraph 49 (enforcement) is amended as follows.
      (2)
In sub-paragraph (1), for “or 40” substitute “, 40 or 40A”.
      (3)
In sub-paragraph (2), for “or 40” substitute “, 40 or 40A”.
5
      (4)
Accordingly, in the heading, omit “standard penalty or daily default”.
21    (1)
Paragraph 63 (tax) is amended as follows.
      (2)
In sub-paragraph (3)—
(a)
omit the “and” at the end of paragraph (a), and
(b)
for the words following paragraph (b) substitute “, and
10
(c)
amounts listed in sub-paragraph (3A).”
      (3)
After that sub-paragraph insert—
   “(3A)
Those amounts are—
(a)
any amount that is recoverable under paragraph 5(2) of
Schedule 11 to VATA 1994 (amounts shown on invoices as
15
VAT), and
(b)
any amount that is treated as VAT by virtue of regulations
under section 54 of VATA 1994 (farmers etc).”
22    (1)
Paragraph 64 (tax position) is amended as follows.
      (2)
In sub-paragraph (1)(c), after “with” insert “the person’s liability to pay”.
20
      (3)
After sub-paragraph (2) insert—
   “(2A)
References in this Schedule to a person’s tax position also include,
where appropriate, a reference to the person’s position as regards
the withholding by the person of another person’s PAYE income
(as defined in section 683 of ITEPA 2003).”
25
Schedule 48
Section 95

Extension of information and inspection powers
1
Schedule 36 to FA 2008 (information and inspection powers) is amended as
follows.
2
In paragraph 5(4)(b) (power to obtain information and documents about
30
persons whose identity is not known), for the words from “, VATA 1994” to
the end substitute “or any other enactment relating to UK tax”.
3
After paragraph 10 insert—
“Power to inspect business premises etc of involved third parties
10A   (1)
An officer of Revenue and Customs may enter business premises
35
of an involved third party (see paragraph 61A) and inspect—
(a)
the premises,
(b)
business assets that are on the premises, and

Finance Bill
Schedule 48 — Extension of information and inspection powers
366

(c)
relevant documents that are on the premises,

if the inspection is reasonably required by the officer for the
purpose of checking the position of any person or class of persons
as regards a relevant tax.
      (2)
The powers under this paragraph may be exercised whether or not
5
the identity of that person is, or the individual identities of those
persons are, known to the officer.
      (3)
The powers under this paragraph do not include power to enter or
inspect any part of the premises that is used solely as a dwelling.
      (4)
In relation to an involved third party, “relevant documents” and
10
“relevant tax” are defined in paragraph 61A.”
4     (1)
Paragraph 12 (carrying out inspections) is amended as follows.
      (2)
In sub-paragraph (1), for “this Part of this Schedule” substitute “paragraph
10, 10A or 11”.
      (3)
Accordingly, in the heading, insert at the end “under paragraph 10, 10A or 11”.
15
5
After that paragraph insert—
“Powers to inspect property for valuation etc
12A   (1)
An officer of Revenue and Customs may enter and inspect
premises for the purpose of valuing the premises if the valuation
is reasonably required for the purpose of checking any person’s
20
position as regards income tax or corporation tax.
      (2)
An officer of Revenue and Customs may enter premises and
inspect—
(a)
the premises, and
(b)
any other property on the premises,
25

for the purpose of valuing, measuring or determining the
character of the premises or property.
      (3)
Sub-paragraph (2) only applies if the valuation, measurement or
determination is reasonably required for the purpose of checking
any person’s position as regards—
30
(a)
capital gains tax,
(b)
corporation tax in respect of chargeable gains,
(c)
inheritance tax,
(d)
stamp duty land tax, or
(e)
stamp duty reserve tax.
35
      (4)
A person who the officer considers is needed to assist with the
valuation, measurement or determination may enter and inspect
the premises or property with the officer.
Carrying out inspections under paragraph 12A
12B   (1)
An inspection under paragraph 12A may be carried out only if
40
condition A or B is satisfied.
      (2)
Condition A is that—

Finance Bill
Schedule 48 — Extension of information and inspection powers
367

(a)
the inspection is carried out at a time agreed to by a
relevant person, and
(b)
the relevant person has been given notice in writing of the
agreed time of the inspection.
      (3)
“Relevant person” means—
5
(a)
the occupier of the premises, or
(b)
if the occupier cannot be identified or the premises are
vacant, a person who controls the premises.
      (4)
Condition B is that—
(a)
the inspection has been approved by the tribunal, and
10
(b)
any relevant person specified by the tribunal has been
given at least 7 days’ notice in writing of the time of the
inspection.
      (5)
A notice under sub-paragraph (4)(b) must state the possible
consequences of obstructing the officer in the exercise of the
15
power.
      (6)
If a notice is given under this paragraph in respect of an inspection
approved by the tribunal (see paragraph 13), it must state that the
inspection has been so approved.
      (7)
An officer of Revenue and Customs seeking to carry out an
20
inspection under paragraph 12A must produce evidence of
authority to carry out the inspection if asked to do so by—
(a)
the occupier of the premises, or
(b)
any other person who appears to the officer to be in charge
of the premises or property.”
25
6     (1)
Paragraph 13 (approval of tribunal) is amended as follows.
      (2)
In sub-paragraph (1), insert at the end “(and for the effect of obtaining such
approval see paragraph 39 (penalties))”.
      (3)
In sub-paragraph (1A) (inserted by Schedule 47), insert at the end “(except
as required under sub-paragraph (2A))”.
30
      (4)
In sub-paragraph (2), after “an inspection” insert “under paragraph 10, 10A
or 11”.
      (5)
After that sub-paragraph insert—
   “(2A)
The tribunal may not approve an inspection under paragraph 12A
unless—
35
(a)
an application for approval is made by, or with the
agreement of, an authorised officer of Revenue and
Customs,
(b)
the person whose tax position is the subject of the
proposed inspection has been given a reasonable
40
opportunity to make representations to the officer of
Revenue and Customs about that inspection,
(c)
the occupier of the premises has been given a reasonable
opportunity to make such representations,
(d)
the tribunal has been given a summary of any
45
representations made, and

Finance Bill
Schedule 48 — Extension of information and inspection powers
368

(e)
the tribunal is satisfied that, in the circumstances, the
inspection is justified.
     (2B)
Paragraphs (c) and (d) of sub-paragraph (2A) do not apply if the
tribunal is satisfied that the occupier of the premises cannot be
identified.”
5
7
In paragraph 17(b) (power to record information), after “premises,” insert
“property, goods,”.
8     (1)
Paragraph 21 (restrictions on giving taxpayer notices) is amended as
follows.
      (2)
In sub-paragraph (7), for “VAT position” substitute “position as regards any
10
tax other than income tax, capital gains tax or corporation tax”.
      (3)
In the heading, insert at the end “following tax return”.
9
After that paragraph insert—
“Taxpayer notices following land transaction return
21A   (1)
Where a person has delivered a land transaction return under
15
section 76 of FA 2003 (returns for purposes of stamp duty land tax)
in respect of a transaction, a taxpayer notice may not be given for
the purpose of checking that person’s stamp duty land tax
position in relation to that transaction.
      (2)
Sub-paragraph (1) does not apply where, or to the extent that, any
20
of conditions A to C is met.
      (3)
Condition A is that a notice of enquiry has been given in respect
of—
(a)
the return, or
(b)
a claim (or an amendment of a claim) made by the person
25
in connection with the transaction,

and the enquiry has not been completed.
      (4)
In sub-paragraph (3) “notice of enquiry” means a notice under
paragraph 12 of Schedule 10, or paragraph 7 of Schedule 11A, to
FA 2003.
30
      (5)
Condition B is that, as regards the person, an officer of Revenue
and Customs has reason to suspect that—
(a)
an amount that ought to have been assessed to stamp duty
land tax in respect of the transaction may not have been
assessed,
35
(b)
an assessment to stamp duty land tax in respect of the
transaction may be or have become insufficient, or
(c)
relief from stamp duty land tax in respect of the transaction
may be or have become excessive.
      (6)
Condition C is that the notice is given for the purpose of obtaining
40
any information or document that is also required for the purpose
of checking that person’s position as regards a tax other than
stamp duty land tax.”

Finance Bill
Schedule 48 — Extension of information and inspection powers
369

10
In paragraph 28 (restrictions on inspection of business documents), and in
the heading before that paragraph, omit “business”.
11
After paragraph 34 insert—
“Involved third parties
34A   (1)
This paragraph applies to a third party notice or a notice under
5
paragraph 5 if—
(a)
it is given to an involved third party (see paragraph 61A),
(b)
it is given for the purpose of checking the position of a
person, or a class of persons, as regards the relevant tax,
and
10
(c)
it refers only to relevant information or relevant
documents.
      (2)
In relation to such a third party notice—
(a)
paragraph 3(1) (approval etc of third party notices) does
not apply,
15
(b)
paragraph 4(1) (copying third party notices to taxpayer)
does not apply, and
(c)
paragraph 30(1) (appeal) has effect as if it permitted an
appeal on any grounds.
      (3)
In relation to such a notice under paragraph 5—
20
(a)
sub-paragraphs (3) and (4) of that paragraph (approval of
tribunal) have effect as if they permitted, but did not
require, an authorised officer of Revenue and Customs to
obtain the approval of the tribunal, and
(b)
paragraph 31 (appeal) has effect as if it permitted an appeal
25
on any grounds.
      (4)
The involved third party may not appeal against a requirement in
the notice to provide any information, or produce any document,
that forms part of the involved third party’s statutory records.
      (5)
In relation to an involved third party, “relevant documents”,
30
“relevant information” and “relevant tax” are defined in
paragraph 61A.
Registered pension schemes etc
34B   (1)
This paragraph applies to a third party notice or a notice under
paragraph 5 if it refers only to information or documents that
35
relate to any pensions matter.
      (2)
“Pensions matter” means any matter relating to—
(a)
a registered pension scheme,
(b)
an annuity purchased with sums or assets held for the
purposes of a registered pension scheme or a pre-2006
40
pension scheme, or
(c)
an employer-financed retirement benefits scheme.
      (3)
In relation to such a third party notice—

Finance Bill
Schedule 48 — Extension of information and inspection powers
370

(a)
paragraph 3(1) (approval etc of third party notices) does
not apply,
(b)
paragraph 4(1) (copying third party notices to taxpayer)
does not apply, and
(c)
paragraph 30(1) (appeal) has effect as if it permitted an
5
appeal on any grounds.
      (4)
In relation to such a notice under paragraph 5—
(a)
sub-paragraphs (3) and (4) of that paragraph (approval of
tribunal) have effect as if they permitted, but did not
require, an authorised officer of Revenue and Customs to
10
obtain the approval of the tribunal, and
(b)
paragraph 31 (appeal) has effect as if it permitted an appeal
on any grounds.
      (5)
A person may not appeal against a requirement in the notice to
provide any information, or produce any document, that forms
15
part of any person’s statutory records.
      (6)
Where the notice relates to a matter within sub-paragraph (2)(a) or
(b), the officer of Revenue and Customs who gives the notice must
give a copy of the notice to the scheme administrator in relation to
the pension scheme.
20
      (7)
Where the notice relates to a matter within sub-paragraph (2)(c),
the officer of Revenue and Customs who gives the notice must
give a copy of the notice to the responsible person in relation to the
employer-financed retirement benefits scheme.
      (8)
Sub-paragraphs (6) and (7) do not apply if the notice is given to a
25
person who, in relation to the scheme or annuity to which the
notice relates, is a prescribed description of person.
Registered pension schemes etc: interpretation
34C
In paragraph 34B—
“employer-financed retirement benefits scheme” has the
30
same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see
sections 393A and 393B of that Act);
“pension scheme” has the same meaning as in Part 4 of FA
2004;
“pre-2006 pension scheme” means a scheme that, at or in
35
respect of any time before 6 April 2006, was—
(a)
a retirement benefits scheme approved for the
purposes of Chapter 1 of Part 14 of ICTA,
(b)
a former approved superannuation fund (as defined
in paragraph 1(3) of Schedule 36 to FA 2004),
40
(c)
a relevant statutory scheme (as defined in section
611A of ICTA) or a pension scheme treated as if it
were such a scheme, or
(d)
a personal pension scheme approved under Chapter
4 of Part 14 of ICTA;
45
“prescribed” means prescribed by regulations made by the
Commissioners;