Finance Bill

House of Commons

Session 2008 - 09
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Finance Bill

Finance Bill
Schedule 50 — Record-keeping
378

substitute—
“5
The duty under paragraph 4 to preserve records may be
satisfied—
(a)
by preserving them in any form and by any means, or
(b)
by preserving the information contained in them in any
5
form and by any means,

subject to any conditions or exceptions specified in writing by the
Commissioners for Her Majesty’s Revenue and Customs.”
11
Accordingly, in the heading before paragraph 5, for “instead of original
records” substitute “etc”.
10
12
Schedule 11A (claims not included in returns) is amended in accordance
with paragraphs 13 and 14.
13    (1)
Paragraph 3 (duty to keep and preserve records) is amended as follows.
      (2)
Omit sub-paragraphs (3) and (4).
      (3)
After sub-paragraph (4) insert—
15
   “(4A)
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
20
(b)
provide that those records include supporting documents
so specified.
     (4B)
Regulations under this paragraph may make provision by
reference to things specified in a notice published by the
Commissioners for Her Majesty’s Revenue and Customs in
25
accordance with the regulations (and not withdrawn by a
subsequent notice).
     (4C)
“Supporting documents” includes accounts, books, deeds,
contracts, vouchers and receipts.”
14
After that paragraph insert—
30
“Preservation of information etc
3A
The duty under paragraph 3 to preserve records may be
satisfied—
(a)
by preserving them in any form and by any means, or
(b)
by preserving the information contained in them in any
35
form and by any means,

subject to any conditions or exceptions specified in writing by the
Commissioners for Her Majesty’s Revenue and Customs.”
Aggregates levy
15
Schedule 7 to FA 2001 (aggregates levy: information and evidence etc) is
40
amended as follows.
16    (1)
Paragraph 2 (records) is amended as follows.

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
379

      (2)
For sub-paragraphs (4) and (5) substitute—
    “(4)
A duty under regulations 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
5
form and by any means,

subject to any conditions or exceptions specified in writing by the
Commissioners.”
      (3)
In sub-paragraph (9), omit “approval or” and “given or”.
17
Omit paragraph 3 (evidence of records that are required to be preserved).
10
Climate change levy
18
Schedule 6 to FA 2000 (climate change levy) is amended as follows.
19    (1)
Paragraph 125 (records) is amended as follows.
      (2)
For sub-paragraphs (4) and (5) substitute—
    “(4)
A duty under regulations under this paragraph to preserve
15
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
20
Commissioners.”
      (3)
In sub-paragraph (9), omit “approval or” and “given or”.
20
Omit paragraph 126 (evidence of records that are required to be preserved).
Landfill tax
21
In paragraph 2 of Schedule 5 to FA 1996 (landfill tax: records), for sub-
25
paragraphs (4) to (7) substitute—
    “(4)
A duty under regulations 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
30
form and by any means,

subject to any conditions or exceptions specified in writing by the
Commissioners.”
Schedule 51
Section 98

Time limits for assessments, claims etc
35
Insurance premium tax
1
Schedule 7 to FA 1994 (insurance premium tax) is amended as follows.

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
380

2
In paragraph 8(4) (recovery of overpaid tax), for “three years” substitute “4
years”.
3
In paragraph 22(9) (interest payable by Commissioners), for “three years”
substitute “4 years”.
4     (1)
Paragraph 26 (assessments: time limits) is amended as follows.
5
      (2)
In sub-paragraph (1), for the words from “three years after” (in the first
place) to the end substitute “4 years after the relevant event”.
      (3)
After that sub-paragraph insert—
   “(1A)
In this paragraph “the relevant event”, in relation to an
assessment, means—
10
(a)
the end of the accounting period concerned, or
(b)
in the case of an assessment under paragraph 25 of an
amount due by way of a penalty other than a penalty
referred to in paragraph 25(2), the event giving rise to the
penalty.”
15
      (4)
In sub-paragraph (3), for “sub-paragraph (1)” substitute “sub-paragraph
(1A)”.
      (5)
For sub-paragraph (4) substitute—
    “(4)
An assessment of an amount due from a person in a case involving
a loss of tax—
20
(a)
brought about deliberately by the person (or by another
person acting on that person’s behalf), or
(b)
attributable to a failure by the person to comply with an
obligation under section 53(1) or (2) or 53AA(1) or (3),

may be made at any time not more than 20 years after the relevant
25
event.
      (5)
In sub-paragraph (4)(a) the reference to a loss brought about
deliberately by the person includes a loss brought about as a result
of a deliberate inaccuracy in a document given to Her Majesty’s
Revenue and Customs by or on behalf of that person.”
30
Inheritance tax
5
IHTA 1984 is amended as follows.
6
In section 131 (transfers within 7 years before death: the relief), after
subsection (2) insert—
“(2ZA)
A claim under subsection (2)(b) must be made not more than 4 years
35
after the transferor’s death.”
7
In section 146(2)(a) (Inheritance (Provision for Family and Dependants) Act
1975), after “claim for the purpose” insert “not more than 4 years after the
date on which the order is made”.
8
In section 150 (voidable transfers), insert at the end—
40
“(3)
A claim under this section must be made not more than 4 years after
the claimant knew, or ought reasonably to have known, that the
relevant transfer has been set aside.”

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
381

9
In section 179 (sale of shares etc from deceased’s estate: the relief), after
subsection (2) insert—
“(2A)
A claim under this Chapter must be made not more than 4 years after
the end of the period mentioned in subsection (1)(a).”
10
In section 191 (sale of land from deceased’s estate: the relief), after
5
subsection (1) insert—
“(1A)
A claim under this Chapter must be made not more than 4 years after
the end of the period mentioned in subsection (1)(a).”
11    (1)
Section 240 (underpayments) is amended as follows.
      (2)
In subsection (2), for “six years” substitute “4 years”.
10
      (3)
For subsection (3) substitute—
“(3)
Subsection (2) has effect subject to subsections (4) and (5).
(4)
Proceedings in a case involving a loss of tax brought about carelessly
by a person liable for the tax (or a person acting on behalf of such a
person) may be brought at any time not more than 6 years after the
15
later of the dates in subsection (2)(a) and (b).
(5)
Proceedings in a case involving a loss of tax brought about
deliberately by a person liable for the tax (or a person acting on
behalf of such a person) may be brought at any time not more than
20 years after the later of those dates.
20
(6)
Subsection (7) applies to any case not falling within subsection (2)
where too little tax has been paid in respect of a chargeable transfer,
provided that the case does not involve a loss of tax brought about
deliberately by a person liable for the tax (or a person acting on
behalf of such a person).
25
(7)
Where this subsection applies—
(a)
no proceedings are to be brought for the recovery of the tax
after the end of the period of 20 years beginning with the date
on which the chargeable transfer was made, and
(b)
at the end of that period any liability for the tax and any
30
Inland Revenue charge for that tax is extinguished.
(8)
In relation to cases of tax chargeable under Chapter 3 of Part 3 of this
Act (apart from section 79), the references in subsections (4), (5) and
(6) to a person liable for the tax are to be treated as including
references to a person who is the settlor in relation to the settlement.”
35
12
After that section insert—
“240A
Underpayments: supplementary
(1)
This section applies for the purposes of section 240.
(2)
A loss of tax is brought about carelessly by a person if the person fails
to take reasonable care to avoid bringing about that loss.
40
(3)
Where—
(a)
information is provided to Her Majesty’s Revenue and
Customs,

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
382

(b)
the person who provided the information, or the person on
whose behalf the information was provided, discovers some
time later that the information was inaccurate, and
(c)
that person fails to take reasonable steps to inform Her
Majesty’s Revenue and Customs,
5

any loss of tax brought about by the inaccuracy is to be treated as
having been brought about carelessly by that person.
(4)
References to a loss of tax brought about deliberately by a person
include a loss of tax brought about as a result of a deliberate
inaccuracy in a document given to Her Majesty’s Revenue and
10
Customs by or on behalf of that person.”
13
In section 241(1) (overpayments), for “six years” substitute “4 years”.
Stamp duty land tax
14
Part 4 of FA 2003 (stamp duty land tax) is amended as follows.
15    (1)
Schedule 10 (returns, enquiries, assessments and appeals) is amended as
15
follows.
      (2)
In paragraph 25(3) (determination of tax chargeable if no return delivered),
for “six years” substitute “4 years”.
      (3)
In paragraph 27(2)(a) (determination superseded by actual self-assessment),
for “six years” substitute “4 years”.
20
      (4)
Paragraph 31 (time limit for assessment) is amended in accordance with sub-
paragraphs (5) to (8).
      (5)
In sub-paragraph (1), for “six years” substitute “4 years”.
      (6)
For sub-paragraph (2) substitute—
    “(2)
An assessment of a person to tax in a case involving a loss of tax
25
brought about carelessly by the purchaser or a related person may
be made at any time not more than 6 years after the effective date
of the transaction to which it relates (subject to sub-paragraph
(2A)).
     (2A)
An assessment of a person to tax in a case involving a loss of tax—
30
(a)
brought about deliberately by the purchaser or a related
person,
(b)
attributable to a failure by the person to comply with an
obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a)
or 8(3)(a) of Schedule 17A, or
35
(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),
40

may be made at any time not more than 20 years after the effective
date of the transaction to which it relates.”
      (7)
In sub-paragraph (4)(a), for “three years” substitute “4 years”.

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
383

      (8)
After sub-paragraph (5) insert—
    “(6)
In this paragraph “related person”, in relation to a purchaser,
means—
(a)
a person acting on behalf of the purchaser, or
(b)
a person who was a partner of the purchaser at the relevant
5
time.”
      (9)
After paragraph 31 insert—
“Losses brought about carelessly or deliberately
31A   (1)
This paragraph applies for the purposes of paragraph 31.
      (2)
A loss of tax is brought about carelessly by a person if the person
10
fails to take reasonable care to avoid bringing about that loss.
      (3)
Where—
(a)
information is provided to Her Majesty’s Revenue and
Customs,
(b)
the person who provided the information, or the person on
15
whose behalf the information was provided, discovers
some time later that the information was inaccurate, and
(c)
that person fails to take reasonable steps to inform Her
Majesty’s Revenue and Customs,

any loss of tax brought about by the inaccuracy is to be treated as
20
having been brought about carelessly by that person.
      (4)
References to a loss of tax brought about deliberately by a person
include a loss of tax brought about as a result of a deliberate
inaccuracy in a document given to Her Majesty’s Revenue and
Customs by or on behalf of that person.”
25
     (10)
In paragraph 34(2) (relief in case of mistake in return), for “six years”
substitute “4 years”.
16    (1)
Paragraph 8 of Schedule 14 (time limit for determination of penalties) is
amended as follows.
      (2)
In sub-paragraph (2)—
30
(a)
for “six years” substitute “4 years”, and
(b)
after “began to be incurred” insert “(“the relevant date”)”.
      (3)
In sub-paragraph (3), insert at the end “(subject to any of the following
provisions of this paragraph allowing a longer period)”.
      (4)
After sub-paragraph (4) insert—
35
   “(4A)
Where a person is liable to a penalty in a case involving a loss of
tax brought about carelessly by the person (or by another person
acting on that person’s behalf), the penalty may be determined, or
the proceedings may be brought, at any time not more than 6 years
after the relevant date (subject to sub-paragraphs (4B) and (5)).
40
     (4B)
Where a person is liable to a penalty in a case involving a loss of
tax—
(a)
brought about deliberately by the person (or by another
person acting on that person’s behalf),

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
384

(b)
attributable to a failure by the person to comply with an
obligation under section 76(1) or paragraph 3(3)(a), 4(3)(a)
or 8(3)(a) of Schedule 17A, or
(c)
attributable to arrangements in respect of which the person
has failed to comply with an obligation under section 309,
5
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),

the penalty may be determined, or the proceedings may be
brought, at any time not more than 20 years after the relevant date.
10
     (4C)
Paragraph 31A of Schedule 10 (losses brought about carelessly or
deliberately) applies for the purpose of this paragraph.”
Petroleum revenue tax
17
OTA 1975 is amended as follows.
18    (1)
The Table in paragraph 1(1) of Schedule 2 (applying provisions of TMA 1970
15
in relation to management and collection of petroleum revenue tax) is
amended as follows.
      (2)
In the entry relating to section 33 of TMA 1970, in the second column, for the
entry relating to subsection (1) substitute “In subsection (1), for “year of
assessment” substitute “chargeable period”.”
20
      (3)
Omit the entries relating to sections 34 and 36 of TMA 1970.
19
In paragraph 10 of Schedule 2 (assessments to tax and determinations of loss
etc), after sub-paragraph (1) insert—
   “(1A)
An assessment under sub-paragraph (1) may be made at any time
not more than 4 years after the end of the chargeable period to
25
which it relates (subject to paragraphs 12A and 12B).”
20    (1)
Paragraph 12 of Schedule 2 (further assessments and determinations) is
amended as follows.
      (2)
After sub-paragraph (1) insert—
   “(1A)
An assessment (or an amendment of an assessment) under sub-
30
paragraph (1) may be made at any time not more than 4 years after
the end of the chargeable period to which the assessment relates
(subject to sub-paragraph (1B) and paragraphs 12A and 12B).
     (1B)
The time limits in sub-paragraph (1A) and paragraphs 12A and
12B do not apply to an amendment of an assessment where the
35
amendment is made in consequence (directly or indirectly) of—
(a)
the granting of relief under section 7(2) or (3) to any
participator for allowable losses accruing in any
chargeable period, or
(b)
a notice of variation served under paragraph 9 of Schedule
40
5 on any responsible person in respect of a claim for any
claim period.”
      (3)
In sub-paragraph (2)—
(a)
omit “(notwithstanding anything in section 34 of the Taxes
Management Act 1970 (ordinary time limit for assessment))”,
45