Finance Bill

House of Commons

Session 2008 - 09
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Finance Bill

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
385

(b)
for “six years” substitute “4 years”, and
(c)
insert at the end “(subject to paragraphs 12A and 12B)”.
21
In paragraph 12A(1) of Schedule 2 (time limit for assessment following
extension of time for delivery of return), for “five years” substitute “4 years”.
22
In that Schedule, after paragraph 12A insert—
5
“12B  (1)
In a case involving a relevant situation brought about carelessly by
a participator (or a person acting on behalf of a participator), an
assessment (or an amendment of an assessment) under this
Schedule on the participator may be made at any time not more
than 6 years after the end of the relevant chargeable period
10
(subject to sub-paragraph (2)).
      (2)
In a case involving a relevant situation brought about deliberately
by a participator (or a person acting on behalf of a participator), an
assessment (or an amendment of an assessment) on the
participator may be made at any time not more than 20 years after
15
the end of the relevant chargeable period.
      (3)
“Relevant situation” means a situation in which—
(a)
there is a loss of tax,
(b)
the assessable profit charged to tax by or stated in an
assessment for a chargeable period ought to be or to have
20
been larger,
(c)
the allowable loss stated in an assessment or a
determination of loss for a chargeable period ought to be or
to have been smaller, or
(d)
an assessment to tax should have been made for a
25
chargeable period but was not made.
      (4)
“Relevant chargeable period” means—
(a)
in the case of a further assessment under paragraph 12(2),
the chargeable period in which the excessive allowable loss
accrued, and
30
(b)
in any other case, the chargeable period to which the
assessment relates.
      (5)
Where the participator carried on a trade or business with one or
more other persons at any time in the chargeable period for which
the assessment under sub-paragraph (1) or (2) is made, an
35
assessment to tax in respect of the profits of that trade or business
may also be made on any of the participator’s partners.
      (6)
In determining the amount of the tax to be charged on a person for
a chargeable period in an assessment in a case mentioned in sub-
paragraph (1) or (2) (including an assessment under sub-
40
paragraph (5)), effect must be given to any relief or allowance to
which that person would have been entitled for that period if a
valid claim or application had been made.
      (7)
Sub-paragraph (6) only applies if the person on whom the
assessment is made so requires.
45
      (8)
Subsections (5) to (7) of section 118 of the Taxes Management Act
1970 (losses and situations brought about carelessly or

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Schedule 51 — Time limits for assessments, claims etc
386

deliberately) apply for the purposes of this paragraph as they
apply for the purposes of that Act.
      (9)
In subsection (6)(b) of that section (as it applies for the purposes of
this paragraph), the reference to the person who provides the
information has effect as if it included any person who becomes
5
the responsible person for the oil field after the information is
provided.”
23    (1)
Paragraph 2 of Schedule 5 (allowance of expenditure other than abortive
exploration expenditure: claim period) is amended as follows.
      (2)
In sub-paragraph (1), for “six years” substitute “4 years”.
10
      (3)
In sub-paragraph (7)—
(a)
in paragraph (c), for “four years” substitute “2 years”, and
(b)
in the words after that paragraph, for “six years” substitute “4 years”.
24    (1)
Paragraph 9 of Schedule 5 (allowance of expenditure other than abortive
exploration expenditure: notice of variation) is amended as follows.
15
      (2)
In sub-paragraph (1)—
(a)
omit the words from “, within” to “field,”,
(b)
for “in the notice” substitute “in a notice of a decision under
paragraph 3 above given to the responsible person for an oil field”,
and
20
(c)
for “that period” substitute “the permitted period”.
      (3)
Omit sub-paragraphs (1A) to (1C) and (2A).
      (4)
After sub-paragraph (2A) insert—
   “(2B)
In this paragraph “permitted period” means the period of 4 years
beginning with the date on which the notice of the decision under
25
paragraph 3 was given (but see sub-paragraph (2C)).
     (2C)
Where the relevant amount was overstated in the notice of
decision as a result of an inaccuracy in a statement or declaration
made by the responsible person (or a person acting on behalf of the
responsible person) in connection with the claim—
30
(a)
if the inaccuracy was careless, the permitted period is
extended to 6 years, and
(b)
if the inaccuracy was deliberate, the permitted period is
extended to 20 years.”
      (5)
Omit sub-paragraph (11).
35
      (6)
Insert at the end—
   “(12)
For the purposes of this section, an inaccuracy in a statement or
declaration made by the responsible person (or a person acting on
behalf of the responsible person) is careless if it is due to a failure
by the person to take reasonable care.
40
     (13)
An inaccuracy in a statement or declaration made by the
responsible person (or a person acting on behalf of the responsible
person) is to be treated as careless if—

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Schedule 51 — Time limits for assessments, claims etc
387

(a)
the responsible person, the person who acted on behalf of
the responsible person or any person who becomes the
responsible person for the oil field after the statement or
declaration is made discovers the inaccuracy some time
after it is made, and
5
(b)
that person fails to take reasonable steps to inform Her
Majesty’s Revenue and Customs.”
25    (1)
Schedule 6 (allowance of expenditure (other than abortive exploration
expenditure) on claim by participator) is amended as follows.
      (2)
In paragraph 1(2) (claim period), for “six years” substitute “4 years”.
10
      (3)
In paragraph 2 (applying provisions of Schedule 5), in the Table, in the entry
relating to paragraph 9 of Schedule 5, omit the words in the second column.
26
In paragraph 1(3) of Schedule 7 (allowance of abortive exploration
expenditure), in the Table, in the entry relating to paragraph 9 of Schedule 5,
in the second column omit—
15
(a)
the words “In sub-paragraph (1C) omit paragraph (c)” and “omit
sub-paragraph (2A)”, and
(b)
the words from “and in sub-paragraph (11)” to the end.
Aggregates levy
27
Part 2 of FA 2001 (aggregates levy) is amended as follows.
20
28
In section 32(1) (repayments of overpaid aggregates levy), for “three years”
substitute “4 years”.
29    (1)
Paragraph 4 of Schedule 5 (time limits for assessments) is amended as
follows.
      (2)
In sub-paragraph (1)(b), for “three years” substitute “4 years”.
25
      (3)
For sub-paragraph (3) substitute—
    “(3)
An assessment of an amount due from a person in a case involving
a loss of aggregates levy—
(a)
brought about deliberately by the person (or by another
person acting on that person’s behalf), or
30
(b)
attributable to a failure by the person to comply with an
obligation under section 24(2) or paragraph 1 of Schedule
4,

may be made at any time not more than 20 years after the end of
the accounting period to which it relates (subject to sub-paragraph
35
(4)).
     (3A)
In sub-paragraph (3)(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.”
40
      (4)
In sub-paragraph (4)—
(a)
in paragraph (a), for “three years” substitute “4 years”, and
(b)
omit paragraph (b) (and the “and” before it).

Finance Bill
Schedule 51 — Time limits for assessments, claims etc
388

30
In paragraph 2(10) of Schedule 8 (interest payable by Commissioners), for
“three years” substitute “4 years”.
31    (1)
Paragraph 4 of Schedule 10 (time limits on penalty assessments) is amended
as follows.
      (2)
In sub-paragraph (1), for “three years” substitute “4 years”.
5
      (3)
For sub-paragraph (2) substitute—
    “(2)
An assessment of a person to a civil penalty in a case involving a
loss of aggregates levy—
(a)
brought about deliberately by the person (or by another
person acting on that person’s behalf), or
10
(b)
attributable to a failure by the person to comply with an
obligation under section 24(2) or paragraph 1 of Schedule
4,

may be made at any time not more than 20 years after the conduct
to which the penalty relates (subject to sub-paragraph (3)).
15
     (2A)
In sub-paragraph (2)(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.”
      (4)
In sub-paragraph (3)—
20
(a)
in paragraph (a), for “three years” substitute “4 years”, and
(b)
omit paragraph (b) (and the “and” before it).
Climate change levy
32
Schedule 6 to FA 2000 (climate change levy) is amended as follows.
33
In paragraph 64(1) (repayments of overpaid climate change levy), for “three
25
years” substitute “4 years”.
34
In paragraph 66(10) (interest payable by the Commissioners), for “three
years” substitute “4 years”.
35    (1)
Paragraph 80 (time limits for assessments) is amended as follows.
      (2)
In sub-paragraph (1)(b), for “three years” substitute “4 years”.
30
      (3)
For sub-paragraph (3) substitute—
    “(3)
An assessment of an amount due from a person in a case involving
a loss of levy—
(a)
brought about deliberately by the person (or by another
person acting on that person’s behalf), or
35
(b)
attributable to a failure by the person to comply with an
obligation under paragraph 53 or 55,

may be made at any time not more than 20 years after the end of
the accounting period to which it relates (subject to sub-paragraph
(4)).
40
     (3A)
In sub-paragraph (3)(a) the reference to a loss brought about
deliberately by the person includes a loss brought about as a result

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Schedule 51 — Time limits for assessments, claims etc
389

of a deliberate inaccuracy in a document given to Her Majesty’s
Revenue and Customs by or on behalf of that person.”
      (4)
In sub-paragraph (4)—
(a)
in paragraph (a), for “three years” substitute “4 years”, and
(b)
omit paragraph (b) (and the “and” before it).
5
36    (1)
Paragraph 108 (time limits on penalty assessments) is amended as follows.
      (2)
In sub-paragraph (1), for “three years” substitute “4 years”.
      (3)
For sub-paragraph (2) substitute—
    “(2)
An assessment of a person to a penalty in a case involving a loss of
levy—
10
(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 paragraph 53 or 55,

may be made at any time not more than 20 years after the conduct
15
to which the penalty relates (subject to sub-paragraph (3)).
     (2A)
In sub-paragraph (2)(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.”
20
      (4)
In sub-paragraph (3)—
(a)
in paragraph (a), for “three years” substitute “4 years”, and
(b)
omit paragraph (b) (and the “and” before it).
Landfill tax
37
Schedule 5 to FA 1996 (landfill tax) is amended as follows.
25
38
In paragraph 14(4) (recovery of overpaid tax), for “three years” substitute “4
years”.
39
In paragraph 29(8) (interest payable by Commissioners), for “three years”
substitute “4 years”.
40    (1)
Paragraph 33 (assessments: time limits) is amended as follows.
30
      (2)
In sub-paragraph (1)—
(a)
for “three years” (in the first place) substitute “4 years”, and
(b)
for the words from “the end of” to the end substitute “the relevant
event”.
      (3)
After that sub-paragraph insert—
35
   “(1A)
In this paragraph “the relevant event”, in relation to an
assessment, means—
(a)
the end of the accounting period concerned, or
(b)
in the case of an assessment under paragraph 32 of an
amount due by way of a penalty other than a penalty
40
referred to in paragraph 32(2), the event giving rise to the
penalty.”

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax
390

      (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—
5
(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 47(2) or (3),

may be made at any time not more than 20 years after the relevant
10
event (subject to sub-paragraph (5)).
     (4A)
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.”
15
      (6)
In sub-paragraph (5)—
(a)
in paragraph (a), for “three years” substitute “4 years”, and
(b)
omit paragraph (b) (and the “and” before it).
Minor and consequential provision
41
In section 36 of TMA 1970 (loss of tax brought about carelessly or
20
deliberately etc), in subsections (2) and (3), for “for the purpose” substitute
“in a case”.
42
In Schedule 39 to FA 2008, omit paragraph 66 (saving for provisions of TMA
1970 as applied by OTA 1975).
43
In consequence of the amendments made by this Schedule, omit—
25
(a)
in FA 1990, section 122, and
(b)
in FA 1997, in Schedule 5, paragraph 6(2)(b) and (c).
Schedule 52
Section 99

Recovery of overpaid tax etc
Part 1
30
Income tax and capital gains tax
Claims for recovery of overpaid tax etc
1
In TMA 1970, for sections 33 and 33A substitute—
“33
Recovery of overpaid tax etc
Schedule 1AB contains provision for and in connection with claims
35
for the recovery of overpaid income tax and capital gains tax.”

Finance Bill
Schedule 52 — Recovery of overpaid tax etc
Part 1 — Income tax and capital gains tax
391

2
After Schedule 1AA to that Act insert—
“Schedule 1AB
Section 33

Recovery of overpaid tax etc
Claim for relief for overpaid tax etc
1     (1)
This paragraph applies where—
5
(a)
a person has paid an amount by way of income tax or
capital gains tax but the person believes that the tax was
not due, or
(b)
a person has been assessed as liable to pay an amount by
way of income tax or capital gains tax, or there has been a
10
determination or direction to that effect, but the person
believes that the tax is not due.
      (2)
The person may make a claim to the Commissioners for
repayment or discharge of the amount.
      (3)
Paragraph 2 makes provision about cases in which the
15
Commissioners are not liable to give effect to a claim under this
Schedule.
      (4)
Paragraphs 3 to 7 (and sections 42 to 43C and Schedule 1A) make
further provision about making and giving effect to claims under
this Schedule.
20
      (5)
Paragraph 8 makes provision about the application of this
Schedule to amounts paid under contract settlements.
      (6)
The Commissioners are not liable to give relief in respect of a case
described in sub-paragraph (1)(a) or (b) except as provided—
(a)
by this Schedule and Schedule 1A (following a claim under
25
this paragraph), or
(b)
by or under another provision of the Income Tax Acts or an
enactment relating to the taxation of capital gains.
      (7)
For the purposes of this Schedule, an amount paid by one person
on behalf of another is treated as paid by the other person.
30
Cases in which Commissioners not liable to give effect to claim
2     (1)
The Commissioners are not liable to give effect to a claim under
this Schedule if or to the extent that the claim falls within a case
described in this paragraph (see also paragraph 4(5)).
      (2)
Case A is where the amount paid, or liable to be paid, is excessive
35
by reason of—
(a)
a mistake in a claim, election or notice,
(b)
a mistake consisting of making or giving, or failing to make
or give, a claim, election or notice,
(c)
a mistake in allocating expenditure to a pool for the
40
purposes of the Capital Allowances Act or a mistake
consisting of making, or failing to make, such an
allocation, or