Finance Bill

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Finance Bill

Finance Bill
Part 7 — Administration
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104
Miscellaneous amendments
(1)
Section 239 of ITA 2007 (date from which interest is chargeable when EIS relief
is withdrawn or reduced) is amended as follows.
(2)
In subsection (1)—
(a)
for “in column 1 of the following table” substitute “in subsection (2)”,
5
(b)
for “given by the corresponding entry in column 2 of the table”
substitute “31 January next following the tax year for which the
assessment is made”, and
(c)
omit the table.
(3)
For subsection (2) substitute—
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“(2)
The provisions are—
section 163,
section 164,
section 173A,
any of sections 181 to 188,
15
section 209,
section 212(1),
section 213,
section 224,
section 232, and
20
section 233.”
(4)
In the following provisions, for the words from “the same rate” to the end
substitute “the rate applicable under section 178 of the Finance Act 1989”—
(a)
section 48(1) of FA 1975 (interest on repayment of estate duty), and
(b)
section 235(1) of IHTA 1984 (interest on overpaid inheritance tax).
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(5)
In section 178(2) of FA 1989 (setting of rates of interest)—
(a)
after paragraph (g) insert—
“(ga)
section 48(1) of the Finance Act 1975,”, and
(b)
in paragraph (k), after “sections 233” insert “, 235(1)”.
(6)
The following provisions (which require HMRC to make an order specifying
30
the new rate of interest when that rate is changed by operation of regulations)
are omitted—
(a)
section 178(5) of FA 1989, and
(b)
section 197(5) of FA 1996.
Penalties
35
105
Penalties for failure to make returns etc
(1)
Schedule 55 contains provision for imposing penalties on persons in respect of
failures to make returns and other documents relating to liabilities for tax.
(2)
That Schedule comes into force on such day as the Treasury may by order
appoint.
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(3)
An order under subsection (2)—

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(a)
may commence a provision generally or only for specified purposes,
and
(b)
may appoint different days for different provisions or for different
purposes.
(4)
The Treasury may by order make any incidental, supplemental, consequential,
5
transitional, transitory or saving provision which may appear appropriate in
consequence of, or otherwise in connection with, Schedule 55.
(5)
An order under subsection (4) may include provision amending, repealing or
revoking any provision of any Act or subordinate legislation whenever passed
or made (including this Act and any Act amended by it).
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(6)
An order under subsection (4) may make different provision for different
purposes.
(7)
An order under this section is to be made by statutory instrument.
(8)
A statutory instrument containing an order under subsection (4) which
includes provision amending or repealing any provision of an Act is subject to
15
annulment in pursuance of a resolution of the House of Commons.
106
Penalties for failure to pay tax
(1)
Schedule 56 contains provision for imposing penalties on persons in respect of
failures to comply with obligations to pay tax.
(2)
That Schedule comes into force on such day as the Treasury may by order
20
appoint.
(3)
An order under subsection (2)—
(a)
may commence a provision generally or only for specified purposes,
and
(b)
may appoint different days for different provisions or for different
25
purposes.
(4)
The Treasury may by order make any incidental, supplemental, consequential,
transitional, transitory or saving provision which may appear appropriate in
consequence of, or otherwise in connection with, Schedule 56.
(5)
An order under subsection (4) may include provision amending, repealing or
30
revoking any provision of any Act or subordinate legislation whenever passed
or made (including this Act and any Act amended by it).
(6)
An order under subsection (4) may make different provision for different
purposes.
(7)
An order under this section is to be made by statutory instrument.
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(8)
A statutory instrument containing an order under subsection (4) which
includes provision amending or repealing any provision of an Act is subject to
annulment in pursuance of a resolution of the House of Commons.
107
Suspension of penalties during currency of agreement for deferred payment
(1)
This section applies if—
40
(a)
a person (“P”) fails to pay an amount of tax falling within the Table in
subsection (5) when it becomes due and payable,

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(b)
before the date on which P becomes liable to any penalty for that
failure, P makes a request to an officer of Revenue and Customs that
payment of the amount of tax be deferred, and
(c)
whether before or after that date, an officer of Revenue and Customs
agrees that payment of that amount may be deferred for a period (“the
5
deferral period”).
(2)
P is not liable to a penalty for failing to pay the amount mentioned in
subsection (1) if—
(a)
the penalty falls within the Table, and
(b)
P would (apart from this subsection) become liable to it during the
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deferral period.
(3)
But if—
(a)
P breaks the agreement (see subsection (4)), and
(b)
an officer of Revenue and Customs serves on P a notice specifying any
penalty to which P would become liable apart from subsection (2),
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P becomes liable, at the date of the notice, to that penalty.
(4)
P breaks an agreement if—
(a)
P fails to pay the amount of tax in question when the deferral period
ends, or
(b)
the deferral is subject to P complying with a condition (including a
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condition that part of the amount be paid during the deferral period)
and P fails to comply with it.
(5)
The taxes and penalties referred to in subsections (1) and (2) are—

Tax
Penalty

Income tax or capital gains tax
Surcharge under section 59C(2) or (3) of TMA

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1970

Value added tax
Surcharge under section 59(4) or 59A(4) of

VATA 1994

Aggregates levy
Penalty interest under paragraph 5 of Schedule

5 to FA 2001

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Climate change levy
Penalty interest under paragraph 82 of

Schedule 6 to FA 2000

Landfill tax
Penalty interest under paragraph 27(2) of

Schedule 5 to FA 1996

Insurance premium tax
Penalty under paragraph 15(2) or (3) of

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Schedule 7 to FA 1994 which is payable by

virtue of paragraph 15(1)(a) of that Schedule.

Any duty of excise
Penalty under section 9(2) or (3) of FA 1994

which is imposed for a failure to pay an amount

of any duty of excise or an amount payable on

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account of any such duty.

(6)
If the agreement mentioned in subsection (1)(c) is varied at any time by a
further agreement between P and an officer of Revenue and Customs, this
section applies from that time to the agreement as varied.

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(7)
The Treasury may by order amend the Table by adding or removing a tax or a
penalty.
(8)
An order under subsection (7) is to be made by statutory instrument.
(9)
A statutory instrument containing an order under subsection (7) is subject to
annulment in pursuance of a resolution of the House of Commons.
5
(10)
In this section, except in the entries in the Table, “penalty” includes surcharge
and penalty interest.
(11)
This section has effect where the agreement mentioned in subsection (1)(c) is
made on or after 24 November 2008.
108
Miscellaneous amendments
10
Schedule 57 contains amendments of Schedule 24 to FA 2007 (penalties for
errors), Schedule 41 to FA 2008 (penalties for failure to notify and certain other
wrongdoing) and certain other enactments relating to penalties.
Miscellaneous
109
Recovery of debts using PAYE regulations
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Schedule 58 contains provision about the recovery of debts by means of
deductions from PAYE income in accordance with PAYE regulations.
110
Managed payment plans
(1)
This section applies where a person (“P”) has entered into a managed payment
plan in respect of—
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(a)
an amount on account of income tax which is to become payable in
accordance with section 59A(2) of TMA 1970,
(b)
an amount of income tax or capital gains tax which is to become
payable in accordance with section 59B of that Act, or
(c)
an amount of corporation tax which is to become payable in accordance
25
with section 59D of that Act.
(2)
P enters into a managed payment plan in respect of an amount if—
(a)
P agrees to pay, and an officer of Revenue and Customs agrees to accept
payment of, the amount by way of instalments,
(b)
the instalments to be paid before the due date are balanced by the
30
instalments to be paid after it (see subsections (8) to (10)), and
(c)
the agreement meets such other requirements as may be specified in
regulations made by the Commissioners.
(3)
But this section does not apply, in the case of an amount of corporation tax,
where an arrangement under section 36 of FA 1998 (payment of tax by
35
members of a group of companies) has been made in relation to the amount.
(4)
If P pays all of the instalments in accordance with the plan, P is to be treated as
having paid, on the due date, the total of those instalments.
(5)
If P—
(a)
pays one or more instalments in accordance with the plan, but
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(b)
fails to pay one or more later instalments in accordance with it,

P is to be treated as having paid, on the due date, the total of the instalments
paid before the failure (but this is subject to subsection (6)).
(6)
Where—
(a)
subsection (5) applies in a case where the first failure to pay an
5
instalment occurs before the due date, and
(b)
P would (in the absence of a managed payment plan) be entitled to be
paid interest on any amount paid before that date,

then, despite that subsection, P is entitled to be paid that interest.
(7)
Where—
10
(a)
subsection (5) applies,
(b)
P makes one or more payments after the due date (whether or not in
accordance with the plan), and
(c)
an officer of Revenue and Customs gives P a notice specifying any or
all of those payments,
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P is not liable to a penalty or surcharge for failing to pay the amount of the
specified payments on or before the due date.
(8)
The instalments to be paid before the due date are balanced by those to be paid
after it if the time value of the instalments to be paid before that date is equal,
or approximately equal, to the time value of the instalments to be paid after it.
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(9)
The time value of the instalments to be paid before the due date is the total of
the time value of each of the instalments to be paid before that date (and the
time value of the instalments to be paid after that date is to be construed
accordingly).
(10)
The time value of an instalment is—
25

where—

A is the amount of the instalment, and

T is the number of days before, or after, the due date that the instalment
is to be paid.
(11)
The Commissioners may by regulations make provision for the purpose of
30
determining when an amount is approximately equal to another amount.
(12)
Regulations under this section may make different provision for different
cases.
(13)
In this section—
“the Commissioners” means the Commissioners for Her Majesty’s
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Revenue and Customs;
“the due date”, in relation to an amount mentioned in subsection (1),
means the date on which it becomes payable.
(14)
This section has effect where the due date falls after the date on which this Act
is passed.
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