Finance Bill

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Finance Bill

Finance Bill
Schedule 5 — Air passenger duty
86

(2)
The Commissioners may agree with the registered operator that this
Chapter is to have effect in relation to the registered operator in
accordance with a special accounting scheme agreed between the
Commissioners and the registered operator (but subject to
subsection (4)).
5
(3)
A special accounting scheme is a scheme which makes provision for
methods of calculating—
(a)
how many persons are to be regarded for the purposes of this
Chapter as chargeable passengers carried by chargeable
aircraft operated by a registered operator, and
10
(b)
how many of those are to be so regarded as having been so
carried on journeys in respect of which duty is chargeable at
any particular rate.
(4)
The Commissioners may publish a notice specifying terms and
conditions subject to which special accounting schemes are to have
15
effect.
(5)
Where the Commissioners and a registered operator have agreed
that this Chapter is to have effect in relation to the registered
operator in accordance with a special accounting scheme, this
Chapter has effect in relation to the registered operator in accordance
20
with the scheme (and with any notice under subsection (4) which has
been published by the Commissioners and not withdrawn) for the
period agreed by the Commissioners and the registered operator.
(6)
The Commissioners and the registered operator may at any time
agree to vary the special accounting scheme for the future.
25
(7)
The Commissioners may at any time terminate the operation of the
special accounting scheme—
(a)
on the application of the registered operator, or
(b)
where they have reasonable grounds for doing so,

by giving notice to the registered operator.”
30
4
In section 42(4) (orders), after “chargeable passengers” insert “, or to increase
the rate of air passenger duty to be charged on the carriage of any chargeable
passengers whose journeys end in any place,”.
5
After Schedule 5 insert—
“Schedule 5A
35
       Air passenger duty: territories etc
Part 1
Part 1 territories

Albania
Finland
Latvia
Portugal

(including

40

Madeira)

Algeria
France (including
Libya
Romania

Corsica)

Finance Bill
Schedule 5 — Air passenger duty
87

Andorra
Germany
Liechtenstein
Russian

Federation, west of

the Urals

Austria
Gibraltar
Lithuania
San Marino

Azores
Greece
Luxembourg
Serbia

5

Belarus
Greenland
Former Yugoslav
Slovak Republic

Republic of

Macedonia

Belgium
Guernsey
Malta
Slovenia

Bosnia and
Hungary
Moldova
Spain (including

10

Herzegovina

the Balearic Islands

and the Canary

Islands)

Bulgaria
Iceland
Monaco
Sweden

Croatia
Republic of Ireland
Montenegro
Switzerland

15

Cyprus
Isle of Man
Morocco
Tunisia

Czech Republic
Italy (including
Netherlands
Turkey

Sicily  and

Sardinia)

Denmark
Jersey
Norway (including
Ukraine

20

(including the

Svalbard)

Faroe Islands)

Estonia
Republic of
Poland
Western Sahara

Kosovo

Part 2
25
Part 2 territories

Afghanistan
Egypt
Kazakhstan
Saudi Arabia

Armenia
Equatorial Guinea
Kuwait
Senegal

Azerbaijan
Eritrea
Kyrgyzstan
Sierra Leone

Bahrain
Ethiopia
Lebanon
Sudan

30

Benin
Gabon
Liberia
Syria

Bermuda
Gambia
Mali
Tajikistan

Burkina Faso
Georgia
Mauritania
Togo

Cameroon
Ghana
Niger
Turkmenistan

Canada
Guinea
Nigeria
Uganda

35

Cape Verde
Guinea-Bissau
Oman
United Arab

Emirates

Central African
Iran
Pakistan
United States of

Republic

America

Chad
Iraq
Qatar
Uzbekistan

40

Finance Bill
Schedule 5 — Air passenger duty
88

Democratic
Israel and the
Russian
Yemen

Republic of Congo
Occupied
Federation, east of

Palestinian
the Urals

Territories

Republic of Congo
Ivory Coast
Saint Pierre and

5

Miquelon

Djibouti
Jordan
Sao Tome and

Principe

Part 3
Part 3 territories
10

Angola
Cuba
Macao SAR
Saint Helena

Anguilla
Dominica
Madagascar
Saint Lucia

Antigua and
Dominican
Malawi
Saint Martin

Barbuda
Republic

Aruba
Ecuador
Maldives
Saint Vincent

15

and the Grenadines

Ascension Island
El Salvador
Martinique
Seychelles

Bahamas
French Guiana
Mauritius
Somalia

Bangladesh
Grenada
Mayotte
South Africa

Barbados
Guadeloupe
Mexico
Sri Lanka

20

Belize
Guatemala
Mongolia
Suriname

Bhutan
Guyana
Montserrat
Swaziland

Botswana
Haiti
Mozambique
Tanzania

Brazil
Honduras
Namibia
Thailand

British Indian
Hong Kong SAR
Nepal
Trinidad and

25

Ocean Territory

Tobago

British Virgin
India
Netherlands
Turks and Caicos

Islands

Antilles
Islands

Burma
Jamaica
Nicaragua
Venezuela

Burundi
Japan
Panama
Vietnam

30

Cayman Islands
Kenya
Puerto Rico
Virgin Islands

China
North Korea
Reunion
Zambia

Colombia
South Korea
Rwanda
Zimbabwe”.

Comoros
Laos
Saint Barthelemy

Costa Rica
Lesotho
Saint Christopher

35

and Nevis (St

Kitts and Nevis)

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
89

Consequential repeals
6
In consequence of the amendments made by section 17 and this Schedule,
omit—
(a)
in FA 1995, section 15,
(b)
in FA 2000, in section 18—
5
(i)
subsections (1) to (5), and
(ii)
subsection (7),
(c)
in FA 2002, section 121, and
(d)
in FA 2007, section 12.
Commencement etc
10
7
The amendments made by paragraphs 2(3) and 6(a), (b)(i), (c) and (d) have
effect in relation to the carriage of passengers beginning on or after 1
November 2009.
8     (1)
No agreement for Chapter 4 of Part 1 of FA 1994 to have effect in relation to
a registered operator in accordance with a special accounting scheme
15
pursuant to section 39 of FA 1994 as substituted by paragraph 3 may be
made so as to have effect as respects the carriage of passengers beginning
before 1 November 2009.
      (2)
Nothing in this Schedule affects the continuing operation of, or of schemes
prepared under, that section as it has effect immediately before this Act is
20
passed as respects the carriage of passengers beginning before 1 November
2009.
Schedule 6
Section 23

Temporary extension of carry back of losses
Income tax
25
1     (1)
A person who has made a loss in a trade in the tax year 2008-09 or 2009-10
may make a claim for relief under this paragraph if—
(a)
relief is available to the person under section 64 of ITA 2007 (trade
loss relief against general income) in relation to an amount of the loss
(“the section 64 amount”), and
30
(b)
condition A or B is met.
      (2)
Condition A is that the person makes a claim under that section for relief in
respect of the section 64 amount—
(a)
where it is a loss made in the tax year 2008-09, for either or both of
the tax years 2007-08 and 2008-09, or
35
(b)
where it is a loss made in the tax year 2009-10, for either or both of
the tax years 2008-09 and 2009-10.
      (3)
Condition B is that—
(a)
where it is a loss made in the tax year 2008-09, for the tax years 2007-
08 and 2008-09, or
40

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
90

(b)
where it is a loss made in the tax year 2009-10, for the tax years 2008-
09 and 2009-10,

the person’s total income is nil or does not include any income from which
a deduction could be made in pursuance of a claim under that section for
relief in respect of the section 64 amount.
5
      (4)
The amount of the loss that may be relieved under this paragraph (“the
deductible amount”) is—
(a)
in a case where condition A is met, so much of the section 64 amount
as cannot be relieved pursuant to the claim under section 64 of ITA
2007, and
10
(b)
in a case where condition B is met, the whole of the section 64
amount,

(but see sub-paragraph (12)).
      (5)
A claim for relief under this paragraph is for the deductible amount to be
deducted (in accordance with sub-paragraph (6) and with whichever is
15
applicable of sub-paragraphs (7), (8), (9) and (10))—
(a)
where it is a loss made in the tax year 2008-09, in either or both of the
following ways—
(i)
in computing the person’s total income for either or both of
the tax years 2005-06 and 2006-07 in accordance with section
20
835 of ICTA, and
(ii)
in calculating the person’s net income for the tax year 2007-08
in accordance with Step 2 of the calculation in section 23 of
ITA 2007 (which applies as if this paragraph were a provision
listed in section 24 of that Act), or
25
(b)
where it is a loss made in the tax year 2009-10, in either or both of the
following ways—
(i)
in computing the person’s total income for the tax year 2006-
07 in accordance with section 835 of ICTA, and
(ii)
in calculating the person’s net income for either or both of the
30
tax years 2007-08 and 2008-09 in accordance with Step 2 of the
calculation in section 23 of ITA 2007 (which applies as if this
paragraph were a provision listed in section 24 of that Act).
      (6)
A deduction is to be made only from profits of the trade (and accordingly, in
relation to the tax years 2007-08 and 2008-09, subsection (2) of section 25 of
35
ITA 2007 has effect as if this sub-paragraph were included in subsection (3)
of that section).
      (7)
This sub-paragraph explains how the deductions are to be made in a case
where the loss is made in the tax year 2008-09 and the person makes a claim
under section 64 of ITA 2007 for relief in respect of the section 64 amount for
40
the tax year 2007-08.

Step 1

Deduct the deductible amount from the profits of the trade for the tax year
2006-07.

Step 2
45

Deduct from the profits of the trade for the tax year 2005-06 so much of the
deductible amount as has not been deducted under Step 1.
      (8)
This sub-paragraph explains how the deductions are to be made in any other
case where the loss is made in the tax year 2008-09.

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
91


Step 1

Deduct the deductible amount from the profits of the trade for the tax year
2007-08.

Step 2

Deduct from the profits of the trade for the tax year 2006-07 so much of the
5
deductible amount as has not been deducted under Step 1.

Step 3

Deduct from the profits of the trade for the tax year 2005-06 so much of the
deductible amount as has not been deducted under Step 1 or 2.
      (9)
This sub-paragraph explains how the deductions are to be made in a case
10
where the loss is made in the tax year 2009-10 and the person makes a claim
under section 64 of ITA 2007 for relief in respect of the section 64 amount for
the tax year 2008-09.

Step 1

Deduct the deductible amount from the profits of the trade for the tax year
15
2007-08.

Step 2

Deduct from the profits of the trade for the tax year 2006-07 so much of the
deductible amount as has not been deducted under Step 1.
     (10)
This sub-paragraph explains how the deductions are to be made in any other
20
case where the loss is made in the tax year 2009-10.

Step 1

Deduct the deductible amount from the profits of the trade for the tax year
2008-09.

Step 2
25

Deduct from the profits of the trade for the tax year 2007-08 so much of the
deductible amount as has not been deducted under Step 1.

Step 3

Deduct from the profits of the trade for the tax year 2006-07 so much of the
deductible amount as has not been deducted under Step 1 or 2.
30
     (11)
The provision made by the preceding provisions means that the following
sections of ITA 2007 apply in relation to relief under this paragraph as in
relation to relief under section 64 of that Act—
(a)
section 66 to 70 (restrictions on relief under section 64),
(b)
sections 74B to 74D (general restrictions on relief),
35
(c)
sections 75 to 79 (restrictions on relief under section 64 and early
trade losses relief in relation to capital allowances),
(d)
section 80 (restrictions on those reliefs in relation to ring fence
income), and
(e)
section 81 (restrictions on those reliefs in relation to dealings in
40
commodity futures).
     (12)
The total amount that may be deducted in accordance with sub-paragraph
(7), or in accordance with Steps 2 and 3 in sub-paragraph (8), is limited to
£50,000; and the total amount that may be deducted in accordance with sub-
paragraph (9), or in accordance with Steps 2 and 3 in sub-paragraph (10), is
45
also limited to £50,000.
2     (1)
A claim for relief under paragraph 1 must be made—

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
92

(a)
where the relief is in respect of a loss made in the tax year 2008-09, on
or before the first anniversary of the normal self-assessment filing
date for that tax year, and
(b)
where the relief is in respect of a loss made in the tax year 2009-10, on
or before the first anniversary of the normal self-assessment filing
5
date for that tax year.
      (2)
Paragraph 1 applies to professions and vocations as it applies to trades.
      (3)
Paragraph 1 is subject to paragraph 2 of Schedule 1B to TMA 1970 (claims for
loss relief involving 2 or more years).
      (4)
Sections 61 to 63 of ITA 2007 (meaning of “making a loss in a tax year” etc
10
and prohibition against double counting) have effect as if paragraph 1 were
included in Chapter 2 of Part 4 of that Act.
      (5)
Subsections (1) to (3) of section 127 of that Act (UK furnished holiday lettings
business treated as trade) have effect as if paragraph 1 were included in Part
4 of that Act.
15
      (6)
The reference in paragraph 3(1) of Schedule 2 to the Social Security
Contributions and Benefits Act 1992 and Social Security Contributions and
Benefits (Northern Ireland) Act 1992 (levy of Class 4 contributions with
income tax) to section 64 of ITA 2007 includes paragraph 1.
Corporation tax
20
3     (1)
Section 393A of ICTA (losses: set off against profits of same or earlier
accounting period) has effect in relation to any loss to which this paragraph
applies as if, in subsection (2) of that section, “3 years” were substituted for
“twelve months” (but subject as follows).
      (2)
This paragraph applies to any loss incurred by a company in a trade in a
25
relevant accounting period (but subject to sub-paragraph (3)); and a relevant
accounting period is one ending after 23 November 2008 and before 24
November 2010.
      (3)
The maximum amount of loss to which this paragraph applies in the case of
any company is—
30
(a)
£50,000 in relation to losses incurred in relevant accounting periods
ending after 23 November 2008 and before 24 November 2009, and
(b)
£50,000 in relation to losses incurred in relevant accounting periods
ending after 23 November 2009 and before 24 November 2010;

and the overall limit or limits apply whether a loss is incurred by the
35
company in only one relevant accounting period or losses are so incurred in
more than one such period.
      (4)
Subject to that, if in the case of the company the length of a relevant
accounting period is less than one year, the maximum amount of the loss
incurred in that period that may be set off under section 393A of ICTA by
40
virtue of this paragraph is the relevant proportion of £50,000.
      (5)
“The relevant proportion” is—

where—
RAP is the number of days in the relevant accounting period, and