Finance Bill

House of Commons

Session 2009 - 10
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Finance Bill

Finance Bill
Schedule 1 — Bank payroll tax
Part 1 — The tax
42

Arrangements for future payments etc
12    (1)
This paragraph applies where—
(a)
arrangements are made during the chargeable period by reason of an
employee’s employment as a relevant banking employee of a taxable
company,
5
(b)
the arrangements make provision under which money may be paid,
or any money’s worth or other benefit provided, to or in respect of
the employee in accordance with the arrangements, and
(c)
were the money so paid, or the money’s worth or other benefit so
provided, during the chargeable period, it would be relevant
10
remuneration awarded to or in respect of the employee during the
chargeable period.
      (2)
The making of the arrangements is to be regarded as the awarding of
relevant remuneration to or in respect of the relevant banking employee by
reason of the employment; and the amount of the relevant remuneration is
15
to regarded as the amount of any money which it is reasonable to assume
will be paid, and any money’s worth or other benefit which it is reasonable
to assume will be provided, as mentioned in sub-paragraph (1).
Loans
13    (1)
This paragraph applies where—
20
(a)
at any time during the chargeable period a relevant loan is provided
to or in respect of a relevant banking employee of a taxable company
by reason of the employee’s employment as a relevant banking
employee otherwise than pursuant to a contractual obligation
arising before the chargeable period, or
25
(b)
at any time during the chargeable period there arises a contractual
obligation to provide a relevant loan to or in respect of the employee
by reason of the employee’s employment as a relevant banking
employee of the taxable company.
      (2)
A loan is a “relevant” loan if the main purpose, or one of the main purposes,
30
of providing it, or undertaking to provide it, is the reduction or elimination
of a liability to bank payroll tax or any other tax or national insurance
contributions.
      (3)
The loan is to be regarded as relevant remuneration awarded during the
chargeable period to or in respect of the relevant banking employee by
35
reason of the employee’s employment as a relevant banking employee; and
the amount of the relevant remuneration is to be regarded as the amount
which is loaned or (where the amount of the loan is not fixed) the amount
which it is reasonable to assume will be loaned.
      (4)
A contractual obligation to provide a relevant loan is taken to arise for the
40
purposes of this paragraph even if provision of it is dependent on
compliance by the relevant banking employee with any conditions.
Anti-avoidance
14    (1)
This paragraph applies where—
(a)
relevant arrangements are entered into by one or more persons
45
during the chargeable period, and

Finance Bill
Schedule 1 — Bank payroll tax
Part 2 — Collection and management of tax
43

(b)
the main purpose, or one of the main purposes, of the person, or any
of the persons, in entering into the relevant arrangements is a
relevant tax avoidance purpose.
      (2)
“Relevant arrangements” means arrangements involving either or both of
the following—
5
(a)
the making of a payment of money, or the provision of any money’s
worth or other benefit, otherwise than during the chargeable period,
and
(b)
the giving otherwise than in the form of relevant remuneration of
any reward which equates in substance to relevant remuneration.
10
      (3)
A “relevant tax avoidance purpose” is the reduction or elimination of a
liability to bank payroll tax which would exist if—
(a)
in a case within paragraph (a) of sub-paragraph (2), the money were
paid, or the money’s worth or other benefit provided, during the
chargeable period, or
15
(b)
in a case within paragraph (b) of that sub-paragraph, the reward
were given in the form of relevant remuneration.
      (4)
Liability to bank payroll tax is to be determined as it would have been if—
(a)
in a case within paragraph (a) of sub-paragraph (2), the money were
paid, or the money’s worth or other benefit provided, during the
20
chargeable period, or
(b)
in a case within paragraph (b) of that sub-paragraph, the reward
were given in the form of relevant remuneration.
No deduction in computing profits
15
No amount of bank payroll tax is to be taken into account in calculating
25
profits or losses for the purposes of income tax or corporation tax.
Part 2
Collection and management of tax
Responsibility for collection and management
16
The Commissioners are responsible for the collection and management of
30
bank payroll tax.
Due date for payment
17
Bank payroll tax is payable by taxable companies on or before 31 August
2010.
Obligation to deliver return
35
18    (1)
In order to establish the amount of bank payroll tax payable by it, every
taxable company must deliver a return to HMRC.
      (2)
The return must be delivered on or before 31 August 2010.
      (3)
A return under this paragraph is referred to as a bank payroll tax return.

Finance Bill
Schedule 1 — Bank payroll tax
Part 2 — Collection and management of tax
44

Content etc of return
19    (1)
HMRC may publish requirements as to—
(a)
the information to be contained in bank payroll tax returns,
(b)
the form in which they must be made,
(c)
the manner in which they must be delivered, and
5
(d)
the documents to be delivered with them.
      (2)
A bank payroll tax return must include—
(a)
an assessment (a “self-assessment”) of the amount of bank payroll
tax payable by the taxable company on the basis of the information
contained in it, and
10
(b)
a declaration by the person making it that, to the best of that person’s
knowledge, it is correct and complete.
Failure to include self-assessment
20    (1)
If a taxable company delivers a bank payroll tax return but fails to include a
self-assessment, HMRC may make the assessment on the company’s behalf
15
on the basis of the information contained in it.
      (2)
The assessment is treated for the purposes of this Schedule as a self-
assessment and as included in the return.
Amendment of return by company
21    (1)
A taxable company may amend its bank payroll tax return.
20
      (2)
An amendment under this paragraph is made by notice to HMRC in such
form, and accompanied by such information, as HMRC may reasonably
require.
      (3)
No such amendment may be made after 31 August 2011.
      (4)
Nothing in sub-paragraph (1) permits a taxable company to amend its return
25
to revise an amount determined under paragraph 7(2), 12(2) or 13(3) merely
because the amount determined under that provision differs from the
amount which is actually paid or provided (or loaned).
Correction of return by HMRC
22    (1)
HMRC may amend a bank payroll tax return so as to correct obvious errors
30
or omissions in it (whether errors of principle, arithmetical mistakes or
otherwise).
      (2)
A correction under this paragraph is made by notice to the taxable company
concerned.
      (3)
No such correction may be made more than 9 months after—
35
(a)
the day on which the return was delivered, or
(b)
if the correction is required in consequence of an amendment made
under paragraph 21, the day on which that amendment was made.
      (4)
A correction under this paragraph is of no effect if the taxable company gives
notice rejecting it.
40
      (5)
Notice of rejection must be given—

Finance Bill
Schedule 1 — Bank payroll tax
Part 2 — Collection and management of tax
45

(a)
to the officer of Revenue and Customs by whom the correction notice
was given, and
(b)
before the end of the period of 30 days beginning with the date on
which the correction notice was given.
Enquiry into return
5
23    (1)
HMRC may enquire into a bank payroll tax return if they give notice to the
taxable company of their intention to do so within the time allowed.
      (2)
If the return was delivered on or before 31 August 2010, notice of enquiry
may be given at any time on or before 31 August 2011.
      (3)
If the return was delivered after 31 August 2010, notice of enquiry may be
10
given at any time up to and including whichever of 31 January, 30 April, 31
July or 31 October next follows the first anniversary of the day on which the
return was delivered.
      (4)
An enquiry extends to anything contained in the return or required to be
contained in the return.
15
      (5)
The following provisions of Schedule 18 to FA 1998 apply to an enquiry into
a bank payroll tax return under this Schedule as they apply to an enquiry
into a company tax return under that Schedule—
(a)
paragraph 24(4) to (5) (notice of enquiry),
(b)
paragraph 25(2) (enquiry following amendment by company) (but
20
as if the reference there to paragraph 24(2) or (3) were to sub-
paragraph (2) or (3) of this paragraph),
(c)
paragraph 31 (amendment of return by company during enquiry),
(d)
paragraphs 31A to 31D (referral of questions to the tribunal during
enquiry),
25
(e)
paragraph 32(1) (completion of enquiry),
(f)
paragraph 33 (direction to complete enquiry), and
(g)
paragraph 34 (amendment of return after enquiry).
Determination by HMRC
24    (1)
HMRC may determine to the best of their knowledge and belief the amount
30
of bank payroll tax payable by a taxable company if the company has not
delivered a bank payroll tax return on or before 31 August 2010.
      (2)
Notice of the determination—
(a)
must be served on the company, and
(b)
must state the date on which it is given.
35
      (3)
The amount determined by HMRC is taken to be the amount payable by the
company (in the same way as if it were an assessment) unless and until the
determination is superseded by a relevant assessment.
      (4)
A relevant assessment is an assessment—
(a)
included in a bank payroll tax return delivered by the company
40
within the period of 12 months beginning with the date on which
notice of the determination was given, or
(b)
made by HMRC under paragraph 20 following delivery of such a
return.

Finance Bill
Schedule 1 — Bank payroll tax
Part 2 — Collection and management of tax
46

      (5)
If—
(a)
proceedings have been commenced for the recovery of an amount
determined by HMRC under this paragraph, and
(b)
before the proceedings are concluded, the determination is
superseded by a relevant assessment,
5

the proceedings may be continued as if they were proceedings for the
recovery of so much of the tax shown in the assessment as has not been paid.
      (6)
No determination may be made under this paragraph after 31 August 2013.
Discovery assessment by HMRC
25    (1)
This paragraph applies if HMRC discover, with respect to a taxable
10
company, any of the following situations—
(a)
an amount which ought to have been assessed to bank payroll tax
has not been assessed,
(b)
an assessment to bank payroll tax is insufficient, or
(c)
an amount of bank payroll tax has been repaid which ought not to
15
have been repaid.
      (2)
HMRC may make an assessment (a “discovery assessment”) in the amount
or further amount which ought in their opinion to be charged or recovered
in order to make good to the Crown the loss of bank payroll tax.
      (3)
If the company has delivered a bank payroll tax return, HMRC may only
20
make a discovery assessment if condition A or condition B is met.
      (4)
Condition A is that the situation discovered by HMRC was brought about
carelessly or deliberately by the company or a person acting on its behalf.
      (5)
Condition B is that HMRC could not reasonably have been expected to be
aware of the situation at the time when they—
25
(a)
ceased to be entitled to give notice of enquiry into the return, or
(b)
completed their enquiries into the return.
26
Notice of a discovery assessment—
(a)
must be served on the taxable company, and
(b)
must state the date on which it is given and the time by which an
30
appeal may be brought against it.
27    (1)
No discovery assessment may be made after the relevant deadline.
      (2)
The relevant deadline is 5 April 2030 if the situation—
(a)
was brought about deliberately by the taxable company, or
(b)
was attributable to the taxable company’s careless failure to deliver
35
a bank payroll tax return on or before 31 August 2010.
      (3)
Subject to sub-paragraph (2)(b), the relevant deadline is 5 April 2016 if the
situation was brought about carelessly by the taxable company.
      (4)
In all other cases, the relevant deadline is 5 April 2014.
      (5)
In this paragraph—
40
(a)
references to the situation are to the one discovered by HMRC, and
(b)
references to the taxable company include a person acting on the
company’s behalf.

Finance Bill
Schedule 1 — Bank payroll tax
Part 2 — Collection and management of tax
47

28    (1)
If a discovery assessment is made with respect to a taxable company, the
company may appeal against it.
      (2)
Notice of appeal must be given—
(a)
in writing,
(b)
within the period of 30 days beginning with the date on which notice
5
of the assessment was given, and
(c)
to the officer of Revenue and Customs by whom notice of the
assessment was given.
      (3)
Any objection to a discovery assessment on the ground that paragraph 25,
26 or 27 was not complied with can only be made on an appeal against the
10
assessment under this paragraph.
Collection and recovery
29    (1)
HMRC may publish requirements as to the method or methods of payment
to be used by taxable companies for paying bank payroll tax.
      (2)
Part 6 of TMA 1970 (collection and recovery) applies in relation to a charge
15
to bank payroll tax as it applies in relation to a charge to corporation tax.
      (3)
See also Chapter 5 of Part 7 of FA 2008 (which makes general provision
about payment and enforcement).
Interest on late payments and repayments
30    (1)
This paragraph applies if an order is made under section 104(3) of FA 2009
20
appointing a day on which sections 101 to 103 of that Act are to come into
force for the purposes of bank payroll tax.
      (2)
Part 2 of Schedule 53 to that Act (which makes special provision about the
late payment interest start date) has effect for those purposes as if—
(a)
the reference in paragraph 4(1) to income tax or capital gains tax
25
included a reference to bank payroll tax, and
(b)
the Part included a provision that the late payment interest start date
in respect of an amount of bank payroll tax assessed and recoverable
under paragraph 25(1)(c) of this Schedule is 31 August 2010.
      (3)
Interest charged under section 101 of FA 2009 on an amount of bank payroll
30
tax may be enforced as if it were an amount of bank payroll tax payable by
the taxable company.
Overpaid tax etc
31    (1)
Paragraphs 50 to 51G of Schedule 18 to FA 1998 (overpaid tax etc) apply (so
far as relevant) to bank payroll tax assessable for the chargeable period as
35
they apply to corporation tax assessable for an accounting period, subject to
the following modifications.
      (2)
With respect to bank payroll tax, a claim under paragraph 51 may not be
made after 31 August 2014.
      (3)
For the purposes of paragraph 51E, the relevant restrictions for making a
40
discovery assessment under this Schedule are—
(a)
the conditions mentioned in paragraph 25(3), and
(b)
expiry of the relevant deadline as defined in paragraph 27.

Finance Bill
Schedule 1 — Bank payroll tax
Part 2 — Collection and management of tax
48

      (4)
Nothing in sub-paragraph (1) permits a taxable company to make a claim
under paragraph 51 of Schedule 18 to FA 1998 with respect to bank payroll
tax merely because an amount determined under paragraph 7(2), 12(2) or
13(3) differs from the amount which is actually paid or provided (or loaned).
Appeals and other proceedings
5
32    (1)
Part 5 of TMA 1970 (appeals and other proceedings) applies in relation to an
appeal against a discovery assessment to bank payroll tax as it applies in
relation to an appeal against an assessment to corporation tax.
      (2)
References in that Part to tax are to be read accordingly.
33    (1)
Where a provision of FA 1998 is applied by this Part of this Schedule, a
10
reference in section 46D of TMA 1970 (questions to be determined by the
relevant tribunal) to that provision includes a reference to that provision as
so applied.
      (2)
A reference in section 48 of TMA 1970 (application to appeals and other
proceedings) to the Taxes Acts includes a reference to those Acts as applied
15
by this Part of this Schedule.
      (3)
Where a provision of FA 1998 is applied by this Part of this Schedule—
(a)
a reference in section 55 of TMA 1970 (recovery of tax not postponed)
to that provision includes a reference to that provision as so applied,
and
20
(b)
references in that section to tax are to be read accordingly.
Obligation to preserve records
34    (1)
Each taxable company must—
(a)
keep such records as may be needed to enable it to establish and
verify the amount of bank payroll tax payable by it and to deliver a
25
correct and complete bank payroll tax return, and
(b)
preserve those records, and any other relevant records, until the end
of 31 August 2016.
      (2)
Other relevant records are records that—
(a)
may be needed for a purpose mentioned in sub-paragraph (1)(a), and
30
(b)
are in the company’s possession or power immediately before the
commencement of this Schedule.
      (3)
The obligation under sub-paragraph (1)(b) may be discharged by—
(a)
preserving the records in any form and by any means, or
(b)
preserving the information contained in them in any form and by
35
any means.
      (4)
The obligation under sub-paragraph (1)(b) includes an obligation to
preserve supporting documents (such as contracts, accounts and
correspondence).
35    (1)
A taxable company which fails to comply with paragraph 34 is liable to a
40
penalty of an amount not exceeding £3,000.
      (2)
Sections 100 to 102 of TMA 1970 apply to a penalty under this paragraph as
they apply to a penalty under section 12B(5) of that Act.