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Finance Bill
Schedule 1 — Bank payroll tax
Part 3 — Definitions

56

 

(a)   

an arm’s length transaction undertaken for wholly commercial

purposes, or

(b)   

following a recommendation of a relevant regulatory body.

     (12)  

For the purposes of sub-paragraph (11) obtaining a tax advantage is not a

commercial purpose.

5

     (13)  

“Tax advantage” means—

(a)   

a relief from tax or increased relief from tax (relief here including a

tax credit),

(b)   

a repayment of tax or increased repayment of tax,

(c)   

the avoidance or reduction of a charge to tax or an assessment to tax

10

(obtained in any way), or

(d)   

the avoidance of a possible assessment to tax (so obtained),

           

and, for this purpose, “tax” includes bank payroll tax and any other tax.

     (14)  

In sub-paragraph (11) “relevant regulatory body” means—

(a)   

the Financial Services Authority, or

15

(b)   

a body discharging functions under the law of a country or territory

outside the United Kingdom corresponding to functions discharged

by the Financial Services Authority.

     (15)  

In this paragraph “dealing on own account” has the same meaning as in

Directive 2004/39/EC of the European Parliament and of the Council of 21

20

April 2004 on markets in financial instruments (see Article 4(1)(6)).

“The trading income of the group” for the relevant period

46    (1)  

This paragraph applies for calculating the “trading income of the group” for

the relevant period for the purposes of paragraph 45.

      (2)  

The trading income for the group for the relevant period is the aggregate

25

of—

(a)   

the gross income calculated in accordance with sub-paragraph (3),

and

(b)   

the net income calculated in accordance with sub-paragraph (4).

      (3)  

The income referred to in sub-paragraph (2)(a) is the gross income—

30

(a)   

arising from the activities of the group (other than net-basis

activities), and

(b)   

disclosed as such in the financial statements of the group,

           

without taking account of any deductions (whether for expenses or

otherwise).

35

      (4)  

The income referred to in sub-paragraph (2)(b) is the net income arising from

the net-basis activities of the group that—

(a)   

is accounted for as such under international accounting standards or

in accordance with practice which is generally accepted accounting

practice in the territory in which the principal company of the group

40

is resident, or

(b)   

would be accounted for as such if income arising from such activities

were accounted for under such standards or in accordance with such

practice.

 
 

Finance Bill
Schedule 1 — Bank payroll tax
Part 3 — Definitions

57

 

      (5)  

In this paragraph “net-basis activities” means activities normally reported

on a net basis in financial statements prepared in accordance with such

standards or practice.

“Investment company” etc

47    (1)  

“Investment company”—

5

(a)   

means a company whose business consists wholly or mainly of, and

the principal part of whose income is derived from, the making of

investments, and

(b)   

also includes any savings bank or other bank for savings.

      (2)  

“UK resident investment company” means an investment company which is

10

resident in the United Kingdom.

“Financial trading company” etc

48    (1)  

“Financial trading company” means a company which—

(a)   

is an authorised person for the purposes of FISMA 2000 (see section

31 of that Act), or

15

(b)   

is not within paragraph (a) but carries on a trade consisting wholly

or partly in dealing in securities.

      (2)  

“UK resident financial trading company” means a financial trading

company which is resident in the United Kingdom.

      (3)  

“Relevant foreign financial trading company” means a company which

20

meets conditions A and B.

      (4)  

Condition A is that the company—

(a)   

is not resident in the United Kingdom, and

(b)   

carries on a trade in the United Kingdom through a permanent

establishment in the United Kingdom.

25

      (5)  

Condition B is that, disregarding any activities of the company other than

those carried on through that permanent establishment, the company is a

financial trading company.

      (6)  

In this paragraph “securities” includes—

(a)   

shares,

30

(b)   

rights of unit holders in unit trust schemes to which TCGA 1992

applies as a result of section 99 of that Act, and

(c)   

in the case of a company with no share capital, interests in the

company possessed by members of the company.

Other interpretative provisions

35

49    (1)  

In this Schedule—

“arrangements” includes any agreement, understanding, scheme,

transaction or series of transactions (whether or not legally

enforceable);

“benefit” includes a facility of any kind;

40

“building society” means a building society within the meaning of the

Building Societies Act 1986;

 
 

Finance Bill
Schedule 2 — Landline duty

58

 

“the Commissioners” means the Commissioners of Her Majesty’s

Revenue and Customs;

“contract of insurance” has the meaning given by section 431(2) of

ICTA;

“control” has the meaning given by section 995 of ITA 2007;

5

“employment”, “employee” and “employer” have the same meaning as

in the employment income Parts of ITEPA 2003 (see sections 4 and 5

of that Act);

“enactment” includes an enactment or instrument (whenever passed or

made);

10

“HMRC” means Her Majesty’s Revenue and Customs;

“insurance company” and “insurance special purpose vehicle” have the

meaning given by section 431(2) of ICTA;

“market value” has the same meaning it has for the purposes of TCGA

1992 by virtue of Part 8 of that Act;

15

“money’s worth” has the meaning given by section 62(3) of ITEPA 2003;

“partnership” includes—

(a)   

a limited liability partnership, and

(b)   

an entity established under the law of a territory outside the

United Kingdom of a similar character to a partnership (and

20

“member”, in relation to a partnership, is to be read

accordingly);

“period of account” and “permanent establishment” have the meaning

given by section 1119 of CTA 2010;

“the tax year 2009-10” has the same meaning as in the Income Tax Acts

25

(see section 989 of ITA 2007).

      (2)  

Section 170(2) to (11) of TCGA 1992 (“group”, “principal company”,

“effective 51% subsidiary”, “company” etc) has effect for the interpretation

of this Schedule as for the interpretation of sections 171 to 181 of that Act.

      (3)  

Section 993 of ITA 2007 (meaning of “connected” persons) applies for the

30

purposes of this Schedule.

      (4)  

For the purposes of this Schedule the territory in which a company is

resident is to be determined as for the purposes of the Corporation Tax Acts.

Schedule 2

Section 23

 

Landline duty

35

The duty

1     (1)  

A duty to be known as landline duty is charged in accordance with this

Schedule.

      (2)  

Landline duty is charged in respect of the making available of a local loop

with a view to its being used.

40

      (3)  

Landline duty is payable by the owner of the local loop.

      (4)  

Landline duty becomes due at the end of the accounting period in which the

local loop is made available.

 
 

Finance Bill
Schedule 2 — Landline duty

59

 

      (5)  

A “local loop” is a single physical circuit connecting a network termination

point to a public electronic communications network.

      (6)  

“Physical circuit” means a circuit used for the provision of electronic

communications services.

      (7)  

A physical circuit is a “single” physical circuit if it consists of—

5

(a)   

a single twisted metallic pair,

(b)   

a single co-axial cable,

(c)   

a single fibre-optic cable,

(d)   

a single twisted metallic pair and a single co-axial cable, or

(e)   

a single twisted metallic pair and a single fibre-optic cable.

10

      (8)  

A “network termination point”, in relation to a public electronic

communications network, is the point at which an end-user is provided with

access to the public electronic communications network.

      (9)  

Landline duty is payable whether or not the local loop is actually used.

     (10)  

In this paragraph—

15

“electronic communications service” has the same meaning as in the

Communications Act 2003 (see section 32 of that Act);

“end-user” and “public electronic communications network” have the

same meaning as in Chapter 1 of Part 2 of that Act (see section 151(1)

of that Act).

20

     (11)  

This paragraph may be amended by order.

Rate of duty

2          

Landline duty in respect of a local loop is charged at the rate of £0.50 for each

month, or part of a month, for which the local loop is made available with a

view to its being used.

25

Exceptions

3     (1)  

Landline duty is not charged in respect of the making available of a local

loop which, in accordance with an order made under section 65 of the

Communications Act 2003 (obligations to be secured by universal service

conditions), is made available to a subscriber who is on a low income or has

30

special social needs on a tariff, or as part of a package, that departs from

those provided under normal commercial conditions.

      (2)  

Landline duty is not charged in respect of the making available of a local

loop with a view to its being used only for television programme services or

radio programme services (or both); and for this purpose—

35

“television programme service” has the meaning it would have in Part

3 of the Communications Act 2003 (see section 362 of that Act) if

subsection (4) of that section were omitted;

“radio programme service” has the same meaning as in that Part of that

Act (see that section).

40

      (3)  

An order may make provision specifying other circumstances in which

landline duty is not chargeable.

 
 

Finance Bill
Schedule 2 — Landline duty

60

 

Administration

4     (1)  

Landline duty is a duty of excise.

      (2)  

The Commissioners are responsible for the collection and management of

landline duty.

Registration of owners of local loops

5

5     (1)  

The Commissioners must keep a register of owners of local loops.

      (2)  

An owner of local loops becomes liable to be registered on making a local

loop available with a view to its being used.

      (3)  

A person who has become liable to be registered ceases to be so liable if the

Commissioners are satisfied at any time that the person no longer makes

10

local loops available with a view to their being used.

      (4)  

A person who is not registered and has not given notice under this sub-

paragraph must, on becoming liable to be registered at any time, give

written notice of that fact to the Commissioners not later than the end of the

prescribed period beginning with that time.

15

      (5)  

The notice must—

(a)   

be in such form,

(b)   

be given in such manner, and

(c)   

contain such information,

           

as may be specified.

20

      (6)  

Regulations may make provision as to the information to be included in, and

the correction of, the register.

      (7)  

In particular, regulations may provide—

(a)   

for the inclusion in the register of persons who have not given notice

but appear to the Commissioners to be liable to be registered,

25

(b)   

for persons who are liable to be registered not to be included in, or to

be removed from, the register in prescribed circumstances,

(c)   

for the removal from the register of persons who have ceased to be

liable to be registered, and

(d)   

for the time from which an entry in the register is to be effective

30

(which may be earlier than the time when the entry is first made in

the register).

Accounting for and payment of duty

6     (1)  

Regulations may require owners of local loops who are registered or liable

to be registered to make returns in respect of landline duty—

35

(a)   

by reference to such periods as may be prescribed or as may be

allowed by the Commissioners, in relation to a particular owner of

local loops, in accordance with regulations, and

(b)   

at such time, and in such manner and form, as may be prescribed or

specified.

40

      (2)  

Any person from whom landline duty is due must pay the duty at such time

and in such manner as may be prescribed or specified.

 
 

Finance Bill
Schedule 2 — Landline duty

61

 

Offence

7     (1)  

A person who is knowingly concerned—

(a)   

in the fraudulent evasion (by any person) of landline duty, or

(b)   

in taking steps with a view to such fraudulent evasion,

           

is guilty of an offence.

5

      (2)  

A person guilty of an offence under sub-paragraph (1) is liable—

(a)   

on summary conviction, to a fine not exceeding—

(i)   

the statutory maximum, or

(ii)   

if greater, 300% of the amount of the landline duty evaded or

sought to be evaded, or

10

   

to imprisonment for a term not exceeding 12 months, or to both, or

(b)   

on conviction on indictment, to a fine or to a term of imprisonment

not exceeding 7 years, or to both.

      (3)  

The reference to 12 months in sub-paragraph (2)(a) is to be read as a

reference to 6 months—

15

(a)   

in relation to England and Wales, in the case of an offence committed

before the coming into force of section 154(1) of the Criminal Justice

Act 2003, and

(b)   

in relation to Northern Ireland.

Penalties

20

8     (1)  

A failure by a person to comply with paragraph 5(4) attracts a penalty under

section 9 of FA 1994.

      (2)  

Schedule 41 to FA 2008 (failure to notify etc) is amended as follows.

      (3)  

In the Table in paragraph 1, after the entry relating to air passenger duty

insert—

25

 

“Landline duty

Obligation under paragraph

 
  

5(4) of Schedule 2 to FA 2010

 
  

(obligation to give notice of

 
  

liability to register)”.

 

      (4)  

In paragraph 7(9) (potential lost revenue), for “or air passenger duty,”

30

substitute “, air passenger duty or landline duty,”.

      (5)  

In the Table in paragraph 1 of Schedule 24 to FA 2007 (penalties for errors),

after the entry relating to air passenger duty insert—

 

“Landline duty

Return under regulations under

 
  

paragraph 6 of Schedule 2 to FA

 

35

  

2010”.

 
 
 

Finance Bill
Schedule 2 — Landline duty

62

 

Application of CEMA 1979

9          

CEMA 1979 (apart from section 116) has effect for the purposes of this

Schedule in relation to any person who is or is liable to be registered as in

relation to revenue traders.

Appeals

5

10    (1)  

In Schedule 5 to FA 1994 (decisions subject to review and appeal), after

paragraph 9A insert—

“The Finance Act 2010

9B         

Any decision under regulations made by virtue of paragraph 5 of

Schedule 2 to the Finance Act 2010 (landline duty) to register, or

10

not to register, any person in the register kept under that

paragraph or to remove a person from that register.”

      (2)  

An appeal which relates to landline duty is not to be entertained under

section 16 of FA 1994 at any time if any return for an accounting period to

which the appeal relates which the appellant is required to make by

15

regulations made by virtue of paragraph 6 has not at that time been made.

Regulations and orders

11    (1)  

In this Schedule “regulations” means regulations made by the

Commissioners and “order” means an order made by the Treasury.

      (2)  

Regulations and orders—

20

(a)   

may make different provision for different cases,

(b)   

may include consequential, incidental, supplementary or

transitional provisions or savings, and

(c)   

may include amendments of any enactment (including an enactment

contained in this Schedule).

25

      (3)  

Regulations and orders are to be made by statutory instrument.

      (4)  

No order may be made under paragraph 1(11) unless a draft of a statutory

instrument containing it has been laid before, and approved by a resolution

of, the House of Commons.

      (5)  

A statutory instrument containing—

30

(a)   

regulations under this Schedule, or

(b)   

an order under this Schedule of which a draft has not been approved

by a resolution of the House of Commons,

           

is subject to annulment in pursuance of a resolution of the House of

Commons.

35

Interpretation

12         

In this Schedule—

“accounting period” means any period prescribed or allowed for the

purposes of paragraph 6;

“the Commissioners” means the Commissioners for Her Majesty’s

40

Revenue and Customs;

 
 

 
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