Finance (No.2) Bill

House of Commons

Session 2010 - 11
Internet Publications
Other Bills before Parliament

Finance (No.2) Bill

Finance (No.2) Bill
Schedule 9 — Interest
Part 2 — Petroleum revenue tax
75

Part 2
Petroleum revenue tax
13
FA 2009 is amended as follows.
14
In section 101 (late payment interest on sums due to HMRC), omit
subsection (2)(b).
5
15
In section 102 (repayment interest on sums to be paid by HMRC), omit
subsection (2)(b).
16
Schedule 53 (late payment interest) is amended as follows.
17
After paragraph 11 insert—
“Instalments of petroleum revenue tax
10
11A
The late payment interest start date in respect of an instalment of
petroleum revenue tax payable under paragraph 2 of Schedule 19
to FA 1982 (payment for tax) is the last day of the month in which
that instalment is payable.
Other amounts of petroleum revenue tax
15
11B
The late payment interest start date in respect of any other amount
of petroleum revenue tax is the date falling two months after the
end of the chargeable period in respect of which the amount is
due.”
18
After paragraph 14 insert—
20
“Instalments of petroleum revenue tax
14A   (1)
An instalment of petroleum revenue tax payable under paragraph
2 of Schedule 19 to FA 1982 (payment for tax) carries late payment
interest until the earlier of—
(a)
the date on which the instalment is paid, and
25
(b)
the date falling two months after the end of the chargeable
period in respect of which the instalment is due.
      (2)
An instalment which remains unpaid after the date mentioned in
sub-paragraph (1)(b) carries interest as an amount payable on
account under section 1 of PRTA 1980.
30
      (3)
For the purposes of determining the date on which an overdue
instalment is paid, a payment on account of one or more such
instalments is to be attributed, so far as possible, to the earliest
month for which an instalment is overdue.”
19
In Schedule 54 (repayment interest), after paragraph 12 insert—
35
“Petroleum revenue tax
12A   (1)
The repayment interest start date in respect of any amount of
petroleum revenue tax is the later of—

Finance (No.2) Bill
Schedule 9 — Interest
Part 2 — Petroleum revenue tax
76

(a)
the date falling two months after the end of the chargeable
period in respect of which the amount was paid, and
(b)
the date on which the amount was paid.
      (2)
Sub-paragraph (1) is subject to paragraph 12B (limit on amount of
repayment interest carried by certain repayments generated by
5
carry back reliefs).
      (3)
For the purposes of this paragraph any instalment or part of an
instalment that becomes repayable is to be regarded, so far as
possible, as consisting of the instalment most recently paid.
12B   (1)
This paragraph applies where—
10
(a)
an assessment for a chargeable period (“the earlier
period”) gives effect to relief under section 7(2) or (3) of
OTA 1975 for one or more allowable losses accruing in a
later chargeable period, and
(b)
by virtue of that assessment, an amount of tax becomes
15
repayable to the participator in question (whether wholly
or partly by reason of giving effect to that relief).
      (2)
The amount of repayment interest carried by the appropriate
repayment is not to exceed the difference between—
(a)
60% of the amount of the allowable loss or losses which is
20
treated as reducing the assessable profit of the earlier
period, and
(b)
the amount of the appropriate repayment.
      (3)
In this paragraph “the appropriate repayment” means so much of
the repayment as is attributable to giving effect to the relief (but
25
this is subject to sub-paragraphs (4) and (5)).
      (4)
Sub-paragraph (5) applies where the assessment (as well as giving
effect to the relief mentioned in sub-paragraph (1)) takes account
of any other matter, whether a relief or not, which goes—
(a)
to reduce the assessable profit of the earlier period, or
30
(b)
otherwise to reduce the tax payable for that period.
      (5)
The appropriate repayment is to be taken to be the difference
between—
(a)
the total amount of tax repayable by virtue of the
assessment, and
35
(b)
the amount of tax (if any) which would have been
repayable if no account had been taken of that relief.
      (6)
If the earlier period ends on or before 30 June 1993, sub-paragraph
(2) has effect as if the percentage specified in paragraph (a) were
85%.
40
      (7)
In this paragraph references to an assessment include an
amendment of an assessment.”

Finance (No.2) Bill
Schedule 10 — Penalty for failure to make returns etc
77

Schedule 10
Section 26

Penalty for failure to make returns etc
1
Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended
as follows.
2     (1)
Paragraph 1 (penalty for failure) is amended as follows.
5
      (2)
In sub-paragraph (2), for “13” substitute “13J”.
      (3)
The Table is amended as follows.
      (4)
After item 7 insert—

“7A
Value added tax
Return under regulations under paragraph 2 of

Schedule 11 to VATA 1994

10

7B
Insurance premium tax
Return under regulations under section 54 of FA 1994”.

      (5)
Insert at the end—

“14
Aggregates levy
Return under regulations under section 25 of FA 2001

15
Climate change levy
Return under regulations under paragraph 41 of

Schedule 6 to FA 2000

15

16
Landfill tax
Return under regulations under section 49 of FA 1996

17
Air passenger duty
Return under regulations under section 38 of FA 1994

18
Alcoholic liquor duties
Return under regulations under section 13, 49, 56 or 62

of ALDA 1979

19
Tobacco products duty
Return under regulations under section 7 of TPDA

20

1979

20
Hydrocarbon oil duties
Return under regulations under section 21 of HODA

1979

21
Excise duties
Return under regulations under section 93 of the

Customs and Excise Management Act 1979

25

22
Excise duties
Return under regulations under section 100G or 100H

of the Customs and Excise Management Act 1979

23
General betting duty
Return under regulations under paragraph 2 of

Schedule 1 to BGDA 1981

24
Pool betting duty
Return under regulations under paragraph 2A of

30

Schedule 1 to BGDA 1981

25
Bingo duty
Return under regulations under paragraph 9 of

Schedule 3 to BGDA 1981

26
Lottery duty
Return under regulations under section 28(2) of FA

1993

35

27
Gaming duty
Return under directions under paragraph 10 of

Schedule 1 to FA 1997

28
Remote gaming duty
Return under regulations under section 26K of BGDA

1981”.

Finance (No.2) Bill
Schedule 10 — Penalty for failure to make returns etc
78

3
For paragraph 2 (amount of penalty for occasional or annual returns) and
the italic heading preceding it substitute—
“Amount of penalty: occasional returns and returns for periods of 6 months or more
2     (1)
Paragraphs 3 to 6 apply in the case of—
(a)
a return falling within any of items 1 to 5, 7 and 8 to 13 in
5
the Table,
(b)
a return falling within any of items 7A, 7B and 14 to 28
which relates to a period of 6 months or more, and
(c)
a return falling within item 7A which relates to a
transitional period for the purposes of the annual
10
accounting scheme.
      (2)
In sub-paragraph (1)(c), a transitional period for the purposes of
the annual accounting scheme is a prescribed accounting period
(within the meaning of section 25(1) of VATA 1994) which—
(a)
ends on the day immediately preceding the date indicated
15
by the Commissioners for Her Majesty’s Revenue and
Customs in a notification of authorisation under
regulation 50 of the Value Added Tax Regulations 1995
(S.I. 1995/2518) (admission to annual accounting scheme),
or
20
(b)
begins on the day immediately following the end of the last
period of 12 months for which such an authorisation has
effect.”
4     (1)
Paragraph 6 (amount of penalty for occasional returns and annual returns)
is amended as follows.
25
      (2)
In sub-paragraph (2), after “P” in the first place it occurs insert
“deliberately”.
      (3)
In sub-paragraph (5), for “any other case” substitute “any case not falling
within sub-paragraph (2)”.
5     (1)
Paragraph 11 (amount of penalty for certain CIS returns after 12 months) is
30
amended as follows.
      (2)
In sub-paragraph (2), after “P” in the first place it occurs insert
“deliberately”.
      (3)
In sub-paragraph (5), for “any other case” substitute “any case not falling
within sub-paragraph (2)”.
35
6     (1)
Paragraph 12 (amount of penalty for other CIS returns after 12 months) is
amended as follows.
      (2)
In sub-paragraph (2), after “P” insert “deliberately”.
7
After paragraph 13 insert—
“Amount of penalty: returns for periods of between 2 and 6 months
40
13A   (1)
Paragraphs 13B to 13E apply in the case of a return falling within
any of items 7A, 7B and 14 to 28 in the Table which relates to a
period of less than 6 months but more than 2 months.

Finance (No.2) Bill
Schedule 10 — Penalty for failure to make returns etc
79

      (2)
But those paragraphs do not apply in the case of a return
mentioned in paragraph 2(1)(c).
13B   (1)
P is liable to a penalty under this paragraph of £100.
      (2)
In addition, a penalty period begins to run on the penalty date for
the return.
5
      (3)
The penalty period ends with the day 12 months after the filing
date for the return, unless it is extended under paragraph
13C(2)(c) or 13H(2)(c).
13C   (1)
This paragraph applies if—
(a)
a penalty period has begun under paragraph 13B or 13G
10
because P has failed to make a return (“return A”), and
(b)
before the end of the period, P fails to make another return
(“return B”) falling within the same item in the Table as
return A.
      (2)
In such a case—
15
(a)
paragraph 13B(1) and (2) do not apply to the failure to
make return B, but
(b)
P is liable to a penalty under this paragraph for that failure,
and
(c)
the penalty period that has begun is extended so that it
20
ends with the day 12 months after the filing date for return
B.
      (3)
The amount of the penalty under this paragraph is determined by
reference to the number of returns that P has failed to make during
the penalty period.
25
      (4)
If the failure to make return B is P’s first failure to make a return
during the penalty period, P is liable, at the time of the failure, to
a penalty of £200.
      (5)
If the failure to make return B is P’s second failure to make a return
during the penalty period, P is liable, at the time of the failure, to
30
a penalty of £300.
      (6)
If the failure to make return B is P’s third or a subsequent failure
to make a return during the penalty period, P is liable, at the time
of the failure, to a penalty of £400.
      (7)
For the purposes of this paragraph—
35
(a)
in accordance with sub-paragraph (1)(b), the references in
sub-paragraphs (3) to (6) to a return are references to a
return falling within the same item in the Table as returns
A and B, and
(b)
a failure to make a return counts for the purposes of those
40
sub-paragraphs if (but only if) the return relates to a period
of less than 6 months.
      (8)
A penalty period may be extended more than once under sub-
paragraph (2)(c).

Finance (No.2) Bill
Schedule 10 — Penalty for failure to make returns etc
80

13D   (1)
P is liable to a penalty under this paragraph if (and only if) P’s
failure continues after the end of the period of 6 months beginning
with the penalty date.
      (2)
The penalty under this paragraph is the greater of—
(a)
5% of any liability to tax which would have been shown in
5
the return in question, and
(b)
£300.
13E   (1)
P is liable to a penalty under this paragraph if (and only if) P’s
failure continues after the end of the period of 12 months
beginning with the penalty date.
10
      (2)
Where, by failing to make the return, P deliberately withholds
information which would enable or assist HMRC to assess P’s
liability to tax, the penalty under this paragraph is determined in
accordance with sub-paragraphs (3) and (4).
      (3)
If the withholding of the information is deliberate and concealed,
15
the penalty is the greater of—
(a)
100% of any liability to tax which would have been shown
in the return in question, and
(b)
£300.
      (4)
If the withholding of the information is deliberate but not
20
concealed, the penalty is the greater of—
(a)
70% of any liability to tax which would have been shown
in the return in question, and
(b)
£300.
      (5)
In any case not falling within sub-paragraph (2), the penalty under
25
this paragraph is the greater of—
(a)
5% of any liability to tax which would have been shown in
the return in question, and
(b)
£300.
Amount of penalty: returns for periods of 2 months or less
30
13F   (1)
Paragraphs 13G to 13J apply in the case of a return falling within
any of items 7A, 7B and 14 to 28 in the Table which relates to a
period of 2 months or less.
      (2)
But those paragraphs do not apply in the case of a return
mentioned in paragraph 2(1)(c).
35
13G   (1)
P is liable to a penalty under this paragraph of £100.
      (2)
In addition, a penalty period begins to run on the penalty date for
the return.
      (3)
The penalty period ends with the day 12 months after the filing
date for the return, unless it is extended under paragraph
40
13C(2)(c) or 13H(2)(c).
13H   (1)
This paragraph applies if—
(a)
a penalty period has begun under paragraph 13B or 13G
because P has failed to make a return (“return A”), and

Finance (No.2) Bill
Schedule 10 — Penalty for failure to make returns etc
81

(b)
before the end of the period, P fails to make another return
(“return B”) falling within the same item in the Table as
return A.
      (2)
In such a case—
(a)
paragraph 13G(1) and (2) do not apply to the failure to
5
make return B, but
(b)
P is liable to a penalty under this paragraph for that failure,
and
(c)
the penalty period that has begun is extended so that it
ends with the day 12 months after the filing date for return
10
B.
      (3)
The amount of the penalty under this paragraph is determined by
reference to the number of returns that P has failed to make during
the penalty period.
      (4)
If the failure to make return B is P’s first, second, third, fourth or
15
fifth failure to make a return during the penalty period, P is liable,
at the time of the failure, to a penalty of £100.
      (5)
If the failure to make return B is P’s sixth or a subsequent failure
to make a return during the penalty period, P is liable, at the time
of the failure, to a penalty of £200.
20
      (6)
For the purposes of this paragraph—
(a)
in accordance with sub-paragraph (1)(b), the references in
sub-paragraphs (3) to (5) to a return are references to a
return falling within the same item in the Table as returns
A and B, and
25
(b)
a failure to make a return counts for the purposes of those
sub-paragraphs if (but only if) the return relates to a period
of less than 6 months.
      (7)
A penalty period may be extended more than once under sub-
paragraph (2)(c).
30
13I   (1)
P is liable to a penalty under this paragraph if (and only if) P’s
failure continues after the end of the period of 6 months beginning
with the penalty date.
      (2)
The penalty under this paragraph is the greater of—
(a)
5% of any liability to tax which would have been shown in
35
the return in question, and
(b)
£300.
13J   (1)
P is liable to a penalty under this paragraph if (and only if) P’s
failure continues after the end of the period of 12 months
beginning with the penalty date.
40
      (2)
Where, by failing to make the return, P deliberately withholds
information which would enable or assist HMRC to assess P’s
liability to tax, the penalty under this paragraph is determined in
accordance with sub-paragraphs (3) and (4).
      (3)
If the withholding of the information is deliberate and concealed,
45
the penalty is the greater of—