Finance (No.2) Bill

House of Commons

Session 2010 - 11
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Finance (No.2) Bill

Finance (No.2) Bill
Schedule 12 — Recovery of overpaid tax etc
Part 2 — Petroleum revenue tax
93

9
In paragraph 12(1B) (disapplication of time limits for further assessments
and determinations)—
(a)
omit the “or” at the end of paragraph (a), and
(b)
after that paragraph insert—
“(aa)
a claim under paragraph 13A (see paragraph 13E),
5
or”.
10
After paragraph 13 insert—
“Claim for relief for overpaid tax etc
13A   (1)
This paragraph applies where—
(a)
a participator has paid an amount by way of tax but
10
believes that the tax was not due, or
(b)
a participator has been assessed as liable to pay an amount
by way of tax but believes that the tax is not due.
      (2)
The participator may make a claim to the Commissioners for Her
Majesty’s Revenue and Customs (“HMRC”) for repayment or
15
discharge of the amount.
      (3)
Paragraph 13B makes provision about cases in which HMRC are
not liable to give effect to a claim under this paragraph.
      (4)
Paragraphs 13C to 14I make further provision about making and
giving effect to claims under this paragraph.
20
      (5)
Paragraph 13F makes provision about the application of this
paragraph and paragraphs 13B to 13E to amounts paid under
contract settlements.
      (6)
HMRC are not liable to give relief in respect of a case described in
sub-paragraph (1)(a) or (b) except as provided—
25
(a)
by this Schedule (following a claim under this paragraph),
or
(b)
by or under another provision of the Oil Taxation Acts.
      (7)
For the purposes of this paragraph and paragraphs 13B to 13F, an
amount paid by one person on behalf of another is treated as paid
30
by the other person.
      (8)
In this paragraph and paragraphs 13B to 13F, “the Oil Taxation
Acts” means—
(a)
Parts 1 and 3 of this Act,
(b)
the Oil Taxation Act 1983, and
35
(c)
any other enactment relating to petroleum revenue tax.
Cases in which HMRC not liable to give effect to a claim
13B   (1)
HMRC are not liable to give effect to a claim under paragraph 13A
if or to the extent that the claim falls within a case described in this
paragraph.
40
      (2)
Case A is where the amount paid, or liable to be paid, is excessive
by reason of—

Finance (No.2) Bill
Schedule 12 — Recovery of overpaid tax etc
Part 2 — Petroleum revenue tax
94

(a)
a mistake in a claim, election or notice or a nomination
under Schedule 10 to FA 1987, or
(b)
a mistake consisting of making or giving, or failing to make
or give, a claim, election or notice or a nomination under
Schedule 10 to FA 1987.
5
      (3)
Case B is where the participator—
(a)
has or could have sought relief by making a claim for
expenditure to be allowed under section 3 or 4 (allowance
of expenditure), or
(b)
is or will be able to seek relief by taking other steps under
10
the Oil Taxation Acts.
      (4)
Case C is where the participator—
(a)
could have sought relief by taking such steps within a
period that has now expired, and
(b)
knew, or ought reasonably to have known, before the end
15
of that period that such relief was available.
      (5)
Case D is where the claim is made on grounds that—
(a)
have been put to a court or tribunal in the course of an
appeal by the participator relating to the amount paid or
liable to be paid, or
20
(b)
have been put to HMRC in the course of an appeal by the
participator relating to that amount that is treated as
having been determined by a tribunal (by virtue of
paragraph 14(9) (settling of appeals by agreement)).
      (6)
Case E is where the participator knew, or ought reasonably to
25
have known, of the grounds for the claim before the latest of the
following—
(a)
the date on which an appeal by the participator relating to
the amount paid, or liable to be paid, in the course of which
the ground could have been put forward (a “relevant
30
appeal”) was determined by a court or tribunal (or is
treated as having been so determined),
(b)
the date on which the participator withdrew a relevant
appeal to a court or tribunal, and
(c)
the end of the period in which the participator was entitled
35
to make a relevant appeal to a court or tribunal.
      (7)
Case F is where the amount in question was paid or is liable to be
paid—
(a)
in consequence of proceedings enforcing the payment of
that amount brought against the participator by HMRC, or
40
(b)
in accordance with an agreement between the participator
and HMRC settling such proceedings.
      (8)
Case G is where—
(a)
the amount paid, or liable to be paid, is excessive by reason
of a mistake in calculating the participator’s liability to tax,
45
and
(b)
liability was calculated in accordance with the practice
generally prevailing at the time.

Finance (No.2) Bill
Schedule 12 — Recovery of overpaid tax etc
Part 2 — Petroleum revenue tax
95

Making a claim
13C   (1)
A claim under paragraph 13A may not be made more than 4 years
after the end of the relevant chargeable period.
      (2)
In relation to a claim made in reliance on paragraph 13A(1)(a), the
relevant chargeable period is—
5
(a)
where the amount paid, or liable to be paid, is excessive by
reason of a mistake in a return or returns under paragraph
2 or 5, the chargeable period to which the return (or, if
more than one, the first return) relates, and
(b)
otherwise, the chargeable period in respect of which the
10
amount was paid.
      (3)
In relation to a claim made in reliance on paragraph 13A(1)(b), the
relevant chargeable period is the chargeable period to which the
assessment relates.
      (4)
A claim under paragraph 13A must be in such form as the HMRC
15
may prescribe.
Decision on claim
13D
HMRC must—
(a)
make a decision on the claim, and
(b)
by notice inform the participator of their decision.
20
Assessment of claimant in connection with claim
13E   (1)
This paragraph applies where—
(a)
a claim is made under paragraph 13A,
(b)
the grounds for giving effect to the claim also provide
grounds for making an assessment or determination under
25
paragraph 10 or 12, or an amendment of such an
assessment or determination, on the participator in respect
of any accounting period, and
(c)
such an assessment, determination or amendment could
be made but for the expiry of a time limit in paragraph
30
10(1A), 12(1A), 12A or 12B.
      (2)
Where this paragraph applies—
(a)
the time limit does not apply, and
(b)
the assessment, determination or amendment is not out of
time if it is made before the final determination of the
35
claim.
      (3)
A claim is not finally determined until it, or the amount to which
it relates, can no longer be varied (whether on appeal or
otherwise).
Contract settlements
40
13F   (1)
In paragraph 13A(1)(a) the reference to an amount paid by a
participator by way of tax includes an amount paid by a person

Finance (No.2) Bill
Schedule 12 — Recovery of overpaid tax etc
Part 2 — Petroleum revenue tax
96

under a contract settlement in connection with tax believed to be
due.
      (2)
Sub-paragraphs (3) to (6) apply if the person who paid the amount
under the contract settlement (“the payer”) and the person from
whom the tax was due (“the taxpayer”) are not the same person.
5
      (3)
In relation to a claim under paragraph 13A in respect of that
amount—
(a)
the references to the participator in paragraph 13B(5) to (7)
(Cases D, E and F) have effect as if they included the
taxpayer,
10
(b)
the reference to the participator in paragraph 13B(8) (Case
G) has effect as if it were a reference to the taxpayer, and
(c)
the reference to the participator in paragraph 13E(1)(b) has
effect as if it were a reference to the taxpayer.
      (4)
Sub-paragraph (5) applies where the grounds for giving effect to a
15
claim by the payer in respect of the amount also provide grounds
for making an assessment or determination under paragraph 10 or
12, or an amendment of such an assessment or determination, on
the taxpayer in respect of any chargeable period.
      (5)
HMRC may set any amount repayable to the payer by virtue of the
20
claim against any amount payable by the taxpayer by virtue of the
assessment, determination or amendment.
      (6)
The obligations of HMRC and the taxpayer are discharged to the
extent of any set-off under sub-paragraph (5).
      (7)
“Contract settlement” means an agreement made in connection
25
with any person’s liability to make a payment to HMRC under or
by virtue of an enactment.”
11    (1)
Paragraph 14 (appeals) is amended as follows.
      (2)
After sub-paragraph (1) insert—
   “(1A)
A participator who has made a claim under paragraph 13A may
30
appeal from the decision on the claim by notice in writing given to
HMRC within 30 days after the date of issue of the notice of the
decision.”
      (3)
In sub-paragraph (9) for “section 33 of the Taxes Management Act 1970 as
applied by paragraph 1 above” substitute “paragraph 13A”.
35
      (4)
In sub-paragraph (10) for “the appeal that” substitute “an appeal under sub-
paragraph (1)”.
      (5)
After sub-paragraph (10) insert—
  “(10A)
If an appeal under sub-paragraph (1A) is notified to the tribunal
and it appears to the tribunal that the decision is wrong, the
40
tribunal shall substitute such decision as may be required.”
Consequential amendments
12    (1)
Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

Finance (No.2) Bill
Schedule 13 — Excise duties: compliance checks
Part 1 — Record-keeping
97

      (2)
In the Table in paragraph 1, after the first entry relating to petroleum
revenue tax insert—

“Petroleum revenue tax
Statement or declaration in connection with

a claim under paragraph 13A of Schedule 2

to the Oil Taxation Act 1975.”

5
      (3)
In paragraph 1(5), after “Oil Taxation Act 1975” insert “or a statement or
declaration under paragraph 13A of that Schedule”.
13
In FA 2009—
(a)
in Schedule 51 (time limits for assessments, claims etc), omit
paragraph 18(2), and
10
(b)
in Schedule 52 (recovery of overpaid tax etc), omit paragraph 11.
Schedule 13
Section 29

Excise duties: compliance checks
Part 1
Record-keeping
15
1     (1)
Section 118A of CEMA 1979 (duty of revenue traders to keep records) is
amended as follows.
      (2)
In subsection (1)(b), for “require” substitute “specify in writing (and
different lesser periods may be specified for different cases)”.
      (3)
For subsection (3) substitute—
20
“(3)
A duty imposed by this section to preserve records may be
discharged—
(a)
by preserving them in any form and by any means, or
(b)
by preserving the information contained in them in any form
and by any means,
25

subject to any conditions or exceptions specified in writing by the
Commissioners.”
      (4)
Omit subsections (4) to (6).
2
In consequence of the amendment made by paragraph 1(4)—
(a)
in FA 1994, omit section 256(3), and
30
(b)
in the Criminal Procedure (Consequential Provisions) (Scotland) Act
1995, omit paragraph 18(2) of Schedule 4.

Finance (No.2) Bill
Schedule 13 — Excise duties: compliance checks
Part 2 — Time limits
98

Part 2
Time limits
Assessments
3     (1)
Section 12 of FA 1994 (assessments to excise duty) is amended as follows.
      (2)
In subsections (4)(a) and (5), for “three years” substitute “4 years”.
5
      (3)
In subsection (5), for the words from “in the case” to the end substitute “in
any case falling within subsection (5A)(a) or (b)”.
      (4)
After subsection (5) insert—
“(5A)
The cases are—
(a)
a case involving a loss of duty of excise brought about
10
deliberately by the person assessed (P) or by another person
acting on P’s behalf, and
(b)
a case in which P has participated in a transaction knowing
that it was part of arrangements of any kind (whether or not
legally enforceable) intended to bring about a loss of duty of
15
excise.”
      (5)
After subsection (6) insert—
“(6A)
The reference in subsection (5A) to a loss of duty of excise brought
about deliberately by P or another person includes a loss that arises
as a result of—
20
(a)
a deliberate inaccuracy in a document given to Her Majesty’s
Revenue and Customs by that person, or
(b)
a deliberate failure by that person to comply with an
obligation specified in the Table in paragraph 1 of Schedule
41 to the Finance Act 2008 with respect to that duty of excise.”
25
      (6)
Omit subsection (7).
      (7)
The amendments made by this paragraph have effect in relation to the
making of assessments under section 20AAB(4) of HODA 1979 as to the
making of assessments under section 12(1) of FA 1994 (see section 20AAB(5)
of HODA 1979).
30
4
In consequence of the amendment made by paragraph 3(6), omit paragraph
22 of Schedule 6 to the Serious Crime Act 2007.
5     (1)
Section 12A of FA 1994 (other assessments relating to excise duty matters) is
amended as follows.
      (2)
In subsections (4)(a) and (6), for “three years” substitute “4 years”.
35
      (3)
In subsection (6), for the words from “where the assessment” to the end
substitute “falling within section 12(5A)(a) or (b)”.
      (4)
After subsection (6) insert—
“(7)
For the purposes of subsection (6), a reference in section 12(5A) to a
loss of duty of excise includes a loss caused by giving relief, allowing
40
a rebate, conferring an entitlement to drawback or repaying an

Finance (No.2) Bill
Schedule 13 — Excise duties: compliance checks
Part 3 — Information and inspection powers
99

amount that ought not to have been given, allowed, conferred or
repaid.”
6     (1)
Schedule 4A to BGDA 1981 (unlicensed amusement machines) is amended
as follows.
      (2)
In paragraph 2(3)(a), for “three years” substitute “4 years”.
5
      (3)
In sub-paragraph (5) of paragraph 6—
(a)
for “three years” substitute “4 years”, and
(b)
omit “or (7)”.
      (4)
For sub-paragraph (6) of that paragraph substitute—
    “(6)
This sub-paragraph applies where—
10
(a)
a loss of amusement machine licence duty is brought about
deliberately by the responsible person or anyone acting on
the responsible person’s behalf (including a
representative), or
(b)
the responsible person has participated in a transaction
15
knowing that it was part of arrangements of any kind
(whether or not legally enforceable) intended to bring
about a loss of amusement machine licence duty.”
      (5)
Omit sub-paragraph (7) of that paragraph.
Claims
20
7
In section 137A(4) of CEMA 1979 (recovery of overpaid excise duty), for
“three years” substitute “4 years”.
8
In Schedule 3 to FA 2001 (excise duty: payments by Commissioners in case
of error or delay), in each of the following provisions, for “three years”
substitute “4 years”—
25
(a)
paragraph 7(1)(d),
(b)
paragraph 8(1)(e),
(c)
paragraph 9(1)(g), and
(d)
paragraph 10(1)(b).
Part 3
30
Information and inspection powers
9
CEMA 1979 is amended as follows.
10
In section 112 (power of entry upon premises etc of revenue traders), after
subsection (6) insert—
“(7)
For the purposes of subsection (1)—
35
(a)
it does not matter if the premises in question are owned or
used partly for the purposes of the trade and partly for other
purposes (including as a dwelling), but
(b)
the officer may not enter or inspect any part of the premises
that is used solely as a dwelling.
40
(8)
Premises used to hold or store anything for the purposes of a revenue
trader’s trade are taken to be used by the revenue trader for the