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
97

      (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
(c)
any other enactment relating to petroleum revenue tax.
5
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.
      (2)
Case A is where the amount paid, or liable to be paid, is excessive
10
by reason of—
(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
15
Schedule 10 to FA 1987.
      (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
20
(b)
is or will be able to seek relief by taking other steps under
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
25
(b)
knew, or ought reasonably to have known, before the end
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
30
liable to be paid, or
(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)).
35
      (6)
Case E is where the participator knew, or ought reasonably to
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
40
the ground could have been put forward (a “relevant
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
45
(c)
the end of the period in which the participator was entitled
to make a relevant appeal to a court or tribunal.

Finance (No. 2) Bill
Schedule 12 — Recovery of overpaid tax etc
Part 2 — Petroleum revenue tax
98

      (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
(b)
in accordance with an agreement between the participator
5
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,
and
10
(b)
liability was calculated in accordance with the practice
generally prevailing at the time.
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.
15
      (2)
In relation to a claim made in reliance on paragraph 13A(1)(a), the
relevant chargeable period is—
(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
20
more than one, the first return) relates, and
(b)
otherwise, the chargeable period in respect of which the
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
25
assessment relates.
      (4)
A claim under paragraph 13A must be in such form as the HMRC
may prescribe.
Decision on claim
13D
HMRC must—
30
(a)
make a decision on the claim, and
(b)
by notice inform the participator of their decision.
Assessment of claimant in connection with claim
13E   (1)
This paragraph applies where—
(a)
a claim is made under paragraph 13A,
35
(b)
the grounds for giving effect to the claim 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 participator in respect
of any accounting period, and
40
(c)
such an assessment, determination or amendment could
be made but for the expiry of a time limit in paragraph
10(1A), 12(1A), 12A or 12B.
      (2)
Where this paragraph applies—

Finance (No. 2) Bill
Schedule 12 — Recovery of overpaid tax etc
Part 2 — Petroleum revenue tax
99

(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
claim.
      (3)
A claim is not finally determined until it, or the amount to which
5
it relates, can no longer be varied (whether on appeal or
otherwise).
Contract settlements
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
10
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.
15
      (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,
20
(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
25
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
30
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
35
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
40
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”.
45

Finance (No. 2) Bill
Schedule 13 — Excise duties: compliance checks
Part 1 — Record-keeping
100

      (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
5
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.
      (2)
In the Table in paragraph 1, after the first entry relating to petroleum
revenue tax insert—
10

“Petroleum revenue tax
Statement or declaration in connection with

a claim under paragraph 13A of Schedule 2

to the Oil Taxation Act 1975.”

      (3)
In paragraph 1(5), after “Oil Taxation Act 1975” insert “or a statement or
declaration under paragraph 13A of that Schedule”.
15
13
In FA 2009—
(a)
in Schedule 51 (time limits for assessments, claims etc), omit
paragraph 18(2), and
(b)
in Schedule 52 (recovery of overpaid tax etc), omit paragraph 11.
Schedule 13
20
Section 29

Excise duties: compliance checks
Part 1
Record-keeping
1     (1)
Section 118A of CEMA 1979 (duty of revenue traders to keep records) is
amended as follows.
25
      (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—
“(3)
A duty imposed by this section to preserve records may be
discharged—
30
(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,

subject to any conditions or exceptions specified in writing by the
Commissioners.”
35
      (4)
Omit subsections (4) to (6).

Finance (No. 2) Bill
Schedule 13 — Excise duties: compliance checks
Part 2 — Time limits
101

2
In consequence of the amendment made by paragraph 1(4)—
(a)
in FA 1994, omit section 256(3), and
(b)
in the Criminal Procedure (Consequential Provisions) (Scotland) Act
1995, omit paragraph 18(2) of Schedule 4.
Part 2
5
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”.
      (3)
In subsection (5), for the words from “in the case” to the end substitute “in
10
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
deliberately by the person assessed (P) or by another person
15
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
excise.”
20
      (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—
(a)
a deliberate inaccuracy in a document given to Her Majesty’s
25
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.”
      (6)
Omit subsection (7).
30
      (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).
4
In consequence of the amendment made by paragraph 3(6), omit paragraph
35
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”.
      (3)
In subsection (6), for the words from “where the assessment” to the end
40
substitute “falling within section 12(5A)(a) or (b)”.

Finance (No. 2) Bill
Schedule 13 — Excise duties: compliance checks
Part 3 — Information and inspection powers
102

      (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
a rebate, conferring an entitlement to drawback or repaying an
amount that ought not to have been given, allowed, conferred or
5
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”.
      (3)
In sub-paragraph (5) of paragraph 6—
10
(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—
(a)
a loss of amusement machine licence duty is brought about
15
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
knowing that it was part of arrangements of any kind
20
(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
7
In section 137A(4) of CEMA 1979 (recovery of overpaid excise duty), for
25
“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”—
(a)
paragraph 7(1)(d),
30
(b)
paragraph 8(1)(e),
(c)
paragraph 9(1)(g), and
(d)
paragraph 10(1)(b).
Part 3
Information and inspection powers
35
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)—
(a)
it does not matter if the premises in question are owned or
40
used partly for the purposes of the trade and partly for other
purposes (including as a dwelling), but

Finance (No. 2) Bill
Schedule 13 — Excise duties: compliance checks
Part 3 — Information and inspection powers
103

(b)
the officer may not enter or inspect any part of the premises
that is used solely as a dwelling.
(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
purposes of that trade, regardless of who owns or occupies the
5
premises.”
11
After that section insert—
“112A
Section 112: supplementary powers
(1)
The power in section 112(1) includes power to inspect any business
documents that are on the premises.
10
(2)
“Business documents” means documents (or copies of documents)
that relate to the carrying on of the revenue trader’s trade, whether
or not ones that a person may be required to produce under section
118B.
(3)
Subsections (4) to (8) of section 118B apply to documents inspected
15
under section 112(1) as they apply to documents produced under
section 118B.
(4)
The power in section 112(1) also includes power—
(a)
to mark items that have been examined or inspected, and
anything containing such items, for the purpose of indicating
20
that they have been examined or inspected, and
(b)
to obtain and record information (whether electronically or
otherwise) relating to the premises, items and documents
that have been examined or inspected.”
12
After section 118B insert—
25
“118BA
Further duty to provide information and documents
(1)
An officer may by notice in writing require a person to provide
documents if—
(a)
they are reasonably required by the officer for the purpose of
protecting, securing, collecting or managing revenues
30
derived from duties of excise, and
(b)
the officer has reasonable cause to believe that the person is
in possession or control of them.
(2)
An officer may not give a notice under this section without the
approval of the tribunal.
35
(3)
An application for approval may be made without notice (except as
required under subsection (4)).
(4)
The tribunal may not give its approval unless—
(a)
it is satisfied that, in the circumstances, the officer proposing
to give the notice is justified in doing so,
40
(b)
the person to whom the notice is to be given has been told
that the documents are required and given a reasonable
opportunity to make representations to an officer, and
(c)
the tribunal has been given a summary of any
representations made by that person.
45