Finance (No. 3) Bill

Session 2010 - 11
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Finance (No. 3) Bill

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 6 — Collection and management
327

      (4)
Accordingly—
(a)
TMA 1970 is to have effect as if any reference to corporation tax
included the bank levy where it is treated by paragraph 49(2) or 50(2)
as an amount of corporation tax chargeable on an entity, and
(b)
in particular, where the bank levy is so treated, it is due and payable
5
as an amount of corporation tax in accordance with section 59D of
TMA 1970, subject to section 59E of that Act.
      (5)
Nothing in section 53 of this Act (leases and changes to accounting
standards) has effect in relation to the bank levy or any provision of this
Schedule.
10
Joint and several liability
52    (1)
This paragraph applies where the bank levy is charged as provided for by
paragraph 4.
      (2)
The entities within sub-paragraph (3) are jointly and severally liable for the
bank levy liability of the relevant group’s responsible member (see
15
paragraph 53) for an accounting period; and HMRC may enforce that
liability against any of those entities accordingly.
      (3)
The entities within this sub-paragraph are—
(a)
if the relevant group is a relevant non-banking group, all relevant
members of the relevant group within the charge to corporation tax
20
as at the end of the chargeable period, or
(b)
otherwise, all members of the relevant group within the charge to
corporation tax as at the end of the chargeable period.
      (4)
In sub-paragraph (3)(a) “relevant member” means a member of the relevant
group which—
25
(a)
is a member of a relevant UK banking sub-group,
(b)
is a UK resident bank covered by paragraph 19(10),
(c)
is an entity covered by paragraph 19(11), or
(d)
is a relevant foreign bank covered by paragraph 19(17).
      (5)
An entity’s liability by virtue of sub-paragraph (2) is not affected if, after the
30
end of the chargeable period, it ceases to be within the charge to corporation
tax.
      (6)
An entity is not within sub-paragraph (3) if, as at the end of the chargeable
period, it is—
(a)
a securitisation company,
35
(b)
a limited liability partnership—
(i)
which is a party to a capital market arrangement, or a
transaction in pursuance of a capital market arrangement,
(ii)
whose trade or business (ignoring any incidental activities)
consists wholly of providing guarantees or owning assets
40
directly or indirectly forming the whole or part of the security
for the capital market arrangement, and
(iii)
which is within the charge to corporation tax, or
(c)
an entity of a kind prescribed by an order made by the Treasury.
      (7)
In sub-paragraph (6)—
45

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 6 — Collection and management
328

“capital market arrangement” has the same meaning as in section
72B(1) of the Insolvency Act 1986 (see paragraph 1 of Schedule 2A of
that Act);
“limited liability partnership” includes an entity established under the
law of a territory outside the United Kingdom of a similar character
5
to a limited liability partnership;
“securitisation company” means a company of the kind mentioned in
paragraphs (a) to (e) of section 83(2) of FA 2005 or paragraphs (a) to
(e) of regulation 4(2) of the Taxation of Securitisation Companies
Regulations 2006 (S.I. 2006/3296).
10
      (8)
The responsible member’s “bank levy liability” for an accounting period—
(a)
is the member’s liability for corporation tax for that period as
calculated in accordance with paragraph 8 of Schedule 18 to FA 1998
so far as the tax calculated consists of the bank levy by virtue of
paragraph 49(2) of this Schedule, and
15
(b)
includes any interest or penalties payable in relation to that tax so far
as it consists of the bank levy.
      (9)
An order under sub-paragraph (6) may have retrospective effect in relation
to—
(a)
any chargeable period in which the order is made, or
20
(b)
in the case of an order made on or before 31 December 2011, any
chargeable period ending on or after 1 January 2011.
     (10)
Orders under sub-paragraph (6) are to be made by statutory instrument.
     (11)
A statutory instrument containing an order under this paragraph is subject
to annulment in pursuance of a resolution of the House of Commons.
25
Meaning of “the responsible member”
53    (1)
This paragraph applies where the bank levy is charged as provided for by
paragraph 4.
      (2)
In this paragraph and paragraph 54 “chargeable member” means a member
of the relevant group within paragraph 52(3).
30
      (3)
The relevant group’s responsible member is the entity (“E”) in relation to
which the following requirements are met—
(a)
E is a chargeable member of the relevant group,
(b)
E has an accounting period for corporation tax purposes which is the
same as the chargeable period,
35
(c)
during the chargeable period but no later than 45 days after it started,
the parent entity, or another entity acting on behalf of the parent
entity, nominated E to HMRC to be the responsible member, and
(d)
HMRC did not reject E’s nomination.

See paragraph 54 for further provision about nominations.
40
      (4)
If—
(a)
no entity meets the requirements in sub-paragraph (3) and the
relevant group is a UK banking group or a building society group,
and
(b)
the parent entity is a chargeable member of the relevant group,
45

the responsible member is the parent entity.

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 6 — Collection and management
329

      (5)
If no entity meets the requirements in sub-paragraph (3) and the relevant
group is a foreign banking group or a relevant non-banking group, the
responsible member is the entity in relation to which the following
requirements are met—
(a)
it is a chargeable member of the relevant group,
5
(b)
it has an accounting period for corporation tax purposes which is the
same as the chargeable period, and
(c)
it is—
(i)
the relevant member with the largest amount of chargeable
equity and liabilities, or
10
(ii)
if the relevant member with the largest amount of chargeable
equity and liabilities is a relevant UK sub-group or a relevant
UK banking sub-group (as the case may be), the entity which
is the parent or parent undertaking for that sub-group.
      (6)
In sub-paragraph (5)(c) “relevant member”—
15
(a)
has the same meaning as in paragraph 18 or 20 (as the case may be),
and
(b)
includes a relevant foreign bank covered by paragraph 17(17) or
19(17) (as the case may be).
      (7)
If no entity meets the requirements of sub-paragraph (3) or sub-paragraph
20
(4) or (5) (as the case may be), the responsible member is the member of the
relevant group determined by HMRC within the period of 30 days after the
end of the chargeable period.
      (8)
HMRC must give written notice of a determination under sub-paragraph (7)
to the member concerned within that period.
25
      (9)
HMRC cannot determine as the responsible member under sub-paragraph
(7)—
(a)
an entity within 52(6)(a) or (b), or
(b)
an entity of a kind prescribed by an order under paragraph 52(6)(c).
     (10)
In relation to chargeable periods arising by virtue of paragraph 40
30
(chargeable periods: entities which do not prepare financial statements), the
Treasury may by order modify the time limit applying to determinations
under sub-paragraph (7) (including determinations in cases to which
paragraph 64(3) applies).
     (11)
An order under sub-paragraph (10) may amend paragraphs 41 to 44 of
35
Schedule 18 to FA 1998 (discovery assessments and determinations) in
relation to any bank levy charged by virtue of paragraph 40 of this Schedule.
     (12)
Orders under sub-paragraph (10) are to be made by statutory instrument.
     (13)
A statutory instrument containing an order under sub-paragraph (10) is
subject to annulment in pursuance of a resolution of the House of Commons.
40
     (14)
An order under this paragraph may have retrospective effect in relation to—
(a)
any chargeable period in which the order is made, or
(b)
in the case of an order made on or before 31 December 2011, any
chargeable period ending on or after 1 January 2011.
54    (1)
This paragraph applies for the purposes of paragraph 53(3).
45
      (2)
Only one nomination may be made during the chargeable period.

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 6 — Collection and management
330

      (3)
A nominator may nominate itself.
      (4)
HMRC may from time to time publish requirements as to the information to
be included with a nomination.
      (5)
HMRC may reject a nomination within the period of 30 days starting with
the day on which it receives the nomination.
5
      (6)
HMRC may reject a nomination only if—
(a)
the nomination contravenes sub-paragraph (2),
(b)
information required under sub-paragraph (4) is missing from the
nomination, or
(c)
HMRC has reason to believe that the nominee will turn out—
10
(i)
not to be a chargeable member of the relevant group,
(ii)
not to have an accounting period for corporation tax
purposes which is the same as the chargeable period, or
(iii)
not to have sufficient resources itself to pay the bank levy.
Consequential amendment to section 1 of PCTA 1968
15
55
In section 1 of the Provisional Collection of Taxes Act 1968 (temporary
statutory effect of House of Commons resolutions affecting certain taxes), in
subsection (1) after “corporation tax” insert “, the bank levy”.
Consequential amendments to TMA 1970
56
TMA 1970 is amended as follows.
20
57    (1)
Section 59E (provision about when corporation tax is due and payable) is
amended as follows.
      (2)
In subsection (11), after paragraph (c) insert—
“(d)
to the bank levy where treated as an amount of corporation
tax chargeable on a company by paragraph 49 or 50 of
25
Schedule 19 to the Finance Act 2011 (the bank levy).”
      (3)
After that subsection insert—
“(12)
Without prejudice to the generality of any provision above—
(a)
in relation to cases where the bank levy is treated as an
amount of corporation tax chargeable on a company,
30
regulations under this section may make provision—
(i)
for amounts of the bank levy to be treated as
becoming due and payable on dates which fall within
the chargeable period (within the meaning of
Schedule 19 to the Finance Act 2011);
35
(ii)
for payments in respect of any such amounts of the
bank levy as are mentioned in sub-paragraph (i) to
become due and payable on dates which fall within
that period;
(b)
in relation to cases where a company on which the bank levy
40
is treated as an amount of corporation tax chargeable for an
accounting period has made payments in respect of
corporation tax for that period, regulations under this section
may make provision for or in connection with determining

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 6 — Collection and management
331

the extent to which those payments are to be treated as being
payments of the bank levy;
(c)
in relation to cases where a company (“the relevant
company”) has made payments in respect of corporation tax
for an accounting period wholly or partly on the assumption
5
that the bank levy will be treated as an amount of corporation
tax chargeable on the relevant company for that period,
regulations under this section may make provision for or in
connection with treating those payments (wholly or partly)
to have been made by another company if it turns out that the
10
bank levy is not to be treated as an amount of corporation tax
chargeable on the relevant company for that period;
(d)
where regulations under this section impose a requirement
within subsection (2)(j) above to furnish information for
purposes related to the bank levy, the regulations may make
15
provision for or in connection with applying Part 7 of
Schedule 36 to the Finance Act 2008 in whole or in part (with
or without modification) as if the requirement to furnish the
information were contained in an information notice within
the meaning of that Schedule.”
20
58
At the end of section 59F(6) (provision for paying corporation tax on behalf
of group members) insert “, and
(c)
the bank levy where treated as an amount of corporation tax
chargeable on a company by paragraph 49 or 50 of Schedule
19 to the Finance Act 2011 (the bank levy).”
25
Consequential amendments to Schedule 18 to FA 1998
59
Schedule 18 to FA 1998 (company tax returns) is amended as follows.
60
At the end of paragraph 1 insert—
“paragraphs 49 and 50 of Schedule 19 to the Finance Act 2011
(the bank levy).”
30
61
After paragraph 3 insert—
“3A   (1)
Her Majesty’s Revenue and Customs may from time to time
publish requirements as to the information, accounts, statements
and reports which a company must deliver as part of its company
tax return where the company has a tax liability by virtue of
35
paragraph 49 or 50 of Schedule 19 to the Finance Act 2011 (the
bank levy); and such information, accounts, statements and
reports must be delivered as if the notice to the company under
paragraph 3(1) had required them to be delivered (and paragraph
4 is to be read accordingly).
40
      (2)
The publication of any requirements under sub-paragraph (1)
does not stop a notice under paragraph 3(1) requiring the delivery
of any additional information, accounts, statements and reports as
part of a company tax return.”
62    (1)
Paragraph 8 is amended as follows.
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Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 6 — Collection and management
332

      (2)
At the end of the “Third step” in sub-paragraph (1) insert—

“3. Any amount of the bank levy chargeable by virtue of
paragraph 49 or 50 of Schedule 19 to the Finance Act 2011 (the
bank levy).”
      (3)
After sub-paragraph (1) insert—
5
   “(1A)
Sub-paragraph (1B) applies if an amount of the bank levy
chargeable by virtue of paragraph 49 or 50 of Schedule 19 to the
Finance Act 2011 (the bank levy) is added at the third step.
     (1B)
Any deductions made at the fourth step are to be treated as made
from all other amounts before being made from the amount of the
10
bank levy.”
63    (1)
Paragraph 11 is amended as follows.
      (2)
The existing provision becomes sub-paragraph (1).
      (3)
After that sub-paragraph insert—
    “(2)
Sub-paragraph (1) does not affect—
15
(a)
the power to require the delivery of accounts, information
or documents in relation to a company’s tax liability by
virtue of paragraph 49 or 50 of Schedule 19 to the Finance
Act 2011 (the bank levy), or
(b)
the requirements which may be imposed under paragraph
20
3A.”
Transitional provision
64    (1)
Sub-paragraphs (2) to (6) apply if the chargeable period starts on or before
the day on which this Act is passed (whether or not it ends on or before that
day).
25
      (2)
Paragraph 53(3)(c) has effect as if for the words “during the chargeable
period but no later than 45 days after it started” there were substituted
“within the period of 7 days starting with the day on which this Act is
passed”.
      (3)
Paragraph 53(7) has effect as if for the words “30 days after the end of the
30
chargeable period” there were substituted “15 days starting with the day on
which this Act is passed”.
      (4)
Paragraph 54(5) has effect as if for “30” there were substituted “7”.
      (5)
Sub-paragraph (6) applies if, before the passing of this Act—
(a)
HMRC published a statement stating that it was ready to receive
35
nominations for responsible members,
(b)
an entity made a nomination in accordance with HMRC’s statement,
and
(c)
the nomination included all information required by HMRC’s
statement.
40
      (6)
For the purposes of paragraphs 53(3)(c) and 54(5) (as modified above) the
nomination is to be treated as if it were made by the entity and received by
HMRC immediately after the passing of this Act.

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 7 — Double taxation relief
333

      (7)
The requirements covered by paragraph 54(4) include any requirements
published by HMRC before the passing of this Act which are stated to apply
for the purposes of nominations for responsible members.
      (8)
But such requirements are to apply only to nominations made during 2011.
      (9)
Regulations under section 59E of TMA 1970, in relation to amounts within
5
subsection (11)(d) of that section (amounts of bank levy), made on or before
31 December 2011 may have effect in relation to amounts of bank levy
which—
(a)
are payable in respect of chargeable periods ending on or before that
day, or
10
(b)
treated as amounts of corporation tax for accounting periods ending
on or before that day.
Part 7
Double taxation relief
Arrangements affording double taxation relief
15
65    (1)
If the Treasury by order declares—
(a)
that arrangements specified in the order have been made in relation
to any foreign territory with a view to affording relief from double
taxation in relation to the bank levy and any equivalent foreign levy,
and
20
(b)
that it is expedient that those arrangements should have effect,

those arrangements (“double taxation arrangements”) have effect so far as
they provide for relief from the bank levy.
      (2)
In this Part of this Schedule—
“equivalent foreign levy”, in relation to a foreign territory, means any
25
tax imposed by the law of that territory which corresponds to the
bank levy;
“foreign territory” means a territory outside the United Kingdom.
      (3)
For the purposes of sub-paragraph (2), tax may correspond to the bank levy
even though—
30
(a)
the tax is payable under the law of a province, state or other part of
a country,
(b)
it is levied by or on behalf of a municipality or other local body, or
(c)
its proceeds form a fund used for a particular purpose.
      (4)
Double taxation arrangements have effect under sub-paragraph (1)—
35
(a)
subject to the following provisions of this paragraph, and
(b)
despite anything in any other enactment.
      (5)
This paragraph gives effect to arrangements even if they provide for relief
from the bank levy for periods before the making of the arrangements or
before the passing of this Act.
40
      (6)
Relief under this paragraph requires a claim.
      (7)
An order under this paragraph revoking an earlier order may contain
transitional provisions that appear to the Treasury to be necessary or
expedient.