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 8 — Definitions
341

(b)
an entity which if it were a UK resident entity which carried on its
activities in the United Kingdom would be required to be an
authorised person.
      (3)
A deposit is “non-protected” so far as it is not a protected deposit for the
purposes of paragraph 29.
5
      (4)
For the purposes of this paragraph—
(a)
“deposit” has the meaning given by article 5(2) of the Financial
Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I.
2001/544), and
(b)
in relation to a deposit held in a territory outside the United
10
Kingdom, the exclusions in articles 6 to 9AB of that Order apply with
whatever modifications are appropriate to achieve the following
purpose.
      (5)
The purpose is that the exclusions are to cover, essentially, the same matters
in relation to the territory concerned as they cover in relation to the United
15
Kingdom.
76
Paragraphs 73 to 75 are subject to Step 6 in paragraph 24(1).
“Relevant foreign bank”
77    (1)
“Relevant foreign bank” means an entity which—
(a)
is a non-UK resident entity,
20
(b)
is an authorised person for the purposes of FISMA 2000 (see section
31 of that Act),
(c)
is an entity which carries on a trade in the United Kingdom through
a permanent establishment in the United Kingdom and—
(i)
whose activities include the relevant regulated activity
25
described in the provision mentioned in paragraph 78(a), or
(ii)
which is both a BIPRU 730k firm and a full scope BIPRU
investment firm, whose activities consist wholly or mainly of
any of the relevant regulated activities described in the
provisions mentioned in paragraph 78(b) to (f),
30
(d)
carries on that relevant regulated activity, or those relevant
regulated activities, wholly or mainly in the course of that trade,
(e)
meets the capital resources condition, and
(f)
is not an excluded entity.
      (2)
“Relevant foreign bank” also includes an entity which—
35
(a)
meets the conditions in sub-paragraph (1)(a) and (f), and
(b)
is a member of a partnership which meets the conditions in
paragraph 79(1)(b) to (e).
“Relevant regulated activity”
78
“Relevant regulated activity” means an activity which is a regulated activity
40
for the purposes of FISMA 2000 by virtue of any of the following provisions
of the Financial Services and Markets Act 2000 (Regulated Activities) Order
2001 (S.I. 2001/544)—
(a)
article 5 (accepting deposits),
(b)
article 14 (dealing in investments as principal),
45

Finance (No. 3) Bill
Schedule 19 — The bank levy
Part 9 — Power to make consequential changes
342

(c)
article 21 (dealing in investments as agent),
(d)
article 25 (arranging deals in investments),
(e)
article 40 (safeguarding and administering investments), and
(f)
article 61 (entering into regulated mortgage contracts).
“UK resident bank”
5
79    (1)
“UK resident bank” means an entity which—
(a)
is a UK resident entity,
(b)
is an authorised person for the purposes of FISMA 2000 (see section
31 of that Act),
(c)
is an entity—
10
(i)
whose activities include the relevant regulated activity
described in the provision mentioned in paragraph 78(a), or
(ii)
which is both a BIPRU 730k firm and a full scope BIPRU
investment firm, whose activities consist wholly or mainly of
any of the relevant regulated activities described in the
15
provisions mentioned in paragraph 78(b) to (f),
(d)
carries on that relevant regulated activity, or those relevant
regulated activities, wholly or mainly in the course of trade,
(e)
meets the capital resources condition, and
(f)
is not an excluded entity.
20
      (2)
“UK resident bank” also includes an entity which—
(a)
meets the conditions in sub-paragraph (1)(a) and (f), and
(b)
is a member of a partnership which meets the conditions in sub-
paragraph (1)(b) to (e).
Part 9
25
Power to make consequential changes
80    (1)
The Treasury may, by order made by statutory instrument, make such
amendments of this Schedule as they consider appropriate in consequence
of—
(a)
any change made to or replacement of the Financial Services and
30
Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544)
(or any replacement),
(b)
any change made to the FSA Handbook, or
(c)
any change in international accounting standards, UK GAAP or US
GAAP.
35
      (2)
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.
      (3)
A statutory instrument containing an order under this paragraph is subject
40
to annulment in pursuance of a resolution of the House of Commons.

Finance (No. 3) Bill
Schedule 20 — Supplies of commodities to be used in producing electricity
343

Schedule 20
Section 77

Supplies of commodities to be used in producing electricity
1
Schedule 6 to FA 2000 (climate change levy) is amended as follows.
2
In paragraph 6 (supplies of gas), after sub-paragraph (1) insert—
   “(1A)
In relation to a supply which is within sub-paragraph (1B) but not
5
sub-paragraph (1C)—
(a)
in sub-paragraph (1)(a) the reference to a gas utility is to be
read as including a reference to an unregulated gas
supplier (within the meaning of paragraph 151), and
(b)
in relation to a supply made by an unregulated gas
10
supplier—
(i)
sub-paragraph (1) has effect as if paragraph (b)(ii)
were omitted, and
(ii)
in paragraph 40(2)(b) the reference to a utility is to
be read as including a reference to an unregulated
15
gas supplier.
     (1B)
A supply is within this sub-paragraph if it is a supply of any gas
to a person to be used by that person in producing electricity.
     (1C)
A supply is within this sub-paragraph if it is a supply of any gas
to a person who intends to cause the gas to be used in—
20
(a)
a fully exempt combined heat and power station, or
(b)
a partly exempt combined heat and power station,

in producing any outputs of the station.

For this purpose “outputs” has the meaning given by paragraph
148(9).”
25
3     (1)
Paragraph 14 (exemption: supplies (other than self-supplies) to electricity
producers) is amended as follows.
      (2)
In sub-paragraph (1), for “a taxable commodity” substitute “electricity”.
      (3)
In sub-paragraphs (1)(a), (2)(b) and (3)(b), for “commodity” substitute
“electricity”.
30
4
In paragraph 21 (regulations to avoid double charges to levy), after sub-
paragraph (2) insert—
   “(2A)
In sub-paragraph (2)(b) “taxable supply” does not include a
taxable supply subject to the carbon price support rates (see
paragraph 42A).”
35
5
In paragraph 42 (amount payable by way of levy), before sub-paragraph (2)
insert—
   “(1B)
Sub-paragraph (1) does not apply to a taxable supply subject to the
carbon price support rates (see paragraph 42A).”
6
After paragraph 42 insert—
40
“42A  (1)
This paragraph applies if a taxable supply is subject to the carbon
price support rates.

Finance (No. 3) Bill
Schedule 20 — Supplies of commodities to be used in producing electricity
344

      (2)
A supply is subject to the carbon price support rates if—
(a)
it is a supply of a taxable commodity, apart from
electricity, to a person to be used by that person in
producing electricity, and
(b)
it is not within sub-paragraph (3).
5
      (3)
A supply is within this sub-paragraph if it is a supply of a taxable
commodity to a person who intends to cause the commodity to be
used in—
(a)
a fully exempt combined heat and power station, or
(b)
a partly exempt combined heat and power station,
10

in producing any outputs of the station.

For this purpose “outputs” has the meaning given by paragraph
148(9).
      (4)
The amount payable by way of levy on the taxable supply is the
amount ascertained by applying the relevant carbon price support
15
rate; and the levy payable on a fraction of a quantity of a
commodity is that fraction of the levy payable on that quantity of
the commodity.
      (5)
The carbon price support rates are as follows.

Taxable commodity
Carbon price support

20

supplied
rate

Gas supplied by a gas
£0.00091 per kilowatt

utility or any gas
hour

supplied in a gaseous

state that is of a kind

25

supplied by a gas

utility

Any petroleum gas, or
£0.01460 per kilogram

other gaseous

hydrocarbon,

30

supplied in a liquid

state

Any other taxable
£0.01188 per kilogram

commodity (apart

from electricity)

35
      (6)
The Commissioners may by regulations make provision for giving
effect to this paragraph.
      (7)
Regulations under sub-paragraph (6) may, in particular, include
provision for determining whether or not a taxable supply is
subject to the carbon price support rates.”
40
7
In paragraph 101 (civil penalties: incorrect certificates), in sub-paragraph
(2)(a)—
(a)
omit the “or” after sub-paragraph (ii), and
(b)
omit the “and” at the end of sub-paragraph (iv) and after that sub-

Finance (No. 3) Bill
Schedule 20 — Supplies of commodities to be used in producing electricity
345

paragraph insert “or
(v)
a taxable supply (or taxable supplies)
subject to the carbon price support rates,
and”.
8     (1)
Subject to what follows, the amendments made by paragraphs 1 to 7 above
5
have effect in relation to supplies treated as taking place on or after 1 April
2013.
      (2)
Sub-paragraph (3) applies to a supply to a person (“the customer”) which—
(a)
is of the description mentioned in paragraph 26(1)(b) of Schedule 6
to FA 2000 (gas in gaseous state), and
10
(b)
is not treated as taking place before 23 March 2011.
      (3)
The amendments made by paragraphs 1 to 7 above have effect in relation to
the gas supplied so far as it is actually supplied to the customer on or after 1
April 2013.
9     (1)
This paragraph applies for the purposes of Schedule 6 to FA 2000 if—
15
(a)
an invoice is issued, or a payment is received, before 1 April 2013 in
respect of the supply to a person (“the customer”) of a taxable
commodity,
(b)
the supply is not of the description mentioned in paragraph 26(1)(b)
of Schedule 6 (gas in gaseous state),
20
(c)
if the supply were to be treated as taking place on 1 April 2013, it
would be a taxable supply subject to the carbon price support rates
(see paragraph 42A of Schedule 6 as inserted by paragraph 6 above),
(d)
a quantity of the taxable commodity is not delivered to the customer
before 1 April 2013, and
25
(e)
the invoicing or payment in advance of delivery is not acceptable
normal practice.

(It does not matter whether the invoice mentioned in paragraph (a) is, or is
not, a climate change levy accounting document.)
      (2)
If the supply would otherwise be treated as taking place before 1 April 2013,
30
and not be a taxable supply, the supply is treated as taking place on that
date.
      (3)
The quantity of the taxable commodity treated as supplied on 1 April 2013
is the quantity to which sub-paragraph (1)(d) applies.
      (4)
For the purposes of this paragraph invoicing or payment in advance of
35
delivery is “acceptable normal practice” if—
(a)
the supply is of a kind in the case of which it is normal practice for
invoices to be issued, or payments to be made, in respect of taxable
commodities before they are delivered to the person (“the
customer”) to whom they are being supplied,
40
(b)
the practice does not involve issuing invoices, or making payments,
more than 15 weeks in advance of the taxable commodities, in
respect of which the invoice is issued or payment is made, being
delivered to the customer, and
(c)
the advance invoicing or payment is in accordance with that practice.
45
      (5)
This paragraph does not apply in relation to supplies treated as taking place
before 23 March 2011.