Finance (No. 3) Bill

Session 2010 - 11
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Finance (No. 3) Bill

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 1 — Power to obtain data
353

(a)
in sub-paragraph (4), after “section 55” insert “or Schedule 6B”, and
(b)
in sub-paragraph (5), after “section” insert “or Schedule”.
7
In paragraph 12(2A) of Schedule 10 to that Act (notice of enquiry into
return), for “or 81A (return or further return in consequence of later linked
transaction)” substitute “, 81A (return or further return in consequence of
5
later linked transaction) or paragraph 6 of Schedule 6B (adjustment for
change of circumstances)”.
8
In paragraphs 11(2C) and 19(2C) of Schedule 15 to that Act (partnerships), in
the substituted sub-paragraph (4), for “as it has” substitute “or Schedule 6B
as they have”.
10
Commencement
9     (1)
The amendments made by this Schedule have effect in relation to relevant
transactions that—
(a)
have an effective date on or after the day on which this Act is passed
(“the commencement day”), and
15
(b)
satisfy sub-paragraph (2).
      (2)
A relevant transaction satisfies this sub-paragraph if—
(a)
it is not linked to a land transaction with an effective date before the
commencement day (a “pre-commencement transaction”), or
(b)
the only pre-commencement transaction to which it is linked is—
20
(i)
an option binding the grantor to enter into the relevant
transaction, or
(ii)
a right of pre-emption restricting the right of the grantor to
enter into it.
Schedule 23
25
Section 86(1)

Data-gathering powers
Part 1
Power to obtain data
Power to give notice
1     (1)
An officer of Revenue and Customs may by notice in writing require a
30
relevant data-holder to provide relevant data.
      (2)
Part 2 of this Schedule sets out who is a relevant data-holder.
      (3)
In relation to a relevant data-holder, “relevant data” means data of a kind
specified for that type of data-holder in regulations made by the Treasury.
      (4)
The data that a relevant data-holder may be required to provide—
35
(a)
may be general data or data relating to particular persons or matters,
and
(b)
may include personal data (such as names and addresses of
individuals).

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 1 — Power to obtain data
354

      (5)
A notice under this paragraph is referred to as a data-holder notice.
Purpose of power
2     (1)
The power in paragraph 1(1) is exercisable to assist with the efficient and
effective discharge of HMRC’s tax functions—
(a)
whether a particular function or more generally, and
5
(b)
whether involving a particular taxpayer or taxpayers generally.
      (2)
It is additional to and is not limited by other powers that HMRC may have
to obtain data (for example, in Schedule 36 to FA 2008).
      (3)
But it may not be used (in place of the power in paragraph 1 of that Schedule)
to obtain data required for the purpose of checking the relevant data-
10
holder’s own tax position.
      (4)
Sub-paragraph (3) does not prevent use of the power in paragraph 1(1) of
this Schedule to obtain data about a matter mentioned in paragraph 14(3)(a)
(beneficial ownership of certain payments etc).
      (5)
Nothing in this paragraph limits the use that may be made of data that have
15
been obtained under this Schedule (see section 17(1) of CRCA 2005).
Specifying relevant data
3     (1)
A data-holder notice must specify the relevant data to be provided.
      (2)
Relevant data may not be specified in a data-holder notice unless an officer
of Revenue and Customs has reason to believe that the data could have a
20
bearing on chargeable or other periods ending on or after the applicable day.
      (3)
The applicable day is the first day of the period of 4 years ending with the
day on which the notice is given.
Compliance
4     (1)
Relevant data specified in a data-holder notice must be provided by such
25
means and in such form as is reasonably specified in the notice.
      (2)
If the notice specifies that the data are to be provided by sending them
somewhere, the data must be sent to such address and within such period as
is reasonably specified in the notice.
      (3)
If the notice specifies that the data are to be provided by making documents
30
available for inspection somewhere, the documents must be made available
for inspection at such place and time as is—
(a)
reasonably specified in the notice, or
(b)
agreed between an officer of Revenue and Customs and the data-
holder.
35
      (4)
A place used solely as a dwelling may not be specified under sub-paragraph
(3)(a).
      (5)
A data-holder notice requiring the provision of specified documents
requires the documents to be provided only if they are in the data-holder’s
possession or power.
40

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 1 — Power to obtain data
355

      (6)
A power in this paragraph to specify something in a notice includes power
to specify it in a document referred to in the notice.
Approval by tribunal
5     (1)
An officer of Revenue and Customs may ask for the approval of the tribunal
before giving a data-holder notice.
5
      (2)
This does not require an officer to do so (but see paragraph 28(3) for the
effect of obtaining approval).
      (3)
An application for approval under this paragraph may be made without
notice (except as required under sub-paragraph (4)).
      (4)
The tribunal may not approve the giving of a data-holder notice unless—
10
(a)
the application for approval is made by, or with the agreement of, an
authorised officer,
(b)
the tribunal is satisfied that, in the circumstances, the officer giving
the notice is justified in doing so,
(c)
the data-holder has been told that the data are to be required and
15
given a reasonable opportunity to make representations to an officer
of Revenue and Customs, and
(d)
the tribunal has been given a summary of any representations made
by the data-holder.
      (5)
Paragraphs (c) and (d) of sub-paragraph (4) do not apply to the extent that
20
the tribunal is satisfied that taking the action specified in those paragraphs
might prejudice any purpose for which the data are required.
      (6)
A decision by the tribunal under this paragraph is final (despite the
provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement
Act 2007).
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      (7)
“Authorised officer” means an officer of Revenue and Customs who is, or is
a member of a class of officers who are, authorised by the Commissioners for
the purposes of this paragraph.
Power to copy documents
6
An officer of Revenue and Customs may take copies of or make extracts
30
from any document provided pursuant to a data-holder notice.
Power to retain documents
7     (1)
If an officer of Revenue and Customs thinks it reasonable to do so, HMRC
may retain documents provided pursuant to a data-holder notice for a
reasonable period.
35
      (2)
While a document is being retained, the data-holder may, if the document is
reasonably required for any purpose, request a copy of it.
      (3)
The retention of a document under this paragraph is not to be regarded as
breaking any lien claimed on the document.
      (4)
If a document retained under this paragraph is lost or damaged, the
40
Commissioners are liable to compensate the owner of the document for any
expenses reasonably incurred in replacing or repairing the document.

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 2 — Relevant data-holders
356

Part 2
Relevant data-holders
Introduction
8     (1)
This Part of this Schedule sets out who is a relevant data-holder for the
purposes of this Schedule.
5
      (2)
Descriptions of the various types of data-holder are to be read as including
anyone who was previously of such a description.
Salaries, fees, commission etc
9     (1)
Each of the following is a relevant data-holder—
(a)
an employer,
10
(b)
a person who is concerned in making payments to or in respect of
another person’s employees with respect to their employment with
that other person,
(c)
an approved agent within the meaning of section 714 of ITEPA 2003
(which relates to payroll giving), and
15
(d)
a person who carries on a business in connection with which relevant
payments are or are likely to be made.
      (2)
Relevant payments are—
(a)
payments for or in connection with services provided by persons
who are not employed in the business, or
20
(b)
periodical or lump sum payments in respect of any copyright, public
lending right, right in a registered design or design right.
      (3)
Payments are taken to be made in connection with a business if they are
made—
(a)
in the course of carrying on the business or a part of it, or
25
(b)
in connection with the formation, acquisition, development or
disposal of the business or a part of it.
      (4)
Sub-paragraph (1)(d) applies to the carrying on of any other kind of activity
as it applies to the carrying on of a business, but only if the activity is being
carried on by a body of persons (and references in sub-paragraphs (2) and
30
(3) to the business are to be read accordingly).
      (5)
A reference in this paragraph to the making of payments includes—
(a)
the provision of benefits, and
(b)
the giving of any other valuable consideration.
10    (1)
This paragraph applies if—
35
(a)
services that an individual provides or is obliged to provide under an
agency contract are treated under section 44(2) of ITEPA 2003 as the
duties of an employment held by the individual with the agency, or
(b)
remuneration receivable under or in consequence of arrangements
falling within section 45 of that Act is treated as earnings from an
40
employment held by an individual with the agency.
      (2)
For the purposes of paragraph 9—
(a)
the individual is treated as being employed by the agency, and

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 2 — Relevant data-holders
357

(b)
payments made to the individual under or in consequence of the
agency contract, or treated as earnings under section 45 of ITEPA
2003, do not count as “relevant payments”.
      (3)
“Agency contract” and “remuneration” have the same meaning as in
Chapter 7 of Part 2 of ITEPA 2003.
5
11    (1)
This paragraph applies if—
(a)
a person (“A”) performs in the United Kingdom duties of an
employment,
(b)
the employment is under or with a person resident outside and not
resident in the United Kingdom,
10
(c)
the duties performed in the United Kingdom are performed for a
continuous period of not less than 30 days, and
(d)
those duties are performed for the benefit of a person (“B”) resident
or carrying on a trade, profession or vocation in the United
Kingdom.
15
      (2)
For the purposes of paragraph 9—
(a)
B is treated as if B were an employer, but
(b)
only the name and place of residence of A may be specified for a
relevant data-holder of B’s type in regulations made under
paragraph 1(3).
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Interest etc
12    (1)
A person by or through whom interest is paid or credited is a relevant data-
holder.
      (2)
For the purposes of this paragraph, the following are to be treated as
interest—
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(a)
a dividend in respect of a share in a building society,
(b)
an amount to which a person holding a deeply discounted security
is entitled on the redemption of that security,
(c)
a foreign dividend, and
(d)
an alternative finance return.
30
      (3)
In sub-paragraph (2)—
“alternative finance return” means—
(a)
an alternative finance return within the meaning of Part 10A
of ITA 2007, and
(b)
an alternative finance return within the meaning of Part 6 of
35
CTA 2009;
“building society” means a building society within the meaning of the
Building Societies Act 1986;
“deeply discounted security” has the same meaning as in Chapter 8 of
Part 4 of ITTOIA 2005;
40
“foreign dividend” means any annual payment, interest or dividend
payable out of, or in respect of the funds or securities of—
(a)
a body of persons that is not resident in the United Kingdom,
or
(b)
a government or public or local authority in a country outside
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the United Kingdom.

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 2 — Relevant data-holders
358

Income, assets etc belonging to others
13
A person who (in whatever capacity) is in receipt of money or value of or
belonging to another is a relevant data-holder.
Payments derived from securities
14    (1)
Each of the following is a relevant data-holder—
5
(a)
a person who is the registered or inscribed holder of securities,
(b)
a person who receives a payment derived from securities or would
be entitled to do so if a payment were made,
(c)
a person who receives a payment treated by the company that makes
it as a payment to which section 1033 of CTA 2010 applies (purchase
10
by unquoted trading company of own shares), and
(d)
a person who receives a chargeable payment within the meaning of
Chapter 5 of Part 23 of CTA 2010 (company distributions:
demergers).
      (2)
But, for a relevant data-holder of a type described in this paragraph, data
15
may only be specified in regulations under paragraph 1(3) if the data
concern a matter mentioned in sub-paragraph (3).
      (3)
The matters are—
(a)
whether the relevant data-holder is the beneficial owner (or sole
beneficial owner) of the securities or payment in question,
20
(b)
if not—
(i)
details of the beneficial owner (or other beneficial owners),
and
(ii)
if those details are not known or if different, details of the
person for whom the securities are held or to whom the
25
payment is or may be paid on, and
(c)
if there is more than one beneficial owner or more than one person of
the kind mentioned in paragraph (b)(ii), their respective interests in
the securities or payment.
      (4)
“Payment derived from securities” includes in particular—
30
(a)
an amount (whether of income or capital) that is payable out of or in
respect of securities or rights attaching to securities, and
(b)
a payment that is representative of any such amount.
15    (1)
A person who makes a payment derived from securities that has been
received from or is paid on behalf of another is a relevant data-holder.
35
      (2)
“Payment derived from securities” has the same meaning as in paragraph
14.
Grants and subsidies out of public funds
16    (1)
A person by whom a payment out of public funds is made by way of grant
or subsidy is a relevant data-holder.
40
      (2)
For these purposes, a payment is a payment out of public funds if it is
provided directly or indirectly by—
(a)
the Crown,

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 2 — Relevant data-holders
359

(b)
any government, public or local authority whether in the United
Kingdom or elsewhere, or
(c)
any EU institution.
Licences, approvals etc
17    (1)
A person by whom licences or approvals are issued or a register is
5
maintained is a relevant data-holder.
      (2)
“Register” includes—
(a)
any record or list that a local authority maintains, and
(b)
any record or list that any other person is required or permitted to
maintain by or under an enactment.
10
Rent and other payments arising from land
18    (1)
Each of the following is a relevant data-holder—
(a)
a lessee (or successor in title of a lessee),
(b)
an occupier of land,
(c)
a person having the use of land, and
15
(d)
a person who, as agent, manages land or is in receipt of rent or other
payments arising from land.
      (2)
The reference to a person who manages land includes a person who markets
property to potential tenants, searches for tenants or provides similar
services.
20
Dealing etc in securities
19    (1)
Each of the following is a relevant data-holder—
(a)
a person who effects or is a party to securities transactions wholly or
partly on behalf of others (whether as agent or principal),
(b)
a person who, in the course of business, acts as registrar or
25
administrator in respect of securities transactions (including a
person who manages a clearing house for any terminal market in
securities),
(c)
a person who makes a payment derived from securities to anyone
other than the registered or inscribed holder of the securities,
30
(d)
a person who makes a payment derived from bearer securities, and
(e)
an accountable person within the meaning of the Stamp Duty
Reserve Tax Regulations 1986 (S.I. 1986/1711).
      (2)
“Payment derived from securities” has the same meaning as in paragraph 14
(and “payment derived from bearer securities” is to be read accordingly).
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      (3)
“Securities transactions” means—
(a)
transactions in securities,
(b)
transactions under which a representative payment has been, is to be
or may be made, or
(c)
the making or receipt of a representative payment.
40
      (4)
In sub-paragraph (3)—