Finance (No. 3) Bill

Session 2010 - 11
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Other Bills before Parliament

Finance (No. 3) Bill

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 2 — Relevant data-holders
360

“representative payment” means a payment that is representative of an
amount payable out of or in respect of securities or rights attaching
to securities;
“transactions in securities” means transactions, of whatever
description, relating to securities, and includes in particular—
5
(a)
the purchase, sale or exchange of securities,
(b)
issuing or securing the issue of new securities,
(c)
applying or subscribing for new securities, and
(d)
altering or securing the alteration of rights attached to
securities.
10
Dealing in other property
20
Each of the following is a relevant data-holder—
(a)
the committee or other person or body of persons responsible for
managing a clearing house for any terminal market in commodities,
(b)
an auctioneer,
15
(c)
a person carrying on a business of dealing in any description of
tangible movable property, and
(d)
a person carrying on a business of acting as an agent or intermediary
in dealings in any description of tangible movable property.
Lloyd’s
20
21
A person who is registered as managing agent at Lloyd’s in relation to a
syndicate of underwriting members of Lloyd’s is a relevant data-holder.
Investment plans etc
22
Each of the following is a relevant data-holder—
(a)
a plan manager (see section 696 of ITTOIA 2005), and
25
(b)
an account provider in relation to a child trust fund (as defined in
section 3 of the Child Trust Funds Act 2004).
Petroleum activities
23
Each of the following is a relevant data-holder—
(a)
the holder of a licence granted under Part 1 of the Petroleum Act
30
1998, and
(b)
the responsible person in relation to an oil field (within the meaning
of Part 1 of OTA 1975).
Insurance activities
24
Each of the following is a relevant data-holder—
35
(a)
a person who is involved (in any capacity) in an insurance business
(as defined for the purposes of Part 3 of FA 1994),
(b)
a person who makes arrangements for persons to enter into contracts
of insurance, and
(c)
a person who is concerned in a business that is not an insurance
40
business and who has been involved in the entering into of a contract

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 3 — Appeals against data-holder notices
361

of insurance that provides cover for any matter associated with the
business.
Environmental activities
25
A person who is involved (in any capacity) in any of the following activities
is a relevant data-holder—
5
(a)
subjecting aggregate to exploitation in the United Kingdom (as
defined for the purposes of Part 2 of FA 2001) or connected activities,
(b)
making or receiving supplies of taxable commodities (as defined for
the purposes of Schedule 6 to FA 2000) or connected activities, and
(c)
landfill disposal (as defined for the purposes of Part 3 of FA 1996).
10
Settlements
26    (1)
Each of the following is a relevant data-holder—
(a)
a person who makes a settlement,
(b)
the trustees of a settlement,
(c)
a beneficiary under a settlement, and
15
(d)
any other person to whom income is payable under a settlement.
      (2)
Section 620 of ITTOIA 2005 (meaning of “settlement” etc) applies for the
purposes of this paragraph.
Charities
27
A charity is a relevant data-holder.
20
Part 3
Appeals against data-holder notices
Right of appeal
28    (1)
The data-holder may appeal against a data-holder notice, or any
requirement in such a notice, on any of the following grounds—
25
(a)
it is unduly onerous to comply with the notice or requirement,
(b)
the data-holder is not a relevant data-holder, or
(c)
data specified in the notice are not relevant data.
      (2)
Sub-paragraph (1)(a) does not apply to a requirement to provide data that
form part of the data-holder’s statutory records.
30
      (3)
Sub-paragraph (1) does not apply if the tribunal approved the giving of the
notice in accordance with paragraph 5.
Procedure for appeal
29    (1)
Notice of an appeal under paragraph 28 must be given—
(a)
in writing,
35
(b)
before the end of the period of 30 days beginning with the date on
which the data-holder notice was given, and
(c)
to the officer of Revenue and Customs by whom the data-holder
notice was given.

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 4 — Penalties
362

      (2)
It must state the grounds of appeal.
      (3)
On an appeal that is notified to the tribunal, the tribunal may confirm, vary
or set aside the data-holder notice or a requirement in it.
      (4)
If the tribunal confirms or varies the notice or a requirement in it, the data-
holder must comply with the notice or requirement—
5
(a)
within such period as is specified by the tribunal, or
(b)
if the tribunal does not specify a period, within such period as is
reasonably specified in writing by an officer of Revenue and
Customs following the tribunal’s decision.
      (5)
A decision by the tribunal under this Part is final (despite the provisions of
10
sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007).
      (6)
Subject to this paragraph, the provisions of Part 5 of TMA 1970 relating to
appeals have effect in relation to appeals under paragraph 28 as they have
effect in relation to an appeal against an assessment to income tax.
Part 4
15
Penalties
Penalties for failure to comply
30    (1)
If the data-holder fails to comply with a data-holder notice, the data-holder
is liable to a penalty of £300.
      (2)
A reference in this Schedule to failing to comply with a data-holder notice
20
includes—
(a)
concealing, destroying or otherwise disposing of a material
document, or
(b)
arranging for any such concealment, destruction or disposal.
      (3)
A document is a material document if, at the time when the data-holder
25
acts—
(a)
the data-holder has received a data-holder notice requiring the data-
holder to provide the document or data contained in the document,
or
(b)
the data-holder has not received such a notice but has been informed
30
by an officer of Revenue and Customs that the data-holder will do so
or is likely to do so.
      (4)
A document is not a material document by virtue of sub-paragraph (3)(a) if
the data-holder notice has already been complied with, unless—
(a)
the data-holder has been notified in writing by an officer of Revenue
35
and Customs that the data-holder must continue to preserve the
document, and
(b)
the notification has not been withdrawn.
      (5)
A document is not a material document by virtue of sub-paragraph (3)(b) if
more than 6 months have elapsed since the data-holder was (or was last)
40
informed.

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 4 — Penalties
363

Daily default penalties for failure to comply
31
If—
(a)
a penalty under paragraph 30 is assessed, and
(b)
the failure in question continues after the data-holder has been
notified of the assessment,
5

the data-holder is liable to a further penalty, for each subsequent day on
which the failure continues, of an amount not exceeding £60 for each such
day.
Penalties for inaccurate information or documents
32    (1)
This paragraph applies if—
10
(a)
in complying with a data-holder notice, the data-holder provides
inaccurate data, and
(b)
condition A, B or C is met.
      (2)
Condition A is that the inaccuracy is—
(a)
due to a failure by the data-holder to take reasonable care, or
15
(b)
deliberate on the data-holder’s part.
      (3)
Condition B is that the data-holder knows of the inaccuracy at the time the
data are provided but does not inform HMRC at that time.
      (4)
Condition C is that the data-holder—
(a)
discovers the inaccuracy some time later, and
20
(b)
fails to take reasonable steps to inform HMRC.
      (5)
If this paragraph applies, the data-holder is liable to a penalty not exceeding
£3,000.
Failure to comply with time limit
33
A failure to do anything required to be done within a limited period of time
25
does not give rise to liability under paragraph 30 or 31 if the thing was done
within such further time (if any) as an officer of Revenue and Customs may
have allowed.
Reasonable excuse
34    (1)
Liability to a penalty under paragraph 30 or 31 does not arise if the data-
30
holder satisfies HMRC or (on an appeal notified to the tribunal) the tribunal
that there is a reasonable excuse for the failure.
      (2)
For the purposes of this paragraph—
(a)
an insufficiency of funds is not a reasonable excuse unless
attributable to events outside the data-holder’s control,
35
(b)
if the data-holder relies on another person to do anything, that is not
a reasonable excuse unless the data-holder took reasonable care to
avoid the failure,
(c)
if the data-holder had a reasonable excuse for the failure but the
excuse has ceased, the data-holder is to be treated as having
40
continued to have the excuse if the failure is remedied without
unreasonable delay after the excuse ceased.

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 4 — Penalties
364

Assessment of penalties
35    (1)
If the data-holder becomes liable to a penalty under paragraph 30, 31 or 32,
HMRC may assess the penalty.
      (2)
If they do so, they must notify the data-holder.
      (3)
An assessment of a penalty under paragraph 30 or 31 must be made within
5
the period of 12 months beginning with the latest of the following—
(a)
the date on which the data-holder became liable to the penalty,
(b)
the end of the period in which notice of an appeal against the data-
holder notice (or a requirement in it) could have been given, and
(c)
if notice of such an appeal is given, the date on which the appeal is
10
determined or withdrawn.
      (4)
An assessment of a penalty under paragraph 32 must be made—
(a)
within the period of 12 months beginning with the date on which the
inaccuracy first came to the attention of an officer of Revenue and
Customs, and
15
(b)
within the period of 6 years beginning with the date on which the
data-holder became liable to the penalty.
Right to appeal against penalty
36
The data-holder may appeal against a decision by an officer of Revenue and
Customs—
20
(a)
that a penalty is payable under paragraph 30, 31 or 32, or
(b)
as to the amount of such a penalty.
Procedure on appeal against penalty
37    (1)
Notice of an appeal under paragraph 36 must be given—
(a)
in writing,
25
(b)
before the end of the period of 30 days beginning with the date on
which notification under paragraph 35 was given, and
(c)
to HMRC.
      (2)
It must state the grounds of appeal.
      (3)
On an appeal under paragraph 36(a) that is notified to the tribunal, the
30
tribunal may confirm or cancel the decision.
      (4)
On an appeal under paragraph 36(b) that is notified to the tribunal, the
tribunal may—
(a)
confirm the decision, or
(b)
substitute for the decision another decision that the officer of
35
Revenue and Customs had power to make.
      (5)
Subject to this paragraph and paragraph 40, the provisions of Part 5 of TMA
1970 relating to appeals have effect in relation to appeals under paragraph
36 as they have effect in relation to an appeal against an assessment to
income tax.
40

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 4 — Penalties
365

Increased daily default penalty
38    (1)
This paragraph applies if—
(a)
a penalty under paragraph 31 is assessed under paragraph 35,
(b)
the failure in respect of which that assessment is made continues for
more than 30 days beginning with the date on which notification of
5
that assessment is given, and
(c)
the data-holder has been told that an application may be made under
this paragraph for an increased daily penalty to be imposed.
      (2)
If this paragraph applies, an officer of Revenue and Customs may make an
application to the tribunal for an increased daily penalty to be imposed on
10
the data-holder.
      (3)
If the tribunal decides that an increased daily penalty should be imposed,
then for each applicable day (see paragraph 39) on which the failure
continues—
(a)
the data-holder is not liable to a penalty under paragraph 31 in
15
respect of the failure, and
(b)
the data-holder is liable instead to a penalty under this paragraph of
an amount determined by the tribunal.
      (4)
The tribunal may not determine an amount exceeding £1,000 for each
applicable day.
20
      (5)
But subject to that, in determining the amount the tribunal must have regard
to—
(a)
the likely cost to the data-holder of complying with the data-holder
notice,
(b)
any benefits to the data-holder of not complying with it, and
25
(c)
any benefits to anyone else resulting from the data-holder’s non-
compliance.
39    (1)
If a data-holder becomes liable to a penalty under paragraph 38, HMRC
must notify the data-holder.
      (2)
The notification must specify the day from which the increased penalty is to
30
apply.
      (3)
That day and any subsequent day is an “applicable day” for the purposes of
paragraph 38(3).
Enforcement of penalties
40    (1)
A penalty under this Schedule must be paid before the end of the period of
35
30 days beginning with the date mentioned in sub-paragraph (2).
      (2)
That date is—
(a)
the date on which notification under paragraph 35 or 39 is given in
respect of the penalty, or
(b)
if (in the case of a penalty under paragraph 30, 31 or 32) a notice of
40
appeal under paragraph 36 is given, the date on which the appeal is
finally determined or withdrawn.
      (3)
A penalty under this Schedule may be enforced as if it were income tax
charged in an assessment and due and payable.

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 5 — Miscellaneous provision and interpretation
366

Power to change amount of penalties
41    (1)
If it appears to the Treasury that there has been a change in the value of
money since the last relevant date, they may by regulations substitute for the
sums for the time being specified in paragraphs 30(1), 31, 32(5) and 38(4)
such other sums as appear to them to be justified by the change.
5
      (2)
“Relevant date”, in relation to a specified sum, means—
(a)
the day on which this Act is passed, and
(b)
each date on which the power conferred by sub-paragraph (1) has
been exercised in relation to that sum.
      (3)
Regulations under this paragraph do not apply to—
10
(a)
a failure which began before the date on which they come into force,
or
(b)
an inaccuracy in any data or document provided to HMRC before
that date.
Double jeopardy
15
42
The data-holder is not liable to a penalty under this Schedule in respect of
anything in respect of which the data-holder has been convicted of an
offence.
Part 5
Miscellaneous provision and interpretation
20
Application of provisions of TMA 1970
43
Subject to the provisions of this Schedule, the following provisions of TMA
1970 apply for the purposes of this Schedule as they apply for the purposes
of the Taxes Acts—
(a)
section 108 (responsibility of company officers),
25
(b)
section 114 (want of form), and
(c)
section 115 (delivery and service of documents).
Regulations
44    (1)
Regulations under this Schedule are to be made by statutory instrument.
      (2)
The first regulations to be made under paragraph 1(3) may not be made
30
unless the instrument containing them has been laid in draft before, and
approved by a resolution of, the House of Commons.
      (3)
Subject to sub-paragraph (2), a statutory instrument containing regulations
under this Schedule is subject to annulment in pursuance of a resolution of
the House of Commons.
35
Tax
45    (1)
In this Schedule “tax” means any or all of the following—
(a)
income tax,
(b)
capital gains tax,
(c)
corporation tax,
40