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 5 — Miscellaneous provision and interpretation
367

(d)
VAT,
(e)
insurance premium tax,
(f)
inheritance tax,
(g)
stamp duty land tax,
(h)
stamp duty reserve tax,
5
(i)
petroleum revenue tax,
(j)
aggregates levy,
(k)
climate change levy,
(l)
landfill tax, and
(m)
relevant foreign tax.
10
      (2)
“Corporation tax” includes any amount assessable or chargeable as if it were
corporation tax.
      (3)
“VAT” means—
(a)
value added tax charged in accordance with VATA 1994, and
(b)
value added tax charged in accordance with the law of another
15
member State,

and includes any amount that is recoverable under paragraph 5(2) of
Schedule 11 to VATA 1994 (amounts shown on invoices as VAT).
      (4)
“Relevant foreign tax” means—
(a)
a tax of a member State, other than the United Kingdom, which is
20
covered by the provisions for the exchange of information under the
Directive of the Council of the European Communities No. 77/799/
EEC (as amended from time to time), and
(b)
any tax or duty which is imposed under the law of a territory in
relation to which arrangements having effect by virtue of section 173
25
of FA 2006 (international tax enforcement arrangements) have been
made and which is covered by the arrangements.
Statutory records
46    (1)
For the purposes of this Schedule data form part of a data-holder’s statutory
records if they are data that the data-holder is required to keep and preserve
30
under or by virtue of any enactment relating to tax.
      (2)
Data cease to form part of a data-holder’s statutory records when the period
for which the data are required to be preserved under or by virtue of that
enactment has expired.
General interpretation
35
47
In this Schedule—
“address” includes an electronic address;
“body of persons” has the same meaning as in TMA 1970;
“chargeable period” means a tax year, accounting period or other
period for which a tax is charged;
40
“charity” has the meaning given by paragraph 1(1) of Schedule 6 to FA
2010;
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs;
“company” has the meaning given by section 288(1) of TCGA 1992;
45

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 5 — Miscellaneous provision and interpretation
368

“data” includes information held in any form;
“the data-holder”, in relation to a data-holder notice, means the person
to whom the notice is addressed;
“data-holder notice” is defined in paragraph 1;
“dividend” includes any kind of distribution;
5
“document” includes a copy of a document (see also section 114 of FA
2008);
“employment”, “employee” and “employer” have the same meaning as
in Parts 2 to 7 of ITEPA 2003 (see, in particular, sections 4 and 5 of
that Act);
10
“HMRC” means Her Majesty’s Revenue and Customs;
“local authority” has the meaning given in section 999 of ITA 2007;
“provide” includes make available for inspection;
“specify” includes describe;
“securities” includes—
15
(a)
shares and stock,
(b)
debentures, including debenture stock, loan stock, bonds,
certificates of deposit and other instruments creating or
acknowledging indebtedness, and
(c)
warrants or other instruments entitling the holder to
20
subscribe for or otherwise acquire anything within
paragraph (a) or (b),
issued by or on behalf of a person resident in, or a government or
public or local authority of, any country (including a country outside
the United Kingdom);
25
“shares” is to be construed in accordance with sections 99 and 103A of
TCGA 1992;
“tax functions” means functions relating to tax;
“the tribunal” means the First-tier Tribunal or, where determined by or
under the Tribunal Procedure Rules, the Upper Tribunal.
30
48
A reference in this Schedule to providing data includes—
(a)
preparing and delivering a return, statement or declaration, and
(b)
providing documents.
49    (1)
A reference in this Schedule to the carrying on of a business also includes—
(a)
the letting of property,
35
(b)
the activities of a charity, and
(c)
the activities of a government department, a local authority, a local
authority association or any other public authority.
      (2)
“Local authority association” has the meaning given in section 1000 of ITA
2007.
40
Crown application
50
This Schedule applies to the Crown but not to Her Majesty in Her private
capacity (within the meaning of the Crown Proceedings Act 1947).

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 6 — Consequential provisions
369

Part 6
Consequential provisions
TMA 1970
51    (1)
TMA 1970 is amended as follows.
      (2)
Omit—
5
(a)
section 13 (persons in receipt of taxable income belonging to others),
(b)
section 14 (return of lodgers and inmates),
(c)
section 15 (return of employees’ earnings etc),
(d)
section 15A (non-resident’s staff are UK client’s employees for
section 15 purposes),
10
(e)
section 16 (fees, commissions etc),
(f)
section 16A (agency workers),
(g)
section 17 (interest paid or credited by banks, building societies etc
without deduction of income tax),
(h)
section 18 (interest paid without deduction of income tax),
15
(i)
section 18A (other payments and licences etc),
(j)
section 19 (information for purposes of charge on profits of UK
property businesses or under Schedule A),
(k)
section 21 (stock jobbers’ transactions),
(l)
section 23 (power to obtain copies of registers of securities),
20
(m)
section 24 (power to obtain information as to income from securities),
(n)
section 25 (issuing houses, stockbrokers, auctioneers etc),
(o)
section 26 (nominee shareholders),
(p)
section 27 (settled property),
(q)
section 76 (protection for certain trustees, agents and receivers), and
25
(r)
section 77I (information from petroleum licence-holders).
      (3)
In the Table in section 98 (special returns etc), omit the entries (so far as they
continue to have effect) relating to—
(a)
section 77I of TMA 1970,
(b)
paragraph 2 of Schedule 15 to FA 1973,
30
(c)
sections 42, 217(4), 226(4) and 768(9) of ICTA,
(d)
paragraph 3 of Schedule 12 to FA 1989,
(e)
sections 302B and 647 of ITTOIA 2005,
(f)
section 241 of CTA 2009, and
(g)
sections 728, 1046(5) to (7) and 1097(1) and (2) of CTA 2010.
35
      (4)
In that Table—
(a)
for the entry relating to section 31 of CTA 2010 substitute the
following entry—
“Section 31(3) and (4) of CTA 2010.”,
(b)
for the entry relating to section 465 of CTA 2010 substitute the
40
following entry—
“Section 465(3) and (4) of CTA 2010.”, and
(c)
for the entry relating to section 1102 of CTA 2010 substitute the
following entry—
“Section 1102(4) and (5) of CTA 2010.”
45

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 6 — Consequential provisions
370

      (5)
In section 103ZA (disapplication of sections 100 to 103)—
(a)
omit “or” at the end of paragraph (d), and
(b)
at the end of paragraph (e) insert “, or
(f)
Schedule 23 to FA 2011 (data-gathering powers).”
FA 1973
5
52
In Schedule 15 to FA 1973 (territorial extension of charge to tax:
supplementary provisions), omit paragraph 2 so far as it continues to have
effect (see section 381 of TIOPA 2010).
FA 1974
53    (1)
In section 24 of FA 1974 (returns of persons treated as employees), for the
10
words from “section 15” to the end substitute “any notice given under
section 8 of the Taxes Management Act 1970 to the person performing the
duties (P) may require a return of P’s income to include particulars of any
general earnings paid to P.”
      (2)
Sub-paragraph (1) applies so far as section 24 of FA 1974 continues to have
15
effect (see section 381 of TIOPA 2010).
FA 1986
54
In Schedule 18 to FA 1986 (securities: other provisions), omit paragraph 8(4)
and (5).
ICTA
20
55
Omit the following provisions of ICTA so far as they continue to have effect
(see section 1184 of CTA 2010 and section 381 of TIOPA 2010)—
(a)
section 42(7) (information required to decide whether to give
provisional notice of determination),
(b)
section 217(4) (information about person for whom chargeable
25
payment is received),
(c)
section 226(4) (information about purchase by unquoted trading
company of its own shares),
(d)
section 768(9) (information about change in ownership of company:
disallowance of trading losses), and
30
(e)
section 816(3) (disapplication of bank exemption).
FA 1989
56
In Schedule 12 to FA 1989 (close companies), omit paragraph 3 so far as it
continues to have effect (see section 1184 of CTA 2010).
ITTOIA 2005
35
57    (1)
ITTOIA 2005 is amended as follows.
      (2)
In Chapter 4 of Part 3 (profits of property businesses: lease premiums etc),
omit section 302B(3) and (4).
      (3)
In Chapter 5 of Part 5 (settlements: amounts treated as income of settlor),
omit section 647.
40

Finance (No. 3) Bill
Schedule 23 — Data-gathering powers
Part 6 — Consequential provisions
371

FA 2005
58
In Schedule 2 to FA 2005 (alternative finance arrangements: further
provisions), omit paragraph 2 so far as it continues to have effect (see section
1329 of CTA 2009).
CRCA 2005
5
59
In Schedule 2 to CRCA 2005 (functions of Commissioners and officers:
restrictions etc), omit paragraph 2.
FA 2008
60
FA 2008 is amended as follows.
61
In section 39 (dormant bank and building society accounts), in subsection
10
(1), omit paragraph (a).
62    (1)
Schedule 36 (information and inspection powers) is amended as follows.
      (2)
Omit paragraph 34A.
      (3)
In paragraph 61A (involved third parties)—
(a)
in sub-paragraph (2), omit ““relevant information”,”,
15
(b)
in each entry in the second column of the Table, for “Information and
documents” substitute “Documents”, and
(c)
accordingly, in the heading of that column, omit “information and
relevant”.
CTA 2009
20
63
In Chapter 4 of Part 4 of CTA 2009 (profits of property businesses: lease
premiums etc), omit section 241(3) and (4).
CTA 2010
64    (1)
CTA 2010 is amended as follows.
      (2)
Omit—
25
(a)
section 31(1) (companies with small profits: power to obtain
information),
(b)
section 465(1) (close companies: power to obtain information),
(c)
section 728 (provision of information about ownership of shares etc),
(d)
section 1046(5) to (7) (information about purchase by unquoted
30
trading company of its own shares),
(e)
section 1097 (information about person for whom chargeable
payment is received), and
(f)
section 1102(2) (non-qualifying distributions etc: additional
information).
35
      (3)
In section 1109 (tax credits for certain recipients of exempt qualifying
distributions), in subsection (4), for “1102(2)” substitute “1102(3)”.

Finance (No. 3) Bill
Schedule 24 — Amendments of Schedule 36 FA 2008
372

Part 7
Application of this Schedule
65    (1)
This Schedule—
(a)
comes into force on 1 April 2012, and
(b)
applies from then on to relevant data with a bearing on any period
5
(whether before, on or after that date), subject to paragraph 3(2).
      (2)
The provisions repealed or otherwise amended by Part 6 of this Schedule
continue to have effect in relation to notices given, or requests made,
pursuant to any of the repealed provisions before 1 April 2012 as if the
repeals and other amendments had not been made.
10
Schedule 24
Section 86(2)

Amendments of Schedule 36 FA 2008
1
Schedule 36 to FA 2008 (information and inspection powers) is amended as
follows.
2     (1)
Paragraph 5 (power to obtain information and documents about persons
15
whose identity is not known) is amended as follows.
      (2)
In sub-paragraph (2), omit “UK”.
      (3)
In sub-paragraph (4)—
(a)
in paragraph (b), for the words from “the Taxes Acts” to the end
substitute “the law (including the law of a territory outside the
20
United Kingdom) relating to tax,” and
(b)
in paragraph (c), omit “UK”.
      (4)
Omit sub-paragraph (5).
      (5)
The amendments made by this paragraph—
(a)
come into force on 1 April 2012, and
25
(b)
apply from then on in relation to tax regardless of when the tax
became due (whether before, on or after that date).
3     (1)
Paragraph 40A (penalties for inaccurate information and documents) is
amended as follows.
      (2)
In sub-paragraph (1)(b), for “A or B” substitute “A, B or C”.
30
      (3)
After sub-paragraph (3) insert—
   “(3A)
Condition B is that the person knows of the inaccuracy at the time
the information is provided or the document produced but does
not inform HMRC at that time.”
      (4)
In sub-paragraph (4), for “B” substitute “C”.
35
      (5)
The amendments made by this paragraph have effect in relation to any
inaccuracy in information provided, or in documents produced, on or after
1 April 2012.

Finance (No. 3) Bill
Schedule 24 — Amendments of Schedule 36 FA 2008
373

4     (1)
After paragraph 49 insert—
“Increased daily default penalty
49A   (1)
This paragraph applies if—
(a)
a penalty under paragraph 40 is assessed under paragraph
46 in respect of a person’s failure to comply with a notice
5
under paragraph 5,
(b)
the failure continues for more than 30 days beginning with
the date on which notification of that assessment was
issued, and
(c)
the person has been told that an application may be made
10
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 the person.
15
      (3)
If the tribunal decides that an increased daily penalty should be
imposed, then for each applicable day (see paragraph 49B) on
which the failure continues—
(a)
the person is not liable to a penalty under paragraph 40 in
respect of the failure, and
20
(b)
the person 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.
      (5)
But subject to that, in determining the amount the tribunal must
25
have regard to—
(a)
the likely cost to the person of complying with the notice,
(b)
any benefits to the person of not complying with it, and
(c)
any benefits to anyone else resulting from the person’s
non-compliance.
30
      (6)
Paragraph 41 applies in relation to the sum specified in sub-
paragraph (4) as it applies in relation to the sums mentioned in
paragraph 41(1).
49B   (1)
If a person becomes liable to a penalty under paragraph 49A,
HMRC must notify the person.
35
      (2)
The notification must specify the day from which the increased
penalty is to apply.
      (3)
That day and any subsequent day is an “applicable day” for the
purposes of paragraph 49A(3).
49C   (1)
A penalty under paragraph 49A must be paid before the end of the
40
period of 30 days beginning with the date on which the
notification under paragraph 49B is issued.
      (2)
A penalty under paragraph 49A may be enforced as if it were
income tax charged in an assessment and due and payable.”