Finance (No. 3) Bill

Session 2010 - 11
Internet Publications
Other Bills before Parliament

Finance (No. 3) Bill

Finance (No. 3) Bill
Schedule 25 — Mutual assistance for recovery of taxes etc
374

      (2)
The amendment made by this paragraph has effect in relation to failures to
comply with a notice under paragraph 5 that begin on or after 1 April 2012.
5     (1)
Paragraph 50 (tax-related penalty) is amended as follows.
      (2)
In sub-paragraph (1)(d), omit “(within the meaning of paragraph 46)”.
      (3)
After sub-paragraph (6) insert—
5
    “(7)
In sub-paragraph (1)(d) “the relevant date” means—
(a)
in a case involving an information notice against which a
person may appeal, the latest of—
(i)
the date on which the person became liable to the
penalty under paragraph 39,
10
(ii)
the end of the period in which notice of an appeal
against the information notice could have been
given, and
(iii)
if notice of such an appeal is given, the date on
which the appeal is determined or withdrawn, and
15
(b)
in any other case, the date on which the person became
liable to the penalty under paragraph 39.”
      (4)
The amendments made by this paragraph have effect where a person
becomes liable to a penalty under paragraph 39 of Schedule 36 to FA 2008 on
or after the day on which this Act is passed.
20
6
In paragraph 61A (involved third parties), in the first column of item 11 of
the Table, after “receiving” insert “supplies of”.
Schedule 25
Section 87

Mutual assistance for recovery of taxes etc
MARD
25
1
In this Schedule “MARD” means Council Directive 2010/24/EU.
HMRC functions
2     (1)
The Commissioners are a competent authority in the United Kingdom for
the purposes of all matters under MARD other than excluded matters.
      (2)
HMRC is designated as the central liaison office in the United Kingdom for
30
the purposes of all matters under MARD other than excluded matters.
      (3)
Excluded matters are—
(a)
requests for assistance in another member State in connection with a
relevant devolved tax, and
(b)
requests for assistance in the United Kingdom in connection with an
35
agricultural levy payable in another member State, where the
assistance requires steps to be taken in or in relation to Scotland.
      (4)
“Relevant devolved tax” means—
(a)
an agricultural levy recoverable by the Scottish Ministers under
section 6(4) of the European Communities Act 1972, and
40

Finance (No. 3) Bill
Schedule 25 — Mutual assistance for recovery of taxes etc
375

(b)
a tax or duty (other than an agricultural levy) imposed in Scotland or
Northern Ireland, if—
(i)
in the case of Scotland, provision for the imposition of it in an
Act of the Scottish Parliament is within the legislative
competence of the Scottish Parliament, or
5
(ii)
in the case of Northern Ireland, it is a transferred matter
within the meaning of the Northern Ireland Act 1998.
Exchange of information
3     (1)
No obligation of secrecy imposed by statute or otherwise precludes a public
authority (or anyone acting on behalf of a public authority) from disclosing
10
information if the disclosure is made for the purpose of giving effect, or
enabling effect to be given, to MARD or a MARD-related instrument.
      (2)
Sub-paragraph (1) applies, in particular, to any disclosure (to persons in the
United Kingdom or elsewhere) in connection with a request or proposed
request by or on behalf of an applicant authority of any member State for
15
assistance in accordance with MARD.
      (3)
Sub-paragraph (2) is not to be taken to limit sub-paragraph (1).
      (4)
Sub-paragraph (1) does not apply to a disclosure relating to any excluded
matters as defined in paragraph 2(3).
Onward disclosure of information received from HMRC
20
4     (1)
A public authority commits an offence if—
(a)
it discloses relevant information, and
(b)
the disclosure is not permitted by sub-paragraph (3).
      (2)
“Relevant information” is information that—
(a)
the public authority has received from HMRC by virtue of paragraph
25
3, and
(b)
relates to a person whose identity is specified in the disclosure or can
be deduced from it.
      (3)
A disclosure is permitted by this sub-paragraph if it is made—
(a)
in accordance with paragraph 3,
30
(b)
in accordance with another enactment (or an instrument made under
an enactment) permitting the disclosure,
(c)
in pursuance of an order of a court,
(d)
for the purposes of civil proceedings (whether or not within the
United Kingdom),
35
(e)
for the purposes of a criminal investigation or criminal proceedings
(whether or not within the United Kingdom),
(f)
with the consent of each person to whom the information relates, or
(g)
with the consent of the Commissioners.
      (4)
Sub-paragraph (1) applies to each of the following as it applies to a public
40
authority—
(a)
an employee or agent of the public authority;
(b)
anyone providing services or exercising functions on behalf of the
public authority;

Finance (No. 3) Bill
Schedule 25 — Mutual assistance for recovery of taxes etc
376

(c)
anyone authorised by the public authority to receive information on
its behalf.
5     (1)
It is a defence for a person charged with an offence under paragraph 4 to
prove that the person reasonably believed—
(a)
that the disclosure was lawful, or
5
(b)
that the information had already and lawfully been made available
to the public.
      (2)
A person guilty of an offence under paragraph 4 is liable—
(a)
on conviction on indictment, to imprisonment for a term not
exceeding 2 years or a fine, or both;
10
(b)
on summary conviction, to imprisonment for a term not exceeding 12
months or a fine not exceeding the statutory maximum, or both.
      (3)
A prosecution for an offence under paragraph 4 may be instituted in
England and Wales only—
(a)
by the Director of Revenue and Customs Prosecution, or
15
(b)
with the consent of the Director of Public Prosecutions.
      (4)
A prosecution for an offence under paragraph 4 may be instituted in
Northern Ireland only—
(a)
by the Commissioners, or
(b)
with the consent of the Director of Public Prosecutions for Northern
20
Ireland.
      (5)
In the application of this paragraph—
(a)
in England and Wales, in relation to an offence committed before the
commencement of section 154(1) of the Criminal Justice Act 2003, or
(b)
in Northern Ireland,
25

the reference in sub-paragraph (2)(b) to 12 months is to be read as a reference
to 6 months.
Enforcement of foreign claims in the UK
6     (1)
This paragraph applies if an applicant authority of another member State
makes a request in accordance with MARD for the recovery in the United
30
Kingdom of a claim.
      (2)
The claim in relation to which such a request is made is referred to as “the
foreign claim”.
      (3)
Such steps may be taken by or on behalf of the relevant UK authority to
enforce the foreign claim as might be taken (whether or not by the relevant
35
UK authority) to enforce a corresponding UK claim.
      (4)
“Steps” includes any legal or administrative steps, whether by way of legal
proceedings, distress, diligence or otherwise.
      (5)
See paragraphs 7 and 8 for the meaning of “the relevant UK authority” and
“corresponding UK claim”.
40
      (6)
The steps mentioned in sub-paragraph (3) include exercising any powers of
set-off that the relevant UK authority would have been entitled to exercise if
the foreign claim had been payable to it under an enactment.

Finance (No. 3) Bill
Schedule 25 — Mutual assistance for recovery of taxes etc
377

      (7)
Any enactment or rule of law relating to a corresponding UK claim is to
apply, with any necessary adaptations, in relation to the foreign claim.
      (8)
The enactments applied by sub-paragraph (7) include in particular those
relating to the recovery of penalties and to the charging and recovery of
interest on unpaid amounts.
5
The relevant UK authority
7     (1)
“The relevant UK authority” is—
(a)
if the foreign claim relates to anything other than an agricultural
levy, the Commissioners;
(b)
if the foreign claim relates to an agricultural levy and the steps are
10
ones to be taken in or in relation to England, the Commissioners
concurrently with the Secretary of State;
(c)
if the foreign claim relates to an agricultural levy and the steps are
ones to be taken in or in relation to Wales, the Commissioners
concurrently with the Welsh Ministers;
15
(d)
if the foreign claim relates to an agricultural levy and the steps are
ones to be taken in or in relation to Northern Ireland, the
Commissioners concurrently with the Department of Agriculture
and Rural Development.
      (2)
A reference in this paragraph to claims relating to an agricultural levy
20
includes claims for penalties, fees, surcharges, interest or costs arising in
connection with an agricultural levy.
Corresponding UK claim
8     (1)
In relation to a foreign claim, “corresponding UK claim” means a claim in the
United Kingdom of a kind that appears to the relevant UK authority to
25
correspond most closely to the kind of foreign claim to which the foreign
claim belongs.
      (2)
But if the relevant UK authority concludes that there is nothing in the United
Kingdom of a kind that is similar to that kind of foreign claim,
“corresponding UK claim” is taken to mean a claim for income tax charged
30
in an assessment and due and payable.
Application of relevant enactments
9     (1)
In relation to any kind of foreign claim, the relevant UK authority may by
regulations make provision as to the application, non-application or
adaptation of any enactment or rule of law relating to corresponding UK
35
claims.
      (2)
Paragraph 6(7) is subject to any provision so made.
Power to make further provision
10    (1)
The Treasury may by regulations make provision about procedural or other
supplementary matters for the purpose of giving effect to MARD and any
40
MARD-related instrument.
      (2)
But provision may not be made for that purpose so far as it relates to any
excluded matters as defined in paragraph 2(3).

Finance (No. 3) Bill
Schedule 25 — Mutual assistance for recovery of taxes etc
378

Contested claims
11    (1)
The taking or continuation of steps against a person under paragraph 6(3)
must be suspended if the person shows that relevant proceedings are
pending, or about to be instituted, before a court, tribunal or other
competent body in the member State in question.
5
      (2)
“Relevant proceedings” are proceedings relevant to the person’s liability on
the foreign claim.
      (3)
Relevant proceedings are “pending” so long as an appeal may be brought
against any decision in the proceedings.
      (4)
Sub-paragraph (1) does not apply to steps that may be taken or continued
10
against the person by the application (by virtue of paragraphs 6(7) and 9) of
an enactment or rule of law that permits such steps to be taken or continued
in similar circumstances in the case of a corresponding UK claim.
      (5)
Sub-paragraph (1) ceases to apply if the relevant proceedings are not
prosecuted or instituted with reasonable speed.
15
Claims determined in taxpayer’s favour
12    (1)
Steps under paragraph 6(3) must not be taken or continued against a person
if a final decision on the foreign claim has been given in the person’s favour
by a court, tribunal or other competent body in the member State in
question.
20
      (2)
For this purpose, a final decision is one against which no appeal lies or
against which an appeal lies within a period that has expired without an
appeal having been brought.
      (3)
If the person shows that such a decision has been given in respect of part of
the foreign claim, steps under paragraph 6(3) must not be taken or continued
25
in relation to that part.
Liability to pay
13
In relation to any steps against a person under paragraph 6(3), no question
may be raised as to the person’s liability on the foreign claim except as
mentioned in paragraph 12.
30
Presumption of validity
14
For the purposes of any steps under paragraph 6(3), a request made by an
applicant authority in another member State is taken to be duly made in
accordance with MARD unless the contrary is proved.
Regulations
35
15    (1)
Regulations under this Schedule are to be made by statutory instrument.
      (2)
A statutory instrument containing regulations under this Schedule is subject
to annulment in pursuance of a resolution of the House of Commons.

Finance (No. 3) Bill
Schedule 25 — Mutual assistance for recovery of taxes etc
379

Interpretation
16
In this Schedule—
“agricultural levy” has the meaning given by section 6 of the European
Communities Act 1972;
“applicant authority” has the same meaning as in MARD;
5
“the Commissioners” means the Commissioners for Her Majesty’s
Revenue and Customs;
“enactment” includes—
(a)
an Act of the Scottish Parliament,
(b)
a Measure or Act of the National Assembly for Wales, and
10
(c)
any Northern Ireland legislation as defined by section 24(5)
of the Interpretation Act 1978;
“HMRC” means Her Majesty’s Revenue and Customs;
“MARD-related instrument” means any EU instrument (including one
made after the passing of this Act) that lays down detailed rules for
15
implementing MARD;
“public authority” means a person with functions of a public nature;
“requested authority” has the same meaning as in MARD.
Consequential amendments etc
17    (1)
Section 134 of and Schedule 39 to FA 2002 (which concern Council Directive
20
2008/55/EC) are repealed with effect from 1 January 2012.
      (2)
Any outstanding request for assistance made in accordance with Council
Directive 2008/55/EC before that date is to be treated on and after that date
for the purposes of this Schedule as if it had been made in accordance with
MARD.
25
      (3)
Despite sub-paragraph (1), section 134 of and Schedule 39 to FA 2002 are to
continue in force on and after that date so far as they relate to excluded
matters as defined in paragraph 2(3) of this Schedule.
18    (1)
Section 322 of FA 2004 (mutual assistance: customs union with the
Principality of Andorra) is amended as follows.
30
      (2)
In subsection (2), in the definition of “the Mutual Assistance Recovery
Directive”, after “as” insert “MARD has”.
      (3)
In that subsection, for the definition of “the UK mutual assistance
provisions” substitute—
““the UK mutual assistance provisions” means the provisions of
35
section 87 of the Finance Act 2011 (mutual assistance for
recovery of taxes etc) and Schedule 25 to that Act.”
      (4)
For subsection (3) substitute—
“(3)
In the UK mutual assistance provisions as they have effect in
accordance with subsection (1)—
40
(a)
references (except for the one in paragraph 1 of Schedule 25)
to MARD are to be read as references to the EC-Andorra
Mutual Assistance Recovery Decision,
(b)
references to another member State are to be read as
references to the Principality of Andorra,
45

Finance (No. 3) Bill
Schedule 26 — Redundant reliefs
Part 1 — Income tax and corporation tax
380

(c)
references to an applicant authority of another member State
are to be read as references to the competent authority of the
Principality of Andorra,
(d)
references to a MARD-related instrument are to be
disregarded, and
5
(e)
paragraph 10 of Schedule 25 (power to make further
provision) is to be treated as omitted.”
      (5)
In subsection (4), for “section 134(6) of the Finance Act 2002 and paragraph
3 of Schedule 39” substitute “section 87(2) of the Finance Act 2011 and
paragraph 9 of Schedule 25”.
10
      (6)
The amendments made by this paragraph have effect from 1 January 2012.
      (7)
Any regulations made by virtue of subsection (4) of section 322 of FA 2004
and in force immediately before 1 January 2012 are to have effect on and
after that date as if made by virtue of that subsection as amended by sub-
paragraph (5).
15
Application
19
This Schedule has effect in relation to the recovery of sums becoming due at
any time, whether before or after this Act is passed.
Schedule 26
Section 91

Redundant reliefs
20
Part 1
Income tax and corporation tax
Transitional relief for charities etc on abolition of payment of tax credits on distributions
1     (1)
Section 35 of, and Schedule 5 to, F(No.2)A 1997 (transitional relief for
charities etc and limitations on entitlement to the relief) are repealed.
25
      (2)
Accordingly—
(a)
in section 231B of ICTA, in subsection (4)—
(i)
after paragraph (b) insert “and”, and
(ii)
omit paragraph (d) (and the “and” before it), and
(b)
the following provisions are repealed—
30
(i)
in ITA 2007, paragraph 379 of Schedule 1;
(ii)
in FA 2010, paragraph 14 of Schedule 6.
Gifts of money for relief in poor countries (“Millennium Gift Aid”)
2     (1)
Section 48 of FA 1998 (gifts of money for relief in poor countries etc) is
repealed.
35
      (2)
Accordingly, the following provisions are repealed—
(a)
in FA 1999, sections 56 and 57;
(b)
in FA 2000, section 42;