Tax Credits Bill

Tax Credits Bill - continued	House of Lords

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	Administration and enforcement
General functions of Board.	5. - (1) Working families' tax credit and disabled person's tax credit shall be under the care and management of the Board.
	(2) Section 10 of the Exchequer and Audit Departments Act 1866 (gross revenues to be paid to Exchequer) shall be construed as allowing the Board to deduct payments for or in respect of tax credit before causing the gross revenues of their department to be paid to the accounts mentioned in that section.
	(3) For the purposes of the Inland Revenue Regulation Act 1890, everything that relates to tax credit shall be taken to relate to inland revenue; and the expressions "in relation to inland revenue", "Collector of Inland Revenue" and "Officer of Inland Revenue" shall be construed accordingly.
	(4) The reference in section 4(1) of that Act (appointment of collectors, officers and other persons) to collecting, receiving, managing and accounting for inland revenue shall be taken to include a reference to paying and managing tax credit.
	(5) The duties of the Board under section 13 of that Act (Board to keep accounts) shall include a duty to set forth in the accounts mentioned in that section-
	(a) the amounts of the several payments made by them of or in respect of tax credit;
	(b) the amounts of the expenses of paying and managing tax credit; and
	(c) the amounts received by them in respect of tax credit,
	distinguishing in each case between amounts relating to working families' tax credit and amounts relating to disabled person's tax credit.
	(6) In any declaration for the purposes of section 6 of the Taxes Management Act 1970 (declarations on taking office), whether made before or after the commencement of this section, the reference to an offence relating to inland revenue shall be taken to include a reference to an offence relating to tax credit.
	(7) Section 163(2) of the Social Security Administration Act 1992 (sums to be paid out of money provided by Parliament) shall have effect subject to subsection (2) above.
Payment of tax credit by employers etc.	6. - (1) Subject to subsection (3), on the making to any person ("the employee") of any payment of, or on account of, any income assessable to income tax under Schedule E, any tax credit to which he is entitled shall, subject to and in accordance with regulations made by the Board under this section, be paid by the person making the payment ("the employer").
	(2) The Board shall ensure that any single parent can decide to receive payment of any tax credit direct from the Board rather than from the employer.
	(3) Any employer employing fewer than ten employees may elect that any tax credit to which an employee is entitled shall be paid by the Board instead of being paid by him.
	(4) For the purposes of subsection (3), the Board may make regulations providing for-
	(a) the method for making or revoking an election;
	(b) the method for cancelling an election if the employer subsequently employs ten or more employees; and
	(c) two or more connected employers to be treated in specified circumstances as if each of them employed the employees employed by the other connected employers as well as the employees employed by himself.
	(5) The Board shall make regulations with respect to the payment of tax credit by employers, and those regulations may, in particular, include provision-
	(a) for requiring employers to make payments of tax credit by reference to notifications of entitlement furnished to them by the Board;
	(b) for the production of wages sheets and other documents and records to officers of the Board for the purpose of enabling them to satisfy themselves that tax credit has been and is being paid, in accordance with the regulations, to employees who are entitled to it;
	(c) for requiring employers to provide information to employees (in their itemised pay statements or otherwise);
	(d) for the funding by the Board of tax credit paid or to be paid by employers (whether by way of set off against income tax or national insurance contributions for which they are accountable to the Board or otherwise);
	(e) for the recovery by the Board of any sums overpaid to employers under paragraph (d) above;
	(f) for the payment of interest on sums due from or to the Board, and for determining the date from which interest is to be calculated; and
	(g) for appeals with respect to matters arising under the regulations which would otherwise not be the subject of an appeal.
	(6) Regulations under this section-
	(a) may make different provision for different cases or circumstances; and
	(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
	(7) This section shall come into force on 6th April 2000.
Rights of employees not to suffer unfair dismissal or other detriment.	7. Schedule 3 to this Act (rights of employees not to suffer unfair dismissal or other detriment) shall have effect.
Powers to obtain information.	8. - (1) Section 20 of the Taxes Management Act 1970 (power to call for documents etc.), and section 20B of that Act (restrictions on powers) so far as relating to section 20, shall apply in relation to an employer's compliance with regulations under section 6 above as they apply in relation to a person's tax liability or its amount.
	(2) Those sections as they so apply shall have effect as if-
	(a) any reference to the taxpayer, a taxpayer or a class of taxpayers were a reference to the employer, an employer or a class of employers;
	(b) any reference to any provision of the Taxes Acts were a reference to regulations under section 6 above;
	(c) any reference to the proper assessment or collection of tax were a reference to the proper award and payment of tax credit;
	(d) the reference in section 20(8) to the taxpayer with whose liability the inspector or the Board is concerned were a reference to the employer with whose compliance with regulations under section 6 above the inspector or the Board is concerned;
	(e) the reference in section 20B(2) to an appeal relating to tax were a reference to an appeal relating to compliance with regulations under section 6 above; and
	(f) the reference in section 20B(6) to reasonable ground for believing that tax has, or may have been, lost to the Crown owing to the fraud of the taxpayer were a reference to reasonable ground for believing that tax credit has, or may have been, incorrectly paid owing to the fraud of the employer.
Penalties for fraud etc. and failures to comply.	9. - (1) Where a person fraudulently or negligently makes any incorrect statement or declaration in connection with a claim for tax credit, he shall be liable to a penalty not exceeding the amount of the difference specified in subsection (2) below.
	(2) The difference is that between-
	(a) the amount of tax credit to which the claimant is or was entitled in the payment period to which the claim relates; and
	(b) the amount of tax credit to which he would have been so entitled if the statement or declaration had been correct.
	(3) Where a person-
	(a) fails to furnish any information or evidence in accordance with regulations under section 5(1)(h) or (hh) of the Administration Act so far as relating to tax credit;
	(b) fails to produce any document or record, or to provide any information, in accordance with regulations under section 6 above; or
	(c) fails to deliver any document or furnish any particulars in accordance with the provisions applied by section 8(1) above,
	he shall be liable, subject to section 10 below, to the penalties mentioned in subsection (4) below.
	(4) The penalties are-
	(a) a penalty not exceeding £300; and
	(b) if the failure continues after a penalty is imposed under paragraph (a) above, a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which the penalty under that paragraph was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).
	(5) Where a person fraudulently or negligently-
	(a) furnishes any incorrect information or evidence of a kind mentioned in regulations under section 5(1)(h) or (hh) of the Administration Act so far as relating to tax credit;
	(b) produces any incorrect document or record, or provides any incorrect information, of a kind mentioned in regulations under section 6 above; or
	(c) delivers any incorrect document or furnishes any incorrect particulars of a kind mentioned in the provisions applied by section 8(1) above,
	he shall be liable to a penalty not exceeding £3,000.
	(6) Where, in the case of any employee-
	(a) an employer refuses or repeatedly fails to make payments of tax credit in accordance with regulations under section 6 above; and
	(b) the Board cancels the notification of entitlement with a view to the payments being made by officers of the Board,
	the employer shall be liable to a penalty not exceeding £3,000.
	(7) Where, in the case of any employee, an employer fraudulently or negligently-
	(a) makes or receives incorrect payments in a tax year in pursuance of regulations under section 6 above; or
	(b) delivers an incorrect return of payments made or received by him in that year in pursuance of such regulations,
	he shall be liable, subject to section 10 below, to a penalty not exceeding £3,000; but no such penalty shall be imposed in respect of any incorrect payments in respect of which a penalty has been imposed under subsection (6) above.
	(8) In this section "the Administration Act" means the Social Security Administration Act 1992 or the Social Security Administration (Northern Ireland) Act 1992.

Prepared 5 May 1999