Finance Act 1998 (c. 36) (c. 36)

(The document as of February, 2008)

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13 In section 15 of the 1994 Act (vehicles becoming chargeable to duty at higher rate), after subsection (2) there shall be inserted the following subsection--

" (2A) For the purposes of subsection (1) a vehicle is also used so as to subject it to a higher rate if--

(a) the rate of vehicle excise duty paid on a vehicle licence taken out for the vehicle was the rate applicable to a vehicle of the same description with respect to which the reduced pollution requirements are satisfied, and

(b) while the licence is in force, the vehicle is used at a time when those requirements are not satisfied with respect to it. "

14 In section 16 of the 1994 Act (exceptions from charge at higher rate in case of tractive units), at the beginning of subsection (1) there shall be inserted "Subject to subsection (9)" and after subsection (7) there shall be inserted the following subsections--

" (8) This subsection applies to a tractive unit ("the relevant tractive unit") in relation to which subsection (2), (4) or (6) applies if--

(a) the rate of duty paid on taking out the licence for the relevant tractive unit is the rate applicable to a tractive unit of the appropriate description with respect to which the reduced pollution requirements are satisfied; and

(b) while the licence is in force, the relevant tractive unit is used at a time when the reduced pollution requirements are not satisfied with respect to it.

(9) Where subsection (8) applies, subsection (1) does not prevent duty becoming payable under section 15 at the rate applicable to a tractive unit of the appropriate description with respect to which the reduced pollution requirements are not satisfied.

(10) In this section "the appropriate description" means the description mentioned in paragraph (b) of whichever of subsections (2), (4) and (6) applies in relation to the relevant tractive unit. "

15 In section 45 of the 1994 Act (offences relating to false or misleading declarations and information), in subsections (3A) and (3B), after "section 61A" there shall be inserted "or 61B".

16 (1) Paragraph 22 of Schedule 2 to that Act (exemption in relation to vehicle testing) shall be amended as follows.

(2) In sub-paragraph (1)--

(a) in paragraph (a), for "or a vehicle weight test" there shall be substituted ", a vehicle weight test or a reduced pollution test"; and

(b) in paragraph (b), for "a compulsory test or a vehicle weight test" there shall be substituted "any such test".

(3) In sub-paragraph (2), after "vehicle weight test" there shall be inserted ", a reduced pollution test".

(4) In sub-paragraph (2A), after "compulsory test", in each place it occurs, there shall be inserted "or a reduced pollution test".

(5) In sub-paragraph (3), after "compulsory test" there shall be inserted ", or a reduced pollution test,".

(6) After sub-paragraph (6A) there shall be inserted the following sub-paragraph--

" (6AA) In this paragraph "a reduced pollution test" means any examination of a vehicle for which provision is made by regulations under section 61B of this Act. "

(7) In sub-paragraph (6B), for "or vehicle weight test" there shall be substituted ", a vehicle weight test or a reduced pollution test".

(8) In sub-paragraphs (8) and (9), the word "or" shall be inserted at the end of paragraphs (a) and (c) and after paragraph (c) there shall be inserted the following paragraph--

" (d) a certificate issued by virtue of section 61B of this Act. "

Commencement

17 (1) Subject to sub-paragraph (2) below, the preceding provisions of this Schedule shall come into force in relation to licences issued on or after such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed under this sub-paragraph for different purposes.

(2) Paragraphs 1, 2, 15 and 16 above come into force with the passing of this Act.

Section 20.

SCHEDULE 2 Assessments for excise duty purposes

Alcoholic Liquor Duties Act 1979 (c. 4)

1 In section 8 of the Alcoholic Liquor Duties Act 1979 (remission of duty in respect of spirits used for medical or scientific purposes) the following subsections shall be inserted after subsection (2)--

" (3) Subsection (4) below applies if--

(a) spirits are received and delivered in accordance with subsection (1) above,

(b) they are not used as proposed, and

(c) it is not shown to the satisfaction of the Commissioners that they can be accounted for by natural waste or other legitimate cause.

(4) In such a case the Commissioners--

(a) may assess as being excise duty due from the person concerned an amount equal to the duty that would have been chargeable on the spirits if, at the time of delivery from warehouse, they had been delivered for home use and otherwise than in accordance with subsection (1) above, and

(b) may notify him or his representative accordingly. "

2 In section 10 of the Alcoholic Liquor Duties Act 1979 (remission of duty on spirits for use in art or manufacture) the following subsections shall be inserted after subsection (2)--

" (3) Subsection (4) below applies if--

(a) spirits are received and delivered in accordance with subsection (1) above,

(b) they are not used as proposed, and

(c) it is not shown to the satisfaction of the Commissioners that they can be accounted for by natural waste or other legitimate cause.

(4) In such a case the Commissioners--

(b) may notify him or his representative accordingly. "

3 (1) Section 11 of the Alcoholic Liquor Duties Act 1979 (relief from duty on imported goods not for human consumption containing spirits) shall be amended as follows.

(2) At the beginning there shall be inserted "(1)".

(3) At the end there shall be inserted--

" (2) Subsection (3) below applies if--

(a) the Commissioners make a direction under subsection (1) above, but

(b) it turns out that the goods were for human consumption.

(3) In such a case the Commissioners--

(a) may assess as being excise duty due from the relevant person an amount equal to the duty that would have been chargeable on the goods if the direction had not been made, and

(b) may notify him or his representative accordingly.

(4) The reference in subsection (3) above to the relevant person is to the importer or (if different) the person who sought the direction. "

Hydrocarbon Oil Duties Act 1979 (c. 5)

4 (1) Section 13AB of the Hydrocarbon Oil Duties Act 1979 (misuse of kerosene) shall be amended as follows.

(2) For subsection (1)(a) there shall be substituted--

" (a) in respect of the quantity of kerosene used the Commissioners may assess as being excise duty due from him an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention, and they may notify him or his representative accordingly; " .

(3) For subsection (2)(a) there shall be substituted--

" (a) in respect of the quantity of kerosene taken into the fuel supply the Commissioners may assess as being excise duty due from him an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention, and they may notify him or his representative accordingly; " .

Tobacco Products Duty Act 1979 (c. 7)

5 In section 8 of the Tobacco Products Duty Act 1979 (charge in cases of default) in subsection (2)--

(a) for "require him to pay duty" there shall be substituted "assess an amount as duty due from him";

(b) at the end there shall be inserted " , and they may notify him or his representative accordingly " .

Finance (No. 2) Act 1992 (c. 48)

6 (1) Section 2 of the Finance (No. 2) Act 1992 (power to provide for drawback of excise duty) shall be amended as follows.

(2) In subsection (3) (cancellation of drawback) paragraph (b) and the word "and" immediately preceding it shall be omitted.

(3) After subsection (3) there shall be inserted--

" (3A) If entitlement to drawback is cancelled under any provision contained in regulations by virtue of subsection (3) above the Commissioners--

(a) may assess as being excise duty due from the prescribed person an amount equal to sums paid or credited to any person in respect of the drawback, and

(b) may notify the prescribed person or his representative accordingly.

(3B) The reference in subsection (3A) above to the prescribed person is to such person as may be prescribed for the purposes of the subsection by regulations under this section. "

Finance Act 1994 (c. 9)

7 In section 12 of the Finance Act 1994 (assessment to excise duty) after subsection (1) there shall be inserted--

" (1A) Subject to subsection (4) below, where it appears to the Commissioners--

(a) that any person is a person from whom any amount has become due in respect of any duty of excise; and

(b) that the amount due can be ascertained by the Commissioners,

the Commissioners may assess the amount of duty due from that person and notify that amount to that person or his representative. "

8 (1) In section 12A of the Finance Act 1994 (other assessments relating to excise duty matters) subsection (3) (amount assessed deemed to be duty due) shall be amended as follows.

(2) At the end of paragraph (b) the word "or" shall be omitted and after that paragraph there shall be inserted--

" (bb) section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979, " .

(3) In paragraph (c) after "13," there shall be inserted "13AB," and after that paragraph there shall be inserted--

" (d) section 8 of the Tobacco Products Duty Act 1979, or

(e) section 2 of the Finance (No. 2) Act 1992, " .

9 (1) In section 12B of the Finance Act 1994, subsection (2) (meaning of relevant time) shall be amended as follows.

(2) After paragraph (e) there shall be inserted--

" (ea) in the case of an assessment under section 8 or 10 of the Alcoholic Liquor Duties Act 1979, the time of delivery from warehouse;

(eb) in the case of an assessment under section 11 of that Act, the time when the direction was made; " .

(3) In paragraph (f) after "13," there shall be inserted "13AB,".

(4) After paragraph (g) there shall be inserted--

" (ga) in the case of an assessment under section 8 of the Tobacco Products Duty Act 1979, the time when the Commissioners are satisfied of a failure to prove as mentioned in subsection (2)(a) or (b) of that section;

(gb) in the case of an assessment under section 2 of the Finance (No. 2) Act 1992, the time when the sums were paid or credited in respect of the drawback; " .

10 In section 14 of the Finance Act 1994 (requirement for review of a decision) in subsection (1)(ba)--

(a) for "or" (occurring after "Management Act") there shall be substituted ", section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979,";

(b) after "13," there shall be inserted "13AB,";

(c) after "Hydrocarbon Oil Duties Act 1979," there shall be inserted "section 8 of the Tobacco Products Duty Act 1979, section 2 of the Finance (No. 2) Act 1992,".

11 In section 16 of the Finance Act 1994 (appeals to a tribunal) there shall be inserted after subsection (3)--

" (3A) Subsection (3) above shall not apply if the appeal arises out of an assessment under section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979. "

Commencement

12 This Schedule shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint; and different days may be appointed under this paragraph for different purposes.

Section 31.

SCHEDULE 3 Advance corporation tax

Section 1 of the Provisional Collection of Taxes Act 1968

1 (1) Section 1 of the [1968 c. 2.] Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions) shall be amended as follows.

(2) In subsection (1) the words "(including advance corporation tax)" shall cease to have effect.

(3) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 10 of the Taxes Management Act 1970

2 (1) Section 10 of the [1970 c. 9.] Taxes Management Act 1970 (notice of liability to corporation tax) shall be amended as follows.

(2) Subsection (4) (which makes provision in relation to surplus ACT) shall cease to have effect.

(3) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.

Section 87 of the Taxes Management Act 1970

3 (1) Section 87 of the [1970 c. 9.] Taxes Management Act 1970 (interest on overdue ACT and income tax on company payments) shall be amended as follows.

(2) In subsection (1) (which contains a reference to Schedule 13) the words "13 or" shall cease to have effect.

(3) In subsection (2), paragraph (a) (which concerns ACT) shall cease to have effect.

(4) In subsection (6) (which contains a reference to Schedule 13) the words "13 or" shall cease to have effect.

(5) In subsection (7)--

(a) the words "advance corporation tax and" shall cease to have effect; and

(b) for "either of those Schedules" there shall be substituted "the said Schedule 16".

(6) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.

Section 87A of the Taxes Management Act 1970

4 (1) Section 87A of the [1970 c. 9.] Taxes Management Act 1970 (interest on overdue corporation tax etc) shall be amended as follows.

(2) Subsection (4) (which makes provision in relation to surplus ACT) shall cease to have effect.

(3) Subsections (4B) and (7) (which make further provision in relation to surplus ACT) shall cease to have effect.

(4) Sub-paragraph (2) above has effect where the later period mentioned in subsection (4) of section 87A begins on or after 6th April 1999.

(5) Sub-paragraph (3) above has effect where the earlier period mentioned in subsections (4B) and (7) of section 87A begins on or after 6th April 1999.

Section 94 of the Taxes Management Act 1970

5 (1) Section 94 of the [1970 c. 9.] Taxes Management Act 1970 (failure to make return for corporation tax) shall be amended as follows.

(2) Subsection (8) (which makes provision in relation to surplus ACT) shall cease to have effect.

(3) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.

Section 109 of the Taxes Management Act 1970

6 (1) Section 109 of the [1970 c. 9.] Taxes Management Act 1970 (corporation tax on close company in connection with loans to participators etc) shall be amended as follows.

(2) In subsection (3A) (interest under section 87A on so much of tax under section 419 of Taxes Act 1988 as is referable to amount of loan or advance repaid shall not be payable in respect of any period after repayment made)--

(a) after "If" there shall be inserted "(a)";

(b) after "principal Act," there shall be inserted " or

(b) there is such a release or writing off of the whole or any part of the debt in respect of a loan or advance as is referred to in that subsection, " ;

(d) after "the repayment was made" there shall be inserted "or the release or writing off occurred".

(3) This paragraph has effect in relation to the release or writing off of the whole or part of a debt on or after 6th April 1999.

Section 13 of the Taxes Act 1988

7 (1) Section 13 of the Taxes Act 1988 (small companies' relief) shall be amended as follows.

(2) In subsection (7) (exclusion of group income etc) for the words from "other than franked investment income" onwards there shall be substituted-- " other than franked investment income (if any) which the company ("the receiving company") receives from a company resident in the United Kingdom which is--

(a) a 51 per cent. subsidiary of the receiving company or of a company resident in the United Kingdom of which the receiving company is a 51 per cent. subsidiary; or

(b) a trading or holding company which does not fall within section 247(1A) and which is owned by a consortium the members of which include the receiving company. "

(3) After subsection (8) there shall be inserted--

" (8AA) Subsections (8) to (9A) of section 247 shall apply for the purposes of subsection (7) above as they apply for the purposes of that section.

(8AB) The reference in subsection (7) above to franked investment income received by a company applies to any such income received by another person on behalf of or in trust for the company, but not to any such income received by the company on behalf of or in trust for another person. "

(4) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 14 of the Taxes Act 1988

8 (1) Section 14 of the Taxes Act 1988 (ACT and qualifying distributions) shall be amended as follows.

(2) Subsections (1) and (3) to (5) (which make provision for and in connection with the imposition of ACT) shall cease to have effect.

(3) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 75 of the Taxes Act 1988

9 (1) Section 75 of the Taxes Act 1988 (expenses of management: investment companies) shall be amended as follows.

(2) In subsection (2) the words "group income" shall cease to have effect.

(3) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 116 of the Taxes Act 1988

10 (1) Section 116 of the Taxes Act 1988 (arrangements for transferring relief) shall be amended as follows.

(2) In subsection (2), paragraph (d) (which makes provision in relation to section 239) shall cease to have effect.

(3) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.

Section 238 of the Taxes Act 1988

11 (1) Section 238 of the Taxes Act 1988 (interpretation of terms and collection of ACT) shall cease to have effect.

(2) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.

Section 239 of the Taxes Act 1988

12 (1) Section 239 of the Taxes Act 1988 (set-off of ACT against liability to corporation tax) shall cease to have effect.

(2) Sub-paragraph (1) above has effect in relation to accounting periods beginning on or after 6th April 1999.

(3) No advance corporation tax shall, by virtue of section 239(4) of the Taxes Act 1988, be treated as if it were paid in respect of distributions made in accounting periods beginning on or after 6th April 1999.

(4) The limit under section 239(2) of the Taxes Act 1988 on the set-off of advance corporation tax for an accounting period of a company beginning before, and ending on or after, 6th April 1999 (a "straddling period") shall be determined as if--

(a) the straddling period were an accounting period beginning at the beginning of the straddling period and ending on 5th April 1999 ("the notional period"); and

(b) there were apportioned to the notional period a proportionate amount of the profits of the company which, apart from this sub-paragraph, would be taken into account in determining the limit under section 239(2) of that Act.

(5) The references in sub-paragraphs (2) and (3) above to accounting periods beginning on or after 6th April 1999 include a reference to a separate accounting period mentioned in section 245(2) of the Taxes Act 1988 which begins on 6th April 1999.

(6) The reference in sub-paragraph (4) above to an accounting period beginning before, and ending on or after, 6th April 1999 includes a reference to a separate accounting period mentioned in section 245(2) of the Taxes Act 1988 which begins before, and ends on or after, that date.

Section 240 of the Taxes Act 1988

13 (1) Section 240 of the Taxes Act 1988 (set-off of company's surplus ACT against subsidiary's liability to corporation tax) shall cease to have effect.

(2) This paragraph has effect in relation to accounting periods of the surrendering company (as defined in section 240(1) of the Taxes Act 1988) beginning on or after 6th April 1999.

Section 241 of the Taxes Act 1988

14 (1) Section 241 of the Taxes Act 1988 (calculation of ACT where company receives franked investment income) shall cease to have effect.

(2) This paragraph has effect in relation to accounting periods beginning on or after 6th April 1999.

Section 245 of the Taxes Act 1988

15 (1) Section 245 of the Taxes Act 1988 (calculation etc of ACT on change of ownership of company) shall cease to have effect.

(2) This paragraph has effect in relation to changes in ownership (within the meaning of section 245 of that Act) occurring on or after 6th April 1999.

Section 245A of the Taxes Act 1988

16 (1) Section 245A of the Taxes Act 1988 (restriction on application of section 240 in certain circumstances) shall cease to have effect.

(2) This paragraph has effect in relation to changes in ownership (within the meaning of section 245A of that Act) occurring on or after 6th April 1999.

Section 245B of the Taxes Act 1988

17 (1) Section 245B of the Taxes Act 1988 (restriction on set-off where asset transferred after change in ownership of company) shall cease to have effect.

(2) Sub-paragraph (1) above has effect in relation to disposals on or after 6th April 1999.

(3) In relation to an accounting period beginning before, and ending on or after, 6th April 1999, the reference in section 245B(4)(a) of the Taxes Act 1988 to the end of the relevant period shall be taken to be a reference to the end of a period which ends on 5th April 1999.

Section 246 of the Taxes Act 1988

18 (1) Section 246 of the Taxes Act 1988 (charge of ACT at previous rate until new rate fixed, and changes of rate) shall cease to have effect.

(2) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 247 of the Taxes Act 1988

19 (1) Section 247 of the Taxes Act 1988 (dividends etc paid by one member of a group to another) shall be amended as follows.

(2) Subsections (1), (2) and (3) (which enable dividends paid by one member of a group to another to be excluded from sections 14(1) and 231 of the Taxes Act 1988 etc) shall cease to have effect.

(3) In subsection (4), for paragraph (a) there shall be substituted--

" (a) the payer company is--

(i) a 51 per cent. subsidiary of the other or of a company so resident of which the other is a 51 per cent. subsidiary, or

(ii) a trading or holding company which does not fall within subsection (1A) above and which is owned by a consortium the members of which include the recipient company, or " .

(4) In subsection (5)--

(a) for "Subsections (1) to (4) above shall not apply to dividends or other payments" there shall be substituted "Subsection (4) above shall not apply to payments"; and

(b) the words "and shall not apply to a dividend" onwards shall cease to have effect.

(5) In subsection (6)--

(a) paragraph (a),

(b) the words "advance corporation tax ought to have been paid or",

(d) the words "paying or",

(e) the words "receiving or", and

(f) the words "the advance corporation tax had been duly paid or",

shall cease to have effect.

(6) In subsection (7) the words "paying or" and "receiving or" shall cease to have effect.

(7) In subsection (10)--

(a) the words "dividends or", and

(b) the words "and references to "group income" shall be construed accordingly",

shall cease to have effect.

(8) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 248 of the Taxes Act 1988

20 (1) Section 248 of the Taxes Act 1988 (provisions supplemental to section 247) shall be amended as follows.

(2) In subsections (2) and (3) the words "dividends or other" shall cease to have effect.

(3) This paragraph has effect in relation to distributions made on or after 6th April 1999.

Section 252 of the Taxes Act 1988

21 (1) Section 252 of the Taxes Act 1988 (rectification of excessive set-off of ACT or tax credit) shall be amended as follows.

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