Finance Act 2000 (c. 17)

(The document as of February, 2008)

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(e) provision that, so far as framed by reference to any document, is framed by reference to that document as from time to time in force.

(3) In making provision under this paragraph, the Treasury must have regard to the object of securing that the efficiency percentage for a combined heat and power station is (save for any appropriate adjustments) a percentage that reflects a fair assessment of the efficiency with which commodities are transformed in the station into electricity or motive power.

Meaning of "utility"

150 (1) In this Schedule "utility" means an electricity utility or a gas utility.

(2) In this Schedule "electricity utility" means the holder of--

(a) a licence under section 6(1)(d) of the [1989 c. 29.] Electricity Act 1989 (supply licences), or

(b) a licence under Article 10(1)(c) or (2) of the [S.I. 1992/231 (N.I. 1).] Electricity Supply (Northern Ireland) Order 1992,

except where the holder is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence.

Until the coming into force of the substitution for section 6 of the [2000 c. 27.] Electricity Act 1989 provided for by the Utilities Act 2000, paragraph (a) above shall have effect as if the reference to section 6(1)(d) were to section 6(1)(c) or (2).

(3) In this Schedule "gas utility" means the holder of--

(a) a licence under section 7A(1) of the [1986 c. 44.] Gas Act 1986 (supply licences), or

(b) a licence under Article 8(1)(c) of the [S.I. 1996/275 (N.I. 2.)] Gas (Northern Ireland) Order 1996,

except where the holder is acting otherwise than for purposes connected with the carrying on of activities authorised by the licence.

(4) Sub-paragraphs (1) to (3) have effect subject to--

(a) any direction under paragraph 151(1), and

(b) any regulations under paragraph 151(2).

Person treated as, or as not being, a utility

151 (1) The Commissioners may by direction (a "utility direction") make, in respect of a person (or persons) specified in the direction, provision authorised by sub-paragraph (3).

(2) The Treasury may by regulations ("utility regulations") make, in respect of any person of a description specified in the regulations, provision authorised by sub-paragraph (3).

(3) The provision authorised by this sub-paragraph is provision for--

(a) a person who is an unregulated electricity supplier to be treated for levy purposes as being an electricity utility;

(b) a person who is an unregulated gas supplier to be treated for levy purposes as being a gas utility;

(d) a person who is a gas utility to be treated for levy purposes as not being a gas utility.

(4) References in sub-paragraph (3) to provision for a person to be treated in a particular way for "levy purposes" are to provision for him to be treated in that way for--

(a) the purposes of this Schedule, or

(b) such of those purposes as are specified in the direction or regulations by which the provision is made.

(5) The power to make any provision by a utility direction or utility regulations may be exercised so that the provision applies in relation to a person only to an extent specified in, or determined under, the direction or regulations.

(6) A utility direction cannot take effect until it has been--

(a) given by the Commissioners to each person in respect of whom it makes provision, and

(b) published by the Commissioners.

(7) Paragraph 146(7)(b) and (c) applies to the power to make provision by a utility direction as to a power to make provision by regulations.

(8) In this paragraph--

"unregulated electricity supplier" means a person who--
(a)
makes supplies of electricity, and
(b)
is not an electricity utility;
"unregulated gas supplier" means a person who--
(a)
makes supplies of gas that is in a gaseous state and is of a kind supplied by a gas utility, and
(b)
is not a gas utility.

Meaning of "auto-generator"

152 (1) In this Schedule "auto-generator" means a person who produces electricity if the electricity that he produces is primarily for his own consumption.

(2) The Commissioners may by regulations specify requirements to be fulfilled before the electricity that a person produces is, for the purposes of sub-paragraph (1), to be taken as produced primarily for his own consumption.

(3) For the purposes of this paragraph, electricity is for a person's own consumption if it is for consumption by him or a person connected with him within the meaning of section 839 of the Taxes Act 1988.

Meaning of "levy due for an accounting period"

153 References in this Schedule, in relation to any accounting period, to levy due from any person for that period are references (subject to any regulations made by virtue of paragraph 41(2)(a)) to the levy for which that person is required, in accordance with regulations under paragraph 41, to account by reference to that period.

Meaning of "repayment of levy"

154 References in this Schedule to a repayment of levy or of an amount of levy are references to any repayment of an amount to any person by virtue of--

(a) any tax credit regulations; or

(b) paragraph 63, 87(3) or 110(3).

Interpretation of "in the course or furtherance of a business"

155 (1) Anything done in connection with the termination or intended termination of a business shall, for the purposes of this Schedule, be treated as being done in the course or furtherance of the business.

(2) Where in a disposition of a business as a going concern, or of its assets (whether or not in connection with its reorganisation or winding up), there is a supply of a taxable commodity, that supply shall for the purposes of this Schedule be taken to be made in the course or furtherance of the business.

Meaning of "resident in the United Kingdom"

156 For the purposes of this Schedule a person is resident in the United Kingdom at any time if, at that time--

(a) that person has an established place of business in the United Kingdom;

(b) that person has a usual place of residence in the United Kingdom; or

(c) that person is a firm or unincorporated body which (without having a relevant connection with the United Kingdom by virtue of paragraph (a)) has amongst its partners or members at least one individual with a usual place of residence in the United Kingdom.

References to the Gas and Electricity Markets Authority: transitional provision

157 (1) Until such time as a transfer of functions from the Director General of Electricity Supply to the Gas and Electricity Markets Authority ("the Authority") has taken effect, references in paragraph 19 to the Authority shall be taken to be references to the Director General.

(2) Until such time as all the functions of the Director General of Electricity Supply have been transferred in accordance with the [2000 c. 27.] Utilities Act 2000 (transfer to the Authority) or abolished, references to the Authority in paragraph 137 shall be taken to include the Director General.

(3) Until such time as all the functions of the Director General of Gas Supply have been transferred in accordance with the Utilities Act 2000 (transfer to the Authority) or abolished, references to the Authority in paragraph 137 shall be taken to include the Director General.

(4) The power conferred by paragraph 146(7) includes, in particular, power for regulations under paragraph 19 to make transitional provision in connection with the transfer of functions from the Director General of Electricity Supply to the Authority. "

Section 30.

SCHEDULE 7 Climate change levy: consequential amendments

Provisional Collection of Taxes Act 1968 (c. 2)

1 In section 1(1) of the Provisional Collection of Taxes Act 1968 (taxes in relation to which resolutions may have temporary statutory effect), after "value added tax" there shall be inserted ", climate change levy,".

Bankruptcy (Scotland) Act 1985 (c. 66)

2 (1) In paragraph 2 of Schedule 3 to the Bankruptcy (Scotland) Act 1985 (tax liabilities that are preferred debts), after sub-paragraph (1B) insert--

" (1C) Any climate change levy which is referable to the period of six months next before the relevant date. "

(2) In that Schedule, after paragraph 8B insert--

" Periods to which climate change levy referable

8C (1) For the purpose of paragraph 2(1C) of Part I of this Schedule--

(a) where the whole of the accounting period to which any climate change levy is attributable falls within the period of six months next before the relevant date ("the relevant period"), the whole amount of that levy shall be referable to the relevant period; and

(b) in any other case the amount of any climate change levy which shall be referable to the relevant period shall be the proportion of the levy which is equal to such proportion (if any) of the accounting period in question as falls within the relevant period.

(2) In sub-paragraph (1) "accounting period" shall be construed in accordance with Schedule 6 to the Finance Act 2000. "

Insolvency Act 1986 (c. 45)

3 (1) In the Insolvency Act 1986--

(a) in section 386(1) (preferential debts), after "landfill tax," insert "climate change levy,"; and

(b) in Schedule 6 (categories of preferential debts), after paragraph 3B insert the paragraph set out in sub-paragraph (2).

(2) That paragraph is as follows--

" 3C Any climate change levy which is referable to the period of 6 months next before the relevant date (which period is referred to below as "the 6-month period").

For the purposes of this paragraph--

(a) where the whole of the accounting period to which any climate change levy is attributable falls within the 6-month period, the whole amount of that levy is referable to that period; and

(b) in any other case the amount of any climate change levy which is referable to the 6-month period is the proportion of the levy which is equal to such proportion (if any) of the accounting period in question as falls within the 6-month period;

and references here to accounting periods shall be construed in accordance with Schedule 6 to the Finance Act 2000. "

Income and Corporation Taxes Act 1988 (c. 1)

4 In section 827 of the Taxes Act 1988 (no deduction for penalties etc.), the following subsection shall be inserted after subsection (1C)--

" (1D) Where a person is liable to make a payment by way of--

(a) any penalty under any provision of Schedule 6 to the Finance Act 2000 (climate change levy),

(b) interest under paragraph 70 of that Schedule (interest on recoverable overpayments etc.),

(d) interest under paragraph 109 of that Schedule (interest on penalties),

the payment shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes. "

Insolvency (Northern Ireland) Order 1989 (N.I. 19)

5 (1) In the [S.I. 1989/2405.] Insolvency (Northern Ireland) Order 1989--

(a) in Article 346(1) (preferential debts), after "landfill tax," insert "climate change levy,"; and

(b) in Schedule 4 (categories of preferential debts), after paragraph 3B insert the paragraph set out in sub-paragraph (2).

(2) That paragraph is as follows--

" 3C Any climate change levy which is referable to the period of 6 months next before the relevant date (which period is referred to below as "the 6-month period").

For the purposes of this paragraph--

(a) where the whole of the accounting period to which any climate change levy is attributable falls within the 6-month period, the whole amount of that levy is referable to that period; and

and references here to accounting periods shall be construed in accordance with Schedule 6 to the Finance Act 2000. "

Finance Act 1996 (c. 8)

6 In section 197(2) of the Finance Act 1996 (enactments for which interest rates are set under section 197), after paragraph (f) there shall be inserted--

" (g) the following provisions of Schedule 6 to the Finance Act 2000 (interest payable to or by the Commissioners in connection with climate change levy), that is to say, paragraphs 41(2)(f), 62(3)(f), 66, 70(1)(b) and 81(3). "

Finance Act 1997 (c. 16)

7 (1) The Finance Act 1997 is amended as follows.

(2) In section 51(5) (indirect taxes in respect of which the Commissioners may make regulations about enforcement by distress), after paragraph (e) insert--

" (f) climate change levy. "

(3) In section 52(5) (enforcement in Scotland of indirect taxes by diligence), after paragraph (e) insert--

" (f) climate change levy. "

(4) Sub-paragraph (3) extends only to Scotland.

Section 47.

SCHEDULE 8 Employee share ownership plans

Part I Introductory

Employee share ownership plans

1 (1) In this Schedule an "employee share ownership plan" means a plan established by a company providing--

(a) for shares ("free shares") to be appropriated to employees without payment, or

(b) for shares ("partnership shares") to be acquired on behalf of employees out of sums deducted from their salary.

(2) A plan that provides for partnership shares may also provide for shares ("matching shares") to be appropriated without payment to employees in proportion to the partnership shares acquired by them.

(3) Where a plan contains provision for all, or more than one, of the kinds of shares mentioned in sub-paragraphs (1) and (2), it may leave it for the company to decide when the provisions relating to each kind of share are to have effect.

(4) In this Schedule, in relation to an employee share ownership plan "the company" means the company which established the plan.

Group plans

2 (1) An employee share ownership plan established by a company that controls other companies (a "parent company") may extend to all or any of those other companies.

In this Schedule a plan established by a parent company which so extends is referred to as a "group plan".

(2) In relation to a group plan a "participating company" means the parent company or any other company to which for the time being the plan is expressed to extend.

Meaning of "award of shares", "participant" etc.

3 (1) For the purposes of this Schedule an award of shares is made under a plan on each occasion when in accordance with the plan--

(a) matching or free shares are appropriated to employees, or

(b) partnership shares are acquired on behalf of employees.

(2) For the purposes of this Schedule an individual participates in an award of free, matching or partnership shares under the plan if shares ("the individual award") included in that award are--

(a) in the case of an award of free or matching shares, appropriated to him, or

(b) in the case of an award of partnership shares, acquired on his behalf,

and references to shares awarded to an individual are to free or matching shares appropriated to him, or partnership shares acquired on his behalf, under the plan.

(3) In this Schedule "participant", in relation to a plan, means an individual to whom shares have been awarded under the plan.

Application for approval

4 (1) Where an employee share ownership plan has been established, on the application of the company the Inland Revenue shall approve the plan if they are satisfied that it meets the requirements of this Schedule.

(2) An application for approval must contain such particulars and be supported by such evidence as the Inland Revenue may require.

Appeal against refusal of approval

5 (1) If the Inland Revenue refuse to approve the plan, the company may appeal to the Special Commissioners.

(2) Notice of appeal must be given to the Inland Revenue within 30 days after their decision was notified to the company.

(3) If the Special Commissioners allow the appeal they may direct the Inland Revenue to approve the plan with effect from such date (but not earlier than the application for approval) as the Commissioners may specify.

Part II General requirements

Introduction

6 The plan must meet the requirements of--

paragraph 7 (the purpose of plan);

paragraph 8 (all-employee nature of plan);

paragraph 9 (participation on same terms);

paragraph 10 (no preferential treatment for directors, etc.);

paragraph 11 (no further conditions);

paragraph 12 (no loan arrangements).

The purpose of the plan

7 (1) The purpose of the plan must be to provide benefits to employees in the nature of shares in a company which give them a continuing stake in that company.

(2) The plan must not contain, and the operation of the plan must not involve, features which are neither essential nor reasonably incidental to that purpose.

All-employee nature of plan

8 (1) The plan must provide that every employee who--

(a) meets the requirements mentioned in Part III (eligibility of individuals) in relation to an award of shares under the plan, and

(b) is chargeable to tax under Case I of Schedule E in respect of the employment by reference to which he satisfies the condition in paragraph 14 (the employment requirement),

is eligible to participate in the award, and invited to do so.

(2) The plan must not contain any feature which has or would have the effect of discouraging any description of employees within sub-paragraph (1) from participating in an award of shares under the plan.

This does not apply to any provision required or authorised by this Schedule.

(3) The plan may provide that an employee who--

(a) meets the requirements mentioned in Part III (eligibility of individuals) in relation to an award of shares under the plan, but

(b) is not chargeable to tax as mentioned in sub-paragraph (1)(b),

is eligible to participate in the award, and may be invited to do so.

(4) For the purposes of this Schedule an individual is a "qualifying employee", in relation to an award of shares, if--

(a) he is eligible to participate in the award, and

(b) either--

(i) he must be invited to participate in the award (see sub-paragraph (1)), or

(ii) under the plan he may be invited to participate in the award (see sub-paragraph (3)) and has been so invited.

Participation on same terms

9 (1) The requirement of this paragraph is--

(a) that every employee who is invited to participate in an award must be invited to participate on the same terms, and

(b) that those who do participate must actually do so on the same terms.

(2) The requirement of this paragraph is infringed by the awarding of free shares by reference to factors other than those mentioned in sub-paragraph (3).

(3) The requirement of this paragraph is not infringed by the awarding of free shares by reference to an employee's--

(a) remuneration,

(b) length of service, or

This is subject to sub-paragraph (4).

(4) Where the awarding of free shares is by reference to more than one of the factors mentioned in sub-paragraph (3) the requirement of this paragraph is infringed unless--

(a) each factor gives rise to a separate entitlement related to the level of remuneration, length of service or (as the case may be) hours worked, and

(b) the total entitlement is the sum of those separate entitlements.

(5) In the case of an award of free shares which provides for performance allowances, this paragraph has effect as provided in paragraph 29 (performance allowances: method one) or, as the case may be, paragraph 30 (performance allowances: method two).

For this purpose "performance allowance" has the meaning given in paragraph 25(1).

No preferential treatment for directors etc.

10 (1) The first requirement of this paragraph is that no feature of the plan must have or be likely to have the effect of conferring benefits wholly or mainly--

(a) on directors, or

(b) on employees receiving higher levels of remuneration.

(2) The second requirement of this paragraph is that in the case of a plan established by a company that is a member of a group, the identity of the company (or, if it is a group plan, the participating companies) must not be such that the plan has or is likely to have the effect of conferring benefits wholly or mainly--

(a) on employees of companies that are members of the group who receive higher levels of remuneration, or

(b) on directors of such companies.

(3) This paragraph is subject to paragraph 9(3) (award of shares by reference to remuneration etc.).

No further conditions

11 No conditions, other than those required or permitted by this Schedule, may be imposed on an employee's participation in an award of shares under the plan.

No loan arrangements

12 (1) The arrangements for the plan must not make any provision, or be in any way associated with any provision made, for loans to some or all of the employees of--

(a) the company, or

(b) in the case of a group plan, any participating company,

and the operation of the plan must not be in any way associated with such loans.

(2) For the purposes of sub-paragraph (1) "arrangements" includes any scheme, agreement, undertaking or understanding, whether or not legally enforceable.

Part III Eligibility of individuals

Introduction

13 (1) The plan must provide that an individual may only participate in an award of shares if--

(a) in the case of free shares, he is eligible to participate in the award at the time it is made, and

(b) in the case of partnership or matching shares--

(i) if there is no accumulation period, he is eligible to participate in the award at the time the partnership share money relating to the award is deducted, and

(ii) if there is an accumulation period, he is eligible to participate in the award at the time of the first deduction of partnership share money relating to the award.

(2) For the purposes of sub-paragraph (1), in the case of an award of matching shares the deduction of partnership share money "relating" to the award is the deduction relating to the award of partnership shares to which the matching shares relate.

(3) An individual is eligible to participate in an award of shares under the plan if and only if--

(a) the requirements of the plan are met as to--

(i) employment (see paragraph 14),

(ii) no material interest (see paragraph 15), and

(iii) not participating in other schemes (see paragraph 16), and

(b) in a case where the individual is not within paragraph 8(1) (employees who must be invited to participate in the award), any further eligibility requirements of the plan are met.

The employment requirement

14 (1) The plan must provide that an individual is not eligible to participate in an award of shares unless--

(a) he is an employee of the company or, in the case of a group plan, of a participating company, and

(b) where the plan provides for a qualifying period, he has at all times during that period been an employee--

(i) of the company, or

(ii) in the case of a group plan, of a company that is a participating company at the end of that period.

(2) If the plan provides for a qualifying period, that period must be--

(a) in the case of free shares, a period of not more than 18 months ending with the date on which the award is made,

(b) in the case of partnership or matching shares--

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