Finance Act 2002 (c. 23)

(The document as of February, 2008)

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(b) the amount given by PY + GE is not more than 30,000 hectolitres, where--

PY is the amount of beer produced in the previous year in the group, and
GE is the aggregate of the grossed-up amount of each estimate that--
- (i) is an estimate for the purposes of subsection (10) below of the amount of the production in the current year in a group brewery in which no beer was produced in the previous year, and
- (ii) is made no later than the time mentioned in subsection (1) above.

(5) For the purposes of subsection (4)(b) above, where a group brewery was in use as beer-production premises during part only of the previous year, the amount of beer produced in the previous year in that brewery shall be taken to have been--

---

where--

A is the amount of beer actually produced in the previous year in that brewery, and
D is the number of days in that part of the previous year.

(6) The second condition is that the aggregate of each estimate that--

(a) is an estimate for the purposes of subsection (10) below of the amount of a group brewery's production in the current year, and

(b) is made no later than the time mentioned in subsection (1) above,

is not more than 30,000 hectolitres.

(7) The third condition is that if any group brewery begins to be used as beer-production premises part-way through the current year, the aggregate of the grossed-up amount of each estimate that--

(a) is an estimate for the purposes of subsection (10) below of the amount of a group brewery's production in the current year, and

(b) is made no later than the time mentioned in subsection (1) above,

is not more than 30,000 hectolitres.

(8) The fourth condition is that less than half of the beer produced in the previous year in each group brewery was produced under licence.

(9) The fifth condition is that the beer is not produced under licence.

(10) Beer produced in the co-operated brewery at an unestimated time is not small brewery beer; and here "unestimated time" means a time in the current year when there is a group brewery for which there does not exist a reasonable estimate, made by the person who first produces beer in that brewery in that year, of the amount of beer that will be produced in that brewery in that year.

(11) Beer produced in the co-operated brewery in the current year after the amount of beer produced in the group in the current year has reached 30,000 hectolitres is not small brewery beer.

(12) Subsection (11) above is without prejudice to section 167(4) of the Customs and Excise Management Act 1979 (recovery of duty unpaid by reason of untrue document or statement).

36F Rate of duty for small brewery beer from co-operated breweries

(1) This section applies to small brewery beer produced in a brewery at a time in a calendar year ("the current year") when the brewery is a co-operated brewery.

(2) The rate of duty in the case of that beer ("the brewery rate") is determined in accordance with this section.

(3) In this section--

"the group" means the group of breweries consisting of--
(a)
the co-operated brewery, and
(b)
every brewery (other than the co-operated brewery) in which beer is produced at the time mentioned in subsection (1) above, or at any earlier time in the current year, by--
(i)
a person who produces beer in the co-operated brewery at the time so mentioned or at any earlier time in the current year, or
(ii)
a person connected with such a person;
"group brewery" means a brewery that is in the group;
"the previous year" means the calendar year immediately preceding the current year;
"the notional previous year's production" has the meaning given by subsection (4) below.

(4) In this section "the notional previous year's production" means the amount, in hectolitres, given by PY + GE where--

PY is the amount of beer produced in the group in the previous year, and
GE is the aggregate of the grossed-up amount of each estimate that--
- (a) is an estimate for the purposes of section 36E(10) above of the amount of the production in the current year in a group brewery in which no beer was produced in the previous year, and
- (b) is made no later than the time mentioned in subsection (1) above.

(5) Where a group brewery was in use as beer-production premises during part only of the previous year, in calculating PY for the purposes of subsection (4) above the amount of beer produced in that brewery in the previous year shall be taken to have been--

---

where--

A is the amount of beer actually produced in the previous year in that brewery, and
D is the number of days in that part of the previous year.

(6) Subsection (7) below applies if--

(a) beer was produced in at least one group brewery in the previous year and the notional previous year's production is not more than 5,000 hectolitres, or

(b) no beer was produced in the group in the previous year and the aggregate of each estimate that--

(i) is an estimate for the purposes of section 36E(10) above of the amount of a group brewery's production in the current year, and

(ii) is made no later than the time mentioned in subsection (1) above,

is not more than 5,000 hectolitres.

(7) If this subsection applies, "the brewery rate" is 50% of the standard rate at the time mentioned in subsection (1) above; but this is subject to rounding under subsection (10) below.

(8) Subsection (9) below applies if--

(a) beer was produced in at least one group brewery in the previous year and the notional previous year's production is more than 5,000 hectolitres but not more than 30,000 hectolitres, or

(b) no beer was produced in the group in the previous year and the aggregate mentioned in subsection (6)(b) above is more than 5,000 hectolitres but not more than 30,000 hectolitres.

(9) If this subsection applies, "the brewery rate" is, subject to rounding under subsection (10) below, given by--

---

where--

if this subsection applies by reason of subsection (8)(a) above, P is the previous year's notional production,
if this subsection applies by reason of subsection (8)(b) above, P is the amount, in hectolitres, of the aggregate mentioned in subsection (6)(b) above, and
"the standard rate" means the standard beer duty rate at the time mentioned in subsection (1) above.

(10) Where a rate given by subsection (7) or (9) above would (apart from this subsection) not be a whole number of pennies, the rate given by that subsection shall be taken to be the rate actually given by that subsection rounded up to the nearest penny.

36G Assessments where incorrectly low rate of duty applied

(1) Subsection (3) below applies if--

(a) duty is charged by section 36 above on any beer, and

(b) it appears at the excise duty point that the beer is small brewery beer for the purposes of section 36(1AA) above, but

(c) it turns out that the beer was not small brewery beer for those purposes (because, for example, circumstances were not as they appeared at that point or they subsequently changed).

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

(a) duty is charged by section 36 above on any beer that is small brewery beer for the purposes of section 36(1AA) above, and

(b) the rate of duty that at the excise duty point appeared to be the correct rate turns out to have been lower than the correct rate (because, for example, circumstances were not as they appeared at that point or they subsequently changed).

(3) In any such case the Commissioners--

(a) may assess the amount that is the difference between--

(i) the actual amount of the duty charged on the beer by section 36 above, and

(ii) the lower amount that, at the excise duty point, appeared to be the amount charged,

as being excise duty due from the person liable to pay the duty charged on the beer by section 36 above, and

(b) may notify him or his representative accordingly.

(4) Where two or more persons are liable to pay the duty charged on the beer--

(a) the reference in subsection (3)(a) above to the person liable to pay the duty is to any one or more of those persons, and

(b) the reference in subsection (3)(b) above to notifying the person liable or his representative is to notifying each person assessed or his representative.

36H Power to vary reduced rate provisions

(1) The Treasury may by order made by statutory instrument make provision amending this Act for the purpose of causing excise duty to be charged on a description of beer--

(a) at a reduced rate instead of at the standard rate;

(b) at the standard rate instead of at a reduced rate;

(2) In this section--

"reduced rate" means a rate lower than the standard rate, and
"the standard rate" means the rate specified by section 36(1AA)(a) above.

(3) An order under subsection (1) above may--

(a) make different provision for different cases;

(b) make such consequential amendments in this Act and other enactments as appear to the Treasury to be necessary or expedient;

(c) make such other consequential provision, and such incidental and transitional provision, as appears to the Treasury to be necessary or expedient.

(4) A statutory instrument by which there is made an order under subsection (1) above shall be laid before the House of Commons after being made.

Unless the instrument is approved by the House of Commons before the expiration of 28 days beginning with the date on which the instrument was made, the order shall cease to have effect on the expiration of that period.

Where the order so ceases to have effect, that does not prejudice--

(a) anything previously done under the order, or

(b) the making of a new order.

In reckoning any such period of 28 days, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than 4 days. " .

3 In section 49(1) of the Alcoholic Liquor Duties Act 1979 (c. 4) (beer regulations), after paragraph (j) insert--

" (k) requiring the production of certificates as to matters relating to beer imported into the United Kingdom and the beer's production and producer, whether as alternative conditions for charging the duty on the beer at a rate lower than that specified by section 36(1AA)(a) above or as evidence that conditions for charging the duty at such a rate are satisfied. " .

4 (1) The Finance Act 1994 (c. 9) is amended as follows.

(2) In section 12A(3)(bb) (recovery of amounts assessed under the Alcoholic Liquor Duties Act 1979), for "or 11" substitute ", 11 or 36G".

(3) In section 12B(2) (meaning of "relevant time" in section 12A), after paragraph (eb) insert--

" (ec) in the case of an assessment under section 36G of that Act, the the time at which the requirement to pay the duty took effect (which time, in a case where there was an excise duty point for the beer fixed under section 1 of the Finance (No. 2) Act 1992, is that excise duty point); " .

(4) In section 14(1)(ba) (review of assessments), for "or 11" substitute ", 11 or 36G".

Section 5

SCHEDULE 2 Hydrocarbon oil duties: minor and consequential amendments relating to biodiesel

Introduction

1 The Hydrocarbon Oil Duties Act 1979 (c. 5) is amended as follows.

Biodiesel and bioblend not to be treated as fuel substitute

2 In section 6A(1) (fuel substitutes: charge of duty) after "which is not hydrocarbon oil" insert ", biodiesel or bioblend".

Exclusion of bioblend from rebates on heavy oil

3 In section 11 (rebate on heavy oil), after subsection (5) insert--

" (6) No rebate shall be allowed under this section in respect of bioblend. " .

Repayment of duty in case of biodiesel used otherwise than as road fuel

4 (1) After section 17 insert--

" 17A Biodiesel used otherwise than as road fuel

(1) If, on an application made for the purposes of this section, it is shown to the satisfaction of the Commissioners that within the period for which the application is made any quantity of biodiesel has been used by the applicant as mentioned in subsection (2) below, then, subject as provided below, the applicant shall be entitled to obtain from the Commissioners repayment of the amount specified below.

(2) A person is entitled to repayment under this section in respect of biodiesel used by him--

(a) otherwise than as road fuel,

(b) otherwise than by mixing the biodiesel with--

(i) hydrocarbon oil, or

(ii) a mixture containing hydrocarbon oil, and

(3) For the purposes of subsection (2)(a) above, use "as road fuel" means use--

(a) as fuel for the engine provided for propelling a road vehicle or for an engine that draws its fuel from the same supply as such an engine, or

(b) as an additive or extender in any substance so used.

(4) The amount of the repayment is the amount of the excise duty which has been paid in respect of the quantity of biodiesel used less the amount of £0.0313 a litre.

(5) The Commissioners may require an applicant for repayment under this section--

(a) to state such facts concerning the biodiesel that is the subject of the claim, or the use to which it was put, as they may think necessary to deal with the application;

(b) to furnish them in such form as they may require with proof of any statement so made;

(d) to permit an officer to inspect any premises, plant or vehicle on or in which the biodiesel in respect of which repayment is claimed is used.

(6) If the applicant fails to comply with any such requirement, the Commissioners may reject the claim. " .

(2) In paragraph 3 of Schedule 4 (regulations about claims for repayments), after "section 9(4), 17," insert "17A,".

Mixing biodiesel and rebated heavy oil

5 (1) In section 20AAA (mixing of rebated oil), after subsection (2A) insert--

" (2B) Where a mixture is produced in contravention of Part 2B of Schedule 2A to this Act, a duty of excise shall be charged on the mixture. " .

(2) In section 20AAA(3) (producer of mixture liable to pay duty), for "or (2A)" substitute ", (2A) or (2B)".

(3) After Part 2A of Schedule 2A (mixing of rebated oil) insert--

" Part 2B Biodiesel

Mixing biodiesel with rebated heavy oil

7B (1) A mixture is produced in contravention of this paragraph if it is produced by mixing--

(a) biodiesel or a substance containing biodiesel, and

(b) rebated heavy oil.

(2) In sub-paragraph (1)(b) above "rebated heavy oil" means heavy oil in respect of which a rebate has been allowed under section 11 of this Act. " .

(4) In paragraph 9(1A) of that Schedule (rates of duty for mixtures of heavy oil), after "subsection (2A)" insert "or (2B)".

(5) In paragraph 10(1) of that Schedule (credit for duty paid on ingredients of mixture), after "section 6" insert ", 6AA, 6AB or 6A".

(6) In section 20AAB (mixing of rebated oil: supplementary), in subsection (1)(a) for "or (2A)" substitute ", (2A) or (2B)".

(7) In section 22 (prohibition on use of petrol substitutes on which duty has not been paid), after subsection (1) insert--

" (1AA) Where any person--

(a) puts any biodiesel to a chargeable use (within the meaning of section 6AA above), and

(b) knows or has reasonable cause to believe that there is duty charged under section 6AA above on that biodiesel which has not been paid and is not lawfully deferred,

his putting the biodiesel to that use shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties), and any goods in respect of which any person contravenes this subsection shall be liable to forfeiture. " .

(8) In section 22(1A) (section 10 of the Finance Act 1994 does not apply), after "subsection (1)" insert "or (1AA)".

Interpretation

6 In section 27(1) (interpretation) at the appropriate places insert--

" "bioblend" has the meaning given by section 6AB(2) above; " , and

" "biodiesel" has the meaning given by section 2AA above; " .

Provision in relation to bioblend corresponding to that made by section 6 of the Finance Act 1998 in relation to section 6 of the Hydrocarbon Oil Duties Act 1979

7 (1) In section 6AB (which charges excise duty on bioblend and is inserted by section 5 of this Act), in subsection (1), omit the words from "and delivered" to the end.

(2) For subsection (6) of that section substitute--

" (6) Where--

(a) imported bioblend is removed to relevant premises,

(b) the bioblend undergoes a production process at those premises or any other relevant premises, and

the duty charged on importation shall not become payable at any time after the production time.

(7) In subsection (6) above--

"the production time" means the time at which the bioblend undergoes the production process; and
"relevant premises" means--
(a)
a refinery,
(b)
other premises used for the production of hydrocarbon oil, or
(c)
premises of such description as may be specified in regulations made by the Commissioners.

(8) For the purposes of subsection (6) above, bioblend undergoes a production process if--

(a) hydrocarbon oil, or bioblend, of any description, or biodiesel, is obtained from it, or

(b) it is subjected to any process of purification or blending. " .

Section 6

SCHEDULE 3 Hydrocarbon oil duties: rebated heavy oil etc

Part 1 Regulating traders in rebated heavy oil

1 In the Hydrocarbon Oil Duties Act 1979 (c. 5), after section 23 insert--

" 23A Regulation of traders in controlled oil

(1) If a revenue trader who is not a registered excise dealer and shipper--

(a) buys or sells controlled oil in the course of a trade or business, or

(b) in the course of a trade or business deals in controlled oil,

his buying or selling, or dealing in, the oil shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties).

(2) Subsection (1) above does not apply to the buying of oil by a revenue trader if--

(a) the oil is for use by the trader, and

(b) that use does not involve selling or dealing in hydrocarbon oil.

(3) Subsection (1) above does not apply to the selling of oil by a revenue trader if--

(a) that oil was for use by the trader,

(b) that use did not involve selling or dealing in hydrocarbon oil,

(d) the oil is sold after the use ends.

(4) Where a revenue trader who is not a registered excise dealer and shipper is entitled to the possession of any controlled oil, the oil is liable to forfeiture.

(5) Subsection (4) above does not apply to oil if--

(a) that oil is for use by the revenue trader, and

(b) that use does not involve selling or dealing in hydrocarbon oil.

(6) Subsection (4) above does not apply to oil if--

(a) the oil was for use by the revenue trader,

(b) that use did not involve selling or dealing in hydrocarbon oil,

(d) that use came to an end before the oil was used, and

(e) the oil is being held pending sale or other disposal.

(7) Where oil is liable to forfeiture by virtue of subsection (4) above--

(a) anything mixed with the oil,

(b) any container in which the oil (and anything mixed with it) is kept, and

is liable to forfeiture.

23B Power to provide for exceptions to section 23A

(1) The Commissioners may by regulations make provision for--

(a) exceptions to section 23A(1) above in addition to those allowed by section 23A(2) and (3) above;

(b) exceptions to section 23A(4) above in addition to those allowed by section 23A(5) and (6) above;

(2) Regulations under subsection (1) above may provide for exceptions allowed by such regulations to have effect subject to conditions--

(a) specified by such regulations;

(b) specified by the Commissioners under such regulations. " .

2 In section 100H(1) of the Customs and Excise Management Act 1979 (c. 2) (particular provision that may be made by registered excise dealers and shippers regulations), after paragraph (n) insert--

" (p) authorised by section 24AA of the Hydrocarbon Oil Duties Act 1979 (regulation of traders in controlled oil). " .

3 In the Hydrocarbon Oil Duties Act 1979 (c. 5), after section 24 insert--

" 24AA Registered excise dealers and shippers regulations: special provision for traders in controlled oil

(1) For the purposes of section 100H(1)(p) of the Management Act (registered excise dealers and shippers regulations may, in particular, make provision authorised by this section), this section authorises provision--

(a) requiring traders in controlled oil to notify prescribed information;

(b) requiring traders in controlled oil to make prescribed returns;

(c) authorising a trader in controlled oil to carry out or arrange for the carrying out of any prescribed activity falling within section 100H(1)(b) of the Management Act in relation to controlled oil, but subject to prescribed conditions or restrictions;

(d) requiring a trader in controlled oil to give security by prescribed means for amounts that may become due from him by way of repayment of rebate;

(e) for taking into account, in determining whether a trader in controlled oil has--

(i) contravened any provision of registered excise dealers and shippers regulations, or

(ii) failed to comply with any prescribed condition, restriction or requirement,

the extent to which the trader has followed guidance issued by the Commissioners (including guidance issued after the making of provision under this paragraph referring to it).

(2) In this section--

"prescribed" has the meaning given by section 100H(3) of the Management Act;
"trader in controlled oil" means a registered excise dealer and shipper carrying on a trade or business that consists of or includes the dealing in, buying or selling of controlled oil. " .

4 (1) Section 27 of the Hydrocarbon Oil Duties Act 1979 (c. 5) (interpretation) is amended as follows.

(2) In subsection (1) insert (at the appropriate place)--

" "controlled oil" means hydrocarbon oil in respect of which a rebate has been allowed under section 11(1)(b), (ba) or (c) or 13AA; " .

(3) In the Table set out in subsection (3) (expressions used in the Act that have a meaning given by another Act included in the Customs and Excise Acts 1979), under the heading "Management Act" insert (at the appropriate places)--

" "registered excise dealer and shipper" " , and

" "revenue trader" " .

Part 2 Minor amendments relating to rebates

5 The Hydrocarbon Oil Duties Act 1979 is amended as follows.

6 In section 12(1) (no rebate allowed on heavy oil intended for use in a road vehicle), after "no rebate" insert "under section 11 above".

7 In section 12(2) (oil not to be used in road vehicles if rebate has been allowed under section 11(1) or 13AA(1)), for "section 11(1)" substitute "section 11".

8 In section 24(2) (regulations made for the purposes of section 12 or 13AA), for "under subsection (2) of that section" substitute "under subsection (2) of section 12, or subsection (3) of section 13AA,".

9 In section 27(1) (interpretation), in the definition of "rebate", after "section 11," insert "13AA,".

Section 12

SCHEDULE 4 Pool betting duty etc

Part 1 Amendments of the Betting and Gaming Duties Act 1981

1 The Betting and Gaming Duties Act 1981 (c. 63) is amended as follows.

2 For sections 6 to 8 (pool betting duty: charge, rate and payment) substitute--

" Pool betting duty

6 The duty

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