Finance Act 2002 (c. 23)

(The document as of February, 2008)

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(2) The Inland Revenue may register a club with effect from such date as they may specify (which may be before the date of the application).

(3) If it appears to the Inland Revenue that a registered club is not, or is no longer, entitled to be registered, they may terminate the club's registration with effect from such date as they may specify (which may be before the date of the decision to terminate the registration).

(4) Where the Inland Revenue--

(a) register a club,

(b) refuse a club's application for registration, or

they shall notify the club accordingly.

(5) The Inland Revenue may publish the names and addresses of registered clubs.

Information etc

12 A club that makes an application to be registered must--

(a) provide the Inland Revenue with such information relating to the application as they may reasonably require;

(b) if required to do so by the Inland Revenue, produce for inspection by them any books, documents or other records in the club's possession, or under its control, that contain such information.

Appeals

13 (1) An appeal to the General Commissioners may be brought against a decision of the Inland Revenue under paragraph 11.

(2) Notice of an appeal under this paragraph must be given--

(a) in writing,

(b) within 30 days of the date of the notification under paragraph 11(4),

(3) The notice of appeal must specify the grounds of appeal.

(4) On the hearing of the appeal the Commissioners may allow the appellant to put forward grounds not specified in the notice, and take them into consideration, if satisfied that the omission was not wilful or unreasonable.

(5) Where the appeal is against a refusal to register a club, or against a decision to register it with effect from a particular date, the Commissioners (if they do not dismiss the appeal) may either--

(a) direct that the club be registered with effect from a specified date, or

(b) remit the matter to the Inland Revenue for reconsideration.

(6) Where the appeal is against a decision to terminate the registration of a club, or to do so with effect from a particular date, the Commissioners (if they do not dismiss the appeal) may either--

(a) rescind the termination,

(b) direct that the termination have effect from a specified date, or

(7) The provisions of the Taxes Management Act 1970 (c. 9) relating to appeals under the Taxes Acts shall apply to an appeal under this paragraph as they apply to those appeals.

Part 6 Interpretation

"Eligible sport"

14 (1) For the purposes of this Schedule "eligible sport" means a sport that is designated for those purposes by Treasury order.

A sport may be so designated by reference to its appearing in a list maintained by a body specified in the order.

(2) An order under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the House of Commons.

"Inland Revenue"

15 (1) Subject to sub-paragraph (2), references in this Schedule to the Inland Revenue are to any officer of the Board.

(2) References to the Inland Revenue in paragraphs 11 and 13(1), (5) and (6) are to the Board.

Other expressions

16 In this Schedule--

(a) "dispose", "disposal", "gain" and "chargeable gain" shall be construed in accordance with the Taxation of Chargeable Gains Act 1992 (c. 12);

(b) "for qualifying purposes" means for the purposes of providing facilities for, and promoting participation in, one or more eligible sports, and "for non-qualifying purposes" shall be construed accordingly.

Section 59

SCHEDULE 19 Capital allowances: cars with low carbon dioxide emissions

Introductory

1 The Capital Allowances Act 2001 (c. 2) is amended as follows.

Types of expenditure for which first-year allowances available

2 In section 39, after the entry relating to section 45A add,

" section 45D

expenditure on cars with low CO₂ emissions, " .

First-year qualifying expenditure: car with low carbon dioxide emissions

3 After section 45C insert--

" 45D Expenditure on cars with low carbon dioxide emissions

(1) Expenditure is first-year qualifying expenditure if--

(a) it is incurred in the period beginning with 17th April 2002 and ending with 31st March 2008,

(b) it is expenditure on a car which is first registered on or after 17th April 2002 and which is unused and not second-hand,

(i) is an electrically-propelled car, or

(ii) is a car with low CO₂ emissions, and

(d) the expenditure is not excluded by section 46 (general exclusions).

(2) For the purposes of this section a car with low CO₂ emissions is a car which satisfies the conditions in subsections (3) and (4).

(3) The first condition is that, when the car is first registered, it is so registered on the basis of an EC certificate of conformity, or a UK approval certificate, that specifies--

(a) in the case of a car other than a bi-fuel car, a CO₂ emissions figure in terms of grams per kilometre driven, or

(b) in the case of a bi-fuel car, separate CO₂ emissions figures in terms of grams per kilometre driven for different fuels.

(4) The second condition is that the applicable CO₂ emissions figure in the case of the car does not exceed 120 grams per kilometre driven.

(5) For the purposes of subsection (4) the applicable CO₂ emissions figure in the case of a car other than a bi-fuel car is--

(a) where the EC certificate of conformity or UK approval certificate specifies only one CO₂ emissions figure, that figure, and

(b) where the certificate specifies more than one CO₂ emissions figure, the figure specified as the CO₂ emissions (combined) figure.

(6) For the purposes of subsection (4) the applicable CO₂ emissions figure in the case of a bi-fuel car is--

(a) where the EC certificate of conformity or UK approval certificate specifies more than one CO₂ emissions figure in relation to each fuel, the lowest CO₂ emissions (combined) figure specified, and

(b) in any other case, the lowest CO₂ figure specified by the certificate.

(7) The Treasury may by order amend the amount from time to time specified in subsection (4).

(8) In this section any reference to a car--

(a) includes a reference to a mechanically propelled road vehicle of a type commonly used as a hackney carriage, but

(b) does not include a reference to a motorcycle.

(9) For the purposes of this section, a car is an electrically-propelled car only if--

(a) it is propelled solely by electrical power, and

(b) that power is derived from--

(i) a source external to the vehicle, or

(ii) an electrical storage battery which is not connected to any source of power when the vehicle is in motion.

(10) In this section--

"bi-fuel car" means a car which is capable of being propelled by--
(a)
petrol and road fuel gas, or
(b)
diesel and road fuel gas;
"car" has the meaning given by section 81 (extended meaning of "car");
"diesel" means any diesel fuel within the definition in Article 2 of Directive 98/70/EC of the European Parliament and of the Council;
"EC certificate of conformity" means a certificate of conformity issued by a manufacturer under any provision of the law of a member State implementing Article 6 of Council Directive 70/156/EEC, as amended;
"petrol" has the meaning given by Article 2 of Directive 98/70/ EC of the European Parliament and of the Council;
"road fuel gas" has the same meaning as in section 168AB of ICTA;
"UK approval certificate" means a certificate issued under--
(a)
section 58(1) or (4) of the Road Traffic Act 1988, or
(b)
Article 31A(4) or (5) of the Road Traffic (Northern Ireland) Order 1981. " .

General exclusions affecting first-year qualifying expenditure

4 (1) Section 46 is amended as follows.

(2) In subsection (1) (expenditure which is subject to the general exclusions) after the entry relating to section 45A add " ,

section 45D

(expenditure on cars with low CO₂ emissions), " .

(3) After subsection (2) (general exclusions listed for the purposes of subsection (1)) insert--

" (3) Subsection (1) is subject to the following provisions of this section.

(4) General exclusion 2 does not prevent expenditure being first-year qualifying expenditure under section 45D. " .

Amount of first-year allowances

5 In section 52(3), in the Table, after the entry relating to expenditure qualifying under section 45A add--

" Expenditure qualifying under section 45D (expenditure on cars with low CO₂ emissions)

100% " .

Single asset pool in relation to cars above cost threshold

6 In section 74, in subsection (2) (cars to which section 74 applies) after paragraph (b) insert " , and

(c) the qualifying expenditure incurred on the provision of the car is not first-year qualifying expenditure under section 45D (expenditure on cars with low CO₂ emissions) " .

Section 61

SCHEDULE 20 Capital allowances: plant or machinery for gas refuelling station

Introductory

1 The Capital Allowances Act 2001 (c. 2) is amended as follows.

Types of expenditure for which first-year allowances available

2 In section 39, after the entry relating to section 45D (which is inserted by Schedule 19 to this Act) add--

" section 45E

expenditure on plant or machinery for gas refuelling station " .

First-year qualifying expenditure: plant or machinery for gas refuelling station

3 After section 45D (which is added by Schedule 19 to this Act) insert--

" 45E Expenditure on plant or machinery for gas refuelling station

(1) Expenditure is first-year qualifying expenditure if--

(a) it is incurred in the period beginning with 17th April 2002 and ending with 31st March 2008,

(b) it is expenditure on plant or machinery for a gas refuelling station where the plant or machinery is unused and not second-hand, and

(2) For the purposes of this section expenditure on plant or machinery for a gas refuelling station is expenditure on plant or machinery installed at a gas refuelling station for use solely for or in connection with refuelling vehicles with natural gas or hydrogen fuel.

(3) For the purposes of subsection (2) the plant or machinery which is for use for or in connection with refuelling vehicles with natural gas or hydrogen fuel includes--

(a) any storage tank for natural gas or hydrogen fuel,

(b) any compressor, pump, control or meter used for or in connection with refuelling vehicles with natural gas or hydrogen fuel, and

(4) For the purposes of this section--

"gas refuelling station" means any premises, or that part of any premises, where vehicles are refuelled with natural gas or hydrogen fuel;
"hydrogen fuel" means a fuel consisting of gaseous or cryogenic liquid hydrogen which is used for propelling vehicles;
"vehicle" means a mechanically propelled road vehicle. " .

General exclusions affecting first-year qualifying expenditure

4 In section 46, in subsection (1) (expenditure which is subject to the general exclusions) after the entry relating to section 45D (which is added by Schedule 19 to this Act) add--

" section 45E

(expenditure on plant or machinery for gas refuelling station) " .

Amount of first-year allowance

5 In section 52(3), in the Table, after the entry relating to expenditure qualifying under section 45D (which is added by Schedule 19 to this Act) add--

" Expenditure qualifying under section 45E (expenditure on plant or machinery for gas refuelling station)

100% " .

Section 63

SCHEDULE 21 First-year allowances for expenditure wholly for a ring fence trade

Part 1 Plant and machinery

Introductory

1 Part 2 of the Capital Allowances Act 2001 (c. 2) (plant and machinery allowances) is amended as follows.

Types of expenditure for which first-year allowances available

2 In section 39, after the entry relating to section 45E (which is added by Schedule 20 to this Act) add " , or

section 45F

expenditure on plant and machinery for use wholly in a ring fence trade. " .

First-year qualifying expenditure: plant and machinery for use wholly in a ring fence trade

3 After section 45E (which is inserted by Schedule 20 to this Act) insert--

" 45F Expenditure on plant and machinery for use wholly in a ring fence trade

(1) Expenditure is first-year qualifying expenditure if--

(a) it is incurred on or after 17th April 2002,

(b) it is incurred by a company,

(d) it is not excluded by section 46 (general exclusions).

(2) This section is subject to section 45G (plant or machinery used for less than five years in a ring fence trade).

(3) In this section "ring fence trade" means a ring fence trade in respect of which tax is chargeable under section 501A of the Taxes Act 1988 (supplementary charge in respect of ring fence trades). " .

Plant or machinery used for less than five years in a ring fence trade

4 After section 45F insert--

" 45G Plant or machinery used for less than five years in a ring fence trade

(1) Expenditure incurred by a company on the provision of plant or machinery is to be treated as never having been first-year qualifying expenditure under section 45F if the plant or machinery--

(a) is at no time in the relevant period used in a ring fence trade carried on by the company or a company connected with it, or

(b) is at any time in the relevant period used for a purpose other than that of a ring fence trade carried on by the company or a company connected with it.

(2) For the purposes of this section "the relevant period" means whichever of the following periods, beginning with the incurring of the expenditure, first ends, namely--

(a) the period ending with the fifth anniversary of the incurring of the expenditure, or

(b) the period ending with the day preceding the first occasion on which the plant or machinery, after becoming owned by the company which incurred the expenditure, is not owned by a company which is either that company or a company connected with it.

(3) All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (1).

(4) If a person who has made a return becomes aware that, after making it, anything in it has become incorrect because of the operation of this section, he must give notice to the Inland Revenue specifying how the return needs to be amended.

(5) The notice must be given within 3 months beginning with the day on which the person first became aware that anything in the return had become incorrect because of the operation of this section.

(6) In this section "ring fence trade" has the same meaning as in section 45F. " .

General exclusions affecting first-year qualifying expenditure

5 In section 46, in subsection (1) (expenditure which is subject to the general exclusions) after the entry relating to section 45E (which is added by Schedule 20 to this Act) add " , or

section 45F

(expenditure on plant and machinery for use wholly in a ring fence trade). " .

Amount of first-year allowances

6 In section 52(3), in the Table, after the entry relating to expenditure qualifying under section 45E (which is added by Schedule 20 to this Act) add--

" Expenditure qualifying under section 45F (expenditure on plant and machinery for use wholly in a ring fence trade) which is long-life asset expenditure	24%
Expenditure qualifying under section 45F (expenditure on plant and machinery for use wholly in a ring fence trade) other than long-life asset expenditure	100% " .

Penalty for failure to provide information etc

7 (1) The Taxes Management Act 1970 (c. 9) is amended as follows.

(2) In the second column of the Table in section 98, in the entry relating to requirements imposed by provisions of the Capital Allowances Act, after "45B(5) and (6)," insert "45G(4) and (5),".

Part 2 Mineral extraction allowances

Introductory

8 Part 5 of the Capital Allowances Act 2001 (c. 2) (mineral extraction allowances) is amended as follows.

First-year qualifying expenditure

9 After section 416, insert the following Chapter--

" Chapter 5A First-year qualifying expenditure

General

416A First-year allowances available for certain types of qualifying expenditure

A first-year allowance is not available unless the qualifying expenditure is first-year qualifying expenditure under section 416B (expenditure incurred wholly for purposes of a ring fence trade).

Types of expenditure which may qualify for first year allowances

416B Expenditure incurred by company for purposes of a ring fence trade

(1) Expenditure is first-year qualifying expenditure if--

(a) it is incurred on or after 17th April 2002,

(b) it is incurred by a company,

(d) it is not excluded by--

(i) subsection (2) (acquisition of mineral asset), or

(ii) subsection (3) (acquisition of asset representing expenditure of connected company).

(2) Expenditure is not first-year qualifying expenditure under this section if it is expenditure on acquiring a mineral asset.

(3) Expenditure is not first-year qualifying expenditure under this section if it is expenditure incurred by a company on the acquisition of an asset representing expenditure incurred by a company connected with that company.

(4) To the extent that references in this section to an asset representing expenditure incurred by a company include a reference to an asset representing expenditure on mineral exploration and access, they also include a reference to any results obtained from any search, exploration or inquiry on which any such expenditure was incurred.

(5) In this section "ring fence trade" means a ring fence trade in respect of which tax is chargeable under section 501A of the Taxes Act 1988 (supplementary charge in respect of ring fence trades).

Supplementary

416C Time when expenditure is incurred

(1) In determining whether expenditure is first-year qualifying expenditure under this Chapter, any effect of the provisions specified in subsection (2) on the time at which the expenditure is to be treated as incurred is to be disregarded.

(2) The provisions are--

(a) section 400(4) (which treats certain pre-trading expenditure as incurred on the first day of trading), and

(b) section 434 (which treats certain other expenditure incurred for the purposes of a trade about to be carried on as incurred on that day). " .

First-year allowances

10 At the beginning of Chapter 6 (allowances and charges) insert--

" First-year allowances

416D First-year allowances

(1) A person is entitled to a first-year allowance in respect of first-year qualifying expenditure if the expenditure is incurred in a chargeable period to which this Act applies.

(2) Any first-year allowance is made for the chargeable period in which the first-year qualifying expenditure is incurred.

(3) The amount of the allowance is a percentage of the first-year qualifying expenditure in respect of which the allowance is made, as shown in the Table--

Table

Amount of first-year allowances

Type of first-year qualifying expenditure	Amount
Expenditure qualifying under section 416B (expenditure incurred wholly for the purposes of a ring fence trade)	100%

(4) A person who is entitled to a first-year allowance may claim the allowance in respect of the whole or a part of the first-year qualifying expenditure.

(5) This section is subject to section 416E (artificially inflated claims for first-year allowances). " .

Artificially inflated claims for first-year allowances

11 After section 416D insert--

" 416E Artificially inflated claims for first-year allowances

(1) To the extent that a transaction is attributable to arrangements entered into wholly or mainly for a disqualifying purpose, it shall be disregarded in determining for a chargeable period the amount of any first-year allowance to which a person is entitled.

(2) For the purposes of this section, arrangements are entered into wholly or mainly for a "disqualifying purpose" if their main object, or one of their main objects, is to enable a person to obtain--

(a) a first-year allowance to which he would not otherwise be entitled, or

(b) a first-year allowance of a greater amount than that to which he would otherwise be entitled.

(3) In this section "arrangements" includes any scheme, agreement or understanding, whether or not legally enforceable. " .

Amount of allowances and charges: balancing charge for period in which expenditure incurred

12 (1) Section 418 is amended as follows.

(2) In subsection (4) (amount of balancing charge) after paragraph (b) insert the following as a second sentence--

" Where a person is liable to a balancing charge in respect of first-year qualifying expenditure for the chargeable period in which he incurred the expenditure, any first-year allowance made in respect of the expenditure shall be treated for the purposes of paragraph (b) as if it were an allowance for an earlier chargeable period. " .

Unrelieved qualifying expenditure: effect of first-year qualifying expenditure

13 (1) Section 419 is amended as follows.

(2) In subsection (1) (amount of qualifying expenditure which is unrelieved qualifying expenditure for the chargeable period in which the expenditure is incurred) for "the whole of it" substitute--

" (a) the whole of it, unless the expenditure is first-year qualifying expenditure, or

(b) if the expenditure is first-year qualifying expenditure, none of it,

but paragraph (b) is subject to subsections (3) to (5). " .

(3) After subsection (2) insert--

" (3) If, in the case of expenditure which is first-year qualifying expenditure, a disposal receipt falls to be brought into account for the chargeable period in which the expenditure is incurred ("the initial period"), subsection (4) below applies.

(4) Where this subsection applies, the unrelieved balance of the expenditure shall be taken to be unrelieved qualifying expenditure for the initial period, but only for the purpose specified in subsection (5).

(5) The purpose is that of determining in accordance with sections 417 and 418--

(a) any question whether the person who incurred the expenditure--

(i) is entitled to a balancing allowance for the initial period, or

(ii) is liable to a balancing charge for that period, and

(b) if so, the amount of that balancing allowance or balancing charge.

(6) In this section "the unrelieved balance of the expenditure" means so much of the first-year qualifying expenditure in question as remains after deducting the amount of any first-year allowance given in respect of the whole or any part of that expenditure. " .

Section 64

SCHEDULE 22 Computation of profits: adjustment on change of basis

Part 1 Introduction

General scheme

1 (1) Where there is a change of basis within section 64, one or more adjustments shall be made in accordance with this Schedule.

(2) Any such adjustment shall be calculated and given effect in accordance with the provisions of Part 2 of this Schedule (general rules), subject to the provisions of Part 3 of this Schedule (special rules for certain cases).

(3) Part 4 of this Schedule contains supplementary provisions and Part 5 provides for commencement.

Part 2 General rules

Calculation of adjustment

2 The amount of the adjustment is calculated as follows:

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