Legalize / United Kingdom / Public General Act

Finance (No. 2) Act 1992

Type Public General Act

Publication 1992-07-16

Last updated 2021-08-01

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part I — Customs and Excise, Value Added Tax and Car Tax

Chapter I — Customs and Excise

Abolition of fiscal frontiers etc.

Rights in pursuance of deposits.

1

(1) Subject to the following provisions of this section, the Commissioners may by regulations make provision, in relation to any duties of excise on goods, for fixing the time when the requirement to pay any duty with which goods become chargeable is to take effect (“the excise duty point”).

(2) Where regulations under this section fix an excise duty point for any goods, the rate of duty for the time being in force at that point shall be the rate used for determining the amount of duty to be paid in pursuance of the requirement that takes effect at that point.

(3) Regulations under this section may provide for the excise duty point for any goods to be such of the following times as may be prescribed in relation to the circumstances of the case, that is to say—

(a) the time when the goods become chargeable with the duty in question;

(b) the time when there is a contravention of any prescribed requirements relating to any suspension arrangements applying to the goods;

(c) the time when the duty on the goods ceases, in the prescribed manner, to be suspended in accordance with any such arrangements;

(d) the time when there is a contravention of any prescribed condition subject to which any relief has been conferred in relation to the goods;

(e) such time after the time which, in accordance with regulations made by virtue of any of the preceding paragraphs, would otherwise be the excise duty point for those goods as may be prescribed;

and regulations made by virtue of any of paragraphs (b) to (e) above may define a time by reference to whether or not at that time the Commissioners have been satisfied as to any matter.

(4) Where regulations under this section prescribe an excise duty point for any goods, such regulations may also make provision—

(a) specifying the person or persons on whom the liability to pay duty on the goods is to fall at the excise duty point (being the person or persons having the prescribed connection with the goods at that point or at such other time, falling no earlier than when the goods become chargeable with the duty, as may be prescribed); and

(b) where more than one person is to be liable to pay the duty, specifying whether the liability is to be both joint and several.

(5) Schedule 1 to this Act (which contains minor and consequential amendments and savings for purposes connected with the other provision made by this section) shall have effect.

(6) The power of the Commissioners to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament and shall include power—

(a) to make different provision for different cases, including different provision for different duties and different goods; and

(b) to make such incidental, supplemental, consequential and transitional provision as the Commissioners think necessary or expedient.

(7) In this section—

“the Commissioners” means the Commissioners of Customs and Excise;

“contravention” includes a failure to comply;

“customs and excise Acts” and “goods” have the same meanings as in the Customs and Excise Management Act 1979; and

“prescribed” means prescribed by regulations under this section;

and references in this section to suspension arrangements are references to any provision made by or under the customs and excise Acts for enabling goods to be held or moved without payment of duty or any provision made by or under those Acts in connection with any provision enabling goods to be so held or moved.

(8) This section and Schedule 1 to this Act shall come into force on such day as the Commissioners may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different provisions and for different purposes.

Power to provide for drawback of excise duty

2

(1) Subject to the following provisions of this section, the Commissioners may, in relation to any duties of excise, by regulations make provision (a) conferring an entitlement to drawback of duty in prescribed cases where the Commissioners are satisfied that goods chargeable with duty have not been, and will not be, consumed in the United Kingdom ; and.

(b) conferring an entitlement to drawback of duty, in prescribed cases, on the shipment as stores, or warehousing in an excise warehouse for use as stores, of goods chargeable with duty

(2) The power of the Commissioners to make regulations under this section shall include power—

(a) to provide for, or for the imposition of, the conditions to which an entitlement to drawback under the regulations is to be subject;

(b) to provide for the determination of the person on whom any such entitlement is conferred;

(c) to make different provision for different cases, including different provision for different duties and different goods; and

(d) to make such incidental, supplemental, consequential and transitional provision as the Commissioners think necessary or expedient.

(3) Without prejudice to the generality of subsection (2)(d) above, the power of the Commissioners to make regulations under this section shall include power, in relation to any drawback of duty to which any person is entitled by virtue of regulations under this section, to provide—

(a) for entitlement to the drawback to be cancelled at any time after it has been conferred if there is a contravention of any conditions to which it is subject or in such other circumstances as may be prescribed; and

(b) for such persons as may be prescribed to be liable to the Commissioners for sums paid or credited to any person in respect of any drawback that has been cancelled in accordance with any such regulations.

(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.

(4) The power of the Commissioners to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(5) In this section—

“the Commissioners” means the Commissioners of Customs and Excise;

“contravention” includes a failure to comply;

“excise warehouse”, “goods”, “shipment”, “stores” and “warehousing” have the same meaningsas in the Customs and Excise Management Act 1979; and

“prescribed” means prescribed by regulations under this section.

(6) This section shall come into force on such day as the Commissioners may by order made by statutory instrument appoint, and different days may be appointed under this subsection for different provisions and for different purposes.

Protection of revenues derived from excise duties

3

(1) Schedule 2 to this Act (which makes additional provision for purposes connected with the protection of the revenues derived from excise duties) shall have effect.

(2) This section and Schedule 2 to this Act 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 subsection for different provisions and for different purposes.

Enforcement powers

4

(1) Except in a case falling within subsection (1A) or (2) below, the powers to which this section applies shall not be exercisable in relation to any person or thing entering or leaving Northern Ireland so as to prevent, restrict or delay the movement of that person or thing between Northern Ireland and a member State or between member States.

(1A) The first case in which a power to which this section applies may be exercised as mentioned in subsection (1) above is where it is necessary to exercise the power in order to ascertain whether the movement in question is or is not in fact between Northern Ireland and a member State or between member States.

(2) The second case in which a power to which this section applies may be exercised as mentioned in subsection (1) above is where it is necessary to exercise the power for purposes connected with—

(a) securing the collection of any ... customs duty or giving effect to any Union customs legislation (within the meaning of Part 1 of the Taxation (Cross-border Trade) Act 2018) relating to any such duty;

(b) the enforcement of any prohibition or restriction for the time being in force by virtue of any provision of Union customs legislation with respect to the movement of goods into or out of the member States; ...

(c) the enforcement of any prohibition or restriction for the time being in force by virtue of any enactment with respect to the importation or exportation of goods into or out of the United Kingdom; or

(d) searching for cash that is recoverable property or intended for use in unlawful conduct

(3) Subject to subsection (4) below, this section applies to any power which is conferred on the Commissioners of Customs and Excise or any officer or constable under any of the following provisions of the Customs and Excise Management Act 1979, that is to say—

(a) section 21 (control of movement of aircraft into and out of the United Kingdom);

(b) section 26 (power to regulate movement by land into and out of Northern Ireland);

(d) section 28 (officers’ powers of access);

(e) section 29 (officers’ powers to detain ships);

(f) section 34 (power to prevent flight of aircraft);

(g) section 78 (questions as to baggage of person entering or leaving the United Kingdom);

(ga) section 157A (general information powers in relation to persons entering or leaving the United Kingdom)

(h) section 164 (powers of search).

(4) The Treasury may by order made by statutory instrument add any power conferred by any enactment contained in the customs and excise Acts to the powers to which this section applies; and a statutory instrument containing an order under this subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) In this section—

“cash” has the meaning given by section 289(6) and (7) of the Proceeds of Crime Act 2002;

“the customs and excise Acts” and “goods” have the same meanings as in the Customs and Excise Management Act 1979;

“recoverable property” has the same meaning as in section 316(1) of the Proceeds of Crime Act 2002; and

“unlawful conduct” has the same meaning as in section 241 of that Act;

and for the purposes of this section a power shall be taken to be exercised otherwise than in relation to a person or thing entering or leaving the United Kingdom in any case where the power is exercisable irrespective of whether the person or thing in question is entering or leaving the United Kingdom.

(6) This section shall come into force on 1st January 1993.

Controls of persons entering the United Kingdom

5

(1) In section 78 of the Customs and Excise Management Act 1979 (controls of persons entering or leaving the United Kingdom), after subsection (2) there shall be inserted the following subsection —

(2A) Subject to subsection (1A) above, where the journey of a person arriving by air in the United Kingdom is continued or resumed by air to a destination in the United Kingdom which is not the place where he is regarded for the purposes of this section as entering the United Kingdom, subsections (1) and (2) above shall apply in relation to that person on his arrival at that destination as they apply in relation to a person entering the United Kingdom.

(2) This section shall come into force on 1st January 1993.

Other provisions

Abolition of duties on matches and mechanical lighters

6

(1) The Matches and Mechanical Lighters Duties Act 1979 shall cease to have effect.

(2) This section shall come into force on 1st January 1993.

Bingo duty: increased exemption etc

7

(1) Schedule 3 to the Betting and Gaming Duties Act 1981 shall be amended as follows.

(2) In paragraph 2 the following shall be substituted for sub-paragraph (1)(a) (exemption from bingo duty for clubs etc. where prizes do not exceed certain limits)—

(a) a person’s eligibility to participate in that bingo depends upon his being a member of a particular society or his being a guest of such a member or of the society;

(3) In paragraph 12(1) (promoter of bingo other than bingo exempt from duty by virtue of paragraph 1, 5 or 6 to keep accounts etc.) for “paragraph 1, 5 or 6 above" there shall be substituted “ Part I of this Schedule ”.

(4) This section shall apply as regards bingo played in any week beginning on or after 3rd August 1992.

Tobacco products duty: retail price of cigarettes

8

In section 5 of the Tobacco Products Duty Act 1979—

(a) in paragraph (b) of subsection (1) (determination of retail price of cigarettes by reference to price recommended by a manufacturer or importer), for “price recommended by the importer or manufacturer" and “price so recommended" there shall be substituted “ recommended price ”; and

(b) after that subsection there shall be inserted the following subsection—

(1A) In subsection (1) above “recommended price”— (a) in relation to a case in which cigarettes of the applicable description are manufactured by a manufacturer in a member State, means any price recommended by that manufacturer; and (b) in relation to a case which does not fall within paragraph (a) above, means any price recommended by an importer of cigarettes of the applicable description.

Amendments relating to new beer duty regime

9

(1) Schedule 2 to the Finance Act 1991 (amendments relating to beer duty) shall be amended as follows.

(2) Immediately before paragraph 22 there shall be inserted—

(21A) In section 386(1) of the Insolvency Act 1986 (categories of preferential debts) after “betting and gaming duties" there shall be inserted “, beer duty".

(3) Immediately before paragraph 23 there shall be inserted—

(22A) In Article 346(1) of the Insolvency (Northern Ireland) Order 1989 (categories of preferential debts) after “betting and gaming duties" there shall be inserted “, beer duty".

Search of aircraft

10

(1) The Customs and Excise Management Act 1979 shall be amended as follows.

(2) In section 27(1) (officers’ powers of boarding and searching aircraft at a customs and excise airport, etc.) for the words “a customs and excise airport" there shall be substituted “ an aerodrome ”.

(3) In section 28(1) (officers’ powers of access to aircraft at customs and excise airport, etc.) for the words “customs and excise airport" there shall be substituted “ aerodrome ”.

(4) In section 163 (power to stop and search vehicles or vessels) the following subsection shall be inserted at the end—

(3) This section shall apply in relation to aircraft as it applies in relation to vehicles or vessels but the power to stop and search in subsection (1) above shall not be available in respect of aircraft which are airborne.

Vehicles excise duty: goods vehicles

11

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Vehicles excise duty: disabled persons

12

Vehicles excise duty: registration marks

13

Chapter II — Value Added Tax

Abolition of fiscal frontiers etc

14

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Schedule 3 to this Act shall have effect for the purposes—

(a) of amending the Value Added Tax Act 1983, Chapter II of Part I of the Finance Act 1985 and certain other enactments in connection with the provision made by subsection (1) above; and

(b) of giving effect, in relation to—

(i) value added tax charged on the supply of goods and services; and

(ii) value added tax charged on the importation of goods from places outside the member States,

to requirements of the directive of the Council of the European Communities dated 17th May 1977 No. 77/388/EEC and the amendments of that directive by the directive of that Council dated 16th December 1991 No. 91/680/EEC (amendments with a view to the abolition of fiscal frontiers).

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Time for raising and answering inquiries

15

Special treatment for persons involved in farming etc

16

Fuel and power

17

Chapter III — Car Tax

Abolition of fiscal frontiers

18

(1) The Car Tax Act 1983 shall be amended in accordance with Schedule 4 to this Act (amendments in connection with the abolition of fiscal frontiers between the member States).

(2) This section and Schedule 4 to this Act 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 subsection for different provisions and for different purposes.

Part II — Income Tax, Corporation Tax and Capital Gains Tax

Chapter I — General

Lower rate

Lower rate: further provisions

19

(1) In section 7(4) of the Taxes Management Act 1970 for “basic rate" there shall be substituted “ the basic rate or the lower rate ”.

(2) In each of the provisions to which this subsection applies, after “basic rate" there shall be inserted “ or the lower rate ”; and this subsection applies to section 91(3)(c) of the Taxes Management Act 1970 and to sections ... 599A(7) of the Taxes Act 1988.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) This section shall apply for the year 1992-93 and subsequent years of assessment.

Married couple’s allowance etc.

Married couple’s allowance etc

20

Schedule 5 to this Act (which makes provision in relation to the married couple’s allowance) shall have effect.

Corporation tax charge and rate

Charge and rate of corporation tax for 1992

21

Corporation tax shall be charged for the financial year 1992 at the rate of 33 per cent.

Small companies

22

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Capital gains tax

Capital gains tax: rates

23

Groups etc.

Amendments relating to group relief etc

24

Schedule 6 to this Act (which contains amendments relating to group relief etc.) shall have effect.

Companies ceasing to be members of groups

25

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Subject to the repeals made by the Taxation of Chargeable Gains Act 1992, in relation to a company which ceases to be a member of a group of companies on or after 15th November 1991 section 278 of the Income and Corporation Taxes Act 1970 (deemed sale etc. where company ceases to be member of a group) shall have effect, and be deemed to have had effect, with the substitution in subsection (1) of the words “ in consequence of another member of the group ceasing to exist ” for the words from “by being wound up" to the end of the subsection.

Charities etc.

Donations to charity: minimum limits

26

Covenanted payments to charity

27

Powers of inspection

28

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) In the Table in section 98 of the Taxes Management Act 1970 (penalties for failure to produce documents etc.) at the end of the second column there shall be inserted—

	Section 28(2) of the Finance (No.2) Act 1992.

(5) Section 94 of the Finance Act 1990 (donations to charity: inspection powers) shall cease to have effect.

(6) This section shall apply in relation to claims made after the day on which this Act is passed.

Interest, dividends and distributions

Returns of interest

29

(1) In section 17 of the Taxes Management Act 1970 (returns of interest) in subsection (4) (interest not required to be included in return if declaration that person beneficially entitled to interest not ordinarily resident in UK) the words from “and if a person" to the end of the subsection shall cease to have effect and after that subsection there shall be inserted the following subsections—

(4A) If a person to whom any interest is paid or credited in respect of any money received or retained in the United Kingdom by notice in writing served on the person paying or crediting the interest— (a) has declared that the person beneficially entitled to the interest is a company not resident in the United Kingdom, and (b) has requested that the interest shall not be included in any return under this section, the person paying or crediting the interest shall not be required to include the interest in any such return. (4B) Subsection (4C) below shall apply where— (a) as a result of a declaration made under section 481(5)(k) of the principal Act and the operation of section 482(5) of that Act in relation to that declaration, there is no obligation under section 480A(1) of that Act to deduct a sum representing income tax out of any interest paid or credited in respect of any money received or retained in the United Kingdom, and (b) the person who makes the declaration referred to in paragraph (a) above, by notice in writing served on the person paying or crediting the interest, requests that the interest shall not be included in any return under this section. (4C) Where this subsection applies, the person paying or crediting the interest shall not be required to include the interest in any return under this section.

(2) This section shall apply to interest paid or credited after the day on which this Act is passed.

Foreign dividends

30

Equity notes

31

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Information relating to distributions

32

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In section 234 of that Act—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) subsections (3) and (4) shall be omitted.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) This section shall apply in relation to distributions begun after the day on which this Act is passed.

Securities and deposits

Deep gain securities

33

Rights in pursuance of deposits

34

Schedule 8 to this Act (which contains provisions about arrangements relating to rights in pursuance of deposits) shall have effect.

Exchange of securities

35

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Subject to the repeals made by the Taxation of Chargeable Gains Act 1992, in relation to exchanges made on or after 1st January 1992 section 85 of the Capital Gains Tax Act 1979 (exchange of securities for those in another company) shall have effect, and be deemed to have had effect, with the insertion after subsection (1)(b) of

or (c) company A holds, or in consequence of the exchange will hold, the greater part of the voting power in company B

Employee shares

36

(1) In section 69 of the Finance Act 1989 (chargeable events as regards employee share ownership trusts) the following shall be inserted after subsection (3)—

(3A) For the purposes of subsection (1)(a) above a transfer is also a qualifying transfer if it is made by way of exchange in circumstances mentioned in section 85(1) of the Capital Gains Tax Act 1979 or section 135(1) of the Taxation of Chargeable Gains Act 1992.

(2) This section applies in relation to exchanges made on or after 1st January 1992.

37

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Business expansion scheme

No relief for shares issued after 1993

38

Extension of relief for private rented housing: property managing companies

39

Extension of relief for private rented housing: lettings to former owner-occupiers

40

Films

Relief for preliminary expenditure

41

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Relief for production or acquisition expenditure

42

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Interpretation of sections 41 and 42

43

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Transfers of trade

Transfer of a UK trade: amendment of 1992 Act

44

The Taxation of Chargeable Gains Act 1992 shall have effect, and be deemed always to have had effect, with the insertion of the following after section 140—

(140A) (1) This section applies where— (a) a qualifying company resident in one member State (company A) transfers the whole or part of a trade carried on by it in the United Kingdom to a qualifying company resident in another member State (company B), (b) the transfer is wholly in exchange for securities issued by company B to company A, (c) a claim is made under this section by company A and company B, (d) section 140B does not prevent this section applying, and (e) the appropriate condition is met in relation to company B immediately after the time of the transfer. (2) Where immediately after the time of the transfer company B is not resident in the United Kingdom, the appropriate condition is that were it to dispose of the assets included in the transfer any chargeable gains accruing to it on the disposal would form part of its chargeable profits for corporation tax purposes by virtue of section 10(3). (3) Where immediately after the time of the transfer company B is resident in the United Kingdom, the appropriate condition is that none of the assets included in the transfer is one in respect of which, by virtue of the asset being of a description specified in double taxation relief arrangements, the company falls to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to it on a disposal. (4) Where this section applies— (a) the two companies shall be treated, so far as relates to corporation tax on chargeable gains, as if any assets included in the transfer were acquired by company B from company A for a consideration of such amount as would secure that on the disposal by way of transfer neither a gain nor a loss would accrue to company A; (b) section 25(3) shall not apply to any such assets by reason of the transfer (if it would apply apart from this paragraph). (5) For the purposes of subsection (1)(a) above, a company shall be regarded as resident in a member State if it is within a charge to tax under the law of the State because it is regarded as resident for the purposes of the charge. (6) For the purposes of subsection (5) above, a company shall be treated as not within a charge to tax under the law of a member State if it falls to be regarded for the purposes of any double taxation relief arrangements to which the State is a party as resident in a territory which is not within any of the member States. (7) In this section— - “qualifying company” means a body incorporated under the law of a member State; - “securities” includes shares. (140B) (1) Section 140A shall not apply unless the transfer of the trade or part is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax. (2) Subsection (1) above shall not apply where, before the transfer, the Board have on the application of company A and company B notified those companies that the Board are satisfied that the transfer will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are mentioned in that subsection. (3) Subsections (2) to (5) of section 138 shall have effect in relation to subsection (2) above as they have effect in relation to subsection (1) of that section.

Transfer of a non-UK trade: amendment of 1992 Act

45

The Taxation of Chargeable Gains Act 1992 shall have effect, and be deemed always to have had effect, with the insertion of the following sections after section 140B—

(140C) (1) This section applies where— (a) a qualifying company resident in the United Kingdom (company A) transfers to a qualifying company resident in another member State (company B) the whole or part of a trade which, immediately before the time of the transfer, company A carried on in a member State other than the United Kingdom through a branch or agency, (b) the transfer includes the whole of the assets of company A used for the purposes of the trade or part (or the whole of those assets other than cash), (c) the transfer is wholly or partly in exchange for securities issued by company B to company A, (d) the aggregate of the chargeable gains accruing to company A on the transfer exceeds the aggregate of the allowable losses so accruing, (e) a claim is made under this section by company A, and (f) section 140D does not prevent this section applying. (2) In a case where this section applies, this Act shall have effect in accordance with subsection (3) below. (3) The allowable losses accruing to company A on the transfer shall be set off against the chargeable gains so accruing and the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses. (4) No claim may be made under this section as regards a transfer in relation to which a claim is made under section 140. (5) In a case where this section applies, section 815A of the Taxes Act shall also apply. (6) For the purposes of subsection (1)(a) above— (a) a company shall not be regarded as resident in the United Kingdom if it falls to be regarded for the purposes of any double taxation relief arrangements to which the United Kingdom is a party as resident in a territory which is not within any of the member States; (b) a company shall be regarded as resident in another member State if it is within a charge to tax under the law of the State because it is regarded as resident for the purposes of the charge. (7) For the purposes of subsection (6)(b) above, a company shall be treated as not within a charge to tax under the law of a member State if it falls to be regarded for the purposes of any double taxation relief arrangements to which the State is a party as resident in a territory which is not within any of the member States. (8) Section 442(3) of the Taxes Act (overseas business of UK insurance companies) shall be ignored in arriving at the chargeable gains accruing to company A on the transfer, and the allowable losses so accruing, for the purposes of subsections (1)(d) and (3) above. (9) In this section— - “qualifying company” means a body incorporated under the law of a member State; - “securities” includes shares. (140D) (1) Section 140C shall not apply unless the transfer of the trade or part is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to income tax, corporation tax or capital gains tax. (2) Subsection (1) above shall not apply where, before the transfer, the Board have on the application of company A notified that company that the Board are satisfied that the transfer will be effected for bona fide commercial reasons and will not form part of any such scheme or arrangements as are mentioned in that subsection. (3) Subsections (2) to (5) of section 138 shall have effect in relation to subsection (2) above as they have effect in relation to subsection (1) of that section.

Transfer of a trade: supplementary (1)

46

(1) The Taxation of Chargeable Gains Act 1992 shall have effect, and be deemed always to have had effect, with the following amendments.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In section 116(11) (qualifying corporate bonds) after “139," there shall be inserted “ 140A, ”.

(4) In section 140 (transfer of assets to non-resident company) the following subsection shall be inserted after subsection (6)—

(6A) No claim may be made under this section as regards a transfer in relation to which a claim is made under section 140C.

(5) In section 174 (disposal or acquisition outside a group)—

(a) in subsection (2) after the word “section" (in the first place where it occurs) there shall be inserted “ 140A, ”;

(b) in subsection (3) after “section" there shall be inserted “ 140A, ”.

(6) In section 177(2) (dividend stripping) after “which section" there shall be inserted “ 140A, ”.

(7) In section 184(2) (indexation)—

(a) after the word “section" (in the first place where it occurs) there shall be inserted “ 140A, ”;

(b) for “either" there shall be substituted “ one ”.

Transfer of a UK trade: amendment of 1970 Act

47

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer of a non-UK trade: amendment of 1970 Act

48

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer of a trade: supplementary (2)

49

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Double taxation relief

Transfer of a non-UK trade

50

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Arbitration Convention

51

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The following section shall be inserted after section 182 of the Finance Act 1989 (disclosure of information)—

(182A) (1) A person who discloses any information acquired by him in the exercise of his functions as a member of an advisory commission set up under the Arbitration Convention is guilty of an offence. (2) Subsection (1) above does not apply to any disclosure of information— (a) with the consent of the person who supplied the information to the commission, or (b) which has been lawfully made available to the public before the disclosure is made. (3) It is a defence for a person charged with an offence under this section to prove that at the time of the alleged offence he believed that the information in question had been lawfully made available to the public before the disclosure was made and had no reasonable cause to believe otherwise. (4) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both; (b) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both. (5) No prosecution for an offence under this section shall be instituted in England and Wales or in Northern Ireland except— (a) by the Board, or (b) by or with the consent of the Director of Public Prosecutions or, in Northern Ireland, the Director of Public Prosecutions for Northern Ireland. (6) In this section— - “the Arbitration Convention” has the meaning given by section 815B(4) of the Taxes Act 1988; - “the Board” means the Commissioners of Inland Revenue.

Interest

52

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous

Car fuel: cash equivalents

53

(1) Section 158 of the Taxes Act 1988 (car fuel) shall be amended as follows.

(2) For subsection (2) (cash equivalents) there shall be substituted—

(2) Subject to the provisions of this section, the cash equivalent of that benefit shall be ascertained from— (a) Table A below where the car has an internal combustion engine with one or more reciprocating pistons and is not a diesel car; (b) Table AB below where the car has an internal combustion engine with one or more reciprocating pistons and is a diesel car; (c) Table B below where the car does not have an internal combustion engine with one or more reciprocating pistons.

Cylinder capacity of car in cubic centimetres	Cash equivalent
1,400 or less	£500
More than 1,400 but not more than 2,000	£630
More than 2,000	£940
Cylinder capacity of car in cubic centimetres	Cash equivalent
---	---
2,000 or less	£460
More than 2,000	£590
Original market value of car	Cash equivalent
---	---
Less than £6,000	£500
£6,000 or more but less than £8,500	£630
£8,500 or more	£940

(2A) For the purposes of subsection (2) above a diesel car is a car which uses heavy oil as fuel; and “heavy oil” here means heavy oil as defined by section 1(4) of the Hydrocarbon Oil Duties Act 1979. (2B) For the purposes of Tables A and AB in subsection (2) above a car’s cylinder capacity is the capacity of its engine calculated as for the purposes of the Vehicles (Excise) Act 1971.

(3) In subsection (4) (Treasury orders) for “either" there shall be substituted “ any ”.

(4) This section shall have effect for the year 1992-93 and subsequent years of assessment.

Foreign earnings

54

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Oil extraction activities: extended transportation

55

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Friendly societies

56

Schedule 9 to this Act (which makes provision in relation to friendly societies) shall have effect.

Rents or receipts between connected persons

57

Rent etc. chargeable under Case VI

58

Furnished accommodation

59

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deduction on account of certain payments

60

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying maintenance payments: extension to member States

61

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying maintenance payments: maintenance assessments etc

62

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paying and collecting agents etc

63

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduced and composite rate

64

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Life assurance business: I minus E basis

65

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Banks etc. in compulsory liquidation

66

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II — Capital allowances

Transfer of a UK trade

67

Computer software

68

Films etc

69

Enterprise zones

70

Expensive motor cars

71

Part III — Miscellaneous and General

Inheritance tax

Increase of rate bands

72

(1) For the Table in Schedule 1 to the Inheritance Tax Act 1984 there shall be substituted—

Portion of value	Portion of value	Rate of tax
Lower limit	Upper limit	Per cent.
£	£

0	150,000	Nil
150,000		40

(2) Subsection (1) above shall apply to any chargeable transfer made on or after 10th March 1992, and section 8(1) of the Inheritance Tax Act 1984 (indexation of rate bands) shall not apply to chargeable transfers made in the year beginning 6th April 1992.

Business and agricultural property relief

73

Schedule 14 to this Act (which makes provision in relation to relief in respect of business property and agricultural property) shall have effect.

Petroleum revenue tax

Oil exported direct from United Kingdom off-shore fields

74

(1) The enactments specified in Schedule 15 to this Act (being enactments relating to oil taxation) shall have effect subject to the amendments in that Schedule, being amendments—

(a) which take account, for the purpose of determining assessable profits and allowable losses, of certain cases where oil which is won from an off-shore oil field is, or could reasonably be expected to be, first landed in a country other than the United Kingdom; or

(b) which are consequential upon, or incidental to, the amendments referred to in paragraph (a) above.

(2) For the purposes of subsection (1)(a) above an oil field is an off-shore oil field if the whole of it is situated outside the geographical area of the United Kingdom (as determined under section 108 of the Finance Act 1986 - the on-shore/off-shore boundary).

(3) In the amendments in Schedule 15 to this Act, any reference to a country other than the United Kingdom shall be treated as a reference to the geographical area of that country exclusive of any land (or waters) to the seaward side of the high-water line along the coast of that country, including the coast of all islands comprised in that country.

(4) For the purpose of subsection (3) above, section 108(5) of the Finance Act 1986 (which provides a means of determining the high-water line at any place in the United Kingdom) shall, with any necessary modifications, apply to determine the high-water line at any place in a country other than the United Kingdom.

(5) Except in so far as they have effect in relation to corporation tax or income tax, the amendments in Schedule 15 to this Act take effect as follows—

(a) in so far as they relate to expenditure incurred, they take effect for claim periods ending after 27th November 1991; and

(b) in so far as they relate to any other matter, they take effect for chargeable periods ending after 30th June 1992.

(6) This section shall be construed as one with Part I of the Oil Taxation Act 1975.

...

Change of name

75

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous

76

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous

Northern Ireland Electricity

77

Schedule 17 to this Act (which makes provision in relation to the transfer of the undertaking of Northern Ireland Electricity) shall have effect.

Gas levy: restriction of liability

78

Treasury bills

79

Publication of rates of interest

80

(1) Section 5(8) of the National Loans Act 1968 (which requires the Treasury to publish certain rates of interest in the London and Edinburgh Gazettes) shall cease to have effect.

(2) This section shall have effect in relation to rates of interest determined after the day on which this Act is passed.

General

Interpretation

81

In this Act “the Taxes Act 1988” means the Income and Corporation Taxes Act 1988.

Repeals

82

The enactments specified in Schedule 18 to this Act (which include provisions which are already spent) are hereby repealed to the extent specified in the third column of that Schedule, but subject to any provision of that Schedule.

Short title

83

This Act may be cited as the Finance (No. 2) Act 1992.

SCHEDULE 1

The Customs and Excise Management Act 1979 (c. 2)

1

In section 1(1) of the Customs and Excise Management Act 1979 (interpretation), after the definition of “examination station" there shall be inserted the following definition—

“excise duty point” has the meaning given by section 1 of the Finance (No. 2) Act 1992;

2

In section 43 of that Act (duty on imported goods)—

(a) in subsection (2), for “and (2C)" there shall be substituted “ (2C) and (2D) ”; and

(b) after subsection (2C) there shall be inserted the following subsection—

(2D) Nothing in the provisions of subsections (1) and (2) above or of subsection (6) below or in any exception to any of those provisions made by or under any of sections 44 to 48 below shall have effect for the purposes of any duty of excise chargeable on any goods for which— (a) the excise duty point is fixed by regulations under section 1 of the Finance (No. 2) Act 1992; and (b) the applicable rate of duty is determined in accordance with subsection (2) of that section.

3

In section 94 of that Act (deficiency in warehoused goods), after subsection (5) there shall be inserted the following subsection—

(6) The preceding provisions of this section so far as they have effect for- (a) fixing the excise duty point for any goods chargeable with a duty of excise; or (b) determining the person on whom any liability to pay any such duty is to fall, shall have effect subject to the provisions of any regulations under section 1 of the Finance (No. 2) Act 1992; and accordingly, the power to make regulations under that section shall include power, for the purposes of, or in connection with, the making of any provision falling within paragraph (a) or (b) above, to modify any of the preceding provisions of this section and the provisions of section 95 below.

4

In section 95(1) of that Act (application of section 94 to deficiencies in goods removed from warehouses), after “subsection (2) below" there shall be inserted “ and to any such regulations as are mentioned in subsection (6) of that section ”.

5

In section 96 of that Act (deficiency in certain goods moved by pipeline), after subsection (5) there shall be inserted the following subsection—

(6) The preceding provisions of this section so far as they have effect for— (a) fixing the excise duty point for any goods chargeable with a duty of excise; or (b) determining the person on whom any liability to pay any such duty is to fall, shall have effect subject to the provisions of any regulations under section 1 of the Finance (No. 2) Act 1992; and, accordingly, the power to make regulations under that section shall include power, for the purposes of, or in connection with, the making of any provision falling within paragraph (a) or (b) above, to modify any of the preceding provisions of this section.

6

(1) Subject to sub-paragraph (2) below, section 100H(1) of that Act (liability to duty under REDS regulations) shall have effect—

(a) with the omission of paragraph (f);

(b) with the substitution in paragraph (g) for the words from “for the payment" to “liable" of the words “ on goods which have been or may be the subject of a transaction involving a registered excise dealer and shipper ”; and

(h) for determining, in relation to goods which are the subject of a transaction involving a registered excise dealer and shipper, the duties of excise chargeable on those goods and the rates of those duties and, in that connection, the method of charging the duties;

(2) Where apart from this sub-paragraph any provisions contained in regulations made by virtue of paragraph (f) or (h) of section 100H(1) of that Act would cease to have effect by virtue of sub-paragraph (1) above, those provisions shall continue in force, notwithstanding that sub-paragraph, as if contained in regulations made under section 1 of this Act and, accordingly, may be revoked, amended or re-enacted by regulations under that section.

7

In section 127A(1) of that Act (power to provide for deferred payment of excise duty), after “payment" there shall be inserted “ (in accordance, where any requirement to pay the duty takes effect, with that requirement) ”.

The Customs and Excise Duties (General Reliefs) Act 1979 (c. 3)

8

(1) In subsection (3) of section 13 of the Customs and Excise Duties (General Reliefs) Act 1979 (power to provide for reliefs in respect of duty and VAT subject to conditions)—

(a) in paragraph (a), after “applies" there shall be inserted “ and conditions with respect to the conduct in relation to the goods of persons other than the person on whom the relief is conferred and of persons whose identity cannot be ascertained at the time of importation ”; and

(b) in paragraph (b), after “including" there shall be inserted “ provisions requiring any person to whom a condition of the relief at any time relates to notify the Commissioners of any non-compliance with the condition and ”.

(2) After that subsection there shall be inserted the following subsections—

(3A) An order under this section may provide, in relation to any relief which under such an order is made subject to a condition, for there to be a presumption that, in such cases as may be described in the order by reference— (a) to the quantity of goods in question; or (b) to any other factor which the Commissioners consider appropriate, the condition is to be treated, unless the Commissioners are satisfied to the contrary, as not being complied with. (3B) An order under this section may provide, in relation to any requirement of such an order for the Commissioners to be notified of non-compliance with a condition to which any relief from payment of any duty of excise is made subject, for goods to be exempt from forfeiture under section 124 of the Customs and Excise Management Act 1979 (forfeiture for breach of certain conditions) in respect of non-compliance with that condition if— (a) the non-compliance is notified to the Commissioners in accordance with that requirement; (b) any duty which becomes payable on those goods by virtue of the non-compliance is paid; and (c) the circumstances are otherwise such as may be described in the order. (3C) If any person fails to comply with any requirement of an order under this section to notify the Commissioners of any non-compliance with a condition to which any relief is made subject- (a) he shall be liable, on summary conviction, to a penalty of an amount not exceeding level 5 on the standard scale; and (b) the goods in respect of which the offence was committed shall be liable to forfeiture.

(3) In subsection (4) of that section (definitions), after the definition of “Community relief" there shall be inserted the following definition—

“conduct”, in relation to any person who has or may acquire possession or control of any goods, includes that person’s intentions at any time in relation to those goods;

The Alcoholic Liquor Duties Act 1979 (c. 4)

9

In section 36(2) of the Alcoholic Liquor Duties Act 1979 (charge of duty on beer), at the end there shall be inserted “ and with any regulations under section 1 of the Finance (No. 2) Act 1992 ”.

10

(1) Subject to sub-paragraph (2) below, paragraph (d) of section 41A(7) of that Act (power to impose liability for beer duty on prescribed persons) shall cease to have effect.

(2) Where apart from this sub-paragraph any provisions contained in regulations made by virtue of paragraph (d) of section 41A(7) of that Act would cease to have effect by virtue of sub-paragraph (1) above, those provisions shall continue in force, notwithstanding that sub-paragraph, as if contained in regulations made under section 1 of this Act and, accordingly, may be revoked, amended or re-enacted by regulations under that section.

11

(1) Subsection (1) of section 49 of that Act (regulations as to the duty on beer) shall have effect with the substitution of the following paragraph for paragraph (e) (power to prescribe matters with respect to charge for beer duty), that is to say—

(e) for determining the duty and the rate thereof and, in that connection, prescribing the method of charging the duty;

(2) Where apart from this sub-paragraph any provisions contained in regulations made by virtue of paragraph (e) of section 49(1) of that Act would cease to have effect by virtue of sub-paragraph (1) above, those provisions shall continue in force, notwithstanding that sub-paragraph, as if contained in regulations made under section 1 of this Act and, accordingly, may be revoked, amended or re-enacted by regulations under that section.

12

In section 54(1) of that Act (charge of duty on wine), at the end there shall be inserted “ and with any regulations under section 1 of the Finance (No. 2) Act 1992 ”.

13

In section 55(1) of that Act (charge of duty on made-wine), at the end there shall be inserted “ and with any regulations under section 1 of the Finance (No. 2) Act 1992 ”.

SCHEDULE 2

The Customs and Excise Management Act 1979 (c. 2)

1

In section 1(1) of the Customs and Excise Management Act 1979 (interpretation)—

(a) in the definition of “occupier", for “means the" there shall be substituted “ includes any ”;

(b) in the definition of “warehoused" and cognate expressions, after “that section" there shall be inserted “ and any regulations made by virtue of section 93(2)(da)(i) or (ee) or (4) below ”.

2

(1) In section 93 of that Act (regulation of warehouses and warehoused goods), for subsection (1) there shall be substituted the following subsection—

(1) The Commissioners may by regulations under this section (referred to in this Act as “warehousing regulations”)— (a) prohibit the deposit or keeping of goods in a warehouse except where the occupier of the warehouse has been approved by the Commissioners in accordance with the regulations and where such conditions as may be prescribed in relation to that occupier are satisfied; (b) otherwise regulate the deposit, keeping, securing and treatment of goods in a warehouse; (c) make provision with respect to goods which are required to be deposited in a warehouse; (d) regulate the removal of goods from a warehouse and make provision with respect to goods which have lawfully been permitted to be removed from a warehouse without payment of duty; and (e) make provision, in relation to goods which have been warehoused or are required to be deposited in a warehouse with respect to the keeping, preservation and production of records and the furnishing of information.

(2) In subsection (2) of that section (further provision that may be made by warehousing regulations)—

(a) after paragraph (d) there shall be inserted the following paragraphs—

(da) providing for all or any prescribed purposes of the customs and excise Acts— (i) for goods to be treated as warehoused where in a prescribed case they are in the custody or under the control of an approved occupier of a warehouse; and (ii) for goods to be treated, at such times before the excise duty point for those goods as may be prescribed or as may be determined under the regulations, as goods which are required to be deposited in a warehouse; (db) providing for the revocation of the approval under regulations of any occupier of a warehouse and applying, with modifications, any of the provisions of section 98 below in relation to such a revocation or to cases where such an approval is not renewed;

(b) in paragraph (ee), for “to be warehoused" there shall be substituted “ required to be deposited in a warehouse ”;

(fa) requiring goods which are required to be deposited in a warehouse or which have lawfully been permitted to be removed from a warehouse without payment of duty to be accompanied by such documents in such form and containing such particulars as may be prescribed; (fb) imposing or providing for the imposition under the regulations of requirements on persons concerned in any prescribed respect with the carriage of such goods to keep and preserve the documents that are required to accompany the goods; (fc) imposing or providing for the imposition under the regulations of requirements on a person so concerned to produce or cause to be produced any documents which are required to accompany any goods by virtue of paragraph (fa) above to an officer when required to do so for the purpose of allowing the officer to inspect them, to copy or take extracts from them or to remove them at a reasonable time and for a reasonable period;

(d) in paragraph (g), after “are" there shall be inserted “ required ”;

(e) in the definition of “relevant business activity" after the word “are", in the first place where it occurs, there shall be inserted “ required ”.

(3) In subsection (2A) of that section (compensation where removed documents are lost)—

(a) after the word “documents", in each place where it occurs, there shall be inserted “ or records ”; and

(b) for “(2)(j)" there shall be substituted “ (2)(fc) or (j) ”.

(4) In subsection (3) of that section (power to make different provision for different warehouses and goods), after the word “for", in the first place where it occurs, there shall be inserted “ different cases, including different provision for different occupiers or descriptions of occupier, for ”.

(5) After subsection (5) of that section there shall be inserted the following subsection—

(5A) Warehousing regulations made by virtue of any of paragraphs (fa) to (fc) or (g) to (j) of subsection (2) above may also provide for the forfeiture of the goods in question in the event of any contravention of, or non-compliance with, any requirements imposed by or under the regulations with respect to any documents or records relating to prescribed goods.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In subsection (7)(b) of that section—

(a) for “to be warehoused" there shall be substituted “ required to be deposited in a warehouse ”;

(b) for “or which are to be warehoused on drawback" there shall be substituted “ which are to be warehoused on drawback or which are otherwise to be treated by virtue of subsection (2)(da)(ii) above as goods which are required to be deposited in a warehouse ”.

3

In section 100(2) of that Act (forfeiture in respect of contraventions relating to warehousing)—

(a) in paragraphs (a) and (b), after “for warehousing" there shall be inserted “ or are otherwise required to be deposited in a warehouse ”;

(b) for paragraph (d) there shall be substituted the following paragraph—

(d) any goods are concealed at a time before they are warehoused when they have been entered for warehousing or are otherwise required to be deposited in a warehouse or when they are required to be in the custody or under the control of the occupier of a warehouse; or

4

In section 100H(1) of that Act (provision that may be contained in REDS regulations), after paragraph (m) there shall be inserted the following paragraph—

(ma) imposing requirements with respect to, or to the production of, the documents required to accompany goods which are the subject of a transaction involving a registered excise dealer and shipper on any person concerned in any prescribed respect with the carriage of those goods, or providing for the imposition under the regulations of any such requirements;

5

In section 117 of that Act (execution of distress against revenue traders in respect of relevant excise duty)—

(a) the word “relevant", in the first place where it occurs in subsection (1) and where it occurs in subsections (2)(a) . . ., shall be omitted;

(b) for the words “a relevant" in subsections (1)(a) and (3) there shall be substituted “ any ”; and

6

In section 129 of that Act (power to remit or repay duty on denatured goods)—

(a) in paragraph (b) of subsection (1) for “warehoused" there shall be substituted “ chargeable with a duty the requirement to pay which has not yet taken effect ”; and

(b) after that subsection there shall be inserted the following subsection—

(1A) The reference in subsection (1) above to goods which are chargeable with a duty the requirement to pay which has not yet taken effect shall be construed as a reference to any goods which are warehoused or, in the application of that section in relation to a duty of excise, to any goods at a time, before the excise duty point for those goods, when they are chargeable with such a duty.

7

In section 170 of that Act (fraudulent evasion of duty), after subsection (5) there shall be inserted the following subsection—

(6) Where any person is guilty of an offence under this section, the goods in respect of which the offence was committed shall be liable to forfeiture.

8

After section 170 of that Act there shall be inserted the following sections—

(170A) (1) Subject to subsection (2) below, if— (a) after the excise duty point for any goods which are chargeable with a duty of excise, a person acquires possession of those goods or is concerned in carrying, removing, depositing, keeping or otherwise dealing with those goods; and (b) at the time when he acquires possession of those goods or is so concerned, the duty on the goods has not been paid and its payment has not been deferred, that person shall be liable, on summary conviction, to a penalty of an amount not exceeding level 5 on the standard scale. (2) In proceedings for an offence under this section it shall be a defence to show that the person who acquired possession of the goods or was concerned in carrying, removing, depositing, keeping or otherwise dealing with them— (a) acted in accordance with the directions of, or with the consent of, the proper officer; or (b) was not himself the person, or one of the persons, liable to pay the unpaid duty and at the time when he acted either— (i) had no grounds for suspecting that the goods were chargeable with a duty of excise that had not yet been paid; or (ii) believed on reasonable grounds that the duty had been paid or its payment deferred or that the liability to pay the duty had not yet taken effect. (170B) (1) If any person is knowingly concerned in the taking of any steps with a view to the fraudulent evasion, whether by himself or another, of any duty of excise on any goods, he shall be liable— (a) on summary conviction, to a penalty of the prescribed sum or of three times the amount of the duty, whichever is the greater, or to imprisonment for a term not exceeding six months or to both; and (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years or to both. (2) Where any person is guilty of an offence under this section, the goods in respect of which the offence was committed shall be liable to forfeiture.

9

In section 171(5) of that Act (which provides for the time at which duty is to be treated as payable where that cannot be ascertained for the purposes of any offence)—

(a) after “43 above" there shall be inserted “ or the relevant excise duty point ”; and

(b) at the end there shall be inserted “ or, as the case may be, as if the time when the proceedings were commenced was the relevant excise duty point. ”

The Customs and Excise Duties (General Reliefs) Act 1979 (c. 3)

10

In section 13C of the Customs and Excise Duties (General Reliefs) Act 1979 (offence where relieved goods used in breach of condition), after subsection (4) there shall be inserted the following subsection—

(5) Where any person is guilty of an offence under this section, the goods in respect of which the offence was committed shall be liable to forfeiture.

SCHEDULE 3

Part I

Introduction

1

The Value Added Tax Act 1983 shall be amended in accordance with the following provisions of this Part of this Schedule.

Imposition and extent of tax

2

In section 1 (charge to tax), for the words from “and on" onwards there shall be substituted “ on the acquisition in the United Kingdom from other member States of any goods and on the importation of goods from places outside the member States. ”

3

(1) After section 2 (scope of tax) there shall be inserted the following sections—

(2A) (1) Tax shall be charged on any acquisition from another member State of any goods where— (a) the acquisition is a taxable acquisition and takes place in the United Kingdom; (b) the acquisition is otherwise than in pursuance of a taxable supply; and (c) the person who makes the acquisition is a taxable person or the goods are subject to a duty of excise or consist in a new means of transport. (2) An acquisition of goods from another member State is a taxable acquisition if— (a) it falls within subsection (3) below or the goods consist in a new means of transport; and (b) it is not an exempt acquisition. (3) An acquisition of goods from another member State falls within this subsection if— (a) the goods are acquired in the course or furtherance of— (i) any business carried on by any person; or (ii) any activities carried on otherwise than by way of business by any body corporate or by any club, association, organisation or other unincorporated body; (b) it is the person who carries on that business or, as the case may be, those activities who acquires the goods; and (c) the supplier— (i) is taxable in another member State at the time of the transaction in pursuance of which the goods are acquired; and (ii) in participating in that transaction, acts in the course or furtherance of a business carried on by him. (4) Tax on any acquisition of goods from another member State is a liability of the person who acquires the goods and (subject to provisions about accounting and payment) becomes due at the time of acquisition. (2B) (1) Tax on the importation of goods from places outside the member States shall be charged and payable as if it were a duty of customs. (2) For the purposes of this Act goods are imported from a place outside the member States where— (a) having been removed from a place outside the member States, they enter the territory of the Community; (b) they enter that territory by being removed to the United Kingdom or are removed to the United Kingdom after entering that territory; and (c) the circumstances are such that it is on their removal to the United Kingdom or subsequently while they are in the United Kingdom that any Community customs debt in respect of duty on their entry into the territory of the Community would be incurred. (3) Accordingly— (a) goods shall not be treated for the purposes of this Act as imported at any time before a Community customs debt in respect of duty on their entry into the territory of the Community would be incurred; and (b) the person who is to be treated for the purposes of this Act as importing any goods from a place outside the member States is the person who would be liable to discharge any such Community customs debt. (4) The preceding provisions of this section shall not apply, except in so far as the context otherwise requires or provision to the contrary is contained in regulations under subsection (1) of section 24 below, for construing any references to importation or to an importer in any enactment or subordinate legislation applied for the purposes of this Act by that subsection. (2C) (1) A person is a taxable person for the purposes of this Act while he is, or is required to be, registered under this Act. (2) Schedules 1 to 1B to this Act shall have effect with respect to registration. (3) Persons registered under any of those Schedules shall be registered in a single register kept by the Commissioners for the purposes of this Act; and, accordingly, references in this Act to being registered under this Act are references to being registered under any of those Schedules. (4) The Commissioners may by regulations make provision as to the inclusion and correction of information in that register with respect to the Schedule under which any person is registered.

Meaning of supply

4

(1) In subsection (3) of section 3 (power to provide for how transactions are to be treated for the purposes of the charge on supplies), at the end there shall be inserted “ and may provide that paragraph 5A of that Schedule shall not apply, in such circumstances as may be described in the order, so as to make a removal of assets a supply of goods under that paragraph. ”

(2) In subsection (5) of that section (treatment of goods as supplied to and from the same person in the course or furtherance of his business), for “acquired" there shall be substituted “ taken possession of ”.

Time of supply

5

In section 4(1) (time of supply), after “apply" there shall be inserted “ (subject to section 35 below) ”.

6

(1) After subsection (3) of section 5 (further provisions as to time of supply), there shall be inserted the following subsections—

(3A) Where any supply of goods involves both— (a) the removal of the goods from the United Kingdom; and (b) their acquisition in another member State by a person who is liable for value added tax on the acquisition in accordance with provisions of the law of that member State corresponding, in relation to that member State, to the provisions of section 2A above, section 4(2) above and subsections (1) to (3) and (5) to (7) of this section shall not apply and the supply shall be treated for the purposes of this Act as taking place on whichever is the earlier of the days specified in subsection (3B) below. (3B) The days mentioned in subsection (3A) above are— (a) the fifteenth day of the month following that in which the removal in question takes place; and (b) the day of the issue, in respect of the supply, of a tax invoice or of an invoice of such other description as the Commissioners may by regulations prescribe.

(2) In subsection (9) of that section—

(a) for “(3)" there shall be substituted “ (3B) ”; . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In subsection (10) of that section (meaning of “tax invoice"), for “taxable person" there shall be substituted “ person to whom such an invoice should be issued. ”

Place of supply

7

(1) In subsection (1) of section 6 (place of supply), after “apply" there shall be inserted “ (subject to section 35 below) ”.

(2) At the beginning of subsection (2) of that section there shall be inserted “ Subject to the following provisions of this section ”.

(3) For subsection (3) of that section (goods removed from or to the United Kingdom) there shall be substituted the following subsections—

(2A) Goods shall be treated— (a) as supplied in the United Kingdom where their supply involves their installation or assembly at a place in the United Kingdom to which they are removed; and (b) as supplied outside the United Kingdom where their supply involves their installation or assembly at a place outside the United Kingdom to which they are removed. (2B) Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where— (a) the supply involves the removal of the goods to the United Kingdom by or under the directions of the person who supplies them; (b) the supply is a transaction in pursuance of which the goods are acquired in the United Kingdom from another member State by a person who is not a taxable person; (c) the supplier— (i) is liable to be registered under Schedule 1A to this Act; or (ii) would be so liable if he were not already registered under this Act or liable to be registered under Schedule 1 to this Act; and (d) the supply is neither a supply of goods consisting in a new means of transport nor anything which is treated as a supply for the purposes of this Act by virtue only of paragraph 5(1) or 5A of Schedule 2 to this Act. (2C) Goods whose place of supply is not determined under any of the preceding provisions of this section and which do not consist in a new means of transport shall be treated as supplied outside the United Kingdom where— (a) the supply involves the removal of the goods, by or under the directions of the person who supplies them, to another member State; (b) the person who makes the supply is taxable in another member State; and (c) provisions of the law of that member State corresponding, in relation to that member State, to the provisions made by subsection (2B) above make that person liable to value added tax on the supply; but this subsection shall not apply in relation to any supply in a case where the liability mentioned in paragraph (c) above depends on the exercise by any person of an option in the United Kingdom corresponding to such an option as is mentioned in paragraph 1(2) of Schedule 1A to this Act, unless that person has given, and has not withdrawn, a notification to the Commissioners that he wishes his supplies to be treated as taking place outside the United Kingdom where they are supplies in relation to which the other requirements of this subsection are satisfied. (2D) Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where— (a) their supply involves their being imported from a place outside the member States; and (b) the person who supplies them is the person by whom, or under whose directions, they are so imported. (3) Goods whose place of supply is not determined under any of the preceding provisions of this section but whose supply involves their removal to or from the United Kingdom shall be treated— (a) as supplied in the United Kingdom where their supply involves their removal from the United Kingdom without also involving their previous removal to the United Kingdom; and (b) as supplied outside the United Kingdom in any other case.

(4) In subsection (4) of that section (goods removed from the United Kingdom in the course of their removal from one part of the United Kingdom to another), for “subsections (2) and (3) above" there shall be substituted “ the preceding provisions of this section ”.

(5) After subsection (4) of that section there shall be inserted the following subsection—

(4A) The Commissioners may by regulations provide that a notification for the purposes of subsection (2C) above is not to be given or withdrawn except in such circumstances, and in such form and manner, as may be prescribed.

(6) In subsection (6) of that section (power to vary rules of place of supply of services), for the word “services", in each place where it occurs, there shall be substituted “ goods or services ”.

8

After subsection (5) of section 7 (reverse charge on services received from abroad) there shall be inserted the following subsection—

(6) The power of the Treasury by order to add to or vary Schedule 3 to this Act shall include power, where any services whose place of supply is determined by an order under section 6(6) above are added to that Schedule, to provide that subsection (1) above shall have effect in relation to those services as if a person belongs in the United Kingdom for the purposes of paragraph (b) of that subsection if, and only if, he is a taxable person.

9

In section 8(1) (place where supplier or recipient belongs), after the word “apply", in the second place where it occurs, there shall be inserted “ (subject to any provision made under section 7(6) above) ”.

Acquisitions of goods from other member States

10

After section 8 there shall be inserted the following sections—

(8A) (1) Subject to the following provisions of this section, references in this Act to the acquisition of goods from another member State shall be construed as references to any acquisition of goods in pursuance of a transaction in relation to which the following conditions are satisfied, that is to say— (a) the transaction is a supply of goods (including anything treated for the purposes of this Act as a supply of goods); and (b) the transaction involves the removal of the goods from another member State; and references in this Act, in relation to such an acquisition, to the supplier shall be construed accordingly. (2) It shall be immaterial for the purposes of subsection (1) above whether the removal of the goods from the other member State is by or under the directions of the supplier or by or under the directions of the person who acquires them or any other person. (3) Where the person with the property in any goods does not change in consequence of anything which is treated for the purposes of this Act as a supply of goods, that supply shall be treated for the purposes of this Act as a transaction in pursuance of which there is an acquisition of goods by the person making it. (4) The Treasury may by order provide with respect to any description of transaction that the acquisition of goods in pursuance of a transaction of that description is not to be treated for the purposes of this Act as the acquisition of goods from another member State. (8B) (1) Subject to section 35 below and any regulations under subsection (3) below, where goods are acquired from another member State, the acquisition shall be treated for the purposes of this Act as taking place on whichever is the earlier of— (a) the fifteenth day of the month following that in which the event occurs which, in relation to that acquisition, is the first relevant event for the purposes of taxing the acquisition; and (b) the day of the issue, in respect of the transaction in pursuance of which the goods are acquired, of an invoice of such a description as the Commissioners may by regulations prescribe. (2) For the purposes of this Act the event which, in relation to any acquisition of goods from another member State, is the first relevant event for the purposes of taxing the acquisition is the first removal of the goods which is involved in the transaction in pursuance of which they are acquired. (3) The Commissioners may by regulations make provision with respect to the time at which an acquisition is to be treated as taking place in prescribed cases where the whole or part of any consideration comprised in the transaction in pursuance of which the goods are acquired is determined or payable periodically, or from time to time, or at the end of a period; and any such regulations may provide, in relation to any case to which they apply, for goods to be treated as separately and successively acquired at prescribed times or intervals. (8C) (1) This section shall apply (subject to sections 32B(5) and 35 below) for determining for the purposes of this Act whether goods acquired from another member State are acquired in the United Kingdom. (2) The goods shall be treated as acquired in the United Kingdom if they are acquired in pursuance of a transaction which involves their removal to the United Kingdom and does not involve their removal from the United Kingdom, and (subject to the following provisions of this section) shall otherwise be treated as acquired outside the United Kingdom. (3) Subject to subsection (4) below, the goods shall be treated as acquired in the United Kingdom if they are acquired by a person who, for the purposes of their acquisition, makes use of a number assigned to him for the purposes of value added tax in the United Kingdom. (4) Subsection (3) above shall not require any goods to be treated as acquired in the United Kingdom where it is established, in accordance with regulations made by the Commissioners for the purposes of this section— (a) that value added tax has been paid in another member State on the acquisition of those goods; and (b) that that tax fell to be paid by virtue of provisions of the law of that member State corresponding, in relation to that member State, to the provision made by subsection (2) above. (5) The Commissioners may by regulations make provision for the purposes of this section— (a) for the circumstances in which a person is to be treated as having been assigned a number for the purposes of value added tax in the United Kingdom; (b) for the circumstances in which a person is to be treated as having made use of such a number for the purposes of the acquisition of any goods; and (c) for the refund, in prescribed circumstances, of tax paid in the United Kingdom on acquisitions of goods in relation to which the conditions specified in subsection (4)(a) and (b) above are satisfied.

Rate of tax and determination of value

11

In section 9(1) (rate of tax)—

(a) after paragraph (a) there shall be inserted the following paragraph—

(aa) on the acquisition of goods from another member State, by reference to the value of the acquisition as determined under this Act; and

; and

(b) in paragraph (b), after the word “goods", in the first place where it occurs, there shall be inserted “ from a place outside the member States ”.

12

(1) In subsection (1) of section 10 (value of supply of goods or services), for “shall be determined as follows" there shall be substituted “ shall, except as otherwise provided by or under this Act, be determined in accordance with this section and Schedule 4 to this Act, and for those purposes subsections (2) to (4) below have effect subject to that Schedule ”.

(2) For subsection (3) of that section (value where supply for no consideration or for consideration not or not wholly in money) there shall be substituted the following subsection—

(3) If the supply is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as, with the addition of the tax chargeable, is equivalent to the consideration.

13

After section 10 there shall be inserted the following section—

(10A) (1) For the purposes of this Act the value of any acquisition of goods from another member State shall be taken to be the value of the transaction in pursuance of which they are acquired. (2) Where goods are acquired from another member State otherwise than in pursuance of a taxable supply, the value of the transaction in pursuance of which they are acquired shall be determined for the purposes of subsection (1) above in accordance with this section and Schedule 4A to this Act, and for those purposes— (a) subsections (3) to (5) below have effect subject to Schedule 4A to this Act; and (b) section 10 above and Schedule 4 to this Act shall not apply in relation to the transaction. (3) If the transaction is for a consideration in money, its value shall be taken to be such amount as is equal to the consideration. (4) If the transaction is for a consideration not consisting or not wholly consisting of money, its value shall be taken to be such amount in money as is equivalent to the consideration. (5) Where a transaction in pursuance of which goods are acquired from another member State is not the only matter to which a consideration in money relates, the transaction shall be deemed to be for such part of the consideration as is properly attributable to it.

14

(1) In subsection (1) of section 11 (value of imported goods), for the words from “imported goods" onwards there shall be substituted “ goods imported from a place outside the member States shall (subject to subsections (2) and (2A) below) be determined according to the rules applicable in the case of Community customs duties, whether or not the goods in question are subject to any such duties. ”

(2) In subsection (2) of that section, for the words before paragraph (a) there shall be substituted “ For the purposes of this Act the value of any goods imported from a place outside the member States shall be taken to include the following so far as they are not already included in that value in accordance with the rules mentioned in subsection (1) above, that is to say- ”.

(3) After subsection (2) of that section there shall be inserted the following subsection—

(2A) Subject to subsection (2) above, where— (a) goods are imported from a place outside the member States for a consideration which is or includes a price in money payable as on the transfer of property; (b) the terms on which those goods are so imported allow a discount for prompt payment of that price; (c) those terms do not include provision for payment of that price by instalments; and (d) payment of that price is made in accordance with those terms so that the discount falls to be allowed, the value of the goods shall be taken for the purposes of this Act to be reduced by the amount of the discount.

Credit for input tax against output tax

15

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