Finance Act 1996

(97A) (1) A person whose business is or includes the provision of clearance services for the purchase and sale of chargeable securities or relevant securities (an “operator”) may, with the approval of the Board, elect that stamp duty and stamp duty reserve tax shall be chargeable in accordance with this section in connection with those clearance services. (2) An election under subsection (1) above— (a) shall come into force on such date as may be notified to the operator by the Board in giving their approval; and (b) shall continue in force unless and until it is terminated in accordance with the following provisions of this section. (3) If and so long as an election under subsection (1) above is in force, stamp duty or stamp duty reserve tax (as the case may require) shall, in connection with the clearance services to which the election relates, be chargeable in relation to— (a) a transfer or issue falling within section 70(1) or 96(1) above, (b) an agreement falling within section 90(4) above by virtue of section 96(1) above, or (c) an agreement falling within section 90(5) above, as it would be chargeable apart from sections 70, 90(4) and (5) and 96 above. (4) Where stamp duty or stamp duty reserve tax is chargeable by virtue of subsection (3) above in relation to a transfer, issue or agreement, sections 70, 90(4) and (5) and 96 above shall not have effect in relation to that transfer, issue or agreement. (5) Nothing in subsection (3) or (4) above affects the application of section 70 or 96 above in relation to a transfer falling within section 70(1) or 96(1) above by the operator or his nominee to, or to a nominee of, another operator in relation to whom no election under subsection (1) above is for the time being in force. (6) The Board may require the operator, as a condition of the approval of his election under subsection (1) above, to make and maintain such arrangements as they may consider satisfactory— (a) for the collection of stamp duty reserve tax chargeable in accordance with this section, and (b) for complying, or securing compliance, with the provisions of this Part and of regulations under section 98 below, so far as relating to such tax. (7) Where the operator is not resident in the United Kingdom and has no branch or agency in the United Kingdom, the Board may require him, as a condition of the approval of his election under subsection (1) above, to appoint and, so long as the election remains in force, maintain a tax representative. (8) A person shall not be an operator’s tax representative under this section unless that person— (a) has a business establishment in the United Kingdom, and (b) is approved by the Board. (9) A person who is at any time an operator’s tax representative under this section— (a) shall be entitled to act on the operator’s behalf for the purposes of stamp duty and stamp duty reserve tax in connection with the clearance services to which the operator’s election under subsection (1) above relates, (b) shall secure (where appropriate by acting on the operator’s behalf) the operator’s compliance with and discharge of the obligations and liabilities to which the operator is subject, in connection with the clearance services to which the operator’s election under subsection (1) above relates, by virtue of legislation relating to stamp duty or stamp duty reserve tax (including obligations and liabilities arising before he became the operator’s tax representative), and (c) shall be personally liable in respect of any failure to secure the operator’s compliance with or discharge of any such obligation or liability, and in respect of anything done for purposes connected with acting on the operator’s behalf, as if the obligations and liabilities imposed on the operator were imposed jointly and severally on the tax representative and the operator. (10) An election under subsection (1) above may be terminated— (a) by not less than thirty days’ notice given by the operator to the Board or by the Board to the operator; or (b) if there is or has been a breach of a condition of the approval of the election imposed by virtue of subsection (6) or (7) above, by a notice— (i) given by the Board to the operator, (ii) taking effect on the giving of the notice or at such later time as may be specified in the notice, and (iii) stating that it is given by reason of the breach of condition. (11) Where an election under subsection (1) above is terminated, section 96 above shall have effect as if chargeable securities of the same amounts and kinds as are, immediately before the termination, held by the operator or his nominee in connection with the provision of the clearance services, had, immediately after the termination, been transferred to the operator or, as the case may be, to the nominee by a transfer falling within subsection (1) of that section. (12) In this section “relevant securities” has the same meaning as in section 70 above.

• (4) Section 97(2) of that Act (no charge to tax under section 96 on transfers to a stock exchange nominee or to, or to a nominee of, a recognised investment exchange or recognised clearing house) shall not have effect in relation to any transfer effected on or after 1st July 1996.

• (5) In section 99(10) of that Act (interpretation of “chargeable securities” in sections 93, 94 and 96) for “and 96” there shall be substituted “ , 96 and 97A ”.

• (6) Subsections (1), (2), (3) and (5) above shall come into force on 1st July 1996.

Part VII — Miscellaneous and supplemental

Miscellaneous: indirect taxation

Setting of rates of interest

197

• (1) The rate of interest applicable for the purposes of an enactment to which this section applies shall be the rate which for the purposes of that enactment is provided for by regulations made by the Treasury under this section.

• (2) This section applies to—

• (a) paragraphs 7 and 8(1) of Schedule 6 to the Finance Act 1994 (interest payable to the Commissioners of Customs and Excise in connection with air passenger duty);

• (b) sections 60(6), (7) and (8) of and paragraphs 21 and 22 of Schedule 7 to that Act (interest on amounts of insurance premium tax and on amounts payable by the Commissioners in respect of that tax);

• (c) sections 74, 78 and 85A(2) and (3) of the Value Added Tax Act 1994 (interest on VAT recovered or recoverable by assessment and interest payable in cases of official error); . . .

• (d) sections 56(3) to (5) of and paragraphs 26 and 29 of Schedule 5 to this Act (interest payable to or by the Commissioners in connection with landfill tax)and

• (e) paragraph 17 of Schedule 5 to the Finance Act 1997 (interest on amounts repayable in respect of overpayments by the Commissioners in connection with excise duties, insurance premium tax and landfill tax).

• (f) sections 126 and 127 of the Finance Act 1999 (interest on overdue customs duty and on repayments of amounts paid by way of customs duty).

• (g) the following provisions of Schedule 6 to the Finance Act 2000 (interest payable to or by the Commissioners in connection with climate change levy), that is to say, paragraphs 41(2)(f), 62(3)(f), 66, 70(1)(b) , 81(3) and 123(4) to (6) .

• (h) the following provisions of the Finance Act 2001 (interest payable to or by the Commissioners in connection with aggregates levy), that is to say—

• (i) sections 25(2)(f) , 30(3)(f) and 42(4) to (6) ;

• (ii) paragraphs 6 and 8(3)(a) of Schedule 5; and

• (iii) paragraphs 2 and 6(1)(b) of Schedule 8.

• (i) Parts 2 and 3 of Schedule 3 to the Finance Act 2001 (interest payable on repayments etc.).

• (3) Regulations under this section may—

• (a) make different provision for different enactments or for different purposes of the same enactment,

• (b) either themselves specify a rate of interest for the purposes of an enactment or make provision for any such rate to be determined, and to change from time to time, by reference to such rate or the average of such rates as may be referred to in the regulations,

• (c) provide for rates to be reduced below, or increased above, what they otherwise would be by specified amounts or by reference to specified formulae,

• (d) provide for rates arrived at by reference to averages or formulae to be rounded up or down,

• (e) provide for circumstances in which changes of rates of interest are or are not to take place, and

• (f) provide that changes of rates are to have effect for periods beginning on or after a day determined in accordance with the regulations in relation to interest running from before that day, as well as in relation to interest running from, or from after, that day.

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

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

• (6) The words “ the rate applicable under section 197 of the Finance Act 1996 ” shall be substituted—

• (a) for the words “the specified rate” in each of paragraphs 7(1) and (3) and 9(1) of Schedule 6 to the Finance Act 1994 (air passenger duty);

• (b) for the words “the prescribed rate” in each of sub-paragraphs (1) and (3) of paragraph 21 of Schedule 7 to that Act (insurance premium tax);

• (c) for the words from “such rate” onwards in sub-paragraph (2) of paragraph 22 of that Schedule; and

• (d) in the Value Added Tax Act 1994—

• (i) for the words “the prescribed rate” in each of subsections (1), (2) and (4) of section 74, and

• (ii) for the words from “such rates” onwards in subsection (3) of section 78.

• (7) Subsections (1) and (6) above shall have effect for periods beginning on or after such day as the Treasury may by order made by statutory instrument appoint and shall have effect in relation to interest running from before that day, as well as in relation to interest running from, or from after, that day; and different days may be appointed under this subsection for different purposes.

Miscellaneous: direct taxation

Banks

198

Schedule 37 to this Act (which re-defines “bank” for certain purposes, and makes related amendments) shall have effect.

Quotation or listing of securities

199

Schedule 38 to this Act (which contains amendments of enactments referring to the quotation or listing of securities) shall have effect.

Domicile for tax purposes of overseas electors

200

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

Enactment of Inland Revenue concessions

201

Schedule 39 to this Act has effect for the purpose of enacting certain extra-statutory concessions relating to income tax, corporation tax, capital gains tax, and stamp duty.

Miscellaneous: other matters

Gilt stripping

202

• (1) In section 47 of the Finance Act 1942 (Treasury regulations with respect to the transfer and registration of Government stock), after paragraph (bb) of subsection (1) there shall be inserted the following paragraphs—

(bc) for the exchange of any such stock and bonds (whenever issued) for strips thereof; (bd) for exchanges by which such strips (whether deriving from the same security or from different securities) are consolidated into a single security of a description so specified;

.

• (2) After subsection (1A) of that section (transfer of deceased persons’ stocks and bonds) there shall be inserted the following subsections—

(1B) In this section “strip”, in relation to any stock or bond, means a security issued under the National Loans Act 1968 which— (a) is issued for the purpose of representing the right to, or of securing— (i) a payment corresponding to a payment of interest or principal remaining to be made under the stock or bond, or (ii) two or more payments each corresponding to a different payment remaining to be so made; (b) is issued in conjunction with the issue of one or more other securities which, together with that security, represent the right to, or secure, payments corresponding to every payment remaining to be made under the stock or bond; and (c) is not itself a security that represents the right to, or secures, payments corresponding to a part of every payment so remaining. (1C) For the purposes of subsection (1B) of this section, where the balance has been struck for a dividend on any stock or bond, any payment to be made in respect of that dividend shall, at times falling after that balance has been struck, be treated as not being a payment remaining to be made under the stock or bond. (1D) Without prejudice to the generality of the powers conferred by the preceding provisions of this section (but subject to subsection (1E) of this section), regulations made by virtue of paragraph (bc) or (bd) of subsection (1) of this section may— (a) provide, for the purpose of authorising the making of exchanges, for any stock or bonds to be treated as issued on such terms as may be specified in the regulations; (b) contain such provision as the Treasury think fit about the circumstances in which and the conditions subject to which exchanges may be effected; and (c) contain any such provision as could be contained in rules made under section 14(3) of the National Loans Act 1968 (Treasury rules as to exchange of securities). (1E) Regulations made by virtue of subsection (1)(bc) or (bd) of this section shall not make provision for the exchange of any stock or bonds, or of any strips, in any cases other than those where the exchange is at the request of the holder or in accordance with an order made by a court. (1F) Regulations under this section may make different provision for different cases and contain such exceptions and exclusions as the Treasury think fit; and the powers of the Treasury to make regulations under this section are without prejudice to any of their powers under the National Loans Act 1968.

• (3) After section 2 of the National Debt (Stockholders Relief) Act 1892 (date for striking balance for a dividend on stock) there shall be inserted the following section—

(2A) (1) Where— (a) any stock is exchanged for strips of that stock, and (b) that exchange takes place after the balance has been struck for a dividend on that stock but before the day on which that dividend is payable, any person who would have been entitled to that dividend but for the exchange shall remain entitled to that dividend notwithstanding the exchange. (2) The Treasury may by order made by statutory instrument provide that for the purposes of this section and section 47(1C) of the Finance Act 1942, the balance for any dividend on any stock is to be deemed to be struck at a time which, by such a period as is specified in the order, precedes the time when the balance is actually struck. (3) A period specified in an order under subsection (2) above shall not exceed 7 days; and an order made under that subsection may make different provision for different cases. (4) In this section “strip”, in relation to any stock, has the meaning given by section 47 of the Finance Act 1942.

• (4) In section 16 of the National Loans Act 1968 (supplemental provisions as to national debt), after subsection (4) there shall be inserted the following subsection—

(4A) In subsections (3) and (4) above the references to stock or registered bonds issued under this Act include references to a strip (within the meaning of section 47 of the Finance Act 1942) of any stock or bond (whether the stock or bond is issued under this Act or otherwise).

• (5) The Treasury may by regulations make provision for securing that enactments and subordinate legislation which—

• (a) apply in relation to government securities or to any description of such securities, or

• (b) for any other purpose refer (in whatever terms) to such securities or to any description of them,

have effect with such modifications as the Treasury may think appropriate in consequence of the making of any provision or arrangements for, or in connection with, the issue or transfer of strips of government securities or the consolidation of such strips into other securities.

• (6) Regulations under subsection (5) above may—

• (a) impose a charge to income tax, corporation tax, capital gains tax, inheritance tax, stamp duty or stamp duty reserve tax;

• (b) include provision applying generally to, or to any description of, enactments or subordinate legislation;

• (c) make different provision for different cases; and

• (d) contain such incidental, supplemental, consequential and transitional provision as the Treasury think appropriate.

• (7) The power to make regulations under subsection (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

• (8) Schedule 40 to this Act (which makes provision in relation to strips for taxation purposes) shall have effect.

• (9) The enactments that may be modified by regulations under this section shall include section 95 above and the enactments contained in Schedule 40 to this Act.

• (10) In this section—

• “government securities” means any securities included in Part I of Schedule 11 to the Finance Act 1942;

• “modifications” includes amendments, additions and omissions; and

• “subordinate legislation” has the same meaning as in the Interpretation Act 1978;

and expressions used in this section and in section 47 of the Finance Act 1942 have the same meanings in this section as in that section.

Modification of the Agriculture Act 1993

203

• (1) Part I of Schedule 2 to the Agriculture Act 1993 (taxation provisions applying to the reorganisation of the milk marketing boards) shall have effect, and be deemed always to have had effect, in accordance with subsections (2) to (4) below where—

• (a) any approved scheme has made provision as to the functions of a milk marketing board in the period after the transfers taking effect on the vesting day under section 11 of that Act;

• (b) regulations have been made by virtue of section 14(2) of that Act (provision following re-organisation) for giving effect to that provision; and

• (c) a transaction is or has been entered into by that board in pursuance of any obligation under those regulations to carry out those functions so far as they relate to a subsidiary of the board.

• (2) For the purposes of that Part of that Schedule—

• (a) anything done by way of entering into the transaction, or for the purpose of carrying it out, shall be deemed to have been done under and in accordance with the scheme; and

• (b) the terms and other provisions having effect in relation to that transaction by virtue of anything contained in, or anything done in exercise of powers conferred by, any regulations under section 14(2) of the Agriculture Act 1993 shall be deemed to be terms for which the scheme provided or, as the case may be, to be provisions of the scheme.

• (3) Sub-paragraph (1) of paragraph 16 of Schedule 2 to the Agriculture Act 1993 (distributions) shall have effect, and be deemed always to have had effect, in a case where the terms and provisions mentioned in subsection (2)(b) above involved or involve—

• (a) the issue or transfer of any shares in, or securities of, any body,

• (b) the conferring of any right to a distribution out of the assets of any body,

• (c) the conferring of any right to, or to acquire, shares in any body, or

• (d) the transfer to any person of any property or rights of a milk marketing board, or of the subsidiary of such a board,

as if the references to the vesting day in paragraphs (a), (c), (d) and (e) of that sub-paragraph were references to the day on which the winding up of the board is completed.

• (4) Sub-paragraph (4) of paragraph 31 of Schedule 2 to the Agriculture Act 1993 (condition to be satisfied if body to be qualifying body by virtue of sub-paragraph (1)(c)) shall have effect, and be deemed always to have had effect, as if—

• (a) the reference, in relation to a company, to 90 per cent. of its ordinary share capital were a reference to 70 per cent. of its ordinary share capital; and

• (b) the references to shares having been issued to any person included references to their having been allotted to that person.

• (5) Paragraph 1 of Schedule 2 to the Agriculture Act 1993 (tax continuity with successor bodies) shall have effect, and be deemed to have had effect, in relation to any relevant transfer after 31st December 1995 to a society registered under the Industrial and Provident Societies Act 1965 of—

• (a) a trade, or part of a trade, of a milk marketing board, or

• (b) any property, rights or liabilities of such a board,

as it has effect in relation to any transfer under section 11 of that Act to a qualifying body.

• (6) Paragraphs 16, 20, 25, 26, 28 and 29 of Schedule 2 to the Agriculture Act 1993 shall have effect, and be deemed to have had effect, in relation to any relevant transfer after 31st December 1995 of assets of a milk marketing board to a society registered under the Industrial and Provident Societies Act 1965 as if—

• (a) the terms and other provisions of the transaction for effecting the transfer were contained in an approved scheme;

• (b) the society were a relevant successor of that board; and

• (c) references in those paragraphs to the vesting day were references to the day on which the winding up of the board is completed.

• (7) For the purposes of subsections (5) and (6) above, a transfer of anything to a society registered under the Industrial and Provident Societies Act 1965 is a relevant transfer if—

• (a) it is a transfer in pursuance of regulations made by virtue of section 14(2) of the Agriculture Act 1993;

• (b) it is not a transfer of shares in a subsidiary of a milk marketing board; and

• (c) the condition mentioned in sub-paragraph (5) of paragraph 31 of Schedule 2 to that Act would have been met in relation to that society if the provision made as to the persons to whom the membership of the society is open were contained in an approved scheme providing for the transfer.

• (8) Paragraph 20 of Schedule 2 to the Agriculture Act 1993 (treatment of acquisition of certain shares and securities) shall not apply, and shall be deemed never to have applied, in relation to the acquisition of any security after 31st December 1995 if the indebtedness acknowledged by that security does not fall, for the purposes of the Taxation of Chargeable Gains Act 1992, to be treated as a debt on a security (as defined in section 132 of that Act of 1992).

• (9) For the purposes of Part 5 of the Corporation Tax Act 2009 (loan relationships), so far as it has effect for any accounting period ending after 31st March 1996 in relation to any creditor relationship represented by a debenture issued on or after 31st December 1995, paragraph 25 of Schedule 2 to the Agriculture Act 1993 shall have effect as if sub-paragraph (2)(a) of that paragraph (deemed consideration for issue of debenture issued under approved scheme) were omitted.

• (10) For the purposes of the Taxation of Chargeable Gains Act 1992, where any debenture to which paragraph 25 of Schedule 2 to the Agriculture Act 1993 applies has been or is issued at any time after 31st December 1995, the indebtedness acknowledged by that debenture shall be deemed (where that would not otherwise be the case) to be, and always to have been, a debt on a security (as defined in section 132 of that Act of 1992).

• (11) Expressions used in this section and in Part I of the Agriculture Act 1993 have the same meanings in this section as in that Part.

Supplemental

Interpretation

204

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

Repeals

205

• (1) The enactments mentioned in Schedule 41 to this Act (which include spent provisions) are hereby repealed to the extent specified in the third column of that Schedule.

• (2) The repeals specified in that Schedule have effect subject to the commencement provisions and savings contained in, or referred to, in the notes set out in that Schedule.

Short title

206

This Act may be cited as the Finance Act 1996.

SCHEDULE 1

The following is the Schedule which shall be inserted after Schedule 2 to the Misuse of rebated kerosene Hydrocarbon Oil Duties Act 1979—

SCHEDULE 2

1

In this Schedule “the 1994 Act” means the Vehicle Excise and Registration Act 1994.

Vehicle licences

2

• (1) Section 7 of the 1994 Act (issue of vehicle licences) shall be amended in accordance with this paragraph.

• (2) After subsection (3) there shall be inserted the following subsections—

(3A) A person applying for a licence shall not be required to make a declaration specified for the purposes of subsection (1)(a) if he agrees to comply with such conditions as may be specified in relation to him by the Secretary of State. (3B) The conditions which may be specified under subsection (3A) include a condition that particulars for the time being specified for the purposes of subsection (1)(b) are furnished by being transmitted to the Secretary of State by such electronic means as he may specify.

• (3) Sub-paragraph (2) above applies to applications made on or after the day on which this Act is passed.

• (4) In subsection (6)—

• (a) after “may provide for—” there shall be inserted the following paragraph—

(aa) the return of any vehicle licence which is damaged or contains any particulars which have become illegible or inaccurate,

;

• (b) in paragraph (a), after “or damaged”, there shall be inserted “ or which contains any particulars which have become illegible or inaccurate ”; and

• (c) at the end of paragraph (b) there shall be inserted “ in any of those circumstances ”.

Trade licences

3

In section 11 of the 1994 Act (trade licences), after subsection (1) there shall be inserted the following subsection—

(1A) The power to prescribe conditions under subsection (1) includes, in particular, the power to prescribe conditions which are to be complied with after the licence is issued.

Registration regulations

4

• (1) Subsection (1) of section 22 of the 1994 Act (registration regulations) shall be amended in accordance with this paragraph.

• (2) In paragraph (d), after “a person by”, there shall be inserted “ , through ”.

• (3) In paragraph (dd), after “a person by”, there shall be inserted “ or through ”.

• (4) At the end of paragraph (h) there shall be inserted “ or which contain any particulars which have become illegible or inaccurate ”.

• (5) After paragraph (h) there shall be inserted the following paragraph—

(i) provide for a fee of such amount as appears to the Secretary of State to be reasonable to be paid on the issue of new registration documents in any of the circumstances mentioned in paragraph (h).

5

In subsection (1B)(a) of section 22 of the 1994 Act, for “the other person there mentioned or to the Secretary of State or to both;” there shall be substituted “ another person there mentioned or to the Secretary of State or to another such person and to the Secretary of State; ”.

6

After subsection (1B) of section 22 of the 1994 Act there shall be inserted the following subsection—

(1C) Regulations under subsection (1)(e) may, in particular, provide that registration documents need not be issued in respect of the registration of a vehicle until the vehicle has been inspected by a person specified by the Secretary of State.

7

After subsection (1C) of section 22 of the 1994 Act there shall be inserted the following subsections—

(1D) The Secretary of State may by regulations require a person— (a) who surrenders a vehicle licence under section 10(2), (b) who does not renew a vehicle licence for a vehicle kept by him, or (c) who keeps an unlicensed vehicle at any place in the United Kingdom, to furnish such particulars and make such declarations as may be prescribed by the regulations, and to do so at such times and in such manner as may be so prescribed. (1E) For the purposes of subsection (1D)(b) a person shall be regarded as not renewing a vehicle licence for a vehicle kept by him if— (a) he keeps a vehicle for which a vehicle licence is in force, and (b) he does not, at such time as may be prescribed by the regulations or within such period as may be so prescribed, take out a vehicle licence to have effect from the expiry of the vehicle licence mentioned in paragraph (a). (1F) For the purposes of subsection (1D)(c) a vehicle is unlicensed if no vehicle licence is in force for the vehicle. (1G) Regulations under subsection (1D) may make such transitional provision as appears to the Secretary of State to be appropriate.

Surrender of licences: repayments

8

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

Offences

9

• (1) In section 29 of the 1994 Act (penalty for using or keeping unlicensed vehicle), at the beginning of subsection (3) there shall be inserted “ Subject to subsection (3A) ”, and after subsection (3) there shall be inserted the following subsection—

(3A) In the case of a person who— (a) has provided the Secretary of State with a declaration or statement (in pursuance of regulations under section 22) that the vehicle will not during a period specified in the declaration or statement be used or kept on a public road, and (b) commits an offence under subsection (1) within a period prescribed by regulations, subsection (3) applies as if the reference in paragraph (a) to level 3 were a reference to level 4.

• (2) This paragraph applies in relation to offences committed on or after the day on which this Act is passed.

10

In section 33 of the 1994 Act (not exhibiting licence), after subsection (3) there shall be inserted the following subsection—

(4) The Secretary of State may make regulations prohibiting a person from exhibiting on a vehicle in respect of which excise duty is chargeable anything— (a) which is intended to be, or (b) which could reasonably be, mistaken for a licence which is for, or in respect of, the vehicle and which is for the time being in force.

11

• (1) Section 45 of the 1994 Act (false or misleading declarations and information) shall be amended in accordance with this paragraph.

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

(2A) A person who makes a declaration or statement which— (a) is required to be made in respect of a vehicle by regulations under section 22, and (b) to his knowledge is either false or in any material respect misleading, is guilty of an offence.

• (3) In subsection (3) (offence of furnishing false or misleading particulars), in paragraph (a), after “required by” there shall be inserted “ virtue of ”.

Offences: information and admissions

12

After section 46 of the 1994 Act there shall be inserted the following section—

(46A) (1) Subsection (2) applies where it appears to the Secretary of State— (a) that a person is a person by, through or to whom a vehicle has been sold or disposed of and that he has failed to comply with regulations made by virtue of section 22(1)(d) requiring him to furnish particulars prescribed by the regulations; (b) that a person is a person by or through whom a vehicle has been sold or disposed of and that he has failed to comply with regulations made by virtue of section 22(1)(dd) requiring him to furnish a document prescribed by the regulations; or (c) that a person is a person who is surrendering a vehicle licence, or who is not renewing a vehicle licence for a vehicle kept by him or who is keeping an unlicensed vehicle and that he has failed to comply with regulations made by virtue of section 22(1D) requiring him to furnish particulars or make a declaration prescribed by the regulations. (2) The Secretary of State may serve a notice on the person in question requiring him to give the Secretary of State such information as it in his power to give— (a) as to the identity of any person who is keeping a specified vehicle or who has kept it at a specified time or during a specified period; (b) as to the identity of any person by, through or to whom a specified vehicle has been sold or disposed of at a specified time or during a specified period; or (c) which may lead to the identification of a person falling within paragraph (a) or (b). (3) A person who fails to comply with a notice under subsection (2) is guilty of an offence. (4) A person guilty of an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 3 on the standard scale. (5) In this section “specified” means specified in a notice under subsection (2).

13

After section 51 of the 1994 Act there shall be inserted the following section—

(51A) (1) Subsection (2) applies in relation to any proceedings in England, Wales or Northern Ireland against a person for an offence on the grounds that— (a) a vehicle has been sold or disposed of by, through or to him and he has failed to furnish particulars prescribed by regulations made by virtue of section 22(1)(d); (b) a vehicle has been sold or disposed of by or through him and he has failed to furnish a document prescribed by regulations made by virtue of section 22(1)(dd); or (c) he has surrendered, or not renewed, a vehicle licence, or is keeping an unlicensed vehicle, and has failed to furnish any particulars or make a declaration prescribed by regulations made by virtue of section 22(1D). (2) If— (a) it is appropriately proved that there has been served on the accused by post a requirement under section 46A to give information as to the identity of the person keeping the vehicle at a particular time, and (b) a statement in writing is produced to the court purporting to be signed by the accused that he was keeping the vehicle at that time, the court may accept the statement as evidence that the accused was keeping the vehicle at that time. (3) In subsection (2) “appropriately proved” has the same meaning as in section 51.

Proceedings in respect of offences

14

• (1) In—

• (a) section 47(1) and (2) of the 1994 Act (institution and conduct of proceedings in England and Wales or Northern Ireland), and

• (b) section 48(3) of the 1994 Act (proceedings in Scotland),

after “section 29, 34” there shall in each case be inserted “ , 35A ”.

• (2) In section 55(1) of the 1994 Act (guilty plea by absent accused), for paragraphs (a) and (b) there shall be substituted “ an offence under section 29 or 35A ”.

• (3) This paragraph applies in relation to proceedings commenced on or after the day on which this Act is passed.

Compounding of offences

15

In section 59 of the 1994 Act (regulations: offences), after subsection (5), there shall be inserted the following subsection—

(6) The Secretary of State may, if he sees fit, compound any proceedings for an offence— (a) under subsection (1), or (b) under regulations under section 24 or 28.

Regulations

16

In section 57(1) of the 1994 Act (regulations generally), the words “ (other than sections 7(2) and (3), 8, 26, 27, 52 and 54) ” shall be omitted.

SCHEDULE 3

1

In subsection (1) of section 6 of the Value Added Tax Act 1994, for the words “section 18” there shall be substituted the words “ sections 18, 18B and 18C ”.

2

In subsection (1) of section 7 of the Value Added Tax Act 1994, for the words “sections 14 and 18” there shall be substituted the words “ sections 14, 18 and 18B ”.

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4

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5

The following sections shall be inserted in the Value Added Tax Act 1994 after section 18.

(18A) (1) The Commissioners may, if it appears to them proper, upon application approve any registered person as a fiscal warehousekeeper; and such approval shall be subject to such conditions as they shall impose. (2) Subject to those conditions and to regulations made under section 18F such a person shall be entitled to keep a fiscal warehouse. (3) “Fiscal warehouse” means such place in the United Kingdom in the occupation or under the control of the fiscal warehousekeeper, not being retail premises, as he shall notify to the Commissioners in writing; and such a place shall become a fiscal warehouse on receipt by the Commissioners of that notification or on the date stated in it as the date from which it is to have effect, whichever is the later, and, subject to subsection (6) below, shall remain a fiscal warehouse so long as it is in the occupation or under the control of the fiscal warehousekeeper or until he shall notify the Commissioners in writing that it is to cease to be a fiscal warehouse. (4) The Commissioners may in considering an application by a person to be a fiscal warehousekeeper take into account any matter which they consider relevant, and may without prejudice to the generality of that provision take into account all or any one or more of the following— (a) his record of compliance and ability to comply with the requirements of this Act and regulations made hereunder; (b) his record of compliance and ability to comply with the requirements of the customs and excise Acts (as defined in the Management Act) and regulations made thereunder; (c) his record of compliance and ability to comply with Community customs provisions; (d) his record of compliance and ability to comply with the requirements of other member States relating to VAT and duties equivalent to duties of excise; (e) if the applicant is a company the records of compliance and ability to comply with the matters set out at (a) to (d) above of its directors, persons connected with its directors, its managing officers, any shadow directors or any of those persons, and, if it is a close company, the records of compliance and ability to comply with the matters set out at (a) to (d) above of the beneficial owners of the shares of the company or any of them; and (f) if the applicant is an individual the records of compliance and ability to comply with the matters set out at (a) to (d) above of any company of which he is or has been a director, managing officer or shadow director or, in the case of a close company, a shareholder or the beneficial owner of shares, and for the purposes of paragraphs (e) and (f) “connected” shall have the meaning given by section 24(7), “managing officer” the meaning given by section 61(6), “shadow director” the meaning given by section 741(2) of the Companies Act 1985 and “close company” the meaning given by the Taxes Act. (5) Subject to subsection (6) below, a person approved under subsection (1) shall remain a fiscal warehousekeeper until he ceases to be a registered person or until he shall notify the Commissioners in writing that he is to cease to be a fiscal warehousekeeper. (6) The Commissioners may if they consider it appropriate from time to time— (a) impose conditions on a fiscal warehousekeeper in addition to those conditions, if any, which they imposed under subsection (1), and vary or revoke any conditions previously imposed; (b) withdraw approval of any person as a fiscal warehousekeeper, and (c) withdraw fiscal warehouse status from any premises. (7) Any application by or on behalf of a person to be a fiscal warehousekeeper shall be in writing in such form as the Commissioners may direct and shall be accompanied by such information as they shall require. (8) Any approval by the Commissioners under subsection (1) above, and any withdrawal of approval or other act by them under subsection (6) above, shall be notified by them to the fiscal warehousekeeper in writing and shall take effect on such notification being made or on any later date specified for the purpose in the notification. (9) Without prejudice to the provisions of section 43 concerning liability for VAT, in subsections (1) and (2) above “registered person” includes any body corporate which under that section is for the time being treated as a member of a group. (18B) (1) Subsections (3) and (4) below apply where— (a) there is an acquisition of goods from another member State; (b) those goods are eligible goods; (c) either— (i) the acquisition takes place while the goods are subject to a fiscal warehousing regime; or (ii) after the acquisition but before the supply, if any, of those goods which next occurs, the acquirer causes the goods to be placed in a fiscal warehousing regime; and (d) the acquirer, not later than the time of the acquisition, prepares and keeps a certificate that the goods are subject to a fiscal warehousing regime, or (as the case may be) that he will cause paragraph (c)(ii) above to be satisfied; and the certificate shall be in such form and be kept for such period as the Commissioners may by regulations specify. (2) Subsections (3) and (4) below also apply where— (a) there is a supply of goods; (b) those goods are eligible goods; (c) either— (i) that supply takes place while the goods are subject to a fiscal warehousing regime; or (ii) after that supply but before the supply, if any, of those goods which next occurs, the person to whom the former supply is made causes the goods to be placed in a fiscal warehousing regime; (d) in a case falling within paragraph (c)(ii) above, the person to whom the supply is made gives the supplier, not later than the time of the supply, a certificate in such form as the Commissioners may by regulations specify that he will cause paragraph (c)(ii) to be satisfied; and (e) the supply is not a retail transaction. (3) The acquisition or supply in question shall be treated for the purposes of this Act as taking place outside the United Kingdom if any subsequent supply of those goods is while they are subject to the fiscal warehousing regime. (4) Where subsection (3) does not apply and the acquisition or supply in question falls, for the purposes of this Act, to be treated as taking place in the United Kingdom, that acquisition or supply shall be treated for the purposes of this Act as taking place when the goods are removed from the fiscal warehousing regime. (5) Where— (a) subsection (4) above applies to an acquisition or a supply, (b) the acquisition or supply is taxable and not zero-rated, and (c) the acquirer or supplier is not a taxable person but would be were it not for paragraph 1(9) of Schedule 1, paragraph 1(7) of Schedule 2 and paragraph 1(6) of Schedule 3, or any of those provisions, VAT shall be chargeable on that acquisition or supply notwithstanding that the acquirer or the supplier is not a taxable person. (6) In this section “eligible goods” means goods— (a) of a description falling within Schedule 5A; (b) upon which any import duties, as defined in article 4(10) of the Community Customs Code of 12th October 1992 (Council Regulation (EEC) No.2913/92), either have been paid or have been deferred under article 224 of that Code or regulations made under section 45 of the Management Act; (c) (in the case of goods imported from a place outside the member States) upon which any VAT chargeable under section 1(1)(c) has been either paid or deferred in accordance with Community customs provisions, and (d) (in the case of goods subject to a duty of excise) upon which that duty has been either paid or deferred under section 127A of the Management Act. (7) For the purposes of this section, apart from subsection (4), an acquisition or supply shall be treated as taking place at the material time for the acquisition or supply. (8) The Treasury may by order vary Schedule 5A by adding to or deleting from it any goods or varying any description of any goods. (18C) (1) Where— (a) a taxable person makes a supply of specified services; (b) those services are wholly performed on or in relation to goods while those goods are subject to a warehousing or fiscal warehousing regime; (c) (except where the services are the supply by an occupier of a warehouse or a fiscal warehousekeeper of warehousing or fiscally warehousing the goods) the person to whom the supply is made gives the supplier a certificate, in such a form as the Commissioners may by regulations specify, that the services are so performed; (d) the supply of services would (apart from this section) be taxable and not zero-rated; and (e) the supplier issues to the person to whom the supply is made an invoice of such a description as the Commissioners may by regulations prescribe, his supply shall be zero-rated. (2) If a supply of services is zero-rated under subsection (1) above (“the zero-rated supply of services”) then, unless there is a supply of the goods in question the material time for which is— (a) while the goods are subject to a warehousing or fiscal warehousing regime, and (b) after the material time for the zero-rated supply of services, subsection (3) below shall apply. (3) Where this subsection applies— (a) a supply of services identical to the zero-rated supply of services shall be treated for the purposes of this Act as being, at the time the goods are removed from the warehousing or fiscal warehousing regime or (if earlier) at the duty point, both made (for the purposes of his business) to the person to whom the zero-rated supply of services was actually made and made by him in the course or furtherance of his business, (b) that supply shall have the same value as the zero-rated supply of services, (c) that supply shall be a taxable (and not a zero-rated) supply, and (d) VAT shall be charged on that supply even if the person treated as making it is not a taxable person. (4) In this section “specified services” means— (a) services of an occupier of a warehouse or a fiscal warehousekeeper of keeping the goods in question in a warehousing or fiscal warehousing regime; (b) in relation to goods subject to a warehousing regime, services of carrying out on the goods operations which are permitted to be carried out under Community customs provisions or warehousing regulations as the case may be; and (c) in relation to goods subject to a fiscal warehousing regime, services of carrying out on the goods any physical operations (other than any prohibited by regulations made under section 18F), for example, and without prejudice to the generality of the foregoing words, preservation and repacking operations. (18D) (1) This section applies to any supply to which section 18B(4) or section 18C(3) applies (supply treated as taking place on removal or duty point) and any acquisition to which section 18B(5) applies (acquisition treated as taking place on removal where acquirer not a taxable person). (2) Any VAT payable on the supply or acquisition shall (subject to any regulations under subsection (3) below) be paid— (a) at the time when the supply or acquisition is treated as taking place under the section in question; and (b) by the person by whom the goods are removed or, as the case may be, together with the excise duty, by the person who is required to pay that duty. (3) The Commissioners may by regulations make provision for enabling a taxable person to pay the VAT he is required to pay by virtue of subsection (2) above at a time later than that provided by that subsection; and they may make different provisions for different descriptions of taxable persons and for different descriptions of goods and services. (18E) (1) This section applies where goods have been subject to a fiscal warehousing regime and, before being lawfully removed from the fiscal warehouse, they are found to be missing or deficient. (2) In any case where this section applies, unless it is shown to the satisfaction of the Commissioners that the absence of or deficiency in the goods can be accounted for by natural waste or other legitimate cause, the Commissioners may require the fiscal warehousekeeper to pay immediately in respect of the missing goods or of the whole or any part of the deficiency, as they see fit, the VAT that would have been chargeable. (3) In subsection (2) “VAT that would have been chargeable” means VAT that would have been chargeable on a supply of the missing goods, or the amount of goods by which the goods are deficient, taking place at the time immediately before the absence arose or the deficiency occurred, if the value of that supply were the open market value; but where that time cannot be ascertained to the Commissioners’ satisfaction, that VAT shall be the greater of the amounts of VAT which would have been chargeable on a supply of those goods— (a) if the value of that supply were the highest open market value during the period (the relevant period) commencing when the goods were placed in the fiscal warehousing regime and ending when the absence or deficiency came to the notice of the Commissioners, or (b) if the rate of VAT chargeable on that supply were the highest rate chargeable on a supply of such goods during the relevant period and the value of that supply were the highest open market value while that rate prevailed. (4) This section has effect without prejudice to any penalty incurred under any other provision of this Act or regulations made under it. (18F) (1) In sections 18A to 18E and this section— - “duty point” has the meaning given by section 18(6); - “eligible goods” has the meaning given by section 18B(6); - “fiscal warehouse” means a place notified to the Commissioners under section 18A(3) and from which such status has not been withdrawn; - “fiscal warehousekeeper” means a person approved under section 18A(1); - “material time”— 1. in relation to any acquisition or supply the time of which is determined in accordance with regulations under section 6(14) or 12(3), means such time as may be prescribed for the purpose of this section by those regulations; 2. in relation to any other acquisition, means the time when the goods reach the destination to which they are despatched from the member State in question; 3. in relation to any other supply of goods, means the time when the supply would be treated as taking place in accordance with subsection (2) of section 6 if paragraph (c) of that subsection were omitted; and 4. in relation to any other supply of services, means the time when the services are performed; - “warehouse”, except in the expression “fiscal warehouse”, has the meaning given by section 18(6); - “warehousing regulations” has the same meaning as in the Management Act. (2) Any reference in sections 18A to 18E or this section to goods being subject to a fiscal warehousing regime is, subject to any regulations made under subsection (8)(e) below, a reference to eligible goods being kept in a fiscal warehouse or being transferred between fiscal warehouses in accordance with such regulations; and any reference to the removal of goods from a fiscal warehousing regime shall be construed accordingly. (3) Subject to subsection (2) above, any reference in sections 18C and 18D to goods being subject to a warehousing regime or to the removal of goods from a warehousing regime shall have the same meaning as in section 18(7). (4) Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they change their nature but the resulting goods are also eligible goods, the provisions of sections 18B to 18E and this section shall apply as if the resulting goods were the original goods. (5) Where as a result of an operation on eligible goods subject to a fiscal warehousing regime they cease to be eligible goods, on their ceasing to be so sections 18B to 18E shall apply as if they had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them. (6) Where— (a) any person ceases to be a fiscal warehousekeeper; or (b) any premises cease to have fiscal warehouse status, sections 18B to 18E and this section shall apply as if the goods of which he is the fiscal warehousekeeper, or the goods in the fiscal warehouse, as the case may be, had at that time been removed from the fiscal warehousing regime; and for that purpose the proprietor of the goods shall be treated as if he were the person removing them. (7) The Commissioners may make regulations governing the deposit, keeping, securing and treatment of goods in a fiscal warehouse, and the removal of goods from a fiscal warehouse. (8) Regulations may, without prejudice to the generality of subsection (7) above, include provisions— (a) in relation to— (i) goods which are, have been or are to be subject to a fiscal warehousing regime, (ii) other goods which are, have been or are to be kept in fiscal warehouses, (iii) fiscal warehouse premises, and (iv) fiscal warehousekeepers and their businesses, as to the keeping, preservation and production of records and the furnishing of returns and information by fiscal warehousekeepers and any other persons; (b) requiring goods deposited in a fiscal warehouse to be produced to or made available for inspection by an authorised person on request by him; (c) prohibiting the carrying out on fiscally warehoused goods of such operations as they may prescribe; (d) regulating the transfer of goods from one fiscal warehouse to another; (e) concerning goods which, though kept in a fiscal warehouse, are not eligible goods or are not intended by a relevant person to be goods in respect of which reliefs are to be enjoyed under sections 18A to 18E and this section; (f) prohibiting the fiscal warehousekeeper from allowing goods to be removed from the fiscal warehousing regime without payment of any VAT payable under section 18D on or by reference to that removal and, if in breach of that prohibition he allows goods to be so removed, making him liable for the VAT jointly and severally with the remover, and may contain such incidental or supplementary provisions as the Commissioners think necessary or expedient. (9) Regulations may make different provision for different cases, including different provision for different fiscal warehousekeepers or descriptions of fiscal warehousekeeper, for fiscal warehouses of different descriptions or for goods of different classes or descriptions or of the same class or description in different circumstances.

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8

• (1) Section 62 of the Value Added Tax Act 1994 shall be amended as follows.

• (2) In paragraph (a) of subsection (1), after the words “a person” there shall be inserted the words “ by whom one or more acquisitions or ”, the words “or” at the end of sub-paragraph (i) and “and” at the end of sub-paragraph (ii) shall be omitted and the following additional sub-paragraphs shall be inserted—

(iii) prepares a certificate in accordance with section 18B(1)(d) or gives a supplier a certificate in accordance with section 18B(2)(d); or (iv) gives the supplier a certificate in accordance with section 18C(1)(c); and

.

• (3) In the passage following paragraph (b) of subsection (1) and in subsections (3) and (4), after the word “giving” wherever it appears there shall be inserted the words “ or preparing ”.

• (4) In subsection (3) after the words “gave” and “given” there shall be inserted in each case the words “ or prepared ”.

9

In subsection (1) of section 69 of the Value Added Tax Act 1994 after paragraph (f) the following shall be added—

; or (g) section 18A in the form of a condition imposed by the Commissioners under subsection (1) or (6) of that section,

.

10

In section 73 of the Value Added Tax Act 1994 the following subsections shall be added after subsection (7)—

(7A) Where a fiscal warehousekeeper has failed to pay VAT required by the Commissioners under section 18E(2), the Commissioners may assess to the best of their judgment the amount of that VAT due from him and notify it to him. (7B) Where it appears to the Commissioners that goods have been removed from a warehouse or fiscal warehouse without payment of the VAT payable under section 18(4) or section 18D on that removal, they may assess to the best of their judgment the amount of VAT due from the person removing the goods or other person liable and notify it to him.

11

In sections 73(9) and 76(5) of the Value Added Tax Act 1994 for the words “or (7)” there shall be substituted “ , (7), (7A) or (7B) ”.

12

In section 83 of the Value Added Tax Act 1994 the following paragraph shall be added after paragraph (d)—

(da) a decision of the Commissioners under section 18A— (i) as to whether or not a person is to be approved as a fiscal warehousekeeper or the conditions from time to time subject to which he is so approved; (ii) for the withdrawal of any such approval; or (iii) for the withdrawal of fiscal warehouse status from any premises;

,

13

In paragraph 1 of Schedule 1 to the Value Added Tax Act 1994, the following sub-paragraph shall be added after sub-paragraph (8)—

(9) In determining the value of a person’s supplies for the purposes of sub-paragraph (1) or (2) above, supplies to which section 18B(4) (last acquisition or supply of goods before removal from fiscal warehousing) applies and supplies treated as made by him under section 18C(3) (self-supply of services on removal of goods from warehousing) shall be disregarded.

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15

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16

In paragraph 8(1) of Schedule 11 to the Value Added Tax Act 1994 after the words “another member State” there shall be inserted the words “ , or in the possession of a fiscal warehousekeeper, ”.

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18

The following Schedule shall be added to the Value Added Tax Act 1994.

SCHEDULE 5A

Description of goods	Combined nomenclature code of the European Union
Tin	8001
Copper	7402
	7403
	7405
	7408
Zinc	7901
Nickel	7502
Aluminium	7601
Lead	7801
Indium	ex 811291
	ex 811299
Cereals	1001 to 1005
	1006: unprocessed rice only
	1007 to 1008
Oil seeds and oleaginous fruit	1201 to 1207
Coconuts, Brazil nuts and cashew nuts	0801
Other nuts	0502
Olives	071120
Grains and seeds (including soya beans)	1201 to 1207
Coffee, not roasted	0901 11 00
	0901 12 00
Tea	0902
Cocoa beans, whole or broken, raw or roasted	1801
Raw sugar	1701 11
	1701 12
Rubber, in primary forms or in plates, sheets or strip	4001
	4002
Wool	5101
Chemicals in bulk	Chapters 28 and 29
Mineral oils (including propane and butane; also including crude petroleum oils)	2709
	2710
	2711 12
	2711 13
Silver	7106
Platinum (palladium, rhodium)	7110 11 00
	7110 21 00
	7110 31 00
Potatoes	0701
Vegetable oils and fats and their fractions, whether or not refined, but not chemically modified	1507 to 1515

SCHEDULE 4

The following is the Schedule which shall be inserted after Schedule 9 to the Value Added Tax Act 1994—

SCHEDULE 5

Part I — Information and samples

Information: general

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Records: taxable persons

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• (1) Regulations may require taxable persons to make records.

• (2) Regulations under sub-paragraph (1) above may be framed by reference to such records as may be stipulated in any notice published by the Commissioners in pursuance of the regulations and not withdrawn by a further notice.

• (3) Regulations may—

• (a) require taxable persons to preserve records of a prescribed description (whether or not the records are required to be made in pursuance of regulations) for such period not exceeding six years as may be specified in the regulations;

• (b) authorise the Commissioners to direct that any such records need only be preserved for a shorter period than that specified in the regulations;

• (c) authorise a direction to be made so as to apply generally or in such cases as the Commissioners may stipulate.

• (4) A duty under regulations under this paragraph to preserve records may be discharged—

• (a) by preserving them in any form and by any means, or

• (b) by preserving the information contained in them in any form and by any means,

subject to any conditions or exceptions specified in writing by the Commissioners.

Documents

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Part II — Powers

Entry and inspection

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Entry and search

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Arrest

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Order for access to recorded information etc.

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• (1) Where, on an application by an authorised person, a justice of the peace or, in Scotland, a justice (within the meaning of section 307 of the Criminal Procedure (Scotland) Act 1995) is satisfied that there are reasonable grounds for believing—

• (a) that an offence in connection with tax is being, has been or is about to be committed, and

• (b) that any recorded information (including any document of any nature whatsoever) which may be required as evidence for the purpose of any proceedings in respect of such an offence is in the possession of any person,

he may make an order under this paragraph.

• (2) An order under this paragraph is an order that the person who appears to the justice to be in possession of the recorded information to which the application relates shall—

• (a) give an authorised person access to it, and

• (b) permit an authorised person to remove and take away any of it which he reasonably considers necessary,

not later than the end of the period of 7 days beginning with the date of the order or the end of such longer period as the order may specify.

• (3) The reference in sub-paragraph (2)(a) above to giving an authorised person access to the recorded information to which the application relates includes a reference to permitting the authorised person to take copies of it or to make extracts from it.

• (4) Where the recorded information consists of information stored in any electronic form , an order under this paragraph shall have effect as an order to produce the information in a form in which it is visible and legible or from which it can readily be produced in a visible and legible form and, if the authorised person wishes to remove it, in a form in which it can be removed.

• (5) This paragraph is without prejudice to paragraphs 3 to 5 above.

Removal of documents etc.

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• (1) An authorised person who removes anything in the exercise of a power conferred by or under paragraph 5 or 7 above shall, if so requested by a person showing himself—

• (a) to be the occupier of premises from which it was removed, or

• (b) to have had custody or control of it immediately before the removal,

provide that person with a record of what he removed.

• (2) The authorised person shall provide the record within a reasonable time from the making of the request for it.

• (3) Subject to sub-paragraph (7) below, if a request for permission to be allowed access to anything which—

• (a) has been removed by an authorised person, and

• (b) is retained by the Commissioners for the purposes of investigating an offence,

is made to the officer in overall charge of the investigation by a person who had custody or control of the thing immediately before it was so removed or by someone acting on behalf of such a person, the officer shall allow the person who made the request access to it under the supervision of an authorised person.

• (4) Subject to sub-paragraph (7) below, if a request for a photograph or copy of any such thing is made to the officer in overall charge of the investigation by a person who had custody or control of the thing immediately before it was so removed, or by someone acting on behalf of such a person, the officer shall—

• (a) allow the person who made the request access to it under the supervision of an authorised person for the purpose of photographing it or copying it, or

• (b) photograph or copy it, or cause it to be photographed or copied.

• (5) Subject to sub-paragraph (7) below, where anything is photographed or copied under sub-paragraph (4)(b) above the officer shall supply the photograph or copy, or cause it to be supplied, to the person who made the request.

• (6) The photograph or copy shall be supplied within a reasonable time from the making of the request.

• (7) There is no duty under this paragraph to allow access to, or to supply a photograph or copy of, anything if the officer in overall charge of the investigation for the purposes of which it was removed has reasonable grounds for believing that to do so would prejudice—

• (a) that investigation,

• (b) the investigation of an offence other than the offence for the purposes of the investigation of which the thing was removed, or

• (c) any criminal proceedings which may be brought as a result of the investigation of which he is in charge or any such investigation as is mentioned in paragraph (b) above.

• (8) Any reference in this paragraph to the officer in overall charge of the investigation is a reference to the person whose name and address are endorsed on the warrant concerned as being the officer so in charge.

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• (1) Where, on an application made as mentioned in sub-paragraph (2) below, the appropriate judicial authority is satisfied that a person has failed to comply with a requirement imposed by paragraph 8 above, the authority may order that person to comply with the requirement within such time and in such manner as may be specified in the order.

• (2) An application under sub-paragraph (1) above shall be made—

• (a) in the case of a failure to comply with any of the requirements imposed by sub-paragraphs (1) and (2) of paragraph 8 above, by the occupier of the premises from which the thing in question was removed or by the person who had custody or control of it immediately before it was so removed, and

• (b) in any other case, by the person who had such custody or control.

• (3) In this paragraph “the appropriate judicial authority” means—

• (a) in England and Wales, a magistrates’ court;

• (b) in Scotland, the sheriff;

• (c) in Northern Ireland, a court of summary jurisdiction, as defined in Article 2(2)(a) of the Magistrates’ Court (Northern Ireland) Order 1981.

• (4) In England and Wales and Northern Ireland, an application for an order under this paragraph shall be made by way of complaint; and sections 21 and 42(2) of the Interpretation Act (Northern Ireland) 1954 shall apply as if any reference in those provisions to any enactment included a reference to this paragraph.

Power to take samples

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• (1) An authorised person, if it appears to him necessary for the protection of the revenue against mistake or fraud, may at any time take, from material which he has reasonable cause to believe is intended to be, is being, or has been disposed of ..., such samples as he may require with a view to determining how the material ought to be or to have been treated for the purposes of tax.

• (1A) An authorised person, if it appears to the person necessary for the protection of the revenue against mistake or fraud, may at any time take, from material which the person has reasonable cause to believe is an amount of fines retained under paragraph 2C(1)(a), such samples as the person may require with a view to determining how the fines tested ought to be or to have been treated for the purposes of tax.

• (2) Any sample taken under this paragraph shall be disposed of in such manner as the Commissioners may direct.

Part III — Recovery

General

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Tax due from any person shall be recoverable as a debt due to the Crown.

Preferential and preferred debts

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

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

• (3) In paragraph 2 the following sub-paragraph shall be inserted after sub-paragraph (1A)—

(1B) Any landfill tax which is referable to the period of six months next before the relevant date.

• (4) The following shall be inserted after paragraph 8A—

(8B) (1) For the purpose of paragraph 2(1B) of Part I of this Schedule— (a) where the whole of the accounting period to which any landfill tax is attributable falls within the period of six months next before the relevant date (“the relevant period”), the whole amount of that tax shall be referable to the relevant period; and (b) in any other case the amount of any landfill tax which shall be referable to the relevant period shall be the proportion of the tax which is equal to such proportion (if any) of the accounting period in question as falls within the relevant period. (2) In sub-paragraph (1) above “accounting period” shall be construed in accordance with Part III of the Finance Act 1996.

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

Distress and diligence

13

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

Recovery of overpaid tax

14

• (1) Where a person has paid an amount to the Commissioners by way of tax which was not tax due to them, they shall be liable to repay the amount to him.

• (2) The Commissioners shall only be liable to repay an amount under this paragraph on a claim being made for the purpose.

• (3) It shall be a defence, in relation to a claim under this paragraph, that repayment of an amount would unjustly enrich the claimant.

• (4) The Commissioners shall not be liable, on a claim made under this paragraph, to repay any amount paid to them more than 4 years before the making of the claim.

• (5) A claim under this paragraph shall be made in such form and manner and shall be supported by such documentary evidence as may be prescribed by regulations.

• (6) Except as provided by this paragraph, the Commissioners shall not be liable to repay an amount paid to them by way of tax by virtue of the fact that it was not tax due to them.

Part IV — Criminal Penalties

Criminal offences

15

• (1) A person is guilty of an offence if—

• (a) being a registrable person, he is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of tax by him or another registrable person, or

• (b) not being a registrable person, he is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of tax by a registrable person.

• (2) Any reference in sub-paragraph (1) above to the evasion of tax includes a reference to the obtaining of a payment under regulations under section 51(2)(c) or (d) or (f) of this Act.

• (3) A person is guilty of an offence if with the requisite intent—

• (a) he produces, furnishes or sends, or causes to be produced, furnished or sent, for the purposes of this Part of this Act any document which is false in a material particular, or

• (b) he otherwise makes use for those purposes of such a document;

and the requisite intent is intent to deceive or to secure that a machine will respond to the document as if it were a true document.

• (4) A person is guilty of an offence if in furnishing any information for the purposes of this Part of this Act he makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular.

• (5) A person is guilty of an offence by virtue of this sub-paragraph if his conduct during any specified period must have involved the commission by him of one or more offences under the preceding provisions of this paragraph; and the preceding provisions of this sub-paragraph apply whether or not the particulars of that offence or those offences are known.

• (6) A person is guilty of an offence if—

• (a) he enters into a taxable landfill contract, or

• (b) he makes arrangements for other persons to enter into such a contract,

with reason to believe that tax in respect of the disposal concerned will be evaded.

• (7) A person is guilty of an offence if he carries out taxable activities without giving security (or further security) he has been required to give under paragraph 31 below.

• (8) For the purposes of this paragraph a taxable landfill contract is a contract under which there is to be a taxable disposal.

Criminal penalties

16

• (1) A person guilty of an offence under paragraph 15(1) above is liable—

• (a) on summary conviction, to a penalty of the statutory maximum £20,000 or of three times the amount of the tax, whichever is the greater, or to imprisonment for a term not exceeding six months or to both;

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 14 years or to both.

• (2) The reference in sub-paragraph (1) above to the amount of the tax shall be construed, in relation to tax itself or a payment falling within paragraph 15(2) above, as a reference to the aggregate of—

• (a) the amount (if any) falsely claimed by way of credit, and

• (b) the amount (if any) by which the gross amount of tax was falsely understated.

• (3) A person guilty of an offence under paragraph 15(3) or (4) above is liable—

• (a) on summary conviction, to a penalty of the statutory maximum £20,000 (or, where sub-paragraph (4) below applies, to the alternative penalty there specified if it is greater) or to imprisonment for a term not exceeding six months or to both;

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 14 years or to both.

• (4) Where—

• (a) the document referred to in paragraph 15(3) above is a return required under this Part of this Act, or

• (b) the information referred to in paragraph 15(4) above is contained in or otherwise relevant to such a return,

the alternative penalty is a penalty equal to three times the aggregate of the amount (if any) falsely claimed by way of credit and the amount (if any) by which the gross amount of tax was understated.

• (5) A person guilty of an offence under paragraph 15(5) above is liable—

• (a) on summary conviction, to a penalty of the statutory maximum £20,000 (or, if greater, three times the amount of any tax that was or was intended to be evaded by his conduct) or to imprisonment for a term not exceeding six months or to both;

• (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 14 years or to both;

and paragraph 15(2) and sub-paragraph (2) above shall apply for the purposes of this sub-paragraph as they apply respectively for the purposes of paragraph 15(1) and sub-paragraph (1) above.

• (6) A person guilty of an offence under paragraph 15(6) above is liable on summary conviction to a penalty of level 5 on the standard scale £20,000 or three times the amount of the tax, whichever is the greater.

• (7) A person guilty of an offence under paragraph 15(7) above is liable on summary conviction to a penalty of level 5 on the standard scale £20,000.

• (8) In this paragraph—

• (a) “credit” means credit for which provision is made by regulations under section 51 of this Act;

• (b) “the gross amount of tax” means the total amount of tax due before taking into account any deduction for which provision is made by regulations under section 51(2) of this Act.

Criminal proceedings etc.

17

Sections 145 to 155 of the Customs and Excise Management Act 1979 (proceedings for offences, mitigation of penalties and certain other matters) shall apply in relation to offences under paragraph 15 above and penalties imposed under paragraph 16 above as they apply in relation to offences and penalties under the customs and excise Acts as defined in that Act.

Part V — Civil Penalties

Evasion

18

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19

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

Misdeclaration or neglect

20

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

Registration

21

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

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

• (3) A person who fails to comply with section 47(4) of this Act is liable to a penalty of £250.

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

Information

22

• (1) If a person—

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

• (b) fails to make records as required by any provision of regulations made under paragraph 2 or 2A above,

he is liable to a penalty of £250; but this is subject to sub-paragraph (4) below.

• (2) Where—

• (a) a penalty (an initial penalty) is imposed on a person under sub-paragraph (1) above, and

• (b) the failure which led to the initial penalty continues after its imposition,

he is (subject to sub-paragraph (4) below) liable to a further penalty of £20 for each day during which (or any part of which) the failure continues after the day on which the initial penalty was imposed.

• (3) A person who—

• (a) fails to preserve records in compliance with any provision of regulations made under paragraph 2 (read with that paragraph and any direction given under the regulations), or

• (b) fails to preserve records in compliance with any provision of regulations made under paragraph 2A (read with that paragraph and any direction given under the regulations),

is liable to a penalty of £250; but this is subject to sub-paragraph (4) below.

• (4) Where by reason of a failure falling within sub-paragraph (1) or (3) above—

• (a) a person is convicted of an offence (whether under this Part of this Act or otherwise), or

• (b) a person is assessed to a penalty under paragraph 18 above or a penalty for a deliberate inaccuracy under Schedule 24 to the Finance Act 2007 (penalties for errors) or a penalty under Schedule 41 to the Finance Act 2008 (penalties: failure to notify and certain VAT and excise wrongdoing),

that failure shall not also give rise to liability to a penalty under this paragraph.

Breach of regulations

23

• (1) Where regulations made under this Part of this Act impose a requirement on any person, they may provide that if the person fails to comply with the requirement he shall be liable to a penalty of £250; but this is subject to sub-paragraphs (2) and (3) below.

• (2) Where by reason of any conduct—

• (a) a person is convicted of an offence (whether under this Part of this Act or otherwise), or

• (b) a person is assessed to a penalty under paragraph 18 above or a penalty for a deliberate inaccuracy under Schedule 24 to the Finance Act 2007 (penalties for errors) or a penalty under Schedule 41 to the Finance Act 2008 (penalties: failure to notify and certain VAT and excise wrongdoing),

that conduct shall not also give rise to liability to a penalty under the regulations.

• (3) Sub-paragraph (1) above does not apply to any failure mentioned in paragraph 22 above.

Walking possession agreements

24

• (1) This paragraph applies where—

• (a) in accordance with regulations under section 51 of the Finance Act 1997 (enforcement by distress) a distress is authorised to be levied on the goods and chattels of a person (a person in default) who has refused or neglected to pay any tax due from him or any amount recoverable as if it were tax due from him, and

• (b) the person levying the distress and the person in default have entered into a walking possession agreement.

• (2) For the purposes of this paragraph a walking possession agreement is an agreement under which, in consideration of the property distrained upon being allowed to remain in the custody of the person in default and of the delaying of its sale, the person in default—

• (a) acknowledges that the property specified in the agreement is under distraint and held in walking possession, and

• (b) undertakes that, except with the consent of the Commissioners and subject to such conditions as they may impose, he will not remove or allow the removal of any of the specified property from the premises named in the agreement.

• (3) If the person in default is in breach of the undertaking contained in a walking possession agreement, he is liable to a penalty equal to half of the tax or other amount referred to in sub-paragraph (1)(a) above.

• (4) This paragraph extends only to Northern Ireland.

Controlled Goods Agreements

23A

• (1) This paragraph applies where an enforcement agent acting under the power conferred by section 51(A1) of the Finance Act 1997 (power to use the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007) has entered into a controlled goods agreement with the person against whom the power is exercisable (“the person in default”).

• (2) In this paragraph, “controlled goods agreement” has the meaning given by paragraph 13(4) of that Schedule.

• (3) If the person in default removes or disposes of goods (or permits their removal or disposal) in breach of the controlled goods agreement, he is liable to a penalty equal to half of the tax or other amount recoverable under section 51(A1) of the Finance Act 1997.

• (4) The person in default shall not be liable to a penalty under sub-paragraph (3) above if he satisfies the Commissioners or, on appeal, an appeal tribunal, that there is a reasonable excuse for the breach in question.

• (5) This paragraph extends only to England and Wales.

Part VI — Interest

Interest on under-declared tax

26

• (1) Sub-paragraph (2) below applies where—

• (a) under section 50(1) of this Act the Commissioners assess an amount of tax due from a registered person for an accounting period and notify it to him, and

• (b) the assessment is made on the basis that the amount (the additional amount) is due from him in addition to any amount shown in a return made in relation to the accounting period.

• (2) The additional amount shall carry interest for the period which—

• (a) begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

• (b) ends with the day before the relevant day.

• (3) For the purposes of sub-paragraph (2) above the relevant day is the earlier of—

• (a) the day on which the assessment is notified to the person;

• (b) the day on which the additional amount is paid.

• (4) Sub-paragraph (5) below applies where under section 50(2) of this Act the Commissioners assess an amount as being tax due from a registered person for an accounting period and notify it to him.

• (5) The amount shall carry interest for the period which—

• (a) begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

• (b) ends with the day before the relevant day.

• (6) For the purposes of sub-paragraph (5) above the relevant day is the earlier of—

• (a) the day on which the assessment is notified to the person;

• (b) the day on which the amount is paid.

• (7) Interest under this paragraph shall be payable at the rate applicable under section 197 of this Act.

• (8) Interest under this paragraph shall be paid without any deduction of income tax.

• (9) Sub-paragraph (10) below applies where—

• (a) an amount carries interest under this paragraph (or would do so apart from that sub-paragraph), and

• (b) all or part of the amount turns out not to be due.

• (10) In such a case—

• (a) the amount or part (as the case may be) shall not carry interest under this paragraph and shall be treated as never having done so, and

• (b) all such adjustments as are reasonable shall be made, including adjustments by way of repayment by the Commissioners where appropriate.

Interest on unpaid tax etc.

27

• (1) Sub-paragraph (2) below applies where—

• (a) a registered person makes a return under provision made under section 49 of this Act (whether or not he makes it at the time required by such provision), and

• (b) the return shows that an amount of tax is due from him for the accounting period in relation to which the return is made.

• (2) The amount shall carry interest for the period which—

• (a) begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

• (b) ends with the day before that on which the amount is paid.

• (3) Sub-paragraph (4) below applies where—

• (a) under section 50(1) of this Act the Commissioners assess an amount of tax due from a registered person person for an accounting period and notify it to him, and

• (b) the assessment is made on the basis that no return required by provision made under section 49 of this Act has been made by the person in relation to the accounting period.

• (4) The amount shall carry interest for the period which—

• (a) begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

• (b) ends with the day before that on which the amount is paid.

• (5) Sub-paragraph (6) below applies where—

• (a) under section 50(1) of this Act the Commissioners assess an amount of tax due from a registered person for an accounting period and notify it to him, and

• (b) the assessment (the supplementary assessment) is made on the basis that the amount (the additional amount) is due from him in addition to any amount shown in a return, or in any previous assessment, made in relation to the accounting period.

• (6) The additional amount shall carry interest for the period which—

• (a) begins with the day on which the supplementary assessment is notified to the person, and

• (b) ends with the day before that on which the additional amount is paid.

• (7) Sub-paragraph (8) below applies where under section 50(2) of this Act the Commissioners assess an amount as being tax due from a registered person for an accounting period and notify it to him.

• (8) The amount shall carry interest for the period which—

• (a) begins with the day on which the assessment is notified to the person, and

• (b) ends with the day before that on which the amount is paid.

• (8A) Sub-paragraph (8B) below applies where under section 50A of this Act the Commissioners assess an amount as being due from a person who is not a registered person in respect of a taxable disposal and notify it to the person.

• (8B) The amount shall carry interest for the period which—

• (a) begins with the day (or the last day of the period) notified under section 50A(2)(b), and

• (b) ends with the day before that on which the amount is paid.

• (9) Sub-paragraph (10) below applies where under paragraph 32 below the Commissioners—

• (a) assess an amount due from a person by way of penalty under Part V of this Schedule or under Schedule 41 to the Finance Act 2008 and notify it to him, or

• (b) assess an amount due from a person by way of interest under paragraph 26 above and notify it to him.

• (10) The amount shall carry interest for the period which—

• (a) begins with the day on which the assessment is notified to the person, and

• (b) ends with the day before that on which the amount is paid.

• (11) Interest under this paragraph shall be compound interest calculated—

• (a) at the penalty rate, and

• (b) with monthly rests;

and the penalty rate is the rate found by taking the rate at which interest is payable under paragraph 26 above and adding 10 percentage points to that rate.

• (12) Interest under this paragraph shall be paid without any deduction of income tax.

• (13) Where—

• (a) the Commissioners assess and notify an amount as mentioned in sub-paragraph (5)(a) or (7) or (8A) or (9)(a) or (b) above,

• (b) they also specify a date for the purposes of this sub-paragraph, and

• (c) the amount concerned is paid on or before that date,

the amount shall not carry interest by virtue of sub-paragraph (6) or (8) or (8B) or (10) above (as the case may be).

• (14) Sub-paragraph (15) below applies where—

• (a) an amount carries interest under this paragraph (or would do so apart from that sub-paragraph), and

• (b) all or part of the amount turns out not to be due.

• (15) In such a case—