Finance Act 2003
2003 c. 14
An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.
[10th July 2003]
Most Gracious Sovereign,
We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—
Table
1. Cigarettes | An amount equal to 22 per cent of the retail price plus £96.88 per thousand cigarettes.
2. Cigars | £141.10 per kilogram.
3. Hand-rolling tobacco | £101.42 per kilogram.
4. Other smoking tobacco and chewing tobacco | £62.03 per kilogram.
(2) This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003.
(1) In section 36(1AA)(a) of the Alcoholic Liquor Duties Act 1979 (c. 4) (rate of duty on beer), for “£11.89” substitute “ £12.22 ”.
(2) This section shall be deemed to have come into force at midnight on 13th April 2003.
(1) For Part 1 of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (rates of duty on wine and made-wine) substitute—
Part 1 Wine and made-wine of a strength not exceeding 22 per cent
Description of wine or made-wine | Rates of duty per hectolitre
£
Wine or made-wine of a strength not exceeding 4 per cent | 48.91
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent | 67.25
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not sparkling | 158.69
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent | 166.70
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent | 220.54
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent | 211.58
(2) This section shall be deemed to have come into force at midnight on 13th April 2003.
(1) In section 6(1A) of the Hydrocarbon Oil Duties Act 1979 (c. 5) (rates of duty)—
(a) in paragraph (a) (ultra low sulphur petrol) for “£0.4582” substitute “ £0.4710 ”,
(b) in paragraph (b) (other light oil) for “£0.5468” substitute “ £0.5620 ”,
(c) in paragraph (c) (ultra low sulphur diesel) for “£0.4582” substitute “ £0.4710 ”, and
(d) in paragraph (d) (other heavy oil) for “£0.5182” substitute “ £0.5327 ”.
(2) In section 6AA(3) of that Act (biodiesel duty) for “£0.2582” substitute “ £0.2710 ”.
(3) In section 13A(1) of that Act (rebate on unleaded petrol) for “£0.0586” substitute “ £0.0601 ”.
(4) This section shall come into force on 1st October 2003.
(1) In section 11(1) of the Hydrocarbon Oil Duties Act 1979 (rebate on heavy oil)—
(a) in paragraph (a) (fuel oil) for “£0.0274” substitute “ £0.0382 ”,
(b) in paragraph (b) (gas oil: general) for “£0.0313” substitute “ £0.0422 ”, and
(c) in paragraph (ba) (ultra low sulphur diesel) for “£0.0313” substitute “ £0.0422 ”.
(2) In section 14(1) of that Act (furnace fuel) for “£0.0274” substitute “ £0.0382 ”.
(3) This section shall be deemed to have come into force at 6 o'clock in the evening of 9th April 2003.
6 General betting duty and pool betting duty: relief for losses
(1) Part 1 of the Betting and Gaming Duties Act 1981 (c. 63) (betting duties) is amended as follows.
(2) In section 5 (net stake receipts) at the end of subsection (3) (negative net stake receipts to be disregarded) insert “ except as provided for by section 5AA ”.
(3) After that section insert—
Relief for losses
5AA (1) This section applies where the amount of a person’s net stake receipts for an accounting period in respect of a class of bets (calculated in accordance with section 5(1)) is a negative amount.
(2) That amount shall be carried forward to the following accounting period and, to the extent that it does not exceed it, deducted from the amount of the person’s net stake receipts in respect of the same class of bets for that period.
(3) If the amount of those net stake receipts for that following accounting period—
(a) is not a positive amount, or
(b) is less than the amount carried forward,
the amount carried forward or, as the case may be, the balance of it shall be treated for the purposes of this section as if it were a negative amount of net stake receipts for that period in respect of the same class of bets.
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(4) Omit section 5A (multiple bets) (which becomes unnecessary as a result of the amendment made by subsection (3) above).
(5) After section 7 (duty charged on net pool betting receipts) insert—
Relief for losses
7ZA (1) This section applies where the amount of a person’s net pool betting receipts for an accounting period is a negative amount.
(2) That amount shall be carried forward to the following accounting period and, to the extent that it does not exceed it, deducted from the amount of the person’s net pool betting receipts for that period.
(3) If the amount of the net pool betting receipts for that following accounting period—
(a) is not a positive amount, or
(b) is less than the amount carried forward,
the amount carried forward or, as the case may be, the balance of it shall be treated for the purposes of this section as if it were a negative amount of net pool betting receipts for that period.
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(6) The amendments made by this section apply in relation to any accounting period beginning on or after 1st September 2003 for which the net stake receipts in respect of a particular class of bets, or (as the case may be) the net pool betting receipts, is a negative amount.
(1) Part 1 of the Betting and Gaming Duties Act 1981 (c. 63) (betting duties) is amended as follows.
(2) After section 5AA (inserted by section 6 above) insert—
Betting exchanges
5AB (1) This section applies where—
(a) one person makes a bet with another person using facilities provided by a third person in the course of a business, and
(b) that business is one that does not involve the provision of premises for use by persons making or taking bets.
(2) General betting duty shall be charged on the amounts (“commission charges”) that the parties to the bet are charged, whether by deduction from winnings or otherwise, for using those facilities.
(3) No deductions shall be allowed from commission charges.
(4) The amount of duty charged under this section in respect of bets determined in an accounting period shall be 15 per cent of the commission charges relating to those bets.
(5) For the purposes of this section, and section 5B(4) so far as relating to this section, a person who arranges for facilities relating to a bet to be provided by another person shall be treated as providing them himself (and the other person shall not).
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(3) In section 5B (liability to pay)—
(a) for subsection (1) substitute—
(1) All general betting duty chargeable in respect of—
(a) bets made in an accounting period, or
(b) in the case of duty chargeable under section 5AB, bets determined in an accounting period,
shall become due at the end of that period.
;
(b) in subsection (4), after “section 4(1) to (3)” insert “ or 5AB ”.
(4) In section 5C (bet-brokers)—
(a) in paragraph (a) of subsection (1) (application of section) after “in the course of a business” insert “ , other than a betting-exchange business, ”;
(b) at the end of that subsection insert— “ In paragraph (a) “betting-exchange business” means a business such as is mentioned in section 5AB(1). ”;
(c) omit subsections (2) (bet treated as made between bettor and bet-broker) and (3) (subsection (2) not to apply to off-course bets where bet-taker is a bookmaker);
(d) in subsection (4) omit the words “In the case of a bet which is excluded from subsection (2) by virtue of subsection (3),”.
(5) The amendments made by this section apply in relation to any accounting period beginning on or after 1st June 2003.
(6) Those amendments do not apply in relation to a bet (a “straddling bet”) that is—
(a) made, using facilities provided by a person (“the broker”), in an accounting period of the broker beginning before 1st June 2003, but
(b) not determined until an accounting period of the broker beginning on or after that date.
(7) Any winnings paid in respect of a straddling bet to which section 5AB of the Betting and Gaming Duties Act 1981 (c. 63) would apply but for subsection (6) above shall be treated for the purposes of that Act as paid in the broker’s accounting period in which the bet was made (“the earlier accounting period”).
(8) Subsection (7) shall not have effect to reduce the general betting duty payable by the broker for the earlier accounting period; but the amount of the reduction that would (but for this subsection) have been made for that period shall be set against any liability of the broker to general betting duty for accounting periods in the following three years, taking earlier periods before later ones until the amount is exhausted.
8 General betting duty: restriction of exemption for on-course bets
(1) In section 12(4) of the Betting and Gaming Duties Act 1981 (general betting duty: supplementary provisions), in the definition of “on-course bet” for “a meeting” substitute “ a horse or dog race meeting ”.
(2) This section applies to bets made on or after 1st September 2003.
10 Amusement machines not operated by coins or tokens
(1) In section 21 of the Betting and Gaming Duties Act 1981 (amusement machine licences), for subsections (3B) to (3D) (meaning of “fifty-penny machine”) substitute—
(3B) For the purposes of this section an amusement machine is a “fifty-penny machine” if, and only if—
(a) where it is a machine on which a game can be played solo, the cost for each time the game is played on it solo—
(i) does not exceed 50p, or
(ii) where the machine provides differing numbers of games in different circumstances, cannot exceed 50p;
and
(b) where it is a machine on which a game can be played by more than one person at a time, the cost per player for each time the game is played on it simultaneously by more than one player—
(i) does not exceed 50p, or
(ii) where the machine provides differing numbers of games in different circumstances, cannot exceed 50p.
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(2) In section 25(1) of that Act (definition of “amusement machine”), in paragraph (c) for “coin or token” substitute “ coin, token or other thing ”.
(3) In section 26(2) of that Act (interpretation), for the definitions of “two-penny machine”, “five-penny machine” and “ten-penny machine” substitute—
“two-penny machine” means an amusement machine in relation to which the cost for each time a game is played on it—
(a) does not exceed 2p, or
(b) where the machine provides differing numbers of games in different circumstances, cannot exceed 2p,
and “five-penny machine” and “ten-penny machine” have a corresponding meaning;
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(4) In the following provisions of the Value Added Tax Act 1994 (c. 23)—
(a) the definition of “gaming machine” in section 23(4), and
(b) Note (3) (definition of “gaming machine”) to Group 4 of Schedule 9,
for “coin or token” substitute “ coin, token or other thing ”.
11 Amusement machines: use of currencies other than sterling
(1) In section 26 of the Betting and Gaming Duties Act 1981 (c. 63) (interpretation etc), omit the definition of “coin” in subsection (2).
(2) After that section insert—
Amounts in currencies other than sterling
26A (1) Any reference in this Part of this Act to a amount in sterling, in the context of—
(a) the cost of playing a game, or
(b) the amount of the prize for a game,
includes a reference to the equivalent amount in another currency.
(2) The equivalent amount in another currency, in relation to any day, shall be determined by reference to the London closing exchange rate for the previous day.
(3) For the purposes of determining what duty is payable on an amusement machine licence in a case where this section applies, the equivalent in another currency of an amount in sterling shall be taken to be its equivalent on the day on which the application for the licence is received by the Commissioners, or the due date in the case of a default licence.
(4) In subsection (3) above—
“default licence” means a licence granted under paragraph 3(1) of Schedule 4A to this Act;
“due date” has the meaning given by paragraph 2(4) of that Schedule.
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(3) This section does not apply in relation to any amusement machine licence granted before the day on which this Act is passed or to anything done under such a licence.
12 Responsibility for unlicensed amusement machines
(1) In section 24(5) of the Betting and Gaming Duties Act 1981 (c. 63) (penalty for unlicensed amusement machines), for paragraph (c) (liability of person responsible for, inter alia, issuing or exchanging coins etc for amusement machine) substitute—
(c) is a person responsible for controlling the use of any amusement machine on the premises, or
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(2) In Schedule 4A to that Act (unlicensed amusement machines), for paragraph (c) of paragraph 7(3) (which makes similar provision) substitute—
(c) responsible for controlling the use of any amusement machine on the premises, or
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(1) For the Table in section 11(2) of the Finance Act 1997 (c. 16) (rates of gaming duty) substitute—
Table
Part of gross gaming yield | Rate
The first £502,500 | 2.5 per cent.
The next £1,115,500 | 12.5 per cent.
The next £1,115,500 | 20 per cent.
The next £1,953,000 | 30 per cent.
The remainder | 40 per cent.
(2) This section has effect in relation to accounting periods beginning on or after 1st April 2003.
(1) In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994 (c. 22) (the general rate)—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) in sub-paragraph (2A) (general rate of duty in case of vehicle with engine with cylinder capacity not exceeding 1,549 cubic centimetres) for “£105” substitute “ £110 ”.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) In paragraph 1J of that Schedule (rates of duty applicable to light goods vehicles first registered on or after 1st March 2001)—
(a) in paragraph (a) (vehicle which is not a lower-emission van) for “£160” substitute “ £165 ”;
(b) in paragraph (b) (vehicle which is a lower-emission van) for “£105” substitute “ £110 ”.
(4) This section applies to any licence taken out on or after 17th April 2003 for a period beginning on or after 1st May 2003.
In section 22ZA of the Vehicle Excise and Registration Act 1994 (c. 22) (nil licences for vehicles for disabled persons: disclosure of information) in subsection (1)(a) (which provides that the section applies to certain information held by the Secretary of State or a person providing services to him) in sub-paragraphs (i) and (ii), after “the Secretary of State” insert “ or a Northern Ireland department ”.
16 Duty at higher rate: exception for tractive units
(1) After section 15 of the Vehicle Excise and Registration Act 1994 insert—
Exception for tractive units from charge at higher rate
15A (1) Where—
(a) a vehicle licence has been taken out for a tractive unit, and
(b) the licence was taken out at a rate of vehicle excise duty applicable to a tractive unit which is to be used with semi-trailers with a minimum number of axles,
duty at a higher rate does not become chargeable under section 15 by reason only that while the licence is in force the tractive unit is used with a semi-trailer with fewer axles than that minimum number, if the condition in subsection (2) is satisfied.
(2) The condition is that the rate of duty at which the licence was taken out is equal to or exceeds the rate which would have been applicable if the revenue weight of the tractive unit had been a weight equal to the actual laden weight, at the time of the use, of the articulated vehicle consisting of the tractive unit and the semi-trailer.
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(2) Section 16 of that Act (which makes provision, in the case of tractive units, for exemptions from the charge to vehicle excise duty at a higher rate on a basis different from that set out in new section 15A) shall cease to have effect.
(3) This section has effect in relation to the use of a tractive unit on or after 9th April 2003.
(1) The Value Added Tax Act 1994 (c. 23) is amended as follows.
(2) In section 24(6)(a) (regulations about input tax etc: requirement of documentary evidence) after “documents” insert “ or other information ”.
(3) In paragraph 4 of Schedule 11 (power to require security and production of documents) for sub-paragraph (1) substitute—
(1) The Commissioners may, as a condition of allowing or repaying input tax to any person, require the production of such evidence relating to VAT as they may specify.
(1A) If they think it necessary for the protection of the revenue, the Commissioners may require, as a condition of making any VAT credit, the giving of such security for the amount of the payment as appears to them appropriate.
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(4) For sub-paragraph (2) of that paragraph substitute—
(2) If they think it necessary for the protection of the revenue, the Commissioners may require a taxable person, as a condition of his supplying or being supplied with goods or services under a taxable supply, to give security, or further security, for the payment of any VAT that is or may become due from—
(a) the taxable person, or
(b) any person by or to whom relevant goods or services are supplied.
(3) In sub-paragraph (2) above “relevant goods or services” means goods or services supplied by or to the taxable person.
(4) Security under sub-paragraph (2) above shall be of such amount, and shall be given in such manner, as the Commissioners may determine.
(5) The powers conferred on the Commissioners by sub-paragraph (2) above are without prejudice to their powers under section 48(7).
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(5) In section 72(11) (penalty for supplying goods in contravention of paragraph 4(2) of Schedule 11) after “supplies” insert “ or is supplied with ”.
(6) In section 83(l) (right of appeal against requirement of security under paragraph 4(2) of Schedule 11 etc) for “paragraph 4(2)” substitute “ paragraph 4(1A) or (2) ”.
(7) In section 84 (further provisions relating to appeals) after subsection (4D) insert—
(4E) Where an appeal is brought against a requirement imposed under paragraph 4(2)(b) of Schedule 11 that a person give security, the tribunal shall allow the appeal unless the Commissioners satisfy the tribunal that—
(a) there has been an evasion of, or an attempt to evade, VAT in relation to goods or services supplied to or by that person, or
(b) it is likely, or without the requirement for security it is likely, that VAT in relation to such goods or services will be evaded.
(4F) A reference in subsection (4E) above to evading VAT includes a reference to obtaining a VAT credit that is not due or a VAT credit in excess of what is due.
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(8) This section shall be deemed to have come into force on 10th April 2003.
18 Joint and several liability for unpaid VAT of another trader
(1) In Part 4 of the Value Added Tax Act 1994 (c. 23) (administration, collection and enforcement), after section 77 insert—
Liability for unpaid VAT of another
Joint and several liability of traders in supply chain where tax unpaid
77A (1) This section applies to goods of any of the following descriptions—
(a) telephones and any other equipment, including parts and accessories, made or adapted for use in connection with telephones or telecommunication;
(b) computers and any other equipment, including parts, accessories and software, made or adapted for use in connection with computers or computer systems.
(2) Where—
(a) a taxable supply of goods to which this section applies has been made to a taxable person, and
(b) at the time of the supply the person knew or had reasonable grounds to suspect that some or all of the VAT payable in respect of that supply, or on any previous or subsequent supply of those goods, would go unpaid,
the Commissioners may serve on him a notice specifying the amount of the VAT so payable that is unpaid, and stating the effect of the notice.
(3) The effect of a notice under this section is that—
(a) the person served with the notice, and
(b) the person liable, apart from this section, for the amount specified in the notice,
are jointly and severally liable to the Commissioners for that amount.
(4) For the purposes of subsection (2) above the amount of VAT that is payable in respect of a supply is the lesser of—
(a) the amount chargeable on the supply, and
(b) the amount shown as due on the supplier’s return for the prescribed accounting period in question (if he has made one) together with any amount assessed as due from him for that period (subject to any appeal by him).
(5) The reference in subsection (4)(b) above to assessing an amount as due from a person includes a reference to the case where, because it is impracticable to do so, the amount is not notified to him.
(6) For the purposes of subsection (2) above, a person shall be presumed to have reasonable grounds for suspecting matters to be as mentioned in paragraph (b) of that subsection if the price payable by him for the goods in question—
(a) was less than the lowest price that might reasonably be expected to be payable for them on the open market, or
(b) was less than the price payable on any previous supply of those goods.
(7) The presumption provided for by subsection (6) above is rebuttable on proof that the low price payable for the goods was due to circumstances unconnected with failure to pay VAT.
(8) Subsection (6) above is without prejudice to any other way of establishing reasonable grounds for suspicion.
(9) The Treasury may by order amend subsection (1) above; and any such order may make such incidental, supplemental, consequential or transitional provision as the Treasury think fit.
(10) For the purposes of this section—
(a) “goods” includes services;
(b) an amount of VAT counts as unpaid only to the extent that it exceeds the amount of any refund due.
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(2) In section 83 of that Act (appeals) after paragraph (r) insert—
(ra) any liability arising by virtue of section 77A;
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(3) In section 84(3) of that Act (appeals not to be entertained unless the VAT has been paid or deposited, except where that would cause hardship) for “or (q)” substitute “ , (q) or (ra) ”.
(4) This section shall be deemed to have come into force on 10th April 2003 except subsection (3) which applies in relation to any appeal notice of which is given on or after the day on which this Act is passed.
20 Supplies arising from prior grant of fee simple
(1) In section 96 of the Value Added Tax Act 1994 (c. 23) (interpretative provisions), after subsection (10A) (time for determining status of supplies arising from prior grant of interest etc) insert—
(10B) Notwithstanding subsection (10A) above—
(a) item 1 of Group 1 of Schedule 9 does not make exempt any supply that arises for the purposes of this Act from the prior grant of a fee simple falling within paragraph (a) of that item; and
(b) that paragraph does not prevent the exemption of a supply that arises for the purposes of this Act from the prior grant of a fee simple not falling within that paragraph.
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(2) This section applies in relation to any supply that arises for the purposes of the Value Added Tax Act 1994 (c. 23) from the prior grant of a fee simple made on or after 9th April 2003.
(1) In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply of goods or services), paragraph 5 (business gifts etc) is amended as follows.
(2) In sub-paragraph (2) (cases where sub-paragraph (1) does not apply), for paragraph (a) substitute—
(a) a business gift the cost of which, together with the cost of any other business gifts made to the same person in the same year, was not more than £50.
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(3) After that sub-paragraph insert—
((2ZA)) In sub-paragraph (2) above—
“business gift” means a gift of goods that is made in the course or furtherance of the business in question;
“cost”, in relation to a gift of goods, means the cost to the donor of acquiring or, as the case may be, producing the goods;
“the same year”, in relation to a gift, means any period of twelve months that includes the day on which the gift is made.
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(4) This section applies in relation to gifts made on or after 1st October 2003.
(1) This Part makes provision for and in connection with the imposition of liability to a penalty where a person—
(a) engages in any conduct for the purpose of evading any relevant tax or duty, or
(b) engages in any conduct by which he contravenes a duty, obligation, requirement or condition imposed by or under legislation relating to any relevant tax or duty.
(2) For the purposes of this Part “relevant tax or duty” means any of the following—
(a) customs duty;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) import VAT;
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) In this Part—
“appeal tribunal” means a the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal;
“the Commissioners” means the Commissioners of Customs and Excise;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“contravene” includes fail to comply with;
...
“demand notice” means a demand notice within the meaning of section 30;
“HMRC” means “Her Majesty’s Revenue and Customs.
“import VAT” means value added tax chargeable by virtue of section 1(1)(c) of the Value Added Tax Act 1994 (c. 23) (importation of goods into the United Kingdom);
“notice” means notice in writing;
...
“prescribed” means specified in, or determined in accordance with, regulations made by the Treasury;
“relevant rule”, in relation to any relevant tax or duty, has the meaning given by subsection (8) of section 26 (as read with subsection (9) of that section);
“representative”, in relation to any person, means—
his personal representative,
his trustee in bankruptcy or interim or permanent trustee,
any receiver or liquidator appointed in relation to that person or any of his property,
or any other person acting in a representative capacity in relation to that person.
“Union Customs Code” means Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code;
“Union export duty” means export duty, as defined in Article 5(21) of the Union Customs Code;
“Union import duty” means import duty, as defined in Article 5(20) of the Union Customs Code.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) Except for this subsection and section 41 (which accordingly come into force on the passing of this Act), this Part comes into force on such day as the Treasury may by order appoint.
(1) In any case where—
(a) a person engages in any conduct for the purpose of evading any relevant tax or duty, and
(b) his conduct involves dishonesty (whether or not such as to give rise to any criminal liability),
that person is liable to a penalty of an amount equal to the amount of the tax or duty evaded or, as the case may be, sought to be evaded.
(2) Subsection (1) is subject to the following provisions of this Part.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) Any reference in this section to a person’s “evading” any relevant tax or duty includes a reference to his obtaining or securing, without his being entitled to it,—
(a) any repayment, rebate or drawback of any relevant tax or duty,
(b) any relief or exemption from, or any allowance against, any relevant tax or duty, or
(c) any deferral or other postponement of his liability to pay any relevant tax or duty or of the discharge by payment of any such liability,
and also includes a reference to his evading the cancellation of any entitlement to, or the withdrawal of, any such repayment, rebate, drawback, relief, exemption or allowance.
(5) In relation to any such evasion of any relevant tax or duty as is mentioned in subsection (4), the reference in subsection (1) to the amount of the tax or duty evaded or sought to be evaded is a reference to the amount of—
(a) the repayment, rebate or drawback,
(b) the relief, exemption or allowance, or
(c) the payment which, or the liability to make which, is deferred or otherwise postponed,
as the case may be.
(6) Where, by reason of conduct falling within subsection (1) in the case of any relevant tax or duty, a person—
(a) is convicted of an offence,
(b) is given, and has not had withdrawn, a demand notice in respect of a penalty to which he is liable under section 26, or
(c) is liable to a penalty imposed upon him under any other provision of the law relating to that relevant tax or duty,
that conduct does not also give rise to liability to a penalty under this section in respect of that relevant tax or duty.
(1) If, in the case of any relevant tax or duty, a person of a prescribed description engages in any conduct by which he contravenes—
(a) a prescribed relevant rule, or
(b) a relevant rule of a prescribed description,
he is liable to a penalty under this section of a prescribed amount.
(2) Subsection (1) is subject to the following provisions of this Part.
(3) The power conferred by subsection (1) to prescribe a description of person includes power to prescribe any person (without further qualification) as such a description.
(4) Different penalties may be prescribed under subsection (1) for different cases or different circumstances.
(5) Any amount prescribed under subsection (1) as the amount of a penalty must not be more than £2,500.
(5A) Where the conduct constituting a contravention of a relevant rule is a contravention of a condition imposed under regulations under section 20(1A), 20B(2), 22(1A) or 25(1A) of the Customs and Excise Management Act 1979—
(a) the Treasury may by regulations provide that, in prescribed circumstances, there are to be deemed for the purposes of subsection (1) of this section to be further separate contraventions of the rule, and
(b) the provision that may be made by the regulations includes provision replicating or applying, with or without modifications, any provision made by section 20A(1A) or (1B), 22A(1A) or (1B) or 25A(1A) or (1B) of the Customs and Excise Management Act 1979.
(6) The Treasury may by order amend subsection (5) by substituting a different amount for the amount for the time being specified in that subsection.
(7) A statutory instrument containing an order under subsection (6) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
(8) In this Part “relevant rule”, in relation to any relevant tax or duty, means any duty, obligation, requirement or condition imposed by or under any of the following—
(za) Part 1 and sections 40A and 40B of the Taxation (Cross-border Trade) Act 2018, as they apply in relation to the relevant tax or duty;
(a) the Customs and Excise Management Act 1979 (c. 2), as it applies in relation to the relevant tax or duty;
(b) any other Act, or any statutory instrument, as it applies in relation to the relevant tax or duty;
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(f) any relevant international rules applying in relation to the relevant tax or duty.
(9) In subsection (8)—
...
“relevant international rules” means international agreements so far as applying in relation to a relevant tax or duty and having effect as part of the law of any part of the United Kingdom by virtue of—
any Act or statutory instrument, ...
...
(1) A person is not liable to a penalty under section 26 if he satisfies—
(a) the Commissioners, or
(b) on appeal, an appeal tribunal,
that there is a reasonable excuse for his conduct.
(2) For the purposes of subsection (1) none of the following is a reasonable excuse—
(a) an insufficiency of funds available to any person for paying any relevant tax or duty or any penalty due;
(b) that reliance was placed by any person on another to perform any task;
(c) that the contravention is attributable, in whole or in part, to the conduct of a person on whom reliance to perform any task was so placed.
(3) Where, by reason of conduct falling within subsection (1) of section 26 in the case of any relevant tax or duty, a person—
(a) is prosecuted for an offence,
(b) is given, and has not had withdrawn, a demand notice in respect of a penalty to which he is liable under section 25, or
(c) is liable to a penalty imposed upon him under any other provision of the law relating to that relevant tax or duty,
that conduct does not also give rise to liability to a penalty under section 26 in respect of that relevant tax or duty.
(4) A person is not liable to a penalty under section 26 in respect of any conduct, so far as relating to import VAT, if in respect of that conduct—
(a) he is liable to a penalty under any of sections 62 to 69A of the Value Added Tax Act 1994 (c. 23) (penalty for contravention of statutory requirements as to VAT), or
(b) he would be so liable but for section 62(4), 63(11), 64(6), 67(9), 69(9) or 69A(7) of that Act (conduct resulting in conviction, different penalty etc).
28 Liability of directors etc where body corporate liable to penalty for evasion
(1) Where it appears to the Commissioners—
(a) that a body corporate is liable to a penalty under section 25, and
(b) that the conduct giving rise to the penalty is, in whole or in part, attributable to the dishonesty of a person who is, or at the material time was, a director or managing officer of the body corporate (a “relevant officer”),
the Commissioners may give a notice under this section to the body corporate (or its representative) and to the relevant officer (or his representative).
(2) A notice under this section must state—
(a) the amount of the penalty referred to in subsection (1)(a) (the “basic penalty”), and
(b) that the Commissioners propose, in accordance with this section, to recover from the relevant officer such portion (which may be the whole) of the basic penalty as is specified in the notice.
(3) If a notice is given under this section, this Part shall apply in relation to the relevant officer as if he were personally liable under section 25 to a penalty which corresponds to that portion of the basic penalty specified in the notice.
(4) If a notice is given under this section—
(a) the amount which may be recovered from the body corporate under this Part is limited to so much (if any) of the basic penalty as is not recoverable from the relevant officer by virtue of subsection (3), and
(b) the body corporate is to be treated as discharged from liability for so much of the basic penalty as is so recoverable from the relevant officer.
(5) In this section “managing officer”, in relation to a body corporate, means—
(a) a manager, secretary or other similar officer of the body corporate, or
(b) a person purporting to act in any such capacity or as a director.
(6) Where the affairs of a body corporate are managed by its members, this section applies in relation to the conduct of a member in connection with his functions of management as if he were a director of the body corporate.
(1) Where a person is liable to a penalty under section 25 or 26—
(a) the Commissioners (whether originally or on review) or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and
(b) the Commissioners on a review, or an appeal tribunal on an appeal, relating to a penalty reduced by the Commissioners under this subsection may cancel the whole or any part of the reduction previously made by the Commissioners.
(2) In exercising their powers under subsection (1), neither the Commissioners nor an appeal tribunal are entitled to take into account any of the matters specified in subsection (3).
(3) Those matters are—
(a) the insufficiency of the funds available to any person for paying any relevant tax or duty or the amount of the penalty,
(b) the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of any relevant tax or duty,
(c) the fact that the person liable to the penalty, or a person acting on his behalf, has acted in good faith.
(1) Where a person is liable to a penalty under this Part, the Commissioners may give to that person or his representative a notice in writing (a “demand notice”) demanding payment of the amount due by way of penalty.
(2) An amount demanded as due from a person or his representative in accordance with subsection (1) is recoverable as if it were an amount due from the person or, as the case may be, the representative as an amount of customs duty.
This subsection is subject to—
(a) any appeal under section 33 (appeals to tribunal); and
(b) subsection (3).
(3) An amount so demanded is not recoverable if or to the extent that—
(a) the demand has subsequently been withdrawn; or
(b) the amount has been reduced under section 29.
(1) A demand notice may not be given—
(a) in the case of a penalty under section 25, more than 20 years after the conduct giving rise to the liability to the penalty ceased, or
(b) in the case of a penalty under section 26, more than 3 years after the conduct giving rise to the liability to the penalty ceased.
(2) A demand notice may not be given more than 2 years after there has come to the knowledge of the Commissioners evidence of facts sufficient in the opinion of the Commissioners to justify the giving of the demand notice.
(3) A demand notice—
(a) may be given in respect of a penalty to which a person was liable under section 25 or 26 immediately before his death, but
(b) in the case of a penalty to which the deceased was so liable under section 25, may not be given more than 3 years after his death.
32 No prosecution after demand notice for penalty under section 26
(1) Where a demand notice is given demanding payment of an amount due by way of penalty under section 26 in respect of any conduct of a person, no proceedings may be brought against that person for any offence constituted by that conduct (whether or not the demand notice is subsequently withdrawn).
(2) Nothing in subsection (1) prevents the bringing of proceedings against a person for an offence under section 20A(1A), 22A(1A) or 25A(1A) of the Customs and Excise Management Act 1979 in circumstances where it is alleged that the person is liable to a penalty of an enhanced amount.
(1) If, in the case of any relevant tax or duty, HMRC give a person or his representative a notice informing him—
(a) that they have decided that the person has engaged in conduct by which he contravenes a relevant rule, and
(b) that the person is, in consequence, liable to a penalty under section 26, but
(c) that they do not propose to give a demand notice in respect of the penalty,
the person or his representative may make an appeal to an appeal tribunal in respect of the decision mentioned in paragraph (a).
(2) Where HMRC give a demand notice to a person or his representative, the person or his representative may make an appeal to an appeal tribunal in respect of —
(a) their decision that the person is liable to a penalty under section 25 or 26, or
(b) their decision as to the amount of the liability.
(3) Where HMRC give a notice under section 28 to a body corporate and to a relevant officer—
(a) subsection (2) does not apply to any demand notice given in respect of the liability of either of them to a penalty under this Part in respect of the conduct in question, but
(b) subsections (4) and (5) have effect instead in relation to any such demand notice.
(4) Where HMRC give a demand notice to the relevant officer or his representative for a penalty which corresponds to the portion of the basic penalty specified in the notice under section 28, the relevant officer or his representative may make an appeal to an appeal tribunal in respect of —
(a) their decision that the conduct of the body corporate referred to in section 28(1)(b) is, in whole or in part, attributable to the relevant officer’s dishonesty, or
(b) their decision as to the portion of the basic penalty which the HMRC are seeking to recover from the relevant officer or his representative.
(5) Where HMRC give a demand notice to the body corporate or its representative for so much of the basic penalty as is not recoverable from the relevant officer by virtue of section 28(3), the body corporate or its representative may make an appeal to an appeal tribunal in respect of —
(a) their decision that the body corporate is liable to a penalty under section 25, or
(b) their decision as to amount of the basic penalty as if it were the amount specified in the demand notice.
(6) The powers of an appeal tribunal on an appeal under this section include—
(a) power to quash or vary a decision; and
(b) power to substitute the tribunal’s own decision for any decision so quashed.
(7) On an appeal under this section—
(a) the burden of proof as to the matters mentioned in section 25(1) or 26(1) lies on HMRC; but
(b) it is otherwise for the appellant to show that the grounds on which any such appeal is brought have been established.
(1) HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under section 33 in respect of the decision.
(2) The offer of the review must be made by notice given to P at the same time as the decision is notified to P.
(3) This section does not apply to the notification of the conclusions of a review.
(1) HMRC must review a decision if—
(a) they have offered a review of the decision under section 33A, and
(b) P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer.
(2) But P may not notify acceptance of the offer if P has already appealed to the appeal tribunal under section 33F.
(3) HMRC shall not review a decision if P has appealed to the appeal tribunal under section 33F in respect of the decision.
(1) If under section 33A, HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended.
(2) If notice is given the relevant period is extended to the end of 30 days from—
(a) the date of the notice, or
(b) any other date set out in the notice or a further notice.
(3) In this section “relevant period” means—
(a) the period of 30 days referred to in section 33B(1)(b), or
(b) if notice has been given under subsection (1) that period as extended (or as most recently extended) in accordance with subsection (2).
(1) This section applies if—
(a) HMRC have offered a review of a decision under section 33A, and
(b) P does not accept the offer within the time allowed under section 33B(1)(b) or 33C(2).
(2) HMRC must review the decision under section 33B if—
(a) after the time allowed, P notifies HMRC in writing requesting a review out of time,
(b) HMRC are satisfied that P had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and
(c) HMRC are satisfied that P made the request without unreasonable delay after the excuse had ceased to apply.
(3) HMRC shall not review a decision if P has appealed to the appeal tribunal under section 33F in respect of the decision.
(1) This section applies if HMRC are required to undertake a review under section 33B or 33D.
(2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.
(3) For the purpose of subsection (2), HMRC must, in particular, have regard to steps taken before the beginning of the review—
(a) by HMRC in reaching the decision, and
(b) by any person in seeking to resolve disagreement about the decision.
(4) The review must take account of any representations made by P at a stage which gives HMRC a reasonable opportunity to consider them.
(5) The review may conclude that the decision is to be—
(a) upheld,
(b) varied, or
(c) cancelled.
(6) HMRC must give P notice of the conclusions of the review and their reasoning within—
(a) a period of 45 days beginning with the relevant date, or
(b) such other period as HMRC and P may agree.
(7) In subsection (6) “relevant date” means—
(a) the date HMRC received P’s notification accepting the offer of a review (in a case falling within section 33A), or
(b) the date on which HMRC decided to undertake the review (in a case falling within section 33D).
(8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the period specified in subsection (6), the review is to be treated as having concluded that the decision is upheld.
(9) If subsection (8) applies, HMRC must notify P of the conclusions which the review is treated as having reached.
(1) An appeal under section 33 is to be made to the appeal tribunal before—
(a) the end of the period of 30 days beginning with the date of the document notifying the decision to which the appeal relates, or
(b) if later, the end of the relevant period (within the meaning of section 33C).
(2) But that is subject to subsections (3) to (5).
(3) In a case where HMRC are required to undertake a review under section 33B —
(a) an appeal may not be made until the conclusion date, and
(b) any appeal is to be made within the period of 30 days beginning with the conclusion date.
(4) In a case where HMRC are requested to undertake a review in accordance with section 33D—
(a) an appeal may not be made to an appeal tribunal—
(i) unless HMRC have notified P as to whether or not a review will be undertaken, and
(ii) if HMRC have notified P that a review will be undertaken, until the conclusion date;
(b) any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date;
(c) if HMRC have notified P that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so.
(5) In a case where section 33E(8) applies, an appeal may be made at any time from the end of the period specified in section 33E(6) to the date 30 days after the conclusion date.
(6) An appeal may be made after the end of the period specified in subsection (1), (3)(b), (4)(b) or (5) if an appeal tribunal gives permission to do so.
(7) In this section “conclusion date” means the date of the document notifying the conclusions of the review.