Law

Finance Act 2026

United Kingdom · statute

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In force since 2026-10-01, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 301 provisions
  1. Title and introductory text
  2. 1 Income tax charge for tax year 2026-27
  3. 2 Main rates of income tax for tax year 2026-27
  4. 3 Default and savings rates of income tax for tax year 2026-27
  5. 4 Increase in dividend ordinary and upper rates
  6. 5 Savings rates of income tax for tax year 2027-28
  7. 6 New rates of income tax on property income
  8. 7 Property rates of income tax for tax year 2027-28
  9. 8 Scottish and Welsh property rates set by Scottish Parliament and Senedd
  10. 9 Freezing starting rate limit for savings for tax years 2026-27 to 2030-31
  11. 10 Basic rate limit and personal allowance for tax years 2028-29 to 2030-31
  12. 11 Charge and main rate for financial year 2027
  13. 12 Standard small profits rate and fraction for financial year 2027
  14. 13 Enterprise management incentives: thresholds and period for exercise
  15. 14 Enterprise investment scheme: increase in amounts and asset requirements
  16. 15 Venture capital trusts: rate of relief and amounts and asset requirements
  17. 16 CSOP schemes and EMI: PISCES shares
  18. 17 Employee car and van ownership schemes
  19. 18 Car or van made available on arm’s length terms
  20. 19 CO2 emissions figure for certain cars with an electric range figure
  21. 20 Employment income: miscellaneous exemptions
  22. 21 Disallowing deduction from earnings for additional household expenses
  23. 22 Payment for cancelled shifts etc.
  24. 23 Location of duties of employment where duties not performed
  25. 24 Umbrella companies
  26. 25 Loan charge settlement scheme
  27. 26 Loan charge settlement scheme: inheritance tax
  28. 27 Loan charge settlement scheme: supplementary
  29. 28 Main rate of writing-down allowances for expenditure on plant or machinery
  30. 29 First-year allowance for main rate expenditure on plant or machinery
  31. 30 Expenditure on zero-emission cars and electric vehicle charging points
  32. 31 Payments for surrender of expenditure credits
  33. 32 Transition from video games tax relief
  34. 33 Special credit for visual effects
  35. 34 R&D undertaken abroad: Chapter 2 relief only
  36. 35 Restriction of relief on disposals to employee-ownership trusts
  37. 36 Anti-avoidance: collective investment scheme reconstructions
  38. 37 Anti-avoidance: company reconstructions
  39. 38 Anti-avoidance: reconstructions involving transfer of business
  40. 39 Incorporation relief: requirement to claim
  41. 40 Non-residents: cell companies
  42. 41 Non-residents: double taxation relief relating to collective investment vehicles
  43. 42 Abolition of notional tax credit on distributions received by non-UK residents
  44. 43 Non-resident, and previously non-domiciled individuals
  45. 44 Trust protections etc: minor amendments and transitional protection
  46. 45 PAYE for treaty non-residents etc.
  47. 46 Unassessed transfer pricing profits
  48. 47 Transfer pricing reform
  49. 48 International controlled transactions
  50. 49 Permanent establishments
  51. 50 Pillar two
  52. 51 Controlled foreign companies: interest on reversal of state aid recovery
  53. 52 Offshore income gains
  54. 53 Offshore income gains: savings
  55. 54 Legacies to charities to be within scope of tax
  56. 55 Approved charitable investments: purpose test
  57. 56 Tainted charity donations: replacement of purpose test with outcome test
  58. 57 Winter fuel payment charge
  59. 58 Carried interest
  60. 59 Pensions: abolition of the lifetime allowance charge
  61. 60 Collective money purchase schemes and Master Trust schemes
  62. 61 Corporate interest restriction: reporting companies
  63. 62 Corporate interest restriction: capital expenditure and tax-EBITDA calculation
  64. 63 Avoidance schemes involving certain non-derecognition liabilities
  65. 64 Energy (oil and gas) profits levy: decommissioning relief agreements
  66. 65 Agricultural property relief and business property relief etc
  67. 66 Tax to be charged on certain pension interests
  68. 67 Liability for tax on pension interests
  69. 68 Withholding of benefits and payment of tax by pension scheme administrator
  70. 69 Connected amendments to IHTA 1984
  71. 70 Connected amendments to income tax rules
  72. 71 Commencement of sections 66 to 70
  73. 72 Rate bands etc for tax year 2030-31
  74. 73 Relevant property: disapplication of exemptions from exit charges
  75. 74 Relevant property: cap on charges for pre-30 October 2024 excluded property
  76. 75 Foreign diplomats etc: periods of UK residence to be disregarded
  77. 76 Minor corrections
  78. 77 Power to make provision about infected blood compensation payments
  79. 78 Scope of exemption for gifts to charities and registered clubs
  80. 79 Section 78: transitional protection for existing interests in possession
  81. 80 Zero-rating of leases of vehicles to recipients of disability benefits
  82. 81 Insurance premium tax relief limited to adapted vehicles
  83. 82 Private hire vehicles or taxis
  84. 83 Certain charitable donations not to be treated as supplies of goods
  85. 84 Refunds of VAT to combined county authorities
  86. 85 UK listing relief
  87. 86 Rate of remote gaming duty
  88. 87 General betting duty on remote bets
  89. 88 Abolition of bingo duty
  90. 89 Rates of duty
  91. 90 Rates of duty effective from 6pm on 26 November 2025
  92. 91 Rates of duty effective from 1 October 2026
  93. 92 Vehicle excise duty for light passenger or light goods vehicles etc
  94. 93 Vehicle excise duty for rigid goods vehicles without trailers and tractive units
  95. 94 Vehicle excise duty for rigid goods vehicles with trailers
  96. 95 Vehicle excise duty for vehicles with exceptional loads etc
  97. 96 Vehicle excise duty for haulage vehicles other than showman’s vehicles
  98. 97 Vehicle excise duty: expensive car supplement
  99. 98 Rates of HGV road user levy
  100. 99 Rates of air passenger duty
  101. 100 Rates of climate change levy
  102. 101 Rates of landfill tax
  103. 102 Rate of aggregates levy
  104. 103 Aggregates levy: amendments relating to disapplication of levy to Scotland
  105. 104 Rate of plastic packaging tax
  106. 105 Chemical recycling: mass balance approach
  107. 107 Sections 105 and 106: commencement
  108. 108 Rates of levy
  109. 109 Amendment of customs tariff power
  110. 112 Customs facilities at approved wharves and other places
  111. 113 Increases to rates of levy
  112. 114 Removal of time limit to claim relief under section 106(3) of FA 2013
  113. 115 Excise duty: charge
  114. 116 Vaping products
  115. 117 Production of vaping products
  116. 118 Excise duty point and payment
  117. 119 Administration
  118. 120 Stamping of vaping products
  119. 121 Issue and management of duty stamps
  120. 122 Approved stamp holders
  121. 123 United Kingdom representatives
  122. 124 Forfeiture
  123. 125 Dealing in unstamped vaping products
  124. 126 Loss and misuse of duty stamps
  125. 127 Failure to comply with this Part etc
  126. 128 Forfeiture: civil penalties
  127. 129 Dealing in duty stamps
  128. 132 Offences: penalties
  129. 133 Forfeiture: offences
  130. 134 Publication of information
  131. 135 Information sharing
  132. 136 Investigation and enforcement
  133. 137 Regulations: further provision
  134. 138 Regulations: procedure
  135. 139 Amendments of other enactments
  136. 140 Interpretation
  137. 141 Commencement and transitional provision
  138. 142 Introduction to CBAM
  139. 143 Charge to CBAM
  140. 144 Importation
  141. 145 Goods processed under a special customs procedure
  142. 146 Person liable: the importer
  143. 147 Exemptions
  144. 148 Embodied emissions
  145. 149 Rate
  146. 150 Carbon price relief
  147. 151 Administration and enforcement
  148. 152 Criminal offences
  149. 153 Supplementary amendments
  150. 154 Emissions: meaning etc
  151. 155 Interpretation
  152. 156 Power to make provision for linked emissions trading schemes
  153. 157 Regulations and notices
  154. 158 Commencement and transitory provision
  155. 159 Prohibition of promotion of certain tax avoidance arrangements
  156. 160 Meaning of promotion
  157. 161 Procedure
  158. 162 Civil penalties
  159. 163 Criminal offence
  160. 164 Criminal liability of responsible persons
  161. 165 Interpretation and commencement
  162. 166 Certification of promoters
  163. 167 Promoter action notices
  164. 168 Preliminary notices
  165. 169 Disclosure of information by HMRC
  166. 170 Appeal against a decision to issue a promoter action notice
  167. 171 Civil penalties
  168. 172 Publication
  169. 173 Reporting to regulators etc
  170. 174 Extension of time periods
  171. 175 Reasonable excuse
  172. 176 Interpretation
  173. 177 Connected persons
  174. 178 Anti-avoidance enactments
  175. 179 Information notices: connected persons
  176. 180 Information notices: third parties
  177. 181 Information notices: unidentified connected persons
  178. 182 Information notices: identification
  179. 183 Information notices: financial institutions
  180. 184 Content and requirements of notices
  181. 185 Restriction on disclosure of notices
  182. 186 Excepted information
  183. 187 Tribunal approval of notices
  184. 188 Withdrawal of notices
  185. 189 Offence of failing to comply with a notice
  186. 190 Offence of concealing information
  187. 191 Criminal liability of responsible persons
  188. 192 Criminal liability of responsible persons: no prosecution of recipient
  189. 193 Imprisonment or a fine
  190. 194 Penalty for failing to comply with a notice
  191. 195 Penalty for concealing information
  192. 196 Penalty for inaccurate information
  193. 197 Penalty for disclosing a notice
  194. 198 Penalty based on monies received
  195. 199 Increased daily default penalty
  196. 200 Extension of time periods
  197. 201 Reasonable excuse
  198. 202 Double jeopardy
  199. 203 Assessment etc of penalties: application of Schedule 36 to FA 2008
  200. 204 Appeals against notices
  201. 205 Appeals against penalties
  202. 206 Interpretation
  203. 207 Application of provisions of TMA 1970
  204. 208 Repeals
  205. 209 Declaration in relation to privileged material
  206. 210 Penalties for an incorrect declaration
  207. 211 Penalties: procedure, appeals etc
  208. 212 Publication following an incorrect declaration
  209. 213 Time limits for publication
  210. 214 Amendments to existing legislation: removal of privilege exemption
  211. 215 Commencement
  212. 216 Penalties for non-disclosure of tax avoidance schemes
  213. 217 Removal of time limits on publication by HMRC
  214. 218 Consequential amendments
  215. 219 Commencement
  216. 220 Construction industry scheme: amendments
  217. 221 Construction industry scheme regulations: amendments
  218. 222 Commencement
  219. 223 Prohibition against unregistered tax advisers interacting with HMRC
  220. 224 Meaning of “tax adviser” and “client”
  221. 225 Application for registration
  222. 226 Meaning of “relevant individual” and “officer”
  223. 227 Registration conditions
  224. 228 Registration conditions: interpretation
  225. 229 Registration conditions: offences
  226. 230 Registration of tax advisers etc
  227. 231 Monitoring of registration conditions
  228. 232 Suspension of registration
  229. 233 Compliance notice
  230. 234 Financial penalties for prohibited interaction with HMRC
  231. 235 Financial penalties for prohibited interaction with HMRC: liability of relevant individuals
  232. 236 Tax advisers: ineligibility orders
  233. 237 Relevant individuals: ineligibility orders
  234. 238 Requirement for tax adviser to notify clients of suspension or ineligibility orders
  235. 239 Reasonable excuse
  236. 240 Extension of period for making representations
  237. 241 Assessment of financial penalties
  238. 242 Time limits and treatment of financial penalties
  239. 243 Double jeopardy
  240. 244 Reviews and appeals
  241. 245 Disclosure of information
  242. 246 Power to publish information
  243. 247 Power to amend Schedule 20 (exceptions)
  244. 248 Interpretation of Chapter
  245. 249 Commencement
  246. 250 Conduct of tax advisers
  247. 251 Power to publish information
  248. 252 Power to publish information: change of circumstances
  249. 253 Power to publish information: interpretation and commencement
  250. 254 Fiscal mandate assessments prepared by the Office for Budget Responsibility
  251. 255 Data-gathering
  252. 256 Persons on whom digital reporting requirements may be imposed
  253. 257 Exemptions from digital reporting requirements
  254. 258 Returns to be delivered by electronic communications etc.
  255. 259 Penalties: amendments consequential on section 258 etc
  256. 260 Powers relating to electronic communications: directions
  257. 261 Power to require digital contact details
  258. 262 Penalty points and late submission penalties (power to cancel etc)
  259. 263 Assessments of late payment penalties etc.
  260. 264 Penalties for failure to pay tax due on further appeal
  261. 265 Failure to deliver company tax returns
  262. 266 Clearances
  263. 267 Binding effect
  264. 268 Extension
  265. 269 Modification
  266. 270 Information
  267. 271 Misrepresentation
  268. 272 Commissioners notice
  269. 273 Powers
  270. 274 Interpretation
  271. 275 Cryptoasset reporting: users and controlling persons resident in the UK
  272. 276 International cryptoasset reporting framework: connected matters
  273. 277 Stamp duty: piloting of digital service etc
  274. 278 Oversight of HMRC tax enforcement functions in Northern Ireland
  275. 279 Repeal of obsolete provision in FA 1925 concerning Dominion Governments
  276. 280 Repeal of other obsolete provisions and correction of wrong cross-references
  277. 281 Interpretation
  278. 282 Short title
  279. Schedule 1 Property and savings rates of income tax: consequential amendments
  280. Schedule 2 Scottish and Welsh property income rates
  281. Schedule 3 Non-resident, and previously non-domiciled individuals
  282. Schedule 4 PAYE for treaty non-residents etc
  283. Schedule 5 Unassessed transfer pricing profits
  284. Schedule 6 Transfer pricing
  285. Schedule 7 Permanent establishments
  286. Schedule 8 Pillar Two
  287. Schedule 9 Tainted charity donations
  288. Schedule 10 Winter fuel payment charge
  289. Schedule 11 Tax treatment of carried interest
  290. Schedule 12 Reform of reliefs for business property and agricultural property
  291. Schedule 13 Abolition of bingo duty: consequential and transitional provision
  292. Schedule 14 Aggregates levy: amendments relating to disapplication of levy to Scotland
  293. Schedule 15 Vaping products duty: amendments of other enactments
  294. Schedule 16 CBAM Goods
  295. Schedule 17 Administration of CBAM
  296. Schedule 18 Offences relating to CBAM
  297. Schedule 19 Supplementary amendments relating to CBAM
  298. Schedule 20 Registration of tax advisers: exceptions
  299. Schedule 21 Registration of tax advisers: reviews and appeals
  300. Schedule 22 Conduct of tax advisers
  301. Schedule 23 Data-gathering

Proposed changes to this act

No one has proposed a change to this act yet.

301 provisions

123 United Kingdom representatives

(1) The Commissioners may approve an approved stamp holder to represent a person who does not have a fixed place of business in the United Kingdom. (2) A duty stamp may, at the request of a UK representative, be issued to the UK representative by way of delivery to an overseas person. (3) A UK representative is responsible for a stamp issued as described in subsection (2) from the point at which it is delivered to the overseas person. (4) Section 122(3) (restriction on transfer) does not apply in relation to the transfer of a duty stamp between a UK representative and an overseas person. (5) A UK representative who transfers a duty stamp to an overseas person remains responsible for the stamp after transfer. (6) For the purposes of subsections (3) and (5), a person who is responsible for a stamp is also liable to penalties arising under this Part or regulations made under this Part in respect of it. (7) The Commissioners may by regulations make provision about UK representatives, including provision— (a) about their dealings with an overseas person and what it means to be responsible for duty stamps, and (b) providing for exceptions to this section. (8) In this Part— “overseas person” means, when used in connection with a UK representative, someone in respect of whom the UK representative is approved under subsection (1); “UK representative” means a person approved under subsection (1), and a reference to a stamp being delivered to an approved stamp holder includes, in the case of a UK representative, a reference to a stamp being delivered to an overseas person.

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124 Forfeiture

(1) The following things are liable to forfeiture— (a) an unstamped vaping product; (b) an invalid duty stamp and any product to which an invalid duty stamp is affixed; (c) a duty stamp that, after the end of the period of 12 months beginning with the day on which it was issued, has not been— (i) affixed to, and activated in respect of, a vaping product, or (ii) returned to a stamp issuer. (2) In subsection (1)(b), an “invalid duty stamp” means— (a) a duty stamp which has been altered after it has been issued; (b) a document which purports to be (but is not) a duty stamp; (c) a voided duty stamp. (3) For things that are liable to forfeiture only in particular circumstances, see— (a) section 128 (civil penalties); (b) section 133 (criminal offences).

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125 Dealing in unstamped vaping products

(1) A person who sells, offers for sale or otherwise deals in unstamped vaping products packaged for retail sale is liable to a penalty. (2) The penalty under subsection (1) is the amount indicated in the table, to be determined by cross-referencing— (a) the number of units in respect of which the penalty is imposed, and (b) whether it is the first, second or further time that the person has been liable to a penalty under subsection (1) since the beginning of the relevant period. 1 to 99 units | 100 to 299 units | 300 to 499 units | 500 units or more First time | £2,500 | £5,000 | £7,500 | £10,000 Second time | £5,000 | £7,500 | £10,000 | £10,000 Further time | £7,500 | £10,000 | £10,000 | £10,000 (3) For the purpose of determining a penalty under subsection (2)— “relevant period” means the period of 24 months ending with the day on which the person becomes liable to the penalty being determined; “unit” means an amount of vaping product packaged for individual retail sale.

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126 Loss and misuse of duty stamps

(1) An approved stamp holder to whom a duty stamp is issued and delivered is liable to a penalty if— (a) the stamp is lost, or (b) at the end of the period of 12 months beginning with the day on which the stamp was issued, the stamp has not been— (i) affixed to, and activated in respect of, a vaping product, (ii) returned to a stamp issuer, or (iii) destroyed. (2) Subsection (1) does not apply if the stamp was lost in circumstances where the approved stamp holder— (a) did not cause the loss, and (b) took all reasonable steps to protect against the loss. (3) The penalty under subsection (1) is an amount equal to five times the monetary amount specified in section 115 (excise duty: charge). (4) The following is conduct which attracts a penalty under section 9 of FA 1994— (a) altering a duty stamp after it has been issued; (b) affixing an invalid duty stamp to a vaping product. (5) In this section, an “invalid duty stamp” means— (a) a duty stamp which has been altered after it has been issued; (b) a document which purports to be (but is not) a duty stamp; (c) a voided duty stamp.

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127 Failure to comply with this Part etc

(1) Failure to comply with a provision or requirement specified in subsection (2) is conduct which attracts a penalty under section 9 of FA 1994. (2) The following provisions and requirements are specified for the purpose of subsection (1)— (a) provision contained in this Part or regulations made under this Part; (b) provision contained in regulations made under section 45 of TCTA 2018 insofar as it applies in relation to vaping products duty; (c) any requirements imposed under such provision.

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128 Forfeiture: civil penalties

(1) This section applies (in addition to section 124) where a person is liable to a penalty under section 125 or 127(1). (2) Where a person is liable to a penalty under section 125 (dealing in unstamped vaping products), any stamped vaping product— (a) that is in the person’s possession at the time of the conduct in respect of which the liability arises, and (b) which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person, is liable to forfeiture. (3) Where a person is liable to a penalty for a failure of a kind described in section 127(1) (failure to comply with this Part etc), the following things are liable to forfeiture— (a) any vaping product or duty stamp to which the failure relates, or (b) where the failure relates to premises— (i) any stamped vaping product found on the premises which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person, and (ii) any duty stamp found on the premises.

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129 Dealing in duty stamps

(1) It is an offence for a person who is not an approved stamp holder to possess a duty stamp that has not been affixed to a vaping product. (2) It is an offence for a person to transfer a duty stamp that has not been affixed to a vaping product to another person. (3) It is a defence for a person charged with an offence under this section to prove that they did not know, suspect or have reason to suspect that they were possessing or transferring a duty stamp that had not been affixed to a vaping product. (4) Subsection (1) and (2) do not apply in relation to— (a) a transfer between a UK representative and an overseas person, (b) possession by the overseas person, or (c) a person providing a delivery service on a commercial basis. (5) Subsection (2) does not apply in relation to a transfer to a stamp issuer.

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132 Offences: penalties

(1) A person who commits an offence under sections 129 to 131 is liable on summary conviction— (a) in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court, or a fine, or both; (b) in Scotland, to imprisonment for a term not exceeding 12 months, or a fine not exceeding the statutory maximum, or both; (c) in Northern Ireland, to imprisonment for a term not exceeding six months, or a fine not exceeding the statutory maximum, or both. (2) A person who commits an offence under sections 129 to 131 is liable, on conviction on indictment, to imprisonment for a term not exceeding 2 years, or a fine, or both.

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133 Forfeiture: offences

(1) This section applies (in addition to section 124) where a person has committed an offence under sections 129 to 131. (2) In the case of an offence under section 129 (dealing in duty stamps), the following things are liable to forfeiture— (a) any duty stamp in relation to which the offence is committed, and (b) any duty stamp that is not affixed to a vaping product and that is in the person’s possession at the time the offence is committed. (3) In the case of an offence under section 130(1) (dealing in unstamped vaping products), any stamped vaping product— (a) that is in the person’s possession at the time the offence is committed, and (b) which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person, is liable to forfeiture. (4) In the case of an offence under section 130(2) or 131 (unlawful use of premises), any stamped vaping product— (a) that is on the premises at the time the offence is committed, and (b) which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person, is liable to forfeiture.

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134 Publication of information

The Commissioners may publish information provided to HMRC under section 120(3)(b) (stamping of vaping products) for the purpose of enabling retailers, consumers and other persons to assess whether a duty stamp has been activated in respect of a vaping product.

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135 Information sharing

(1) The Commissioners may disclose such information as the Commissioners consider appropriate in connection with— (a) the Commissioners’ functions relating to vaping products duty, or (b) the recipient’s functions relating to vaping products duty. (2) Any person with functions relating to vaping products duty may disclose to HMRC such information as the person considers appropriate in connection with— (a) the Commissioners’ functions relating to vaping products duty, or (b) the person’s functions relating to vaping products duty. (3) A person who receives information from the Commissioners as a result of this section may not— (a) use the information for a purpose other than the purpose for which it was disclosed, or (b) further disclose the information, except with the consent of the Commissioners (which may be general or specific). (4) If— (a) a person discloses information in contravention of subsection (3)(b), and (b) the information relates to a person whose identity is specified in, or can be deduced from, the disclosure, section 19 of CRCA 2005 (offence of wrongful disclosure) applies in relation to that disclosure as it applies in relation to a disclosure of information in contravention of section 20(9) of that Act. (5) Nothing in this section limits the circumstances in which information may be disclosed under section 18(2) of CRCA 2005 or under any other enactment or rule of law. (6) In this section, a reference to the Commissioners or HMRC include a reference to anyone acting on their behalf.

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136 Investigation and enforcement

(1) A local enforcement authority may investigate compliance with this Part, regulations made under this Part and regulations made under section 45 of TCTA 2018 in relation to vaping products duty, and may carry out inspections of vaping products for that purpose. (2) In this section, “local enforcement authority” means— (a) in Great Britain, a local weights and measures authority within the meaning of section 69 of the Weights and Measures Act 1985; (b) in Northern Ireland, a district council.

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137 Regulations: further provision

(1) Regulations under this Part may— (a) confer a discretion on any specified person to do anything under, or for the purposes of, the regulations; (b) make provision by reference to things specified in a notice published in accordance with the regulations; (c) make supplementary, incidental and consequential provision; (d) make transitional or transitory provision and savings. (2) A power to make regulations under this Part, or a power to exercise a discretion or publish a notice under regulations made under this Part, may be exercised— (a) in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified case or description of case; (b) so as to make different provision for different purposes or areas. (3) A notice published under this Part may be withdrawn or revised by further published notice. (4) A power to make regulations under this Part does not restrict any power to make legislation under any other enactment relating to excise duty.

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138 Regulations: procedure

(1) Regulations under this Part must be made by statutory instrument. (2) A statutory instrument containing regulations under this Part is subject to made affirmative procedure if it contains (whether alone or with other provision) provision that— (a) amends an Act of Parliament, (b) restricts any rebate of or relief from vaping products duty, or (c) extends the cases in which vaping products are required to be stamped. (3) Where a statutory instrument is subject to made affirmative procedure— (a) it must be laid before the House of Commons after being made, and (b) it ceases to have effect at the end of the period of 28 days beginning with the day on which the instrument is made, unless within that period the instrument is approved by a resolution of the House of Commons. (4) Where a statutory instrument ceases to have effect as a result of subsection (3), that does not— (a) affect the validity of anything previously done under the instrument, or (b) prevent the making of a new statutory instrument. (5) In calculating the period of 28 days for the purposes of subsection (3), no account is to be taken of any whole days that fall within a period during which— (a) Parliament is dissolved or prorogued, or (b) the House of Commons is adjourned for more than 4 days. (6) A statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of the House of Commons if it does not contain provision of a kind described in subsection (2). (7) Subsections (2) to (6) do not apply to regulations made under section 141 (commencement and transitional provision).

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139 Amendments of other enactments

Schedule 15 contains amendments of other enactments.

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140 Interpretation

In this Part— “activated”, in relation to a duty stamp, means linked to a particular vaping product in accordance with regulations made under section 120 and section 45 of TCTA 2018; “approved stamp holder” means a person approved under section 122 (approved stamp holders); “Commissioners” means the Commissioners for His Majesty’s Revenue and Customs; “duty deferment arrangement” means provision made by or under the customs and excise Acts that permits the payment of excise duty to be deferred; “duty stamp” has the meaning given in section 120(4); “HMRC” means His Majesty’s Revenue and Customs; “medicinal product” has the meaning given in the Human Medicines Regulations 2012 (S.I. 2012/1916); “overseas person” has the meaning given in section 123(8) (United Kingdom representatives); “retail packaging”, in relation to a product, means the packaging in which it is, or is intended to be, presented for sale by retail; “stamp issuer” has the meaning given in section 121(4); “stamped vaping product” means a vaping product which is stamped in accordance with this Part and regulations made under section 45 of TCTA 2018; “tobacco product” has the meaning given in section 1 of TPDA 1979; “UK representative” has the meaning given in section 123(8); “unstamped vaping product” means a vaping product which is required to be stamped in accordance with this Part and regulations made under section 45 of TCTA 2018, but is not so stamped; “vape” means a device that vaporises substances for the purpose of inhalation through a mouthpiece; “vaping product” has the meaning given in section 116(1) (but see subsection (2)); “vaping products duty” has the meaning given in section 115(3).

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141 Commencement and transitional provision

(1) Section 115 comes into force on 1 October 2026. (2) Section 115 has effect in relation to vaping products that— (a) were produced in, or imported into, the United Kingdom before 1 October 2026, and (b) are stamped (see section 120(2)), as though they were produced in, or imported into, the United Kingdom on 1 October 2026. (3) Sections 117(4) (production only in accordance with regulations) and 120(1) (duty to stamp in accordance with regulations) come into force on such day as the Treasury may by regulations appoint. (4) Section 129 comes into force two months after this Act is passed. (5) Sections 130 and 131 (dealing in unstamped vaping products and sales ban) come into force on 1 April 2027, and have effect in relation to vaping products irrespective of when they were produced or imported. (6) The Treasury may by regulations provide that, for a specified period, this Part has effect as though— (a) a reference to a duty stamp includes a reference to a transitional duty stamp; (b) in section 122(3) the words “and activated in respect of” were omitted; (c) sections 124(1)(c) and 126(1)(b) were omitted. (7) Regulations under subsection (6) may— (a) define “transitional duty stamp”; (b) make further provision about the specified period and transitional duty stamps. (8) The Treasury may by regulations provide that, for a specified period, this Part has effect as though a reference to an approved stamp holder or UK representative is a reference to a person being approved or treated as an approved stamp holder or UK representative. (9) Regulations under subsection (8) may make provision about when a person is to be treated as an approved stamp holder or UK representative. (10) The Treasury may by regulations extend a period specified in regulations under this section. (11) Regulations under subsection (7)(b) may include provision imposing penalties and for forfeiture. (12) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

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142 Introduction to CBAM

(1) A tax called the carbon border adjustment mechanism (“CBAM”) is to be charged in accordance with this Part. (2) In this Part— (a) sections 143 to 150 and Schedule 16 set out the charge to CBAM (and include exemptions and relief); (b) section 151 and Schedule 17 provide for the administration and enforcement of CBAM; (c) section 152 and Schedule 18 provide for criminal offences relating to CBAM; (d) sections 153 to 158 and Schedule 19 make general provision.

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143 Charge to CBAM

(1) CBAM is charged on the emissions embodied in a CBAM good when the good is imported into the United Kingdom. (2) In this Part, “CBAM good” means a good specified by Schedule 16 (but see section 145(3)). (3) Schedule 16 specifies the following kinds of goods— (a) aluminium goods; (b) cement; (c) fertilisers; (d) hydrogen; (e) iron and steel goods.

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144 Importation

(1) For the purposes of this Part, a reference to a good being imported into the United Kingdom is a reference to— (a) the first time a good is imported as described in this section, and (b) if a good is imported as described in this section and subsequently exported from the United Kingdom, the next time the good is imported as described in this section. (2) If a CBAM good is chargeable to import duty under section 1 of TCTA 2018, it is imported when liability to import duty is incurred in respect of the good. (3) If a CBAM good is chargeable to duty under section 30C of TCTA 2018, it is imported when liability to that duty is incurred in respect of the good. (4) If a CBAM good is chargeable to duty under section 30A(3) or 40A(1)(a) of TCTA 2018 (or would be so chargeable but for regulations within section 30B(1)(a) or 40B(1)(a) of that Act), it is imported when liability to that duty is incurred in respect of the good (or would be incurred but for the regulations). (5) If a CBAM good is— (a) a Union good that is imported into the United Kingdom as a result of its entry into Northern Ireland and not excluded by regulations made by the Treasury, (b) a good that is imported into the United Kingdom from the Isle of Man and not excluded by regulations made by the Treasury, (c) a domestic good by virtue of regulations made under section 33(8) of TCTA 2018 relating to goods declared for an outward processing procedure, or (d) a domestic good by virtue of subsection (6) of section 36 of TCTA 2018 or regulations made under that section, it is imported at the time of importation for the purposes of the customs and excise Acts. (6) If a CBAM good would be chargeable to duty under section 30C of TCTA 2018 but for regulations within subsection (6)(a) of that section, it is imported at the time of entry of the good in Great Britain in the course of the removal of the good to Great Britain from Northern Ireland. (7) The reference in subsection (4) to when liability to duty under section 30A(3) or 40A(1)(a) of TCTA 2018 is incurred in respect of a good is to when, for the purpose of the duty, a customs debt on import is incurred under UCC 2013. (8) For the purposes of determining, in accordance with subsection (5), when a CBAM good is imported into the United Kingdom from the Isle of Man, section 8 of the Isle of Man Act 1979 (removal of goods from the Isle of Man) has effect as if, in subsection (2) of that Act, at the end of paragraph (c), there were inserted ; or (d) goods which are CBAM goods. (9) Section 5 of CEMA 1979 applies for the purpose of subsection (6) to determine the time of entry of a CBAM good in Great Britain in the course of the removal of the good to Great Britain from Northern Ireland as it applies for the purpose of the customs and excise Acts to determine the time of importation of goods— (a) reading references in that section to the time of importation of goods as the time of entry of the CBAM good in Great Britain, and (b) reading references in subsections (2) and (6) of that section to the United Kingdom as Great Britain. (10) Regulations made by the Treasury may exclude from subsection (4) or (6) (as the case may be) goods that would be chargeable to duty under section 30A(3), 30C or 40A(1)(a) of TCTA 2018 but for regulations within section 30B(1)(a), 30C(6)(a) or 40B(1)(a) of that Act.

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145 Goods processed under a special customs procedure

(1) Subsection (2) applies where— (a) a CBAM good has been declared for a special customs procedure, (b) the CBAM good is processed under the procedure, (c) the processing produces a good that is not a CBAM good, and (d) that good is imported into the United Kingdom. (2) When the good that is not a CBAM good is first imported as described in section 144, CBAM is charged on so much of the emissions embodied in that good as were embodied in the CBAM good when it was declared for the special customs procedure. (3) References in this Part to a CBAM good include a reference to a good imported in the circumstances described in subsection (1). (4) In this section, “special customs procedure” means— (a) a special Customs procedure (within the meaning of section 3(4) of TCTA 2018); (b) a special procedure provided for by Title 7 of UCC 2013, other than the outward processing procedure.

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146 Person liable: the importer

(1) The person liable to CBAM on the emissions embodied in a CBAM good is the importer. (2) If a CBAM good is imported as described in section 144(2), (3) or (6), the importer is— (a) if liability to import duty, or duty under section 30C of TCTA 2018, is incurred when a declaration for a Customs procedure is accepted, or when there is a breach of a requirement relating to the procedure— (i) the person in whose name the declaration for the procedure was made, or (ii) if the declaration was made on behalf of another person, the person on whose behalf the declaration was made, or (b) if paragraph (a) does not apply, the person on whose behalf the good is imported. (3) If a CBAM good is imported as described in section 144(4), the importer is— (a) if liability to duty under section 30A(3) or 40A(1)(a) of TCTA 2018 is incurred when a Union customs declaration in respect of the good is accepted, or when there is a breach of a requirement relating to the procedure for which it is accepted— (i) the declarant, or (ii) if the declaration was made on behalf of another person, the person on whose behalf the declaration was made, or (b) if paragraph (a) does not apply, the person on whose behalf the good is imported. (4) If a CBAM good is imported as described in section 144(5), the importer is the person on whose behalf the good is imported. (5) In this section— “Customs procedure” means a procedure set out in section 3(3) of TCTA 2018; “declarant”, in relation to a Union customs declaration, has the meaning given by Article 5(15) of UCC 2013; “Union customs declaration” means a customs declaration for the purposes of UCC 2013.

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147 Exemptions

(1) CBAM is not charged on the emissions embodied in a CBAM good if the importer— (a) is, at the time the good is imported, neither registrable nor registered (see Part 2 of Schedule 17), or (b) is importing the good otherwise than in the course of a business. (2) CBAM is not charged on the emissions embodied in a CBAM good if— (a) the place of origin of the good is the United Kingdom, determined in accordance with provision applicable in relation to the customs tariff in its standard form (see section 17(1) to (6) of TCTA 2018); (b) the good is imported as described in section 144(2) or (3) and returned goods relief is available in respect of the good; (c) the good is imported as described in section 144(4) and relief under Article 203 of UCC 2013 (returned goods) is available in respect of the good; (d) the good is within section 144(5)(a) and was— (i) exported from the United Kingdom as a Union good as a result of its removal from Northern Ireland, and (ii) imported into the United Kingdom as described in section 144(5)(a) not more than 3 years later, in the state in which it was exported (see Article 203(5) of UCC 2013); (e) the good is imported as described in section 144(5)(b) and returned goods relief would be available in respect of it if liability to import duty were incurred by reference to its importation into the United Kingdom. (3) CBAM is not charged on so much of the emissions embodied in a CBAM good (“the chargeable good”) as are attributable to the production of another CBAM good which— (a) originated from the United Kingdom, determined in accordance with provision applicable in relation to the customs tariff in its standard form (see section 17(1) to (6) of TCTA 2018), and (b) was processed to produce the chargeable good. (4) If, but for this subsection, a liability to duty would have been incurred for the purposes of section 144(2) or (3) in circumstances where— (a) liability to duty was incurred in accordance with section 4(4)(a) of TCTA 2018, (b) liability to duty was incurred by virtue of HMRC accepting a declaration of the good for a temporary admission procedure, and (c) full relief was given from the liability to duty incurred, the liability to duty is treated as not having been incurred on that occasion for the purposes of section 144(2) or (3) (and, accordingly, the good is treated as not having been imported as described in section 144(2) or (3) on that occasion). (5) But subsection (4) does not apply if— (a) there was no entitlement to make the declaration mentioned in subsection (4)(b), or (b) the full relief given, mentioned in subsection (4)(c), was not available. (6) The Treasury may by regulations specify other circumstances in which CBAM is not charged on emissions, or certain emissions, embodied in a CBAM good. (7) Regulations under subsection (6) may also treat an importation into the United Kingdom, for any purpose of this Part, of a CBAM good in respect of which the regulations apply as not having occurred (including by virtue of provision similar to subsection (4)). (8) In this section— “customs tariff in its standard form” means the customs tariff, as defined in section 8 of TCTA 2018, as it has effect without regard to any provision made under sections 9 to 15 or section 19(4) of that Act; “returned goods relief” means relief for import duty available— by virtue of the UK Reliefs document, and by reference to the fact the good is being returned to the United Kingdom, or Great Britain, having previously been exported; “temporary admission procedure” has the meaning given by paragraph 15 of Schedule 2 to TCTA 2018; “UK Reliefs document” has the meaning given by regulations under section 19 of TCTA 2018.

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148 Embodied emissions

(1) In this Part, “emissions embodied in a CBAM good” means emissions that are attributable to the production of a CBAM good. (2) The Treasury may by regulations make provision about what it means for emissions to be attributable to the production of a CBAM good. (3) Regulations under subsection (2) may (among other things) make provision about emissions that are emitted in the course of an activity carried out in connection with the production of— (a) a CBAM good, or (b) materials used (including goods processed) to produce a CBAM good. (4) See paragraphs 10 and 11 of Schedule 17 for provision about how to determine and evidence emissions embodied in a CBAM good.

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149 Rate

(1) CBAM is charged at an amount equal to the sectoral domestic price applicable in respect of the CBAM good multiplied by the number of tonnes of carbon dioxide equivalent emissions embodied in the CBAM good. (2) The “sectoral domestic price” applicable in respect of a CBAM good is the price calculated and published by the Treasury for— (a) the CBAM sector in which the good falls, and (b) the quarter in which the liability to CBAM is incurred in respect of the good. (3) The Treasury must calculate and publish the sectoral domestic price for each CBAM sector for each quarter (“quarter Q”) as follows— Step 1 Calculate the average price per tonne of specified emissions under the UK Emissions Trading Scheme in the quarter preceding quarter Q— by reference to auction clearing prices for UK ETS allowances at auctions during the quarter preceding quarter Q, or if no allowances were sold at auction during that quarter, as provided in regulations under subsection (6). Step 2 Reduce that price by a percentage equal to the baseline free allocation percentage for the CBAM sector, as adjusted by a factor specified by regulations under subsection (6)— for the CBAM sector for the year in which quarter Q falls, and in light of reduction factors applicable in determining, under the UK Emissions Trading Scheme, the allocation in that year of free UK ETS allowances in respect of sub-installations that have a process that serves production of goods falling within the CBAM sector. (4) In this section— “auction” means an auction under the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (S.I. 2021/484); “auction clearing price”, in relation to a UK ETS allowance, has the same meaning as in those Regulations (see regulation 7); “baseline free allocation percentage” means, in relation to a CBAM sector, the average percentage of sectoral emissions that were covered— in the 2019 scheme year, by free EU ETS allowances, and in the 2022 and 2023 scheme years, by free UK ETS allowances, allocated in the scheme years mentioned here in respect of sub-installations that have a process that serves the production of goods falling within the CBAM sector; “CBAM sector” means the commodity codes set out under a single heading in the Table in Schedule 16 other than the commodity codes that the Table indicates are excepted; “the ETS Regulations” means the Greenhouse Gas Emissions Trading Scheme Regulations 2012 (S.I. 2012/3038); “free EU ETS allowance” means an allowance allocated free of charge in accordance with Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emissions allowance trading within the Community and amending Council Directive 96/61/EC; “free UK ETS allowance” means an allowance allocated free of charge under Part 4A of the UK ETS Order; “quarter” means a period of 3 months ending at the end of March, June, September or December; “regulated activity” and “specified emissions” have the meaning given by paragraph 3 of Schedule 2 to the UK ETS Order (or, in relation the 2019 scheme year, given by regulation 3 of the ETS Regulations as it had effect during that year); “scheme year” has the meaning— in relation to the 2019 scheme year, given by regulation 3 of the ETS Regulations; in relation to the 2022 and 2023 scheme years, given by article 4 of the UK ETS order; “sectoral emissions” means, in relation to a CBAM sector, the specified emissions that were emitted in the course of regulated activities carried out at sub-installations in the United Kingdom that have a process that serves the production of goods falling within the CBAM sector; “sub-installation” means each kind of sub-installation defined by Article 2 of Commission Delegated Regulation (EU) 2019/331 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (or, in relation to the 2019 scheme year, has the meaning given by regulation 3 of the ETS Regulations as it had effect during that year); “UK ETS allowance” means an allowance created under the UK ETS Order (see article 18); “UK ETS Order” means the Greenhouse Gas Emissions Trading Scheme Order 2020 (S.I. 2020/1265). (5) In determining the “baseline free allocation percentage” in relation to a CBAM sector, ignore any scheme year in which there were no sectoral emissions. (6) The Treasury may by regulations make further provision about the calculation of the sectoral domestic price. (7) In this section— (a) references to a good falling within a CBAM sector are references to the good falling within one of the commodity codes comprising the sector; (b) references to emissions are references to tonnes of carbon dioxide equivalent emissions; (c) references to regulated activities carried out to produce goods include regulated activities consisting in the production of heating and cooling consumed during the regulated activities.

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150 Carbon price relief

(1) The amount of CBAM charged on emissions may be reduced under this section if another monetary amount is payable in relation to the emissions, whether the amount is— (a) in the form of taxation, (b) in exchange for allowances (however expressed) under an emissions trading scheme, or (c) required to be paid under the law of a country or territory in connection with the importation of goods into the country or territory. (2) The Treasury may by regulations make provision about relief under this section, including provision— (a) describing which monetary amounts may generate relief, (b) about when a monetary amount is to be treated as being payable in relation to emissions, and how the emissions are to be identified, and (c) about determining the amount of relief. (3) In this Part, “carbon price” means a monetary amount of a kind described in regulations under subsection (2)(a). (4) Regulations under subsection (2) may (among other things) make provision— (a) for the amount of relief to be determined by reference to averages, estimates, assumptions or by reference to information provided by a third party; (b) to take account of other reliefs, allowances, offsets or similar relating to a carbon price; (c) about cases where two or more carbon prices are payable in relation to the same emissions; (d) for the amount of relief to differ depending on where the carbon price is payable; (e) specifying periods by reference to which calculations or measurements are to be made. (5) In this section, references to an amount being payable in relation to emissions includes a reference to— (a) an amount that indirectly relates to emissions, and (b) an amount having been payable, or that is going to become payable, in relation to emissions.

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151 Administration and enforcement

Schedule 17 makes provision for the administration and enforcement of CBAM.

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152 Criminal offences

Schedule 18 makes provision for criminal offences relating to CBAM and about proceedings for those offences.

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153 Supplementary amendments

Schedule 19 contains supplementary amendments of other legislation.

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154 Emissions: meaning etc

(1) In this Part, “emissions” means emissions of greenhouse gases (within the meaning of section 92 of the Climate Change Act 2008) into the atmosphere that are attributable to human activity. (2) For the purposes of this Part, “emissions” are determined or expressed in tonnes of carbon dioxide equivalent. (3) In this Part, a “tonne of carbon dioxide equivalent” means one metric tonne of carbon dioxide or an amount of any other greenhouse gas with an equivalent global warming potential. (4) The Commissioners may by regulations make provision setting, or about the determination of, such amounts.

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155 Interpretation

(1) In this Part— “business” includes any activity of a government department or other public authority, or of a charity, that is carried out for commercial purposes; “CBAM good”: see section 143; “the Commissioners” means the Commissioners for His Majesty’s Revenue and Customs; “the customs and excise Acts” has the meaning given by section 1 of CEMA 1979; “emissions”: see section 154; “HMRC” means His Majesty’s Revenue and Customs; “import”: see section 144; “import duty” has the meaning given by section 1 of TCTA 2018; “importer”: see section 146; “registered person” and “registrable person”: see paragraph 2(10) of Schedule 17; “tonne of carbon dioxide equivalent” see section 154; “UCC 2013” means Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code, as it has effect by virtue of section 7A of the European Union (Withdrawal) Act 2018; “UK Emissions Trading Scheme” has the meaning given in Article 16 of the Greenhouse Gas Emissions Trading Order 2020 (S.I. 2020/1265); “Union good” has the meaning given by Article 5(23) of UCC 2013; “working day” means any day other than— a Saturday or Sunday, or a day that is a bank holiday in any part of the United Kingdom under the Banking and Financial Dealings Act 1971. (2) In this Part— (a) a person imports a CBAM good only if the person is “the importer” of the good (within the meaning of section 146); (b) references to the production of goods include the manufacture of goods; (c) references to the processing of goods have the same meaning as in TCTA 2018 (see section 37(4) of that Act). (3) The Treasury may by regulations make such amendments to this Part as they consider appropriate in consequence of UCC 2013, or any legislation replacing it, being amended or replaced.

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156 Power to make provision for linked emissions trading schemes

(1) The Treasury may by regulations amend this Part for the purpose of— (a) excluding emissions embodied in goods that originate from a country or territory with a linked emissions trading scheme from the charge to CBAM; (b) providing that such goods are to be disregarded when calculating the aggregate value of imports for the purposes of Part 2 of Schedule 2 (registration). (2) In this section, “a country or territory with a linked emissions trading scheme” means— (a) a country or territory that has entered into arrangements with the United Kingdom for the purpose of linking its emissions trading scheme with the UK Emissions Trading Scheme, or (b) a country or territory that has entered into arrangements with a country or territory of a kind referred to in paragraph (a) for the purpose of linking its emissions trading scheme with that country or territory’s emissions trading scheme.

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157 Regulations and notices

(1) Regulations under this Part— (a) may make different provision for different purposes; (b) may include incidental, consequential, supplementary or transitional provision. (2) Regulations under this Part may make provision by reference to things specified in a notice that is— (a) published by the Treasury or the Commissioners in accordance with the regulations, and (b) not withdrawn by a further notice. (3) Regulations under this Part are to be made by statutory instrument. (4) A statutory instrument containing regulations under section 156(1) (linked emission trading schemes) is subject to the affirmative procedure. (5) A statutory instrument containing regulations under any of the following provisions is subject to the made affirmative procedure— (a) section 149(6) (rate of CBAM); (b) section 150(2) (carbon price relief); (c) paragraph 47 of Schedule 17 (amount of penalties). (6) A statutory instrument containing regulations under paragraph 2(3) of Schedule 16 and under section 8 of TCTA 2018 is subject to the procedure under section 32 of TCTA 2018 that applies by virtue of the instrument containing regulations section 8 of TCTA 2018. (7) A statutory instrument containing regulations under this Part, other than regulations in respect of which subsection (4), (5) or (6) applies, is subject to the negative procedure. (8) Subsection (7) does not apply to a statutory instrument containing only regulations under section 158 (transitory provision). (9) Where a statutory instrument is subject to the affirmative procedure, it may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons. (10) Where a statutory instrument is subject to the made affirmative procedure— (a) it must be laid before the House of Commons after being made, and (b) it ceases to have effect at the end of the period of 28 days beginning with the day on which the instrument is made, unless within that period the instrument is approved by a resolution of the House of Commons. (11) Where a statutory instrument is subject to the negative procedure, it is subject to annulment in pursuance of a resolution of the House of Commons. (12) Where a statutory instrument ceases to have effect as a result of subsection (10), that does not— (a) affect the validity of anything previously done under the instrument, or (b) prevent the making of a new statutory instrument. (13) In calculating the period of 28 days for the purposes of subsection (10), no account is to be taken of any whole days that fall within a period during which— (a) Parliament is dissolved or prorogued, or (b) the House of Commons is adjourned for more than 4 days. (14) Any provision that may be included in regulations in a statutory instrument under this Part subject to the negative procedure may be included in regulations in a statutory instrument subject to the affirmative procedure or the made affirmative procedure. (15) Any provision that may be included in regulations in a statutory instrument under this Part subject to the made affirmative procedure may be included in regulations in a statutory instrument subject to the affirmative procedure. (16) A notice published by the Treasury or the Commissioners under this Part— (a) may be amended or withdrawn by a further notice; (b) may include provision mentioned in subsection (1)(a) and (b).

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158 Commencement and transitory provision

(1) This Part has effect in relation to goods imported into the United Kingdom on or after 1 January 2027. (2) The Treasury may by regulations modify the effect of— (a) paragraph 2(4) of Schedule 17 as regards any person who triggers registration in 2027 or 2028; (b) paragraph 6(2) or (3) or 7(2) for the purposes of any accounting period in respect of CBAM falling in 2027 or 2028. (3) Provision included in regulations under this section by virtue of section 157(1)(b) may modify the effect of any enactment.

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159 Prohibition of promotion of certain tax avoidance arrangements

(1) A person must not promote arrangements that— (a) have been, or are likely to be, marketed as a means by which a person may seek a particular tax advantage if there is no realistic prospect that the arrangements will result in the tax advantage, or (b) are of a kind specified in regulations under subsection (2). (2) The Commissioners may by regulations specify arrangements that in the reasonable opinion of the Commissioners— (a) have been, or are likely to be, marketed as a means by which a person may seek a particular tax advantage, (b) are unlikely to result in the tax advantage, and (c) are likely to cause harm to participants. (3) The following factors would, for example, indicate that arrangements are likely to cause harm to participants— (a) a large number of participants; (b) participants that are not independently advised; (c) participants with otherwise straightforward tax affairs; (d) mass-marketing; (e) standardised implementation documents; (f) promoters that are unknown to, or not able to be contacted by, participants. (4) Regulations under subsection (2) may specify arrangements by— (a) describing— (i) some or all of the steps to be taken by participants or other persons; (ii) the tax advantage sought; (iii) the marketing; (iv) characteristics of participants; (b) providing examples or illustrations; (c) such other means as the Commissioners consider appropriate. (5) It does not matter for the purposes of this section whether a person knows, or has reason to believe, that the arrangements fall within subsection (1).

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160 Meaning of promotion

(1) For the purposes of section 159, a person promotes arrangements if, in the course of a business or with a view to monetary gain, the person— (a) communicates information with a view to encouraging another person to implement the arrangements or part of the arrangements, (b) makes the arrangements available for implementation by another person, (c) in circumstances where the arrangements have been implemented by another person, organises or manages any aspect of the arrangements, or (d) arranges (whether directly or indirectly) for another person or persons to take the steps above. (2) A person does not promote arrangements merely by— (a) providing goods or services on commercial terms in circumstances where the person does not know, and could not reasonably be expected to know, that the goods or services are being procured or used for the purposes of arrangements falling within section 159(1) (prohibition of promotion), or (b) providing legally privileged advice or legally privileged information. (3) For the purposes of subsection (2)(b), advice or information is legally privileged if a claim to legal professional privilege, or (in Scotland) to confidentiality of communications as between client and professional legal adviser, could be maintained in respect of it in legal proceedings.

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161 Procedure

(1) Regulations under section 159(2) are to be made by statutory instrument. (2) A statutory instrument containing regulations under section 159(2) must be laid before the House of Commons after being made. (3) Regulations contained in a statutory instrument laid before the House of Commons under subsection (2) cease to have effect at the end of the period of 28 days beginning on the day on which the instrument is made unless, during that period, the instrument is approved by a resolution of the House of Commons. (4) In calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which— (a) Parliament is dissolved or prorogued, or (b) the House of Commons is adjourned for more than four days. (5) If the regulations cease to have effect as a result of subsection (3), that does not— (a) affect the validity of anything previously done under the regulations, or (b) prevent the making of new regulations.

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162 Civil penalties

(1) A person who promotes arrangements in breach of section 159(1) is liable to a penalty. (2) The maximum penalty under this section is the sum of— (a) £1,000,000, and (b) £5,000 for each person who participated in the arrangements. (3) Before imposing a penalty under this section, an authorised officer of Revenue and Customs must— (a) notify the person of the fact that the authorised officer considers subsection (1) to apply, and (b) allow the person 30 days from the date of notification to make representations to HMRC. (4) In imposing a penalty under this section, an authorised officer of Revenue and Customs must have regard to— (a) the number of persons participating, or targeted to participate, in the arrangements, (b) the amount of tax that was likely at risk in connection with the arrangements, (c) whether and to what extent the person cooperated with HMRC, and (d) whether the wrongdoing was repeated, or continued over an extended period. (5) A penalty imposed under this section is to be treated as a penalty determined under section 100(1) of TMA 1970. (6) A penalty imposed under this section is to carry interest in accordance with section 101 of FA 2009. (7) A person is not liable to a penalty under this section in respect of anything for which the person has been convicted of an offence. (8) In paragraph 5(6) of Schedule 13 to FA 2020 (joint and several liability of company directors etc) after paragraph (f) insert— (g) section 162 of FA 2026 (prohibition of promotion of certain tax avoidance arrangements: penalties).

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163 Criminal offence

(1) A person who promotes arrangements in breach of section 159(1) commits an offence. (2) A person who commits an offence under this section is liable— (a) on summary conviction, to— (i) in England and Wales, a fine, or (ii) in Scotland or Northern Ireland, a fine not exceeding the statutory maximum, or (b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both.

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164 Criminal liability of responsible persons

(1) If an offence under section 163 is committed by a body corporate or a partnership and— (a) is committed with the consent or connivance of a responsible person, or (b) is attributable to the neglect of a responsible person, the responsible person commits the offence (as well as the body or partnership). (2) A “responsible person” means— (a) in relation to a body corporate other than one whose affairs are managed by its members— (i) a director, manager, secretary or other similar officer of the body, or a person purporting to act in such a capacity, or (ii) a shadow director within the meaning given in section 251 of the Companies Act 2006; (b) in relation to a limited liability partnership or other body corporate whose affairs are managed by its members— (i) a member exercising management functions, or purporting to do so, or (ii) in the case of a limited liability partnership, a shadow member; (c) in relation to a partnership, a partner or a person purporting to act in that capacity. (3) In this section, a “shadow member” means a person in accordance with whose directions or instructions the members of the limited liability partnership are accustomed to act, save that a person is not a shadow member by reason only of the fact that the members act on advice given by that person in a professional capacity.

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