Finance Act 1997
1997 c. 16
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.
[19th March 1997]
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 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 Rates of duty on spirits and wines of equivalent strength.
(1) In section 5 of the Alcoholic Liquor Duties Act 1979 (spirits), for “£19.78” there shall be substituted “ £18.99 ”.
(2) In Part II of the Table of rates of duty in Schedule 1 to that Act (wine or made-wine of a strength exceeding 22 per cent.), for “19.78” there shall be substituted “ 18.99 ”.
(3) This section shall be deemed to have come into force at 6 o’clock in the evening of 26th November 1996.
2 Rates of duty on lower strengths of wine and made-wine.
(1) For Part I of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 (wine and made-wine of a strength not exceeding 22 per cent.) there shall be substituted—
Part I Wine or 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. | 43.28
Wine or made-wine of a strength exceeding 4 per cent. but not exceeding 5.5 per cent. | 59.51
Wine or made-wine of a strength exceeding 5.5 per cent. but not exceeding 15 per cent. and not being sparkling | 140.44
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent. but less than 5 per cent. | 195.63
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. | 200.64
Wine or made-wine of a strength exceeding 15 per cent. but not exceeding 22 per cent. | 187.24
(2) This section shall be deemed to have come into force on 1st January 1997.
(1) In subsection (1A) of section 62 of the Alcoholic Liquor Duties Act 1979 (rates of excise duty on cider)—
(a) in paragraph (a), after “exceeding 7.5 per cent.” there shall be inserted “ which is not sparkling cider ”; and
(b) immediately before the word “and” at the end of that paragraph there shall be inserted the following paragraph—
(aa) £36.45 per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent.;
.
(2) After subsection (6) of that section there shall be inserted the following subsection—
(7) References in this section to making cider shall be construed as including references to producing sparkling cider by rendering cider sparkling; and references in this section to cider made in the United Kingdom, to makers of cider and to making cider for sale shall be construed accordingly.
(3) After that section there shall be inserted the following section—
Meaning of “sparkling” etc. in section 62.
62A (1) This section applies for the purposes of section 62 above.
(2) Cider which is for the time being in a closed bottle is sparkling if, due to the presence of carbon dioxide, the pressure in the bottle, measured at a temperature of 20 degrees C, is not less than 3 bars in excess of atmospheric pressure.
(3) Cider which is for the time being in a closed bottle is sparkling regardless of the pressure in the bottle if the bottle has a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening.
(4) Cider which is not for the time being in a closed container is sparkling if it has characteristics similar to those of cider which has been removed from a closed bottle and which, before removal, fell within subsection (2) above.
(5) Cider shall be regarded as having been rendered sparkling if, as a result of aeration, fermentation or any other process, it either—
(a) falls within subsection (2) above; or
(b) takes on characteristics similar to those of cider which has been removed from a closed bottle and which, before removal, fell within subsection (2) above.
(6) Cider which has not previously been rendered sparkling by virtue of subsection (5) above shall be regarded as having been rendered sparkling if it is transferred into a closed bottle which has a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening.
(7) Cider which is in a closed bottle and has not previously been rendered sparkling by virtue of subsection (5) or (6) above shall be regarded as having been rendered sparkling if the stopper of its bottle is exchanged for a stopper of a kind mentioned in subsection (6) above.
(4) In section 64 of that Act (remission or repayment of duty on spoilt cider), after subsection (1) there shall be inserted the following subsection—
(1A) In subsection (1) above the references to a maker of cider include references to any person who is taken for the purposes of section 62 above to be a maker of cider.
(5) This section shall be deemed to have come into force on 1st January 1997.
(6) Any order or regulations made under section 62 or 64 of the Alcoholic Liquor Duties Act 1979 before 1st January 1997—
(a) shall have effect (but only if and for so long as the order or regulations would be in force apart from this subsection) as if the amendments made to that Act by this section had been made before the making of the order or regulations, and
(b) shall be deemed at all times on or after that date so to have had effect.
(1) After the section 62A inserted into the Alcoholic Liquor Duties Act 1979 by section 3 above there shall be inserted the following section—
Cider labelled as strong cider.
62B (1) For the purposes of this Act, any liquor which would apart from this section be standard cider and which—
(a) is in an up-labelled container, or
(b) has, at any time after 31st December 1996 when it was in the United Kingdom, been in an up-labelled container,
shall be deemed to be strong cider, and not standard cider.
(2) Accordingly, references in this Act to making cider include references to—
(a) putting standard cider in an up-labelled container; or
(b) causing a container in which there is standard cider to be up-labelled.
(3) Where, by virtue of this section, any duty is charged under section 62 above on any cider, a rebate shall be allowed in respect of the amount of any duty charged on that cider under that section otherwise than by virtue of this section.
(4) For the purposes of this section—
(a) “standard cider” means cider which is not sparkling and is of a strength not exceeding 7.5 per cent.; and
(b) “strong cider” means cider which is not sparkling and is of a strength exceeding 7.5 per cent.
(5) For the purposes of this section a container is up-labelled if there is anything on—
(a) the container itself,
(b) a label or leaflet attached to or used with the container, or
(c) any packaging used for or in association with the container,
which states or tends to suggest that the strength of any liquor in that container falls within the strong cider strength range.
(6) For the purposes of subsection (5) above, a strength falls within the strong cider strength range if it exceeds 7.5 per cent. but is less than 8.5 per cent.
(2) This section shall be deemed to have come into force on 1st January 1997.
(1) After section 55A of the Alcoholic Liquor Duties Act 1979 there shall be inserted the following section—
Cider labelled as made-wine.
55B (1) For the purposes of this Act, any liquor which would apart from this section be cider and which—
(a) is in an up-labelled container, or
(b) has, at any time after 31st December 1996 when it was in the United Kingdom, been in an up-labelled container,
shall be deemed to be made-wine, and not cider.
(2) Accordingly, references in this Act to producing made-wine include references to—
(a) putting cider in an up-labelled container; or
(b) causing a container in which there is cider to be up-labelled.
(3) For the purposes of this Act, where any liquor is deemed by this section to be made-wine, it shall be deemed—
(a) if it is in an up-labelled container, to be made-wine of the strength that the labelling for the container states or tends to suggest; and
(b) if it is no longer in an up-labelled container, to be made-wine of the strength stated or suggested by the labelling for the up-labelled container in which it was contained when it was first deemed b this section to be made-wine.
(4) Subsection (3)(a) above has effect subject to any provision that may be made by regulations under section 2(3) above.
(5) Where, by virtue of this section, any duty is charged under section 55 above on any liquor, a rebate shall be allowed in respect of the amount of any duty charged on that liquor under section 62 below.
(6) For the purposes of this section a container is up-labelled if the labelling for the container states or tends to suggest that the strength of any liquor in that container is or exceeds 8.5 per cent.
(7) In this section references to the labelling for any container are references to anything on—
(a) the container itself,
(b) a label or leaflet attached to or used with the container, or
(c) any packaging used for or in association with the container.
(2) In section 1 of that Act (interpretation)—
(a) in subsection (5) (meaning of “made-wine”), after “subsection (10)” there shall be inserted “ and section 55B(1) ”; and
(b) in subsection (6) (meaning of “cider”), after “means” there shall be inserted “ , subject to section 55B(1) below, ”.
(3) In section 2(3A) of that Act (regulations may provide for duty to be charged by reference to strengths shown on bottle labels)—
(a) after the word “beer,”, in the first place where it occurs, there shall be inserted “ cider, ”; and
(b) for the words “spirits, beer, wine or made-wine”, in the second place where they occur, there shall be substituted “ liquor in that bottle or other container ”.
(4) In section 56(1)(c) of that Act (restriction on use of wine in production of made-wine), after “of wine” there shall be inserted “ or cider ”.
(5) Subsections (1) and (2) above shall be deemed to have come into force on 1st January 1997.
(1) In section 6(1) of the Hydrocarbon Oil Duties Act 1979, for “£0.3912” (duty on light oil) and “£0.3430” (duty on heavy oil) there shall be substituted “ £0.4168 ” and “ £0.3686 ”, respectively.
(2) In section 8(3) of that Act (duty on road fuel gas), for “£0.2817” there shall be substituted “ £0.2113 ”.
(3) In section 11(1) of that Act (rebate on heavy oil), for “£0.0181” (fuel oil) and “£0.0233” (gas oil) there shall be substituted “ £0.0194 ” and “ £0.0250 ”, respectively.
(4) In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0181” there shall be substituted “ £0.0194 ”.
(5) This section shall be deemed to have come into force at 6 o’clock in the evening of 26th November 1996.
(1) In section 1 of the Hydrocarbon Oil Duties Act 1979 (definitions of oil)—
(a) in subsection (1), for “(2) to (4)” there shall be substituted “ (2) to (6) ”; and
(b) after subsection (4) there shall be inserted the following subsections—
(5) “Gas oil” means heavy oil of which not more than 50 per cent. by volume distils at a temperature not exceeding 240° C and of which more than 50 per cent. by volume distils at a temperature not exceeding 340° C.
(6) “Ultra low sulphur diesel” means gas oil the sulphur content of which does not exceed 0.005 per cent. by weight or is nil.
(2) In section 6 of that Act (excise duty on hydrocarbon oil), in subsection (1) (as amended by section 6 above), for the words from “the rate of £0.4168” to the end of the subsection there shall be substituted “ the rates specified in subsection (1A) below. ”
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) In subsection (3) of that section, for “that subsection” there shall be substituted “ subsection (1A) above ”.
(5) In section 11(1) of that Act (rebate on heavy oil)—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) in paragraph (c), for “other than fuel oil and” there shall be substituted “ which is neither fuel oil nor ”.
(6) In section 13AA(6) of that Act (rate for rebated gas oil), for “section 6(1) above in the case of heavy oil” there shall be substituted “ section 6(1A) above in the case of heavy oil which is not ultra low sulphur diesel, ”.
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8) In section 27(1) of that Act (interpretation)—
(a) after the definition of “aviation gasoline” there shall be inserted the following definition—
“gas oil” has the meaning given by section 1(5) above;
and
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9) In Schedule 2A to that Act (mixing of heavy oil)—
(a) in paragraph 4(a), after “section 11(1)(b)” there shall be inserted “ or (ba) ”;
(b) in paragraph 6(b), after “section 11(1)(b)” there shall be inserted “ or (ba) ”;
(c) after paragraph 6 there shall be inserted—
Mixing different types of partially rebated gas oil
6A A mixture of heavy oils is produced in contravention of this paragraph if such a mixture is produced by mixing—
(a) ultra low sulphur diesel in respect of which a rebate has been allowed under section 11(1)(ba) of this Act; and
(b) gas oil in respect of which a rebate has been allowed under section 11(1)(b) of this Act.
;
(d) in paragraph 7 (complex mixtures of heavy oils), for the words from “if such a mixture” to the end of the paragraph there shall be substituted “ if the production of a mixture of two of the components of that mixture is a contravention of any of paragraphs 4 to 6A above. ”;
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(f) in paragraph 9(2) (rate for heavy oil), for “in the case of heavy oil by section 6(1) of this Act” there shall be substituted “ by section 6(1A) of this Act in the case of heavy oil which is not ultra low sulphur diesel ”; and
(g) in paragraph 11 (interpretation), for “ “fuel oil” and “gas oil” have the same meanings ” there shall be substituted “ “fuel oil” has the same meaning ”.
(10) This section shall come into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint.
(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—
TABLE
1. Cigarettes | An amount equal to 21 per cent. of the retail price plus £65.97 per thousand cigarettes.
2. Cigars | £98.02 per kilogram.
3. Hand-rolling tobacco | £87.74 per kilogram.
4. Other smoking tobacco and chewing tobacco | £43.10 per kilogram.
(2) This section shall be deemed to have come into force at 6 o’clock in the evening of 26th November 1996.
(1) In subsection (2) of section 30 of the Finance Act 1994 (rate of duty for journeys ending in the UK, another EEA State or certain territories for whose external relations either the UK or another member State is responsible), for “£5” there shall be substituted “ £10 ”.
(2) In subsection (4) of that section (rate of duty in other cases), for “£10” there shall be substituted “ £20 ”.
(3) This section applies in cases where, in accordance with section 28(2)(a) of that Act (duty becomes due when aircraft first takes off on passenger’s flight), duty becomes due on or after 1st November 1997.
(1) A gaming licence shall not be required under section 13 of the Betting and Gaming Duties Act 1981 (gaming licence duty) for any gaming on or after 1st October 1997; but a duty of excise (to be known as “gaming duty”) shall be charged in accordance with section 11 below on any premises in the United Kingdom where gaming to which this section applies (“dutiable gaming”) takes place on or after that date.
(2) Subject as follows, this section applies to—
(a) casino games, and
(b) equal chance gaming.
(3) This section does not apply to any lawful gaming which is gaming to which any of the following provisions applies and takes place in accordance with the requirements of that provision, that is to say—
(a) Part 1 of Schedule 15 to the Gambling Act 2005 or Article 55(2) of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (private parties);
(b) section 279 of that Act (premises licensed for the sale of liquor);
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) ... Article 126 of that Order (gaming at entertainments not held for private gain);
(e) Part 13 of that Act or Article 77, 153 or 154 of that Order (amusements with prizes).
(3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3AA) This section does not apply to the playing of a game in respect of which—
(a) ... lottery duty is chargeable, or would be chargeable but for an express exception, or
(b) machine games duty is chargeable.
(3AB) This section does not apply to the playing of bingo.
(3B) This section does not apply to any lawful gaming which consists of games played in Great Britain at an entertainment in respect of which all the payments made by the players (whether by way of entrance fee or stake or otherwise) are, after making permissible deductions from those payments, applied for a purpose other than that of private gain (within the meaning of the Gambling Act 2005).
(3C) For the purposes of subsection (3B), only the following deductions are permissible deductions—
(a) deductions on account of reasonable expenses incurred in organising or providing the facilities for the purposes of the games, and
(b) deductions for the provision of prizes or awards in respect of the games.
(4) This section does not apply—
(a) in Great Britain, to the playing of a game where the provision of facilities for its playing falls within section 269 of the Gambling Act 2005 (equal chance gaming at members' or commercial clubs and miners' welfare institutes), or
(b) in Northern Ireland, to the playing of a game to which Article 128 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (certain clubs) applies.
(5) The Treasury may by order made by statutory instrument provide that any specified game is or is not to be a casino game or equal chance gaming for the purposes of this section if it appears to them, having regard to the character of the game and the circumstances in which it is played, that it is appropriate to do so.
(6) Any reference in an order under subsection (5) above to a particular game shall be taken to include a reference to any game (by whatever name called) which is essentially similar to that game.
(7) In this section, “bingo” includes any version of that game, whatever name it is called.
(1) Gaming duty shall be charged on premises for every accounting period which contains a time when dutiable gaming takes place on those premises.
(2) Subject to subsections (3), (4A) and (4B) below, the amount of gaming duty which is charged on any premises for any accounting period shall be calculated, in accordance with the following Table, by—
(a) applying the rates specified in that Table to the parts so specified of the gross gaming yield in that period from the premises; and
(b) aggregating the results.
TABLE
Part of gross gaming yield | Rate
The first £2,686,000 | 15%
The next £1,852,000 | 20%
The next £3,243,000 | 30%
The next £6,845,000 | 40%
The remainder | 50%
(3) Where, in an accounting period, unregistered gaming takes place on any premises, the amount of gaming duty which is charged on those premises for that period shall be equal to 50 per cent of the gross gaming yield in that period from the premises.
(4) For the purposes of subsection (3) above, unregistered gaming takes place on premises in an accounting period if—
(a) dutiable gaming takes place on those premises at any time in that period, and
(b) at that time those premises are not specified in the entry on the gaming duty register for a person by whom at that time they are notifiable for the purposes of paragraph 6 of Schedule 1 to this Act.
(4A) Where the gaming duty provisions of this Act have effect in relation to any premises as if accounting periods were periods longer or shorter than six months (“alternative accounting periods”) as a result of—
(a) a direction under paragraph 9(1A) of Schedule 1, or
(b) a direction or agreement under paragraph 9(1C) of Schedule 1,
then for the purposes of determining the amount of gaming duty which is to be charged on those premises for that period, the Table in subsection (2) is modified in accordance with subsection (4B).
(4B) Each amount specified in column 1 of the Table is multiplied by—
A B
where—
A is the number of days in the alternative accounting period directed or agreed, and
B is the number of days in the period that would have been the accounting period in the absence of any direction or agreement (or where the alternative accounting period spans more than one such period, the first of those periods).
(5) The Commissioners may by regulations—
(a) provide for the cases in which dutiable gaming is to be treated as taking place on any premises for part only of an accounting period; and
(b) in relation to such cases, provide for the parts of the gross gaming yield specified in the first column of the Table in subsection (2) above to be reduced in relation to those premises for that accounting period in such manner as may be determined in accordance with the regulations.
(6) Where the Commissioners are satisfied—
(a) that dutiable gaming is, has been or may be taking place in the course of any accounting period at different premises situated at the same location or in very close proximity to each other, and
(b) that the activities carried on at those premises are connected or form part of the same business or are, or are comprised in, connected businesses,
the Commissioners may direct that for the purposes of gaming duty the different premises are to be treated as different parts of the same premises.
(7) Sections 13A to 16 of the Finance Act 1994 (review and appeals) shall have effect in relation to any decision of the Commissioners to make or vary a direction under subsection (6) above as if that decision were a decision of a description falling within section 13(A)(2)(j) of that Act.
(8) For the purposes of this section the gross gaming yield from any premises in any accounting period shall consist of the aggregate of—
(a) the gaming receipts for that period from those premises; and
(b) where a provider of the premises (or a person acting on his behalf) is banker in relation to any dutiable gaming taking place on those premises in that period, the banker’s profits for that period from that gaming.
(9) For the purposes of subsection (8) above the gaming receipts for an accounting period from any premises are the receipts in that period from charges made in connection with any dutiable gaming which has taken place on the premises other than—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) any charge the payment of which confers no more than an entitlement to admission to the premises.
(10) In subsection (8) above the banker's profits from any gaming are—
(a) the value, in money or money's worth, of the stakes staked with the banker in any such gaming, less
(b) the value of the prizes provided by the banker to those taking part in such gaming otherwise than on behalf of a provider of the premises.
(10ZA) Where the gross gaming yield from any premises in an accounting period is a negative amount (“amount X”)—
(a) the gross gaming yield for those premises in that accounting period is treated as nil, and
(b) amount X may be carried forward in reduction of the gross gaming yield for those premises for one or more later accounting periods.
(10A) Subsections (2) to (6)(a) of section 20 of the Betting and Gaming Duties Act 1981 (expenditure on bingo winnings: valuation of prizes) apply, with any necessary modifications, for the purposes of gaming duty as they apply for the purposes of bingo duty.
(11) The Treasury may by order made by statutory instrument amend subsections (8) to (10A) above.
(1) The liability to pay the gaming duty charged on any premises for any accounting period shall fall jointly and severally on—
(a) every person who is a provider of the premises at a time in that period when dutiable gaming takes place there;
(b) every person concerned in the organisation or management of any dutiable gaming taking place on those premises in that period;
(c) where any of the persons mentioned in paragraphs (a) and (b) above is a body corporate that is treated as a member of a group for the purposes of Part I of Schedule 1 to this Act, every body corporate that is treated as a member of that group for those purposes; and
(d) where any of the persons mentioned in paragraphs (a) to (c) above is a body corporate, every director of that body.
(2) A person shall for the purposes of this section be conclusively presumed to be a provider of premises at any time if at that time—
(a) he is registered on the gaming duty register, and
(b) those premises are specified in his entry on that register.
(3) The Commissioners may by regulations make provision—
(a) for apportioning the liability for any gaming duty charged on any premises for an accounting period between different persons; and
(b) for the amount of gaming duty charged on any premises for the different parts of a period for which an apportionment falls to be made to be computed (in accordance with regulations made by virtue of section 11(5)(b) above) as if each part of the period were the only part of the period during which dutiable gaming has taken place on those premises.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) Any failure by any person to pay any amount of gaming duty due from him—
(a) shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) which shall be calculated by reference to the amount that has not been paid; and
(b) shall also attract daily penalties.
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 Supplemental provisions relating to gaming duty.
(1) Schedule 1 to this Act (which makes supplemental provision with respect to gaming duty) shall have effect.
(2) Schedule 2 to this Act (which amends the Customs and Excise Management Act 1979 and contains other amendments) shall have effect.
14 Subordinate legislation relating to gaming duty.
(1) Any power conferred on the Commissioners by section 11 or 12 above or Schedule 1 to this Act to make regulations—
(a) shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons; and
(b) shall include power to make different provision for different cases.
(2) A statutory instrument containing an order under section 10(5) providing that any game is to be a casino game or equal chance gaming or any order under section 11(11)—
(a) shall be laid before the House of Commons after being made; and
(b) shall cease to have effect (without prejudice to anything previously done under the order or to the making of a new order) at the end of the period of 28 days after the day on which it was made unless it has been approved, before the end of that period, by a resolution of that House.
(3) In reckoning the period of 28 days mentioned in subsection (2)(b) above, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days.
(4) A statutory instrument containing an order under section 10(5) that does not provide for any game to be a casino game or equal chance gaming is subject to annulment in pursuance of a resolution of the House of Commons.
(1) This section shall have effect for the purposes of construing the gaming duty provisions of this Act, that is to say, sections 10 to 14 above, this section and Schedule 1 to this Act.
(2) The gaming duty provisions of this Act shall be construed as one with the Customs and Excise Management Act 1979.
(3) In the gaming duty provisions of this Act—
“accounting period” means, subject to the provisions of Schedule 1 to this Act, a period of six months beginning with 1st April or 1st October;
“casino games” means games of chance which are not equal chance gaming (but subject to any order under section 10(5));
“dutiable gaming” means gaming to which section 10 above applies;
“equal chance gaming”—
in Great Britain, means gaming which does not involve playing or staking against a bank (however described, and whether or not controlled or administered by a player) and in which the chances are equally favourable to all participants, and
in Northern Ireland, means gaming in respect of which none of the conditions specified in Article 55 of the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 is met,
(but subject to any order under section 10(5));
“gaming” has the same meaning as in the Betting and Gaming Duties Act 1981 (see section 33(1));
“the gaming duty register” means the register maintained under paragraph 1 of Schedule 1 to this Act;
“premises” includes any place and any means of transport and shall be construed subject to section 11(6) above;
“provider”, in relation to any premises where gaming takes place, means any person having a right to control the admission of persons to those premises, whether or not he has a right to control the admission of persons to the gaming.
(4) For the avoidance of doubt it is hereby declared that the imposition or payment of gaming duty does not make lawful any gaming which is otherwise unlawful.
(1) In Schedule 1 to the Vehicle Excise and Registration Act 1994 (annual rates of duty), in paragraph 1(2) (the general rate), for “£140” there shall be substituted “ £145 ”.
(2) This section applies in relation to licences taken out after 26th November 1996.
In paragraph 19 of Schedule 2 to the Vehicle Excise and Registration Act 1994 (exemption for vehicles for disabled persons), after sub-paragraph (2) there shall be inserted the following sub-paragraph—
(2A) This paragraph shall have effect as if a person were in receipt of a disability living allowance by virtue of entitlement to the mobility component at the higher rate in any case where—
(a) he has ceased to be in receipt of it as a result of having ceased to satisfy a condition of receiving the allowance or of receiving the mobility component at that rate;
(b) that condition is either—
(i) a condition relating to circumstances in which he is undergoing medical or other treatment as an in-patient in a hospital or similar institution; or
(ii) a condition specified in regulations made by the Secretary of State;
and
(c) he would continue to be entitled to receive the mobility component of the allowance at the higher rate but for his failure to satisfy that condition.
(1) After section 19A of the Vehicle Excise and Registration Act 1994 there shall be inserted the following section—
Issue of licences before payment of duty.
19B (1) The Secretary of State may, if he thinks fit, issue a vehicle licence or a trade licence to a person who has agreed with the Secretary of State to pay the duty payable on the licence in a manner provided for in the agreement.
(2) In a case where—
(a) a vehicle licence or a trade licence is issued to a person in accordance with subsection (1),
(b) the duty payable on the licence is not received by the Secretary of State in accordance with the agreement, and
(c) the Secretary of State sends a notice by post to the person informing him that the licence is void as from the time when it was granted,
the licence shall be void as from the time when it was granted.
(3) In a case where—
(a) paragraphs (a) and (b) of subsection (2) apply,
(b) the Secretary of State sends a notice by post to the person requiring him to secure that the duty payable on the licence is paid within such reasonable period as is specified in the notice,
(c) the requirement in the notice is not complied with, and
(d) the Secretary of State sends a further notice by post to the person informing him that the licence is void as from the time when it was granted,
the licence shall be void as from the time when it was granted.
(2) In subsection (1)(a) of section 35A of that Act (dishonoured cheques)—
(a) after “19A(2)(b)” there shall be inserted “ or 19B(2)(c) ”; and
(b) after “19A(3)(d)” there shall be inserted “ or 19B(3)(d) ”.
(1) In paragraph 3 of Schedule 2A to the Vehicle Excise and Registration Act 1994 (immobilisation, removal and disposal of vehicles), for sub-paragraph (1) there shall be substituted the following sub-paragraph—
(1) The regulations may make provision with respect to any case where—
(a) an authorised person has reason to believe that an offence under section 29(1)—
(i) is being committed as regards a vehicle which is stationary on a public road; or
(ii) was being committed as regards a vehicle at a time when an immobilisation device which is fixed to the vehicle was fixed to it in accordance with the regulations;
and
(b) such conditions as may be prescribed are fulfilled.
(2) In sub-paragraph (2) of that paragraph, for “an authorised person, or a person acting under the direction of an authorised person” there shall be substituted “ the authorised person, or a person acting under his direction ”.
(3) In sub-paragraph (6) of that paragraph, for “when the immobilisation device was fixed” there shall be substituted “ when the vehicle was removed ”.
(4) This section shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint.
(1) For section 51 of the Finance Act 1994 (rate of tax) there shall be substituted—
Rate of tax.
51 (1) Tax shall be charged—
(a) at the higher rate, in the case of a premium which is liable to tax at that rate; and
(b) at the standard rate, in any other case.
(2) For the purposes of this Part—
(a) the higher rate is 17.5 per cent.; and
(b) the standard rate is 4 per cent.
(2) In section 73(1) of the Finance Act 1994 (general interpretation) there shall be inserted at the appropriate places—
(a) “the higher rate” shall be construed in accordance with section 51 above;
(b) “the standard rate” shall be construed in accordance with section 51 above;
.
(1) After section 51 of the Finance Act 1994 (rate of tax) there shall be inserted—
Premiums liable to tax at the higher rate.
51A (1) A premium received under a taxable insurance contract by an insurer is liable to tax at the higher rate if it falls within one or more of the paragraphs of Part II of Schedule 6A to this Act.
(2) Part I of Schedule 6A to this Act shall have effect with respect to the interpretation of that Schedule.
(3) Provision may be made by order amending Schedule 6A as it has effect for the time being.
(4) This section is subject to section 69 below.
(2) In section 74 of the Finance Act 1994 (regulations and orders)—
(a) in subsection (4) (order under section 71 to be subject to affirmative procedure) after “An order under section” there shall be inserted “ 51A or ”; and
(b) in subsection (6) (regulations or orders, other than an order under section 71, to be subject to negative procedure) after “(other than an order under section” there shall be inserted “ 51A or ”.
(3) After Schedule 6 to the Finance Act 1994 there shall be inserted the Schedule set out in Schedule 4 to this Act.
(1) For section 69 of the Finance Act 1994 (reduced chargeable amount) there shall be substituted—
Charge to tax where different rates of tax apply.
69 (1) This section applies for the purpose of determining the chargeable amount in a case where a contract provides cover falling within any one of the following paragraphs, that is to say—
(a) cover for one or more exempt matters,
(b) cover for one or more standard rate matters, or
(c) cover for one or more higher rate matters,
and also provides cover falling within another of those paragraphs.
(2) In the following provisions of this section “the non-exempt premium” means the difference between—
(a) the amount of the premium; and
(b) such part of the premium as is attributable to any exempt matter or matters or, if no part is so attributable, nil.
(3) If the contract provides cover for one or more exempt matters and also provides cover for either—
(a) one or more standard rate matters, or
(b) one or more higher rate matters,
the chargeable amount is such amount as, with the addition of the tax chargeable at the standard rate or (as the case may be) the higher rate, is equal to the non-exempt premium.
(4) If the contract provides cover for both—
(a) one or more standard rate matters, and
(b) one or more higher rate matters,
the higher rate element and the standard rate element shall be found in accordance with the following provisions of this section.
(5) For the purposes of this section—
(a) “the higher rate element” is such portion of the non-exempt premium as is attributable to the higher rate matters (including tax at the higher rate); and
(b) “the standard rate element” is the difference between—
(i) the non-exempt premium; and
(ii) the higher rate element.
(6) In a case falling within subsection (4) above, tax shall be charged separately—
(a) at the standard rate, by reference to the standard rate chargeable amount, and
(b) at the higher rate, by reference to the higher rate chargeable amount,
and the tax chargeable in respect of the premium is the aggregate of those amounts of tax.
(7) For the purposes of this section—
“the higher rate chargeable amount” is such amount as, with the addition of the tax chargeable at the higher rate, is equal to the higher rate element;
“the standard rate chargeable amount” is such amount as, with the addition of the tax chargeable at the standard rate, is equal to the standard rate element.
(8) References in this Part to the chargeable amount shall, in a case falling within subsection (4) above, be taken as referring separately to the standard rate chargeable amount and the higher rate chargeable amount.
(9) In applying subsection (2)(b) above, any amount that is included in the premium as being referable to tax (whether or not the amount corresponds to the actual amount of tax payable in respect of the premium) shall be taken to be wholly attributable to the non-exempt matter or matters.
(10) In applying subsection (5)(a) above, any amount that is included in the premium as being referable to tax at the higher rate (whether or not the amount corresponds to the actual amount of tax payable at that rate in respect of the premium) shall be taken to be wholly attributable to the higher rate element.
(11) Subject to subsections (9) and (10) above, any attribution under subsection (2)(b) or (5)(a) above shall be made on such basis as is just and reasonable.
(12) For the purposes of this section—
(a) an “exempt matter” is any matter such that, if it were the only matter for which the contract provided cover, the contract would not be a taxable insurance contract;
(b) a “non-exempt matter” is a matter which is not an exempt matter;
(c) a “standard rate matter” is any matter such that, if it were the only matter for which the contract provided cover, tax at the standard rate would be chargeable on the chargeable amount;
(d) a “higher rate matter” is any matter such that, if it were the only matter for which the contract provided cover, tax at the higher rate would be chargeable on the chargeable amount.
(13) If the contract relates to a lifeboat and lifeboat equipment, the lifeboat and the equipment shall be taken together in applying this section.
(14) For the purposes of this section “lifeboat” and “lifeboat equipment” have the same meaning as in paragraph 6 of Schedule 7A to this Act.
(2) Accordingly, in section 50 of the Finance Act 1994 (chargeable amount) in subsection (3) (which provides that subsection (2) has effect subject to section 69) for “Subsection (2)” there shall be substituted “ Subsections (1) and (2) ”.
(1) Except as provided by subsection (2) below, sections 21 to 23 above have effect in relation to a premium which falls to be regarded for the purposes of Part III of the Finance Act 1994 as received under a taxable insurance contract by an insurer on or after 1st April 1997.
(2) Sections 21 to 23 above do not have effect in relation to a premium if the premium—
(a) is in respect of a contract made before 1st April 1997; and
(b) falls, by virtue of regulations under section 68 of the Finance Act 1994 (special accounting scheme), to be regarded for the purposes of Part III of that Act as received under the contract by the insurer on a date before 1st August 1997.
(3) Subsection (2) above does not apply in relation to a premium if the premium—
(a) is an additional premium under the contract;
(b) falls as mentioned in subsection (2)(b) above to be regarded as received under the contract by the insurer on or after 1st April 1997; and
(c) is in respect of a risk which was not covered by the contract before 1st April 1997.
(4) Without prejudice to the generality of subsections (1) to (3) above, those subsections shall be construed in accordance with sections 67A to 67C of the Finance Act 1994 (which are inserted by section 29 below).
25 Certain fees to be treated as premiums under higher rate contracts.
(1) After section 52 of the Finance Act 1994 there shall be inserted—
Certain fees to be treated as premiums under higher rate contracts.
52A (1) This section applies where—
(a) at or about the time when a higher rate contract is effected, and
(b) in connection with that contract,
a fee in respect of an insurance-related service is charged by a taxable intermediary to a person who is or becomes the insured (or one of the insured) under the contract or to a person who acts for or on behalf of such a person.
(2) Where this section applies—
(a) a payment in respect of the fee shall be treated for the purposes of this Part as a premium received under a taxable insurance contract by an insurer, and
(b) that premium—
(i) shall be treated for the purposes of this Part as so received at the time when the payment is made, and
(ii) shall be chargeable to tax at the higher rate.
(3) Tax charged by virtue of subsection (2) above shall be payable by the taxable intermediary as if he were the insurer under the contract mentioned in paragraph (a) of that subsection.
(4) For the purposes of this section, a contract of insurance is a “higher rate contract” if—
(a) it is a taxable insurance contract; and
(b) the whole or any part of a premium received under the contract by the insurer is (apart from this section) liable to tax at the higher rate.
(5) For the purposes of this Part a “taxable intermediary” is a person falling within subsection (6) below who—
(a) at or about the time when a higher rate contract is effected, and
(b) in connection with that contract,
charges a fee in respect of an insurance-related service to a person who is or becomes the insured (or one of the insured) under the contract or to a person who acts for or on behalf of such a person.
(6) A person falls within this subsection if—
(a) he is a supplier of goods or services falling within subsection (7) below; or
(b) he is connected with a supplier of goods or services falling within that subsection; or
(c) he is a person who pays—
(i) the whole or any part of the premium received under that contract, or
(ii) a fee connected with the arranging of that contract,
to a supplier of goods or services falling within subsection (7) below or to a person who is connected with a supplier of goods or services falling within that subsection.
(7) A person is a supplier of goods or services falling within this subsection if—
(a) he is a supplier of motor cars or motor cycles, within the meaning of paragraph 2 of Schedule 6A to this Act;
(b) he is a supplier of relevant goods, within the meaning of paragraph 3 of that Schedule; or
(c) he is a tour operator or travel agent.
(8) For the purposes of this section, any question whether a person is connected with another shall be determined in accordance with section 839 of the Taxes Act 1988.
(9) In this section—
“insurance-related service” means any service which is related to, or connected with, insurance;
“tour operator” and “travel agent” have the same meaning as in paragraph 4 of Schedule 6A to this Act.
(2) The amendment made by subsection (1) above has effect in relation to payments in respect of fees charged on or after the day on which this Act is passed.
After section 53 of the Finance Act 1994 (registration of insurers) there shall be inserted—
Registration of taxable intermediaries.
53AA (1) A person who—
(a) is a taxable intermediary, and
(b) is not registered,
is liable to be registered.
(2) The register kept under this section may contain such information as the Commissioners think is required for the purposes of the care and management of the tax.
(3) A person who—
(a) at any time forms the intention of charging taxable intermediary’s fees, and
(b) is not already charging such fees in the course of another business,
shall notify the Commissioners of those facts.
(4) A person who at any time—
(a) ceases to have the intention of charging taxable intermediary’s fees in the course of his business, and
(b) has no intention of charging such fees in the course of another business of his,
shall notify the Commissioners of those facts.
(5) Where a person is liable to be registered by virtue of subsection (1) above, the Commissioners shall register him with effect from the time when he begins to charge taxable intermediary’s fees in the course of the business concerned; and it is immaterial whether or not he notifies the Commissioners under subsection (3) above.
(6) Where a person—
(a) notifies the Commissioners under subsection (4) above, and
(b) satisfies them of the facts there mentioned,
the Commissioners shall cancel his registration with effect from the earliest practicable time after he ceases to charge taxable intermediary’s fees in the course of any business of his.
(7) In a case where—
(a) the Commissioners are satisfied that a person has ceased to charge taxable intermediary’s fees in the course of any business of his, but
(b) he has not notified them under subsection (4) above,
they may cancel his registration with effect from the earliest practicable time after he so ceased.
(8) For the purposes of this section regulations may make provision—
(a) as to the time within which a notification is to be made;
(b) as to the form and manner in which any notification is to be made and as to the information to be contained in or provided with it;
(c) requiring a person who has made a notification to notify the Commissioners if any information contained in or provided in connection with it is or becomes inaccurate;
(d) as to the correction of entries in the register.
(9) In this Part “taxable intermediary’s fees” means fees which, to the extent of any payment in respect of them, are chargeable to tax by virtue of section 52A above.
(1) The Finance Act 1994 shall be amended in accordance with the following provisions of this section.
(2) In section 53A (information required to keep register up to date) in subsection (1)(b), after the words “register kept under section 53” there shall be inserted “ or 53AA ”.
(3) In section 55 (credit)—
(a) after “insurer”, wherever occurring other than in subsection (2), there shall be inserted “ or taxable intermediary ”;
(b) in subsection (1), after “premium” there shall be inserted “ or taxable intermediary’s fee (as the case may be) ”;
(c) in subsection (3)(f), after “registrable” there shall be inserted “ (whether under section 53 or section 53AA) ”;
(d) in subsection (5), after “insurer’s” there shall be inserted “ or taxable intermediary’s ”; and
(e) in subsection (8)(a), after “premium” there shall be inserted “ or taxable intermediary’s fee ”.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) In section 59 (review of Commissioners’ decisions) in subsection (1) (which specifies the kinds of decision to which the section applies) after paragraph (b) there shall be inserted—
(bb) whether a payment falls to be treated under section 52A(2) above as a premium received under a taxable insurance contract by an insurer and chargeable to tax at the higher rate;
.
(7) In section 62 (partnership, bankruptcy, transfer of business etc) in subsections (1) and (5), after “insurer”, wherever occurring, there shall be inserted “ or taxable intermediary ”.
(8) In section 63(1) (which details the functions of representative members of groups of companies)—
(a) after paragraph (a) there shall be inserted—
(aa) any business carried on by a member of the group who is a taxable intermediary shall be treated as carried on by the representative member,
; and
(b) after paragraph (b) there shall be inserted—
(bb) the representative member shall be taken to be the taxable intermediary in relation to any taxable intermediary’s fees as regards which a member of the group is the actual taxable intermediary,
.
(9) In section 73 (interpretation) in subsection (1) there shall be inserted at the appropriate places—
(a) “taxable intermediary” shall be construed in accordance with section 52A above;
(b) “taxable intermediary’s fees” has the meaning given by section 53AA(9) above.
(10) At the beginning of subsection (3) of that section (meaning of “registrable person”) there shall be inserted “ Subject to subsection (3A) below, ” and after that subsection there shall be inserted—
(3A) References in sections 53A and 54 above and paragraphs 1, 9 and 12 of Schedule 7 to this Act to a registrable person include a reference to a person who—
(a) is registered under section 53AA above; or
(b) is liable to be registered under that section.
(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) In section 72 of the Finance Act 1994 (interpretation: premium) after subsection (1) there shall be inserted—
(1A) Where an amount is charged to the insured by any person in connection with a taxable insurance contract, any payment in respect of that amount is to be regarded as a payment received under that contract by the insurer unless—
(a) the payment is chargeable to tax at the higher rate by virtue of section 52A above; or
(b) the amount is charged under a separate contract and is identified in writing to the insured as a separate amount so charged.
(2) The amendment made by subsection (1) above has effect in relation to payments received in respect of amounts charged on or after 1st April 1997.
(1) After section 67 of the Finance Act 1994 there shall be inserted—
Announced increase in rate of tax: certain premiums treated as received on date of increase.
67A (1) This section applies in any case where a proposed increase is announced by a Minister of the Crown in the rate at which tax is to be charged on a premium if it is received by the insurer on or after a date specified in the announcement (“the date of the change”).
(2) In a case where—
(a) a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the date of the change, and
(b) the period of cover for the risk begins on or after the date of the change,
for the purposes of this Part the premium shall be taken to be received on the date of the change.
(3) Subsection (4) below applies where—
(a) a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the date of the change;
(b) the period of cover for the risk begins before the date of the change and ends on or after the first anniversary of the date of the change; and
(c) the premium, or any part of it, is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change.
(4) For the purposes of this Part—
(a) so much of the premium as is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change shall be taken to be received on the date of the change; and
(b) so much as is so attributable shall be taken to be a separate premium.
(5) In determining whether the condition in subsection (2)(a) or (3)(a) above is satisfied, the provisions of regulations made by virtue of subsection (3) or (7) of section 68 below apply as they would apart from this section; but, subject to that, where subsection (2) or (4) above applies—
(a) that subsection shall have effect notwithstanding anything in section 68 below or regulations made under that section; and
(b) any regulations made under that section shall have effect as if the entry made in the accounts of the insurer showing the premium as due to him had been made as at the date of the change.
(6) Any attribution under this section shall be made on such basis as is just and reasonable.
(7) In this section—
“increase”, in relation to the rate of tax, includes the imposition of a charge to tax by adding to the descriptions of contract which are taxable insurance contracts;
“Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975.
Announced increase in rate of tax: certain contracts treated as made on date of increase.
67B (1) This section applies in any case where—
(a) an announcement falling within section 67A(1) above is made; but
(b) a proposed exception from the increase in question is also announced by a Minister of the Crown; and
(c) the proposed exception is to apply in relation to a premium only if the conditions described in subsection (2) below are satisfied in respect of the premium.
(2) Those conditions are—
(a) that the premium is in respect of a contract made before the date of the change;
(b) that the premium falls, by virtue of regulations under section 68 below, to be regarded for the purposes of this Part as received under the contract by the insurer before such date (“the concessionary date”) as is specified for the purpose in the announcement.
(3) In a case where—
(a) a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the concessionary date, and
(b) the period of cover for the risk begins on or after the date of the change,
the rate of tax applicable in relation to the premium shall be determined as if the contract had been made on the date of the change.
(4) Subsection (5) below applies where—
(a) a premium under a contract of insurance is received by the insurer on or after the date of the announcement but before the concessionary date;
(b) the period of cover for the risk begins before the date of the change and ends on or after the first anniversary of the date of the change; and
(c) the premium, or any part of it, is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change.
(5) Where this subsection applies—
(a) the rate of tax applicable in relation to so much of the premium as is attributable to such of the period of cover as falls on or after the first anniversary of the date of the change shall be determined as if the contract had been made on the date of the change; and
(b) so much of the premium as is so attributable shall be taken to be a separate premium.
(6) Any attribution under this section shall be made on such basis as is just and reasonable.
(7) In this section—
“the date of the change” has the same meaning as in section 67A above;
“Minister of the Crown” has the same meaning as in section 67A above.
Announced increase in rate of tax: exceptions and apportionments.
67C (1) Sections 67A(2) and 67B(3) above do not apply in relation to a premium if the risk to which that premium relates belongs to a class of risk as regards which the normal practice is for a premium to be received by or on behalf of the insurer before the date when cover begins.
(2) Sections 67A(3) and (4) and 67B(4) and (5) above do not apply in relation to a premium if the risk to which that premium relates belongs to a class of risk as regards which the normal practice is for cover to be provided for a period exceeding twelve months.
(3) If a contract relates to more than one risk, then, in the application of section 67A(2), 67A(3) and (4), 67B(3) or 67B(4) and (5) above—
(a) the reference in section 67A(2)(b) or (3)(b) or 67B(3)(b) or (4)(b), as the case may be, to the risk shall be taken as a reference to any given risk,
(b) so much of the premium as is attributable to any given risk shall be taken for the purposes of section 67A(2), 67A(3) and (4), 67B(3) or 67B(4) and (5) above, as the case may be, to be a separate premium relating to that risk,
(c) those provisions shall then apply separately in the case of each given risk and the separate premium relating to it, and
(d) any further attribution required by section 67A(3) and (4) or 67B(4) and (5) above shall be made accordingly,
and subsections (1) and (2) above shall apply accordingly.
(4) Any attribution under this section shall be made on such basis as is just and reasonable.
(2) In the application of sections 67A to 67C of the Finance Act 1994 in relation to the increases in insurance premium tax effected by this Part and the exceptions from those increases—
(a) the announcement relating to those increases, as described in section 67A(1), and to those exceptions, as described in section 67B(1), shall be taken to have been made on 26th November 1996;
(b) “the date of the change” is 1st April 1997; and
(c) “the concessionary date” is 1st August 1997.
(3) The amendment made by subsection (1) above has effect on and after 26th November 1996.
(1) After subsection (7) of section 72 of the Finance Act 1994 (insurance premiums to be treated as received by the insurer when received by another person on his behalf) there shall be inserted—
(7A) Where any person is authorised by or on behalf of an employee to deduct from anything due to the employee under his contract of employment an amount in respect of a payment due under a taxable insurance contract, subsection (7) above shall not apply to the receipt on behalf of the insurer by the person so authorised of the amount deducted.
(2) After subsection (8) of that section there shall be inserted—
(8A) Where, by virtue of subsection (7A) above, subsection (7) above does not apply to the receipt of an amount by a person and the whole or part of the amount is referable to commission to which he is entitled—
(a) if the whole of the amount is so referable, the amount shall be treated as received by the insurer when it is deducted by that person; and
(b) otherwise, the part of the amount that is so referable shall be treated as received by the insurer when the remainder of the payment concerned is or is treated as received by him.
(3) This section applies in relation to amounts deducted on or after the day on which this Act is passed.
(1) In Schedule 1 to the Value Added Tax Act 1994 (registration in respect of taxable supplies), after paragraph 1 there shall be inserted the following paragraph—
1A (1) Paragraph 2 below is for the purpose of preventing the maintenance or creation of any artificial separation of business activities carried on by two or more persons from resulting in an avoidance of VAT.
(2) In determining for the purposes of sub-paragraph (1) above whether any separation of business activities is artificial, regard shall be had to the extent to which the different persons carrying on those activities are closely bound to one another by financial, economic and organisational links.
(2) In sub-paragraph (2) of paragraph 2 of that Schedule (power of Commissioners to make direction for aggregation of businesses)—
(a) in paragraph (b), the words from “which should properly” to “described in the direction” shall be omitted;
(b) in paragraph (c), for “that business” there shall be substituted “ the business described in the direction ”; and
(c) paragraph (d) (Commissioners to be satisfied before making direction for aggregation that avoidance is one of the main reasons for division) shall be omitted;
and, accordingly, in sub-paragraph (4) of that paragraph (power of Commissioners to make supplementary direction) the word “properly” shall be omitted.
(3) In section 84(7) of that Act (determination of appeals against directions), for the words from “as to the matters” onwards there shall be substituted “ that there were grounds for making the direction. ”
(4) This section has effect in relation to the making of directions on or after the day on which this Act is passed.
For sub-paragraph (2) of paragraph 10 of Schedule 1 to the Value Added Tax Act 1994 (non-taxable supplies in respect of which a person is entitled to be registered) there shall be substituted the following sub-paragraph—
(2) A supply is within this sub-paragraph if—
(a) it is made outside the United Kingdom but would be a taxable supply if made in the United Kingdom; or
(b) it is specified for the purposes of subsection (2) of section 26 in an order made under paragraph (c) of that subsection.
(1) In Group 15 of Schedule 8 to the Value Added Tax Act 1994 (charities etc), for Note (1) there shall be substituted the following Note—
(1) Item 1 shall apply only if—
(a) the supply is a sale of goods donated to that charity or taxable person;
(b) the sale takes place as a result of the goods having been made available to the general public for purchase (whether in a shop or elsewhere); and
(c) the sale does not take place as a result of any arrangements (whether legally binding or not) which related to the goods and were entered into by each of the parties to the sale before the goods were made available to the general public.
(2) This section has effect in relation to supplies made on or after 26th November 1996.
(1) In Group 15 of Schedule 8 to the Value Added Tax Act 1994 (charities etc), after Note (4) there shall be inserted the following Notes—
(4A) Subject to Note (5B), a charitable institution shall not be regarded as providing care or medical or surgical treatment for handicapped persons unless—
(a) it provides care or medical or surgical treatment in a relevant establishment; and
(b) the majority of the persons who receive care or medical or surgical treatment in that establishment are handicapped persons.
(4B) “Relevant establishment” means—
(a) a day-centre, other than a day-centre which exists primarily as a place for activities that are social or recreational or both; or
(b) an institution which is—
(i) approved, licensed or registered in accordance with the provisions of any enactment or Northern Ireland legislation; or
(ii) exempted by or under the provisions of any enactment or Northern Ireland legislation from any requirement to be approved, licensed or registered;
and in paragraph (b) above the references to the provisions of any enactment or Northern Ireland legislation are references only to provisions which, so far as relating to England, Wales, Scotland or Northern Ireland, have the same effect in every locality within that part of the United Kingdom.
(2) After Note (5) to that Group there shall be inserted the following Notes—
(5A) Subject to Note (5B), items 4 to 7 do not apply where the eligible body falls within Note (4)(f) unless the relevant goods are or are to be used in a relevant establishment in which that body provides care or medical or surgical treatment to persons the majority of whom are handicapped.
(5B) Nothing in Note (4A) or (5A) shall prevent a supply from falling within items 4 to 7 where—
(a) the eligible body provides medical care to handicapped persons in their own homes;
(b) the relevant goods fall within Note (3)(a) or are parts or accessories for use in or with goods described in Note (3)(a); and
(c) those goods are or are to be used in or in connection with the provision of that care.
(3) This section has effect in relation to supplies made on or after 26th November 1996.
(1) Section 96 of the Value Added Tax Act 1994 (interpretation) shall have effect, and be deemed always to have had effect, with the following subsection inserted after subsection (10), namely—
(10A) Where—
(a) the grant of any interest, right, licence or facilities gives rise for the purposes of this Act to supplies made at different times after the making of the grant, and
(b) a question whether any of those supplies is zero-rated or exempt falls to be determined according to whether or not the grant is a grant of a description specified in Schedule 8 or 9 or paragraph 2(2) or (3) of Schedule 10,
that question shall be determined according to whether the description is applicable as at the time of supply, rather than by reference to the time of the grant.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Amendments corresponding to those made by subsections (1) and (2) above shall be deemed to have had effect, for the purposes of the cases to which it applied, in relation to the Value Added Tax Act 1983; and any provisions about the coming into force of any amendment of that Act shall be deemed to have had effect accordingly.
(4) Nothing in this section shall be taken to affect the operation, in relation to times before its repeal took effect, of paragraph 4 of Schedule 10 to the Value Added Tax Act 1994 or of any enactment re-enacted in that paragraph.
(1) In Schedule 9 to the Value Added Tax Act 1994 (exemptions), for Group 2 (insurance) there shall be substituted the following Group—
Group 2 — Insurance
Item No.
1 The provision of insurance or reinsurance by a person who provides it in the course of—
(a) any insurance business which he is authorised under section 3 or 4 of the Insurance Companies Act 1982 to carry on, or
(b) any business in respect of which he is exempted under section 2 of that Act from the requirement to be so authorised.
2 The provision by an insurer or reinsurer who belongs outside the United Kingdom of—
(a) insurance against any of the risks or other things described in Schedules 1 and 2 to the Insurance Companies Act 1982, or
(b) reinsurance relating to any of those risks or other things.
3 The provision of insurance or reinsurance by the Export Credits Guarantee Department.
4 The provision by an insurance broker or insurance agent of any of the services of an insurance intermediary in a case in which those services—
(a) are related (whether or not a contract of insurance or reinsurance is finally concluded) to any such provision of insurance or reinsurance as falls, or would fall, within item 1, 2 or 3; and
(b) are provided by that broker or agent in the course of his acting in an intermediary capacity.
Notes:
(1) For the purposes of item 4 services are services of an insurance intermediary if they fall within any of the following paragraphs—
(a) the bringing together, with a view to the insurance or reinsurance of risks, of—
(i) persons who are or may be seeking insurance or reinsurance, and
(ii) persons who provide insurance or reinsurance;
(b) the carrying out of work preparatory to the conclusion of contracts of insurance or reinsurance;
(c) the provision of assistance in the administration and performance of such contracts, including the handling of claims;
(d) the collection of premiums.
(2) For the purposes of item 4 an insurance broker or insurance agent is acting “in an intermediary capacity” wherever he is acting as an intermediary, or one of the intermediaries, between—
(a) a person who provides any insurance or reinsurance the provision of which falls within item 1, 2 or 3, and
(b) a person who is or may be seeking insurance or reinsurance or is an insured person.
(3) Where—
(a) a person (“the supplier”) makes a supply of goods or services to another (“the customer”),
(b) the supply of the goods or services is a taxable supply and is not a zero-rated supply,
(c) a transaction under which insurance is to be or may be arranged for the customer is entered into in connection with the supply of the goods or services,
(d) a supply of services which are related (whether or not a contract of insurance is finally concluded) to the provision of insurance in pursuance of that transaction is made by—
(i) the person by whom the supply of the goods or services is made, or
(ii) a person who is connected with that person and, in connection with the provision of that insurance, deals directly with the customer,
and
(e) the related services do not consist in the handling of claims under the contract for that insurance,
those related services do not fall within item 4 unless the relevant requirements are fulfilled.
(4) For the purposes of Note (3) the relevant requirements are—
(a) that a document containing the statements specified in Note (5) is prepared;
(b) that the matters that must be stated in the document have been disclosed to the customer at or before the time when the transaction mentioned in Note (3)(c) is entered into; and
(c) that there is compliance with all such requirements (if any) as to—
(i) the preparation and form of the document,
(ii) the manner of disclosing to the customer the matters that must be stated in the document, and
(iii) the delivery of a copy of the document to the customer,
as may be set out in a notice that has been published by the Commissioners and has not been withdrawn.
(5) The statements referred to in Note (4) are—
(a) a statement setting out the amount of the premium under any contract of insurance that is to be or may be entered into in pursuance of the transaction in question; and
(b) a statement setting out every amount that the customer is, is to be or has been required to pay, otherwise than by way of such a premium, in connection with that transaction or anything that is to be, may be or has been done in pursuance of that transaction.
(6) For the purposes of Note (3) any question whether a person is connected with another shall be determined in accordance with section 839 of the Taxes Act.
(7) Item 4 does not include—
(a) the supply of any market research, product design, advertising, promotional or similar services; or
(b) the collection, collation and provision of information for use in connection with market research, product design, advertising, promotional or similar activities.
(8) Item 4 does not include the supply of any valuation or inspection services.
(9) Item 4 does not include the supply of any services by loss adjusters, average adjusters, motor assessors, surveyors or other experts except where—
(a) the services consist in the handling of a claim under a contract of insurance or reinsurance;
(b) the person handling the claim is authorised when doing so to act on behalf of the insurer or reinsurer; and
(c) that person’s authority so to act includes written authority to determine whether to accept or reject the claim and, where accepting it in whole or in part, to settle the amount to be paid on the claim.
(10) Item 4 does not include the supply of any services which—
(a) are supplied in pursuance of a contract of insurance or reinsurance or of any arrangements made in connection with such a contract; and
(b) are so supplied either—
(i) instead of the payment of the whole or any part of any indemnity for which the contract provides, or
(ii) for the purpose, in any other manner, of satisfying any claim under that contract, whether in whole or in part.
(2) This section has effect in relation to supplies made on or after the day on which this Act is passed.
(1) In section 36 of the Value Added Tax Act 1994, paragraph (b) of subsection (4) (condition of bad debt relief that property in goods supplied has passed) shall not apply in the case of any claim made under that section in relation to a supply of goods made after the day on which this Act is passed.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) No claim for a refund may be made in accordance with section 22 of the Value Added Tax Act 1983 (old scheme for bad debt relief) at any time after the day on which this Act is passed.