(1) VATA 1994 is amended as follows.
(2) After section 14 insert—
Goods supplied between the UK and member States under call-off stock arrangements
Call-off stock arrangements
14A Schedule 4B (call-off stock arrangements) has effect.
(3) In section 69 (breaches of regulatory provisions)—
(a) in subsection (1)(a) for “or paragraph 5 of Schedule 3A” substitute “ , paragraph 5 of Schedule 3A or paragraph 9(1) or (2)(a) of Schedule 4B ”, and
(b) in subsection (2) after “under” insert “ paragraph 8 or 9(2)(b) of Schedule 4B or ”.
(4) In Schedule 4 (matters to be treated as a supply of goods or services) in paragraph 6, after sub-paragraph (2) insert—
(3) Sub-paragraph (1) above is subject to paragraph 2 of Schedule 4B (call-off stock arrangements).
(5) After Schedule 4A insert—
SCHEDULE 4B
Call-off stock arrangements
Section 14A
Where this Schedule applies
1 (1) This Schedule applies where—
(a) on or after 1 January 2020 goods forming part of the assets of any business are removed —
(i) from the United Kingdom for the purpose of being taken to a place in a member State, or
(ii) from a member State for the purpose of being taken to a place in the United Kingdom,
(b) the goods are removed in the course or furtherance of that business by or under the directions of the person carrying on that business (“the supplier”),
(c) the goods are removed with a view to their being supplied in the destination State, at a later stage and after their arrival there, to another person (“the customer”),
(d) at the time of the removal the customer is entitled to take ownership of the goods in accordance with an agreement existing between the customer and the supplier,
(e) at the time of the removal the supplier does not have a business establishment or other fixed establishment in the destination State,
(f) at the time of the removal the customer is identified for the purposes of VAT in accordance with the law of the destination State and both the identity of the customer and the number assigned to the customer for the purposes of VAT by the destination State are known to the supplier,
(g) as soon as reasonably practicable after the removal the supplier records the removal in the register provided for in Article 243(3) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, and
(h) the supplier includes the number mentioned in paragraph (f) in the recapitulative statement provided for in Article 262(2) of Council Directive 2006/112/EC.
(2) In this Schedule—
“the destination State” means—
in a case within paragraph (i) of sub-paragraph (1)(a), the member State concerned, and
in a case within paragraph (ii) of sub-paragraph (1)(a), the United Kingdom, and
“the origin State” means—
in a case within paragraph (i) of sub-paragraph (1)(a), the United Kingdom, and
in a case within paragraph (ii) of sub-paragraph (1)(a), the member State concerned.
Removal of the goods not to be treated as a supply
2 The removal of the goods from the origin State is not to be treated by reason of paragraph 6(1) of Schedule 4 as a supply of goods by the supplier.
Goods transferred to the customer within 12 months of arrival
3 (1) The rules in sub-paragraph (2) apply if—
(a) during the period of 12 months beginning with the day the goods arrive in the destination State the supplier transfers the whole property in the goods to the customer, and
(b) during the period beginning with the day the goods arrive in the destination State and ending immediately before the time of that transfer no relevant event occurs.
(2) The rules are that—
(a) a supply of the goods in the origin State is deemed to be made by the supplier,
(b) the deemed supply is deemed to involve the removal of the goods from the origin State at the time of the transfer mentioned in sub-paragraph (1),
(c) the consideration given by the customer for the transfer mentioned in sub-paragraph (1) is deemed to have been given for the deemed supply, and
(d) an acquisition of the goods by the customer in pursuance of the deemed supply is deemed to take place in the destination State.
(3) For the meaning of a “relevant event”, see paragraph 7.
Relevant event occurs within 12 months of arrival
4 (1) The rules in sub-paragraph (2) apply (subject to paragraph 6) if—
(a) during the period of 12 months beginning with the day the goods arrive in the destination State a relevant event occurs, and
(b) during the period beginning with the day the goods arrive in the destination State and ending immediately before the time that relevant event occurs the supplier does not transfer the whole property in the goods to the customer.
(2) The rules are that—
(a) a supply of the goods in the origin State is deemed to be made by the supplier,
(b) the deemed supply is deemed to involve the removal of the goods from the origin State at the time the relevant event occurs, and
(c) an acquisition of the goods by the supplier in pursuance of the deemed supply is deemed to take place in the destination State.
(3) For the meaning of a “relevant event”, see paragraph 7.
Goods not transferred and no relevant event occurs within 12 months of arrival
5 (1) The rules in sub-paragraph (2) apply (subject to paragraph 6) if during the period of 12 months beginning with the day the goods arrive in the destination State the supplier does not transfer the whole property in the goods to the customer and no relevant event occurs.
(2) The rules are that—
(a) a supply of the goods in the origin State is deemed to be made by the supplier,
(b) the deemed supply is deemed to involve the removal of the goods from the origin State at the beginning of the day following the expiry of the period of 12 months mentioned in sub-paragraph (1), and
(c) an acquisition of the goods by the supplier in pursuance of the deemed supply is deemed to take place in the destination State.
(3) For the meaning of a “relevant event”, see paragraph 7.
Exception to paragraphs 4 and 5: goods returned to origin State
6 The rules in paragraphs 4(2) and 5(2) do not apply if during the period of 12 months beginning with the day the goods arrive in the destination State—
(a) the goods are returned to the origin State by or under the direction of the supplier, and
(b) the supplier records the return of the goods in the register provided for in Article 243(3) of Council Directive 2006/112/EC.
Meaning of “relevant event”
7 (1) For the purposes of this Schedule each of the following events is a relevant event—
(a) the supplier forms an intention not to supply the goods to the customer (but see sub-paragraph (2)),
(b) the supplier forms an intention to supply the goods to the customer otherwise than in the destination State,
(c) the supplier establishes a business establishment or other fixed establishment in the destination State,
(d) the customer ceases to be identified for the purposes of VAT in accordance with the law of the destination State,
(e) the goods are removed from the destination State by or under the directions of the supplier otherwise than for the purpose of being returned to the origin State, or
(f) the goods are destroyed, lost or stolen.
(2) But the event mentioned in paragraph (a) of sub-paragraph (1) is not a relevant event for the purposes of this Schedule if—
(a) at the time that the event occurs the supplier forms an intention to supply the goods to another person (“the substitute customer”),
(b) at that time the substitute customer is identified for the purposes of VAT in accordance with the law of the destination State,
(c) the supplier includes the number assigned to the substitute customer for the purposes of VAT by the destination State in the recapitulative statement provided for in Article 262(2) of Council Directive 2006/112/EC, and
(d) as soon as reasonably practicable after forming the intention to supply the goods to the substitute customer the supplier records that intention in the register provided for in Article 243(3) of Council Directive 2006/112/EC.
(3) In a case where sub-paragraph (2) applies, references in this Schedule to the customer are to be then read as references to the substitute customer.
(4) In a case where the goods are destroyed, lost or stolen but it is not possible to determine the date on which that occurred, the goods are to be treated for the purposes of this Schedule as having been destroyed, lost or stolen on the date on which they were found to be destroyed or missing.
Record keeping by the supplier
8 In a case where the origin State is the United Kingdom, any record made by the supplier in pursuance of paragraph 1(1)(g), 6(b) or 7(2)(d) must be preserved for such period not exceeding 6 years as the Commissioners may specify in writing.
Record keeping by the customer
9 (1) In a case where the destination State is the United Kingdom, the customer must as soon as is reasonably practicable make a record of the information relating to the goods that is specified in Article 54A(2) of Council Implementing Regulation (EU) No. 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax.
(2) A record made under this paragraph must—
(a) be made in a register kept by the customer for the purposes of this paragraph, and
(b) be preserved for such period not exceeding 6 years as the Commissioners may specify in writing.
(6) In Schedule 6 (valuation of supplies: special cases) in paragraph 6(1) in paragraph (c) after “that Schedule” insert
; or
(d) paragraph 4(2)(a) or 5(2)(a) of Schedule 4B
.
(7) The Value Added Tax Regulations 1995 (S.I. 1995/2518) are amended as follows.
(8) In regulation 21 (interpretation of Part 4)—
(a) the existing text becomes paragraph (1), and
(b) after that paragraph insert—
(2) For the purposes of this Part—
(a) goods are removed from the United Kingdom under call-off stock arrangements if they are removed from the United Kingdom in circumstances where the conditions in paragraphs (a) to (g) of paragraph 1(1) of Schedule 4B to the Act are met,
(b) references to “the customer” or “the destination State”, in relation to goods removed from the United Kingdom under call-off stock arrangements, are to be construed in accordance with paragraph 1 of Schedule 4B to the Act, and
(c) “call-off stock goods”, in relation to a taxable person, means goods that have been removed from the United Kingdom under call-off stock arrangements by or under the directions of the taxable person.
(9) After regulation 22 insert—
22ZA (1) A taxable person must submit a statement to the Commissioners if any of the following events occurs—
(a) goods are removed from the United Kingdom under call-off stock arrangements by or under the directions of the taxable person;
(b) call-off stock goods are returned to the United Kingdom by or under the directions of the taxable person at any time during the period of 12 months beginning with their arrival in the destination State;
(c) the taxable person forms an intention to supply call-off stock goods to a person (“the substitute”) other than the customer in circumstances where—
(i) the taxable person forms that intention during the period of 12 months beginning with the arrival of the goods in the destination State, and
(ii) the substitute is identified for VAT purposes in accordance with the law of the destination State.
(2) The statement must—
(a) be made in the form specified in a notice published by the Commissioners,
(b) contain, in respect of each event mentioned in paragraph (1) which has occurred within the period in respect of which the statement is made, such information as may from time to time be specified in a notice published by the Commissioners, and
(c) contain a declaration that the information provided in the statement is true and complete.
(3) Paragraphs (3), (4) and (6) of regulation 22 have effect for the purpose of determining the period in respect of which the statement must be made, but as if—
(a) in paragraph (3)(a) of regulation 22, for “paragraphs (4) to (6)” there were substituted “ paragraphs (4) and (6) ”,
(b) in paragraph (3)(a) of regulation 22, for “the EU supply of goods is made” there were substituted “ the event occurs ”,
(c) in paragraph (4)(a) of regulation 22, for “the supply is made” there were substituted “ the event occurs ”, and
(d) in paragraph (6) of regulation 22, the reference to paragraph (1) of that regulation were a reference to paragraph (1) of this regulation.
(4) In determining the period in respect of which the statement must be made, the time at which an event mentioned in paragraph (1)(a) of this regulation is to be taken to occur is the time the goods concerned are removed from the United Kingdom (rather than the time the condition mentioned in paragraph (g) of paragraph 1(1) to Schedule 4B to the Act is met in respect of the removal).
(10) In regulation 22B (EC sales statements: supplementary)—
(a) in paragraph (1) for the words from “statements”, in the first place it occurs, to “and” substitute “ more than one statement is to be submitted under regulations 22 to ”,
(b) in paragraph (2) after “22” insert “ , 22ZA ”, and
(c) in paragraph (3), in the words before paragraph (a), after “22” insert “ , 22ZA ”.
(11) Regulation 22ZA of the Value Added Tax Regulations 1995 (as inserted by subsection (9)) is to be treated for the purposes of sections 65 and 66 of VATA 1994 as having been made under paragraph 2(3) of Schedule 11 to that Act.
(1) After section 55 of ALDA 1979 insert—
Post-duty point dilution of wine or made-wine
55ZA (1) This section applies if—
(a) wine or made-wine is imported into the United Kingdom or produced in the United Kingdom for sale,
(b) excise duty is chargeable on the wine or made-wine as a result of section 54 or 55,
(c) after the excise duty point in relation to that charge, a person mixes or otherwise adds, at any place in the United Kingdom, water or any other substance to the wine or made-wine in a case where what results (“the new product”) is intended for sale, and
(d) if the addition had taken place immediately before that duty point, the amount of the excise duty would have been greater than the amount actually payable.
(2) The addition attracts a penalty under section 9 of the Finance Act 1994 (civil penalties), and the new product is liable to forfeiture.
(3) This section has effect, despite section 8 of the Isle of Man Act 1979, as if a removal of wine or made-wine to the United Kingdom from the Isle of Man constituted its importation into the United Kingdom (and references to the charge to excise duty as a result of section 54 or 55 and to the excise duty point are to be read accordingly).
(2) The amendment made by this section has effect in relation to any addition of water or any other substance on or after 1 April 2020.
(1) In Schedule 1 to TPDA 1979 (table of rates of tobacco products duty), for the Table substitute—
1 Cigarettes | An amount equal to the higher of— 16.5% of the retail price plus £237.34 per thousand cigarettes, or £305.23 per thousand cigarettes.
2 Cigars | £296.04 per kilogram
3 Hand-rolling tobacco | £253.33 per kilogram
4 Other smoking tobacco and chewing tobacco | £130.16 per kilogram
5 Tobacco for heating | £243.95 per kilogram
(2) The amendment made by this section is treated as having come into force at 6pm on 11 March 2020.
84 Applicable CO2 emissions figure determined using WLTP values
(1) In Schedule 1 to VERA 1994 (annual rates of duty) in paragraph 1GA(5) (meaning of “the applicable CO2 emissions figure”)—
(a) omit “and” at the end of paragraph (a),
(b) in paragraph (b)—
(i) after “figure” insert “ of a vehicle first registered before 1 April 2020 ”,
(ii) for “light-duty” substitute “ light ”, and
(iii) after “EU certificate of conformity” insert “ or UK approval certificate ”, and
(c) at the end of paragraph (b) insert
, and
(c) for the purpose of determining the applicable CO2 emissions figure of a vehicle first registered on or after 1 April 2020, ignore any values specified in an EU certificate of conformity or UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values
.
(2) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2020.
(1) VERA 1994 is amended as follows.
(2) In paragraph 25 of Schedule 2 (exempt vehicles: light passenger vehicles with low CO2 emissions) omit sub-paragraphs (5) and (6) (no exemption if vehicle price exceeds £40,000 etc).
(3) As a consequence, Part 1AA of Schedule 1 (annual rates of duty: light passenger vehicles registered on or after 1 April 2017) is amended as follows.
(4) In paragraph 1GB (exemption from paying duty on first vehicle licence for certain vehicles)—
(a) in sub-paragraph (1) omit “(2) or”, and
(b) omit sub-paragraph (2).
(5) In paragraph 1GD (rates of duty payable on any other vehicle licence for vehicle), in sub-paragraph (2) omit “or (4)”.
(6) In paragraph 1GE (higher rates of duty: vehicles with a price exceeding £40,000)—
(a) omit sub-paragraphs (3) and (4), and
(b) in sub-paragraph (5) for “sub-paragraphs (2) and (4) do” substitute “ Sub-paragraph (2) does ”.
(7) In paragraph 1GF (calculating the price of a vehicle), in sub-paragraph (1) omit “and (3)(a)”.
(8) The amendments made by this section come into force on 1 April 2020 but do not apply in relation to licences in force immediately before that date.
(1) In VERA 1994, in Part 1AA of Schedule 1 (annual rates of duty: light passenger vehicles registered on or after 1 April 2017), paragraph 1GA is amended as follows.
(2) After sub-paragraph (1) insert—
(1A) But this Part of this Schedule does not apply to a motor caravan which is first registered, under this Act or under the law of a country or territory outside the United Kingdom, on or after 12 March 2020.
(3) After sub-paragraph (2) insert—
(2A) For the purposes of sub-paragraph (1A) a vehicle is a “motor caravan” if the certificate mentioned in sub-paragraph (1)(b) identifies the vehicle as a motor caravan within the meaning of Annex II to Directive 2007/46/EC.
87 Exemption in respect of medical courier vehicles
(1) Schedule 2 to VERA 1994 (exempt vehicles) is amended as follows.
(2) In the heading before paragraph 6, after “Ambulances” insert “ , medical courier vehicles ”.
(3) After paragraph 6 insert—
6A (1) A vehicle is an exempt vehicle if—
(a) it is used primarily for the transportation of medical items,
(b) it is readily identifiable as a vehicle used for the transportation of medical items by being marked “Blood” on both sides, and
(c) it is registered under this Act in the name of a charity whose main purpose is to provide services for the transportation of medical items.
(2) In this paragraph—
“charity” means a charity as defined by paragraph 1 of Schedule 6 to the Finance Act 2010;
“medical items” means items intended for use for medical purposes, including in particular—
blood;
medicines and other medical supplies;
items relating to people who are undergoing medical treatment;
“item” includes any substance.
(4) The amendments made by this section come into force on 1 April 2020.
(1) Subject to section 88A, section 5(2) of the HGV Road User Levy Act 2013 (HGV road user levy charged for all periods for which a UK heavy goods vehicle is charged to vehicle excise duty) does not apply where the period for which a UK heavy goods vehicle is charged to vehicle excise duty is a period that begins in the exempt period.
(2) Section 6(2) of the 2013 Act (HGV road user levy charged in respect of non-UK heavy goods vehicle for each day on which the vehicle is used or kept on a road to which the Act applies) does not apply in respect of any day in the exempt period.
(3) For the purposes of this section and section 88A, the exempt period is the period of 36 months beginning with 1 August 2020.
(4) Section 7 of the 2013 Act (rebate of levy) has effect as if, after subsection (2A), there were inserted—
(2B) A rebate entitlement also arises where HGV road user levy has been paid in respect of a non-UK heavy goods vehicle in accordance with section 6(2) in respect of any part of the exempt period within the meaning of section 88(3) of the Finance Act 2020.
88A HGV road user levy: transitional provision for end of exempt period
(1) This section applies where—
(a) a UK heavy goods vehicle (the “charged vehicle”) is charged to vehicle excise duty in respect of more than one period (a “charged period”) beginning within the last 12 months of the exempt period, and
(b) the combined length of the charged periods is more than 12 months.
(2) Section 5(2) of the 2013 Act applies in relation to the charged vehicle in respect of each complete month in the period (the “transitional liability period”)—
(a) beginning with the day after the last exempt day in relation to the charged vehicle, and
(b) ending with the end of the charged period during which that last exempt day occurs.
(3) The last exempt day, in relation to a charged vehicle, is the last day of the period of 12 months beginning with the day on which the first charged period beginning within the last 12 months of the exempt period began.
(4) Subsection (5) applies where, in relation to the charged vehicle—
(a) a notification has been made under section 7(2)(c) of the 2013 Act (an “off-road notification”) in respect of a period beginning within the last 12 months of the exempt period, and
(b) vehicle excise duty is charged in respect of a period beginning—
(i) after the day on which the off-road notification is made, and
(ii) within the last 12 months of the exempt period.
(5) In calculating the period of 12 months mentioned in subsection (3) ignore the number of whole months in the period beginning with the day on which the off-road notification is made and ending with the first day of the period described in subsection (4)(b).
(6) The Secretary of State, and any person who may exercise powers on behalf of the Secretary of State under section 9 of the 2013 Act (collection of levy), may (in addition to having the powers, duties and liabilities mentioned in that section) give a notice (a “payment notice”) to a person liable for HGV road user levy in respect of a transitional liability period.
(7) A payment notice must state—
(a) the amount of HGV road user levy for which the person is liable in respect of the transitional liability period,
(b) how the amount is to be paid, and
(c) that payment must be made within the period of 28 days beginning with the day on which the notice is given.
(8) The amount in subsection (7)(a) is given by—
L×M12
where—
L is the yearly rate of HGV road user levy applicable in relation to the vehicle on the first day of the transitional liability period, and
M is the number of whole months during the transitional liability period.
(9) In relation to the transitional liability period—
(a) a person commits an offence under section 11 of the 2013 Act (offence of using or keeping heavy goods vehicle if levy not paid) only if the person—
(i) has been given a payment notice, and
(ii) has failed to make payment in accordance with that notice, and
(b) section 7(5A) of the Vehicle Excise and Registration Act 1994 has effect as if the reference to HGV road user levy having been paid were a reference to it having been paid in accordance with a payment notice.
(10) In this section “UK heavy goods vehicle” has the same meaning as in the HGV Road User Levy Act 2013 (see section 2 of that Act).
(1) In section 30(4A) of FA 1994 (air passenger duty: long haul rates)—
(a) in paragraph (a), for “£80” substitute “ £82 ”, and
(b) in paragraph (b), for “£176” substitute “ £180 ”.
(2) The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2021.
91 Amounts of gross gaming yield charged to gaming duty
(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—
TABLE
Part of gross gaming yield | Rate
The first £2,471,000 | 15%
The next £1,703,500 | 20%
The next £2,983,000 | 30%
The next £6,296,500 | 40%
The remainder | 50%
.
(2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2020.
92 Rates of climate change levy until 1 April 2021
(1) Paragraph 42 of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) is amended as follows.
(2) In sub-paragraph (1), for the table substitute—
Taxable commodity supplied | Rate at which levy payable if supply is not a reduced-rate supply
Electricity | £0.00811 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility | £0.00406 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state | £0.02175 per kilogram
Any other taxable commodity | £0.03174 per kilogram
.
(3) In sub-paragraph (1)—
(a) in paragraph (ba) (reduced-rate supplies of electricity), for “7” substitute “ 8 ”,
(b) after that paragraph insert—
(bb) if the supply is a reduced-rate of supply of any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state, 23 per cent of the amount that would be payable if the supply were a supply to which paragraph (a) applies;
, and
(c) in paragraph (c) (other reduced-rate supplies), for “22” substitute “ 19 ”.
(4) In consequence of the amendment made by subsection (3), in the Notes to paragraph 2 of Schedule 1 to the Climate Change Levy (General) Regulations 2001, for the definition of “r” substitute—
r= 0.92 in the case of electricity; 0.77 in the case of any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state; and 0.81 in any other case.
(5) The amendments made by this section have effect in relation to supplies treated as taking place on or after 1 April 2020.
(1) Paragraph 42 of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) is amended as follows.
(2) In sub-paragraph (1), for the table substitute—
TABLE
Taxable commodity supplied | Rate at which levy payable if supply is not a reduced-rate supply
Electricity | £0.00775 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility | £0.00465 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state | £0.02175 per kilogram
Any other taxable commodity | £0.03640 per kilogram
.
(3) In sub-paragraph (1)(c), as amended by section 92(3)(c), for “19” substitute “ 17 ”.
(4) In consequence of the amendment made by subsection (3), in the definition of “r” in the Notes to paragraph 2 of Schedule 1 to the Climate Change Levy (General) Regulations 2001, as amended by section 92(4), for “0.81” substitute “ 0.83 ”.
(5) The amendments made by this section have effect in relation to supplies treated as taking place on or after 1 April 2021.
(1) Section 42 of FA 1996 (amount of landfill tax) is amended as follows.
(2) In subsection (1)(a) (standard rate), for “£91.35” substitute “ £94.15 ”.
(3) In subsection (2) (reduced rate for certain disposals), in the words after paragraph (b)—
(a) for “£91.35” substitute “ £94.15 ”, and
(b) for “£2.90” substitute “ £3 ”.
(4) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2020.
96 Charge for allocating allowances under emissions reduction trading scheme
(1) The Treasury may impose charges by providing in regulations for emissions allowances to be allocated in return for payment.
(2) Regulations under subsection (1) may in particular include provision—
(a) for persons other than persons to whom a trading scheme applies to be allocated emissions allowances in return for payment;
(b) as to the imposition of fees and the making and forfeiting of deposits;
(c) as to the person by whom allocations in return for payment are to be conducted;
(d) for allocations in return for payment to be overseen by an independent person appointed by the Treasury;
(e) for the imposition of penalties for failure to comply with the terms of the regulations or of a scheme under subsection (3);
(f) for the imposition of interest in respect of any charges, fees or penalties due under the regulations;
(g) for and in connection with the recovery of any charges, fees, penalties or interest due under the regulations;
(h) conferring rights of appeal against decisions made in allocations in return for payment, the forfeiting of deposits and the imposition of penalties (including specifying the person, court or tribunal to hear and determine appeals).
(3) The Treasury may make schemes about the conduct and terms of allocations of emissions allowances in return for payment (the schemes having effect subject to any regulations under this section).
(4) Schemes under subsection (3) may in particular include provision about—
(a) who may participate in allocations in return for payment,
(b) the allowances to be allocated in return for payment, and
(c) where and when allocations in return for payment are to take place.
(5) Regulations under this section are to be made by statutory instrument.
(6) A statutory instrument containing the first regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.
(7) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons (unless a draft of the instrument has been laid before, and approved by a resolution of, that House).
(8) In this section—
“emissions allowance” means an allowance under paragraph 5 of Schedule 2 to the Climate Change Act 2008 relating to a trading scheme;
“trading scheme” means a trading scheme dealt with under Part 1 of that Schedule (schemes limiting activities relating to emissions of greenhouse gas).
In section 15(1)(b) of TCTA 2018 (import duty: international disputes etc), for “is authorised under international law” substitute “ considers that (having regard to the matters set out in section 28 and any other relevant matters) it is appropriate ”.
(1) In section 386 of the Insolvency Act 1986 (preferential debts)—
(a) in subsection (1) after “other deposits” insert “ ; certain HMRC debts ”;
(b) in subsection (1B) for “or 15BB” substitute “ , 15BB or 15D ”.
(2) In Schedule 6 to that Act (preferential debts) after paragraph 15C insert—
Category 9: Certain HMRC debts
15D (1) Any amount owed at the relevant date by the debtor to the Commissioners in respect of—
(a) value added tax, or
(b) a relevant deduction.
(2) In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020.
(3) For the purposes of sub-paragraph (1)(b) a deduction is “relevant” if—
(a) the debtor is required, by virtue of an enactment, to make the deduction from a payment made to another person and to pay an amount to the Commissioners on account of the deduction,
(b) the payment to the Commissioners is credited against any liabilities of the other person, and
(c) the deduction is of a kind specified in regulations under section 99(3) of the Finance Act 2020.
(4) In this paragraph “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.
(3) In section 129(2) of the Bankruptcy (Scotland) Act 2016 (asp 21) (priority in distribution: meaning of certain expressions) in the definition of “secondary preferred debt” for “paragraph 7 or 8” substitute “ any of paragraphs 7 to 8A ”.
(4) In Part 1 of Schedule 3 to that Act (list of preferred debts) after paragraph 8 insert—
Certain HMRC debts
8A (1) Any amount owed at the relevant date by the debtor to the Commissioners in respect of—
(a) value added tax, or
(b) a relevant deduction.
(2) In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020.
(3) For the purposes of sub-paragraph (1)(b) a deduction is “relevant” if—
(a) the debtor is required, by virtue of an enactment, to make the deduction from a payment made to another person and to pay an amount to the Commissioners on account of the deduction,
(b) the payment to the Commissioners is credited against any liabilities of the other person, and
(c) the deduction is of a kind specified in regulations under section 99(3) of the Finance Act 2020.
(4) In this paragraph “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.
(5) In Article 346 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (preferential debts)—
(a) in paragraph (1) after “other deposits” insert “ ; certain HMRC debts ”;
(b) in paragraph (1B) for “or 20” substitute “ , 20 or 22 ”.
(6) In Schedule 4 to that Order (preferential debts) after paragraph 21 insert—
Category 9: Certain HMRC debts
22 (1) Any amount owed at the relevant date by the debtor to the Commissioners in respect of—
(a) value added tax, or
(b) a relevant deduction.
(2) In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020.
(3) For the purposes of sub-paragraph (1)(b) a deduction is “relevant” if—
(a) the debtor is required, by virtue of an enactment, to make the deduction from a payment made to another person and to pay an amount to the Commissioners on account of the deduction,
(b) the payment to the Commissioners is credited against any liabilities of the other person, and
(c) the deduction is of a kind specified in regulations under section 99(3) of the Finance Act 2020.
(4) In this paragraph “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.
(7) The amendments made by this section do not apply in relation to any case where the relevant date is before 1 December 2020.
(1) The Treasury may by regulations provide that only the following amounts are secondary preferential debts (or, in relation to Scotland, secondary preferred debts) for the purpose of a relevant provision—
(a) in the case of amounts owed in respect of value added tax, amounts referable to such period as is specified in the regulations;
(b) in the case of amounts owed in respect of a relevant deduction, amounts owed in respect of a deduction from a payment made during such period as is specified in the regulations.
(2) In subsection (1) “relevant provision” means—
(a) paragraph 15D(1) of Schedule 6 to the Insolvency Act 1986 (preferential debts: certain HMRC debts);
(b) paragraph 8A(1) of Schedule 3 to the Bankruptcy (Scotland) Act 2016 (asp 21) (list of preferred debts: certain HMRC debts);
(c) paragraph 22(1) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (preferential debts: certain HMRC debts).
(3) The Treasury may by regulations specify kinds of deductions for the purposes of—
(a) paragraph 15D(3)(c) of Schedule 6 to the Insolvency Act 1986;
(b) paragraph 8A(3)(c) of Schedule 3 to the Bankruptcy (Scotland) Act 2016 (asp 21);
(c) paragraph 22(3)(c) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).
(4) Regulations under this section may contain transitional or supplementary provision.
(5) Regulations under this section—
(a) are to be made by statutory instrument;
(b) are subject to annulment in pursuance of a resolution of the House of Commons.
100 Joint and several liability of company directors etc
(1) Schedule 13 makes provision for individuals to be jointly and severally liable, in certain circumstances involving insolvency or potential insolvency, for amounts payable to the Commissioners for Her Majesty's Revenue and Customs by bodies corporate or unincorporate.
(2) A reference in Schedule 13 to a tax liability of a company does not include—
(a) any tax liability that relates to a period ending before the day on which this Act is passed;
(b) any tax liability (other than one that relates to a period) arising from an event or default occurring before that day.
(3) For the purposes of subsection (2), a tax liability relates to a period if—
(a) the liability arises in respect of a particular tax year, accounting period or other period, or
(b) the amount of the liability is calculated by reference to a particular period.
(4) A reference in paragraph 5 of Schedule 13 to a penalty does not include any penalty in respect of which the determination to impose the penalty, or (as the case may be) the commencement of proceedings before the tribunal for the penalty to be imposed, occurs before the day on which this Act is passed.
101 Amendments relating to the operation of the GAAR
Schedule 14 makes—
(a) provision about the procedural requirements and time limits for the making of adjustments by virtue of section 209 of FA 2013, and
(b) provision amending paragraph 5 of Schedule 43C to that Act.
Schedule 15 makes provision for tax relief in respect of—
(a) payments made under or otherwise referable to the Windrush Compensation Scheme,
(b) payments under the Troubles Permanent Disablement Payment Scheme, ...
(ba) payments made under or otherwise referable to compensation schemes established in connection with certain matters relating to Post Office Limited, and
(c) other compensation payments made by or on behalf of a government, public authority or local authority.
(1) Anything capable of being done by an officer of Revenue and Customs by virtue of a function conferred by or under an enactment relating to taxation may be done by HMRC (whether by means involving the use of a computer or otherwise).
(2) Accordingly, it follows that HMRC may (among other things)—
(a) give a notice under section 8, 8A or 12AA of TMA 1970 (notice to file personal, trustee or partnership return);
(b) amend a return under section 9ZB of that Act (correction of personal or trustee return);
(c) make an assessment to tax in accordance with section 30A of that Act (assessing procedure);
(d) make a determination under section 100 of that Act (determination of penalties);
(e) give a notice under paragraph 3 of Schedule 18 to FA 1998 (notice to file company tax return);
(f) make a determination under paragraph 2 or 3 of Schedule 14 to FA 2003 (SDLT: determination of penalties).
(3) Anything done by HMRC in accordance with subsection (1) has the same effect as it would have if done by an officer of Revenue and Customs (or, where the function is conferred on an officer of a particular kind, an officer of that kind).
(4) In this section—
“HMRC” means Her Majesty's Revenue and Customs;
references to an officer of Revenue and Customs include an officer of a particular kind, such as an officer authorised for the purposes of an enactment.
(5) This section is treated as always having been in force.
(6) However, this section does not apply in relation to anything mentioned in subsection (1) done by HMRC if—
(a) before 11 March 2020, a court or tribunal determined that the relevant act was of no effect because it was not done by an officer of Revenue and Customs (or an officer of a particular kind), and
(b) at the beginning of 11 March 2020, the order of the court or tribunal giving effect to that determination had not been set aside or overturned on appeal.
104 Returns relating to LLP not carrying on business etc with view to profit
(1) In TMA 1970 after section 12ABZA insert—
Returns relating to LLP not carrying on business etc with view to profit
12ABZAA (1) This section applies where—
(a) a person delivers a purported partnership return (“the relevant return”) in respect of a period (“the relevant period”),
(b) the relevant return—
(i) is made on the basis that the activities of a limited liability partnership (“the LLP”) are treated, under section 863 of ITTOIA 2005 or section 1273 of CTA 2009, as carried on in partnership by its members (“the purported partnership”), and
(ii) relates to the purported partnership, but
(c) the LLP does not carry on a business with a view to profit in the relevant period (and, accordingly, its activities are not treated as mentioned in paragraph (b)(i)).
(2) For the purposes of the relevant enactments, treat the relevant return as a partnership return (and, accordingly, anything done under a relevant enactment in connection with the relevant return has the same effect as it would have if done in connection with a partnership return in a corresponding partnership case).
(3) “Relevant enactment” means—
(a) any of the following—
(i) sections 12AC and 28B (enquiries into partnership returns),
(ii) Part 4 of FA 2014 (follower notices and accelerated payment notices), and
(b) any enactment relating to, or applying for the purposes of, an enactment within paragraph (a).
(4) In relation to the relevant return, the relevant enactments apply with the necessary modifications, including in particular the following—
(a) “partner” includes purported partner, and
(b) “partnership” includes the purported partnership.
(5) In this section—
“business” includes trade or profession;
“corresponding partnership case” means a corresponding case in which the limited liability partnership in question carries on a business with a view to profit in the relevant period;
“purported partner” means any person who was a member of the LLP in the relevant period;
“purported partnership return” means anything that—
purports to be a partnership return, and
is in a form, and is delivered in a way, that a partnership return could have been made and delivered in a corresponding partnership case.
(2) The amendment made by subsection (1) is treated as always having been in force.
(3) However, that amendment does not apply in relation to a purported partnership return if—
(a) before 11 March 2020, a court or tribunal determined, in proceedings to which a limited liability partnership was a party, that the purported partnership return was not a return under section 12AA of TMA 1970, and
(b) at the beginning of 11 March 2020, the order of the court or tribunal giving effect to that determination had not been set aside or overturned on appeal.
(4) In Part 1 of Schedule 14 to F(No.2)A 2017 (digital reporting and record-keeping for income tax etc: amendments of TMA 1970), after paragraph 10B insert—
10BA (1) Section 12ABZAA (returns relating to LLP not carrying on business etc with view to profit) is amended as follows.
(2) For subsection (2) substitute—
(2) For the purposes of the relevant enactments—
(a) where the relevant return purports to be a section 12AA partnership return, treat it as a section 12AA partnership return;
(b) where the relevant return purports to be a Schedule A1 partnership return, treat it as a Schedule A1 partnership return,
(and, accordingly, anything done under a relevant enactment in connection with the relevant return has the same effect as it would have if done in connection with a section 12AA or Schedule A1 partnership return (as the case may be) in a corresponding partnership case).
(3) In subsection (5), in the definition of “purported partnership return”—
(a) in paragraph (a), for “partnership return” substitute “ section 12AA or Schedule A1 partnership return ”;
(b) in paragraph (b), for “partnership return” substitute “ section 12AA or Schedule A1 partnership return (as the case may be) ”.
(5) The reference in section 61(6) of F(No.2)A 2017 (commencement) to Schedule 14 to that Act is to be read as a reference to that Schedule as amended by subsection (4) of this section.
105 Interest on unpaid tax in case of disaster etc of national significance
(1) Section 135 of FA 2008 (interest on unpaid tax in case of disaster etc of national significance) is amended as follows.
(2) In subsection (2), for the words from “arising” to the end substitute
that—
(a) arises under or by virtue of an enactment or a contract settlement, and
(b) is of a description (if any) specified in the order.
(3) In subsection (4)—
(a) after “relief period” insert “ , in relation to a deferred amount, ”;
(b) in paragraph (b), after “revoked” insert “ or amended so that it ceases to have effect in relation to the deferred amount ”.
(4) In subsection (10)—
(a) at the end of paragraph (a), omit “and”;
(b) at the end of paragraph (b) insert
, and
(c) may specify different dates in relation to liabilities of different descriptions.
(5) The amendments made by this section have effect from 20 March 2020.
(1) Schedule 16 makes provision about the taxation of coronavirus support payments.
(2) In this section, and in that Schedule, “coronavirus support payment” means a payment made (whether before or after the passing of this Act) under any of the following schemes—
(a) the coronavirus job retention scheme;
(b) the self-employment income support scheme;
(c) any other scheme that is the subject of a direction given under section 76 of the Coronavirus Act 2020 (functions of Her Majesty's Revenue and Customs in relation to coronavirus or coronavirus disease);
(d) the coronavirus statutory sick pay rebate scheme;
(e) a coronavirus business support grant scheme;
(f) any scheme specified or described in regulations made under this section by the Treasury.
(3) The Treasury may by regulations make provision about (including provision modifying) the application of Schedule 16 to a scheme falling within subsection (2)(b) to (f) (including provision modifying paragraph 8 of that Schedule so that it applies to payments made under a coronavirus business support grant scheme).
(4) Regulations under this section may make provision about coronavirus support payments made before (as well as after) the making of the regulations.
(5) In this section, and in that Schedule—
“coronavirus” and “coronavirus disease” have the meaning they have in the Coronavirus Act 2020 (see section 1 of that Act);
“coronavirus business support grant scheme” means any scheme (whether announced or operating before or after the passing of this Act), other than a scheme within subsection (2)(a) to (d), under which a public authority makes grants to businesses with the object of providing support to those businesses in connection with any effect or anticipated effect (direct or indirect) of coronavirus or coronavirus disease;
“the coronavirus job retention scheme” means the scheme (as it has effect from time to time) that is the subject of the direction given by the Treasury on 15 April 2020 under section 76 of the Coronavirus Act 2020;
“the coronavirus statutory sick pay rebate scheme” means the scheme (as it has effect from time to time) given effect to by the Statutory Sick Pay (Coronavirus) (Funding of Employers' Liabilities) Regulations 2020 (S.I. 2020/512);
“employment-related scheme” means the coronavirus job retention scheme or the coronavirus statutory sick pay rebate scheme;
“the self-employment income support scheme” means the scheme (as it has effect from time to time) that is the subject of the direction given by the Treasury on 30 April 2020 under section 76 of the Coronavirus Act 2020.
(6) Examples of coronavirus business support grant schemes as at 24 June 2020 include—
(a) the small business grant fund that is the subject of the guidance about that scheme and the retail, hospitality and leisure grant fund published by the Department for Business, Energy & Industrial Strategy on 1 April 2020;
(b) the retail, hospitality and leisure grant fund that is the subject of that guidance;
(c) the local authority discretionary grants fund that is the subject of the guidance about that scheme published by the Department for Business, Energy & Industrial Strategy on 13 May 2020;
(d) the schemes corresponding to the small business grant fund, retail and hospitality grant fund and local authority discretionary grants fund in Scotland, Wales and Northern Ireland.
(1) Schedule 5 to ITEPA 2003 (enterprise management incentives) is modified in accordance with subsections (2) and (3).
(2) Paragraph 26 (requirement as to commitment of working time) has effect as if, in sub-paragraph (3)—
(a) the “or” at the end of paragraph (c) were omitted, and
(b) at the end of paragraph (d), there were inserted
, or
(e) not being required to work for reasons connected with coronavirus disease (within the meaning given by section 1(1) of the Coronavirus Act 2020).
(3) Paragraph 27 (meaning of “working time”) has effect as if, in sub-paragraph (1)(b), for “(d)” there were substituted “ (e) ”.
(4) Section 535 of ITEPA 2003 (disqualifying events relating to employee in relation to enterprise management incentives) has effect as if, in the closing words of subsection (3), for “(d)” there were substituted “ (e) ”.
(5) The modifications made by this section have effect in relation to the period—
(a) beginning with 19 March 2020, and
(b) ending with 5 April 2022.
108 Protected pension age of members re-employed as a result of coronavirus
(1) In FA 2004, in Schedule 36 (pension schemes etc), paragraph 22 (rights to take benefit before normal minimum pension age) is amended as follows.
(2) In sub-paragraph (7F), at the end of paragraph (b) insert
, and
(c) that the member is or was employed as mentioned in sub-paragraph (7B)(a) where—
(i) the employment began at any time during the coronavirus period, and
(ii) the only or main reason that the member was taken into employment was to help the employer to respond to the public health, social, economic or other effects of coronavirus.
(3) After sub-paragraph (7J) insert—
(7K) In sub-paragraph (7F)(c)—
“coronavirus” has the same meaning as in the Coronavirus Act 2020 (see section 1(1) of that Act);
“the coronavirus period” means the period beginning with 1 March 2020 and ending with 1 November 2020.
(7L) The Treasury may by regulations amend the definition of “the coronavirus period” in sub-paragraph (7K) so as to replace the later of the dates specified in it with another date falling before 6 April 2021.
(7M) The power in sub-paragraph (7L) may be exercised on more than one occasion.
(4) The amendments made by this section are treated as having come into force on 1 March 2020.
109 Modifications of the statutory residence test in connection with coronavirus
(1) This section applies for the purposes of determining—
(a) whether an individual was or was not resident in the United Kingdom for the tax year 2019-20 for the purposes of relevant tax, and
(b) if an individual was not so resident in the United Kingdom for the tax year 2019-20 (including as a result of this section), whether the individual was or was not resident in the United Kingdom for the tax year 2020-21 for the purposes of relevant tax.
“Relevant tax” has the meaning given by paragraph 1(4) of Schedule 45 to FA 2013 (statutory residence test).
(2) That Schedule is modified in accordance with subsections (3) to (13).
(3) Paragraph 8 (second automatic UK test: days at overseas homes) has effect as if after sub-paragraph (5) there were inserted—
(5A) For the purposes of sub-paragraphs (1)(b) and (4), a day does not count as a day when P is present at a home of P's in the UK if it is a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it).
(4) Paragraph 22 (key concepts: days spent) has effect as if—
(a) in sub-paragraph (2), for “two cases” there were substituted “ three cases ”;
(b) after sub-paragraph (6) there were inserted—
(7) The third case is where—
(a) that day falls within the period beginning with 1 March 2020 and ending with 1 June 2020,
(b) on that day P is present in the UK for an applicable reason related to coronavirus disease, and
(c) in the tax year in question, P is resident in a territory outside the UK (“the overseas territory”).
(8) The following are applicable reasons related to coronavirus disease—
(a) that P is present in the UK as a medical or healthcare professional for purposes connected with the detection, treatment or prevention of coronavirus disease;
(b) that P is present in the UK for purposes connected with the development or production of medicinal products (including vaccines), devices, equipment or facilities related to the detection, treatment or prevention of coronavirus disease.
(9) For the purposes of sub-paragraph (7)(c), P is resident in an overseas territory in the tax year in question if P is considered for tax purposes to be a resident of that territory in accordance with the laws of that territory.
(10) The Treasury may by regulations made by statutory instrument—
(a) amend sub-paragraph (7)(a) so as to replace the later of the dates specified in it with another date falling before 6 April 2021;
(b) amend this paragraph so as to add one or more applicable reasons related to coronavirus disease.
(11) The powers under sub-paragraph (10) may be exercised on more than one occasion.
(12) A statutory instrument containing regulations under sub-paragraph (10) is subject to annulment in pursuance of a resolution of the House of Commons.
(5) Paragraph 23 (key concepts: days spent and the deeming rule) has effect as if after sub-paragraph (5) there were inserted—
(5A) For the purposes of sub-paragraphs (3)(b) and (4), a day does not count as a qualifying day if it is a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it).
(6) Paragraph 28(2) (rules for calculating the reference period) has effect as if—
(a) in paragraph (b) the “and” at the end were omitted;
(b) after paragraph (b) there were inserted—
(ba) absences from work at times during the period specified in an emergency volunteering certificate issued to P under Schedule 7 to the Coronavirus Act 2020 (emergency volunteering leave), and
;
(c) in paragraph (c), for “or (b)” there were substituted “ , (b) or (ba) ”.
(7) Paragraph 29 (significant breaks from UK or overseas work) has effect as if in sub-paragraphs (1)(b) and (2)(b), for “or parenting leave” there were substituted “ , parenting leave or emergency volunteering leave under Schedule 7 to the Coronavirus Act 2020 ”.
(8) Paragraph 32 (family tie) has effect as if after sub-paragraph (4) there were inserted—
(4A) But a day does not count as a day on which P sees the child if the day on which P sees the child would be a day falling within the third case in paragraph 22(7) (if P were present in the UK at the end of it).
(9) Paragraph 34 (accommodation tie) has effect as if after sub-paragraph (1) there were inserted—
(1A) For the purposes of sub-paragraph (1)—
(a) if the place is available to P on a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of that day), that day is to be disregarded for the purposes of sub-paragraph (b), and
(b) a night spent by P at the place immediately before or after a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of that day) is to be disregarded for the purposes of sub-paragraph (c).
(10) Paragraph 35 (work tie) has effect as if after sub-paragraph (2) there were inserted—
(3) But a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it) does not count as a day on which P works in the UK.
(11) Paragraph 37 (90-day tie) has effect as if—
(a) the existing text were sub-paragraph (1);
(b) after that sub-paragraph, there were inserted—
(2) For the purposes of sub-paragraph (1), a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of it) does not count as a day P has spent in the UK in the year in question.
(12) Paragraph 38 (country tie) has effect as if after sub-paragraph (3) there were inserted—
(4) For the purposes of sub-paragraph (3), P is to be treated as not being present in the UK at the end of a day that would fall within the third case in paragraph 22(7) (if P were present in the UK at the end of that day).
(13) Paragraph 145 (interpretation) has effect as if at the appropriate place there were inserted—
“coronavirus disease” has the same meaning as in the Coronavirus Act 2020 (see section 1(1) of that Act);
.
(1) This section applies if an individual to whom shares in a company have been issued—
(a) enters into a convertible loan agreement with the company under the Future Fund on or after 20 May 2020, and
(b) subsequently receives value from the company under the terms of the agreement.
(2) If, as a result of the receipt of value, any EIS relief attributable to shares issued before the relevant time would (apart from this subsection) be withdrawn or reduced under section 213 of ITA 2007, the value received is to be ignored for the purposes of that section.
(3) If, as a result of the receipt of value, any SEIS relief attributable to shares issued before the relevant time would (apart from this subsection) be withdrawn or reduced under section 257FE of ITA 2007, the value received is to be ignored for the purposes of that section.
(4) If, as a result of the receipt of value, shares issued before the relevant time would (apart from this subsection) cease to be eligible shares by reason of paragraph 13(1)(b) of Schedule 5B to TCGA 1992, the value received is to be ignored for the purposes of that paragraph.
(5) In this section—
“the Future Fund” means the scheme of that name operated from 20 May 2020 by the British Business Bank plc on behalf of the Secretary of State;
“the relevant time” means the time when the individual enters into the convertible loan agreement.
111 Preparing for a new tax in respect of certain plastic packaging
The Commissioners for Her Majesty's Revenue and Customs may make preparations for the introduction of a new tax to be charged in respect of certain plastic packaging.
(1) In section 4(1) of the National Loans Act 1968 (which sets a limit on local loans made in pursuance of section 3 of that Act)—
(a) for “£85 billion” substitute “ £115 billion ”, and
(b) for “£95 billion” substitute “ £135 billion ”.
(2) The Local Loans (Increase of Limit) Order 2019 (SI 2019/1317) is revoked.
(3) This section comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
In this Act the following abbreviations are references to the following Acts—
ALDA 1979 | Alcoholic Liquor Duties Act 1979
CAA 2001 | Capital Allowances Act 2001
CTA 2009 | Corporation Tax Act 2009
CTA 2010 | Corporation Tax Act 2010
FA, followed by a year | Finance Act of that year
F(No.2)A, followed by a year | Finance (No.2) Act of that year
HODA 1979 | Hydrocarbon Oil Duties Act 1979
IHTA 1984 | Inheritance Tax Act 1984
ITA 2007 | Income Tax Act 2007
ITEPA 2003 | Income Tax (Earnings and Pensions) Act 2003
ITTOIA 2005 | Income Tax (Trading and Other Income) Act 2005
TCGA 1992 | Taxation of Chargeable Gains Act 1992
TCTA 2018 | Taxation (Cross-border Trade) Act 2018
TMA 1970 | Taxes Management Act 1970
TPDA 1979 | Tobacco Products Duty Act 1979
VATA 1994 | Value Added Tax Act 1994
VERA 1994 | Vehicle Excise and Registration Act 1994
SCHEDULE 1 Workers' services provided through intermediaries
Section 7
PART 1 Amendments to Chapter 8 of Part 2 of ITEPA 2003
1 Chapter 8 of Part 2 of ITEPA 2003 (application of provisions to workers under arrangements made by intermediaries) is amended as follows.
2 For the heading of the Chapter substitute “Workers' services provided through intermediaries to small clients”.
3 (1) Section 48 (scope of Chapter) is amended as follows.
(2) In subsection (1) for the words from “, but” to the end substitute
in a case where the services are provided to a person who is not a public authority and who either—
(a) qualifies as small for a tax year, or
(b) does not have a UK connection for a tax year.
(3) After subsection (3) insert—
(4) For provisions determining when a person qualifies as small for a tax year, see sections 60A to 60G.
(5) For provision determining when a person has a UK connection for a tax year, see section 60I.
4 (1) Section 50 (worker treated as receiving earnings from employment) is amended as follows.
(2) In subsection (1) before paragraph (a) insert—
(za) the client qualifies as small or does not have a UK connection,
.
(3) After subsection (4) insert—
(5) The condition in paragraph (za) of subsection (1) is to be ignored if—
(a) the client concerned is an individual, and
(b) the services concerned are performed otherwise than for the purposes of the client's business.
(6) For the purposes of paragraph (za) of subsection (1) the client is to be treated as not qualifying as small for the tax year concerned if the client is treated as medium or large for that tax year by reason of section 61TA(3)(a).
5 After section 60 insert—
When a person qualifies as small for a tax year
When a company qualifies as small for a tax year
60A (1) For the purposes of this Chapter, a company qualifies as small for a tax year if one of the following conditions is met (but this is subject to section 60C).
(2) The first condition is that the company's first financial year is not relevant to the tax year.
(3) The second condition is that the small companies regime applies to the company for its last financial year that is relevant to the tax year.
(4) For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company's accounts and reports for the financial year ends before the beginning of the tax year.
(5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
When a company qualifies as small for a tax year: joint ventures
60B (1) This section applies when determining for the purposes of section 60A(3) whether the small companies regime applies to a company for a financial year in a case where—
(a) at the end of the financial year the company is jointly controlled by two or more other persons, and
(b) one or more of those other persons are undertakings (“the joint venturer undertakings”).
(2) If the company is a parent company, the joint venturer undertakings are to be treated as members of the group headed by the company.
(3) If the company is not a parent company, the company and the joint venturer undertakings are to be treated as constituting a group of which the company is the parent company.
(4) In this section the expression “jointly controlled” is to be read in accordance with those provisions of international accounting standards which relate to joint ventures.
(5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
When a company qualifies as small for a tax year: subsidiaries
60C (1) A company does not qualify as small for a tax year by reason of the condition in section 60A(3) being met if—
(a) the company is a member of a group at the end of its last financial year that is relevant to the tax year,
(b) the company is not the parent undertaking of that group at the end of that financial year, and
(c) the undertaking that is the parent undertaking of that group at that time does not qualify as small in relation to its last financial year that is relevant to the tax year.
(2) Where the parent undertaking mentioned in subsection (1)(c) is not a company, sections 382 and 383 of the Companies Act 2006 have effect for determining whether the parent undertaking qualifies as small in relation to its last financial year that is relevant to the tax year as if references in those sections to a company and a parent company included references to an undertaking and a parent undertaking.
(3) For the purposes of subsections (1)(c) and (2) a financial year of an undertaking that is not a company is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year.
(4) For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company's accounts and reports for the financial year ends before the beginning of the tax year.
(5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
When a relevant undertaking qualifies as small for a tax year
60D (1) Sections 60A to 60C apply in relation to a relevant undertaking as they apply in relation to a company, subject to any necessary modifications.
(2) In this section “relevant undertaking” means an undertaking in respect of which regulations have effect under—
(a) section 15(a) of the Limited Liability Partnerships Act 2000,
(b) section 1043 of the Companies Act 2006 (unregistered companies), or
(c) section 1049 of the Companies Act 2006 (overseas companies).
(3) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
When other undertakings qualify as small for a tax year
60E (1) An undertaking that is not a company or a relevant undertaking qualifies as small for a tax year if one of the following conditions is met.
(2) The first condition is that the undertaking's first financial year is not relevant to the tax year.
(3) The second condition is that the undertaking's turnover for its last financial year that is relevant to the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006.
(4) For the purposes of this section a financial year of an undertaking is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year.
(5) In this section—
“relevant undertaking” has the meaning given by section 60D, and
“turnover”, in relation to an undertaking, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived.
(6) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
When other persons qualify as small for a tax year
60F (1) For the purposes of this Chapter, a person who is not a company, relevant undertaking or other undertaking qualifies as small for a tax year if the person's turnover for the last calendar year before the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006.
(2) In this section—
“company” and “undertaking” have the same meaning as in the Companies Act 2006,
“relevant undertaking” has the meaning given by section 60D, and
“turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived.
Sections 60A to 60F: connected persons
60G (1) This section applies where—
(a) it is necessary for the purposes of determining whether a person qualifies as small for a tax year (“the tax year concerned”) to first determine the person's turnover for a financial year or calendar year (“the assessment year”), and
(b) at the end of the assessment year the person is connected with one or more other persons (“the connected persons”).
(2) For the purposes of determining whether the person qualifies as small for the tax year concerned the person's turnover for the assessment year is to be taken to be the sum of—
(a) the person's turnover for the assessment year, and
(b) the relevant turnover of each of the connected persons.
(3) In subsection (2)(b) “the relevant turnover” of a connected person means—
(a) in a case where the connected person is a company, relevant undertaking or other undertaking, its turnover for its last financial year that is relevant to the tax year concerned, and
(b) in a case where the connected person is not a company, relevant undertaking or other undertaking, the turnover of the connected person for the last calendar year ending before the tax year concerned.
(4) For the purposes of subsection (3)(a)—
(a) a financial year of a company or relevant undertaking is relevant to the tax year concerned if the period for filing accounts and reports for the financial year ends before the beginning of the tax year concerned, and
(b) a financial year of any other undertaking is relevant to the tax year concerned if it ends more than 9 months before the beginning of the tax year concerned.
(5) In a case where—
(a) the person mentioned in subsection (1)(a) is a company or relevant undertaking, and
(b) at the end of the assessment period the person is a member of a group,
the person is to be treated for the purposes of this section as not being connected with any person that is a member of that group.
(6) In this section—
“turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived, and
“relevant undertaking” has the meaning given by section 60D.
(7) For provision determining whether one person is connected with another, see section 718 (connected persons).
(8) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act.
Duty on client to state whether it qualifies as small for a tax year
60H (1) This section applies if, in the case of an engagement that meets conditions (a) to (b) in section 49(1), the client receives from the client's agent or the worker a request to state whether in the client's opinion the client qualifies as small for a tax year specified in the request.
(2) The client must provide to the person who made the request a statement as to whether in the client's opinion the client qualifies as small for the tax year specified in the request.
(3) If the client fails to provide the statement by the time mentioned in subsection (4) the duty to do so is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.
(4) The time is whichever is the later of—
(a) the end of the period of 45 days beginning with the date the client receives the request, and
(b) the beginning of the period of 45 days ending with the start of the tax year specified in the request.
(5) In this section “the client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in paragraph (b) of section 49(1).
When a person has a UK connection
When a person has a UK connection for a tax year
60I (1) For the purposes of this Chapter, a person has a UK connection for a tax year if (and only if) immediately before the beginning of that tax year the person—
(a) is resident in the United Kingdom, or
(b) has a permanent establishment in the United Kingdom.
(2) In this section “permanent establishment”—
(a) in relation to a company, is to be read (by virtue of section 1007A of ITA 2007) in accordance with Chapter 2 of Part 24 of CTA 2010, and
(b) in relation to any other person, is to be read in accordance with that Chapter but as if references in that Chapter to a company were references to that person.
Interpretation
6 In section 61(1) (interpretation), in the definition of company, before “means” insert “ (except in sections 60A to 60G) ”.
PART 2 Amendments to Chapter 10 of Part 2 of ITEPA 2003
7 Chapter 10 of Part 2 of ITEPA 2003 (workers' services provided to public sector through intermediaries) is amended as follows.
8 For the heading of the Chapter substitute “Workers' services provided through intermediaries to public authorities or medium or large clients”.
9 (1) Section 61K (scope of Chapter) is amended as follows.
(2) In subsection (1) for the words “to a public authority through an intermediary” substitute
through an intermediary in a case where the services are provided to a person who—
(a) is a public authority, or
(b) qualifies as medium or large and has a UK connection for a tax year
.
(3) After subsection (2) insert—
(3) For the purposes of this Chapter a person qualifies as medium or large for a tax year if the person does not qualify as small for the tax year for the purposes of Chapter 8 of this Part (see sections 60A to 60G).
(4) Section 60I (when a person has a UK connection for a tax year) applies for the purposes of this Chapter.
10 In section 61L (meaning of “public authority”) in subsection (1)—
(a) after paragraph (a) insert—
(aa) a body specified in section 23(3) of the Freedom of Information Act 2000,
,
(b) omit the “or” at the end of paragraph (e), and
(c) after paragraph (f) insert
, or
(g) a company connected with any person mentioned in paragraphs (a) to (f).
11 (1) Section 61M (engagements to which the Chapter applies) is amended as follows.
(2) In subsection (1)—
(a) omit paragraph (b),
(b) omit the “and” at the end of paragraph (c), and
(c) after paragraph (c) insert—
(ca) the client—
(i) is a public authority, or
(ii) is a person who qualifies as medium or large and has a UK connection for one or more tax years during which the arrangements mentioned in paragraph (c) have effect, and
.
(3) After subsection (1) insert—
(1A) But sections 61N to 61R do not apply if—
(a) the client is an individual, and
(b) the services are provided otherwise than for the purposes of the client's trade or business.
12 (1) Section 61N (worker treated as receiving earnings from employment) is amended as follows.
(2) In subsection (3)—
(a) after “subsections (5) to (7)” insert “ and (8A) ”, and
(b) after “61T” insert “ , 61TA ”.
(3) For subsection (5) substitute—
(5) Unless and until the client gives a status determination statement to the worker (see section 61NA), subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to section 61V.
(5A) Subsections (6) and (7) apply, subject to sections 61T, 61TA and 61V, if—
(a) the client has given a status determination statement to the worker,
(b) the client is not the fee-payer, and
(c) the fee-payer is not a qualifying person.
(4) In subsection (8) (meaning of “qualifying person”) before paragraph (a) insert—
(za) has been given by the person immediately above them in the chain the status determination statement given by the client to the worker,
.
(5) After subsection (8) insert—
(8A) If the client is not a public authority, a person is to be treated by subsection (3) as making a deemed direct payment to the worker only if the chain payment made by the person is made in a tax year for which the client qualifies as medium or large and has a UK connection.
13 After section 61N insert—
Meaning of status determination statement
61NA (1) For the purposes of section 61N “status determination statement” means a statement by the client that—
(a) states that the client has concluded that the condition in section 61M(1)(d) is met in the case of the engagement and explains the reasons for that conclusion, or
(b) states (albeit incorrectly) that the client has concluded that the condition in section 61M(1)(d) is not met in the case of the engagement and explains the reasons for that conclusion.
(2) But a statement is not a status determination statement if the client fails to take reasonable care in coming to the conclusion mentioned in it.
(3) For further provisions concerning status determination statements, see section 61T (client-led status disagreement process) and section 61TA (duty for client to withdraw status determination statement if it ceases to be medium or large).
14 In section 61O(1) (conditions where intermediary is a company) for paragraph (b) substitute—
(b) it is the case that—
(i) the worker has a material interest in the intermediary,
(ii) the worker has received a chain payment from the intermediary, or
(iii) the worker has rights which entitle, or which in any circumstances would entitle, the worker to receive a chain payment from the intermediary.
15 In section 61R (application of Income Tax Acts in relation to deemed employment) omit subsection (7).
16 For section 61T substitute—
Client-led status disagreement process
61T (1) This section applies if, before the final chain payment is made in the case of an engagement to which this Chapter applies, the worker or the deemed employer makes representations to the client that the conclusion contained in a status determination statement is incorrect.
(2) The client must either—
(a) give a statement to the worker or (as the case may be) the deemed employer that—
(i) states that the client has considered the representations and has decided that the conclusion contained in the status determination statement is correct, and
(ii) states the reasons for that decision, or
(b) give a new status determination statement to the worker and the deemed employer that—
(i) contains a different conclusion from the conclusion contained in the previous status determination statement,
(ii) states the date from which the client considers that the conclusion contained in the new status determination statement became correct, and
(iii) states that the previous status determination statement is withdrawn.
(3) If the client fails to comply with the duty in subsection (2) before the end of the period of 45 days beginning with the date the client receives the representations, section 61N(3) and (4) has effect from the end of that period until the duty is complied with as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to section 61V.
(4) A new status determination statement given to the deemed employer under subsection (2)(b) is to be treated for the purposes of section 61N(8)(za) as having been given to the deemed employer by the person immediately above the deemed employer in the chain.
(5) In this section—
“the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment;
“status determination statement” has the meaning given by section 61NA.
Duty for client to withdraw status determination statement if it ceases to be medium or large
61TA (1) This section applies if in the case of an engagement to which this Chapter applies—
(a) the client is not a public authority,
(b) the client gives a status determination statement to the worker, the client's agent or both, and
(c) the client does not (but for this section) qualify as medium or large for a tax year beginning after the status determination statement is given.
(2) Before the beginning of the tax year the client must give a statement to the relevant person, or (as the case may be) to both of the relevant persons, stating—
(a) that the client does not qualify as medium or large for the tax year, and
(b) that the status determination statement is withdrawn with effect from the beginning of the tax year.
(3) If the client fails to comply with that duty the following rules apply in relation to the engagement for the tax year—
(a) the client is to be treated as medium or large for the tax year, and
(b) section 61N(3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client.
(4) For the purposes of subsection (2)—
(a) the worker is a relevant person if the status determination statement was given to the worker, and
(b) the deemed employer is a relevant person if the status determination statement was given to the client's agent.
(5) In this section—
“client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in section 61M(1)(c);
“the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment;
“status determination statement” has the meaning given by section 61NA.
17 (1) Section 61W (prevention of double charge to tax and allowance of certain deductions) is amended as follows.
(2) In subsection (1)—
(a) in paragraph (b) for “a public authority” substitute “ another person (“the client”) ”, and
(b) in paragraph (d) for “that public authority” substitute “ the client ”.
(3) In subsection (2)(b) for “public authority” substitute “ client ”.
PART 3 Consequential and miscellaneous amendments
18 In section 61D of ITEPA 2003 (managed service companies: worker treated as receiving earnings from employment) for subsection (4A) substitute—
(4A) This section does not apply where the provision of the relevant services gives rise (directly or indirectly) to an engagement to which Chapter 10 applies and either—
(a) the client for the purposes of section 61M(1) is a public authority, or
(b) the client for the purposes of section 61M(1)—
(i) qualifies as medium or large for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received, and
(ii) has a UK connection for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received.
(4B) Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) apply for the purposes of subsection (4A).
(4C) It does not matter for the purposes of subsection (4A) whether the client for the purposes of this Chapter is also “the client” for the purposes of section 61M(1).
19 After section 688A of ITEPA 2003 insert—
Workers' services provided through intermediaries: recovery of PAYE
688AA (1) PAYE Regulations may make provision for, or in connection with, the recovery of a deemed employer PAYE debt from a relevant person.
(2) “A deemed employer PAYE debt” means an amount—
(a) that a person (“the deemed employer”) is liable to pay under PAYE regulations in consequence of being treated under section 61N(3) as having made a deemed direct payment to a worker, and
(b) that an officer of Revenue and Customs considers there is no realistic prospect of recovering from the deemed employer within a reasonable period.
(3) “Relevant person”, in relation to a deemed employer PAYE debt, means a person who is not the deemed employer and who—
(a) is the highest person in the chain identified under section 61N(1) in determining that the deemed employer is to be treated as having made the deemed direct payment, or
(b) is the second highest person in that chain and is a qualifying person (within the meaning given by section 61N(8)) at the time the deemed employer is treated as having made that deemed direct payment.
20 In section 60 of FA 2004 (construction industry scheme: meaning of contract payments) after subsection (3) insert—
(3A) This exception applies in so far as—
(a) the payment can reasonably be taken to be for the services of an individual, and
(b) the provision of those services gives rise to an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies (workers' services provided through intermediaries to public authorities or medium or large clients).
(3B) But the exception in subsection (3A) does not apply if, in the case of the engagement mentioned in paragraph (b) of that subsection, the client for the purposes of section 61M(1) of ITEPA 2003—
(a) is not a public authority, and
(b) either—
(i) does not qualify as medium or large for the tax year in which the payment concerned is made, or
(ii) does not have a UK connection for the tax year in which the payment concerned is made.
(3C) Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) of ITEPA 2003 apply for the purposes of subsection (3B).
21 For the italic heading before section 141A of CTA 2009 substitute “ Worker's services provided through intermediary to public authority or medium or large client ”.
22 In the heading of section 141A of CTA 2009 for “public sector” substitute “ public authority or medium or large client ”.
23 (1) Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.
(2) In section 1129 (qualifying expenditure on externally provided workers: connected persons) after subsection (4) insert—
(4A) In subsection (2) the reference to the staff provision payment is to that payment before any deduction is made from the payment under—
(a) section 61S of ITEPA 2003,
(b) regulation 19 of the Social Security Contributions (Intermediaries) Regulations 2000, or
(c) regulation 19 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.
(3) In section 1131 (qualifying expenditure on externally provided workers: other cases) after subsection (2) insert—
(3) In subsection (2) the reference to the staff provision payment is to that payment before any deduction is made from the payment under—
(a) section 61S of ITEPA 2003,
(b) regulation 19 of the Social Security Contributions (Intermediaries) Regulations 2000, or
(c) regulation 19 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.
(4) After section 1131 insert—
Sections 1129 and 1131: secondary Class 1 NICS paid by company
1131A (1) This section applies if—
(a) a company makes a staff provision payment,
(b) the company is treated as making a payment of deemed direct earnings the amount of which is calculated by reference to the amount of the staff provision payment, and
(c) the company pays a secondary Class 1 national insurance contribution in respect of the payment of deemed direct earnings.
(2) In determining the company's qualifying expenditure on externally provided workers in accordance with section 1129(2) or section 1131(2) the amount of the staff payment provision is to be treated as increased by the amount of the contribution.
(3) In determining the company's qualifying expenditure on externally provided workers in accordance with section 1129(2) the aggregate of the relevant expenditure of each staff controller is to be treated as increased by the amount of the contribution.
(4) But subsection (2) does not apply to the extent that the expenditure incurred by the company in paying the contribution is met directly or indirectly by a staff controller.
(5) “A payment of deemed direct earning” means a payment the company is treated as making by reason of regulation 14 of the Social Security Contributions (Intermediaries) Regulations 2000 or regulation 14 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.
PART 4 Commencement and transitional provisions
Commencement
24 The amendments made by Part 1 of this Schedule have effect for the tax year 2021-22 and subsequent tax years.
25 The amendments made by Part 2 of this Schedule have effect in relation to deemed direct payments treated as made on or after 6 April 2021.
26 The amendment made by paragraph 18 of this Schedule has effect for the purposes of determining whether section 61D of ITEPA 2003 applies in a case where the payment or benefit mentioned in subsection (1)(b) of that section is received on or after 6 April 2021.
27 The amendment made by paragraph 20 of this Schedule has effect in relation to payments made under a construction contract on or after 6 April 2021.
28 The amendments made by paragraph 23 of this Schedule have effect in relation to expenditure incurred on or after 6 April 2021.
29 Sections 101 to 103 of FA 2009 (interest) come into force on 6 April 2021 in relation to amounts payable or paid to Her Majesty's Revenue and Customs under regulations made by virtue of section 688AA of ITEPA 2003 (as inserted by paragraph 19 of this Schedule).
Transitional provisions
30 (1) This paragraph applies where—
(a) the client in the case of an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies is not a public authority within the meaning given by section 61L of ITEPA 2003 (as that section had effect before the amendments made by paragraph 10 of this Schedule), and
(b) a chain payment is made on or after 6 April 2021 that can reasonably be taken to be for services performed by the worker before 6 April 2021.
(2) The chain payment is to be disregarded for the purposes of Chapter 10 of Part 2 of ITEPA 2003.
31 (1) This paragraph applies where—
(a) the client in the case of an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies is not a public authority within the meaning given by section 61L of ITEPA 2003 (as that section had effect before the amendments made by paragraph 10 of this Schedule), and
(b) one or more qualifying chain payments are made in the tax year 2021-22 or a subsequent tax year (“the tax year concerned”) to the intermediary.
(2) A chain payment made to the intermediary is a qualifying chain payment if it can reasonably be taken to be for services performed by the worker before 6 April 2021.
(3) A chain payment made to the intermediary is also a qualifying chain payment if—
(a) another chain payment (“the earlier payment”) was made before 6 April 2021 to a person other than the intermediary,
(b) the earlier payment can reasonably be taken to be for the same services as the chain payment made to the intermediary, and
(c) the person who made the earlier payment would, but for paragraph 25 of this Schedule, have been treated by section 61N(3) and (4) of ITEPA 2003 as making a deemed direct payment to the worker at the same time as they made the earlier payment.
(4) Chapter 8 of Part 2 of ITEPA 2003 applies in relation to the engagement for the tax year concerned (in addition to Chapter 10 of Part 2 of ITEPA 2003), but as if—
(a) the amendments made by Part 1 of this Schedule had not been made, and
(b) the qualifying chain payments received by the intermediary in the tax year concerned are the only payments and benefits received by the intermediary in that year in respect of the engagement.
32 (1) This paragraph applies for the purposes of paragraphs 30 and 31 where a chain payment (“the actual payment”) is made that can reasonably be taken to be for services of the worker performed during a period that begins before and ends on or after 6 April 2021.
(2) The actual payment is to be treated as two separate chain payments—
(a) one consisting of so much of the amount or value of the actual payment as can on a just and reasonable apportionment be taken to be for services performed before 6 April 2021, and
(b) another consisting of so much of the amount or value of the actual payment as can on a just and reasonable apportionment be taken to be for services performed on or after 6 April 2021.
33 For the purposes of section 61N(5), (5A)(a) and (8)(za) of ITEPA 2003 it does not matter whether the status determination statement concerned is given before 6 April 2021 or on or after that date.
34 For the purposes of section 61T of ITEPA 2003—
(a) it does not matter whether the representations to the client mentioned in subsection (1) of that section were made before 6 April 2021 or on or after that date, but
(b) in a case where the representations were made before 6 April 2021 that section has effect as if the reference in subsection (3) to the date the client receives the representations were to 6 April 2021.
SCHEDULE 2 The loan charge: consequential amendments
Sections 15 and 16
PART 1 Amendments to F(No.2)A 2017 in consequence of section 15
1 Schedule 11 to F(No.2)A 2017 (employment income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.
2 In paragraph 1 (application of Part 7A of ITEPA 2003: relevant step) in sub-paragraph (2) for the words from “before” to the end substitute “ before the end of 5 April 2019. ”
3 For the italic heading before paragraph 2 substitute “Meaning of “ loan ” and “quasi loan” ”.
4 In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”) omit sub-paragraph (6).
5 (1) Paragraph 4 (when an amount of a loan is outstanding: certain repayments to be disregarded) is amended as follows.
(2) In sub-paragraph (1)(b)(ii) for “the relevant date” substitute “ 5 April 2019 ”.
(3) In sub-paragraph (2) for “the relevant date” substitute “ 5 April 2019 ”.
(4) Omit sub-paragraph (4).
6 In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a right to payment of the loan) in sub-paragraph (1)(b) for “6 April 1999” substitute “ 9 December 2010 ”.
7 In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B acquires a right to the payment or transfer of assets) in sub-paragraph (1)(b) for “6 April 1999” substitute “ 9 December 2010 ”.
8 Omit paragraph 19 (meaning of “approved fixed term loan”) and the italic heading before that paragraph.
9 For the heading of Part 2 substitute “ Accelerated payments ”.
10 Omit paragraphs 20 to 22 and the italic headings before each of those paragraphs.
11 Omit the italic heading before paragraph 23.
12 (1) Paragraph 23 (accelerated payments) is amended as follows.
(2) In sub-paragraph (1)—
(a) in paragraph (d) for “the relevant date” substitute “ 5 April 2019 ”, and
(b) in paragraph (e) for “the relevant date” substitute “ 5 April 2019 ”.
(3) Omit sub-paragraph (4).
13 (1) Paragraph 35A (when the duty to provide loan charge information arises) is amended as follows.
(2) Omit sub-paragraph (3).
(3) In sub-paragraph (4) in the words before paragraph (a) for “third” substitute “ second ”.
(4) In sub-paragraph (5)—
(a) in the words before paragraph (a) for “fourth” substitute “ third ”,
(b) in paragraph (a) for the words from the beginning to “conditions” substitute “ neither the first nor the second condition ”, and
(c) in paragraph (b)—
(i) for “and (2)(b)” substitute “ and (2) ”, and
(ii) omit the words from “(and if paragraph” to “omitted)”.
(5) In sub-paragraph (6) in the words before paragraph (a) for “fourth” substitute “ third ”.
(6) In sub-paragraph (7) omit paragraph (b).
14 In paragraph 35B (duty of appropriate third party to provide information to A) in sub-paragraph (1) omit “Q,”.
15 (1) Paragraph 35D (meaning of “loan charge information”) is amended as follows.
(2) In sub-paragraph (1)—
(a) in paragraph (e) omit “, or the loan mentioned in paragraph 35A(3)(a),”,
(b) in paragraph (j) omit “, Q”, and
(c) in paragraph (k) omit “, or in a case within paragraph 35A(3)(a),”.
(3) In sub-paragraph (2) omit paragraph (a).
16 (1) Paragraph 36 (duty to provide loan charge information to B) is amended as follows.
(2) In sub-paragraph (1)(b) for “6 April 1999” substitute “ 9 December 2010 ”.
(3) In sub-paragraph (2) for the words from “the period” to the end substitute “ 15 April 2019 ”.
(4) Omit sub-paragraph (4).
17 Schedule 12 to F(No.2)A 2017 (trading income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.
18 For the italic heading before paragraph 2 substitute “Meaning of “ loan ” and “quasi loan” ”.
19 In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”) omit sub-paragraph (6).
20 Omit paragraphs 15 to 18 and the italic heading before each of those paragraphs.
21 (1) Paragraph 19 (accelerated payments: application of paragraph 20) is amended as follows.
(2) In sub-paragraph (1)—
(a) in paragraph (e) for “the relevant date” substitute “ 5 April 2019 ”, and
(b) in paragraph (f) for “the relevant date” substitute “ 5 April 2019 ”.
(3) Omit sub-paragraph (3).
22 In paragraph 23 (meaning of “loan charge information”) in sub-paragraph (2) omit paragraph (a).
PART 2 Amendments in consequence of section 16
ITEPA 2003
23 ITEPA 2003 is amended as follows.
24 (1) Section 554A (application of Chapter 2 of Part 7A: the main case) is amended as follows.
(2) In subsection (2) after “paragraph 1” insert “ or 1A ”.
(3) For subsection (4) substitute—
(4) Chapter 2 does not apply by reason of—
(a) a relevant step taken on or after A's death if—
(i) the relevant step is within section 554B, or
(ii) the relevant step is within section 554C by virtue of subsection (1)(ab) of that section,
(b) a relevant step within paragraph 1 of Schedule 11 to F(No.2)A 2017 which is treated as being taken on or after A's death, or
(c) a relevant step within paragraph 1A of Schedule 11 to F(No.2)A 2017 in a case where the initial step (within the meaning given by sub-paragraph (1)(a) of that paragraph) is treated as being taken on or after A's death.
25 In section 554Z (interpretation: general) in subsection (10)(d) after “paragraph 1” insert “ or 1A ”.
F(No.2)A 2017
26 Schedule 11 to F(No.2)A 2017 (employment income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.
27 In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”)—
(a) in sub-paragraph (2), in the words before paragraph (a), for “paragraph 1” substitute “ paragraphs 1 and 1A ”,
(b) in sub-paragraph (4) for “paragraph 1” substitute “ paragraphs 1 and 1A ”, and
(c) in sub-paragraph (5) for “paragraph 1” substitute “ paragraphs 1 and 1A ”.
28 In paragraph 3(1) (meaning of “outstanding”: loans) for “paragraph 1” substitute “ paragraphs 1 and 1A ”.
29 In paragraph 4 (when an amount of a loan is outstanding: certain repayments to be disregarded) in sub-paragraph (6) for “the relevant step treated as taken by paragraph 1” substitute “ a relevant step treated as taken by paragraph 1 or 1A ”.
30 In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a right to payment of the loan) in sub-paragraph (2)(b) for “paragraph 1(4)” substitute “ paragraphs 1(4) and 1A(5) ”.
31 In paragraph 7 (meaning of “outstanding”: loans in currencies other than stirling) in sub-paragraph (3) after “relevant step” insert “ within paragraph 1 ”.
32 In paragraph 10 (meaning of “outstanding”: loans made in a depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert “ within paragraph 1 ”.
33 In paragraph 11(1) (meaning of “outstanding”: quasi-loans) for “paragraph 1” substitute “ paragraphs 1 and 1A ”.
34 In paragraph 12 (certain payments or transfers to be disregarded for the purposes of paragraph 11) in sub-paragraph (5) for “the relevant step treated as taken by paragraph 1” substitute “ a relevant step treated as taken by paragraph 1 or 1A ”.
35 In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B acquires a right to the payment or transfer of assets) in sub-paragraph (2)(b) for “paragraph 1(4)” substitute “ paragraphs 1(4) and 1A(5) ”.
36 In paragraph 15 (meaning of “outstanding”: quasi-loans in currencies other than sterling) in sub-paragraph (3) after “relevant step” insert “ within paragraph 1 ”.
37 In paragraph 18 (meaning of “outstanding”: quasi-loans made in a depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert “ within paragraph 1 ”.
38 After paragraph 35 insert—
Exclusion for relevant step within paragraph 1A where initial step excluded
35ZA Chapter 2 of Part 7A of ITEPA 2003 does not apply by reason of a relevant step within paragraph 1A if that Chapter does not apply by reason of the initial step (within the meaning given by sub-paragraph (1)(a) of paragraph 1A).
Social Security (Contributions) Regulations 2001
39 (1) The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) are amended as follows.
(2) In regulation 22B (amounts to be treated as earnings: Part 7A of ITEPA 2003) in paragraph (3A)(a) after “paragraph 1” insert “ or 1A ”.
(3) In regulation 22C (amounts to be treated as earnings paid to or for the benefit of the earner: Schedule 11 to F(No.2)A 2017) in paragraph (1)—
(a) after “paragraph 1” insert “ or 1A ”, and
(b) after “paragraph 1(2)” insert “ or 1A(3) or (4) ”.
Section 23
PART 1 Reduction in lifetime limit
Reduction in lifetime limit
1 In section 169N of TCGA 1992 (entrepreneurs' relief: amount of relief)—
(a) in subsection (4), for “£10 million” substitute “ £1 million ”;
(b) in subsection (4A), for “£10 million” substitute “ £1 million ”.
Commencement
2 The amendments made by paragraph 1 have effect in relation to disposals made on or after 11 March 2020.
Anti-forestalling: unconditional contracts
3 (1) This paragraph applies where an asset is conveyed or transferred on or after 11 March 2020 under a contract made before that date that is not conditional.
(2) Despite section 28(1) of TCGA 1992 (disposal under unconditional contract made at time of contract and not at time of later conveyance or transfer), the disposal is to be treated for the purposes of paragraph 2 as taking place at the time the asset is conveyed or transferred, and not at the time the contract is made, unless the condition in sub-paragraph (3) or (4) is met.
(3) The condition in this sub-paragraph is that—
(a) the parties to the contract are not connected persons,
(b) no purpose of entering into the contract was obtaining an advantage by reason of the application of section 28(1) of TCGA 1992, and
(c) the person making the conveyance or transfer makes a claim which includes a statement that the condition in paragraph (b) is met.
(4) The condition in this sub-paragraph is that—
(a) the parties to the contract are connected persons,
(b) the contract was entered into wholly for commercial reasons,
(c) no purpose of entering into the contract was obtaining an advantage by reason of the application of section 28(1) of TCGA 1992, and
(d) the person making the conveyance or transfer makes a claim which includes a statement that the conditions in paragraphs (b) and (c) are met.
(5) Section 169M(2) and (3) of TCGA 1992 apply to a claim under sub-paragraph (3)(c) or (4)(d) as if it were a claim under that section.
Anti-forestalling: reorganisations of share capital
4 (1) This paragraph applies where—
(a) on or after 6 April 2019 but before 11 March 2020, there is a reorganisation, and
(b) on 11 March 2020—
(i) the company is the relevant individual's personal company and is either a trading company or the holding company of a trading group, and
(ii) the relevant individual is an officer or employee of the company or (if the company is a member of a trading group) of one or more companies which are members of the trading group.
(2) In sub-paragraph (1) “the relevant individual” means—
(a) where a claim under section 169M of TCGA 1992 is made jointly by the trustees of a settlement and a qualifying beneficiary, the qualifying beneficiary;
(b) where a claim under that section is made by an individual, the individual.
(3) Where an election in respect of the reorganisation is made under section 169Q of TCGA 1992 (reorganisations: disapplication of section 127) on or after 11 March 2020, the disposal of the original shares is to be treated for the purposes of paragraph 2 as taking place at the time of the election and not at the time of the reorganisation.
(4) References in this paragraph to a reorganisation do not include an exchange of shares or securities which is treated as a reorganisation by virtue of section 135 or 136 of TCGA 1992 (but see paragraph 5).
Anti-forestalling: exchanges of securities etc
5 (1) This paragraph applies where—
(a) on or after 6 April 2019 but before 11 March 2020, there is an exchange of shares or securities within section 135(1) of TCGA 1992, and
(b) the condition in sub-paragraph (2) or (3) is met.
(2) The condition in this sub-paragraph is that—
(a) the persons who hold shares or securities in company B immediately after the exchange are substantially the same as those who held shares or securities in company A immediately before the exchange, or
(b) the persons who have control of company B immediately after the exchange are substantially the same as those who had control of company A immediately before the exchange.
(3) The condition in this sub-paragraph is that—
(a) the relevant shareholders, taken together, hold a greater percentage of the ordinary share capital in company B immediately after the exchange than they held in company A immediately before the exchange, and
(b) on 11 March 2020—
(i) company B is the relevant individual's personal company and is either a trading company or the holding company of a trading group, and
(ii) the relevant individual is an officer or employee of company B or (if company B is a member of a trading group) of one or more companies which are members of the trading group.
(4) In sub-paragraph (3)—
“the relevant individual” means—
where a claim under section 169M of TCGA 1992 is made jointly by the trustees of a settlement and a qualifying beneficiary, the qualifying beneficiary;
where a claim under that section is made by an individual, the individual;
“the relevant shareholders” means the persons who—
immediately after the exchange, hold shares or securities in company B, and
immediately before the exchange, also held shares or securities in company A.
(5) For the purposes of sub-paragraph (2)(a), connected persons are to be treated as the same person.
(6) Where an election in respect of the exchange is made under section 169Q of TCGA 1992 (reorganisations: disapplication of section 127) on or after 11 March 2020, the disposal of the original shares is to be treated for the purposes of paragraph 2 as taking place at the time of the election and not at the time of the exchange.
(7) Where, before the exchange, the Commissioners for Her Majesty's Revenue and Customs have issued a notification in respect of it under section 138(1) of TCGA 1992 (advance clearance procedure)—
(a) sections 127 to 131 of that Act apply with the necessary adaptations as if—
(i) company A and company B were the same company, and
(ii) the exchange were a reorganisation;
(b) section 169Q of that Act applies as if the exchange were treated as a reorganisation by virtue of section 135 of that Act.
Interpretation
6 (1) Paragraphs 2 to 5 are to be construed as if they were contained in Chapter 3 of Part 5 of TCGA 1992, subject to sub-paragraph (2).
(2) In those paragraphs—
“company A” and “company B” have the same meanings as in section 135 of TCGA 1992;
“original shares” has the meaning given by section 126 of TCGA 1992;
“reorganisation” has the meaning given by that section;
“trading company” and “trading group” have the meanings given by paragraph 1 of Schedule 7ZA to TCGA 1992.
PART 2 Re-naming the relief
7 (1) In section 169H(1) of TCGA 1992 (relief under Chapter 3 of Part 5: introduction), for “to be known as “entrepreneurs' relief”” substitute “ to be known as “business asset disposal relief” ”.
(2) In consequence of that amendment—
(a) in the rest of TCGA 1992, for “entrepreneurs' relief”, wherever occurring, substitute “ business asset disposal relief ”;
(b) in section 169V of TCGA 1992 (operation of deferred entrepreneurs' relief), for “ER purposes”, wherever occurring, substitute “ relevant purposes ”.
(3) Nothing in this paragraph affects the operation of Chapter 3 of Part 5 of TCGA 1992.
8 This Part of this Schedule has effect for the tax year 2020-21 and subsequent tax years.
Section 25
PART 1 Corporate capital loss restriction
Restriction on deduction from chargeable gains: main provisions
1 Part 7ZA of CTA 2010 (restrictions on obtaining certain deductions) is amended as follows.
2 After section 269ZB insert—
Restriction on deductions from chargeable gains
269ZBA (1) This section has effect for determining the taxable total profits of a company for an accounting period.
(2) The sum of any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods) may not exceed the relevant maximum.
But this is subject to subsection (7).
(3) In this section the “relevant maximum” means the sum of—
(a) 50% of the company's relevant chargeable gains for the accounting period, and
(b) the amount of the company's chargeable gains deductions allowance for the accounting period.
(4) Section 269ZF contains provision for determining a company's relevant chargeable gains for an accounting period.
(5) A company's “chargeable gains deductions allowance” for an accounting period—
(a) is so much of the company's deductions allowance for the period as is specified in the company's tax return as its chargeable gains deductions allowance for the period, and
(b) accordingly, is nil if no amount of the company's deductions allowance for the period is so specified.
(6) An amount specified under subsection (5)(a) as a company's chargeable gains deductions allowance for an accounting period may not exceed the difference between—
(a) the amount of the company's deductions allowance for the period, and
(b) the total of any amounts specified for the period under—
(i) section 269ZB(7)(a) (trading profits deductions allowance),
(ii) section 269ZC(5)(a) (non-trading income profits deductions allowance), and
(iii) in the case of an insurance company, section 269ZFC(5)(a) (BLAGAB deductions allowance).
(7) Subsection (2) does not apply in relation to a company for an accounting period where, in determining the company's qualifying chargeable gains for the period, the amount given by step 1 in section 269ZF(3) is not greater than nil.
3 (1) Section 269ZC (restriction on deductions from non-trading profits) is amended in accordance with this paragraph.
(2) In subsection (2), for “the relevant maximum” substitute “the difference between—
(a) the relevant maximum, and
(b) the amount of any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods).”
(3) For subsection (3) substitute—
(3) In this section the “relevant maximum” means the sum of—
(a) 50% of the company's total relevant non-trading profits for the accounting period, and
(b) the amount of the company's total non-trading profits deductions allowance for the accounting period.
(3A) A company's “total non-trading profits deductions allowance” for the accounting period is the sum of—
(a) the company's non-trading income profits deductions allowance (see subsection (5)), and
(b) the company's chargeable gains deductions allowance (see section 269ZBA(5)).
(4) In subsection (4), for “relevant non-trading profits” substitute “ total relevant non-trading profits ”.
(5) In subsection (5) for “ “non-trading profits deductions allowance””, in both places it occurs, substitute “ “non-trading income profits deductions allowance” ”.
(6) In subsection (6)—
(a) in the words before paragraph (a), for “ “non-trading profits deductions allowance”” substitute “ “non-trading income profits deductions allowance” ”, and
(b) for paragraph (b) substitute—
(b) the total of any amounts specified for the period under—
(i) section 269ZB(7)(a) (trading profits deductions allowance),
(ii) section 269ZBA(5)(a) (chargeable gains deductions allowance), and
(iii) in the case of an insurance company, section 269ZFC(5)(a) (BLAGAB deductions allowance).
(7) In subsection (8), for “relevant non-trading profits” substitute “ qualifying non-trading income profits and qualifying chargeable gains ”.
4 In section 269ZD (restriction on deductions from total profits), in subsection (2)(b), after sub-paragraph (i) (before the “and”) insert—
(ia) any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods),
.
5 In section 269ZF (relevant profits), after subsection (2) insert—
(2A) A company's “relevant chargeable gains” for an accounting period are—
(a) the company's qualifying chargeable gains for the accounting period (see subsection (3)), less
(b) the company's chargeable gains deductions allowance for the accounting period (see section 269ZBA(5)).
But if the allowance mentioned in paragraph (b) exceeds the qualifying chargeable gains mentioned in paragraph (a), the company's “relevant chargeable gains” for the accounting period are nil.
(2B) A company's “total relevant non-trading profits” for an accounting period are—
(a) the sum of—
(i) the company's qualifying non-trading income profits for the period, and
(ii) the company's qualifying chargeable gains for the period, less
(b) the company's total non-trading profits deductions allowance for the period (see section 269ZC(3A)).
6 In section 269ZF, in subsection (3), for steps 3 to 5 substitute—
Step 3 - trading profits, non-trading income profits and chargeable gains Divide the company's total profits for the accounting period (as modified under step 1(2)) into—
(a) profits of a trade of the company (the company's “trading profits”),
(b) profits, other than chargeable gains, that are not profits of a trade of the company (the company's “non-trading income profits”), and
(c) chargeable gains included in the total profits (the company's “chargeable gains”).
Step 4 - apportionment of the step 2 amount
(1) Allocate the whole of the step 2 amount to one of, or between two or all of, the following—
(a) the company's trading profits,
(b) the company's non-trading income profits, and
(c) the company's chargeable gains.
(2) Reduce, but not below nil, each of the company's trading profits, non-trading income profits and chargeable gains by the amount (if any) allocated to it under paragraph (1).
Step 5 - amount of qualifying trading profits, qualifying non-trading income profits and qualifying chargeable gains The amounts resulting from step 3, after any reduction under step 4, are—
(a) in the case of the amount in step 3(a), the company's qualifying trading profits,
(b) in the case of the amount in step 3(b), the company's qualifying nontrading income profits, and
(c) in the case of the amount in step 3(c), the company's qualifying chargeable gains.
7 In section 269ZF(4) (calculation of modified total profits)—
(a) omit “and” at the end of paragraph (f), and
(b) after paragraph (g) insert
; and
(h) make no deductions under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods).
Insolvent companies
8 After section 269ZW insert—
Increase of deductions allowance for insolvent companies
269ZWA (1) This section applies in relation to a company if—
(a) the company has gone into insolvent liquidation (see subsection (4)), or
(b) a corresponding situation exists in relation to the company in a country or territory outside the United Kingdom.
(2) The company's deductions allowance for a winding up accounting period (as determined in accordance with section 269ZR or 269ZW) is to be treated (for all purposes) as increased by—
(a) the amount of chargeable gains accruing to the company in the accounting period after deducting any allowable losses accruing to the company in the period, or
(b) if lower, the amount of any allowable losses previously accruing to the company, so far as not previously deducted under section 2A(1) of TCGA 1992.
(3) In determining the amount of chargeable gains accruing to the company in a winding up accounting period for the purposes of subsection (2), ignore—
(a) any chargeable gains (but not any allowable losses) accruing to the company on the disposal of an asset if—
(i) section 171(1) of TCGA 1992 (transfers within a group: no gain no loss) applied in relation to the disposal by which the company acquired the asset (the “no gain/no loss disposal”),
(ii) the asset was acquired by the company, by virtue of the no gain/no loss disposal, in a winding up accounting period, and
(iii) the company making the no gain/no loss disposal has not, at that time, gone into insolvent liquidation, and
(b) any chargeable gains (but not any allowable losses) transferred to the company in accordance with an election made under section 171A of TCGA 1992 (election to reallocate gain or loss to another member of the group) if—
(i) the election is made in a winding up accounting period, and
(ii) the company from which the chargeable gain is transferred has not, at the time the election is made, gone into insolvent liquidation.
(4) For the purposes of this section, a company has gone into insolvent liquidation if—
(a) it has gone into liquidation, within the meaning of section 247(2) of the Insolvency Act 1986 or article 6(2) of the Insolvency (Northern Ireland) Order 1989 (SI 1989/2405 (NI 19), and
(b) at the time it goes into liquidation, its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.
(5) In this section a “winding up accounting period” means—
(a) the accounting period of the company that begins when the winding up starts (within the meaning of section 12(7) of CTA 2009), and
(b) each subsequent accounting period.
9 In section 269ZZ (company tax return to specify amount of deductions allowance), in subsection (1), after paragraph (a) (but before the “and”) insert—
(aa) if section 269ZWA (increase of deductions allowance for insolvent companies) applies, what that amount would be without the increase provided for by subsection (2) of that section,
.
Companies without a source of chargeable income
10 After section 269ZY of CTA 2010 insert—
Deductions allowance for company without a source of chargeable income
269ZYA (1) This section applies in relation to a company and a financial year (“the relevant financial year”) if—
(a) the company has no source of chargeable income (see subsection (2)) throughout the relevant financial year, and
(b) if the company is a member of a group (see section 269ZZB) at any time during the relevant financial year, each other company that is, at any time during the relevant financial year, a member of the group has no source of chargeable income throughout the relevant financial year.
(2) For the purposes of this section and section 269ZYB, a company “has no source of chargeable income” if the company is either—
(a) not within the charge to corporation tax, or
(b) chargeable to corporation tax only because of a chargeable gain accruing to the company on the disposal of an asset.
(3) A company may make a claim under this section in respect of an accounting period if—
(a) the accounting period falls wholly within the relevant financial year, and
(b) the company is chargeable to corporation tax for the accounting period only because of a chargeable gain accruing to the company on the disposal of an asset.
(4) If a claim is made by a company under this section in respect of an accounting period (a “claim AP”), the company's deductions allowance for the claim AP is the lower of—
(a) the available deductions allowance amount (see subsection (9)),
(b) the total amount of allowable losses accruing to the company in any previous accounting period, so far as not previously deducted under section 2A(1)(a) or (b) of TCGA 1992, and
(c) the chargeable gains accruing to the company in the claim AP.
(5) A claim under this section in respect of an accounting period—
(a) must be made within the period of two years after the end of the accounting period, but
(b) may not be made before the end of the relevant financial year.
(6) Sections 269ZR to 269ZY (deductions allowances) do not apply to a claim AP.
(7) Subsection (8) applies if—
(a) there is at least one claim AP falling wholly within the relevant financial year, and
(b) there is at least one accounting period falling wholly within the relevant financial year in respect of which no claim is made under this section (an “alternative AP”).
(8) The company's deductions allowance for an alternative AP is the lower of—
(a) the deductions allowance that would be available, ignoring the effect of this section (see sections 269ZR to 269ZY), and
(b) the available deductions allowance amount (see subsection (9)).
(9) For the purposes of this section, the “available deductions allowance amount” is—
(a) £5,000,000, less
(b) the total of the deductions allowance amounts (if any) already claimed by—
(i) the company, and
(ii) if the company is a member of a group at any time during the relevant financial year, each other company that is, at any time during the relevant financial year, a member of the group,
in respect of each claim AP and alternative AP that falls wholly within the relevant financial year.
(10) In this section, references to the deductions allowance amounts claimed by a company in respect of an accounting period—
(a) for a claim AP, are references to any deductions allowance claimed by the company under this section in respect of the period, and
(b) for an alternative AP, are references to any other amount specified in the company's tax return as its chargeable gains deductions allowance for the period.
(11) For the purposes of subsection (9)(b), in the cases listed in the first column of the table below, the rules in the second column apply to determine the order in which deductions allowance amounts are to be treated as claimed in respect of the accounting periods—
Case | Rule
1. There is a claim AP and another claim AP starting on the same day or a different day. | The order in which the claims under this section are made.
2. There is an alternative AP (“AP1”) and another alternative AP (“AP2”) starting on a later day. | AP1 before AP2.
3. There is an alternative AP and another alternative AP starting on the same day. | The order in which the tax returns for the alternative APs are delivered.
4. There is a claim AP and an alternative AP starting on the same day, an earlier day or a later day. | The claim AP before the alternative AP.
Provisional application of section 269ZYA
269ZYB (1) This section applies in relation to a company and an accounting period if—
(a) the conditions in section 269ZYA(3)(a) and (b) are met in relation to the accounting period, and
(b) the company's tax return for the accounting period is delivered before the end of the financial year in which the accounting period falls (“the relevant financial year”).
(2) The company may make a declaration in the return for the accounting period that—
(a) at all earlier times in the relevant financial year—
(i) the company had no source of chargeable income (see section 269ZYA(2)), and
(ii) if the company is a member of a group, each other member of the group had no source of chargeable income, and
(b) the person intends to make a claim under section 269ZYA(3) in respect of the accounting period.
(3) Until the declaration ceases to have effect, section 269ZYA has effect as if the company had made a claim under that section.
(4) The declaration ceases to have effect if—
(a) it is withdrawn,
(b) it is superseded by a claim made under section 269ZYA, or
(c) the company or, if the company is a member of a group, another member of the group, acquires a source of chargeable income before the end of the relevant financial year.
(5) So far as not previously ceasing to have effect under subsection (4), the declaration ceases to have effect two years after the end of the accounting period in respect of which it is made.
(6) If the declaration ceases to have effect, all necessary adjustments must be made, by assessment, amendment of returns or otherwise.
(7) Subsection (6) applies despite any limitation on the time within which assessments or amendments may be made.
Offshore collective investment vehicles
11 In section 269ZZB of CTA 2010 (meaning of “group”), at the end insert—
(9) For the purposes of the application of this Part in relation to a collective investment vehicle to which paragraph 4 of Schedule 5AAA to TCGA 1992 applies, the reference in paragraph 4(2) of that Schedule to “relevant purposes” is to be treated as including a reference to the purposes of this section.
Insurance companies: ring fence
12 (1) Section 210A of TCGA 1992 (insurance: ring-fencing of losses) is amended as follows.
(2) In subsection (2), after “to the company”, in the first place it occurs, insert “ as permitted by subsection (2A) ”.
(3) After subsection (2) insert—
(2A) The following deductions may be made from the shareholders' share of the BLAGAB chargeable gains accruing to the company in an accounting period—
(a) any available non-BLAGAB allowable losses accruing to the company in the period may be deducted under section 2A(1)(a), and
(b) after making any deductions within paragraph (a), any available non-BLAGAB allowable losses previously accruing to the company, which have not been allowed as a deduction from chargeable gains accruing in the period or in any previous accounting period, may (subject to section 269ZFC of CTA 2010) be deducted under section 2A(1)(b).
(2B) But those deductions may not reduce the shareholders' share of BLAGAB chargeable gains below nil.
(2C) The amount of “available non-BLAGAB allowable losses” accruing to a company in an accounting period is the amount by which the non-BLAGAB allowable losses accruing to the company in the accounting period exceed the non-BLAGAB chargeable gains so accruing.
(4) In subsection (6)(a)—
(a) omit “amount by which”, and
(b) omit “exceeds the shareholders' share of BLAGAB chargeable gains so accruing”.
(5) In subsection (8), in the words before paragraph (a)—
(a) for “If the” substitute “ If there are ”, and
(b) omit “exceed the BLAGAB allowable losses so accruing”.
(6) In subsection (8)(b), after “deduction” insert “ , under step 2 of section 75(1) of FA 2012, ”.
(7) For subsection (9) substitute—
(9) If there are BLAGAB allowable losses accruing to the company in the subsequent accounting period, the amount arrived at under subsection (7)(a) is increased by the shareholders' share of the amount of those allowable losses.
(8) In subsection (13)—
(a) in the definition of “BLAGAB allowable losses”, at the end insert “ but excluding any allowable losses deducted under step 2 of section 75(1) of FA 2012 in determining the BLAGAB chargeable gains of the company for an accounting period, ”;
(b) in the definition of “BLAGAB chargeable gains”, after “means chargeable gains” insert “ (as adjusted for allowable losses in accordance with section 75 of FA 2012) ”.
13 After section 269ZFB of CTA 2010 insert—
Restriction on deductions of non-BLAGAB allowable losses from BLAGAB chargeable gains
269ZFC (1) This section has effect for determining the taxable total profits of an insurance company for an accounting period.
(2) The sum of any deductions of non-BLAGAB allowable losses from the shareholders' share of BLAGAB chargeable gains made by an insurance company for an accounting period under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act, may not exceed the relevant maximum.
(3) In this section, the “relevant maximum” means the sum of—
(a) 50% of the company's relevant BLAGAB chargeable gains for the accounting period, and
(b) the amount of the company's BLAGAB deductions allowance for the accounting period.
(4) A company's “relevant BLAGAB chargeable gains” for an accounting period are—
(a) the shareholders' share of the BLAGAB chargeable gains for the accounting period, after any reduction under section 210A(2A)(a) of TCGA 1992, less
(b) the amount of the company's BLAGAB deductions allowance for the accounting period.
But if the allowance mentioned in paragraph (b) exceeds the shareholders' share of the BLAGAB chargeable gains mentioned in paragraph (a), the company's “relevant BLAGAB chargeable gains” for the accounting period are nil.
(5) A company's “BLAGAB deductions allowance” for an accounting period—
(a) is so much of the company's deductions allowance for the period as is specified in the company's tax return as its BLAGAB deductions allowance for the period, and
(b) accordingly, is nil if no amount of the company's deductions allowance for the period is so specified.
(6) An amount specified under subsection (5)(a) as the company's BLAGAB deductions allowance for an accounting period may not exceed the difference between—
(a) the amount of the company's deductions allowance for the period, and
(b) the total of any amounts specified for the period under section 269ZB(7)(a) (trading profits deductions allowance), section 269ZBA(5)(a) (chargeable gains deductions allowance) and section 269ZC(5)(a) (non-trading income profits deductions allowance).
(7) In this section, “BLAGAB chargeable gains”, “insurance company” and “the shareholders' share of BLAGAB chargeable gains” have the same meaning as in section 210A of TCGA 1992.
14 (1) Part 7ZA of CTA 2010 is amended in accordance with this paragraph.
(2) In section 269ZD(2)(b)—
(a) omit the “and” after sub-paragraph (ia) (inserted by paragraph 4 of this Schedule), and
(b) after sub-paragraph (ii) insert
and
(iia) any deductions of non-BLAGAB allowable losses from the shareholders' share of BLAGAB chargeable gains made for the accounting period under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act.
(3) In section 269ZFB(2), at the end of paragraph (b) insert “and provided that no deductions of non-BLAGAB allowable losses from the shareholders' share of BLAGAB chargeable gains are to be made under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act.”
15 In section 95 of FA 2012 (use of non-BLAGAB allowable losses to reduce I-E profit) for “in accordance with section 210A(2) of TCGA 1992” substitute “ under section 2A(1) of TCGA 1992, as permitted by section 210A(2) and (2A) of that Act, ”.
Oil activities: ring fence
16 In section 197 of TCGA 1992 (disposals of interests in oil fields etc: ring fence provisions), after subsection (4) insert—
(4A) A deduction in respect of an aggregate loss accruing in a chargeable period that is (in accordance with subsection (4)(b) and (c)) allowable as a deduction against an aggregate gain treated as accruing in a later period is to be ignored for the purposes of section 269ZBA of CTA 2010 (corporate capital loss restriction: restriction on deductions from chargeable gains).
Clogged losses
17 In section 18 of TCGA 1992 (transactions between connected persons) at the end insert—
(9) If deductible clogged losses have accrued to a company, the company may make a claim in respect of an accounting period for—
(a) an amount of the deductible clogged losses to be treated, for the purposes of section 2A(1)(a), as allowable losses accruing in the accounting period, and
(b) the same amount of allowable losses accruing to the company in the period to be treated, for the purposes of section 2A(1)(b), as allowable losses previously accruing to the company while it was within the charge to corporation tax.
(10) The amount in respect of which the claim is made may not exceed the total amount of any allowable losses accruing to the company in the accounting period for which the claim is made.
(11) In subsection (9), “deductible clogged losses” means losses which would, apart from Part 7ZA of CTA 2010, be deductible under subsection (3) from chargeable gains accruing to the company in an accounting period.
(12) A claim under subsection (9) must be made by being included in the company's tax return for the accounting period for which the claim is made.
Pre-entry losses
18 (1) Schedule 7A to TCGA 1992 (restriction on set-off of pre-entry losses) is amended in accordance with this paragraph.
(2) In paragraph 6(1)(b), after “from that gain” insert “ (subject to sub-paragraphs (1A) to (1C)) ”.
(3) In paragraph 6(1)(c), after “section 2A(1)” insert “ (subject to sub-paragraphs (1A) to (1C)) ”.
(4) After sub-paragraph (1) insert—
(1A) Sub-paragraph (1B) applies, in respect of an accounting period, if the amount of chargeable gains accruing to the company in the period exceeds the total of—
(a) the amount of pre-entry losses accruing to the company in the period that are deductible under sub-paragraph (1)(a), and
(b) the amount of allowable losses, other than pre-entry losses, accruing to the company in the period.
(1B) Where this sub-paragraph applies in respect of an accounting period—
(a) the sum of any deductions under sub-paragraph (1)(b) may not exceed the total of—
(i) the amount of pre-entry losses that, on the assumption in sub-paragraph (1C), would be deductible under sub-paragraph (1)(b), and
(ii) the amount of allowable losses (other than pre-entry losses) that, on the assumption in sub-paragraph (1C), would be deductible under section 2A(1), and
(b) for the purposes of sub-paragraph (1)(c), the deductions made under section 2A(1) may not exceed the difference between—
(i) the total of the amounts mentioned in paragraph (a)(i) and (ii), and
(ii) the amount of pre-entry losses deducted under sub-paragraph (1)(b).
(1C) The assumption is that deductions under sub-paragraph (1)(b) are treated for the purposes of Part 7ZA of CTA 2010 (restrictions on obtaining certain deductions) as if they were made under section 2A(1)(b) of this Act.
Real estate investment trusts
19 Part 12 of CTA 2010 (real estate investment trusts) is amended as follows.
20 In section 535B (use of pre-April 2019 residual business losses or deficits) at the end insert—
(4) In determining, for the purposes of subsection (2)(a), the amount of allowable losses accruing on disposals made before 6 April 2019 which would otherwise have been deducted from gains accruing to residual business of the company, section 269ZBA (restriction on deductions) is to be ignored.
21 In section 550 (attribution of distributions) at the end insert—
(4) In determining the amount of relevant non-chargeable gains for the purposes of this section, section 269ZBA (restriction on deductions) is to be ignored.
22 In section 556 (disposal of assets) in subsection (7), for “and 535A” substitute “ , 535A and 535B ”.
Counteraction of avoidance arrangements
23 (1) Section 19 of F(No.2)A 2017 (losses: counteraction of avoidance arrangements) is amended in accordance with this paragraph.
(2) In subsection (8), before paragraph (a) insert—
(za) section 2A(1) of TCGA 1992 (allowable capital losses);
.
(3) At the end insert—
(13) In the case of a tax advantage as a result of a deduction (or increased deduction) under section 2A(1) of TCGA 1992, subsections (10) and (11) have effect as if the references to 1 April 2017 were to 1 April 2020.
Minor and consequential amendments to Part 7ZA of CTA 2010
24 Part 7ZA of CTA 2010 is amended as follows.
25 (1) Section 269ZB (restriction on deductions from trading profits) is amended in accordance with this paragraph.
(2) In subsection (8), for paragraph (b) substitute—
(b) the total of—
(i) the amount of the company's total non-trading profits deductions allowance for the period (see section 269ZC(3A)), and
(ii) in the case of an insurance company, any amount specified for the period under section 269ZFC(5)(a) (BLAGAB deductions allowance).
(3) Omit subsection (9) (meaning of a company's “deductions allowance”).
26 In section 269ZC (restriction on deductions from non-trading profits) omit subsection (7) (meaning of a company's “deductions allowance”).
27 In section 269ZD (restriction on deductions from total profits) omit subsection (6) (meaning of a company's “deductions allowance”).
28 After section 269ZD insert—
References to a company's “deductions allowance”
269ZDA (1) This section applies for the purposes of sections 269ZB to 269ZD and 269ZFC.
(2) A company's “deductions allowance” for an accounting period is to be determined in accordance with section 269ZR where, at any time in that period—
(a) the company is a member of a group (see section 269ZZB), and
(b) one or more other companies within the charge to corporation tax are members of that group.
(3) Otherwise, a company's “deductions allowance” for an accounting period is to be determined in accordance with section 269ZW.
(4) But subsections (2) and (3) are subject to section 269ZYA (deductions allowance for company without a source of chargeable income).
29 (1) Section 269ZF (“relevant trading profits” and “relevant non-trading profits”) is amended in accordance with this paragraph.
(2) In subsection (2)—
(a) for “ “relevant non-trading profits””, in both places it occurs, substitute “ “relevant non-trading income profits” ”,
(b) in paragraph (a), for “qualifying non-trading profits” substitute “ qualifying non-trading income profits ”, and
(c) in paragraph (b) for “non-trading profits deductions allowance” substitute “ non-trading income profits deductions allowance ”.
(3) In subsection (3), in the words before step 1, for “and qualifying non-trading profits” substitute “ , qualifying non-trading income profits and qualifying chargeable gains ”.
(4) In subsection (3), in paragraph (3) of step 1—
(a) for “and relevant non-trading profits” substitute “ , qualifying non-trading income profits and qualifying chargeable gains ”, and
(b) for “both” substitute “ each ”.
(5) In subsection (3), in paragraph (3) of step 2—
(a) for “and the qualifying non-trading profits” substitute “ , qualifying non-trading income profits and qualifying chargeable gains ”, and
(b) for “both” substitute “ each ”.
(6) In the heading, for “and “relevant non-trading profits”” substitute “ , “total relevant non-trading profits” etc ”.
30 (1) Section 269ZFA (“relevant profits”) is amended as follows.
(2) In subsection (1)(b), for “section 269ZD(6)” substitute “ section 269ZDA ”.
(3) In subsection (2)—
(a) in paragraph (a), for “qualifying trading profits and qualifying non-trading profits” substitute “ modified total profits ”, and
(b) in paragraph (b), for “in determining” substitute “ which could be relieved against ”.
31 In section 269ZG (general insurance companies: excluded accounting periods), in subsection (1), for “269ZE” substitute “ 269ZD ”.
32 In section 269ZR (deductions allowance for company in a group), at the end insert—
(5) See section 269ZYA for further provision about the deductions allowance for a company without a source of chargeable income which is a member of a group.
33 In section 269ZW (deductions allowance for company not in a group), at the end insert—
(4) See section 269ZYA for further provision about the deductions allowance for a company without a source of chargeable income.
34 In section 269ZZ (company tax return to specify amount of deductions allowance), in subsection (2)—
(a) after “section 269ZB(2),” insert “ 269ZBA(2), ”, and
(b) for “or 269ZD(2) or section 124D(1) of FA 2012” substitute “ , 269ZD(2) or 269ZFC(2) ”.
35 (1) Section 269ZZA(1) (excessive specification of deductions allowance: application of section) is amended in accordance with this paragraph.
(2) After paragraph (b) insert—
(ba) the company's chargeable gains deductions allowance for the period,
.
(3) In paragraph (c) for “non-trading profits deductions allowance” substitute “ non-trading income profits deductions allowance ”.
(4) After paragraph (d) insert—
(da) the company's BLAGAB deductions allowance for the period.
(5) Omit paragraph (e).
Minor and consequential amendments to Part 7A of CTA 2010
36 Part 7A of CTA 2010 (banking companies: restrictions on obtaining certain deductions) is amended as follows.
37 (1) Section 269CB (restriction on deductions for non-trading deficits from loan relationships) is amended as follows.
(2) In subsection (2)—
(a) for “relevant non-trading profits”, in both places it occurs, substitute “ total relevant non-trading profits ”, and
(b) for “subsection (2)” substitute “ subsection (2B) ”.
(3) In subsection (3), for “relevant non-trading profits”, in both places it occurs, substitute “ total relevant non-trading profits ”.
38 In section 269CN (definitions)—
(a) omit the definition of “relevant non-trading profits”, and
(b) at the end insert—
“total relevant non-trading profits”, in relation to a company, has the meaning given by section 269ZF(2B).
PART 2 Corporate capital loss deductions: miscellaneous provision
Companies without a source of chargeable income: carry back of losses
39 In section 2A of TCGA 1992 (company's total profits to include chargeable gains), after subsection (2) insert—
(3) Subsection (4) applies if—
(a) a company has two or more accounting periods that fall wholly within the same financial year,
(b) the company is chargeable to corporation tax for each of those accounting periods only because of a chargeable gain accruing to the company on the disposal of asset, and
(c) in the period (if any) between each of those accounting periods, the company is not within the charge to corporation tax.
(4) For the purposes of determining the amount of chargeable gains to be included in the company's total profits for each of the accounting periods by reference to which this subsection applies, subsection (1) has effect as if after paragraph (a) (before the “and”) there were inserted—
(aa) so far as not otherwise deducted under this section, any allowable losses accruing to the company in another accounting period that falls wholly within the same financial year as the period mentioned in paragraph (a),
.
Insurance companies: minor amendments to TCGA 1992 and FA 2012
40 In section 210A of TCGA 1992, in subsection (10C), for the words from “In determining” to “an accounting period” substitute “ For the purposes of subsections (10A) and (10B) ”.
41 In section 93 of FA 2012 (minimum profits test), at the end insert—
(6) For the purposes of this section, assume that non-BLAGAB allowable losses cannot be deducted to any extent from BLAGAB chargeable gains (and, accordingly, assume that section 95 is not included in this Act).
PART 3 Commencement and anti-forestalling provision
Commencement
42 The amendments made by this Schedule have effect in relation to accounting periods beginning on or after 1 April 2020.
43 (1) Paragraph 44 applies where a company has an accounting period beginning before 1 April 2020 and ending on or after that date (the “straddling period”).
(2) For the purposes of paragraph 44—
(a) the “pre-commencement period” means the part of the straddling period falling before 1 April 2020, and
(b) the “post-commencement period” means the part of the straddling period falling on or after that date.
44 (1) The amount of chargeable gains to be included in the company's total profits for the straddling period is the total of—
(a) the chargeable gains accruing to the company in the pre-commencement period, after making any deductions under section 2A(1) of TCGA 1992, and
(b) the chargeable gains accruing to the company in the post-commencement period, after making any deductions under that section.
(2) For the purposes of sub-paragraph (1)(a) and (b), section 2A of TCGA 1992 applies as if the pre-commencement period and the post-commencement period were separate accounting periods, subject to the modification in sub-paragraph (3).
(3) For the purposes of determining the amount to be included in the company's total profits in respect of chargeable gains for a period, the reference in section 2A(1)(a) of TCGA 1992 to any allowable losses accruing to the company in the period is to be treated as including—
(a) for the purposes of the pre-commencement period, a reference to any allowable losses accruing to the company in the post-commencement period so far as they exceed the chargeable gains accruing to the company in the post-commencement period, and
(b) for the purposes of the post-commencement period, a reference to any available allowable losses accruing to the company in the pre-commencement period so far as they exceed the chargeable gains accruing to the company in the pre-commencement period.
(4) For the purposes of applying Part 7ZA of CTA 2010 in relation to the straddling period—
(a) section 269ZBA of that Act applies in relation to the post-commencement period as if it were a separate accounting period,
(b) the reference in section 269ZF(4)(h) to deductions under section 2A(1)(b) of TCGA 1992 is to be treated as if it were a reference only to deductions under that provision from the chargeable gains of the post-commencement period, and
(c) the reference in step 3(c) of section 269ZF to the chargeable gains included in the company's total profits is to be treated as if it were a reference to the total of—
(i) the chargeable gains accruing to the company in the pre-commencement period, after making any deductions under section 2A(1)(a) or (b) of TCGA 1992, and
(ii) the chargeable gains accruing to the company in the post-commencement period, after making any deductions under section 2A(1)(a) of that Act.
45 (1) This paragraph applies in relation to a non-UK resident company which carries on a UK property business or has other UK property income—
(a) if the conditions in sub-paragraph (2) are met, and
(b) unless the company has elected that this paragraph is not to apply.
(2) The conditions are met if the company—
(a) is within the charge to income tax for the tax year 2019-20,
(b) is chargeable to corporation tax for an accounting period falling wholly within the period beginning with 1 April 2020 and ending with 5 April 2020 because of a chargeable gain accruing to the company on the disposal of an asset, and
(c) is within the charge to corporation tax on income for an accounting period beginning on 6 April 2020.
(3) For the purposes of determining the amount to be included in the company's total profits in respect of chargeable gains for an accounting period mentioned in sub-paragraph (2)(b) or (2)(c), the reference in section 2A(1)(a) of TCGA 1992 to any allowable losses accruing to the company in the period is to be treated as including—
(a) for the purposes of an accounting period mentioned in sub-paragraph (2)(b), a reference to any allowable losses accruing to the company in the accounting period mentioned in sub-paragraph (2)(c) (so far as those losses are not otherwise deducted under section 2A(1) of TCGA 1992), and
(b) for the purposes of the accounting period mentioned in sub-paragraph (2)(c), a reference to any allowable losses accruing to the company in an accounting period mentioned in sub-paragraph (2)(b) (so far as those losses are not otherwise deducted under section 2A(1) of TCGA 1992).
(4) For the purposes of the application of Part 7ZA of CTA 2010 in relation to the accounting periods mentioned in sub-paragraphs (2)(b) and (2)(c)—
(a) section 269ZYA of CTA 2010 (deductions allowance for company without a source of chargeable income) applies as if the company had made a claim under that section in respect of each accounting period mentioned in sub-paragraph (2)(b), and
(b) the company's deductions allowance for the accounting period mentioned in sub-paragraph (2)(c) is treated as being reduced by the amount of the company's deductions allowance for each accounting period mentioned in sub-paragraph (2)(b).
Anti-forestalling provision
46 (1) This sub-paragraph applies if—
(a) a company has an accounting period ending before 1 April 2020,
(b) the company would, apart from this paragraph, obtain a tax advantage as a result of a deduction, or an increased deduction, under section 2A(1)(b) of TCGA 1992,
(c) the tax advantage arises as a result of arrangements entered into on or after 29 October 2018, and
(d) the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage as a result of the fact that section 269ZBA of CTA 2010, inserted by this Schedule, is not to have effect for the accounting period for which the deduction would be made.
(2) If sub-paragraph (1) applies, the deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 may not exceed 50% of the company's qualifying chargeable gains for the period.
(3) So far as necessary for the purposes of this paragraph, Part 7ZA of CTA 2010 is treated as having come into force on the same day as this paragraph.
(4) This paragraph is treated as having come into force on 29 October 2018.
(5) Where a company has a straddling period, the pre-commencement period and the post-commencement period are treated for the purposes of this paragraph as separate accounting periods.
(6) In this paragraph—
(a) “arrangements” includes any agreement, understanding, scheme transaction or series of transactions (whether or not legally enforceable),
(b) “straddling period”, “pre-commencement period” and “post-commencement period” have the same meaning as they have for the purposes of paragraph 44, and
(c) “tax advantage” has the meaning given by section 1139 of CTA 2010.