Details of the Schedule
Part 1
3.Paragraph 1 introduces new section 257MW of the Income Tax Act (ITA) 2007. The power allows the list of activities that are excluded from qualifying for SITR to be amended by regulations. The new power allows regulations to take effect retrospectively (but no earlier than 6 April 2015) where the activities become newly eligible for the SITR, that is, where the regulations are wholly relieving.
4.Subsection (5) of new section 257MW provides for regulations made under this section to be combined in the same statutory instrument with regulations made under other powers in new section 251A, section 257MB and section 311. As a result, it would be possible to use one statutory instrument to amend the excluded activities for SITR, EIS (and SEIS) and VCTs at the same time.
Parts 2 and 3
5.Parts 2 and 3 of the Schedule exclude from the EIS, SEIS (by virtue of section 257DA of ITA 2007) and VCTs companies generating power whose activities involve anaerobic digestion or hydroelectric power for which a government subsidy is obtained.
6.The provisions also exclude activities where the generation of the electricity is carried on in connection with a Contract for Difference, a new government subsidy that will replace Renewables Obligations Certificates (ROCs) and Renewable Heat Incentives (RHIs) in due course, or similar scheme outside the UK. Activities involving ROCs and RHIs are already excluded activities for the purposes of the venture capital schemes.
7.The changes in Parts 2 and 3 will take effect on and after 6 April 2015.
Part 4
8.Part 4 of the Schedule makes further provision on excluded activities for the EIS (and the SEIS by virtue of section 257DA of ITA 2007) and VCTs. However, unlike the changes in Parts 2 and 3 of the Schedule, the changes in Part 4 will take effect on a date specified by HM Treasury regulations.
9.Paragraphs 10 and 11 of the Schedule make provision to remove the exception that currently allows all types of subsidised energy generation activities by certain types of community organisations to qualify for the venture capital schemes.
10.The effect of paragraphs 10 and 11, taken together with Parts 2 and 3 of the Schedule, will be to exclude all activities involving subsidised energy generation from the EIS, SEIS and VCTs.
11.Paragraph 13 of the Schedule makes provision to amend the list of excluded activities for SITR. The export or generation of electricity subsidised by way of a Feed-in Tariff will no longer be an excluded activity.
