Finance Act 1980

1 (1) Where a person is liable to a charge under paragraph 2(1) or 10(1) of Schedule 5 to the [1976 c. 40.] Finance Act 1976 (charges by way of recovery of stock relief) in respect of any period of account (hereafter referred to as “ the period of charge ”) he may, subject to the provisions of this Part of this Schedule, elect that so much (if any) of the charge as is eligible for deferment under those provisions shall be deferred to the next period of account.

(2) Subject to sub-paragraph (3) below, the amount of a charge eligible for deferment is so much of it as exceeds 5 per cent, of the opening stock value in the period of charge.

(3) Where the amount that would be eligible for deferment under sub-paragraph (2) above exceeds £100,000 and at the relevant time the person in question was a net debtor in respect of trading stock—

(a) none of the excess shall be eligible for deferment unless the value of his trading stock at that time exceeded his net indebtedness; and

(b) the amount of the excess eligible for deferment shall be reduced by the proportion which his net indebtedness bore to that value.

(4) The relevant time referred to in sub-paragraph (3) above is—

(a) the beginning of the period or earliest period of account ending in the financial year 1979 (in the case of a company) or the year 1979-80 (in other cases); or

(b) if there is no such period of account, the beginning of the period of account current at the end of that financial year or year of assessment, as the case may be.

(5) For the purposes of sub-paragraph (3) above a person was at the time there mentioned a net debtor in respect of trading stock if—

(a) the amount owed by him at that time (whether or not payment had become due) in respect of the trading stock which he then held or had previously sold in the course of the trade or otherwise disposed of, exceeded

(b) the amount then owed to him (whether or not payment had become due) in respect of trading stock sold by him in the course of the trade or otherwise disposed of;

and references to his net indebtedness are to that excess.

(6) For the purposes of sub-paragraph (5) above there shall be left out of account—

(a) any amounts owed to the person in question which are allowable as deductions in respect of bad or doubtful debts in computing his profits or gains for the purposes of Case I of Schedule D ; and

(b) any amounts of value added tax owed by him to the Commissioners of Customs and Excise or by those Commissioners to him.

(7) Subject to sub-paragraph (8) below, no election shall be made by any person in respect of a charge for any period of account (and any election already made shall be treated as of no effect) if—

(a) he was liable to a charge under the said paragraph 2(1) or 10(1) in respect of the period of account preceding the period of charge; or

(b) the period of charge or the next period of account is longer or shorter than twelve months ; or

(c) during or at the end of the period of charge or of the preceding or the next period of account—

(i) the whole or part of the trade is transferred to or from another person ; or

(ii) there is a change in the persons engaged in carrying on the trade.

(8) Sub-paragraph (7)(b) above applies only where the period of charge or the next period of account ends in or after the financial year 1980 (in the case of a company) or the year 1980-81 (in other cases).