5(1)In section 19 of the 1985 Act, in subsection (2) (surcharge liability notice if default for two accounting periods)—
(a)in paragraph (a) for “any two prescribed accounting periods” there shall be substituted “ a prescribed accounting period ”,
(b)paragraph (b) shall be omitted, and
(c)in paragraph (c) for “later period referred to in paragraph (b)” there shall be substituted “ period referred to in paragraph (a) ”.
(2)In subsection (3) of that section for “defaults in respect of two prescribed accounting periods and the second of those periods” there shall be substituted “ a default in respect of a prescribed accounting period and that period ”.
(3)This paragraph shall apply in relation to any case where a person is in default for the purposes of section 19 of the 1985 Act and is so in default because of a failure of the Commissioners of Customs and Excise to receive a return, or an amount of tax, on or before a day falling on or after 1st October 1993; and in the case of sub-paragraph (2) above it is immaterial when the existing surcharge period began.
6(1)For subsection (4) of section 19 of the 1985 Act (amount of surcharge) there shall be substituted the following subsection—
“(4)Subject to subsections (6) to (9) below, if a taxable person on whom a surcharge liability notice has been served—
(a)is in default in respect of a prescribed accounting period ending within the surcharge period specified in (or extended by) that notice, and
(b)has outstanding tax for that prescribed accounting period,
he shall be liable to a surcharge equal to whichever is the greater of the following, namely, the specified percentage of his outstanding tax for that prescribed accounting period and £30.”
(2)In subsection (5) of that section (specified percentages for default surcharge)—
(a)for “subsection (4)(a) above” there shall be substituted “ subsection (4) above ”, and
(b)after “surcharge period” there shall be inserted “ and for which he has outstanding tax ”.
(3)After subsection (5) of that section there shall be inserted the following subsection—
“(5A)For the purposes of subsections (4) and (5) above a person has outstanding tax for a prescribed accounting period if some or all of the tax for which he is liable in respect of that period has not been paid by the last day on which he is required (as mentioned in subsection (1) above) to make a return for that period; and the reference in subsection (4) above to a person’s outstanding tax for a prescribed accounting period is to so much of the tax for which he is so liable as has not been paid by that day.”
(4)This paragraph shall apply in relation to any case where a person—
(a)is in default for the purposes of section 19 of the 1985 Act in respect of a prescribed accounting period ending within a surcharge period, and
(b)is so in default because of a failure of the Commissioners of Customs and Excise to receive a return, or an amount of tax, on or before a day falling on or after 30th September 1993.
7(1)In subsection (5) of section 19 of the 1985 Act (specified percentages for default surcharge)—
(a)at the end of paragraph (b) there shall be inserted “ and ”, and
(b)for paragraphs (c) and (d) there shall be substituted the following paragraph—
“(c)in relation to each such period after the second, the specified percentage is 15 per cent.”
(2)Sub-paragraph (1) above shall apply in relation to any liability to a surcharge arising on or after 1st April 1993.
(3)In section 19(5) of the 1985 Act (as amended by sub-paragraph (1) above), for paragraphs (a) to (c) there shall be substituted the following paragraphs—
“(a)in relation to the first such prescribed accounting period, the specified percentage is 2 per cent.;
(b)in relation to the second such period, the specified percentage is 5 per cent.;
(c)in relation to the third such period, the specified percentage is 10 per cent.;
(d)in relation to each such period after the third, the specified percentage is 15 per cent.”
(4)Sub-paragraph (3) above shall apply in relation to any liability to a surcharge arising on or after 1st October 1993.