Finance Act 1994 (c. 9)

Part III U.K. Insurance Premium Tax

Supplementary U.K.

70 Interpretation: taxable insurance contracts. U.K.

(1) Subject to [F1 subsection (1A) below], any contract of insurance is a taxable insurance contract.

[F2 (1A) A contract is not a taxable insurance contract if it falls within one or more of the paragraphs of Part I of Schedule 7A to this Act.

(1B) Part II of Schedule 7A to this Act (interpretation of certain provisions of Part I) shall have effect.]

F3 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F3 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) This section has effect subject to section 71 below.

(12) This section and section 71 below have effect for the purposes of this Part.

Textual Amendments

F1 Words in s. 70(1) substituted (1.10.1994) by S.I. 1994/1698, art. 4(a)

F2 S. 70(1A)(1B) inserted (1.10.1994) by S.I. 1994/1698, art. 4(b)

F3 S. 70(2)-(10) deleted (1.10.1994) by S.I. 1994/1698, art. 4(c)

71 Taxable insurance contracts: power to change definition. U.K.

(1) Provision may be made by order that—

(a) a contract of insurance that would otherwise not be a taxable insurance contract shall be a taxable insurance contract if it falls within a particular description;

(b) a contract of insurance that would otherwise be a taxable insurance contract shall not be a taxable insurance contract if it falls within a particular description.

(2) A description referred to in subsection (1) above may be by reference to the nature of the insured or by reference to such other factors as the Treasury think fit.

(3) Provision under this section may be made in such way as the Treasury think fit, and in particular may be made by amending this Part.

(4) An order under this section may amend or modify the effect of section 69 above in such way as the Treasury think fit.

72 Interpretation: premium. U.K.

(1) In relation to a taxable insurance contract, a premium is any payment received under the contract by the insurer, and in particular includes any payment wholly or partly referable to—

(a) any risk,

(b) costs of administration,

(c) commission,

(d) any facility for paying in instalments or making deferred payment (whether or not payment for the facility is called interest), or

(e) tax.

[F4 (1A) Where an amount is charged to the insured by any person in connection with a taxable insurance contract, any payment in respect of that amount is to be regarded as a payment received under that contract by the insurer unless—

(a) the payment is chargeable to tax at the higher rate by virtue of section 52A above; or

(b) the amount is charged under a separate contract and is identified in writing to the insured as a separate amount so charged.]

(2) A premium may consist wholly or partly of anything other than money, and references to payment in subsection (1) above shall be construed accordingly.

(3) Where a premium is to any extent received in a form other than money, its amount shall be taken to be—

(a) an amount equal to the value of whatever is received in a form other than money, or

(b) if money is also received, the aggregate of the amount found under paragraph (a) above and the amount received in the form of money.

(4) The value to be taken for the purposes of subsection (3) above is open market value at the time of the receipt by the insurer.

(5) The open market value of anything at any time shall be taken to be an amount equal to such consideration in money as would be payable on a sale of it at that time to a person standing in no such relationship with any person as would affect that consideration.

(6) Where (apart from this subsection) anything received under a contract by the insurer would be taken to be an instalment of a premium, it shall be taken to be a separate premium.

(7) Where anything is received by any person on behalf of the insurer—

(a) it shall be treated as received by the insurer when it is received by the other person, and

(b) the later receipt of the whole or any part of it by the insurer shall be disregarded.

[F5 (7A) Where any person is authorised by or on behalf of an employee to deduct from anything due to the employee under his contract of employment an amount in respect of a payment due under a taxable insurance contract, subsection (7) above shall not apply to the receipt on behalf of the insurer by the person so authorised of the amount deducted.]

(8) In a case where—

(a) a payment under a taxable insurance contract is made to a person (the intermediary) by or on behalf of the insured, and

(b) the whole or part of the payment is referable to commission to which the intermediary is entitled,

in determining for the purposes of subsection (7) above whether, or how much of, the payment is received by the intermediary on behalf of the insurer any of the payment that is referable to that commission shall be regarded as received by the intermediary on behalf of the insurer notwithstanding the intermediary’s entitlement.

[F6 (8A) Where, by virtue of subsection (7A) above, subsection (7) above does not apply to the receipt of an amount by a person and the whole or part of the amount is referable to commission to which he is entitled—

(a) if the whole of the amount is so referable, the amount shall be treated as received by the insurer when it is deducted by that person; and

(b) otherwise, the part of the amount that is so referable shall be treated as received by the insurer when the remainder of the payment concerned is or is treated as received by him.]

(9) References in subsection (8) above to a payment include references to a payment in a form other than money.

(10) This section has effect for the purposes of this Part.

Textual Amendments

F4 S. 72(1A) inserted (19.3.1997 with effect as mentioned in s. 28(2) of the amending Act) by 1997 c. 16, s. 28(1)

F5 S. 72(7A) inserted (19.3.1997 with effect as mentioned in s. 30(3) of the amending Act) by 1997 c. 16, s. 30(1)

F6 S. 72(8A) inserted (19.3.1997 with effect as mentioned in s. 30(3) of the amending Act) by 1997 c. 16, s. 30(2)

73 Interpretation: other provisions. U.K.

(1) Unless the context otherwise requires—

• “accounting period” shall be construed in accordance with section 54 above;

• “appeal tribunal” means a VAT and duties tribunal;

• “authorised person” means any person acting under the authority of the Commissioners;

• “the Commissioners” means the Commissioners of Customs and Excise;

• “conduct” includes any act, omission or statement;

• [F7 “the higher rate” shall be construed in accordance with section 51 above;]

• [F8 “insurance business” means a business which consists of or includes the provision of insurance;]

• “insurer” means a person or body of persons (whether incorporated or not) carrying on insurance business;

• “legislation relating to insurance premium tax” means this Part (as defined by subsection (9) below), any other enactment (whenever passed) relating to insurance premium tax, and any subordinate legislation made under any such enactment;

• “prescribed” means prescribed by an order or regulations under this Part;

• [F7 “the standard rate” shall be construed in accordance with section 51 above;]

• “tax” means insurance premium tax;

• “tax representative” shall be construed in accordance with section 57 above;

• “taxable business” means a business which consists of or includes the provision of insurance under taxable insurance contracts;

• “taxable insurance contract” shall be construed in accordance with section 70 above.

• [F9 “taxable intermediary” shall be construed in accordance with section 52A above;]

• [F9 “taxable intermediary’s fees” has the meaning given by section 53AA(9) above.]

(2) A risk is situated in the United Kingdom if, by virtue of section 96A(3) of the M1 Insurance Companies Act 1982, it is situated in the United Kingdom for the purposes of that Act.

(3) [F10 Subject to subsection (3A) below,] a registrable person is a person who—

(a) is registered under section 53 above, or

(b) is liable to be registered under that section.

[F11 (3A) References in sections 53A and 54 above and paragraphs 1, 9 and 12 of Schedule 7 to this Act to a registrable person include a reference to a person who—

(a) is registered under section 53AA above; or

(b) is liable to be registered under that section.]

(4) A commercial ship is a ship which is—

(a) of a gross tonnage of 15 tons or more, and

(b) not designed or adapted for use for recreation or pleasure.

(5) A commercial aircraft is an aircraft which is—

(a) of a weight of 8,000 kilogrammes or more, and

(b) not designed or adapted for use for recreation or pleasure.

(6) A lifeboat is a vessel used or to be used solely for rescue or assistance at sea; and lifeboat equipment is anything used or to be used solely in connection with a lifeboat.

(7) Foreign or international railway rolling stock is railway rolling stock used principally for journeys taking place wholly or partly outside the United Kingdom.

(8) Goods in foreign or international transit are goods in transit where their carriage—

(a) begins and ends outside the United Kingdom,

(b) begins outside but ends in the United Kingdom, or

(c) ends outside but begins in the United Kingdom.

(9) A reference to this Part includes a reference to any order or regulations made under it and a reference to a provision of this Part includes a reference to any order or regulations made under the provision, unless otherwise required by the context or any order or regulations.

(10) This section has effect for the purposes of this Part.

Textual Amendments

F7 Definitions in s. 73(1) inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 21(2)

F8 Definition in s. 73(1) inserted (1.5.1995) by 1995 c. 4, s. 34, Sch. 5 para. 6

F9 Definitions in s. 73(1) inserted (19.3.1997) by 1997 c. 16, s. 27(9)

F10 Words in s. 73(3) inserted (19.3.1997) by 1997 c. 16, s. 27(10)

F11 S. 73(3A) inserted (19.3.1997) by 1997 c. 16, s. 27(10)

Marginal Citations

M1 1982 c. 50.

74 Orders and regulations. U.K.

(1) The power to make an order under section 61 above shall be exercisable by the Commissioners, and the power to make an order under any other provision of this Part shall be exercisable by the Treasury.

(2) Any power to make regulations under this Part shall be exercisable by the Commissioners.

(3) Any power to make an order or regulations under this Part shall be exercisable by statutory instrument.

(4) An order under section [F12 51A or] 71 above shall be laid before the House of Commons; and unless it is approved by that House before the expiration of a period of 28 days beginning with the date on which it was made it shall cease to have effect on the expiration of that period, but without prejudice to anything previously done under the order or to the making of a new order.

(5) In reckoning any such period as is mentioned in subsection (4) above no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the House of Commons is adjourned for more than four days.

(6) A statutory instrument containing an order or regulations under this Part (other than an order under section [F13 51A or] 71 above) shall be subject to annulment in pursuance of a resolution of the House of Commons.

(7) Any power to make an order or regulations under this Part—

(a) may be exercised as regards prescribed cases or descriptions of case;

(b) may be exercised differently in relation to different cases or descriptions of case.

(8) An order or regulations under this Part may include such supplementary, incidental, consequential or transitional provisions as appear to the Treasury or the Commissioners (as the case may be) to be necessary or expedient.

(9) No specific provision of this Part about an order or regulations shall prejudice the generality of subsections (7) and (8) above.

Textual Amendments

F12 Words in s. 74(4) inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 22(2)(a)

F13 Words in s. 74(6) inserted (19.3.1997 with effect as mentioned in s. 24 of the amending Act) by 1997 c. 16, s. 22(2)(b)