Section 202: Bank Levy: Rates from 1 January 2013
Summary
1.Section 202 amends the rates at which the bank levy is charged from 1 January 2013 onwards.
Details of the Section
2.Subsection (1) introduces amendments to the bank levy legislation.
3.Subsection (2) increases the bank levy rates from 1 January 2013.
4.Subsection (3) amends Paragraph 7, Schedule 19, Finance Act 2011 so that it applies where some or all of the chargeable period falls before 1 January 2013. It introduces into the table of rates at paragraph 7(2) the new bank levy rates for the period 1 January 2013 onwards.
5.Subsection (4) removes the rates shown in Paragraph 5, Schedule 34, Finance Act 2012 (old rates) which have been superseded by the new rates.
6.Subsection (5) provides that the new rate changes made by subsections (2) to (4) are treated as having come into force on 1 January 2013.
7.Subsections (6) to (12) provide transitional provisions for collecting the additional amounts of bank levy that arise from the introduction of the new rates.
8.Subsection (6) states that transitional provisions apply where an entity (E) is charged to the bank levy for an accounting period in respect of a chargeable period that falls wholly or partly on or after 1 January 2013 and one, or more, of the instalment payments for the accounting period in question are due and payable before Royal Assent of Finance Act 2013.
9.Subsection (7) provides that the new rates are to be ignored when determining the amount of any instalment payment that is due before Royal Assent (pre-commencement instalment payments). These continue to be paid at the old rates.
10.Subsection (8) provides that where there is at least one instalment payment for the accounting period of E which is due and payable on or after Royal Assent (post-commencement instalment payments), the amount of the first such instalment payment is increased by the adjustment amount.
11.Subsection (9) provides that where E does not have any post-commencement instalment payments, the adjustment amount will be due and payable 30 days after Royal Assent.
12.Subsection (10) explains how to determine the “adjustment amount” for the purposes of subsections (8) and (9). The adjustment amount is the difference between the pre-commencement instalment payments calculated firstly on the basis that the new rates are ignored (i.e. using the old rates) and then on the basis that the new rates are not ignored.
13.Subsection (11) ensures that references within the provisions of Corporation Tax (Instalment Payment) Regulations 1998 (S.I. 1998/3175) to regulations 4A to 4D, 5, 5A or 5B of those Regulations are to be read as including references to subsections (6) to (10).
14.Subsection (12) ensures that section 59D of the Taxes Management Act 1970, which provides the general rule for the collection of corporation tax, is also subject to subsections (6) to (11).
15.Subsection (13) provides definitions of terms used in this section.
Background
16.The bank levy is an annual balance sheet charge based upon the chargeable equities and liabilities of all UK banks and building society groups, foreign banks and banking groups operating in the UK and UK banks in non-banking groups from 1 January 2011 onwards.
17.Bank levy is treated as if it is corporation tax, and the relevant entity or, in the case of a banking group, the “the responsible member” (see paragraph 54, Schedule 19) is required to both make a return of the bank levy (as part of its company tax return) and to pay the bank levy.
18.Entities that pay the bank levy are required to do so under the provisions of The Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175).
