Finance (No. 2) Act 2023

Schedules

Section 10

Schedule 1 U.K. Relief for research and development

Part 1 U.K. Claim notifications

Requirement to make claim notifications in relation to certain R&D claims U.K.

1 (1) Chapter 6A of Part 3 of CTA 2009 (trade profits: R&D expenditure credits) is amended as follows.

(2) In section 104A (R&D expenditure credits), after subsection (5) insert—

“(5A) This section is subject to section 104AA.”

(3) After that section insert—

“104AA Requirement to make a claim notification

(1) A company may not make a claim under section 104A(1) (an “RDEC claim”) after the end of the claim notification period unless—

(a) the company has made an R&D claim during the period of three years ending with the last day of the claim notification period,

(b) the company makes a claim notification in respect of the RDEC claim within the claim notification period, or

(c) the accounting period in respect of which the RDEC claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.

(2) For the purposes of subsection (1)(a) ignore any R&D claim for an accounting period beginning before 1 April 2023 that is included in the company’s company tax return only by virtue of an amendment made on or after that date (see paragraph 83B(2) of Schedule 18 to FA 1998).”

(4) In section 104Y (interpretation), in subsection (1)—

(a) before the entry for “large company” insert—

• ““claim notification” (see section 1142A),

• “claim notification period” (see section 1142A),”;

(b) after the entry for “research and development” insert—

• ““R&D claim” (see section 1142B),”.

2 (1) Part 13 of CTA 2009 (additional relief for expenditure on R&D) is amended as follows.

(2) In section 1044 (additional deduction in calculating profits of trade), in subsection (9), after “subject to” insert —

(a) section 1045A (requirement to make a claim notification);

(b).

(3) Before section 1046 (relief only available where company is going concern) but after the preceding italic heading insert—

“1045A Requirement to make a claim notification

(1) A company may not make a claim under section 1044(6) (an “additional deduction claim”) after the end of the claim notification period unless—

(a) the company has made an R&D claim during the period of three years ending with the last day of the claim notification period,

(b) the company makes a claim notification in respect of the additional deduction claim within the claim notification period, or

(c) the accounting period in respect of which the additional deduction claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.

(2) For the purposes of subsection (1)(a) ignore any R&D claim for an accounting period beginning before 1 April 2023 that is included in the company’s company tax return only by virtue of an amendment made on or after that date (see paragraph 83B(2) of Schedule 18 to FA 1998).”.

(4) In section 1054 (entitlement to and payment of tax credit), in subsection (5), after “subject to” insert —

(a) section 1054A (requirement to make a claim notification);

(b).

(5) After that section insert—

“1054A Requirement to make a claim notification

(1) A company may not make a claim under section 1054(2) (an “R&D tax credit claim”) after the end of the claim notification period unless—

(a) the company has made an R&D claim during the period of three years ending with the last day of the claim notification period,

(b) the company makes a claim notification in respect of the R&D tax credit claim within the claim notification period, or

(c) the accounting period in respect of which the R&D tax credit claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.

(2) For the purposes of subsection (1)(a) ignore any R&D claim for an accounting period beginning before 1 April 2023 that is included in the company’s company tax return only by virtue of an amendment made on or after that date (see paragraph 83B(2) of Schedule 18 to FA 1998).”

(6) After section 1142 (“qualifying body”) insert—

“1142A “Claim notification” and “claim notification period”

(1) For the purposes of this Part—

• “claim notification” means, in relation to an R&D claim, a notification made by the company to an officer of His Majesty’s Revenue and Customs in accordance with regulations under subsection (2);

• “claim notification period” means, in relation to an R&D claim, the period—

  (a)

  beginning with the first day of the period of account which is the same as the accounting period in respect of which the claim is made, or within which that accounting period falls, and

  (b)

  ending with the last day of the period of six months beginning with the first day after that period of account.

(2) The Commissioners for His Majesty’s Revenue and Customs may by regulations specify, in relation to a claim notification—

(a) information to be provided with the notification;

(b) the form and manner in which the notification is to be made.

1142B “R&D claim”

For the purposes of this Part an “R&D claim” means a claim under—

(a) section 104A (R&D expenditure credits),

(b) section 1044 (relief for SMEs: additional deduction), or

(c) section 1054 (entitlement to R&D tax credit).”

Part 2 U.K. R&D expenditure on data and cloud computing

Relief for R&D expenditure on data and cloud computing U.K.

3 (1) Chapter 9 of Part 13 of CTA 2009 (additional relief for expenditure on R&D: supplementary) is amended as follows.

(2) In the italic heading before section 1125 (“software or consumable items”), after “Software” insert “, data licences, cloud computing services”.

(3) In that section—

(a) in the heading, after “Software” insert “, data licences, cloud computing services”;

(b) in subsection (1)—

(i) in the words before paragraph (a), for “or consumable items means expenditure on” substitute “, data licences, cloud computing services or consumable items means an amount paid by the company in respect of”;

(ii) omit the “or” at the end of that paragraph;

(iii) after that paragraph insert—

“(aa) data licences,

(ab) cloud computing services, or”;

(c) after subsection (1) insert—

“(1A) For the purposes of subsection (1)(aa) a data licence is a licence to access and use a collection of digital data.

(1B) For the purposes of subsection (1)(ab) cloud computing services include the provision of access to, and maintenance of, remote—

(a) data storage and hardware facilities;

(b) operating systems and software platforms.”

(4) In section 1126 (software or consumable items: attributable expenditure)—

(a) in the heading, after “Software” insert “, data licences, cloud computing services”;

(b) in subsections (1), (2), (3), (4), (5) and (6), in each place it appears, after “software” insert “, data licences, cloud computing services”.

(5) After section 1126 insert—

“1126ZA Attributable expenditure: special rules for data and cloud computing

(1) Expenditure on data licences or cloud computing services is not to be treated as attributable to relevant research and development if, in connection with the grant of a licence or the provision of a service, a relevant person obtains—

(a) a right to sell data in respect of which the licence is granted or the service is provided (as the case may be);

(b) a right to publish, share or otherwise communicate data in respect of which the licence is granted or the service is provided (as the case may be) to a third party, other than for the purposes of communications reasonably necessary for, or incidental to, the purposes of the relevant research and development.

(2) Expenditure on data licences or cloud computing services is not to be treated as attributable to relevant research and development so far as it is attributable to a qualifying indirect activity.

(3) In this section—

• “qualifying indirect activity” means an activity mentioned in paragraph 31 of the Guidelines on the Meaning of Research and Development for Tax Purposes issued on 7 March 2023 and as amended from time to time;

• “relevant person” has the meaning given in section 1126A(10).”

(6) In section 1126A (attributable expenditure: special rules), in the heading, after “special rules” insert “for consumable items”.

(7) In section 1126B (attributable expenditure: further provision)—

(a) in subsection (1)—

(i) after “expenditure on” insert “data licences, cloud computing services or”;

(ii) after “1126” insert “, 1126ZA”;

(b) in subsection (2)—

(i) in paragraph (a), after “expenditure on” insert “data licences, cloud computing services or”;

(ii) in paragraph (b), after “in which” insert “data licences, cloud computing services or”;

(c) in subsection (4), after paragraph (a) insert—

“(aa) section 1126ZA;”.

Relief for R&D expenditure on data and cloud computing: consequential amendments U.K.

4 CTA 2009 is amended as follows.

5 In Chapter 6A of Part 3 (trade profits: R&D expenditure credits)—

(a) in section 104D (expenditure on sub-contracted R&D undertaken in-house), in subsection (3)(b), after “software” insert “, data licences, cloud computing services”;

(b) in section 104G (subsidised qualifying expenditure on in-house direct R&D), in subsection (3)(b), after “software” insert “, data licences, cloud computing services”;

(c) in section 104J (qualifying expenditure on in-house direct R&D), in subsection (2)(b), after “software” insert “, data licences, cloud computing services”;

(d) in section 104Y (interpretation), in subsection (2), in the description of sections 1125 to 1126B, after “software” insert “, data licences, cloud computing services”.

6 In Part 13 (additional relief for expenditure on R&D)—

(a) in Chapter 2 (relief for SMEs: cost of R&D incurred by SME), in section 1052 (qualifying expenditure on in-house direct R&D), in subsection (2)(b), after “software” insert “, data licences, cloud computing services”;

(b) in Chapter 9 (supplementary), in section 1134 (qualifying element of sub-contractor payment: connected persons), in subsection (3)(c), after “software” insert “, data licences, cloud computing services”.

7 In Schedule 2 (transitionals and savings), in Part 15 (research and development)—

(a) in the italic heading before paragraph 122, after “software” insert “, data licences, cloud computing services”;

(b) in paragraph 122(2), after “software” insert “, data licences, cloud computing services”.

8 In Schedule 4 (index of defined expressions), in both places it occurs, after “software” insert “, data licences, cloud computing services”.

9 In section 357BLB of CTA 2010 (qualifying expenditure on relevant R&D undertaken in-house)—

(a) in subsection (2), in paragraph (b), after “software” insert “, data licences, cloud computing services”;

(b) in subsection (7)—

(i) in paragraph (c), after “software” insert “, data licences, cloud computing services”;

(ii) in paragraph (d), after “software” insert “, data licences, cloud computing services”.

Part 3 U.K. Amendments to Schedule 18 to FA 1998

Introduction U.K.

10 Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.

Power of HMRC to collect overpaid R&D tax relief or expenditure credit U.K.

11 In paragraph 52 (recovery of excessive repayments etc)—

(a) in sub-paragraph (2) omit paragraphs (bza) and (ba);

(b) for sub-paragraph (2A) substitute—

“(2A) The provisions of paragraphs 41 and 45 to 48 relating to discovery assessments apply to an amount paid to a company by way of—

(a) first-year tax credit under Schedule A1 to the Capital Allowances Act;

(b) R&D expenditure credit under Chapter 6A of Part 3 of the Corporation Tax Act 2009;

(c) R&D tax credit under Chapter 2 or 7 of Part 13 of that Act,

but only to the extent that the company was not, or is no longer, entitled to the credit.”

Time limits for R&D claims U.K.

12 For paragraph 83E (time limit for claims) substitute—

“83E (1) Except where sub-paragraph (3) applies, a claim to which this Part of this Schedule applies may be made, amended or withdrawn at any time up to the last day of the period of—

(a) two years beginning with the last day of the period of account, in a case where the period of account to which the claim relates is not longer than 18 months, or

(b) 42 months beginning with the first day of the period of account, in any other case.

(2) Sub-paragraph (3) applies where—

(a) a company makes a claim for R&D tax relief under Part 13 of the Corporation Tax Act 2009,

(b) the company is not entitled to the relief, and

(c) an officer of Revenue and Customs exercises the power under paragraph 34(2)(b) or (2A) to make an amendment by removing the claim from the company tax return in which it is made.

(3) The company may make, amend or withdraw a claim for R&D expenditure credit under Chapter 6A of Part 3 of the Corporation Tax Act 2009 in respect of eligible expenditure at any time up to whichever is the last of the following dates—

(a) 30 days after notice of the amendment mentioned in sub-paragraph (2)(c) is issued;

(b) if an appeal is brought against that amendment, 30 days after the date on which the appeal is finally determined.

(4) In this paragraph “eligible expenditure” means expenditure—

(a) to which the claim mentioned in sub-paragraph (2)(a) relates, and

(b) in respect of which the company is entitled to R&D expenditure credit.

(5) A claim to which this Part of this Schedule applies may be made, amended or withdrawn after the end of the period mentioned in sub-paragraph (1) or (3) (as the case may be) if an officer of Revenue and Customs allows it.”

Requirement to provide additional information in relation to R&D claims U.K.

13 In Part 9A (company tax returns etc: claims for R&D expenditure credits or R&D tax relief), after paragraph 83E (substituted by paragraph 12) insert—

“Additional information to be provided in relation to claim

83EA (1) A claim to which this Part of this Schedule applies is invalid unless the claimant company has provided information to an officer of Revenue and Customs in accordance with regulations under sub-paragraph (2) not later than the date on which the claim is made or amended by the company in accordance with paragraph 83E.

(2) The Commissioners for Revenue and Customs may by regulations specify, in relation to a claim to which this Part of this Schedule applies—

(a) information to be provided by the claimant company;

(b) the form and manner in which the information is to be provided.”

Power of HMRC to remove R&D claims made in error from return U.K.

14 In Part 9A (claims for R&D expenditure credits or R&D tax relief), after paragraph 83EA (inserted by paragraph 13) insert—

“Removal from return of claims made in error

83EB (1) This paragraph applies, in relation to a claim to which this Part of this Schedule applies (the “original claim”), where an officer of Revenue and Customs—

(a) reasonably believes that a claimant company has failed to comply with a requirement relating to the making of the claim (and accordingly that the claim has been made in error), and

(b) exercises the power under paragraph 16(1) to make a correction by removing the claim from the company tax return in which it is made.

(2) Sub-paragraphs (4) and (5) of paragraph 16 do not apply in relation to the correction (and accordingly the claimant company may not reject the correction).

(3) The claimant company may, within 90 days beginning with the date of the notice issued under paragraph 16(3), send written representations to an officer of Revenue and Customs objecting to the notice on the grounds that a matter stated in the notice was incorrect.

(4) An officer of Revenue and Customs must consider any representations made under sub-paragraph (3).

(5) Having considered the representations, the officer must determine whether to—

(a) confirm the notice, or

(b) withdraw the notice,

and must notify the claimant company accordingly.

(6) Nothing in sub-paragraph (2) prevents the claimant company from amending its company tax return to make a new claim to which this Part of this Schedule would apply in respect of the expenditure to which the original claim related (but see sub-paragraph (7)).

(7) Where, in relation to the original claim—

(a) a claim notification (within the meaning of section 1142A of the Corporation Tax Act 2009) was required to be made, and

(b) no claim notification was made,

the company may not make a new claim to which this Part of this Schedule would apply in respect of the expenditure to which the original claim related.”

Part 4 U.K. Miscellaneous amendments

Amendment of CTA 2009 U.K.

15 CTA 2009 is amended as follows.

R&D tax relief: circumstances in which enterprises are treated as SMEs U.K.

16 (1) In section 1119—

(a) in subsection (1), at the end insert “(and see sections 1120A and 1120B)”;

(b) in subsection (2), for “section 1120” substitute “sections 1120 to 1120B”.

(2) In section 1120 (qualifications to section 1119)—

(a) after subsection (6) insert—

“(6A) This section is subject to sections 1120A and 1120B.”;

(b) in subsection (7), in the words before paragraph (a), after “section” insert “and in sections 1120A and 1120B”.

(3) After that section insert—

“1120A Enterprise treated as an SME where related enterprise becomes large

(1) This section applies, in relation to an accounting period, where the following conditions are met.

(2) The first condition is that, for the duration of the accounting period, an enterprise (“E”) is related to a partner enterprise or linked enterprise (“F”).

(3) The second condition is that, at the start of the accounting period, both E and F are small or medium-sized enterprises.

(4) The third condition is that, at the end of the accounting period, E is not a small or medium-sized enterprise by reason only that F has, during the accounting period, exceeded the employee limit or either of the financial limits.

(5) Both E and F are to be treated as if they were small or medium-sized enterprises for the accounting period.

1120B Enterprise treated as an SME where acquired by an SME

(1) This section applies, in relation to an accounting period, where the following conditions are met.

(2) The first condition is that, at the start of the accounting period, an enterprise (“E”) was not a small or medium-sized enterprise by reason only that a partner enterprise or linked enterprise to which E was related exceeded the employee limit or either of the financial limits.

(3) The second condition is that, during the accounting period, control of E was acquired by a company that, at the time of the acquisition, was a small or medium-sized enterprise.

(4) E is to be treated as if it were a small or medium-sized enterprise for the accounting period.

(5) In subsection (3) “control” has the same meaning as in section 1124 of CTA 2010.”

Accounts treated as prepared on going concern basis U.K.

17 (1) In section 104T (R&D expenditure credits: “going concern”), after subsection (4) insert—

“(4A) For the purposes of this section, where a company (“A”) is a member of the same group as another company (“B”) and A’s latest published accounts were not prepared on a going concern basis by reason only of a relevant group transfer, the accounts are to be treated as if they were prepared on a going concern basis.

(4B) For the purposes of this section a “relevant group transfer” is a transfer within the accounting period to which the latest published accounts relate by A of its trade and research and development to another member of the group mentioned in subsection (4A).”

(2) In section 1046 (R&D relief for SMEs: relief only available where company is going concern), after subsection (2C) insert—

“(2D) For the purposes of this section, where a company (“A”) is a member of the same group as another company (“B”) and A’s latest published accounts were not prepared on a going concern basis by reason only of a relevant group transfer, the accounts are to be treated as if they were prepared on a going concern basis.

(2E) For the purposes of this section—

(a) a “relevant group transfer” is a transfer, within the accounting period to which the latest published accounts relate, by A of its trade and research and development to another member of the group mentioned in subsection (2D);

(b) A and B are members of the same group if they are members of the same group of companies for the purposes of Part 5 of CTA 2010 (group relief).”

(3) In section 1057 (R&D relief for SMEs: tax credit only available where company is a going concern), after subsection (4C) insert—

“(4D) For the purposes of this section, where a company (“A”) is a member of the same group as another company (“B”) and A’s latest published accounts were not prepared on a going concern basis by reason only of a relevant group transfer, the accounts are to be treated as if they were prepared on a going concern basis.

(4E) For the purposes of this section—

(a) a “relevant group transfer” is a transfer, within the accounting period to which the latest published accounts relate, by A of its trade and research and development to another member of the group mentioned in subsection (4D);

(b) A and B are members of the same group if they are members of the same group of companies for the purposes of Part 5 of CTA 2010 (group relief).”

Meaning of expenditure incurred on payments U.K.

18 (1) In section 104Y (R&D expenditure credits: interpretation), at the end insert—

“(4) References in this Chapter to expenditure incurred on payments (however expressed) are references to expenditure incurred on payments made before the making of a claim under this Chapter in relation to that expenditure.”

(2) Before section 1140 insert—

“1139A Expenditure incurred on payments

(1) References in this Part to expenditure incurred on payments (however expressed) are references to expenditure incurred on payments made before the making of a claim under this Part in relation to that expenditure.”

Part 5 U.K. Commencement

19 U.K. The amendment made by paragraph 13 of this Schedule has effect in relation to claims made on or after 1 August 2023.

20 U.K. The amendments made by the remaining provisions of this Schedule have effect in relation to accounting periods beginning on or after 1 April 2023.

Section 29

Schedule 2 U.K. Estates in administration and trusts

Part 1 U.K. Estates in administration

Chapter 1 U.K. Income tax

The applicable rate for grossing up basic amounts of estate income U.K.

1 (1) Chapter 6 of Part 5 of ITTOIA 2005 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 656 (income charged: UK estates), in subsection (2) omit “for that year”.

(3) In section 657 (income charged: foreign estates), in subsection (3) omit “for that year”.

(4) For section 663 (the applicable rate for grossing up basic amounts of estate income) substitute—

“663 The applicable rate for grossing up basic amounts of estate income

(1) The applicable rate by reference to which a basic amount of estate income is grossed up for the purposes of sections 656 and 657 depends on the rate at which income tax was borne by the parts of the aggregate income of the estate from which section 679 treats the basic amount as having been paid.

(2) If the same rate was borne by all of the income from which section 679 treats the basic amount as having been paid, the applicable rate is that rate.

(3) If different rates were borne by different parts of the income from which section 679 treats the basic amount as having been paid, each of those rates is the applicable rate by reference to which the corresponding part of the basic amount is grossed up.”

The applicable rate for grossing up for determining shares in an estate in the final tax year U.K.

2 (1) Chapter 6 of Part 5 of ITTOIA 2005 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 668 (reduction in share of residuary income of estate)—

(a) in subsection (1), in paragraph (b), for “(grossed up where subsection (5) applies)” substitute “grossed up, where the estate is a UK estate, by the applicable rate (see subsections (5A) to (5C))”;

(b) for subsection (5) substitute—

“(5A) The applicable rate by reference to which a sum within subsection (1)(b) is grossed up depends on the rate at which income tax was borne by the parts of the aggregate income of the estate from which section 679A treats the sum as having been paid.

(5B) If the same rate was borne by all the income from which section 679A treats the sum as having been paid, the applicable rate is that rate.

(5C) If different rates were borne by different parts of the income from which section 679A treats the sum as having been paid, each of those rates is the applicable rate by reference to which the corresponding part of the sum is grossed up.”

(3) After section 679 insert—

“679A Income from which sums within section 668(1)(b) are treated as paid

(1) The part of the aggregate income of the estate from which a sum within section 668(1)(b) is treated as paid is determined by applying assumptions A and B in that order.

(2) Assumption A is that if there are different persons with an absolute interest in the residue of the estate, such apportionments of the aggregate income of the estate in respect of those interests are to be made as are just and reasonable for the different interests.

(3) Assumption B is that sums are paid from the income to which a person’s share of the residuary estate relates in descending order, starting with the income bearing income tax at the highest rate and ending with the income bearing income tax at the lowest rate.

(4) If some, but not all, of the aggregate income of the estate is income within section 680, assumption C is applied before assumptions A and B.

(5) Assumption C is that the basic amount is paid from income that is not within section 680 before it is paid from income within that section.

(6) Assumptions A and B then apply—

(a) first to determine the part of the income not within that section from which the basic amount is paid, and

(b) then to determine the part of the income within that section from which the basic amount is paid.”

(4) In section 680 (income treated as bearing income tax), in subsection (1)—

(a) omit the “and” at the end of the entry for section 670;

(b) at the end insert “, and

• section 679A (income from which sums within section 668(1)(b) are treated as paid).”

Income from stock dividends etc treated as bearing income tax at 0% U.K.

3 (1) Chapter 6 of Part 5 of ITTOIA 2005 (beneficiaries' income from estates in administration) is amended as follows.

(2) In section 670 (applicable rate for determining assumed income entitlement (UK estates)) omit subsection (4A).

(3) In section 680 (income treated as bearing income tax)—

(a) in subsection (2), after “within subsection” insert “(2A) or”;

(b) after subsection (2) insert—

“(2A) A sum that is part of the aggregate income of the estate because of falling within section 664(2)(c) (stock dividends) or (d) (release of loans to participator in close company: loans and advances to persons who die) is treated as bearing income tax at 0%.”

Income treated as dividend income and savings income U.K.

4 (1) Chapter 6 of Part 5 of ITTOIA 2005 (beneficiaries’ income from estates in administration) is amended as follows.

(2) For section 680A (income treated as dividend income) substitute—

“680A Income treated as dividend income

(1) This section applies to estate income that—

(a) by virtue of section 663 (applicable rate for grossing up basic amounts of estate income) is treated as bearing income tax at the ordinary dividend rate, or

(b) by virtue of that section and section 680(2A) (income treated as bearing income tax: dividends and loans to a participator in close company) is treated as bearing income tax at 0%.

(2) The income is treated as being dividend income.”

(3) After that section insert—

“680B Income treated as savings income

(1) This section applies to estate income relating to a person’s interest in the residue of an estate so far as that interest relates to income that—

(a) falls within section 664(2)(a) (income of personal representatives charged to UK income tax), and

(b) is savings income (see section 18 of ITA 2007).

(2) The income is treated as being savings income.”

Order in which basic amounts are treated as paid from aggregate income U.K.

5 In section 679 of ITTOIA 2005 (income from which basic amounts are treated as paid)—

(a) in subsection (3), for the words “in the following order” to the end of paragraph (c) substitute “in descending order, starting with the income bearing income tax at the highest rate and ending with the income bearing income tax at the lowest rate”;

(b) in subsection (4), for “treated under section 680 as bearing income tax” substitute “within section 680”.

Chapter 2 U.K. Corporation tax

The applicable rate for grossing up basic amounts of estate income U.K.

6 (1) Chapter 3 of Part 10 of CTA 2009 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 941 (income charged: UK estates), in subsection (2) omit “for the relevant tax year”.

(3) In section 942 (income charged: foreign estates), in subsection (3) omit “for the relevant tax year”.

(4) For section 946 (applicable rate for grossing up basic amounts of estate income) substitute—

“946 Applicable rate for grossing up basic amounts of estate income

(1) The applicable rate by reference to which a basic amount of estate income is grossed up for the purposes of sections 941 and 942 depends on the rate at which income tax was borne by the parts of the aggregate income of the estate from which section 962 treats the basic amount as having been paid.

(2) If the same rate was borne by all of the income from which section 962 treats the basic amount as having been paid, the applicable rate is that rate.

(3) If different rates were borne by different parts of the income from which section 962 treats the basic amount as having been paid, each of those rates is the applicable rate by reference to which the corresponding part of the basic amount is grossed up.”

(5) After section 961 insert—

“961A Meaning of “the relevant tax year”

In sections 960 and 961, “the relevant tax year” in relation to an amount of estate income, means the tax year in which the amount of estate income would be treated as arising if—

(a) the references in this Chapter to accounting periods were references to tax years, and

(b) section 950(3) (apportionment between accounting periods) were ignored.”

The applicable rate for grossing up for determining shares in an estate in the final tax year U.K.

7 (1) Chapter 3 of Part 10 of CTA 2009 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 951 (reduction in share of residuary income of estate)—

(a) in subsection (1), in paragraph (b), for “(grossed up where subsection (5) applies)” substitute “grossed up, where the estate is a UK estate, by the applicable rate (see subsections (5A) to (5C));

(b) for subsection (5) substitute—

“(5A) The applicable rate by reference to which a sum within subsection (1)(b) is grossed up depends on the rate at which income tax was borne by the parts of the aggregate income of the estate from which section 962A treats the sum as having been paid.

(5B) If the same rate was borne by all the income from which section 962A treats the sum as having been paid, the applicable rate is that rate.

(5C) If different rates were borne by different parts of the income from which section 962A treats the sum as having been paid, each of those rates is the applicable rate by reference to which the corresponding part of the sum is grossed up.”

(3) After section 962 insert—

“962A Income from which sums within section 951(1)(b) are treated as paid

(1) The part of the aggregate income of the estate from which a sum within section 951(1)(b) is treated as paid is determined by applying assumptions A and B in that order.

(2) Assumption A is that if there are different persons with an absolute interest in the residue of the estate, such apportionments of the aggregate income of the estate in respect of those interests are to be made as are just and reasonable for the different interests.

(3) Assumption B is that sums are paid from the income to which a person’s share of the residuary estate relates in descending order, starting with the income bearing income tax at the highest rate and ending with the income bearing income tax at the lowest rate.

(4) If some, but not all, of the aggregate income of the estate is income within section 963, assumption C is applied before assumptions A and B.

(5) Assumption C is that the basic amount is paid from income that is not within section 963 before it is paid from income within that section.

(6) Assumptions A and B then apply—

(a) first to determine the part of the income not within that section from which the basic amount is paid, and

(b) then to determine the part of the income within that section from which the basic amount is paid.”

(4) In section 963 (income treated as bearing income tax)—

(a) omit the “and” at the end of the entry for section 952;

(b) at the end insert “, and

• section 962A (income from which sums within section 951(1)(b) are treated as paid).”

Income from stock dividends etc treated as bearing income tax at 0% U.K.

8 (1) Chapter 3 of Part 10 of CTA 2009 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 936 (meaning of “UK estate” and “foreign estate”), in subsections (4) and (5), after “section 963(3)” insert “, (3A)”.

(3) In section 963 of CTA 2009 (income treated as bearing income tax)—

(a) in subsection (2), after “within subsection (3)” insert “, (3A)”;

(b) in subsection (3), omit paragraph (b) (and the “or” immediately before it);

(c) after subsection (3) insert—

“(3A) A sum that is part of the aggregate income of the estate because of falling within section 947(2)(c) (stock dividends) or (d) (release of loans to participator in close company: loans and advances to persons who die) is treated as bearing income tax at 0%.”

Order in which basic amounts are treated as paid from aggregate income U.K.

9 In section 962 of CTA 2009 (income from which basic amounts are treated as paid)—

(a) in subsection (3), for the words “in the following order” to the end of paragraph (b) substitute “in descending order, starting with the income bearing income tax at the highest rate and ending with the income bearing income tax at the lowest rate”;

(b) in subsection (4), for “treated under section 963 as bearing income tax” substitute “within section 963”.

Part 2 U.K. Low income trusts and estates

Chapter 1 U.K. Income tax

Low income estates and trusts: tax liability of personal representatives and trustees U.K.

10 (1) Chapter 3 of Part 2 of ITA 2007 (calculation of income tax liability) is amended as follows.

(2) In section 23 (the calculation of income tax liability), at the end of Step 2 insert—

“See also section 24B which provides that a taxpayer’s net income is taken to be £0 in certain cases.”

(3) After section 24A insert—

“24B Calculation of net income at Step 2 for low income estates and trusts

(1) Subsection (2) applies in relation to a taxpayer if—

(a) they are the personal representative of a deceased person and, ignoring this section, their net income in that capacity at the end of Step 2 of the calculation in section 23 would be equal to or less than the de minimis estates amount, or

(b) they are the trustee of a settlement (“the relevant settlement”) and, ignoring this section, their net income in that capacity at the end of that Step would be equal to or less than the de minimis trusts amount.

(2) The taxpayer’s net income in their capacity as a personal representative of a deceased person or trustee of a settlement (as the case may be) at the end of Step 2 of the calculation in section 23 is taken to be £0.

(3) The de minimis estates amount is £500.

(4) The de minimis trusts amount is—

(a) £500, or

(b) in a case where subsection (5) applies, the higher of—

(i) £100, and

(ii) the settlor’s threshold amount.

(5) This subsection applies where—

(a) the settlor in relation to the relevant settlement is also the settlor in relation to one or more qualifying settlements,

(b) ignoring this section, the trust rate income (within the meaning of Part 9) for the tax year of the trustees of the relevant settlement would be greater than £0, and

(c) the relevant settlement is a settlement in respect of which each of the conditions mentioned in subsection (9) is met throughout the tax year.

(6) The settlor’s threshold amount is the amount given by—

where QS is the total number of qualifying settlements.

(7) If there is more than one settlor in relation to the relevant settlement—

(a) calculate the threshold amount of each of them, and

(b) use the lowest of those threshold amounts for the purposes of subsection (4)(b)(ii).

(8) A settlement is a “qualifying settlement” if—

(a) it is not the relevant settlement,

(b) it is in existence at a time during the tax year,

(c) ignoring this section, the trust rate income (within the meaning of Part 9) for the tax year of the trustees of the settlement would be greater than £0, and

(d) it is a settlement in respect of which each of the conditions mentioned in subsection (9) is met throughout the tax year.

(9) The conditions are—

(a) the property comprised in the settlement is not held for a pensions purpose within the meaning of paragraph 7(3) of Schedule 1C to TCGA 1992 (property comprised in settlements held for a pensions purpose);

(b) no income arising under the settlement is treated as the income of the settlor as a result of section 624 of ITTOIA 2005 (income where settlor retains an interest);

(c) the settlement is not a qualifying trust within the meaning of section 34 or 35 of FA 2005 (trusts for the benefit of disabled persons or relevant minors);

(d) the settlement is not a heritage maintenance settlement within the meaning of Chapter 10 of Part 9 (heritage maintenance settlements) (see section 507(2) and (3)).”

Low income estates: tax liability of beneficiaries U.K.

11 (1) Chapter 6 of Part 5 of ITTOIA 2005 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 649 (charge to tax on estate income), after subsection (1) insert—

“(1A) But income tax is not charged on estate income so far as that income consists of a basic amount which section 679 treats as having been paid from de minimis aggregate income.

(1B) In subsection (1A), “de minimis aggregate income” means aggregate income of an estate which is treated as bearing income tax at 0% because of section 680(1A).”

(3) In section 656 (income charged: UK estates), in subsection (1), for “tax is charged under section 649” substitute “the charge to tax under section 649 is a charge”.

(4) In section 657 (income charged: foreign estates), in subsection (1), for “tax is charged under section 649” substitute “the charge to tax under section 649 is a charge”.

(5) In section 679 (income from which basic amounts are treated as paid)—

(a) in subsection (3) (as amended by paragraph 5(a)), at the end insert “(subject to subsection (3A))”;

(b) after that subsection insert—

“(3A) For the purposes of assumption B, where those parts include—

(a) income bearing income tax at 0% by virtue of section 680(1A), and

(b) other income bearing income tax at 0%,

payments are to be made from income within paragraph (a) after income within paragraph (b).”

(6) In section 679A (income from which sums within section 668(1)(b) are treated as paid) (inserted by paragraph 2(3))—

(a) in subsection (3), at the end insert “(subject to subsection (3A))”;

(b) after that subsection insert—

“(3A) For the purposes of assumption B, where that income includes—

(a) income bearing income tax at 0% by virtue of section 680(1A), and

(b) other income bearing income tax at 0%,

sums are to be paid from income within paragraph (a) after income within paragraph (b).”

(7) In section 680 (income treated as bearing income tax)—

(a) after subsection (1) insert—

“(1A) If, in the case of a UK estate, the aggregate income of the estate for a tax year is equal to or less than the de minimis estates amount (within the meaning of section 24B of ITA 2007), the aggregate income of the estate for that tax year is treated as bearing income tax at 0%.”;

(b) for subsection (2) substitute—

“(2) If—

(a) subsection (1A) does not apply to treat the aggregate income of the estate for a tax year as bearing income tax at 0%, and

(b) the aggregate income of the estate for that tax year includes a sum within subsection (2A) or (4),

the sum is treated as bearing income tax at the rate specified for it in that subsection.”;

(c) in subsection (5), after “sums within this section” insert “or from aggregate income treated as bearing income tax at 0% by virtue of subsection (1A)”.

Chapter 2 U.K. Corporation tax

Low income estates: tax liability of beneficiaries U.K.

12 (1) Chapter 3 of Part 10 of CTA 2009 (beneficiaries’ income from estates in administration) is amended as follows.

(2) In section 934 (charge to tax on estate income), after subsection (1) insert—

“(1A) But corporation tax is not charged on estate income so far as that income consists of a basic amount which section 962 treats as having been paid from de minimis aggregate income.

(1B) In subsection (1A), “de minimis aggregate income” means aggregate income of an estate which is treated as bearing income tax at 0% because of section 963(1A).”

(3) In section 941 (income charged: UK estates), in subsection (1), for “tax is charged under section 934” substitute “the charge to tax under section 934 is a charge”.

(4) In section 942 (income charged: foreign estates), in subsection (1), for “tax is charged under section 934” substitute “the charge to tax under section 934 is a charge”.

(5) In section 962 (income from which basic amounts are treated as paid)—

(a) in subsection (3) (as amended by paragraph 9(a)), at the end insert “(subject to subsection (3A))”;

(b) after that subsection insert—

“(3A) For the purposes of assumption B, where those parts include—

(a) income bearing income tax at 0% by virtue of section 963(1A), and

(b) other income bearing income tax at 0%,

payments are to be made from income within paragraph (a) after income within paragraph (b).”

(6) In section 962A (income from which sums within section 951(1)(b) are treated as paid) (inserted by paragraph 7(3))—

(a) in subsection (3), at the end insert “(subject to subsection (3A))”;

(b) after that subsection insert—

“(3A) For the purposes of assumption B, where that income includes—

(a) income bearing income tax at 0% by virtue of section 963(1A), and

(b) other income bearing income tax at 0%,

sums are to be paid from income within paragraph (a) after income within paragraph (b).”

(7) In section 963 (income treated as bearing income tax)—

(a) after subsection (1) insert—

“(1A) If, in the case of a UK estate, the aggregate income of the estate for a tax year is equal to or less than the de minimis estates amount (within the meaning of section 24B of ITA 2007), the aggregate income of the estate for that tax year is treated as bearing income tax at 0%.”;

(b) for subsection (2) substitute—

“(2) If—

(a) subsection (1A) does not apply to treat the aggregate income of the estate for a tax year as bearing income tax at 0%, and

(b) the aggregate income of the estate for that tax year includes a sum within subsection (3), (3A) or (4),

the sum is treated as bearing income tax at the rate specified for it in that subsection.”;

(c) in subsection (5), after “sums within this section” insert “or from aggregate income treated as bearing income tax at 0% by virtue of subsection (1A) ”.

Part 3 U.K. Rate of tax charged on trustees’ first slice of trust rate income: income tax

13 (1) ITA 2007 is amended as follows. U.K.

(2) Omit Chapter 6 of Part 9 (trustees’ first slice of trust rate income).

(3) In consequence of the amendment made by sub-paragraph (2)—

(a) in section 2(9)(b) (overview of Act), for “4, 5 and 6” substitute “4 and 5”;

(b) in section 11(2) (income charged at the default basic rate: non- individuals), for “6” substitute “5”;

(c) in section 14(2) (income charged at the dividend ordinary rate: other persons), for “6” substitute “5”;

(d) in section 15 (income charged at the trust rate and the dividend trust rate), for “6” substitute “5”;

(e) in section 16(2) (savings and dividend income to be treated as highest part of total income) omit paragraph (a) (and the “and” after it);

(f) in section 23 (the calculation of income tax liability), in Step 4, for “6” substitute “5”;

(g) in section 462 (overview of Part 9) omit subsection (6);

(h) in section 484 (trustees’ expenses to be set against trustees’ trust rate income) omit subsection (3);

(i) in section 498 (types of income tax for the purposes of section 497) omit Type 4.

Part 4 U.K. Commencement

14 (1) The amendments made by this Schedule have effect as follows. U.K.

(2) In Part 1—

(a) the amendments made by Chapter 1 have effect in relation to the tax year 2023-24 and subsequent tax years;

(b) the amendments made by Chapter 2 have effect in relation to accounting periods beginning on or after 1 April 2023.

(3) In Part 2—

(a) the amendments made by Chapter 1 have effect in relation to the tax year 2024-25 and subsequent tax years;

(b) the amendments made by Chapter 2 have effect in relation to accounting periods beginning on or after 1 April 2024;

(4) The amendments made by Part 3 have effect in relation to the tax year 2024-25 and subsequent tax years.

Section 34

Schedule 3 U.K. Corporate interest restriction etc.

Part 1 U.K. Amendments to TIOPA 2010

Introduction U.K.

1 Part 10 of TIOPA 2010 (corporate interest restriction) is amended as follows.

Tax-interest expense amounts of a company: charities U.K.

2 In section 382 (the tax-interest expense amounts of a company), after subsection (1) insert—

“(1A) But, in the case of a company which is a charity (as defined in paragraph 1 of Schedule 6 to FA 2010) at the end of the period of account, references in this Part to a “tax-interest expense amount” of the company do not include references to an amount which meets Condition A, B or C.”

First period of account where new holding company U.K.

3 In section 395A (carry forward of interest allowance: new holding company), for subsection (3) substitute—

“(3) For the purposes of this Chapter and Chapter 5—

(a) so far as it would not otherwise be the case—

(i) the first period of account of the new group is treated as beginning with the day on which the qualifying takeover occurs (the “takeover day”), and

(ii) the last period of account of the old group is treated as ending on the day before the takeover day;

(b) the interest allowance of the new group is determined as if periods of account of the old group which ended before the beginning of the first period of account of the new group were periods of account of the new group.”

4 In section 400A (carry forward of excess debt cap: new holding company), in subsection (3)—

(a) for “the group’s fixed ratio debt cap” substitute “the new group’s fixed ratio debt cap”;

(b) for “ending immediately before the qualifying takeover” substitute “ending on the day before the takeover day (see section 395A(3))”.

Amounts not brought into account in determining a company’s tax-EBITDA U.K.

5 (1) Section 407(1) (amounts not brought into account in determining a company’s tax-EBITDA) is amended as follows.

(2) At the end of paragraph (a) insert “(or an amount which would, apart from section 388, be a tax-interest income amount);”.

(3) After paragraph (g) insert—

“(ga) a reduction under paragraph 37(3)(b) of Schedule 5 to FA 2019 (non-UK resident companies carrying on UK property businesses etc: unrelieved amounts);”.

“Relevant expense amount” and “relevant income amount” U.K.

6 (1) Section 411 (“relevant expense amount” and “relevant income amount”) is amended as follows.

(2) For subsection (1)(j) substitute—

“(j) debits that are brought into account under Part 5 of CTA 2009 as a result of section 481 of that Act (relevant non-lending relationships), or would be so brought into account if the company in question were within the charge to corporation tax, other than—

(i) exchange losses, or

(ii) impairment losses;”.

(3) For subsection (2)(h) substitute—

“(h) credits that are brought into account under Part 5 of CTA 2009 as a result of section 481 of that Act (relevant non-lending relationships), or would be so brought into account if the company in question were within the charge to corporation tax, other than—

(i) exchange gains, or

(ii) the reversal of impairment losses;”.

7 In section 412 (interpretation of section 411), in subsection (7), omit the definition of “relevant non-lending relationship”.

Adjusted net group-interest expense: debits referable to times before UK property business etc carried on U.K.

8 (1) Section 413 (adjusted net group-interest expense) is amended as follows.

(2) In subsection (3) (upward adjustment), after paragraph (c) insert—

“(ca) an amount in respect of a loan relationship that is brought into account by a member of the group, for a relevant accounting period in relation to the period of account, under section 330ZA CTA 2009 (debits referable to times before UK property business etc carried on) so far as that amount has not been included in the adjusted net group-interest expense of the group for any earlier period of account;

(cb) an amount in respect of a relevant derivative contract that would be brought into account by a member of the group, for a relevant accounting period in relation to the period of account, under section 607ZA of CTA 2009, if an election under regulation 6A of the Disregard Regulations (as defined in section 421) had effect in relation to the contract, so far as the relevant amount has not been included in the adjusted net group-interest expense of the group for any earlier period of account;

(cc) a relevant income amount in respect of a loan relationship or a relevant derivative contract to which a member of the group is a party that—

(i) is recognised in the financial statements of the group for the period,

(ii) is not brought into account by a member of the group, for a relevant accounting period in relation to the period of account, and

(iii) is expected to be brought into account, or (in the case of a relevant derivative contract) would, if an election under regulation 6A of the Disregard Regulations had effect in relation to the contract, be expected to be brought into account, by a member of the group, for another accounting period, under section 330ZA or section 607ZA of CTA 2009;”.

(3) In subsection (4) (downward adjustment), after paragraph (c) insert—

“(ca) a relevant expense amount, in respect of a loan relationship or a relevant derivative contract to which a member of the group is a party, that—

(i) is recognised in the financial statements of the group for the period,

(ii) is not brought into account by a member of the group, for a relevant accounting period in relation to the period of account, and

(iii) is expected to be brought into account, or (in the case of a relevant derivative contract) would, if an election under regulation 6A of the Disregard Regulations had effect in relation to the contract, be expected to be brought into account, by a member of the group, for another accounting period, under section 330ZA or section 607ZA of CTA 2009;”.

(4) At the end insert—

“(7) Subsection (8) applies, unless the reporting company elects otherwise, in relation to a period of account of a worldwide group—

(a) ending on or after 6 April 2020, and

(b) beginning before 1 April 2023.

(8) In relation to the period of account—

(a) no amount within any of paragraphs (ca) to (cc) of subsection (3) is to be treated as an “upward adjustment”, and

(b) no amount within paragraph (ca) of subsection (4) is to be treated as a “downward adjustment”.”

Adjusted net group-interest expense: debits in respect of pre-trading expenditure U.K.

9 (1) Section 413 (adjusted net group-interest expense) is amended as follows.

(2) In subsection (3) (upward adjustment), after paragraph (cc) (inserted by paragraph 8 of this Schedule) insert—

“(cd) an amount that is brought into account by a member of the group, for a relevant accounting period in relation to the period of account, under section 330(3) of CTA 2009 (debits in respect of pre-trading expenditure) in accordance with an election made under section 330(1)(b) of that Act, so far as that amount has not been included in the adjusted net group-interest expense of the group for any earlier period of account;”.

(3) In subsection (4) (downward adjustment), after paragraph (ca) (inserted by paragraph 8 of this Schedule) insert—

“(cb) an amount, in respect of a loan relationship to which a member of the group is a party, that—

(i) is recognised in the financial statements of the group for the period, but

(ii) is prevented from being brought into account in accordance with an election made under section 330(1)(b) of CTA 2009 (debits in respect of pre-trading expenditure);”.

Qualifying net group-interest expense: meaning of “equity notes” U.K.

10 In section 414 (qualifying net-group interest expense), in subsection (3), at the beginning of paragraph (c) insert “relevant”.

11 In section 415 (qualifying net group-interest expense: interpretation), for subsection (7) substitute—

“(7) For the purposes of section 414(3)(c), a “relevant equity note” is a security that—

(a) is an equity note within the meaning of section 1016 of CTA 2010, by reference to satisfying a test in subsection (2) of that section, and

(b) would satisfy that test if the “permitted period” for the purposes of that section were the period of 100 years beginning with the date of the security’s issue.”

Capitalised interest brought into account for tax purposes in accordance with GAAP U.K.

12 (1) Section 423 (capitalised interest brought into account for tax purposes in accordance with GAAP) is amended as follows.

(2) After subsection (2A) insert—

“(2AA) Section 413 has effect, in the case of a GAAP-taxable asset within subsection (2AB), as if—

(a) the definition of “upward adjustment” included so much of its carrying value as is attributable to a relevant expense amount (whether or not that amount is brought into account in the group’s financial statements for the relevant period of account); and

(b) the definition of “downward adjustment” included so much of its carrying value as is attributable to a relevant income amount (whether or not that amount is brought into account in the group’s financial statements for the relevant period of account).

(2AB) A GAAP-taxable asset is within this subsection if it is (or, under section 173 of TCGA 1992, is treated as being) appropriated, in a relevant accounting period in relation to a period of account, from trading stock to fixed assets.”

(3) In subsection (3), for “(2)(b) and (2A)” substitute “(2)(b), (2A) and (2AA)”.

Interest allowance (non-consolidated investment) election: “non-consolidated associate” U.K.

13 (1) Section 429 (meaning of “non-consolidated associate”) is amended as follows.

(2) In subsection (1), for “or C” substitute “, C or D”.

(3) In subsection (2), in the words before paragraph (a), for “the entity” substitute “the ultimate parent’s interest in the entity”.

(4) After subsection (4) insert—

“(4A) Condition D is that—

(a) the entity is—

(i) a partnership, or

(ii) a transparent entity (other than a partnership), and

(b) the ultimate parent’s interest in the entity is accounted for in the financial statements of the group for the relevant period of account on the basis of fair value accounting.”

(5) For subsection (6) substitute—

“(6) For the purposes of this section—

(a) “entity” includes anything which may be treated as an entity for accounting purposes (regardless of whether it has a legal personality as a body corporate);

(b) an entity is “transparent” if—

(i) it is not chargeable to corporation tax or income tax as a person (ignoring any exemptions), or

(ii) it is a collective investment vehicle which is “transparent for income tax purposes” for the purposes of paragraph 8 of Schedule 5AAA to TCGA 1992 (see paragraph 8(7) of that Schedule).”

Public infrastructure U.K.

14 (1) Section 435 (group elections modifying the operation of sections 433 and 434) is amended as follows.

(2) In subsection (1), after “worldwide group” insert “, and have each made an election under section 433,”.

(3) In subsection (2)—

(a) before paragraph (a) insert—

“(aa) must be made before the end of the earliest elected accounting period (see subsection (11));”;

(b) in paragraph (a), after “election” insert “, which may not be before the first day of the earliest elected accounting period”.

(4) In subsection (3), for “an election, revocation” substitute “a revocation”.

(5) At the end insert—

“(11) The “earliest elected accounting period” is the accounting period which—

(a) is the first elected accounting period of an elected company, and

(b) begins no later than the first elected accounting period of each other elected company.

(12) For the purposes of subsection (11), the “first elected accounting period” of an elected company is the first of the company’s accounting periods in relation to which the election is to have effect.

(13) If there is more than one earliest elected accounting period under subsection (11) and those periods (the “relevant periods”) do not all end on the same date, the “earliest elected accounting period” is the relevant period that ends no later than each of the other relevant periods.”

15 (1) Section 436 (meaning of “qualifying infrastructure activity”) is amended as follows.

(2) In subsection (5), for paragraphs (a) and (b) substitute—

“(a) the building or part is, or is to be, let on a short-term basis —

(i) within a UK property business carried on by the company, or another member of the worldwide group of which it is a member at that time, and

(ii) to persons who, at that time, are not related parties of the company or member.”

(3) After subsection (5) insert—

“(5A) But a building, or part of a building, is not a public infrastructure asset in relation to a company at a particular time if, were the building or part to be disposed of at that time, profits arising from the disposal would be charged to corporation tax as profits of a trade.”

16 After section 438 insert—

“438A Application of section 438: certain creditors treated as qualifying infrastructure companies

(1) This section applies where—

(a) a company (“C”), at a time in the period mentioned in subsection (1) of section 438—

(i) is a member of the worldwide group of which the qualifying infrastructure company mentioned in that subsection is a member, but

(ii) is not a UK group company; and

(b) C is a creditor in relation to an amount which—

(i) is a relevant loan relationship debit (as defined in section 383) for the debtor company, or

(ii) would be a relevant loan relationship debit if the debtor company were UK resident.

(2) For the purposes of section 438, C is treated in relation to the amount mentioned in subsection (1)(b) (the “relevant loan amount”) as a qualifying infrastructure company if—

(a) throughout the period mentioned in section 438(1), C—

(i) meets the public infrastructure income test for the accounting period (see subsections (2) to (4) of section 433) and subsection (3) of this section), and

(ii) meets the public infrastructure assets test for the accounting period (see subsections (5) to (10) of that section and subsection (4) of this section),

(but does not satisfy the conditions in subsection (1)(c) and (d) of section 433);

(b) the loan to which the relevant loan amount relates (the “relevant loan”) is fully funded by another loan (the “corresponding loan”) made to C for that purpose and on substantially the same terms as the relevant loan; and

(c) amounts arising to C in respect of the corresponding loan would, if section 438(2) applied to C, qualify as “exempt amounts” within the meaning of that subsection.

(3) For the purposes of subsection (2)(a)(i), C is also treated as meeting the public infrastructure income test for an accounting period if all, or all but an insignificant proportion, of its income for the period derives from—

(a) anything listed in any of paragraphs (a) to (c) of section 433(2),

(b) shares in, or debt issued by, a company that meets the test in section 433(2) for that period,

(c) shares in or debt issued by a company that is treated as meeting the public infrastructure income test for that period by reason of this subsection.

(4) For the purposes of subsection (2)(a)(ii), C is also treated as meeting the public infrastructure assets test for an accounting period if all, or all but an insignificant proportion, of the total value of the company's assets recognised in an appropriate balance sheet on each day in that period derives from—

(a) anything listed in any of paragraphs (a) to (e) of section 433(5),

(b) shares in, or debt issued by, a company that meets the test in section 433(5) for that period,

(c) shares in or debt issued by a company that is treated as meeting the public infrastructure assets test for that period by reason of this subsection.

(5) For the purposes of determining whether amounts arising to C would qualify as exempt amounts under section 438(2) (for the purposes of subsection (2)(c) of this section), the recourse of a creditor is treated as being limited to relevant infrastructure matters if, in the event that C fails to perform its obligations in question, the recourse of the creditor is limited to—

(a) anything listed in paragraphs (a) to (c) of section 438(4),

(b) shares in or debt issued by a company whose income and assets consist wholly of income and assets within those paragraphs,

(c) shares in or debt issued by a company whose income and assets consist wholly of income and assets within paragraphs (a) or (b) of this subsection, or

(d) shares in or debt issued by a company whose income and assets consists wholly of income and assets within paragraphs (a) to (c) of this subsection, and so on.

(6) For the purposes of subsection (5), in determining whether a company’s income and assets consists wholly of income and assets of a particular description, any source of income or any asset is ignored if, having regard to all the circumstances, it is reasonable to regard as insignificant the amount of income arising from the source, or (as the case may be) the value of the asset recognised, in the accounting period.”

Partnerships and other transparent entities U.K.

17 In section 447 (partnerships and other transparent entities), for subsection (6) substitute—

“(6) For the purposes of this section an entity is “transparent” if—

(a) it is not chargeable to corporation tax or income tax as a person (ignoring any exemptions), or

(b) it is a collective investment vehicle which is “transparent for income tax purposes” for the purposes of paragraph 8 of Schedule 5AAA to TCGA 1992 (see paragraph 8(7) of that Schedule).”

Investments held by investment managers U.K.

18 (1) Section 454A (investments held by investment managers) is amended as follows.

(2) In subsection (1)(a), for “is a member of a worldwide group” substitute “would, apart from this section, be a member of a worldwide group”.

(3) After subsection (1) insert—

“(1A) Except in a case within subsection (2), for the purposes of this Part—

(a) the group does not include S (or its subsidiaries), and

(b) accordingly, none of those entities is regarded as a consolidated subsidiary of any member of the group.”

(4) In subsection (2), for “For the purposes of this Part” substitute “Where S is a partnership or another transparent entity, for the purposes of this Part”.

Determining the worldwide group: “non-consolidated subsidiary” and “consolidated subsidiary” U.K.

19 (1) Section 475 (meaning of “non-consolidated subsidiary” and “consolidated subsidiary”) is amended as follows.

(2) In subsection (1)(b), omit “or on the basis that X were an asset held for sale or held for distribution to owners”.

(3) For subsection (3) substitute—

“(3) In this section “subsidiary” has the meaning given by international accounting standards.”

Appointment of a reporting company by Revenue and Customs U.K.

20 In paragraph 4 of Schedule 7A (appointment of a reporting company by Revenue and Customs), in sub-paragraph (5)(a) for “36 months” substitute “4 years”.

Revised interest restriction return U.K.

21 (1) Paragraph 8 of Schedule 7A (revised interest restriction return) is amended as follows.

(2) For sub-paragraph (4) substitute—

“(4) Where any of the figures contained in the previous interest restriction return have become incorrect (whether or not as a result of a member of the group amending, or being treated as amending, its company tax return), the reporting company must submit a revised interest restriction return (for the purpose of correcting those figures) to an officer of Revenue and Customs.”

(3) For sub-paragraph (5) substitute—

“(5) A revised interest restriction return submitted under sub-paragraph (4) is of no effect unless it is received by an officer of Revenue and Customs before the end of—

(a) the period of 3 months beginning with the relevant day, or

(b) in a case where sub-paragraph (5B) applies, such longer period as an officer of Revenue and Customs may allow.

(5A) For the purposes of sub-paragraph (5), the “relevant day” is—

(a) where the figures contained in the previous interest restriction return have become incorrect as the result of a member of the group amending, or being treated as amending, an amount stated in its company tax return, the first day on which that amount can no longer be altered (within the meaning of paragraph 88(3) to (5) of Schedule 18 to FA 1998);

(b) in any other case, the day on which the figures contained in the previous interest restriction return were found to have become incorrect.

(5B) This sub-paragraph applies where an officer of Revenue and Customs considers that, as a result of an enquiry into a company tax return of another member of the group, the reporting company may subsequently be required to submit another revised interest restriction return under sub-paragraph (4).

(5C) A revised interest restriction return submitted under sub-paragraph (4) may differ from the previous return only so far as the differences are in consequence of the correction referred to in that sub-paragraph.”

22 (1) Paragraph 29 of Schedule 7A (penalty for failure to deliver a return) is amended as follows.

(2) In sub-paragraph (1)—

(a) in paragraph (a), after “paragraph 7” insert “, or a revised interest restriction return under paragraph 8(4),”;

(b) in paragraph (b), omit “(see sub-paragraph (5) of that paragraph)”.

(3) After sub-paragraph (1), insert—

“(1A) In subsection (1)(b), the reference to the “filing date” in relation to a period of account is—

(a) in relation to an interest restriction return under paragraph 7, a reference to the filing date for the purposes of that paragraph (see paragraph 7(5) and (5A));

(b) in relation to a revised interest restriction return under paragraph 8(4), a reference to the end of the period within which the return may have effect (see paragraph 8(5)).”

Enquiry into interest restriction return U.K.

23 In paragraph 41 of Schedule 7A (normal time limits for opening enquiry), in sub-paragraph (2)—

(a) omit paragraph (b) (but not the “and” at the end), and

(b) in paragraph (c), after “receives the” insert “return or”.

Determinations by officers of Revenue and Customs U.K.

24 (1) Paragraph 56 of Schedule 7A (power of Revenue and Customs to make determinations where no return filed etc) is amended as follows.

(2) For sub-paragraph (1)(b) (but not the “and” at the end) substitute—

“(b) the filing date in relation to the relevant period of account has passed (see paragraph 7(5)),”.

(3) In sub-paragraph (1)(c)—

(a) omit “A,”;

(b) for “or C” substitute “, C or D”.

(4) Omit sub-paragraphs (2) and (3).

(5) After sub-paragraph (5) insert—

“(5A) Condition D is that—

(a) the appointment of a reporting company has effect in relation to the relevant period of account,

(b) the reporting company is required to submit a revised interest restriction return for the period under paragraph 8(4), and

(c) the time limit in paragraph 8(5) for the submission of the revised return has passed without the revised return being received by an officer of Revenue and Customs.”

(6) In sub-paragraph (9)—

(a) after “made” insert “—

(a) in a case where Condition D is met, after the end of the period of 12 months beginning with the expiry of the time limit mentioned in paragraph 8(5), and

(b) in any other case,”;

(b) for “the determination date” substitute “the filing date referred to in sub-paragraph (1)(b)”.

Consequential claims to company tax returns U.K.

25 In paragraph 72 of Schedule 7A (consequential claims to company tax returns), in sub-paragraph (1)(a) omit “56 or”.

Part 2 U.K. Other amendments

Penalties for errors: CIR alterations to be ignored in calculating potential lost revenue U.K.

26 (1) Paragraph 5 of Schedule 24 to FA 2007 (penalties for errors: calculating potential lost revenue) is amended as follows.

(2) In sub-paragraph (4), before paragraph (a) insert—

“(za) any CIR alteration, other than a permitted reduction, in respect of the tax period to which the document relates,”.

(3) At the end insert—

“(5) For the purposes of sub-paragraph (4)(za)—

(a) a “CIR alteration” means an alteration made to an amount disallowed, or reactivated, under Part 10 of the Taxation (International and Other Provisions) Act 2010 as a result of the submission of a revised interest restriction return under paragraph 8(4) of Schedule 7A to that Act;

(b) a CIR alteration is a “permitted reduction” if it has the effect of—

(i) reducing the allocated disallowance of a company by no more than the relevant proportion, or

(ii) increasing the allocated reactivation of a company by no more than the relevant proportion.

(c) the “relevant proportion” is—

(i) for the purposes of paragraph (b)(i), the proportion by which the total disallowed amount of the worldwide group for the period is reduced, as a result of the submission of the revised interest restriction return;

(ii) for the purposes of paragraph (b)(ii) the proportion by which the interest reactivation cap of the worldwide group is increased, as a result of the submission of the revised interest restriction return.

(6) In sub-paragraph (5), the following terms have the same meaning as in Part 10 of the Taxation (International and Other Provisions) Act 2010—

• “allocated disallowance” (see paragraph 22(2) of Schedule 7A to that Act);

• “allocated reactivation” (see paragraph 25(2) of that Schedule);

• “total disallowed amount of the worldwide group” and “interest reactivation cap of the worldwide group” (see section 373 of that Act).”

Disapplication of carry forward rule for deficits U.K.

27 (1) Section 457 of CTA 2009 (basic rule for deficits: carry forward to accounting periods after deficit period) is amended as follows.

(2) In subsection (1), after “section 458” insert “(subject to subsection (2A))”.

(3) After subsection (2) insert—

“(2A) If the company is a charity at the end of the deficit period, the deficit may not be carried forward and set off against non-trading profits (as described in subsection (1)) for an accounting period (and, accordingly, the deficit may not be surrendered as group relief under Part 5 of CTA 2010 for the purposes of subsection (2)(a)).”

Defined expressions used in Part 10 of TIOPA 2010: “insurance company” U.K.

28 (1) In section 494 of TIOPA 2010 (other interpretation), at the end insert—

“(3) The definition of “insurance company” in section 65 of FA 2012 (which is applicable to this Part as a result of section 141(2) of that Act) has effect for the purposes of this Part as if, in subsection (2)(a), the reference to Part 4A of the Financial Services and Markets Act 2000 included a reference to the law of a territory outside the United Kingdom which is similar to or corresponds to that Part.”

(2) In Part 7 of Schedule 11 to that Act (index of defined expressions), in the entry relating to an insurance company, in the second column, for “section 141 of FA 2012” substitute “section 494(3)”.

Determining the worldwide group: consequential amendment U.K.

29 In Part 1 of Schedule 8 to FA 2018 (corporate interest restriction: amendments of Part 10 of TIOPA 2010), omit paragraph 13.

Part 3 U.K. Parts 1 and 2: commencement and transitional provision

30 U.K. Except as provided in paragraphs 31 to 35, the amendments made by Parts 1 and 2 of this Schedule have effect for periods of account of worldwide groups that begin on or after 1 April 2023.

31 U.K. The amendments made by paragraph 5(1) and (3) have effect for periods of account of worldwide groups ending on or after 6 April 2020.

32 (1) The amendments made by paragraph 8 have effect for periods of account of worldwide groups ending on or after 6 April 2020. U.K.

(2) Sub-paragraph (3) applies if—

(a) in accordance with Schedule 7A to TIOPA 2010, a reporting company has submitted an interest restriction return for a period of account of a worldwide group ending—

(i) on or after 6 April 2020, but

(ii) before the day on which this Act is passed; and

(b) any of the figures in the interest restriction return have become incorrect as a result of the amendments made by paragraph 8 (including as a result of an election made under section 413(7) of TIOPA 2010).

(3) A revised interest restriction return submitted under paragraph 8 of Schedule 7A to TIOPA 2010 has effect (so far as that would not otherwise be the case) if it is received before the end of the period of 3 months beginning with the day on which this Act is passed.

33 U.K. The amendments made by paragraph 9 have effect for periods of account of worldwide groups in relation to which an election under section 330 of CTA 2009 is made, in respect of a relevant accounting period, on or after the day on which this Act is passed.

34 U.K. The amendments made by paragraphs 2, 14 to 16, and 27, have effect for accounting periods that begin on or after 1 April 2023.

35 U.K. The amendment made by paragraph 20 has effect in relation to appointments of reporting companies made, and the amendments made by paragraph 24(1), (2), (3)(a), (4) and (6)(b) have effect in relation to determinations made, on or after the day on which this Act is passed.

36 U.K. References in this Part of this Schedule to periods of account of worldwide groups have the same meaning as in Part 10 of TIOPA 2010 (see section 480 of that Act).

Part 4 U.K. Tax treatment of financing costs and income

37 U.K. This Part of this Schedule applies if—

(a) a company (“C”) was, for the purposes of Part 7 of TIOPA 2010, a member of a worldwide group in a period of account of the group beginning before 1 April 2017,

(b) the reporting body has, in relation to that period of account, submitted—

(i) a statement of disallowances under section 278 or 279 of TIOPA 2010, and

(ii) a statement of allocated exemptions under section 290 or 291 of that Act,

(c) after the submission of the statement mentioned in sub-paragraph (b), the total disallowed amount of the worldwide group for that period of account is reduced (as a result of an enquiry into C’s company tax for a relevant accounting period or otherwise),

(d) as a result of the reduction in the total disallowed amount, the sum of the amounts specified in the statement of allocated exemptions under section 292(4)(b) of TIOPA 2010 exceeds the limit specified in section 292(6) of that Act,

(e) on or after 15 March 2023, the reporting body submits a revised statement of disallowances under section 279 of TIOPA 2010, and

(f) the revised statement of disallowances is treated, under regulation 13 of the 2009 Regulations, as if it had been received by HMRC by the time specified in section 279(2) of TIOPA 2010.

38 (1) Part 7 of TIOPA 2010 has effect in relation to the worldwide group as if the revised statement of disallowances had not been submitted unless— U.K.

(a) on or after 15 March 2023, the reporting body also submits a revised statement of allocated exemptions under section 291 of TIOPA 2010, and

(b) the revised statement of allocated exemptions is treated, under regulation 28 of the 2009 Regulations or under sub-paragraph (2), as if it had been received by HMRC by the time specified in section 291(2) of TIOPA 2010.

(2) Where the revised statement of allocated exemptions mentioned in sub-paragraph (1)(a) is received by HMRC before the end of the period of 30 days beginning with the day on which this Act comes into force, it is treated for the purposes of this Part (and of the application of Part 7 of TIOPA 2010 for the purposes of this Part) as if it had been received by HMRC by the time specified in section 291(2) of TIOPA 2010.

(3) If the revised statement of disallowances referred to in paragraph 37(e) specifies that no financing expense amounts for the relevant period of account are to be disallowed, the requirement in section 280(4) of TIOPA 2010 does not apply in relation to the statement.

(4) If the revised statement of allocated exemptions referred to in sub-paragraph (1)(a) specifies that no financing income amounts for the relevant period of account are to be exempted, the requirement in section 292(4) of TIOPA 2010 does not apply in relation to the statement.

39 U.K. For the purposes of this Part (and of the application of Part 7 of TIOPA 2010 for the purposes of this Part) references to the “reporting body” include references to C unless—

(a) the ultimate parent of the worldwide group notifies HMRC that another company is the reporting body for those purposes,

(b) the other company is—

(i) for the purposes of paragraph 37, a company to which Chapter 3 of Part 7 of TIOPA 2010 applies, or

(ii) for the purposes of paragraph 38(1), a company to which Chapter 4 of Part 7 of TIOPA 2010 applies, and

(c) the notice is given before the end of the period within which the revised statement of disallowances mentioned in paragraph 37(f) would be treated, under regulation 13 of the 2009 Regulations, as if it had been received by HMRC by the time specified in section 279(2) of TIOPA 2010.

40 (1) References in this Part to any provision of Part 7 of TIOPA 2010, or of the 2009 Regulations, are references to that provision as it continues to have effect in relation to— U.K.

(a) periods of account of the worldwide group ending before 1 April 2017, and

(b) where financial statements of the worldwide group are drawn up in respect of a period that begins before, and ends on or after, 1 April 2017, the period—

(i) beginning at the time the straddling period of account (as defined in paragraph 26(3)(b) of Schedule 5 to F(No.2)A 2017) begins, and

(ii) ending with 31 March 2017.

(2) In this Part, the “2009 Regulations” means the Corporation Tax (Financing Costs and Income) Regulations 2009 (S.I. 2009/3173).

(3) Terms used in this Part and in Part 7 of TIOPA 2010 have the same meaning as in that Part of that Act.

Section 35

Schedule 4 U.K. Investment vehicles

Part 1 U.K. UK property rich collective investment vehicles etc

Genuine diversity of ownership U.K.

1 (1) Schedule 5AAA to TCGA 1992 is amended as follows.

(2) In paragraph 7 (appropriate connection)—

(a) in sub-paragraph (5)—

(i) in paragraph (a), for “it meets” substitute “the vehicle meets or, if the vehicle is part of multi-vehicle arrangements, the arrangements meet”;

(ii) in paragraph (b), for “it meets” substitute “the vehicle meets, or those multi-vehicle arrangements meet,”;

(iii) omit the words after paragraph (b);

(b) after that sub-paragraph insert—

“(5A) For the purposes of sub-paragraph (5), those Regulations have effect as if references to a fund included—

(a) multi-vehicle arrangements, and

(b) a collective investment vehicle which is not an offshore fund.”;

(c) after sub-paragraph (7) insert—

“(8) In this Schedule “multi-vehicle arrangements” means arrangements comprising two or more vehicles under which an investor in one of those vehicles would reasonably regard that investment as an investment in the arrangements as a whole rather than exclusively in any particular vehicle.”

(3) In paragraph 13 (qualifying conditions)—

(a) in sub-paragraph (3)—

(i) in paragraph (a), for “it meets” substitute “the scheme meets or, if the scheme is part of multi-vehicle arrangements, the arrangements meet”;

(ii) in paragraph (b), for “it meets” substitute “the scheme meets, or those multi-vehicle arrangements meet,”;

(iii) omit the words after paragraph (b);

(b) after that sub-paragraph insert—

“(3A) For the purposes of sub-paragraph (3), those Regulations have effect as if references to a fund included—

(a) multi-vehicle arrangements, and

(b) a collective investment scheme which is not an offshore fund.”

(4) In paragraph 46 (meaning of qualifying investor etc)—

(a) in sub-paragraph (4)—

(i) in paragraph (a), for “it meets” substitute “the vehicle meets or, if the vehicle is part of multi-vehicle arrangements, the arrangements meet”;

(ii) in paragraph (b), for “it meets” substitute “the vehicle meets, or those multi-vehicle arrangements meet,”;

(iii) omit the words after paragraph (b);

(b) after that sub-paragraph insert—

“(4A) For the purposes of sub-paragraph (4), those Regulations have effect as if references to a fund included—

(a) multi-vehicle arrangements, and

(b) a collective investment vehicle which is not an offshore fund.”

(5) In paragraph 46A (application of diversity of ownership condition), after sub-paragraph (3) insert—

“(4) Where the collective investment vehicle is part of multi-vehicle arrangements, sub-paragraphs (2) and (3) apply as if references to the vehicle included the multi-vehicle arrangements.”

(6) In paragraph 47 (other definitions), in sub-paragraph (1) at the appropriate place insert—

• ““multi-vehicle arrangements” has the meaning given by paragraph 7(8);”.

(7) In paragraph 51 (genuine diversity of ownership condition in case of funds existing before 6 April 2020), after sub-paragraph (2) insert—

“(3) Where the collective investment vehicle is part of multi-vehicle arrangements, sub-paragraph (2) applies as if references to the vehicle included the multi-vehicle arrangements.”

Part 2 U.K. Real estate investment trusts

Amendment of CTA 2010 U.K.

2 CTA 2010 is amended in accordance with paragraphs 3 to 5.

REITs involving single commercial property U.K.

3 (1) In section 527 (being a UK REIT in relation to an accounting period)—

(a) in subsection (2)(b), after “met” insert “or in relation to which condition C is met”;

(b) in subsection (3)(b) after “met” insert “or in relation to which condition C is met”.

(2) In section 529 (conditions as to property rental business)—

(a) after subsection (2) insert—

“(2A) Condition C is that the property rental business involves at least 1 property—

(a) the value of which is equal to, or exceeds, £20 million at the relevant time, and

(b) which is designed, fitted or equipped for the purpose of being rented, and is rented or available for rent, as a commercial unit.

(2B) For the purposes of subsection (2A) the “relevant time” means—

(a) where the group or company is a UK REIT and its property rental business previously met conditions A and B, the first day on which at least one of those conditions ceased to be met, or

(b) otherwise, entry.”;

(b) in subsection (3), for “and B” substitute “to C”;

(c) in subsection (4), in the words before paragraph (a), for “and B” substitute “to C”.

(3) In section 561—

(a) in subsection (3) for “conditions A and B in section 529 (property rental business)” substitute “the property rental business condition”;

(b) after that subsection insert—

“(3A) For the purposes of this section, and sections 563 and 575, the “property rental business condition” is met if either conditions A and B or condition C in section 529 (property rental business) are met.”

(4) In section 563 (breach of conditions as to property rental business)—

(a) in the heading, for “conditions as to property rental business” substitute “property rental business condition”;

(b) in subsection (1), for “condition A or B in section 529 (property rental business)” substitute “the property rental business condition (see section 561(3A))”.

(5) In section 575 (breach of conditions as to property rental business)—

(a) in subsection (1), for “condition A or B in section 529 (property rental business)” substitute “the property rental business condition (see section 561(3A))”;

(b) in subsection (2)—

(i) omit the “or” after paragraph (a);

(ii) at the end of paragraph (b) insert “, or

(c) more than twice in relation to Condition C in that section.”;

(c) in subsection (4), in Rule 2, for “condition A or B in section 529” substitute “the property rental business condition”.

3-year development rule U.K.

4 (1) Section 556 (disposal of assets) is amended as follows.

(2) In subsection (3), in paragraph (b)—

(a) omit “fair”, and

(b) omit the words from “(determined” to the end.

(3) After that subsection insert—

“(3ZA) For the purposes of subsection (3)(b) the value of a property is to be treated as its fair value (determined in accordance with international accounting standards) at whichever of the following times that value is the greatest—

(a) on entry;

(b) when the property was acquired;

(c) the beginning of the accounting period in which the development commenced.”

(4) In subsection (3A), in paragraph (b)—

(a) omit “fair”, and

(b) omit the words from “(determined” to the end.

(5) After that subsection insert—

“(3AA) For the purposes of subsection (3A)(b) the value of a property is to be treated as its fair value (determined in accordance with international accounting standards) at whichever of the following times that value is the greatest—

(a) on entry;

(b) when the property was acquired;

(c) the beginning of the accounting period in which the development commenced.”

(6) The amendments made by this paragraph have effect in relation to disposals of assets made on or after 1 April 2023.

Genuine diversity of ownership U.K.

5 (1) Section 528ZB of CTA 2010 is amended as follows.

(2) In subsection (2)—

(a) in the words before paragraph (a), for “it meets” substitute “the scheme meets or, if the scheme is part of multi-vehicle arrangements, the arrangements meet”;

(b) omit the words after paragraph (b).

(3) After that subsection insert—

“(2A) For the purposes of subsection (2), those Regulations have effect as if references to a fund included—

(a) multi-vehicle arrangements, and

(b) a collective investment scheme which is not an offshore fund.”

(4) In subsection (3), for “the vehicle” substitute “the scheme”.

(5) In subsection (4), for “vehicle”, in both places it occurs, substitute “scheme”.

(6) After subsection (5) insert—

“(6) Where the collective investment scheme is part of multi-vehicle arrangements, subsections (3) to (5) apply as if references to “the scheme” included the multi-vehicle arrangements.

(7) In this section “multi-vehicle arrangements” means arrangements comprising two or more schemes under which an investor in one of those schemes would reasonably regard that investment as an investment in the arrangements as a whole rather than exclusively in any particular scheme.”

Amendment of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 U.K.

6 (1) The Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 (S.I. 2006/2867) are amended as follows.

(2) After regulation 7 insert—

“7A Partial gross payment of distributions to partnerships

(1) This regulation applies to the payment of a relevant distribution by a company if—

(a) the company reasonably believes that the recipient is a partnership whose partners include a person or body—

(i) to which paragraph (2) or (3) of regulation 7 applies, or

(ii) to which paragraph (4) of that regulation applies where the partner’s share of the partnership profits are to be applied for the purposes of the fund, scheme, account or plan in respect of which that partner has duties,

(b) the company has a reasonable belief as to the share of partnership profits that each partner is entitled to,

(c) the company reasonably believes that arrangements exist that will result in each partner’s share of the partnership profits reflecting whether or not tax was deducted in relation to that partner (as a result of regulation 3(2) and this regulation), and

(d) the company elects to make the payment in accordance with paragraph (2) (by making it in accordance with that paragraph).

(2) The relevant proportion of the relevant distribution is to be paid without deduction of income tax.

(3) The relevant proportion is equal to the sum of the shares of the partnership profits (expressed as proportions) to which each partner who falls within paragraph (1)(a)(i) or (ii) is entitled.

(4) But—

(a) paragraph (2) is subject to the qualification in paragraph (7) of regulation 7, and

(b) if the company’s belief as to any of the matters referred to in paragraph (1) is incorrect, these Regulations apply to the payment as if it were never one to which this regulation applied.

(5) Upon discovering that a payment that was made in accordance with paragraph (2) should not have been made in accordance with that paragraph (as a result of paragraph (4) or otherwise), the company who made it must deliver an amended return in accordance with regulation 11.

(6) Where this paragraph applies to the payment of a relevant distribution, the company making it must (in addition to its duty under regulation 6(1)) furnish the partnership with a statement in writing in respect of each partner that is not a partner who falls within paragraph (1)(a)(i) or (ii) showing the amount of tax deducted in relation to each such partner.

(7) The duty imposed by paragraph (6) is enforceable at the suit or instance of the partnership.”

(3) In regulation 3(2) (deduction of tax), after “regulation 7” insert “or 7A”.

Part 3 U.K. Qualifying asset holding companies

Amendment of Schedule 2 to FA 2022 U.K.

7 Schedule 2 to FA 2022 (qualifying asset holding companies) is amended as follows.

Securitisation companies unable to be QAHCs U.K.

8 (1) In paragraph 2(1) (conditions for being a QAHC), in paragraph (e) for “not” substitute “neither a securitisation company nor”.

(2) In paragraph 58(1) (interpretation), at the appropriate place insert—

• ““securitisation company” means a company whose profits are brought into account, for corporation tax purposes, in accordance with regulation 14 of the Taxation of Securitisation Companies Regulations 2006 (S.I. 2006/3296);”.

(3) The amendments made by this paragraph are treated as having come into force on 15 March 2023.

(4) Those amendments are not to have effect in relation to a securitisation company that was a QAHC immediately before that date for so long as it continuously remains a QAHC.

Beneficial entitlement held only through QAHCs U.K.

9 (1) In paragraph 4 (only direct and certain indirect interests to constitute “relevant interests”), after sub-paragraph (2) insert—

“(2A) For the purposes of sub-paragraph (1)(b)(i), a beneficial entitlement of T or C held solely through one or more QAHCs is to be treated as held by that person directly.”

(2) The amendment made by this paragraph is treated as having come into force on 20 July 2022.

(3) But the amendment is not to have effect in relation to a QAHC that became a QAHC before that date if the effect of the amendment would, by itself, cause the QAHC to cease to meet the ownership condition on that date, ignoring—

(a) any provision of Schedule 2 to FA 2022 that would, in some circumstances, treat the ownership condition as met or a breach of the condition as having not occurred, and

(b) any prior breach of that condition.

Determining relevant interests U.K.

10 In paragraph 5(4) (determining relevant interests), after paragraph (h) insert—

“(ha) in sections 170(3) and 172(3) (shares or securities with limited or temporary rights), for “less than” there were substituted “more than”,

(hb) in section 174 (option arrangements)—

(i) in subsection (1), in Step 4, for “lowest proportion” there were substituted “highest proportion”, and

(ii) in subsection (2), for “less than” there were substituted “more than”,

(hc) in sections 175(3), 176(3), 177(3) and 178(3) (cases in which more than one of sections 170, 172, and 174 apply), for “lowest proportion” there were substituted “highest proportion”,”.

Dealing with bodies corporate without share capital U.K.

11 (1) In paragraph 9 (qualifying funds)—

(a) in sub-paragraph (2)(a), in the words before sub-paragraph (i), after “scheme” insert “, or is an AIF that is not a collective investment scheme only by reason of it being a body corporate,”;

(b) in sub-paragraph (5)—

(i) in paragraph (a), after “company”, in the first place it occurs, insert “that has share capital”;

(ii) in paragraph (b)(i), after “company” insert “that has share capital”;

(c) in sub-paragraph (6), after “collective investment scheme” insert “, or is an AIF that is not a collective investment scheme only by reason of it being a body corporate,”.

(2) Schedule 2 to FA 2022 has effect, and is to be deemed always to have had effect, with the amendment made by this paragraph.

Genuine diversity of ownership U.K.

12 (1) Paragraph 9 is amended as follows.

(2) In sub-paragraph (2)(a)—

(a) in sub-paragraph (i), for “it meets” substitute “the fund meets or, if the fund is part of multi-vehicle arrangements, the arrangements meet”;

(b) in sub-paragraph (ii), for “it” substitute “the fund or those multi-vehicle arrangements”.

(3) In sub-paragraph (3)—

(a) before paragraph (a) insert—

“(za) the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001) have effect as if references to a fund included—

(i) multi-vehicle arrangements,

(ii) a collective investment scheme which is not an offshore fund, and

(iii) an AIF that is not a collective investment scheme only by reason of it being a body corporate (and which is not an offshore fund);”;

(b) in paragraph (a), in the words before sub-paragraph (i)—

(i) for “the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001)” substitute “those Regulations”;

(ii) after “a fund” insert “or multi-vehicle arrangements”;

(iii) after “the fund”, in both places it occurs, insert “or multi-vehicle arrangements”;

(c) in that paragraph—

(i) in sub-paragraphs (i) and (ii), after “fund” insert “or multi-vehicle arrangements”;

(ii) in sub-paragraph (ii), after “fund” insert “or multi-vehicle arrangements”;

(iii) in sub-paragraph (iii), for “vehicle” substitute “fund or multi-vehicle arrangements”;

(d) in paragraph (b), after “fund” insert “or multi-vehicle arrangements”.

(4) In sub-paragraph (4) after “fund”, in each place it occurs, insert “or multi-vehicle arrangements”.

(5) In sub-paragraph (10), at the end insert—

• ““multi-vehicle arrangements” means arrangements comprising two or more funds under which an investor in one of those funds would reasonably regard that investment as an investment in the arrangements as a whole rather than exclusively in any particular fund;”.

Investment strategy condition U.K.

13 (1) In paragraph 13 (activity and investment strategy conditions), after sub-paragraph (2) insert—

“(3) A company (“C”) may make an election under this sub-paragraph that all relevant equity securities held by C are to be treated as if they were not equity securities listed or traded on a recognised stock exchange or any other public market or exchange for the purposes of—

(a) the investment strategy condition as it applies to C, and

(b) that condition as it applies to any other company with a relevant interest in C.

(4) Equity securities are “relevant” if—

(a) they are listed or traded on a recognised stock exchange or any other public market or exchange,

(b) they are held directly by C,

(c) they were not acquired at a time when the election had effect from a company that is a member of the same group as C, other than a company that was a QAHC at the time of the acquisition, and

(d) where C has previously been and ceased being a QAHC, they were acquired after the most recent occasion on which C became a QAHC.

(5) An election under sub-paragraph (3)—

(a) must be notified to HMRC,

(b) has effect only while the company is a QAHC,

(c) is revoked on the company ceasing to be a QAHC, and

(d) may not otherwise be revoked.

(6) Where an election under sub-paragraph (3) has effect, any dividend or other distribution received by C in respect of relevant equity securities that would otherwise be exempt for the purposes of section 931A(1) of CTA 2009 (charge to tax on distributions received) is to be treated as not exempt for the purposes of that section.

(7) Where—

(a) C disposes of relevant equity securities (“the dispossessed securities”), and

(b) within the period of thirty days after the disposal, C acquires securities (“the acquired securities”) of the same class,

any dividend or other distribution received by a person in respect of holding the acquired securities in the period (“the dispossession period”) commencing with the disposal by C of the dispossessed securities and ending with the acquisition by C of the acquired securities is to be treated as having been received by C for Corporation Tax purposes.

(8) But the amount of any dividend or other distribution treated as received by C as a result of sub-paragraph (7) is limited to the amount of the dividend or other distribution C would have received had C held the dispossessed securities throughout the dispossession period.

(9) Equity securities are not to be treated as being of the same class unless they are so treated by the practice of the recognised stock exchange, other public market or exchange they are listed or traded on.”

(2) Omit paragraph 35 (and the italic heading before it).

(3) In paragraph 58, after sub-paragraph (2) insert—

“(3) In this Schedule, apart from in paragraphs 42 and 43 (worldwide groups), references to a company being a member of a group of companies are to be read in accordance with section 170 of TCGA 1992 (interpretation of sections 171 to 181 of that Act: groups).”

Disposal of derivatives where underlying subject matter is shares U.K.

14 (1) In paragraph 53 (no chargeable gain on disposal of overseas land or certain shares), in sub-paragraph (4), at the appropriate place insert—

• ““derivative contract” means—

  (a)

  a derivative contract within the meaning of Part 7 of CTA 2009 (see section 576 of that Act), or

  (b)

  a contract which is not a derivative contract within the meaning of that Part only as a result of section 589(2)(b) of that Act (general exclusion of contracts whose underlying subject matter consists of shares);”.

(2) That paragraph has effect, and is to be deemed always to have had effect, with the amendment made by sub-paragraph (1).

Alternative finance arrangements U.K.

15 (1) After paragraph 58 insert—

“Alternative finance arrangements

59 (1) Sub-paragraph (2) applies for the purposes of determining the amounts of relevant interests in companies in accordance with paragraphs 3 to 6 and the provisions of Chapter 6 of Part 6 of CTA 2010 applied by those paragraphs.

(2) Where a person has (in substance) a beneficial entitlement to the profits of a company as a result of qualifying alternative finance arrangements—

(a) that entitlement is to be treated as an entitlement to a proportion of the profits of that company available for distribution to equity holders of the company, and

(b) that person is to be treated as an equity holder.

(3) “Qualifying alternative finance arrangements” means arrangements—

(a) that constitute alternative finance arrangements for the purposes of Chapter 6 of Part 6 of CTA 2009 (alternative finance arrangements), or

(b) that do not constitute alternative finance arrangements only as a result of section 508 of that Act (exclusion provision not at arms length).

(4) But arrangements that are analogous to a normal commercial loan are not qualifying alternative finance arrangements.

(5) Arrangements are analogous to a normal commercial loan if, were the arrangements structured as a loan that resulted in the same or similar entitlements of the parties to the arrangements, they would constitute a normal commercial loan within the meaning of section 162 of CTA 2010.”

(2) In paragraph 3, after sub-paragraph (5) insert—

“(5A) See also paragraph 59, which makes provision for parties to alternative finance arrangements who are equivalent to equity holders to be treated as such.”

(3) In paragraph 58(1), in the definition of “equity holder” at the end insert “, but see also paragraph 59 of this Schedule”.

Section 37

Schedule 5 U.K. Records relating to transfer pricing

Part 1 U.K. Amendments relating to corporation tax

Records to be kept for the purposes of corporation tax U.K.

1 (1) In Part 3 of Schedule 18 to FA 1998 (duty to keep and preserve records), paragraph 21 is amended as follows.

(2) After sub-paragraph (5A) insert—

“(5AA) Regulations under this paragraph may make provision, in relation to relevant transfer pricing records specified, or of a description specified, in the regulations—

(a) as to the form or manner in which those records are to be kept and preserved;

(b) by reference to things specified in the transfer pricing guidelines (within the meaning of section 164 of TIOPA 2010 (interpretation in accordance with OECD principles)).”

(3) For sub-paragraph (6) substitute—

“(6) For the purposes of this paragraph—

(a) records are “relevant transfer pricing records” if the Commissioners for His Majesty’s Revenue and Customs reasonably consider that the records may relate to the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing);

(b) “supporting documents” includes accounts, books, deeds, contracts, vouchers and receipts.”

Assessments relating to corporation tax U.K.

2 In Part 5 of Schedule 18 to FA 1998 (determinations and assessments), after paragraph 49 insert—

“Transfer pricing records: carelessness

49A (1) This paragraph applies where—

(a) the situation mentioned in paragraph 41(1) or (2) has been brought about by a person within any of paragraphs (a) to (c) of paragraph 43 (“P”) as regards a relevant accounting period of a company,

(b) the situation relates to the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing) for the purposes of that period, and

(c) the company has failed to comply, in relation to specified relevant transfer pricing records that relate to the calculation, with either or both of—

(i) paragraph 21 (duty to keep and preserve records), and

(ii) an information notice (within the meaning of Schedule 36 to the Finance Act 2008 (information and inspection powers)).

(2) It is to be presumed for the purposes of this Part of this Schedule that the situation mentioned in paragraph 41(1) or (2) was brought about carelessly by P, unless—

(a) the situation was brought about deliberately by P, or

(b) the company satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid the situation.

(3) For the purposes of this paragraph—

(a) “relevant accounting period of a company” means an accounting period in respect of which—

(i) the company, together with one or more other enterprises, constitutes an MNE Group within the meaning of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations), and

(ii) the MNE Group meets the threshold requirement within the meaning of those Regulations (see regulations 3(2) to (4) of those Regulations);

(b) records are “specified relevant transfer pricing records” if—

(i) they are relevant transfer pricing records specified, or of a description specified, in regulations under paragraph 21 (duties to keep and preserve records), and

(ii) the company is required to keep and preserve those records under that paragraph.”

Part 2 U.K. Amendments relating to income tax

Records to be kept for the purposes of income tax U.K.

3 (1) In Part 2 of TMA 1970 (records), section 12B (records to be kept for purposes of returns) is amended as follows.

(2) After subsection (5B) insert—

“(5BA) Regulations under this section may make provision, in relation to relevant transfer pricing records specified, or of a description specified, in the regulations—

(a) as to the form or manner in which those records are to be kept and preserved;

(b) by reference to things specified in the transfer pricing guidelines (within the meaning of section 164 of TIOPA 2010 (interpretation in accordance with OECD principles)).”

(3) In subsection (6)—

(a) omit the “and” after paragraph (a);

(b) after that paragraph insert—

“(aa) records are “relevant transfer pricing records” if the Commissioners for His Majesty’s Revenue and Customs reasonably consider that the records may relate to the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing);”.

Assessments relating to income tax U.K.

4 In Part 4 of TMA 1970 (assessment and claims), after section 30B insert—

“30C Transfer pricing records: carelessness for the purposes of section 29

(1) This section applies where—

(a) the situation mentioned in section 29(1) has been brought about by a relevant trustee, or a person acting on their behalf, as regards a relevant year of assessment,

(b) the situation relates to the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing) for the purposes of that year, and

(c) the relevant person has failed to comply, in relation to specified relevant transfer pricing records that relate to the calculation, with either or both of—

(i) section 12B (records to be kept for the purposes of returns), and

(ii) an information notice (within the meaning of Schedule 36 to the Finance Act 2008 (information and inspection powers)).

(2) It is to be presumed for the purposes of section 29 that the situation mentioned in section 29(1) was brought about carelessly by the relevant trustee, or the person acting on their behalf, unless—

(a) the situation was brought about deliberately by the relevant trustee, or the person acting on their behalf, or

(b) the relevant trustee satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that they, or the person acting on their behalf, took reasonable care to avoid the situation.

(3) For the purposes of this paragraph—

(a) “relevant person” means a person who was required by a notice under section 8A to make and deliver the return in respect of the relevant year of assessment;

(b) “relevant year of assessment” means a year of assessment in respect of which—

(i) the trustees of the trust concerned, together with one or more other enterprises, constitutes an MNE Group within the meaning of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations), and

(ii) the MNE Group meets the threshold requirement within the meaning of those Regulations (see regulations 3(2) to (4) of those Regulations);

(c) records are “specified relevant transfer pricing records” if—

(i) they are relevant transfer pricing records specified, or of a description specified, in regulations under section 12B, and

(ii) the relevant person is required to keep and preserve those records under that section.

30D Transfer pricing records: carelessness for the purposes of section 30B

(1) This section applies where—

(a) the situation mentioned in section 30B(1) has been brought about by a person within section 30B(5) (“P”) as regards a partnership statement in respect of a relevant period,

(b) the situation relates to the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing) for the purposes of that period, and

(c) the relevant person (whether or not P) has failed to comply, in relation to specified relevant transfer pricing records that relate to the calculation, with either or both of—

(i) section 12B (records to be kept for the purposes of returns), and

(ii) an information notice (within the meaning of Schedule 36 to the Finance Act 2008 (information and inspection powers)).

(2) It is to be presumed for the purposes of section 30B that the situation mentioned in section 30B(1) was brought about carelessly by P, unless—

(a) the situation was brought about deliberately by P, or

(b) the relevant person satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid the situation.

(3) For the purposes of this paragraph—

(a) “relevant period” means a period in respect of which—

(i) the partnership to which the partnership statement relates, together with one or more other enterprises, constitutes an MNE Group within the meaning of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations), and

(ii) the MNE Group meets the threshold requirement within the meaning of those Regulations (see regulations 3(2) to (4) of those Regulations);

(b) “relevant person” means a person who was required by a notice under section 12AA to make and deliver the return in respect of the relevant period;

(c) records are “specified relevant transfer pricing records” if—

(i) they are relevant transfer pricing records specified, or of a description specified, in regulations under section 12B, and

(ii) the relevant person is required to keep and preserve those records under that section.”

Part 3 U.K. Amendments relating to corporation tax and income tax

Penalties for errors U.K.

5 (1) Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

(2) In Part 1 (liability for penalty), after paragraph 3B insert—

“Errors related to transfer pricing records

3C (1) This paragraph applies where—

(a) a document of a kind listed in the Table in paragraph 1 relating to a relevant tax period is given to HMRC by a person (“P”),

(b) the document contains an inaccuracy—

(i) which falls within paragraph 1(2), and

(ii) which involves the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing) for the purposes of that period, and

(c) the relevant person (whether or not P) failed to comply, in relation to specified relevant transfer pricing records that relate to the inaccuracy, with one or more of—

(i) section 12B of TMA 1970 (records to be kept for the purposes of returns),

(ii) paragraph 21 of Schedule 18 to FA 1998 (duty to keep and preserve records), and

(iii) an information notice (within the meaning of Schedule 36 to FA 2008 (information and inspection powers)).

(2) It is to be presumed that the inaccuracy was careless, within the meaning of paragraph 3, unless—

(a) the inaccuracy was deliberate on P’s part, or

(b) P satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid the inaccuracy.

(3) Sub-paragraphs (4) to (6) apply for the purposes of this paragraph.

(4) “Relevant person”, in relation to a document of a kind listed in the Table in paragraph 1, means—

(a) the person to whose tax liability the document relates,

(b) in the case of a return under section 8A of TMA 1970 (trustee's return), a relevant trustee (within the meaning of that Act), or

(c) in the case of a partnership return, or a statement, declaration or accounts in connection with a partnership return, a person who was required by a notice under section 12AA of TMA 1970 (partnership return) to make and deliver a return in respect of relevant tax period.

(5) “Relevant tax period” means a tax period—

(a) in respect of which—

(i) the person mentioned in sub-paragraph (4)(a),

(ii) in the case mentioned in sub-paragraph (4)(b), the trustees of the trust concerned, or

(iii) in the case mentioned in sub-paragraph (4)(c), the partnership to which the partnership return relates,

together with one or more other enterprises, constitutes an MNE Group within the meaning of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations), and

(b) in respect of which the MNE Group meets the threshold requirement within the meaning of those Regulations (see regulations 3(2) to (4) of those Regulations).

(6) Records are “specified relevant transfer pricing records” if—

(a) they are relevant transfer pricing records specified, or of a description specified, in regulations under section 12B of TMA 1970 or paragraph 21 of Schedule 18 to FA 1998 (duties to keep and preserve records), and

(b) the relevant person is required to keep and preserve those records under either or both of those provisions.”

(3) In Part 4 (miscellaneous), in paragraph 18 (agency), in sub-paragraph (6)—

(a) for “Paragraph 3A applies” substitute “Paragraphs 3A and 3C apply”;

(b) for “it applies” substitute “they apply”.

Information and inspection powers U.K.

6 (1) Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.

(2) In Part 4 (restrictions on powers), in paragraph 21 (taxpayer notices following tax return)—

(a) in sub-paragraph (3), for “D” substitute “E”;

(b) after sub-paragraph (8) insert—

“(8A) Condition E is that the notice is given for the purpose of obtaining any specified relevant transfer pricing information or documents.

(8B) For the purposes of Condition E, information or documents are “specified relevant transfer pricing information or documents” if—

(a) they are relevant transfer pricing records specified, or of a description specified, in regulations under section 12B of TMA 1970 or paragraph 21 of Schedule 18 to FA 1998 (duties to keep and preserve records), and

(b) the relevant person is required to keep and preserve those records under either or both of those provisions.

(8C) For the purposes of subsection (8B), the “relevant person” means—

(a) in the case of a tax return made in respect of a chargeable period under section 8A or 12AA of TMA 1970 (trustee’s and partnership returns)—

(i) the person, or

(ii) a person who was required by a notice under the section concerned to make and deliver the return;

(b) in any other case, the person.”;

(3) In Part 6 (special cases), after paragraph 37B insert—

“Specified relevant transfer pricing documents

37C (1) This paragraph applies to an information notice given to a relevant person in an MNE Group (“A”) to the extent that the notice refers to specified relevant transfer pricing documents.

(2) Paragraph 18 (documents not in person’s possession or power) does not apply in relation to a specified relevant transfer pricing document that—

(a) is not in A’s possession or power, but

(b) is in the power or possession of another relevant person in the MNE Group concerned (“B”),

(and accordingly the information notice may require A to produce the document).

(3) For the purposes of this paragraph—

(a) documents are “specified relevant transfer pricing documents” if—

(i) they are relevant transfer pricing records specified, or of a description specified, in regulations under section 12B of TMA 1970 or paragraph 21 of Schedule 18 to FA 1998 (duties to keep and preserve records), and

(ii) A is required to keep and preserve those records under either or both of those provisions;

(b) “MNE Group” has the same meaning as in the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations);

(c) “relevant person in an MNE Group” means—

(i) a company,

(ii) a trustee of a trust, or

(iii) a partner in a partnership,

where that company, the trustees or the partnership, together with one or more other enterprises, constitutes an MNE Group.”

Part 4 U.K. Commencement

7 U.K. Regulations made under—

(a) paragraph 21 of Schedule 18 to FA 1998 by virtue of the amendments made by paragraph 1 of this Schedule, or

(b) section 12B of TMA 1970 by virtue of the amendments made by paragraph 3 of this Schedule,

have effect in relation to such accounting periods or tax years beginning on or after 1 April 2023 as are specified in the regulations.

Section 44

Schedule 6 U.K. Categories of alcoholic products: interpretation

Spirits U.K.

1 “Spirits” means—

(a) spirits of any description, and

(b) any mixture or compound made with spirits (including, subject to the following provisions of this Schedule, mixtures that also contain other alcoholic products).

Commencement Information

I1 Sch. 6 para. 1 not in force at Royal Assent, see s. 120(2)

I2 Sch. 6 para. 1 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

2 The extraction of spirits absorbed in a wooden cask is treated, for the purposes of this Part, as the production of spirits.

Commencement Information

I3 Sch. 6 para. 2 not in force at Royal Assent, see s. 120(2)

I4 Sch. 6 para. 2 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Beer U.K.

3 “Beer” means—

(a) ale,

(b) porter,

(c) stout,

(d) any other type of beer, and

(e) any other product which is made or sold as beer or as a substitute for beer.

Commencement Information

I5 Sch. 6 para. 3 not in force at Royal Assent, see s. 120(2)

I6 Sch. 6 para. 3 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

4 (1) A qualifying beer-based beverage is treated as beer for the purposes of this Part.

(2) “Beer-based beverage” means a beverage which is a mixture of beer and any of the following—

(a) fruit or ginger—

(i) cordial,

(ii) carbonated water,

(iii) juice, or

(iv) squash;

(b) lemonade or limeade;

(c) unfermented ginger beer;

(d) any alcoholic product or other alcoholic substance.

(3) A beer-based beverage is “qualifying” if—

(a) it would, apart from this paragraph, fall within paragraph 12 (other fermented products), and

(b) it is of an alcoholic strength not exceeding 5.5%.

Commencement Information

I7 Sch. 6 para. 4 not in force at Royal Assent, see s. 120(2)

I8 Sch. 6 para. 4 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Cider U.K.

5 “Cider” means a product which—

(a) is obtained from the fermentation of apple juice or pear juice,

(b) has been produced without the addition, at any time, of—

(i) another alcoholic product, or

(ii) anything, other than a permitted substance, which communicates colour or flavour,

(c) satisfies the juice content requirements (see paragraph 7), and

(d) is of an alcoholic strength of less than 8.5%.

Commencement Information

I9 Sch. 6 para. 5 not in force at Royal Assent, see s. 120(2)

I10 Sch. 6 para. 5 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

6 In paragraph 5, “permitted substance” means a substance that—

(a) appears to the Commissioners to be necessary for the purposes of producing cider, and

(b) is specified in a notice published by the Commissioners for the purposes of this Schedule.

Commencement Information

I11 Sch. 6 para. 6 not in force at Royal Assent, see s. 120(2)

I12 Sch. 6 para. 6 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

7 (1) For the purposes of paragraph 5, the juice content requirements are satisfied in relation to a product if—

(a) qualifying fruit juice comprises at least 35% of the volume of the pre-fermentation mixture for the product, and

(b) the total of—

(i) the volume of qualifying fruit juice included in the pre-fermentation mixture, and

(ii) the volume of qualifying fruit juice added after fermentation begins,

comprises at least 35% of the end product.

(2) “Qualifying fruit juice” means apple or pear juice of a gravity of at least 1033 degrees.

(3) The “gravity” of apple or pear juice in degrees is determined by—

(a) calculating the ratio of the weight of the volume of the juice to the weight of an equal volume of distilled water (both as at 20°C), and

(b) multiplying that ratio by 1000.

(4) “Pre-fermentation mixture” means the mixture of juice and other ingredients in which the fermentation (from which the cider is obtained) takes place, as that mixture exists immediately before the fermentation process begins.

(5) If the cider consists of a blend of two or more products, each constituting cider, references in sub-paragraph (4) to the pre-fermentation mixture are to the pre-fermentation mixtures for each of those products taken as a whole.

Commencement Information

I13 Sch. 6 para. 7 not in force at Royal Assent, see s. 120(2)

I14 Sch. 6 para. 7 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

8 (1) “Sparkling cider” means cider which—

(a) if it is packaged in a closed bottle, either—

(i) due to the presence of carbon dioxide, the pressure in the bottle, measured at a temperature of 20°C, is not less than 3 bars in excess of atmospheric pressure, or

(ii) (regardless of the pressure) the bottle has a mushroom-shaped stopper held in place by a tie or fastening;

(b) if it is not packaged in a closed bottle, has characteristics similar to those of cider which (while packaged in a closed bottle) falls within paragraph (a)(i).

(2) Cider is to be regarded as having been rendered sparkling if—

(a) as a result of aeration, fermentation or any other process, it falls within sub-paragraph (1), or

(b) (if not previously rendered sparkling under paragraph (a)) it is transferred into a closed bottle which has, or the stopper of its bottle is exchanged for, a stopper of the kind mentioned in sub-paragraph (1)(a)(ii).

Commencement Information

I15 Sch. 6 para. 8 not in force at Royal Assent, see s. 120(2)

I16 Sch. 6 para. 8 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

9 Rendering cider sparkling, at any time after the excise duty point in relation to that cider, is treated for the purposes of this Part as producing sparkling cider.

Commencement Information

I17 Sch. 6 para. 9 not in force at Royal Assent, see s. 120(2)

I18 Sch. 6 para. 9 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

10 “Still cider” means cider that is not sparkling cider.

Commencement Information

I19 Sch. 6 para. 10 not in force at Royal Assent, see s. 120(2)

I20 Sch. 6 para. 10 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Wine U.K.

11 “Wine” means any product obtained from the alcoholic fermentation of fresh grapes or of the must of fresh grapes (whether or not the product is fortified with spirits).

Commencement Information

I21 Sch. 6 para. 11 not in force at Royal Assent, see s. 120(2)

I22 Sch. 6 para. 11 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Other fermented products U.K.

12 “Other fermented product” means a product which—

(a) is either—

(i) obtained from the alcoholic fermentation of any substance, or

(ii) obtained by mixing a product obtained from the alcoholic fermentation of any substance, or anything derived from that product, with anything else; but

(b) is not beer, cider, wine or spirits.

Commencement Information

I23 Sch. 6 para. 12 not in force at Royal Assent, see s. 120(2)

I24 Sch. 6 para. 12 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Section 48

Schedule 7 U.K. Rates of alcohol duty

Commencement Information

I25 Sch. 7 not in force at Royal Assent, see s. 120(2)

I26 Sch. 7 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

TABLE 1

Alcoholic strength of alcoholic product	Rate of duty per litre of alcohol in the product
Less than 3.5%	£9.27
At least 3.5% but less than 8.5%	See Table 2
At least 8.5% but not exceeding 22%	£28.50
Exceeding 22%	£31.64

TABLE 2

Description of alcoholic product (of an alcoholic strength of at least 3.5% but less than 8.5%)	Rate of duty per litre of alcohol in the product
(a) Still cider (b) Sparkling cider of an alcoholic strength not exceeding 5.5%	£9.67
Beer	£21.01
(a) Spirits, wine and other fermented products (b) Sparkling cider of an alcoholic strength exceeding 5.5%	£24.77

Section 50

Schedule 8 U.K. Qualifying draught products: reduced rates

Commencement Information

I27 Sch. 8 not in force at Royal Assent, see s. 120(2)

I28 Sch. 8 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Description of alcoholic product	Rate of duty per litre of alcohol in the product
Alcoholic products of an alcoholic strength of less than 3.5%	£8.42
(a) Still cider of an alcoholic strength of at least 3.5% (b) Sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%	£8.78
(a) Beer, spirits, wine and other fermented products of an alcoholic strength of at least 3.5% (but less than 8.5%) (b) Sparkling cider of an alcoholic strength exceeding 5.5%	£19.08

Section 59

Schedule 9 U.K. Small producer alcoholic products: duty discount

Part 1 U.K. Alcoholic products, other than qualifying draught products, of an alcoholic strength of less than 8.5%

Commencement Information

I29 Sch. 9 Pt. 1 not in force at Royal Assent, see s. 120(2)

I30 Sch. 9 Pt. 1 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	9.27	-
2	5	50	2.32	46.35
3	50	100	1.39	150.75
4	100	200	0.46	220.25
5	200	600	-	266.25
6	600	1000	-	266.25
7	1000	4500	-0.08	266.25

Spirits of an alcoholic strength of less than 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	6.03	-
2	5	50	2.32	30.15
3	50	100	1.39	134.55
4	100	200	0.46	204.05
5	200	600	-	250.05
6	600	1000	-	250.05
7	1000	4500	-0.07	250.05

Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	9.67	-
2	5	50	2.42	48.35
3	50	100	1.45	157.25
4	100	200	0.48	229.75
5	200	600	-	277.75
6	600	1000	-	277.75
7	1000	4500	-0.08	277.75

Beer of an alcoholic strength of at least 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	18.91	-
2	5	112.5	10.51	94.55
3	112.5	225	9.45	1224.38
4	225	450	5.25	2287.50
5	450	900	3.15	3468.75
6	900	1350	-	4886.25
7	1350	4500	-1.55	4886.25

Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	24.77	-
2	5	50	2.48	123.85
3	50	100	2.48	235.45
4	100	200	1.24	359.45
5	200	600	-	483.45
6	600	1000	-	483.45
7	1000	4500	-0.14	483.45

Spirits of an alcoholic strength of at least 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£	Cumulative discount (£)
1	0	5	19.82	-
2	5	50	2.48	99.10
3	50	100	2.48	210.70
4	100	200	1.24	334.70
5	200	600	-	458.70
6	600	1000	-	458.70
7	1000	4500	-0.13	458.70

Part 2 U.K. Qualifying draught products of an alcoholic strength of less than 8.5%

Commencement Information

I31 Sch. 9 Pt. 2 not in force at Royal Assent, see s. 120(2)

I32 Sch. 9 Pt. 2 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(a) (with reg. 10)

Alcoholic products, other than spirits, of an alcoholic strength of less than 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	8.42	-
2	5	50	2.11	42.10
3	50	100	1.26	137.05
4	100	200	0.42	200.05
5	200	600	-	242.05
6	600	1000	-	242.05
7	1000	4500	-0.07	242.05

Spirits of an alcoholic strength of less than 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	5.47	-
2	5	50	2.11	27.35
3	50	100	1.26	122.30
4	100	200	0.42	185.30
5	200	600	-	227.30
6	600	1000	-	227.30
7	1000	4500	-0.06	227.30

Still cider of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength of at least 3.5% but not exceeding 5.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	8.78	-
2	5	50	2.19	43.90
3	50	100	1.32	142.45
4	100	200	0.44	208.45
5	200	600	-	252.45
6	600	1000	-	252.45
7	1000	4500	-0.07	252.45

Beer of an alcoholic strength of at least 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	17.17	-
2	5	112.5	9.54	85.85
3	112.5	225	8.59	1111.40
4	225	450	4.77	2077.78
5	450	900	2.86	3151.03
6	900	1350	-	4438.03
7	1350	4500	-1.41	4438.03

Wine and other fermented products of an alcoholic strength of at least 3.5%; sparkling cider of an alcoholic strength exceeding 5.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	19.08	-
2	5	50	1.91	95.40
3	50	100	1.91	181.35
4	100	200	0.95	276.85
5	200	600	-	371.85
6	600	1000	-	371.85
7	1000	4500	-0.11	371.85

Spirits of an alcoholic strength of at least 3.5%

Discount band	Start threshold (hectolitres)	End threshold (hectolitres)	Marginal discount (£)	Cumulative discount (£)
1	0	5	15.26	-
2	5	50	1.91	76.30
3	50	100	1.91	162.25
4	100	200	0.95	257.75
5	200	600	-	352.75
6	600	1000	-	352.75
7	1000	4500	-0.10	352.75

Section 105

Schedule 10 U.K. Penalties for contraventions of alcohol wholesaling provisions

Liability to penalty U.K.

1 A penalty is payable by a person (“P”) who contravenes section 100(1) or 103(1).

Commencement Information

I33 Sch. 10 para. 1 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I34 Sch. 10 para. 1 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Amount of penalty U.K.

2 (1) If the contravention is deliberate and concealed, the amount of the penalty is the maximum amount (see paragraph 10).

(2) If the contravention is deliberate but not concealed, the amount of the penalty is 70% of the maximum amount.

(3) In any other case, the amount of the penalty is 30% of the maximum amount.

(4) The contravention is—

(a) “deliberate and concealed” if the contravention is deliberate and P makes arrangements to conceal the contravention, and

(b) “deliberate but not concealed” if the contravention is deliberate but P does not make arrangements to conceal the contravention.

Commencement Information

I35 Sch. 10 para. 2 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I36 Sch. 10 para. 2 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Reductions for disclosure U.K.

3 (1) Paragraph 4 provides for reductions in penalties under this Schedule where P discloses a contravention.

(2) P discloses a contravention by—

(a) telling the Commissioners about it,

(b) giving the Commissioners reasonable help in identifying any other contraventions of section 100(1) or 103(1) of which P is aware, and

(c) allowing the Commissioners access to records for the purpose of identifying such contraventions.

(3) Disclosure of a contravention—

(a) is “unprompted” if made at a time when P has no reason to believe that the Commissioners have discovered or are about to discover the contravention, and

(b) otherwise, is “prompted”.

(4) In relation to disclosure “quality” includes timing, nature and extent.

Commencement Information

I37 Sch. 10 para. 3 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I38 Sch. 10 para. 3 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

4 (1) Where P discloses a contravention, the Commissioners must reduce the penalty to one that reflects the quality of the disclosure.

(2) If the disclosure is prompted, the penalty may not be reduced below—

(a) in the case of a contravention that is deliberate and concealed, 50% of the maximum amount,

(b) in the case of a contravention that is deliberate but not concealed, 35% of the maximum amount, and

(c) in any other case, 20% of the maximum amount.

(3) If the disclosure is unprompted, the penalty may not be reduced below—

(a) in the case of a contravention that is deliberate and concealed, 30% of the maximum amount,

(b) in the case of a contravention that is deliberate but not concealed, 20% of the maximum amount, and

(c) in any other case, 10% of the maximum amount.

Commencement Information

I39 Sch. 10 para. 4 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I40 Sch. 10 para. 4 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Special reduction U.K.

5 (1) If the Commissioners think it right because of special circumstances, they may reduce a penalty under this Schedule.

(2) In sub-paragraph (1) “special circumstances” does not include ability to pay.

(3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to—

(a) staying a penalty, and

(b) agreeing a compromise in relation to proceedings for a penalty.

Commencement Information

I41 Sch. 10 para. 5 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I42 Sch. 10 para. 5 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Assessment U.K.

6 (1) Where P becomes liable for a penalty under this Schedule, the Commissioners must—

(a) assess the penalty,

(b) notify P, and

(c) state in the notice the contravention in respect of which the penalty is assessed.

(2) A penalty under this Schedule must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.

(3) An assessment is to be treated as an amount of duty due from P under this Act and may be recovered accordingly.

(4) An assessment of a penalty under this Schedule may not be made later than one year after evidence of facts sufficient in the opinion of the Commissioners to indicate the contravention comes to their knowledge.

(5) Two or more contraventions may be treated by the Commissioners as a single contravention for the purposes of assessing a penalty under this Schedule.

Commencement Information

I43 Sch. 10 para. 6 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I44 Sch. 10 para. 6 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Reasonable excuse U.K.

7 (1) Liability to a penalty does not arise under this Schedule in respect of a contravention which is not deliberate if P satisfies the Commissioners or (on an appeal made to the appeal tribunal) the tribunal that there is a reasonable excuse for the contravention.

(2) For the purposes of sub-paragraph (1), where P relies on any other person to do anything, that is not a reasonable excuse unless P took reasonable care to avoid the contravention.

Commencement Information

I45 Sch. 10 para. 7 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I46 Sch. 10 para. 7 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Companies: officer’s liability U.K.

8 (1) Where a penalty under this Schedule is payable by a company in respect of a contravention which was attributable to an officer of the company, the officer is liable to pay such portion of the penalty (which may be 100%) as the Commissioners may specify by written notice to the officer.

(2) Sub-paragraph (1) does not allow the Commissioners to recover more than 100% of a penalty.

(3) In the application of sub-paragraph (1) to a body corporate other than a limited liability partnership, “officer” means—

(a) a director (including a shadow director within the meaning of section 251 of the Companies Act 2006),

(b) a manager, and

(c) a secretary.

(4) In the application of sub-paragraph (1) to a limited liability partnership, “officer” means a member.

(5) In the application of sub-paragraph (1) in any other case, “officer” means—

(a) a director,

(b) a manager,

(c) a secretary, and

(d) any other person managing or purporting to manage any of the company’s affairs.

(6) Where the Commissioners have specified a portion of a penalty in a notice given to an officer under sub-paragraph (1)—

(a) paragraph 5 applies to the specified portion as to a penalty,

(b) the officer must pay the specified portion before the end of the period of 30 days beginning with the day on which the notice is given,

(c) sub-paragraphs (3) to (5) of paragraph 6 apply as if the notice were an assessment of a penalty, and

(d) paragraph 9 applies as if the officer were liable to a penalty.

(7) In this paragraph “company” means any body corporate or unincorporated association, but does not include a partnership.

Commencement Information

I47 Sch. 10 para. 8 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I48 Sch. 10 para. 8 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Double jeopardy U.K.

9 P is not liable to a penalty under this Schedule in respect of a contravention in respect of which P has been convicted of an offence.

Commencement Information

I49 Sch. 10 para. 9 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I50 Sch. 10 para. 9 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

The maximum amount U.K.

10 (1) In this Schedule, “the maximum amount” means £10,000.

(2) If it appears to the Treasury that there has been a change in the value of money since the last relevant date, the Treasury may by regulations substitute for the sum for the time being specified in sub-paragraph (1) such other sum as appears to them to be justified by the change.

(3) In sub-paragraph (2), “relevant date” means—

(a) the date on which the Finance (No. 2) Act 2023 is passed, and

(b) each date on which the power conferred by that sub-paragraph has been exercised.

(4) Regulations under this paragraph do not apply to any contravention which occurred before the date on which they come into force.

Commencement Information

I51 Sch. 10 para. 10 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I52 Sch. 10 para. 10 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Appeal tribunal U.K.

11 In this Schedule “appeal tribunal” has the same meaning as in Chapter 2 of Part 1 of the FA 1994.

Commencement Information

I53 Sch. 10 para. 11 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I54 Sch. 10 para. 11 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(e) (with reg. 10)

Section 108

Schedule 11 U.K. Alcohol duty: reviews and appeals

1 (1) Section 13A(2) of FA 1994 (meaning of “relevant decision”) is amended as follows. U.K.

(2) In paragraph (c), for “section 8, 10, 11 or 36G of the Alcoholic Liquor Duties Act 1979,” substitute “section 52, 60, 78 or 79 of Part 2 of the Finance (No. 2) Act 2023 (alcohol duty),”.

(3) In paragraph (ea), for sub-paragraphs (i) and (ii) substitute—

“(i) regulations under section 102 of Part 2 of the Finance (No. 2) Act 2023 (alcohol duty), or

(ii) Schedule 12 to that Act;”.

(4) In paragraph (f), for “paragraph 4(2)(h) of Schedule 2A to the Alcoholic Liquor Duties Act 1979 (duty stamps)” substitute “paragraph 4(2)(h) of Schedule 12 to the Finance (No. 2) Act 2023 (alcohol duty: duty stamps)”.

Commencement Information

I55 Sch. 11 para. 1 not in force at Royal Assent, see s. 120(2)

I56 Sch. 11 para. 1 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(f) (with reg. 3(2)-(4), 10)

2 U.K. In Schedule 5 to FA 1994 (decisions subject to review and appeal), for paragraph 3 (and the heading immediately preceding it) substitute—

“Part 2 of the Finance (No. 2) Act 2023 (alcohol duty)

3 (1) The following decisions under or for the purposes of Part 2 of the Finance (No. 2) Act 2023 (alcohol duty)—

(a) any decision as to whether or not any duty is to be remitted or repaid under section 73 (research and experiments) or 74 (spoilt alcoholic products) as to the conditions subject to which the duty is to be remitted or repaid;

(b) any decision—

(i) on a claim under section 75 for repayment of duty (alcoholic ingredients relief), or

(ii) as to whether or not to remit duty under that section;

(c) any decision for the purposes of section 76 (imported medical articles) or section 78 (authorised use for certain purposes) as to whether or not to recognise any article as used for medical purposes;

(d) any decision for the purposes of section 78 (authorised use for certain purposes)—

(i) as to the use to which any article is or is to be put, or as to the purposes for which it is or is to be used,

(ii) as to whether or not permission or authorisation for any person to receive, or for the delivery of, any spirits without payment of duty is to be granted or withdrawn, or

(iii) as to the conditions subject to which the permission or authorisation is granted;

(e) any decision for the purposes of section 79 (imported goods not for human consumption) as to whether or not any goods are for human consumption;

(f) any decision for the purposes of section 82 (approval requirement: producers) or 83 (supplementary provision about approvals)—

(i) as to whether or not, and in respect of which alcoholic products, premises or activities, an approval is given,

(ii) the period for which, or conditions subject to which, an approval is given,

(iii) as to the revocation or variation of an approval, or

(iv) as to whether a person is exempt from the approval requirement;

(g) any decision as to the application of an exemption under section 86 (mixing alcoholic products);

(h) any decision as to whether or not a licence for the purposes of section 91 (licence to manufacture and deal wholesale in denatured alcohol) is to be granted to a person, or as to the revocation or suspension of a licence for the purposes of that section;

(i) any decision for the purposes of any provision of Chapter 7 (wholesaling of controlled alcoholic products) as to whether or not, and in which respects, a person is to be, or to continue to be, approved and registered or as to the conditions or restrictions subject to which a person is to be approved and registered;

(j) any decision for the purposes of section 111 as to whether or not any drawback is to be set against an amount chargeable in respect of alcohol duty or as to the conditions subject to which drawback is set against that amount.

(2) Any decision which—

(a) is made under or for the purposes of any regulations under section 88 (alcoholic products regulations) of the Finance (No. 2) Act 2023, and

(b) is a decision as to whether or not a person is to be required to give security for the fulfilment of an obligation or as to the form or amount of, or the conditions of, the security.

(3) Any decision which is made under or for the purposes of any regulations under section 90 (denatured alcohol) or section 92 (regulations relating to denatured alcohol) of the Finance (No. 2) Act 2023 and is a decision—

(a) as to whether or not any process is to be, or to continue to be, approved for any purposes;

(b) as to the conditions subject to which the approval is given;

(c) as to the revocation or variation of an approval;

(d) as to whether or not a person is to be required to give security for the fulfilment of an obligation or as to the form or amount of, or the conditions of, the security.

(4) Any decision which—

(a) is made under paragraph 1 of Schedule 3 to the Finance Act 2001, and

(b) relates to Part 2 of the Finance (No. 2) Act 2023.”

Commencement Information

I57 Sch. 11 para. 2 not in force at Royal Assent, see s. 120(2)

I58 Sch. 11 para. 2 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(f) (with reg. 3(2)-(4), 10)

Section 112

Schedule 12 U.K. Alcohol duty: duty stamps

Retail containers to be stamped U.K.

1 (1) Retail containers of alcoholic products to which this Schedule applies are to be stamped—

(a) in such cases and circumstances, and with a duty stamp of such a type, as may be prescribed; but

(b) subject to such exceptions as may be prescribed.

(2) In this Schedule “retail container”, in relation to an alcoholic product, means a container—

(a) of a capacity of 35 centilitres or more, and

(b) in which, or from which, the alcoholic product is intended to be sold by retail.

(3) This Schedule applies to alcoholic products that are—

(a) spirits, wine or other fermented products, and

(b) of an alcoholic strength of at least 30%.

(4) For the purposes of this Schedule a retail container is “stamped” if—

(a) it carries a type A stamp or a label which incorporates a type B stamp, and

(b) the stamp or label mentioned in paragraph (a) has been affixed to the container in a way that complies with the requirements of regulations under this Schedule.

(5) In this Schedule “duty stamp” means any of the following—

(a) a document (a “type A stamp”) issued by or on behalf of the Commissioners which—

(i) is designed to be affixed to a retail container of an alcoholic product, and

(ii) indicates that the appropriate duty, or an amount representing some or all of the appropriate duty, has been (or is to be) paid;

(b) a part of a label for a retail container of an alcoholic product (a “type B stamp”) which—

(i) is incorporated in the label under the authority of the Commissioners, and

(ii) indicates that the appropriate duty, or an amount representing some or all of the appropriate duty, has been (or is to be) paid.

(6) In sub-paragraph (5) “the appropriate duty” means the duty chargeable on the quantity and description of the alcoholic product contained, or to be contained, in the retail container to which the stamp, or the label incorporating the stamp, is, or is to be, affixed.

Commencement Information

I59 Sch. 12 para. 1 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I60 Sch. 12 para. 1 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Power to alter alcoholic products, and capacity of containers, to which this Schedule applies U.K.

2 (1) The Treasury may by regulations amend paragraph 1(2)(a) for the purpose of varying the capacity from time to time specified in that provision.

(2) The Treasury may by regulations amend paragraph 1(3) so that this Schedule—

(a) applies to any description of alcoholic product to which it does not apply, or

(b) ceases to apply to any description of alcoholic product to which it does apply.

Commencement Information

I61 Sch. 12 para. 2 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I62 Sch. 12 para. 2 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Acquisition of, and payment for, duty stamps U.K.

3 (1) The Commissioners may by regulations make provision as to the terms and conditions on which a person may obtain—

(a) a type A stamp,

(b) authority to incorporate in a label a type B stamp,

(c) authority to obtain a label incorporating a type B stamp (a “type B label”),

(d) authority to affix a type B label to a retail container of an alcoholic product.

(2) Regulations under sub-paragraph (1) may in particular make provision for or in connection with—

(a) requiring a person in prescribed cases or circumstances to pay, or agree to pay, the prescribed amount to the Commissioners or to a person authorised by the Commissioners for this purpose;

(b) requiring a person in prescribed cases or circumstances to provide to the Commissioners such security as they may require in respect of payment of the appropriate duty.

(3) An amount prescribed for the purposes of sub-paragraph (2)(a) must not exceed the aggregate of—

(a) an amount representing the appropriate duty, and

(b) in the case of a type A stamp, the cost of issuing the stamp.

(4) Regulations under sub-paragraph (1) may also in particular make provision for or in connection with requiring or enabling the Commissioners to bear, in prescribed circumstances, in the case of a type B stamp, all or part of so much of the cost of producing the label as is attributable to the incorporation in it of the stamp.

(5) The whole of an amount payable for a duty stamp shall be treated for the purposes of the customs and excise Acts as an amount due by way of excise duty.

(6) In this paragraph “the appropriate duty” means the duty chargeable on the quantity and description of alcoholic product contained, or to be contained, in the retail container to which the stamp, or the label incorporating the stamp, is to be affixed.

Commencement Information

I63 Sch. 12 para. 3 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I64 Sch. 12 para. 3 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Regulations U.K.

4 (1) The Commissioners may by regulations make provision about matters relating to duty stamps.

(2) The regulations may, in particular, make provision about—

(a) the times at which a retail container must bear a duty stamp;

(b) the type of duty stamp (see paragraph 1(5)) with which a retail container is to be stamped in any particular case or circumstances;

(c) the design and appearance of a duty stamp (including the production of a type B label);

(d) the information that is to appear on a duty stamp;

(e) the cost of issuing a type A stamp for the purposes of paragraph 3(3)(b);

(f) the procedure for obtaining—

(i) a type A stamp,

(ii) authority to incorporate in a label a type B stamp,

(iii) authority to obtain a type B label,

(iv) authority to affix a type B label to a retail container of an alcoholic product,

(including provision setting periods of notice);

(g) where on the container a type A stamp, or a type B label, is to be affixed;

(h) repayment of, or credit for, in prescribed circumstances and subject to such conditions as may be prescribed, all or part of a payment made under or by reason of this Schedule to the Commissioners or to a person authorised by the Commissioners;

(i) liability to forfeiture in prescribed circumstances of some or all of a payment made, or security provided, under or by reason of this Schedule to the Commissioners or to a person authorised by the Commissioners.

(3) The regulations may also, in particular, make provision for or in connection with preventing a type A stamp, or a type B label, from being used by a person other than—

(a) in the case of a type A stamp, the person to or for whom the stamp was issued or a person authorised by that person to affix the stamp to a retail container of an alcoholic product;

(b) in the case of a type B stamp, the person to or for whom authority to obtain the type B label, or to affix that label to a retail container of an alcoholic product, was given by the Commissioners.

(4) The regulations may also, in particular, make provision—

(a) for or in connection with requiring a person (“P”) who is not established, and does not have any fixed establishment, in the United Kingdom, in prescribed circumstances, to appoint another person (a “duty stamps representative”) to act on P’s behalf in relation to duty stamps, and

(b) as to the rights, obligations or liabilities of duty stamps representatives.

(5) The Commissioners may, with a view to the protection of the revenue, make regulations for securing and collecting duty payable in accordance with this Schedule.

Commencement Information

I65 Sch. 12 para. 4 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I66 Sch. 12 para. 4 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Offences of possession, sale etc of unstamped containers U.K.

5 (1) Except in such cases as may be prescribed, it is an offence for a person to—

(a) possess, transport or display, or

(b) sell, offer for sale or otherwise deal in,

unstamped retail containers containing alcoholic products to which this Schedule applies.

(2) It is a defence for a person charged with an offence under this paragraph to prove that the retail containers in question were not required to be stamped.

(3) A person who commits an offence under this paragraph is liable—

(a) on summary conviction in England and Wales, to a fine not exceeding £20,000;

(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.

(4) A retail container in relation to which an offence under this paragraph is committed is liable to forfeiture (together with its contents).

Commencement Information

I67 Sch. 12 para. 5 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I68 Sch. 12 para. 5 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Offence of using premises for sale of alcoholic products in or from unstamped containers U.K.

6 (1) It is an offence for a manager of premises to cause or permit the premises to be used for the sale of alcoholic products, to which this Schedule applies, in or from an unstamped retail container.

(2) It is a defence for a person charged with an offence under this section to prove that the retail container in question was not required to be stamped.

(3) A person who commits an offence under this paragraph is liable—

(a) on summary conviction in England and Wales, to a fine not exceeding £20,000;

(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.

(4) Where an offence under this paragraph is committed, all unstamped retail containers of alcoholic products on the premises at the time of the offence are liable to forfeiture (together with their contents).

(5) For the purposes of this Schedule, a person is a “manager” of premises if the person—

(a) is entitled to control their use,

(b) is entrusted with their management, or

(c) is in charge of them.

Commencement Information

I69 Sch. 12 para. 6 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I70 Sch. 12 para. 6 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Alcohol sales ban following conviction for an offence under paragraph 6 U.K.

7 (1) A court by or before which a person is convicted of an offence under paragraph 6 may make an order prohibiting the use of the premises, in respect of which the offence was committed, for the sale of alcoholic products during a period specified in the order.

(2) The period—

(a) begins on the day specified in the order, and

(b) may not exceed 6 months.

(3) It is an offence for a manager of premises to cause or permit the premises to be used in breach of an order under this paragraph.

(4) A person who commits an offence under this paragraph is liable—

(a) on summary conviction in England and Wales, to a fine not exceeding £20,000;

(b) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.

Commencement Information

I71 Sch. 12 para. 7 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I72 Sch. 12 para. 7 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Penalty for altering duty stamps U.K.

8 (1) This paragraph applies where a person, otherwise than in accordance with regulations under this Schedule—

(a) alters a type A stamp after it has been issued, or

(b) alters a type B stamp after the label in which it is incorporated has been produced.

(2) The alteration is conduct which attracts a penalty under section 9 of FA 1994 (civil penalties).

(3) The stamp, or the label in which it is incorporated, is liable to forfeiture.

Commencement Information

I73 Sch. 12 para. 8 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I74 Sch. 12 para. 8 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Penalty for affixing wrong, altered or forged stamps, or over-labelling U.K.

9 (1) This paragraph applies where a person affixes to a retail container that is required to be stamped any of the items mentioned in sub-paragraphs (2) to (5).

(2) The first is—

(a) a type A stamp, or

(b) a label incorporating a type B stamp,

if the stamp is not a correct stamp for that container in accordance with regulations under this Schedule.

(3) The second is—

(a) a type A stamp that has been altered, otherwise than in accordance with regulations under this Schedule, after it has been issued, or

(b) a label incorporating a type B stamp if the stamp has been altered, otherwise than in accordance with regulations under this Schedule, after the label has been produced.

(4) The third is an item that purports to be (but is not)—

(a) a type A stamp, or

(b) a label incorporating a type B stamp.

(5) The fourth is any label or other item affixed in such a way as to cover up all or part of—

(a) a type A stamp affixed to the container, or

(b) a type B stamp incorporated in a label affixed to the container,

except where the label or other item is so affixed in accordance with regulations under this Schedule.

(6) The person’s conduct attracts a penalty under section 9 of FA 1994 (civil penalties).

(7) The retail container is liable to forfeiture (together with its contents).

Commencement Information

I75 Sch. 12 para. 9 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I76 Sch. 12 para. 9 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Penalty for failing to comply with regulations U.K.

10 (1) If a person fails to comply with a requirement imposed by or under regulations under this Schedule—

(a) the person’s conduct attracts a penalty under section 9 of FA 1994;

(b) any article in respect of which the person fails to comply with the requirement is liable to forfeiture (including, in the case of a container, its contents).

(2) Regulations under this Schedule may make provision as to the amount by reference to which the penalty under sub-paragraph (1)(a) is to be calculated.

Commencement Information

I77 Sch. 12 para. 10 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I78 Sch. 12 para. 10 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Forfeiture of forged, altered or stolen duty stamps U.K.

11 (1) The following items are liable to forfeiture.

(2) The first is an item that purports to be (but is not)—

(a) a type A stamp, or

(b) a label incorporating a type B stamp.

(3) The second is—

(a) a type A stamp that has been altered, otherwise than in accordance with regulations under this Schedule, after it has been issued, or

(b) a label incorporating a type B stamp if the stamp has been altered, otherwise than in accordance with regulations under this Schedule, after the label has been produced.

(4) The third is—

(a) a type A stamp, or

(b) a label incorporating a type B stamp,

that is in a person’s possession unlawfully.

Commencement Information

I79 Sch. 12 para. 11 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I80 Sch. 12 para. 11 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Interpretation U.K.

12 In this Schedule—

• “duty stamp” has the meaning given by paragraph 1(5);

• “prescribed” means prescribed in regulations made by the Commissioners;

• “retail container” has the meaning given by paragraph 1(2);

• “stamped” and “unstamped” are to be read in accordance with paragraph 1(4);

• “type A stamp” has the meaning given by paragraph 1(5)(a);

• “type B stamp” has the meaning given by paragraph 1(5)(b).

Commencement Information

I81 Sch. 12 para. 12 in force at Royal Assent for specified purposes, see s. 120(1)(b)

I82 Sch. 12 para. 12 in force at 1.8.2023 in so far as not already in force by S.I. 2023/884, reg. 2(1)(h) (with reg. 10)

Section 114

Schedule 13 U.K. Alcohol duty: minor and consequential amendments

Part 1 U.K. General

CEMA 1979 U.K.

1 CEMA 1979 is amended in accordance with paragraphs 2 to 5.

Commencement Information

I83 Sch. 13 para. 1 not in force at Royal Assent, see s. 120(2)

I84 Sch. 13 para. 1 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

2 (1) Section 1 (interpretation) is amended as follows.

(2) In subsection (1), in the definition of “the Customs and Excise Acts 1979”, after “the Tobacco Products Duty Act 1979” insert—

“and references (however expressed) to the Customs and Excise Acts 1979, or to the group of Acts included in the Customs and Excise Acts 1979, include references to Part 2 of the Finance (No. 2) Act 2023 (alcohol duty);”

(3) In subsection (3), omit “Alcoholic Liquor Duties Act 1979” and the list of expressions relating to that Act.

(4) After subsection (3) insert—

“(3ZA) Any expression used in this Act or in any instrument made under this Act to which a meaning is given by Part 2 of the Finance (No. 2) Act 2023 (alcohol duty) has, except where the context otherwise requires, the same meaning in this Act or any such instrument as in that Part; and for ease of reference the following is a list of the expressions concerned—

• “alcoholic product”

• “beer”

• “cider”

• “other fermented product”

• “spirits”

• “wholesaler”

• “wine”.”

Commencement Information

I85 Sch. 13 para. 2 not in force at Royal Assent, see s. 120(2)

I86 Sch. 13 para. 2 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

3 In section 112 (power of entry upon premises, etc of revenue traders), in subsection (5), for “dutiable alcoholic liquors” substitute “alcoholic products”.

Commencement Information

I87 Sch. 13 para. 3 not in force at Royal Assent, see s. 120(2)

I88 Sch. 13 para. 3 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

4 (1) Section 114 (power to prohibit use of certain substances in exciseable goods) is amended as follows.

(2) In subsections (1) and (2), for “or liquor”, in each place it occurs, substitute “, product or liquid”.

(3) In subsection (3)—

(a) for “or liquor” substitute “, product or liquid”;

(b) for “substance or liquid” substitute “substance, product or liquid”.

Commencement Information

I89 Sch. 13 para. 4 not in force at Royal Assent, see s. 120(2)

I90 Sch. 13 para. 4 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

5 In section 163A (power to search articles), in subsection (2), in the words before paragraph (a), for “dutiable alcoholic liquor” substitute “alcoholic products”.

Commencement Information

I91 Sch. 13 para. 5 not in force at Royal Assent, see s. 120(2)

I92 Sch. 13 para. 5 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

Customs and Excise Duties (General Reliefs) Act 1979 U.K.

6 In section 18 of the Customs and Excise Duties (General Reliefs) Act 1979 (interpretation) in subsection (2), for “Alcoholic Liquor Duties Act 1979” substitute “Part 2 of the Finance (No. 2) Act 2023”.

Commencement Information

I93 Sch. 13 para. 6 not in force at Royal Assent, see s. 120(2)

I94 Sch. 13 para. 6 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

Excise Duties (Surcharges or Rebates) Act 1979 U.K.

7 In section 1 of the Excise Duties (Surcharges or Rebates) Act 1979 (surcharges or rebates of amounts due for excise duties), in subsection (1), for paragraph (a) substitute—

“(a) that chargeable in respect of alcoholic products;”.

Commencement Information

I95 Sch. 13 para. 7 not in force at Royal Assent, see s. 120(2)

I96 Sch. 13 para. 7 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

FA 1994 U.K.

8 FA 1994 is amended in accordance with paragraphs 9 to 14.

Commencement Information

I97 Sch. 13 para. 8 not in force at Royal Assent, see s. 120(2)

I98 Sch. 13 para. 8 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

9 In section 12 (assessments to excise duty), in subsection (2)(ca), for “Schedule 2A to the Alcoholic Liquor Duties Act 1979” substitute “Schedule 12 to the Finance (No. 2) Act 2023”.

Commencement Information

I99 Sch. 13 para. 9 not in force at Royal Assent, see s. 120(2)

I100 Sch. 13 para. 9 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

10 In section 12A (other assessments relating to excise duty matters), in subsection (3), for paragraph (bb) substitute—

“(bb) section 60, 78 or 79 of the Finance (No. 2) Act 2023,”.

Commencement Information

I101 Sch. 13 para. 10 not in force at Royal Assent, see s. 120(2)

I102 Sch. 13 para. 10 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

11 (1) Section 12B (section 12A: supplementary provisions) is amended as follows.

(2) In subsection (2), for paragraphs (ea) and (eb) substitute—

“(ea) in the case of an assessment under section 78 of the Finance (No. 2) Act 2023, the time of delivery from the relevant premises (as defined in that section);

(eb) in the case of an assessment under section 79 of that Act, the time of importation;”.

(3) In subsection (2)(ec), for “section 36G of that Act” substitute “section 60 of that Act”.

Commencement Information

I103 Sch. 13 para. 11 not in force at Royal Assent, see s. 120(2)

I104 Sch. 13 para. 11 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

12 In section 16 (appeals to a tribunal), in subsection (3A), for “section 8, 10 or 11 of the Alcoholic Liquor Duties Act 1979” substitute “section 78 or 79 of the Finance (No. 2) Act 2023 (alcohol duty: certain reliefs or exemptions for spirits)”.

Commencement Information

I105 Sch. 13 para. 12 not in force at Royal Assent, see s. 120(2)

I106 Sch. 13 para. 12 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

13 In section 16A (temporary approvals etc. pending review or appeal), in subsection (2)(c) for “section 88C ALDA 1979” substitute “section 100 of the Finance (No. 2) Act 2023”.

Commencement Information

I107 Sch. 13 para. 13 not in force at Royal Assent, see s. 120(2)

I108 Sch. 13 para. 13 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

14 In Schedule 5 (decisions subject to review and appeal)—

(a) in the shoulder reference, for “Section 14” substitute “Section 13A”;

(b) omit paragraph 9ZA (and the heading preceding it).

Commencement Information

I109 Sch. 13 para. 14 not in force at Royal Assent, see s. 120(2)

I110 Sch. 13 para. 14 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

VATA 1994 U.K.

15 (1) In Part 2 of Schedule 8 to VATA 1994 (zero-rating: groups), Group 1 (food) is amended as follows.

(2) In excepted item 3, for the words from “any duty” to “made-wine” substitute “alcohol duty under Part 2 of the Finance (No. 2) Act 2023”.

(3) In excepted item 7, in paragraph (c), for “made-wine” substitute “other fermented products (as defined in Part 2 of the Finance (No. 2) Act 2023)”.

Commencement Information

I111 Sch. 13 para. 15 not in force at Royal Assent, see s. 120(2)

I112 Sch. 13 para. 15 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

FA 2001 U.K.

16 In paragraph 1(2) of Schedule 3 to FA 2001 (excise duty: payments by the Commissioners in case of error or delay)—

(a) in paragraph (a), for “section 8(1) or 10(1) of the Alcoholic Liquor Duties Act 1979” substitute “section 78 of the Finance (No. 2) Act 2023 (alcohol duty: authorised use for certain purposes)”;

(b) omit paragraph (b).

Commencement Information

I113 Sch. 13 para. 16 not in force at Royal Assent, see s. 120(2)

I114 Sch. 13 para. 16 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

FA 2007 U.K.

17 In Schedule 24 to FA 2007 (penalties for errors), in the Table in paragraph 1, for the entry relating to alcoholic liquor duties and statements or declarations in connection with a claim for repayment of duty under section 4(4) of FA 1995 substitute—

“Alcohol duty

Statement or declaration in connection with a claim for repayment of duty under section 75 of F(No. 2)A 2023.”

Commencement Information

I115 Sch. 13 para. 17 not in force at Royal Assent, see s. 120(2)

I116 Sch. 13 para. 17 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

FA 2008 U.K.

18 (1) Schedule 41 to FA 2008 (penalties: failure to notify etc.) is amended as follows.

(2) In the Table in paragraph 1, for the entry relating to alcohol liquor duties and the obligation to be authorised and registered to obtain and use duty stamps under regulations under ALDA 1979 substitute—

“Alcohol duty	Obligations under section 91 of F(No. 2)A 2023 (licence to manufacture and deal wholesale in denatured alcohol).
Alcohol duty	Obligation to be authorised and registered to obtain and use duty stamps under regulations under paragraph 4 of Schedule 12 to F(No. 2)A 2023 (duty stamps).”

(3) In the Table in paragraph 3, for the three entries relating to ALDA 1979 substitute—

“Part 2 of F(No. 2)A 2023 (alcohol duty), section 53(2)	Unauthorised repackaging of qualifying draught products.
Part 2 of F(No. 2)A 2023 (alcohol duty), section 78(8)	Spirits: authorised use for certain purposes.
Part 2 of F(No. 2)A 2023 (alcohol duty), section 79(2)	Spirits: imported goods not for human consumption.”

Commencement Information

I117 Sch. 13 para. 18 not in force at Royal Assent, see s. 120(2)

I118 Sch. 13 para. 18 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

TCTA 2018 U.K.

19 (1) TCTA 2018 is amended as follows.

(2) In section 49 (sections 44 to 48: interpretation), in the definition of “excise duty”, for paragraph (a) substitute—

“(a) Part 2 of the Finance (No. 2) Act 2023 (alcohol duty),”.

(3) In section 53 (meaning of “excise duty”), for paragraph (a) substitute—

“(a) Part 2 of the Finance (No. 2) Act 2023 (alcohol duty),”.

Commencement Information

I119 Sch. 13 para. 19 not in force at Royal Assent, see s. 120(2)

I120 Sch. 13 para. 19 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

Taxation (Post-transition Period) Act 2020 U.K.

20 In section 4(2) of the Taxation (Post-transition Period) Act 2020 (“relevant excise duty provision”), for paragraphs (a) to (f) substitute—

“(a) section 42 of F(No.2) A 2023 (alcohol);”.

Commencement Information

I121 Sch. 13 para. 20 not in force at Royal Assent, see s. 120(2)

I122 Sch. 13 para. 20 in force at 1.8.2023 by S.I. 2023/884, reg. 2(1)(j) (with reg. 10)

Prospective

Part 2 U.K. Approvals etc.

CEMA 1979 U.K.

21 CEMA 1979 is amended in accordance with paragraphs 22 to 27.

Commencement Information

I123 Sch. 13 para. 21 not in force at Royal Assent, see s. 120(2)

22 (1) Section 1(1) (interpretation:defined terms) is amended as follows.

(2) In the definition of “the Customs and Excise Acts 1979”, omit “the Alcoholic Liquor Duties Act 1979,”.

(3) In the definition of “excise warehouse”, omit “, and, except in that section, also includes a distiller's warehouse”.

(4) In the definition of “warehouse”—

(a) for “expressions” substitute “expression”;

(b) omit “and “distiller's warehouse””;

(c) omit “and, except in that section, also includes a distiller's warehouse”.

Commencement Information

I124 Sch. 13 para. 22 not in force at Royal Assent, see s. 120(2)

23 (1) Section 112 (power of entry upon premises, etc of revenue traders) is amended as follows.

(2) In subsection (3), for the words from “distiller” to “occupier” substitute “a person who produces alcoholic products or an occupier”.

(3) In subsection (6), for “a distiller” substitute “a person who produces alcoholic products”.

Commencement Information

I125 Sch. 13 para. 23 not in force at Royal Assent, see s. 120(2)

24 In section 113 (power to search for concealed pipes etc), in subsection (6), for the words for the words from “distillers” to “cider” substitute “persons who produce alcoholic products”.

Commencement Information

I126 Sch. 13 para. 24 not in force at Royal Assent, see s. 120(2)

25 In section 136 (offences in connection with claims for drawback etc), in subsection (5), for paragraph (b) substitute—

“(b) section 74 of the Finance (No. 2) Act 2023 (remission or repayment of duty on spoilt alcoholic products).”

Commencement Information

I127 Sch. 13 para. 25 not in force at Royal Assent, see s. 120(2)

26 (1) Section 160 (power to take samples) is amended as follows.

(2) In subsection (2), for the words from “any of the following” to “cider” substitute “a revenue trader to whom this subsection applies”.

(3) After subsection (2) insert—

“(2A) The revenue traders to whom subsection (2) applies are persons who produce alcoholic products.”

Commencement Information

I128 Sch. 13 para. 26 not in force at Royal Assent, see s. 120(2)

27 In section 178 (citation) in subsection (2), omit “the Alcoholic Liquor Duties Act 1979,”.

Commencement Information

I129 Sch. 13 para. 27 not in force at Royal Assent, see s. 120(2)

FA 1994 U.K.

28 In section 16A of FA 1994 (temporary approvals etc. pending review or appeal), at the end of subsection (2) insert—

“(g) approved under section 82 of the Finance (No. 2) Act 2023 (approval to produce alcoholic products).”

Commencement Information

I130 Sch. 13 para. 28 not in force at Royal Assent, see s. 120(2)

FA 2007 U.K.

29 (1) The Table in paragraph 1 of Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

(2) Omit the entry relating to alcoholic liquor duties and returns under regulations under section 13, 49, 56 or 62 of ALDA 1979.

(3) After the entry relating to alcohol duty (inserted by paragraph 17 of this Schedule) insert—

“Alcohol duty

Return under regulations under section 88 of F(No. 2)A 2023.”

Commencement Information

I131 Sch. 13 para. 29 not in force at Royal Assent, see s. 120(2)

FA 2008 U.K.

30 (1) The Table in paragraph 1 of Schedule 41 to FA 2008 (penalties: failure to notify etc.) is amended as follows.

(2) After the entry relating to air passenger duty insert—

“Alcohol duty

Obligations under section 88 of F(No. 2)A 2023 (approval requirement: producers).”

(3) Omit—

(a) the entry relating to alcohol liquor duties and obligations under sections 12(1), 47(1), 54(2), 55(2) and 62(2) of ALDA 1979 (obligations to hold licence to manufacture spirits, register to brew beer, hold licence to produce wine or made-wine and register to make cider), and

(b) the entry relating to alcohol liquor duties and the obligation to have plant and processes approved for the manufacture of spirits under regulations under section 15(6) of ALDA 1979 (distillers' warehouses).

Commencement Information

I132 Sch. 13 para. 30 not in force at Royal Assent, see s. 120(2)

FA 2009 U.K.

31 FA 2009 is amended in accordance with paragraphs 32 and 33.

Commencement Information

I133 Sch. 13 para. 31 not in force at Royal Assent, see s. 120(2)

32 (1) In Schedule 55 (penalty for failure to make returns etc), in the Table in paragraph 1, for item 18 substitute—

“18

Alcohol duty

Return under regulations under section 88 of F(No.2)A 2023”.

(2) In subsections (2) and (4) of section 106 (penalties for failure to make returns: commencement) references to Schedule 55 to that Act have effect as references to that Schedule as amended by this paragraph.

Commencement Information

I134 Sch. 13 para. 32 not in force at Royal Assent, see s. 120(2)

33 (1) In Schedule 56 (penalty for failure to make payments on time), in the Table in paragraph 1, for item 11E substitute—

“11E

Alcohol duty

Amount payable under regulations under section 88 of F(No. 2)A 2023 (except an amount falling within item 17A, 23 or 24)

The date determined by or under regulations under section 88 of F(No. 2)A 2023 as the date by which the amount must be paid”.

(2) In subsections (2) and (4) of section 107 (penalties for failure to pay tax) references to Schedule 56 to that Act have effect as references to that Schedule as amended by this paragraph.

Commencement Information

I135 Sch. 13 para. 33 not in force at Royal Assent, see s. 120(2)

Section 125

Schedule 14 U.K. Administration of multinational top-up tax

Part 1 U.K. Overview

1 (1) The Commissioners for His Majesty’s Revenue and Customs are responsible for the collection and management of multinational top-up tax. U.K.

(2) This Schedule—

(a) contains provision to enable HMRC to determine when a person is chargeable to multinational top-up tax for an accounting period;

(b) contains requirements to provide information to HMRC for the purposes of multinational top-up and taxes under the law of other territories that are equivalent to multinational top-up tax;

(c) allows for the assessment of amounts of multinational top-up tax;

(d) sets out associated administrative provisions;

(e) makes consequential and other amendments to other enactments.

(3) This Schedule makes provision about a “filing member” of a multinational group (see Part 2) and contains provision requiring such a member to—

(a) register with HMRC (see Part 3);

(b) submit an information return to HMRC (see Part 4);

(c) submit a self-assessment return to HMRC (see Part 5);

(d) keep and preserve records (see Part 9).

(4) Part 10 of this Schedule makes provision for when and how payment of multinational top-up tax payable is to be made.

(5) This Schedule makes provision for—

(a) penalties (see Part 11);

(b) appeals and claims for repayment of overpaid tax (see Part 12).

Part 2 U.K. Meaning of “filing member”

2 (1) The filing member of a multinational group is the ultimate parent of that group, unless a nomination under sub-paragraph (2) is in force. U.K.

(2) The nomination referred to in sub-paragraph (1) is a nomination by the ultimate parent of the group that another person should act as the filing member.

(3) The ultimate parent may only nominate a person if—

(a) the person is a member of the group, and

(b) the person is a company.

(4) If the ultimate parent nominates a person under sub-paragraph (2), they must—

(a) nominate the same person as the filing member for the purposes of Schedule 18;

(b) if the nomination ceases to be in force, revoke the nomination referred to in paragraph (a);

(c) if the nomination referred to in paragraph (a) ceases to be in force, revoke the nomination.

(5) The ultimate parent must provide the person nominated with everything the person may reasonably require in order to comply with the obligations of a filing member under this Schedule.

(6) While a nomination under sub-paragraph (2) is in force, the filing member of a multinational group is the person nominated.

(7) A nomination is in force from the time it is made until any of the following events occurs—

(a) the ultimate parent nominates another person;

(b) the person nominated ceases to be a member of the group;

(c) the person nominated ceases to be a company;

(d) the ultimate parent revokes the nomination;

(e) an officer of Revenue and Customs revokes the nomination.

(8) An officer of Revenue and Customs may revoke a nomination if the officer considers that—

(a) the ultimate parent is not complying with its obligation under sub-paragraph (5), or

(b) the person nominated is not complying with the obligations of a filing member under this Schedule.

(9) An officer of Revenue and Customs revokes a nomination by notifying the ultimate parent and the nominated person of the revocation.

(10) The revocation has effect when the notification is issued.

(11) Any nomination, or revocation of a nomination, must be in writing.

(12) Paragraph 3 makes provision for circumstances in which the ultimate parent is the filing entity but is not a company.

(13) Paragraph 4 makes specific provision for a multinational group that is part of a multi-parent group.

(14) Paragraph 5 makes provision for the effect of the filing member of a multinational group changing.

3 (1) This paragraph applies where— U.K.

(a) the filing member of a multinational group is its ultimate parent, and

(b) the ultimate parent is not a company.

(2) The obligations of the filing member under this Schedule may be met by—

(a) in the case of a partnership other than a limited partnership F1 ..., any partner;

(b) in the case of a limited partnership, any general partner;

F2 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) in the case of a trust, any trustee;

(e) in the case of any other arrangement, any person responsible for preparing the separate financial accounts.

[F3 (3) In this Schedule—

(a) “limited partnership” includes an entity established under the law of a territory outside the United Kingdom that is equivalent to a limited partnership, and

(b) “general partner” includes a partner of such an entity that corresponds to a general partner.

(4) See also section 232A, which contains provision about the continuity of partnerships which is relevant to this paragraph.

(5) Where an obligation of a partnership may be met by one of its partners and the partnership does not comply with that obligation—

(a) an officer of Revenue and Customs may by notice require any such partner to meet the obligation, and

(b) that partner is to be treated for that purpose as the filing member (and accordingly may be subject to any penalty for a failure to comply).]

Textual Amendments

F1 Words in Sch. 14 para. 3(2)(a) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(a)(i)

F2 Sch. 14 para. 3(2)(c) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(a)(ii)

F3 Sch. 14 para. 3(3)-(5) substituted for Sch. 14 para. 3(3) (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(a)(iii)

4 (1) The obligations of a filing member of a multinational group that is part of a multi-parent group may be met by the filing member of any of the groups that are part of that multi-parent group, subject to sub-paragraph (2). U.K.

(2) The obligations of the filing member may not be met by a person nominated under paragraph 2(2) unless the ultimate parent of each group forming the multi-parent group has authorised the nomination.

(3) Any authorisation must be in writing.

5 (1) This paragraph applies if at any time (“the relevant time”) a person (“the new filing member”) becomes the filing member of a multinational group in place of another person (“the old filing member”). U.K.

(2) The obligations and liabilities of the new filing member under this Schedule include any obligations and liabilities the old filing member had under this Schedule.

(3) Anything done as the filing member of the group by or in relation to the old filing member, before the relevant time, is treated as having been done by or in relation to the new filing member.

(4) Accordingly, a penalty may be imposed on the new filing member in respect of anything done before the relevant time if, at that time, a penalty could have been imposed on the old filing member in respect of the thing done.

(5) Anything done by HMRC in relation to the old filing member under this Schedule, before the end of the day the change is notified, is treated for all purposes under this Schedule as done in relation to the new filing member.

(6) Anything that, at any time during the period beginning with the relevant time and ending with the day the change is notified, is in the process of being done under this Schedule in relation to the old filing member may be continued in relation to the new filing member.

(7) Accordingly, any reference in an enactment or other instrument to the filing member of the group is to be read, so far as necessary for the purposes of giving effect to any of sub-paragraphs (2) to (6), as being or including a reference to the new filing member.

(8) In this paragraph—

(a) any reference to an act includes an omission;

(b) any reference to the day the change is notified is to the day on which an officer of Revenue and Customs receives notification that the new filing member has become the filing member of the group.

(9) Nothing in this paragraph—

(a) prevents HMRC or anyone else, after the relevant time, from imposing a penalty, exercising any other power, or doing anything else, in relation to the old filing member in respect of anything done before the relevant time, or

(b) affects the validity of anything done before the relevant time.

Part 3 U.K. Registration

6 (1) The filing member of a multinational group must register with HMRC if the group becomes a qualifying multinational group. U.K.

[F4 (1A) The reference to a multinational group in sub-paragraph (1) does not include a group exclusively comprised of excluded entities (who are only regarded as members of the group for certain purposes in accordance with section 127(2)).]

(2) For the purposes of sub-paragraph (1), a multinational group becomes a qualifying multinational group on the first day of the first accounting period it is a qualifying multinational group (the “trigger day”).

(3) A filing member registers with HMRC by providing specified information to HMRC.

(4) The specified information is—

(a) the name of the filing member;

(b) the name of the ultimate parent (if different to the filing member);

(c) the date of the trigger day;

(d) the date on which the accounting period in which the trigger day occurs will end or has ended;

(e) any other information that may be specified in a notice published by HMRC.

(5) The information must be provided in the way specified in a notice published by HMRC.

(6) The information must be provided by the end of the period of six months beginning with the day after the accounting period in which the trigger day occurs ends.

(7) In this Schedule, a “registered group” means a multinational group that is registered under this paragraph.

(8) A multinational group is registered under this paragraph if—

(a) the filing member of the group has registered under this paragraph, and

(b) a notice of de-registration is not in force in relation to the registration (see paragraph 7).

(9) Paragraphs 8 and 9 provide further notification requirements in relation to a registered group.

Textual Amendments

F4 Sch. 14 para. 6(1A) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(a)

7 (1) This paragraph applies where the filing member of a multinational group has registered under paragraph 6. U.K.

(2) An officer of Revenue and Customs may issue the filing member with a notice of de-registration in relation to the registration.

(3) The effect of an officer issuing a notice of de-registration is that, beginning with the effective date, the registration to which the notice relates is not to be treated as a registration under paragraph 6.

(4) “The effective date” is a date specified in or determined by reference to the notice as the date on which the notice takes effect.

(5) But a notice of de-registration does not affect the validity of a registration for the purposes of any obligation arising before the effective date.

(6) An officer or Revenue and Customs may issue a notice of de-registration only if—

(a) the filing member has applied for such a notice, and

(b) it appears to the officer that the group will not be a qualifying multinational group for any accounting period beginning with the period in which the effective date falls.

8 (1) This paragraph applies where the filing member of a registered group changes. U.K.

(2) The new filing member must notify HMRC of the change before the end of the period of 6 months beginning with the day the change occurs.

(3) But, if the change occurs before the end of the period referred to in paragraph 6(6), the new filing member may notify HMRC of the change at any time before the end of that period even if later than the end of the period in sub-paragraph (2).

(4) The notification must be given in the way specified in a notice published by HMRC.

9 (1) The filing member of a registered group must notify HMRC of any other change to the information provided under paragraph 6. U.K.

(2) The notification must be given before the end of the period of 6 months beginning with the day on which the change occurs.

(3) But, if the change occurs before the end of the period referred to in paragraph 6(6), the filing member may notify HMRC of the change at any time before the end of that period even if later than the end of the period in sub-paragraph (2).

(4) The notification must be given in the way specified in a notice published by HMRC.

Part 4 U.K. Information returns

10 (1) The filing member of a registered group must submit an information return to HMRC for each accounting period in which the group is a qualifying multinational group, unless sub-paragraph (4) applies. U.K.

(2) An “information return” is a return containing the following information—

(a) identification of the members of the group;

(b) information on the overall corporate structure of the group;

(c) information relevant to the determination of effective tax rates, top-up amounts or allocation of top-up amounts;

(d) such other information specified in a notice published by HMRC as HMRC may consider relevant to the sharing of information between Pillar Two territories in connection with the Pillar Two rules.

(3) HMRC may specify in a notice the particular items of information to be submitted as part of an information return.

(4) This sub-paragraph applies if an information return has been submitted for that period to another qualifying authority.

(5) A “qualifying authority” is an authority outside the United Kingdom with which HMRC has an agreement under which the authority will share the information contained in information returns submitted to that authority with HMRC.

(6) If sub-paragraph (4) applies, the filing member must notify HMRC (an “overseas return notification”).

(7) An information return or overseas return notification must be submitted in the way specified in a notice published by HMRC.

(8) HMRC may specify in a notice that other information is to be provided together with an overseas return notification.

(9) An information return or overseas return notification must be submitted by the end of the period of 15 months beginning with the day after the end of the accounting period in respect of which the return or notification is being submitted.

(10) But the longer period in sub-paragraph (11) applies if the return or notification is being submitted in respect of the first accounting period in relation to which the group is a registered group.

(11) Where this sub-paragraph applies, the information return or overseas return notification must be submitted by the end of the period of 18 months beginning with the day after the end of the accounting period.

11 (1) The filing member may amend a return submitted under paragraph 10 by notice to HMRC. U.K.

(2) The filing member may further amend a return previously amended by further notice to HMRC.

(3) No amendment may be made after the end of the period of 12 months beginning with the day after the latest date by which the return or notification was required to be submitted under paragraph 10.

(4) An amendment must be submitted in the way specified in a notice published by HMRC.

12 U.K. HMRC may take into account an information return in performing any of its functions.

Part 5 U.K. Self-assessment returns

13 (1) The filing member of a registered group must submit a self-assessment return to HMRC for each accounting period, unless sub-paragraph (3) applies. U.K.

(2) A “self-assessment return” is a return containing—

(a) an assessment by the filing member as to—

(i) which members of the group are chargeable to multinational top-up tax, and

(ii) the amount of multinational top-up tax is chargeable to each such member, and

(b) such other information as may be specified in a notice published by HMRC.

(3) This sub-paragraph applies if—

(a) the conditions in sub-paragraph (5) are met in relation to the group for the accounting period,

(b) the filing member has submitted a below-threshold notification to HMRC, and

(c) the filing member has not withdrawn the below-threshold notification.

(4) A “below-threshold notification” is a notification that the filing member—

(a) considers that the conditions in sub-paragraph (5) are met for an accounting period, and

(b) does not expect that the conditions will cease to be met for that accounting period or any subsequent accounting period.

(5) The conditions are that—

(a) the group was not a qualifying multinational group in the accounting period, and

(b) the group is unlikely to be a qualifying multinational group in the next two accounting periods.

(6) A self-assessment return or below-threshold notification must be submitted in the way specified in a notice published by HMRC.

(7) HMRC may specify in a notice that other information is to be provided together with a below-threshold notification.

(8) A self-assessment return or below-threshold notification must be submitted by the end of the period of 15 months beginning with the day after the end of the accounting period in respect of which the return or notification is being submitted.

(9) But the longer period in sub-paragraph (10) applies if a self-assessment return is being submitted in respect of the first accounting period in relation to which the group is a registered group.

(10) Where this sub-paragraph applies, the self-assessment return must be submitted by the end of the period of 18 months beginning with the day after the end of the accounting period.

14 (1) The filing member may amend a return submitted under paragraph 13 by notice to HMRC. U.K.

(2) The filing member may further amend a return previously amended by further notice to HMRC.

(3) No amendment may be made after the end of the period of 12 months beginning with the day after the latest date by which the return or notification was required to be submitted under paragraph 13.

(4) An amendment must be submitted in the way specified in a notice published by HMRC.

Part 6 U.K. Enquiries into a self-assessment return

15 (1) This Part of this Schedule applies if the filing member of a multinational group has submitted a self-assessment return under paragraph 13 for an accounting period. U.K.

(2) In this Part “return” means a self-assessment return (including as amended under paragraph 14).

16 (1) An officer of Revenue and Customs may enquire into the return if, within the time allowed, the officer gives notice to the filing member of the officer's intention to do so. U.K.

(2) The time allowed is—

(a) if the return was submitted on or before the submission date, up to the end of the period of 12 months after the submission date;

(b) if the return was submitted after the submission date, up to and including the quarter day next following the first anniversary of the day on which the return was delivered;

(c) if the return is amended under paragraph 14, up to and including the quarter day next following the first anniversary of the day on which the return was amended.

(3) The submission date is the day ending the period for submission of the return referred to in paragraph 13(8) (or the longer period referred to in paragraph 13(10) where applicable).

(4) The quarter days are 31 January, 30 April, 31 July and 31 October.

(5) A notice under this paragraph is referred to in this Part of this Schedule as a “notice of enquiry”.

(6) A return that has been the subject of one notice of enquiry may not be the subject of another, except one given in consequence of an amendment of the return.

17 (1) An enquiry may extend to anything contained in the return, or required to be contained in the return, including anything that relates— U.K.

(a) to the question of whether multinational top-up tax is chargeable in respect of the accounting period, or

(b) to the amount of tax so chargeable.

(2) But, where the notice of enquiry is given in consequence of an amendment of a return—

(a) at a time when it is no longer possible to give a notice of enquiry under paragraph 16(2)(a) or (b),

(b) after a partial closure notice (see paragraph 22(1)) has been issued in relation to the matters to which the amendment relates or which are affected by the amendment, or

(c) after an enquiry into a return has been completed,

the enquiry into the return is limited to matters to which the amendment relates or that are affected by the amendment.

18 (1) For the purposes of this Part an enquiry is in progress into a return for the whole of the period— U.K.

(a) beginning with the day on which notice of enquiry is given in relation to that return, and

(b) ending with the day on which the enquiry is completed.

(2) The enquiry is completed on the day a final closure notice is given (see paragraph 22(2)).

19 (1) If at a time when an enquiry is in progress into a return an officer of Revenue and Customs forms the opinion— U.K.

(a) that an amount stated in the return as the amount of multinational top-up tax payable by a member of the group is insufficient, and

(b) that unless the assessment in the return is immediately amended there is likely to be a loss of tax to the Crown,

the officer may by notice in writing to the filing member amend the assessment to make good the deficiency.

(2) In the case of an enquiry that under paragraph 17(2) is limited to matters arising from an amendment of the return, sub-paragraph (1) applies only so far as the deficiency is attributable to the amendment.

(3) In the case of an enquiry in relation to which one or more partial closure notices have been given, sub-paragraph (1) applies only so far as the deficiency is attributable to matters not addressed by those notices.

20 (1) This paragraph applies if a return is amended at a time when an enquiry is in progress into the return. U.K.

(2) The amendment does not restrict the scope of the enquiry but may be taken into account (together with any matters arising) in the enquiry (whether or not the amendment takes effect under sub-paragraph (4)).

(3) Sub-paragraph (4) applies where the amendment is made otherwise than under paragraph 19.

(4) So far as the amendment affects the amount stated in the return as the amount of tax payable, the amendment does not take effect, in relation to any matter to which it relates or which is affected by it, while the enquiry is in progress, except to the extent that—

(a) a partial closure notice has been given in relation to a matter to which the amendment relates or which is affected by it, and

(b) the notice states that the amendment is to take effect.

(5) The final closure notice—

(a) must state whether and to what extent an amendment whose effect is deferred under sub-paragraph (4) is to take effect;

(b) may state that an amendment made under paragraph 19, and whose effect is not terminated or amended by a partial closure notice, is to cease to have effect or is to be amended as specified in the notice.

21 (1) At any time when an enquiry is in progress into a return any question arising in connection with the subject-matter of the enquiry may be referred to the tribunal for determination. U.K.

(2) Notice of the referral must be given to the tribunal jointly by the filing member and an officer of Revenue and Customs.

(3) More than one notice of referral may be given in relation to an enquiry.

(4) An officer of Revenue and Customs or the filing member may withdraw a notice of referral.

(5) The effect of the notice being withdrawn is that the questions referred are not (unless they have already been finally determined) to be finally determined by the tribunal.

(6) While proceedings on a referral are in progress in relation to an enquiry—

(a) no closure notice may be given in relation to the enquiry, and

(b) no application may be made for a direction to give such a notice.

(7) Proceedings are in progress where—

(a) notice of referral has been given,

(b) the notice has not been withdrawn, and

(c) the questions referred have not been finally determined.

(8) In this paragraph, a question referred is finally determined when—

(a) it has been determined by the tribunal, and

(b) there is no further possibility of the determination being varied or set aside (disregarding any power to grant permission to appeal out of time).

(9) The determination of a question referred to the tribunal is binding on the parties to the referral in the same way, and to the same extent, as a decision on a preliminary issue in an appeal under Part 12 of this Schedule.

(10) The determination must be taken into account by an officer of Revenue and Customs—

(a) in reaching the officer's conclusions on the enquiry, and

(b) in formulating any amendments of the return required to give effect to those conclusions.

(11) The question determined may not be reopened on an appeal under Part 12 of this Schedule, except to the extent that it could be reopened if it had been determined as a preliminary issue in that appeal.

22 (1) Any matter to which an enquiry into a return relates is completed by an officer of Revenue and Customs giving the filing member a partial closure notice. U.K.

(2) An enquiry into a return is completed by an officer of Revenue and Customs giving the filing member a final closure notice.

(3) In this Part of this Schedule, “closure notice” means a partial closure notice or a final closure notice.

(4) A closure notice is a notice stating—

(a) that the enquiry, or the enquiry in so far as it relates to a particular matter, is complete;

(b) the conclusion reached in the enquiry.

(5) The conclusion must be one of the following—

(a) that no amendment of the return is required, or

(b) that the amendments of the return specified in the notice are to be made.

(6) A closure notice takes effect when it is given to the filing member.

(7) The officer—

(a) must provide additional information together with the notice as to the basis for the conclusion;

(b) may provide such other information as the officer thinks fit.

(8) A final closure notice may not, in relation to a matter to which a partial closure notice relates, state a different conclusion in respect of that matter to that stated in the partial closure notice.

23 (1) The filing member may apply to the tribunal for a direction that an officer of Revenue and Customs give a closure notice within a specified period. U.K.

(2) The tribunal hearing the application must give a direction unless satisfied that HMRC has reasonable grounds for not giving a closure notice within a specified period.

(3) An application under this paragraph is to be treated as an appeal under Part 12 of this Schedule.

Part 7 U.K. Determinations where self-assessment return not submitted

24 U.K. This Part of this Schedule applies if the filing member of a multinational group has not submitted a self-assessment return under paragraph 13 for an accounting period.

25 (1) An officer of Revenue and Customs may make a determination if— U.K.

(a) the group is not a registered group and the officer has reasonable grounds to believe the group should be, or

(b) the officer has reasonable grounds to believe the filing member should have submitted a self-assessment return.

(2) A “determination” is a determination by the officer to the best of the officer’s knowledge and belief as to the total amount of tax payable by a member of the group for the accounting period.

(3) The officer must give notice of the determination to the filing member.

(4) The notice must state the date on which it was issued.

(5) No determination may be made—

(a) on or before the last date on which the return was required to be submitted or would have been so required had the group been a registered group;

(b) more than 3 years after that date.

26 (1) If, after a determination has been made— U.K.

(a) a self-assessment return is submitted for the accounting period, and

(b) an information return or overseas return notification has been submitted for that period,

the assessment in the self-assessment return supersedes the assessment in the determination.

(2) Sub-paragraph (1) does not apply to a self-assessment return delivered after the later of—

(a) the day 3 years after the day on which the power to make the determination first became exercisable, and

(b) the day 12 months after the date of the determination.

(3) Where—

(a) proceedings have begun for the recovery of any tax assessed in a determination, and

(b) before the proceedings are concluded the determination is superseded under sub-paragraph (1),

the proceedings may be continued as if they were proceedings for the recovery of so much of the tax assessed in the self-assessment return as is due and payable and has not been paid.

(4) Where—

(a) action is being taken under Part 1 of Schedule 8 to the F(No.2)A 2015 (enforcement of deduction from accounts) for the recovery of an amount (“the original amount”) of tax assessed in a determination, and

(b) before that action is concluded the determination is superseded under sub-paragraph (1),

that action may be continued as if it were an action for the recovery of so much of the tax assessed in the return as is due and payable, has not been paid and does not exceed the original amount.

Part 8 U.K. Discovery assessments

27 (1) If, in respect of an accounting period, an officer of Revenue and Customs discovers that— U.K.

(a) an amount of multinational top-up tax that ought to have been assessed in respect of a multinational group has not been assessed, or

(b) an assessment to tax is or has become insufficient,

the officer may make an assessment (a “discovery assessment”) in the amount which ought in the officer's opinion to be charged in order to make good to the Crown the loss of tax.

(2) This is subject to the restrictions in paragraph 28.

28 (1) This paragraph applies where the filing member of the group has submitted a self-assessment return under paragraph 13 for the accounting period in respect of which the officer makes a discovery assessment. U.K.

(2) Where this paragraph applies, the power to make a discovery assessment—

(a) may only be made in the two cases specified in sub-paragraphs (3) and (4), and

(b) may not be made in the circumstances specified in sub-paragraph (6).

(3) The first case is where the situation mentioned in paragraph 27(1) was brought about carelessly or deliberately on the part of—

(a) a member of the group of which the person forms part, or

(b) a person acting on behalf of a member of the group.

(4) The second case is where an officer of Revenue and Customs, at the time the officer—

(a) ceased to be entitled to give a notice of enquiry into the return submitted in respect of the group for the accounting period, or

(b) completed an enquiry into the return,

could not have been reasonably expected, on the basis of the information made available to the officer before that time, to be aware of the situation mentioned in paragraph 27(1).

(5) For this purpose information is regarded as made available to the officer of Revenue and Customs if—

(a) it is contained in a self-assessment return, an information return, an overseas return notification or a below-threshold notification for the accounting period in question or either of the two immediately preceding accounting periods,

(b) it is contained in any documents produced or information provided by the filing member for the purposes of an enquiry into any such return or notification, or

(c) it is information the existence of which, and the relevance of which as regards the situation mentioned in paragraph 27(1)—

(i) could reasonably be expected to be inferred by the officer of Revenue and Customs from information falling within paragraph (a) or (b), or

(ii) are notified in writing to an officer of Revenue and Customs by the filing member or another person acting on the filing member's behalf.

(6) No discovery assessment may be made if—

(a) the situation mentioned in paragraph 27(1) is attributable to a mistake in the return as to the basis on which the tax liability ought to have been calculated, and

(b) the return was in fact made on the basis or in accordance with the practice generally prevailing at the time it was made.

29 (1) The general rule is that no discovery assessment may be made more than 4 years after the end of the accounting period to which it relates. U.K.

(2) A discovery assessment in a case involving a loss of tax brought about carelessly by a member of the group (or a person acting on their behalf) may be made at any time not more than 6 years after the end of the accounting period to which it relates.

(3) A discovery assessment in a case involving a loss of tax brought about deliberately by a member of the group (or a person acting on their behalf) may be made at any time not more than 20 years after the end of the accounting period to which it relates.

(4) A discovery assessment in a case involving a loss of tax brought about as a result of a failure of a filing member to register with HMRC under paragraph 6 may be made at any time not more than 20 years after the end of the accounting period to which it relates.

30 (1) The officer of Revenue and Customs must give notice of a discovery assessment to the filing member. U.K.

(2) The notice must state—

(a) the tax due,

(b) the date on which the notice is issued, and

(c) the time within which any appeal against the assessment must be made.

(3) After notice of the assessment has been served under this paragraph, the assessment may not be altered except as provided for by or under this Schedule.

(4) Where an officer of Revenue and Customs has—

(a) decided to make an assessment to tax, and

(b) taken all other decisions needed for arriving at the amount of the assessment,

the officer may entrust to another officer of Revenue and Customs the responsibility for completing the assessing procedure, whether by means involving the use of a computer or otherwise, including responsibility for serving notice of the assessment.

Part 9 U.K. Record-keeping requirements

31 (1) The filing member of the group must— U.K.

(a) keep such records as may be needed to enable it to deliver correct and complete returns if required, and

(b) preserve those records in accordance with this paragraph.

(2) The records must be preserved until the end of the relevant day.

(3) “The relevant day” means—

(a) the later of—

(i) the ninth anniversary of the last day of the accounting period to which the records relate, and

(ii) if a self-assessment return relating to that accounting period is submitted and a notice of enquiry into that return has been given before the anniversary referred to in sub-paragraph (i), the day at the end of the period of six months beginning with the day the enquiry is completed;

(b) such earlier day as may be specified in a notice published by HMRC (and different days may be specified for different cases).

(4) The duty to preserve records may be satisfied—

(a) by preserving them in any form and by any means, or

(b) by preserving the information contained in them in any form and by any means,

subject to any conditions or exceptions specified in a notice published by HMRC.

Part 10 U.K. Payments of multinational top-up tax

Timing of payments U.K.

32 (1) Multinational top-up tax due must be paid by the end of the period of 15 months beginning with the day after the end of the accounting period.

(2) But the longer period in sub-paragraph (3) applies if the liability to pay tax arises in respect of the first accounting period in relation to which a group is a qualifying multinational group.

(3) Where this sub-paragraph applies, multinational top-up tax due must be paid by the end of the period of 18 months beginning with the day after the end of the accounting period.

(4) A person’s liability to pay multinational top-up tax may be discharged by another member of the multinational group to which the liability relates (but see paragraph 37).

33 (1) Interest is to accrue on amounts payable under paragraph 32, but not paid, from the day after the latest date on which the amounts were required to be paid.

(2) The rate of interest is to be as provided in regulations under section 178 of FA 1989.

[F5 33A (1) Where a person has paid an amount that has been paid by way of multinational top-up tax but the amount is not due, the amount incurs interest at the rate provided for in regulations made under section 178 of FA 1989 from the later of—

(a) the day after the latest day (under paragraph 32) by which the amount paid would have been required to be paid as multinational top-up tax if it were due, and

(b) the day on which the amount was paid.

(2) See paragraph 51 for provision about making claims for the repayment of an amount that is not tax that was due (but see also paragraph 52 which, for example, prevents such a claim being made where an amendment to an assessment can be, or could have been, made).]

Textual Amendments

F5 Sch. 14 para. 33A inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 37(3)

Group payment notices U.K.

34 (1) An officer of Revenue and Customs may issue a group payment notice if an amount payable by a member of a multinational group of multinational top-up tax (including any interest on that amount) is not paid by the end of the period of three months beginning with the relevant date.

(2) A group payment notice may be issued to any person who is a member of the group or who was a member of the group at [F6 any time in the accounting period to which the amount payable relates] (wherever in the world they are located), subject to paragraph 35 where the group contains ring-fenced entities.

[F7 (2A) The references to a member of a group in sub-paragraph (2) do not include a member of a group that is—

(a) a securitisation company (within the meaning given by section 267(4)),

(b) a covered bond vehicle (within the meaning given by section 272A(5)), or

(c) an investment entity.]

(3) A group payment notice is a notice requiring the recipient to pay an outstanding amount of multinational top-up tax payable by a member of the group by a date specified in the notice.

(4) The notice may not specify a date earlier than the date 30 days after the notice is issued.

(5) A group payment notice must state—

(a) the amount of any tax that remains unpaid,

(b) the date any tax first became payable, and

(c) the member's right of appeal (see paragraph 36(3)).

(6) A group payment notice may not be issued more than 3 years and 6 months after the relevant date.

(7) If the amount payable is as assessed in a self-assessment return, the relevant date is the later of—

(a) the date on which multinational top-up tax must be paid;

(b) in a case where the return is delivered after the submission date, the date on which the return is delivered;

(c) if notice of enquiry is given, the date on which the enquiry is completed;

(d) if as a result of such an enquiry the return is amended, the date of the closure notice in relation to that enquiry;

(e) if there is an appeal against the closure notice, the date on which the appeal is finally determined.

(8) If the amount payable is as assessed in a discovery assessment, the relevant date is—

(a) if there is no appeal against the assessment, the date on which the notice of assessment is issued, or

(b) if there is such an appeal, the date on which the appeal is finally determined.

(9) If the amount payable is as assessed in a determination that has not been superseded, the relevant date is the date on which notice of the determination was issued.

Textual Amendments

F6 Words in Sch. 14 para. 34(2) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(b)(i)

F7 Sch. 14 para. 34(2A) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(b)(ii)

35 (1) Where the multinational group contains ring-fenced entities, a group payment notice may not be issued to a ring-fenced entity in respect of a liability relating to a responsible member of the group which is not a [F8 member of a ring-fenced body sub-group that the entity is a member of].

(2) A ring-fenced entity is a body corporate which is—

(a) a ring-fenced body, or

(b) a member of a ring-fenced body sub-group.

(3) “Ring-fenced body” has the same meaning as in section 142A of the Financial Services and Markets Act 2000.

(4) A “ring-fenced body sub-group” is a group of entities consisting of—

(a) an RFB parent undertaking and its subsidiaries, or

(b) a ring-fenced body, which is not a subsidiary of an RFB parent undertaking, and the ring-fenced body’s subsidiaries.

(5) “RFB parent undertaking” means a body corporate which is subject to rules made under section 192JA of the Financial Services and Markets Act 2000 (rules applying to parent undertakings of ring-fenced bodies).

Textual Amendments

F8 Words in Sch. 14 para. 35(1) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(c)

36 (1) The effect of a group payment notice being issued under paragraph 34 is that the recipient is treated as if—

(a) a liability of a member other than the recipient were a liability of the recipient (“the deemed liability”),

(b) the deemed liability became due and payable when the relevant liability became due and payable, and

(c) any payments made in respect of the relevant liability were made in respect of the deemed liability.

(2) Nothing in this paragraph gives the recipient a right to appeal against any assessment, determination or other decision giving rise to a liability of a member other than the recipient (or against the deemed liability).

(3) The recipient may appeal against the notice, within the period of 30 days beginning with the date on which it is given, on the ground that the [F9 recipient is not a person to whom the notice can be given (see paragraphs 34(2) and (2A) and 35(1)).]

(4) Where an appeal is made, anything required by the notice to be paid is due and payable as if there had been no appeal.

Textual Amendments

F9 Words in Sch. 14 para. 36(3) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(d)

Effect of group payment for tax purposes U.K.

37 (1) This paragraph applies where a member of a multinational group (the “payer”) makes a payment in respect of the liability to pay multinational top-up tax of another member of the same group (the “payee”) (whether or not in consequence of a group payment notice).

(2) The payer may recover the amount from the payee.

(3) In calculating the payer's income, profits or losses for tax purposes—

(a) the payment is not allowed as a deduction, and

(b) the reimbursement of any such payment is not to be regarded as a receipt.

(4) The payment—

(a) is not to be taken into account in calculating the profits or losses of either the payer or payee for corporation tax or income tax purposes of either the payer or the payee, and

(b) is not to be regarded as a distribution for [F10 income tax or] corporation tax purposes.

(5) The amount paid by the payer is to be taken into account in calculating—

(a) the amount unpaid by the payee for tax purposes, and

(b) the amount due by virtue of a group payment notice relating to the amount unpaid.

(6) Similarly, any payment by the [F11 payee] of any of the amount unpaid is to be taken into account in calculating the amount due by virtue of a group payment notice (or by virtue of any other group payment notice relating to the amount unpaid).

(7) In this paragraph, “for tax purposes” means for the purposes of income tax, corporation tax, multinational top-up tax or domestic top-up tax.

Textual Amendments

F10 Words in Sch. 14 para. 37(4)(b) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(e)(i)

F11 Word in Sch. 14 para. 37(6) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(1)(e)(ii)

Partnership payment notices U.K.

[F12 37A (1) An officer of Revenue and Customs may issue a partnership payment notice if an amount of multinational top-up tax payable by a member of a multinational group that is a partnership (including any interest on that amount) is not paid by the end of the period of three months beginning with the relevant date (see paragraph 34(7) to (9)).

(2) A partnership payment notice may be issued to any person (wherever in the world they are located) who—

(a) is a partner, or

(b) was a partner at any time in the accounting period to which the amount payable relates.

(3) A partnership payment notice is a notice requiring the recipient to pay an outstanding amount of multinational top-up tax payable by a member of the group that is a partnership by a date specified in the notice.

(4) Sub-paragraphs (4) to (9) of paragraph 34 and paragraph 36 apply to a partnership payment notice as they apply to a group payment notice.

(5) In this paragraph and in paragraph 37B, reference to a partner, in the case of a limited partnership, is to a general partner.]

Textual Amendments

F12 Sch. 14 paras. 37A, 37B and cross-headings inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(b)

Recovery of partnership payment and effect for tax purposes etc U.K.

[F12 37B (1) This paragraph applies where a partner of a member of a multinational group that is a partnership (the “payer”) makes a payment in respect of the liability to pay multinational top-up tax of the partnership (whether or not in consequence of a partnership payment notice).

(2) The payer may recover the amount from the other partners.

(3) In calculating the payer's income, profits or losses for tax purposes—

(a) the payment is not allowed as a deduction, and

(b) the reimbursement of any such payment is not to be regarded as a receipt.

(4) The payment or its reimbursement—

(a) is not (otherwise) to be taken into account in calculating the profits or losses of for corporation tax or income tax purposes of either the payer or the other partners, and

(b) is not to be regarded as a distribution for income tax or corporation tax purposes.

(5) The amount paid by the payer is to be taken into account in calculating—

(a) the amount of multinational top-up tax unpaid by the partnership, and

(b) the amount due by virtue of a partnership payment notice relating to the amount unpaid.

(6) Similarly, any payment by the partnership or by any of the other partners of any of the amount unpaid is to be taken into account in calculating the amount due by virtue of a partnership payment notice (or by virtue of any other partnership payment notice relating to the amount unpaid).

(7) In this paragraph, “for tax purposes” means for the purposes of income tax, corporation tax, multinational top-up tax or domestic top-up tax.]

Textual Amendments

F12 Sch. 14 paras. 37A, 37B and cross-headings inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(b)

Recovery U.K.

38 (1) Any amount due by way of multinational top-up tax liability is recoverable as a debt due to the Crown.

(2) “Multinational top-up tax liability”, in relation to a multinational group for an accounting period, means—

(a) a liability of any person who was a member of the group in the period to multinational top-up tax in respect of the period;

(b) a liability of a person to a penalty referred to in paragraph 40 for anything done (or not done) in respect of the period.

Power to make regulations U.K.

39 (1) The Treasury may by regulations make further provision about the payment of multinational top-up tax in circumstances where—

(a) a member of a group makes a payment on behalf of another member of the group, F13 ...

[F14 (aa) a partner of a partnership makes a payment on behalf of the partnership or another partner, or]

(b) a member of a group is also liable to pay domestic top-up tax.

(2) The regulations may in particular make provision for—

(a) deeming a payment made by one member of a group to have been made by another;

[F15 (aa) deeming a payment made by a partner of a partnership to have been made by the partnership or another partner;]

(b) deeming a payment made in respect of multinational top-up tax to have been made in respect of domestic top-up tax.

Textual Amendments

F13 Word in Sch. 14 para. 39(1)(a) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(c)(i)

F14 Sch. 14 para. 39(1)(aa) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(c)(ii)

F15 Sch. 14 para. 39(2)(aa) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 2(6)(c)(iii)

Part 11 U.K. Penalties

Penalties payable in connection with this Schedule U.K.

40 This Part of this Schedule sets out penalties payable in connection with this Schedule, as follows—

(a) paragraph 41 amends Schedule 41 to FA 2008 to impose a penalty on a filing member of a multinational group that fails to register with or otherwise notify HMRC under Part 3 of this Schedule;

(b) paragraph 42 imposes a penalty on a filing member of a registered group that fails to submit an information return or overseas return notification under Part 4 of this Schedule;

(c) paragraph 43 imposes a penalty on a filing member of a registered group that fails to submit a self-assessment return or below-threshold notification under Part 5 of this Schedule;

(d) paragraph 45 amends Schedule 24 to FA 2007 to impose a penalty on a filing member of a multinational group that provides inaccurate information to HMRC;

(e) paragraph 46 imposes a penalty on a filing member of a multinational group that fails to keep or preserve records under Part 9 of this Schedule.

41 In paragraph 1 of Schedule 41 to FA 2008 (penalties for failure to notify etc), in the table after the entry relating to digital services tax insert—

“Multinational top-up tax

Obligation of a filing member of a multinational group under Part 3 of Schedule 14 to FA 2023.”.

42 (1) A penalty is payable if the filing member fails to submit an information return or overseas return notification by the submission date, unless paragraph 44 (reasonable excuse) applies.

(2) The penalty is—

(a) £100, if the return or notification is submitted within three months after the submission date;

(b) £200, if the return or notification is submitted within six months after the submission date;

(c) £200 plus the additional penalty amount, in any other case.

(3) For a third successive failure, the amount referred to in—

(a) sub-paragraph (2)(a) is increased to £500;

(b) sub-paragraph (2)(b) and (c) is increased to £1,000.

(4) For this purpose, a “third successive failure” occurs where—

(a) the duty to submit a return or notification applies in relation to a group for three successive accounting periods,

(b) the member was liable to a penalty under this paragraph in respect of each of the first two accounting periods, and

(c) the member is liable to a penalty under this paragraph in respect of the third accounting period.

(5) The additional penalty amount is £60 multiplied by the number of days, after the day six months after the submission date, on which the filing member fails to submit the return or notification.

(6) The submission date is the last date the filing member is permitted to submit the return or notification under Part 4 of this Schedule.

43 (1) A penalty is payable if the filing member fails to submit a self-assessment return or below-threshold notification by the submission date, unless paragraph 44 (reasonable excuse) applies.

(2) The penalty is—

(a) £100, if the return or notification is submitted within three months after the submission date;

(b) £200, if the return or notification is submitted within six months after the submission date;

(c) the higher of £200 and 10% of the unpaid tax, if the return or notification is submitted within twelve months after the submission date;

(d) the higher of £200 and 20% of the unpaid tax, in any other case.

(3) For a third successive failure, the amount referred to in—

(a) sub-paragraph (2)(a) is increased to £500;

(b) sub-paragraph (2)(b), (c) and (d) is increased to £1,000.

(4) For this purpose, a “third successive failure” occurs where—

(a) the duty to submit a return or notification applies in relation to a group for three successive accounting periods,

(b) the member was liable to a penalty under this paragraph in respect of each of the first two accounting periods, and

(c) the member is liable to penalty under this paragraph in respect of the third accounting period.

(5) The “unpaid tax” means the total amount of tax payable by members of the group for the accounting period which remains unpaid on the date when the liability to the penalty under this paragraph arises.

(6) The submission date is the last date the filing member is permitted to submit the return or notification under Part 5 of this Schedule.

44 (1) This paragraph applies if the filing member satisfies HMRC or (on appeal) the tribunal that there is a reasonable excuse for the failure to submit the return or notification (as the case may be).

(2) For that purpose—

(a) an insufficiency of funds is not a reasonable excuse,

(b) where the member relies on any other person to do anything, that is not a reasonable excuse unless the member took reasonable care to avoid the failure, and

(c) where the member had a reasonable excuse for the failure but the excuse has ceased, the member is to be treated as having continued to have the excuse only if the failure is remedied without unreasonable delay after the excuse ceased.

45 In paragraph 1 of Schedule 24 to FA 2007 (penalties for errors etc), in the table after the entry relating to digital services tax returns insert—

“Multinational top-up tax	Overseas return notification and information provided with it
Multinational top-up tax	Self-assessment return and information provided with it
Multinational top-up tax	Below-threshold notification and information provided with it”.

46 (1) A penalty is payable if—

(a) the member breaches their obligations under Part 9 of this Schedule in relation to an accounting period, and

(b) HMRC is not satisfied that any facts which HMRC reasonably requires to be proved, and which would have been proved by the records, are proved by other documentary evidence provided to HMRC.

(2) The penalty is £3,000.

Penalties under paragraphs 42, 43 and 46: administration and supplemental provision U.K.

47 Paragraphs 48 and 49 apply in relation to a penalty payable under paragraph 42, 43 or 46.

48 (1) HMRC must—

(a) assess the penalty, and

(b) notify the member of the assessment.

(2) The assessment of a penalty—

(a) is to be treated for procedural purposes in the same way as an assessment to tax (except in respect of a matter expressly provided for by this Schedule),

(b) may be enforced as if it were an assessment to tax (save that interest is not to accrue on a penalty under paragraph 33), and

(c) may be combined with an assessment to tax.

(3) A supplementary assessment may be made in respect of a penalty if an earlier assessment is based on an amount of tax due and payable that is found by HMRC to be an underestimate or insufficient.

(4) Sub-paragraph (5) applies if—

(a) an assessment in respect of a penalty is based on a liability to tax shown in a self-assessment return, and

(b) that liability is found by HMRC to be excessive.

(5) HMRC may by notice amend the assessment so it is based on the correct amount.

(6) An amendment under sub-paragraph (5)—

(a) does not affect when the penalty must be paid;

(b) may be made after the last day on which the assessment in question could have been made (under sub-paragraph (7)).

(7) An assessment of a penalty must be made before the end of the period of 12 months beginning with—

(a) the end of the appeal period for the assessment of the liability to tax shown in the self-assessment return, or

(b) if there is no such assessment, the date on which that liability is ascertained or it is ascertained that the liability is nil.

(8) In sub-paragraph (7) “appeal period” means the period during which—

(a) an appeal could be brought, or

(b) an appeal that has been brought has not been determined or withdrawn.

(9) A penalty must be paid before the end of the period of 30 days beginning with the day on which notification of the penalty is issued.

49 (1) If HMRC thinks it right because of special circumstances, HMRC may reduce the penalty.

(2) In sub-paragraph (1) “special circumstances” does not include—

(a) ability to pay, or

(b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another.

(3) In sub-paragraph (1) the reference to reducing a penalty includes a reference to—

(a) staying a penalty, and

(b) agreeing a compromise in relation to proceedings in respect of a penalty.

Multiple penalties in respect of same accounting period U.K.

50 (1) This paragraph applies where a person incurs more than one penalty in respect of multinational top-up tax in the same accounting period.

(2) The amount of each penalty after the first is to be reduced so that the total amount of all such penalties in the period does not exceed the greatest amount incurred for any such penalty.

Part 12 U.K. Appeals and claims

Claims in relation to overpaid tax U.K.

51 (1) A person (a “claimant”) who has paid an amount by way of multinational top-up tax may make a claim to the Commissioners for repayment of tax that was not due.

(2) The claim must—

(a) be made on or before the overpayment claim date,

(b) be in the form and contain information specified in a notice published by HMRC, and

(c) not be submitted at the same time as a self-assessment return.

(3) The overpayment claim date is the date four years after the end of the accounting period in respect of which the amount was paid.

(4) The Commissioners must give effect to a claim as made, unless—

(a) a condition in sub-paragraph (2) is not met in relation to the claim,

(b) paragraph 52 applies, or

(c) the claim is amended following an enquiry under paragraph 53.

(5) The Commissioners are not F16 ... liable to repay any amount paid by way of multinational top-up tax by reason of the fact it was not tax due [F17 otherwise than—

(a) pursuant to a claim under this paragraph, or

(b) in accordance with another provision of this Schedule.]

F18 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F19 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) Paragraph 54 makes further provision in relation to amounts repaid.

Textual Amendments

F16 Words in Sch. 14 para. 51(5) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 37(2)(a)(i)

F17 Words in Sch. 14 para. 51(5) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 37(2)(a)(ii)

F18 Sch. 14 para. 51(6) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 37(2)(b)

F19 Sch. 14 para. 51(7) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 37(2)(b)

52 (1) This paragraph applies where one or more of Cases A to D apply.

(2) Case A applies where a member of the claimant’s group has an unpaid liability to tax.

(3) Case B applies where the claimant is seeking or will be able to seek relief by taking other steps under this Part of this Act.

(4) Case C applies where the claimant—

(a) could have sought relief by taking such steps within a period that has now expired, and

(b) knew, or ought reasonably to have known, before the end of that period that such relief was available.

(5) Case D applies where—

(a) the amount paid is excessive by reason of a mistake in calculating the amount of tax payable by members of the claimant’s group for the accounting period, and

(b) the amount was calculated in accordance with the practice generally prevailing at the time.

(6) Where this paragraph applies, the Commissioners are not liable to repay any amount paid by way of multinational top-up tax by reason of the fact it was not tax due.

53 (1) An officer of Revenue and Customs may enquire into a claim if, within the time allowed, the officer gives notice to the claimant of the officer's intention to do so.

(2) The time allowed is the period ending with the quarter day next following the first anniversary of the day on which the claim was made.

(3) The quarter days are 31 January, 30 April, 31 July and 31 October.

(4) A claim enquired into under sub-paragraph (1) may not be the subject of a further notice under that sub-paragraph.

(5) An enquiry is completed when the officer by notice (a “closure notice”) informs the claimant that the enquiry is complete and states the conclusion reached in the enquiry.

(6) The conclusion must be one of the following—

(a) that no amendment of the claim is required, or

(b) that the amendments of the claim specified in the notice are to be made.

(7) A closure notice takes effect when it is issued.

(8) The officer must give effect to any amendments made by the closure notice by making such adjustments as may be necessary whether—

(a) by way of assessment, or

(b) by discharge or repayment of tax.

(9) The adjustments must be made within 30 days of the date of issue of the closure notice.

(10) Paragraph 23 (direction to complete enquiry) applies in relation to an enquiry under this paragraph as it applies in relation to an enquiry under paragraph 16.

54 (1) This paragraph applies where—

(a) an amount has been paid by way of a repayment of tax, and

(b) the amount paid exceeded the amount which the Commissioners were or could be liable at that time to repay.

(2) The Commissioners may—

(a) to the best of their judgment, assess the amount of the excess, and

(b) notify the amount to the person to whom the repayment was made.

(3) Sub-paragraph (4) applies where—

(a) an assessment has been notified under sub-paragraph (2), and

(b) it appears to the Commissioners that the amount which ought to have been assessed as due exceeds the amount that has already been assessed.

(4) The Commissioners may—

(a) on or before the last day on which the assessment could have been made, make a supplementary assessment of the amount of tax due, and

(b) notify the amount to the person to whom the repayment was made.

(5) An amount assessed and notified under sub-paragraph (2) or (4) counts as a liability to multinational top-up tax for the purposes of this Part of this Act.

(6) But sub-paragraph (5) does not have effect if, or to the extent that, the assessment has been withdrawn or reduced.

(7) An assessment under this paragraph may not be made more than 4 years after the end of the accounting period in which evidence of facts sufficient in the opinion of the Commissioners to justify making the assessment comes to their knowledge.

Appeals of decisions: general U.K.

55 (1) An appeal may be brought against—

(a) an amendment of a self-assessment return under paragraph 19 (amendment during enquiry to prevent loss of tax);

(b) an amendment made by a closure notice under paragraph 22;

(c) a discovery assessment;

(d) an assessment of a penalty under paragraph 42, 43 or 46;

(e) an amendment made by a closure notice under paragraph 53;

(f) an assessment made under paragraph 54.

(2) Any such appeal is to be brought by the filing member (“the appellant”).

(3) Notice of the appeal must be given to HMRC—

(a) in writing, and

(b) within 30 days after the specified date.

(4) “Specified date” means—

(a) in relation to an appeal under sub-paragraph (1)(a), the date on which the notice of amendment was issued;

(b) in relation to an appeal under sub-paragraph (1)(b) or (e), the date on which the closure notice was issued;

(c) in relation to an appeal under sub-paragraph (1)(c), (d) or (f), the date on which the notice of assessment was issued.

(5) The notice of appeal must specify the grounds of appeal.

(6) Notice may be given after the time limit in sub-paragraph (3)(b) if—

(a) HMRC agrees, or

(b) where HMRC does not agree, the tribunal gives permission.

(7) HMRC must agree to notice being given after the time limit if the appellant has requested in writing that HMRC do so and HMRC is satisfied—

(a) that there was a reasonable excuse for not giving the notice before the time limit, and

(b) that the request has been made without unreasonable delay.

(8) If a request of the kind mentioned in sub-paragraph (7) is made, HMRC must notify the appellant of whether or not HMRC agrees to the request.

56 (1) The effect of a notice of appeal being given is that—

(a) a review may be conducted by HMRC into the matter to which the appeal relates;

(b) HMRC and the appellant may settle the appeal by agreement;

(c) the appeal may be determined by the tribunal;

(d) a payment of multinational top-up tax may be postponed pending determination of the appeal.

(2) But if—

(a) the appeal is an appeal under paragraph 55(1)(a) against an amendment of a self-assessment, and

(b) the appeal is made while an enquiry into the return is in progress,

sub-paragraphs (1)(a) and (c) do not apply in relation to the appeal until the enquiry is completed.

(3) See also paragraph 67 for special provision relating to the appeal of a penalty under paragraph 42, 43 or 46.

Reviews by HMRC U.K.

57 (1) A review is to be conducted by HMRC if—

(a) the appellant notifies HMRC that it requires HMRC to review the matter, or

(b) HMRC offers to review the matter and the appellant accepts the offer within the period of 30 days beginning with the date of the offer (the “acceptance period”).

(2) The appellant may not notify HMRC that the appellant requires HMRC to review the matter if—

(a) the appellant has already done so in relation to the same matter,

(b) HMRC has offered to review the matter, or

(c) the appellant has notified the appeal to the tribunal.

(3) HMRC may not offer to review the matter if—

(a) HMRC has already done so in relation to the same matter,

(b) the appellant has notified HMRC that the appellant requires HMRC to review the matter, or

(c) the appellant has notified the appeal to the tribunal.

(4) An offer by HMRC to review the matter must—

(a) be made in writing, and

(b) contain a statement of HMRC’s view of the matter.

(5) If the appellant does not accept the offer within the acceptance period—

(a) HMRC's view of the matter is to be treated as if it were contained in a settlement agreement under paragraph 61, but

(b) the right to withdraw from such an agreement does not apply in relation to that notional agreement.

(6) Sub-paragraph (5) does not apply to the matter if, or to the extent that, the appellant notifies the appeal to the tribunal.

(7) The appellant may notify the appeal to the tribunal—

(a) within the acceptance period;

(b) after the end of that period only if the tribunal gives permission.

58 (1) The review is to be conducted as follows.

(2) If the appellant required the review, HMRC must notify the appellant of HMRC’s view of the matter within—

(a) the period of 30 days beginning with the day on which HMRC received notification of the requirement to review from the appellant, or

(b) such longer period as is reasonable.

(3) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.

(4) For the purpose of sub-paragraph (3), HMRC must, in particular, have regard to steps taken before the beginning of the review—

(a) by HMRC in deciding the matter, and

(b) by any person in seeking to resolve disagreement about the matter.

(5) The review must take account of any representations made by the appellant at a stage which gives HMRC a reasonable opportunity to consider them.

59 (1) The review may conclude that HMRC's view of the matter (as notified to the appellant under paragraph 57(4) or 58(2)) is to be—

(a) upheld,

(b) varied, or

(c) cancelled.

(2) HMRC must notify the appellant of the conclusions of the review and the reasoning for those conclusions within—

(a) the period of 45 days beginning with the relevant day, or

(b) such other period as may be agreed.

(3) In sub-paragraph (2) “relevant day” means—

(a) in a case where the appellant required the review, the day when HMRC notified the appellant of HMRC's view of the matter;

(b) in a case where HMRC offered the review, the day when HMRC received notification of the appellant's acceptance of the offer.

(4) If HMRC do not give notice of the conclusions of the review within the period specified in sub-paragraph (3), the review is treated as having concluded that HMRC's view of the matter in question is upheld.

(5) If sub-paragraph (4) applies, HMRC must notify the appellant of the conclusions which the review is treated as having reached.

(6) The conclusions of a review are to be treated as if they were contained in a settlement agreement under paragraph 61, but the right to withdraw from such an agreement does not apply in relation to that notional agreement.

(7) Sub-paragraph (6) does not apply to the matter if, or to the extent that, the appellant notifies the appeal to the tribunal.

(8) The appellant may notify the appeal to the tribunal—

(a) within the post-review period;

(b) after the end of that period only if the tribunal gives permission.

(9) The post-review period is—

(a) if HMRC has notified the appellant of the conclusions of the review in accordance with sub-paragraph (2), the period of 30 days beginning with that notice;

(b) if HMRC has not so notified the appellant, the period beginning with the day following the last day of the period specified in sub-paragraph (2) and ending 30 days after the date on which HMRC gives notice in accordance with sub-paragraph (5).

60 (1) In paragraphs 57 to 59, a reference to the appellant includes a person acting on behalf of the appellant except in relation to—

(a) notification by HMRC of an offer of review (and of their view of the matter) under paragraph 57;

(b) notification of HMRC's view under paragraph 58(2)(a);

(c) notification of the conclusions of a review under paragraph 59(2) or (5).

(2) But if any such notification is given to the appellant, a copy of the notification may also be given to a person acting on behalf of the appellant.

(3) A notification in connection with a review must be given in writing.

Settlement agreements U.K.

61 (1) “Settlement agreement” means an agreement in writing between the appellant and an officer of Revenue and Customs that is—

(a) entered into before the appeal is determined, and

(b) to the effect that the decision appealed against should be upheld without variation, varied in a particular manner or discharged or cancelled.

(2) Where a settlement agreement is entered into in relation to an appeal, the consequences are to be the same (for all purposes) as if, at the time the agreement was entered into, the tribunal had decided the appeal and had upheld the decision without variation, varied it in that manner or discharged or cancelled it, as the case may be.

(3) Sub-paragraph (2) does not apply if, within 30 days beginning with the date on which the settlement agreement was entered into, the appellant gives notice in writing to HMRC that it wishes to withdraw from the agreement.

(4) Sub-paragraph (5) applies where notice of an appeal has been given and—

(a) the appellant notifies HMRC, orally or in writing, that the appellant does not wish to proceed with the appeal, and

(b) HMRC does not, within 30 days after that notification, give the appellant notice in writing indicating that HMRC is unwilling that the appeal should be withdrawn.

(5) Sub-paragraphs (1) to (3) have effect as if, at the date of the appellant's notification, the appellant and an officer of Revenue and Customs had agreed that the decision under appeal should be upheld without variation.

Determination by tribunal U.K.

62 (1) The appellant may notify the appeal to the tribunal.

(2) If the tribunal decides that a person is overcharged to multinational top-up tax, the assessment must be reduced accordingly.

(3) If the tribunal decides that a person is undercharged to multinational top-up tax, the assessment must be increased accordingly.

(4) In a case where neither sub-paragraph (2) or (3) apply, the assessment is to stand good.

(5) On the determination of the appeal—

(a) any tax overpaid must be repaid as if a claim had been made under paragraph 51 on the day notice of the appeal was given to HMRC;

(b) any tax payable in accordance with the determination is payable in accordance with paragraph 32.

(6) Interest is to be incurred on amounts payable in accordance with those paragraphs.

(7) Where a party to an appeal to the tribunal makes a further appeal, tax is to be payable or repayable in accordance with the determination of the tribunal or court (as the case may be), even though the further appeal is pending.

(8) But if the amount charged by the assessment is altered by the order or judgment of the Upper Tribunal or court, then—

(a) if too much tax has been paid, the amount overpaid must be refunded, with any interest allowed by the order or judgment, and

(b) if too little tax has been charged, the tax is payable in accordance with paragraph 32.

(9) The determination of the tribunal is final and conclusive except as otherwise provided in sections 10 to 16 of the Tribunals, Courts and Enforcement Act 2007.

Postponement of payment pending appeal U.K.

63 (1) The general rule is that an appeal under this Part of this Schedule does not postpone any liability to pay multinational top-up tax.

(2) Accordingly, the periods within which tax is payable under paragraph 32 continue to apply notwithstanding an appeal.

(3) But a liability may be postponed if—

(a) a determination is made by HMRC to that effect;

(b) a direction is made by a tribunal to that effect;

(c) HMRC and the appellant agree to a postponement.

(4) The effect of a liability being postponed is that the period within which the tax is payable is extended by the period of the postponement.

(5) The period of the postponement—

(a) may not begin after the date the appeal is determined;

(b) is to end on the date the appeal is determined.

64 (1) The appellant may apply to HMRC for a determination if the appellant has grounds to believe that—

(a) a person has been overcharged to multinational top-up tax;

(b) an amount of tax postponed under a previous determination is excessive or insufficient.

(2) An application must be made within 30 days after the specified date (see paragraph 55(4)), unless sub-paragraph (3) applies.

(3) This sub-paragraph applies if—

(a) there is a change in the circumstances of the case as a result of which the appellant has grounds to believe the matter in sub-paragraph (1), or

(b) the application could, if it were a notice of appeal, be given at a later date under paragraph 55(6).

(4) The application must state the amount believed to be overcharged and the grounds for that belief.

(5) HMRC may determine—

(a) whether any amount of tax is to be postponed, and

(b) the amount of any tax postponed.

(6) The amount of any tax postponed is to be determined as the amount (if any) by which it appears that there are reasonable grounds for believing that the person is overcharged.

65 (1) The appellant may apply to the tribunal for a direction if—

(a) the appellant has applied to HMRC for a determination,

(b) HMRC has made a determination, and

(c) the appellant does not agree with the determination.

(2) The tribunal may direct whether the determination of HMRC was correct.

(3) A decision of the tribunal under this paragraph is final and conclusive (despite the provisions of sections 12 and 15 of the Tribunals, Courts and Enforcement Act 2007).

66 (1) HMRC and the appellant may agree that payment of an amount of tax should be postponed pending the determination of the appeal.

(2) The agreement may modify a determination by HMRC under paragraph 64.

(3) Where the agreement does so, it is to be treated in the same way as a settlement agreement under paragraph 61.

(4) The consequences of an agreement are to be the same as if the tribunal had, at the time when the agreement was entered into, made a direction to the same effect as the agreement.

(5) The existence of an agreement does not preclude a further determination by HMRC or direction by the tribunal modifying the agreement.

(6) An agreement—

(a) must be made in writing;

(b) may be made with a person acting on behalf of the appellant in relation to the appeal.

Special provisions as to penalties U.K.

67 (1) This paragraph applies to an appeal as to—

(a) whether a penalty under paragraph 42, 43 or 46 is payable;

(b) the amount of such a penalty.

(2) Payment of the penalty is always postponed pending determination of the appeal.

(3) Accordingly—

(a) paragraphs 63(1) to (3) and 64 to 66 do not apply to such an appeal;

(b) paragraphs 63(4) and (5) always apply to such an appeal.

(4) If the appeal is notified to the tribunal, the tribunal may—

(a) confirm a decision of HMRC;

(b) substitute for the decision another decision that HMRC had power to make.

(5) The tribunal may only make a decision that HMRC had power to make under paragraph 49 (reduction of penalties) if the tribunal considers HMRC’s decision to have been flawed when considered in light of the principles applicable in proceedings for judicial review.

(6) On determination of the appeal, where a penalty is payable it is to be paid before the end of 30 days beginning with the day on which the determination was issued.

Part 13 U.K. Other amendments

68 (1) In section 1(1) of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax etc) after “digital services tax,” insert “multinational top-up tax,”. U.K.

(2) In section 178(2) of FA 1989 (setting of interest rates), at the end insert—

“(x) paragraphs 33 and 51 of Schedule 14 to the Finance Act 2023.”.

(3) In paragraph 63(1) of Schedule 36 to FA 2008 (information and inspection powers), after paragraph (cc) insert—

“(cd) multinational top-up tax;”.

(4) In section 206(3) of FA 2013, at the end insert—

“(h) multinational top-up tax.”.

Section 127(9)

Schedule 15 U.K. Multinational top-up tax: elections

Long term elections U.K.

1 (1) This paragraph applies to an election under the following provisions of Part 3—

(a) section 127(8);

[F20 (aa) section 141(7);]

(b) section 161;

(c) section 162;

(d) section 164;

(e) section 165;

(f) section 166;

(g) section 187;

(h) section 213;

(i) section 214.

(2) An election to which this paragraph applies—

(a) must specify the first accounting period for which it is to have effect (“the first election period”),

(b) must be made no later than the date by which the information return or overseas return notification in respect of that period is due,

(c) must be included in an information return submitted to HMRC or a qualifying authority in respect of that period, and

(d) has effect for the first election period and each subsequent accounting period until the commencement of the first accounting period for which a revocation of the election has effect.

(3) A revocation of an election to which this paragraph applies is to be made by the filing member of a multinational group and—

(a) must specify the first accounting period for which it is to have effect,

(b) must be made no later than the date by which the information return or overseas return notification in respect of that period is due, and

(c) must be included in an information return submitted to HMRC or a qualifying authority in respect of that period.

(4) But a revocation of an election to which this paragraph applies may not be made that has effect for the first election period or any of the next 4 accounting periods.

(5) Where an election to which this paragraph applies has been revoked, no further election of the same type may be made that has effect for the first accounting period for which the revocation has effect or any of the next 4 accounting periods.

Textual Amendments

F20 Sch. 15 para. 1(1)(aa) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(2)(a)

Annual elections U.K.

2 (1) This paragraph applies to an election under the following provisions of Part 3—

[F21 (za) section 176D(3)(b);]

(a) section 186;

(b) section 163;

(c) section 182(8);

(d) section 189;

(e) section 195(2);

[F22 (ea) section 199;]

(f) section 205;

[F23 (fa) section 216;]

(g) section 217(8);

(h) section 221(4);

(i) paragraph 2(9) of Schedule 16;

(j) paragraph 3 of Schedule 16;

[F24 (k) paragraph 14 of Schedule 16;]

[F25 (l) paragraph 1 of Schedule 16A.]

(2) An election to which this paragraph applies—

(a) must specify the accounting period for which it is to have effect,

(b) must be made no later than the date by which the information return or overseas return notification in respect of that period is due, and

(c) must be included in an information return submitted to HMRC or a qualifying authority in respect of that period.

Textual Amendments

F21 Sch. 15 para. 2(1)(za) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 16(2)

F22 Sch. 15 para. 2(1)(ea) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(2)(b)(i)

F23 Sch. 15 para. 2(1)(fa) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(2)(b)(ii)

F24 Sch. 15 para. 2(1)(k) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 40(2)

F25 Sch. 15 para. 2(1)(l) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 41(4)

Section 260

Schedule 16 U.K. Multinational top-up tax: transitional provision

Part 1 U.K. General transitional measures

Transitional relief for substance-based income exclusion U.K.

1 (1) Section 195(4) (payroll carve-out amount) has effect for an accounting period that commences in a year listed in following table as if for “5%” there were substituted the specified percentage for that year—

Year	Specified percentage
2023	10%
2024	9.8%
2025	9.6%
2026	9.4%
2027	9.2%
2028	9.0%
2029	8.2%
2030	7.4%
2031	6.6%
2032	5.8%

(2) Section 195(5) (tangible asset carve-out amount) has effect for an accounting period that commences in a year listed in following table as if for “5%” there were substituted the specified percentage for that year—

Year	Specified percentage
2023	8%
2024	7.8%
2025	7.6%
2026	7.4%
2027	7.2%
2028	7.0%
2029	6.6%
2030	6.2%
2031	5.8%
2032	5.4%

Intra-group transfers before entry into regime U.K.

2 (1) Sub-paragraph (3) applies where—

(a) assets are transferred from one member of a multinational group to another member of that group,

[F26 (b) the Pillar Two rules do not apply to the transferor for the accounting period in which the transfer takes place (but in determining this, section 255(4) has effect as if sub-paragraph (ii) of paragraph (b) were omitted),

(ba) a qualifying domestic top-up tax does not apply in relation to the transferor for that period, and]

(c) the transfer took place on or after 1 December 2021.

(2) But sub-paragraph (3) does not apply in relation to a transfer of assets manufactured, or of a class or description sold, in the course of carrying on a trade by the transferor or the transferee.

(3) Where this sub-paragraph applies, for the purposes of Part 3 of this Act—

(a) the value of the assets at the relevant time is the carrying value of the assets in the hands of the transferor immediately before the transfer, and

(b) any deferred tax asset that would arise in relation to the assets in the underlying profits of the transferee is limited to [F27 the lesser of the cap amount and the sum of—

(i) the value of deferred tax assets that arose in relation to the assets before their transfer, and

(ii)] the tax paid amount in relation to the transfer of assets.

[F28 (3A) For the purposes of determining the value of a deferred tax asset under sub-paragraph (3)(b)(i)—

(a) if the rate of tax in relation to that asset is greater than 15%, the value is to be adjusted so that it reflects the value it would be if the rate had been 15%, and

(b) exclude the impact of any valuation adjustments or accounting recognition adjustments.]

(4) For the purposes of this paragraph “the relevant time” means the later of—

(a) the date of the transfer, and

(b) the commencement of the first accounting period in which [F29 the Pillar Two rules apply to the transferee.]

F30 (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F30 (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Where the relevant time is after the date of the transfer—

(a) the value of the assets at the relevant time is to be adjusted to reflect—

(i) capitalised expenditure incurred in respect of the assets in the period between the date of the transfer and the relevant time, and

(ii) amortisation and depreciation of the assets that, had the transfer not occurred, would have been recognised by the transferor if the transferor had continued to use the accounting policies and rates for amortisation and depreciation of the assets previously used, and

(b) the tax paid amount in relation to the transfer of the assets [F31 , and the value of deferred tax assets that arose in relation to the assets before their transfer, are] to be adjusted to reflect the matters referred to in paragraph (a)(i) and (ii).

(6) To determine the “tax paid amount” in relation to a transfer of assets take the following steps—

• Step 1

  Determine the amount of the tax expense of the transferor in relation to the transfer of the assets that relates to covered taxes.

• Step 2

  Determine the amount, if any, of qualifying current tax expense relating to the transfer of the assets that would have been allocated to the transferor as a result of section 177 or 179 (permanent establishments and controlled foreign company regimes) if—

  (a)

  [F32 the ultimate parent had been located in the United Kingdom and the accounting period commenced on or after 31 December 2023, and]

  (b)

  section 179(2) (restriction of allocation of mobile income) were ignored.

• Step 3

  Add together the amounts determined under Steps 1 and 2.

[F33 (7) In determining the tax expense of the transferor in relation to the transfer of the assets—

(a) where any loss arising in the accounting period in which the transfer took place is offset against any taxable gain arising on the transfer, ignore that offsetting, and

(b) exclude the impact of any valuation adjustments or accounting recognition adjustments.]

(8) The “cap amount” in relation to a transfer of assets is the amount given by—

(a) dividing—

(i) the amount of tax expense determined under Step 1 in sub-paragraph (6), by

(ii) the nominal rate of tax to which that expense relates, and

(b) multiplying the result of paragraph (a) by 15%.

(9) Where [F34 the sum of] the tax paid amount [F35 and the value of deferred tax assets that arose in relation to the assets before their transfer is greater than] the cap amount F36 ..., the filing member may elect that sub-paragraph (3) does not apply in relation to the transfer of assets.

(10) Paragraph 2 of Schedule 15 (annual elections) applies to an election under sub-paragraph (9).

(11) For the purposes of this paragraph,

[F37 (a)] “a transfer of assets” includes a transaction that relates to assets that does not result in a change in their ownership if the transaction has [F38 a similar effect for accounting purposes to] a change in ownership of those assets;

[F39 (b) a qualifying domestic top-up tax is not to be taken as applying to a member of a multinational group if provision for a QDMTT Safe Harbour (within the meaning of the Pillar Two rules) applies to it.]

[F40 (12) Where assets are transferred from one member of a multinational group to another member of that group as a result of a series of transfers that—

(a) fall within sub-paragraph (1), but

(b) do not fall within sub-paragraph (2),

that series is to be treated as a single transfer of assets that falls within sub-paragraph (1).

(13) This paragraph applies to that single transfer as if—

(a) the reference to the transferor in sub-paragraph (3)(a) were to the transferor in relation to the first transfer in the series,

(b) the references in sub-paragraph (3)(b) to the cap amount, the value of deferred tax assets that arose in relation to the assets before their transfer and the tax paid amount were to the aggregate of each such amount or value as determined for the purpose of each transfer that makes up the series,

(c) the reference to the date of the transfer in sub-paragraph (4)(a) were to the date of the last transfer in the series, and

(d) the references to the transferee in sub-paragraph (4)(b) were to the transferee in relation to the last transfer in the series.]

Textual Amendments

F26 Sch. 16 para. 2(1)(b)(ba) substituted for Sch. 16 para. 2(1)(b) (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(a)

F27 Words in Sch. 16 para. 2(3)(b) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(2)

F28 Sch. 16 para. 2(3A) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(3)

F29 Words in Sch. 16 para. 2(4)(b) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(b)(i)

F30 Sch. 16 para. 2(4)(b)(i)(ii) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(b)(ii)

F31 Words in Sch. 16 para. 2(5)(b) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(4)

F32 Words in Sch. 16 para. 2(6) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(c)

F33 Sch. 16 para. 2(7) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(5)

F34 Words in Sch. 16 para. 2(9) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(6)(a)

F35 Words in Sch. 16 para. 2(9) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(6)(b)

F36 Words in Sch. 16 para. 2(9) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 38(6)(c)

F37 Words in Sch. 16 para. 2(11) renumbered as Sch. 16 para. 2(11)(a) (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(d)(i)

F38 Words in Sch. 16 para. 2(11) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(7)

F39 Sch. 16 para. 2(11)(b) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 34(2)(d)(ii)

F40 Sch. 16 para. 2(12)(13) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 38(8)

Part 2 U.K. Transitional safe harbour

Chapter 1 U.K. Transitional safe harbour election

Election U.K.

3 [F41 (1) The filing member of a multinational group may make a transitional safe harbour election for an accounting period in respect of a territory.

(1A) The effect of the election is that all of the standard members of the group located in the territory are to be treated as not having top-up amounts or additional top-up amounts for the purpose of determining the liability of any member of the group to multinational top-up tax.]

(2) An election may only be made for an accounting period if—

(a) the period commences on or before 31 December 2026 and ends on or before 30 June 2028,

(b) a qualifying country-by-country report has been prepared in relation to the territory for the period,

(c) the election has been made in respect of the territory for each preceding accounting period—

(i) that commenced on or after 31 December 2023, and

(ii) in which the Pillar Two rules [F42 would, ignoring any transitional safe harbour election, have applied to any member] of the group in the territory,

(d) an election under section 189 (deemed distribution tax election) has not been made in respect of the territory for the accounting period, and

(e) at least one of the following tests are met for the territory in accounting period—

(i) the threshold test (see paragraph 7),

(ii) the simplified effective tax rate test (see paragraph 8), or

(iii) the routine profits test (see paragraph 9).

(3) An election may not be made in respect of the territory of the ultimate parent of a multinational group for an accounting period if the ultimate parent is a flow-through entity unless, were the adjusted profits of the ultimate parent determined for that period in accordance with Part 3—

(a) its adjusted profits would be nil as a result of the application of section 170 (adjustments for ultimate parent that is a flow-through entity), or

(b) all of the ultimate parent’s adjusted profits would be attributable to one or more permanent establishments (see section 159) and no amount of income or expense of any permanent establishment would be treated, as a result of section 160 (attribution of losses between permanent establishment and main entity), as income or expense of the ultimate parent.

F43 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.

(6) The information return in which the election is made must set out which of the tests referred to in sub-paragraph (2)(e) are being relied on and include evidence of how any that is relied on is met.

[F44 (7) For the purposes of this Part of this Schedule, a country-by-country report in relation to a territory is “qualifying” if the information relating to the territory is prepared on the basis of qualified financial statements of the multinational group (see paragraph 4).

(8) Where there is no requirement under the law of any territory for a country-by-country report to be prepared and filed in respect of a multinational group, the filling member may include, in the information return in which the election is made, the information that would have been in such a report—

(a) prepared in accordance with legislation implementing the OECD’s guidance on country-by-country reporting under the law of the territory of the ultimate parent, or

(b) where there is no such legislation, prepared in accordance with that guidance.

(9) Where such information has been included in that information return, that information is to be treated as if it were a country-by-country report in relation to the territory for the purposes of this Chapter (and where that information complies with sub-paragraph (7), the condition in sub-paragraph (2)(b) is to be treated as met).]

Textual Amendments

F41 Sch. 16 para. 3(1)(1A) substituted for Sch. 16 para. 3(1) (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 39(2)

F42 Words in Sch. 16 para. 3(2)(c)(ii) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 34(3)(a)

F43 Sch. 16 para. 3(4) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 34(3)(b)

F44 Sch. 16 para. 3(7)-(9) substituted for Sch. 16 para. 3(7)(8) (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 29(2)

Qualified financial statements and basis of calculations U.K.

4 (1) For the purposes of this Part of this Schedule “qualified financial statements” of a multinational group means—

(a) the accounts used to prepare the consolidated financial statement of the ultimate parent, or

(b) financial statements of members of the group prepared in accordance with acceptable accounting standards or an authorised accounting standard.

(2) Where a member of a multinational group is not included in consolidated financial statements of any member of the group on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that member that are used for preparation of the group’s country-by-country report are to be regarded as forming part of the qualified financial statements of the group.

(3) For the purposes of establishing whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory, the basis for that determination is to be the information derived from qualified financial statements as to—

(a) revenue,

(b) profit (loss) before income tax, F45 ...

(c) qualifying income tax expense (see paragraph 5) [F46 , and

(d) qualified substance based income amount (see paragraph 9(2)).]

(4) Information derived from qualified financial statements as to revenue or profit (loss) before income tax must be adjusted—

(a) as the information was adjusted for the purposes of its inclusion in a qualifying country-by-country report in relation to the territory, or

(b) if the information was not included in such a report, as it would have been adjusted had it been included in such a report.

See also paragraph 6 which provides for circumstances in which further adjustments are required to profit (loss) before income tax and circumstances in which adjustments are required to qualifying income tax expense.

(5) The information described in sub-paragraph (3)(a) to [F47 (d)] that must be used to determine whether the tests in paragraphs 7 to 9 are met in relation to members of a multinational group in a territory must be derived from whichever of the following was used to prepare the qualifying country-by-country report in relation to the territory—

(a) qualified financial statements falling within sub-paragraph (1)(a), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2), or

(b) qualified financial statements falling within sub-paragraph (1)(b), along with any financial accounts treated as qualified financial statements as a result of sub-paragraph (2).

(6) Where that information in respect of a territory is not available in qualified financial statements of a multinational group, no election may be made in respect of that territory.

Textual Amendments

F45 Word in Sch. 16 para. 4(3) omitted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 12 para. 39(3)(a)(i)

F46 Sch. 16 para. 4(3)(d) and word inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 39(3)(a)(ii)

F47 Word in Sch. 16 para. 4(5) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 39(3)(b)

Qualifying income tax expense U.K.

5 In this Part of this Schedule, “qualifying income tax expense” means income tax expense adjusted to exclude—

(a) any amount that does not relate to covered taxes, and

(b) any amount that relates to an uncertain tax position.

Adjustments U.K.

6 (1) Sub-paragraph (2) applies where the adjusted profits of the ultimate parent of a multinational group for an accounting period would be reduced as a result of section 171(1) (ultimate parent subject to deductible dividend regime).

(2) Where this sub-paragraph applies the profit (loss) before income tax of the ultimate parent for that period is to be reduced (but not below nil) by the amount referred to in section 171(1).

(3) Sub-paragraph (4) applies where—

(a) the standard members of a multinational group in a territory have a net unrealised fair value loss for an accounting period, and

(b) that loss exceeds 50 million euros.

(4) Where this sub-paragraph applies, those losses are to be excluded from the aggregate profit (loss) before income tax of those members.

(5) For the purposes of sub-paragraph (3), the standard members of a multinational group in a territory have a net unrealised fair value loss for an accounting period to the extent their losses that arise from changes in fair value of relevant ownership interests exceed gains arising from changes in fair value of relevant ownership interests.

(6) An ownership interest in an entity is relevant [F48 unless], at the end of the accounting period, the members of the multinational group do not between them have ownership interests that entitle them to 10% or more of the entity’s —

(a) profits,

(b) capital,

(c) reserves, and

(d) voting rights.

(7) Amounts of profits and qualifying tax expense allocated, for the purposes of Part 3, to a member of a multinational group from an investment entity as a result of an election under section 213 (investment entity tax transparency election) are to be reflected (to the extent they are not already) in the member’s profit (loss) before income tax and qualifying tax expense used for the purposes of applying the tests in paragraphs 7 to 9.

(8) Amounts that are to be included or otherwise taken account of, for the purposes of Part 3, in the adjusted profits and covered tax balance of a member of a multinational group as a result of an election under section 214 (taxable distribution method election) are to be reflected (to the extent they are not already) in the member’s profit (loss) before income tax and qualifying tax expense used for the purposes of applying the tests in paragraphs 7 to 9.

Textual Amendments

F48 Word in Sch. 16 para. 6(6) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 39(4)

Threshold test U.K.

7 (1) The threshold test is met for a territory in an accounting period if—

(a) the revenue of the standard members in that territory for the period is less than 10 million euros, and

(b) the aggregate profit (loss) before income tax of those members for that period is less than 1 million euros.

(2) Where those members include members that are held for sale and the revenue of those members is not otherwise included in the amount determined for the purposes of sub-paragraph (1)(a), that revenue is to be so included.

Simplified effective tax rate test U.K.

8 (1) The simplified effective tax rate test is met for a territory in an accounting period if the simplified effective tax rate of the standard members of the group in that territory is—

(a) in the case of an accounting period beginning before 1 January 2025, at least 15%,

(b) in the case of an accounting period beginning in 2025, at least 16%, or

(c) in the case of an accounting period beginning on or after 1 January 2026, at least 17%.

(2) The simplified effective tax rate of the standard members of a multinational group in a territory in an accounting period is the amount (expressed as a percentage) given by dividing—

(a) the aggregate qualifying income tax expense of those members for that period, by

(b) the aggregate profit (loss) before income tax of those members for that period.

Routine profits test U.K.

9 (1) The routine profits test is met for a territory in an accounting period if—

(a) the qualified substance based income exclusion amount for that territory for that period is equal to or greater than the aggregate profit (loss) before income tax for that period of the standard members of the group located in that territory, or

(b) the aggregate profit (loss) before income tax of those members for that period is nil or reflects an overall loss.

(2) The “qualified substance based income exclusion amount” for a territory for an accounting period is the substance based exclusion determined for the territory for the period in accordance with section 195 (and see also paragraph 1 of this Schedule) ignoring any payroll carve-out amount or tangible asset carve-out amount of any standard member of the group in that territory—

(a) that is not regarded as a constituent entity of the multinational group for the purposes of the group’s country-by-country report, or

(b) that is not regarded as located in the territory for the purposes of that report.

Chapter 2 U.K. Application to joint ventures etc

Application in the case of joint venture group U.K.

10 [F49 (1)] For the purpose of applying Chapter 1 of this Part of this Schedule to a joint venture group (see [F50 section 227] which applies this Schedule generally, with modifications, to joint venture groups) [F51 , that Chapter has effect as if]—

(a) paragraph [F52 3(2)(b)] were omitted (requirement for qualifying country-by-country report),

(b) the reference in paragraph 4(2) to “the financial accounts of that member that are used for preparation of the group’s country-by-country report” were to the financial accounts that would be used if a qualifying country-by-country report had been prepared in respect of the joint venture group, and

(c) in paragraph 9(2), the words from “ignoring” to the end were omitted.

[F53 (2) For that purpose ignore section 227(1)(a) (reference to ultimate parent treated as reference to joint venture parent).

(3) Accordingly, the filing member of a multinational group may make a separate transitional safe harbour election in respect of joint venture members of a joint venture group in a territory.]

Textual Amendments

F49 Sch. 16 para. 10 renumbered as Sch. 16 para. 10(1) (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(3)(a)

F50 Words in Sch. 16 para. 10(1) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(3)(b)(i)

F51 Words in Sch. 16 para. 10(1) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(3)(b)(ii)

F52 Word in Sch. 16 para. 10(1)(a) substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(3)(c)

F53 Sch. 16 para. 10(2)(3) inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(3)(d)

Application to investment entities in same territory as owners U.K.

11 (1) Subsection (2) applies where—

(a) an investment entity that is a member of a multinational group, and

(b) all of the members of a multinational group with direct ownership interests in it,

are located in the same territory.

(2) The investment entity is to be treated as a standard member of that group for the purposes of this Part of this Schedule.

Minority owned members U.K.

12 For the purposes of this Part of this Schedule, references to the standard members of a multinational group include minority owned members.

[F54 Part 3 U.K. Transitional reporting election

Textual Amendments

F54 Sch. 16 Pt. 3 inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 40(1)

Transitional reporting election U.K.

13 (1) HMRC may publish a notice that provides for alternative requirements for the information that must be contained in an information return in respect of members of a multinational group to which an election under sub-paragraph (3) applies.

(2) Where—

(a) HMRC have published a notice under paragraph (1) containing alternative requirements, and

(b) an election under sub-paragraph (3) applies to members of a multinational group for an accounting period,

paragraph 10 of Schedule 14 applies to the filing member of the group for that period subject to the notice.

(3) An election under this sub-paragraph—

(a) is to be made in respect of all of the members of a multinational group in a territory,

(b) is to be made by the filing member of the group,

(c) may only have effect in relation to an accounting period that begins on or before 31 December 2028 and ends before 1 July 2030, and

(d) may only be made if condition A, B or C is met.

(4) Condition A is that none of the members in the territory have top-up amounts or additional top-up amounts for the accounting period to which the election is to apply.

(5) Condition B is that—

(a) there is only one responsible member responsible for all of the members in the territory for the accounting period to which the election is to apply, and

(b) the sum of amounts attributed under Chapter 7 of Part 3 to that responsible member for that period in respect of those members’ top-up amounts and additional top-up amounts is equal to the sum of the members’ top-up amount and additional top-up amounts.

(6) Condition C is that—

(a) there is more than one responsible member responsible for the members of the group in the territory for the accounting period to which the election is to apply, and

(b) each responsible member is responsible for every member of the group in the territory and has the same inclusion ratio for each member it is responsible for.

(7) Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.]

Section 260

[F55 Schedule 16A U.K. Multinational top-up tax: safe harbours

Textual Amendments

F55 Sch. 16A inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 41(1)

Part 1 U.K. Qualifying domestic top-up tax safe harbour

Chapter 1 U.K. Qualifying domestic top-up tax safe harbour election

Election for qualifying domestic top-up tax safe harbour U.K.

1 (1) The filing member of a multinational group may make a qualifying domestic top-up tax safe harbour election for an accounting period in respect of a territory.

(2) The effect of the election is that all of the standard members of the group located in the territory are to be treated as not having top-up amounts or additional top-up amounts for the purpose of determining the liability of any member of the group to multinational top-up tax.

(3) An election may only be made for an accounting period if—

(a) a qualifying domestic top-up tax applies in that territory for that period,

(b) that tax is accredited for the purposes of the election (see paragraph 2), and

(c) none of the disqualifying conditions in paragraph 3 apply for that period.

(4) Paragraph 2 of Schedule 15 (annual elections) applies to an election under this paragraph.

Accredited qualifying domestic top-up tax U.K.

2 A qualifying domestic top-up tax is accredited for the purposes of an election under paragraph 1 if that tax is specified as such in regulations made by the Treasury.

Disqualifying conditions U.K.

3 (1) Conditions A to D are disqualifying conditions for the purposes of paragraph 1(3)(c) in relation to a multinational group and a territory.

(2) Condition A is that—

(a) the ultimate parent is located in the territory,

(b) the ultimate parent is a flow-through entity, and

(c) the qualifying domestic top-up tax applying in the territory—

(i) does not generally impose a charge on the ultimate parent as a result of it being a flow-through entity, and

(ii) does not include provision for a charge to be imposed on the ultimate parent in circumstances where there would otherwise be an amount of tax that was not charged to any member of the group in that territory.

(3) Condition B is that—

(a) a responsible member of the group is located in the territory,

(b) the member is not the ultimate parent of the group,

(c) the member is a flow-through entity, and

(d) the qualifying domestic top-up tax applying in the territory—

(i) does not generally impose a charge on the member as a result of it being a flow-through entity, and

(ii) does not include provision for a charge to be imposed on the member in circumstances where there would otherwise be an amount of tax that was not charged to any member of the group in that territory.

(4) Condition C is that—

(a) the qualifying domestic top-up tax applying in the territory provides that it does not apply to a multinational group in the initial phase of the group’s international expansion,

(b) that provision is not limited in application to circumstances where the members of a multinational group in the territory are not subject to Pillar Two rules, and

(c) that provision applies to the group.

(5) Condition D is that the enforceability of an amount of qualifying domestic top-up tax accruing to a standard member of the group is in question.

(6) Subsections (3), (4) and (6) of section 256A (qualifying domestic top-up tax treated as not accruing where contested) apply for the purpose of determining whether the enforceability of an amount of qualifying domestic top-up tax is in question.

Chapter 2 U.K. Application to non-standard members of a multinational group

Application in the case of joint venture group U.K.

4 (1) For the purpose of applying Chapter 1 of this Part of this Schedule to a joint venture group (see section 227 which applies this Schedule generally, with modifications, to joint venture groups), that Chapter has effect as if in paragraph 3—

(a) in sub-paragraph (1), for “Conditions A to D” there were substituted “Conditions A to E”,

(b) after sub-paragraph (6), there were inserted—

“(7) Condition E is that the qualifying domestic top-up tax applying in the territory—

(a) does not generally impose a charge on members of the group that are members of a joint venture group, and

(b) does not include provision for a charge to be imposed on such members in circumstances where there would otherwise be an amount of tax that was not charged to any member of the group in that territory.”

(2) For that purpose ignore section 227(1)(a) (reference to ultimate parent treated as reference to joint venture parent).

(3) Accordingly, the filing member of a multinational group may make a separate qualifying domestic top-up tax safe harbour election in respect of joint venture members of a joint venture group in a territory.

Application in the case of investment entities U.K.

5 (1) Chapter 1 of this Part of this Schedule to applies to investment entities and has effect for that purpose as if—

(a) references to standard members of a multinational group were to members of the group that are investment entities, and

(b) in paragraph 3—

(i) in sub-paragraph (1), for “Conditions A to D” there were substituted “Conditions A to E”,

(ii) after sub-paragraph (6), there were inserted—

“(7) Condition E is that the qualifying domestic top-up tax applying in the territory—

(a) does not generally impose a charge on members of the group that are investment entities, and

(b) does not include provision for a charge to be imposed on such members in circumstances where there would otherwise be an amount of tax that was not charged to any member of the group in that territory.”

(2) Accordingly, the filing member of a multinational group may make a separate qualifying domestic top-up tax safe harbour election in respect of members of the group that are investment entities.

Application in the case of minority owned members U.K.

6 (1) Chapter 1 of this Part of this Schedule to applies to minority owned members of a multinational group and has effect for that purpose as if references to standard members of a multinational group were to members of the group that are minority owned members.

(2) Accordingly, the filing member of a multinational group may make a separate qualifying domestic top-up tax safe harbour election in respect of minority owned members of the group.]

Section 261

Schedule 17 U.K. Index of expressions defined or explained in Parts 3 and 4

Term	Provision defining or explaining it
acceptable accounting standards	section 250(1)
acceptable overseas GAAP	section 250(3)
accounting currency	section 144(5)
accounting purposes	section 259
additional top-up amount	sections 203 and 206
adjusted profits	section 133
authorised accounting standard	section 249(3)
carrying value	section 259
[F56 CFC entity	section 179(4)]
[F57 CFS currency	section 254(1)]
combined covered tax balance	section 132
company	section 259
connected	section 258
consolidated group	section 126(2)
controlled foreign company tax regime	section 179(4)
controlling interest	section 242(4)
[F57 country-by-country report	section 251A]
[F57 covered bond vehicle	section 272A(5)]
covered tax balance (and positive covered tax balance and negative covered tax balance)	section 174
covered taxes	section 173
current tax	section 259
deferred tax	section 259
deferred tax expense	section 259
deferred tax asset	section 259
deferred tax liability	section 259
direct ownership interest	section 242(1)
disqualified refundable imputation tax	section 253(1)
[F57 domestic entity purposes (in Part 4)	section 273(1)]
[F57 domestic purposes (in Part 4)	section 272(1)]
domestic top-up tax	section 265
DTT excluded entity (in Part 4)	section 267
eligible distribution tax system	section 189(3)
eligible payroll costs	section 196
eligible tangible asset amount	section 197
entity	section 231
excluded dividends	section 141(2)
excluded entity	section 127
excluded equity gain or loss	section 142(2)
fair value	section 259
filing member	paragraph 2 of Schedule 14
flow-through entity	section 168(2)
[F58 general partner (in Schedule 14)	paragraph 3(3) of Schedule 14]
[F59 governmental] entity	section 234(1)
group (in Part 4)	section 266(9)
held for sale	section 259
HMRC	section 259
impairment	section 259
indirect ownership interest	section 242(3)
information return	paragraph 10(2) of Schedule 14
international accounting standards	section 259
international financial reporting standards	section 259
investment entity	section 236(3)
investment fund	section 236(1)
joint venture group	section 226(1)
joint venture parent	section 226(2)
joint venture subsidiary	section 226(3)
[F58 limited partnership (in Schedule 14)	paragraph 3(3) of Schedule 14]
location (of an entity)	section 239
main entity (in relation to a permanent establishment)	section 232
material competitive distortions	section 249(4) and (5)
merger	section 130(5)
minority owned member	section 228(1)
minority subgroup	section 228(2)
mobile income	section 178(3)
multinational group	section 126
multinational top-up tax	section 121
multi-parent group	section 229
OECD tax model	section 259
other comprehensive income	section 143(3)
ownership interest	section 242(1)
overseas REIT equivalent	section 259
[F58 partnership	section 259(1)]
pension fund	section 235(1)
[F60 pension] services entity	section 235(2)
permanent establishment	section 232
Pillar Two rules	section 255
Pillar Two territory	section 241
property, plant and equipment	section 143(3)
protected cell company (and “part”, “cell” and “core”)	section 233
QDT credit	section 194(3)
qualified refundable imputation tax	section 253(2)
qualifying (in relation to a multinational group)	section 129
qualifying (in relation to a refundable tax credit)	section 148
qualifying authority	paragraph 10(5) of Schedule 14
qualifying current tax expense	section 174(5)
qualifying de-merger	section 131(2)
qualifying domestic top-up tax	section 256
qualifying entity (in Part 4)	section 266
qualifying financial statements (in Part 4)	section 266(10)
qualifying reorganisation	section 212
qualifying undertaxed profits tax	section 257
refundable tax credit	section 148
recapture amount	section 190(4)
registered group	paragraph 6(7) of Schedule 14
responsible member	section 128
[F57 securitisation company	section 267(4)]
special loss deferred tax asset	section 187(3)
standard member	section 132(3)(a) (but see also section 228)
stateless entity	section 239
subject to Pillar Two IIR tax	section 128(7)
substance based income exclusion	section 195
tax currency	section 144(5)
[F57 tax equity partnership arrangement	section 176D(5)]
tax expense	section 259
tax expense amount	section 138(2)
tax transparent (in relation to an entity)	section 238
taxable income	section 144(5)
third currency	section 144(5)
total deferred tax adjustment amount	section 182
[F57 transitional safe harbour election	section 255(6)]
underlying profits	section 134
underlying profits accounts	section 136
UK GAAP	section 250(2)
UK REIT	section 259
ultimate parent	section 126
uncertain tax position	section 259

Textual Amendments

F56 Words in Sch. 17 Table inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 18(5)

F57 Words in Sch. 17 Table inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(4)(c)

F58 Words in Sch. 17 Table inserted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 2(7)

F59 Word in Sch. 17 Table substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(4)(a)

F60 Word in Sch. 17 Table substituted (22.2.2024 with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 58(4)(b)

Section 275

Schedule 18 U.K. Administration of domestic top-up tax

Introduction U.K.

1 (1) The Commissioners for His Majesty’s Revenue and Customs are responsible for the collection and management of domestic top-up tax.

(2) This Schedule applies (with modifications) Schedule 14 (administration of multinational top-up tax) for the purposes of administering domestic top-up tax.

Meaning of “filing member” U.K.

2 Part 2 of Schedule 14 applies, save that—

(a) where a qualifying entity is not part of a group, Part 2 of Schedule 14 does not apply, and references to “filing member” in Schedule 14 apply as if they were references to the qualifying entity;

(b) where a qualifying entity is part of a group—

(i) references to a “multinational group” apply as if they were references to a group;

(ii) the reference in paragraph 2(4)(a) of Schedule 14 to this Schedule applies as if it were a reference to Schedule 14.

Registration U.K.

3 Part 3 of Schedule 14 applies as if—

(a) for paragraph 6(1) and (2) there were substituted—

“(1) A filing member must register with HMRC if the filing member or, if the filing member is a member of a group, a member of that group—

(a) is located in the United Kingdom and

(b) is a qualifying entity.

(2) For the purposes of sub-paragraph (1), a qualifying entity becomes a qualifying entity on the first day of the first accounting period it is a qualifying entity (the “trigger day”).”;

(b) references to a “multinational group” were references to a group.

Other administrative provisions U.K.

4 (1) Subject to paragraph 5, Parts 4 to 12 of Schedule 14 apply as if—

(a) references to “multinational top-up tax” were to domestic top-up tax;

(b) references to “domestic top-up tax” were to multinational top-up tax;

(c) references to a “multinational group” were references to a group;

(d) where an entity registered under Part 3 of that Schedule (or which should have been registered) is not part of a group—

(i) references to a group or its members (however framed) were references to the entity or an entity (as the context requires);

(ii) references to “the filing member of a group” were references to the entity.

(2) In particular, the Treasury’s power to make regulations under paragraph 39 applies in relation to payments of domestic top-up tax.

5 (1) In Part 11 of Schedule 14 (penalties), only paragraphs 40(b), (c) and (e), 42 to 44, and 46 to 50 apply.

(2) The reference in paragraph 38 of Schedule 14 (as applied by paragraph 4) to a penalty referred to in paragraph 40 of that Schedule applies as if, instead of referring to the penalties referred to in paragraph 40(a), (b) and (d) of that Schedule, it referred to the penalties inserted by paragraph 6.

Amendments: penalties U.K.

6 (1) In paragraph 1 of Schedule 41 to FA 2008 (penalties for failure to notify etc), in the table after the entry relating to multinational top-up tax (as inserted by paragraph 41 of Schedule 14), insert—

“Domestic top-up tax

Obligation of a filing member to register under paragraph 6 of Schedule 14 to F(No.2)A 2023, as applied by paragraph 3 of Schedule 18 to F(No.2)A 2023”

(2) In paragraph 1 of Schedule 24 to FA 2007 (penalties for errors etc), in the table after the entry relating to multinational top-up tax (as inserted by paragraph 45 of Schedule 14), insert—

“Domestic top-up tax	Overseas return notification and information provided with it
Domestic top-up tax	Self-assessment return and information provided with it
Domestic top-up tax	Below-threshold notification and information provided with it”

Other amendments U.K.

7 (1) In section 1(1) of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax etc) after “multinational top-up tax,” (as inserted by paragraph 68(1) of Schedule 14) insert “domestic top-up tax,”.

(2) In section 178(2) of FA 1989 (setting of interest rates), after paragraph (x) (as inserted by paragraph 68(2) of Schedule 14) insert—

“(y) paragraphs 33 and 51 of Schedule 14 to the Finance (No.2) Act 2023, as applied in relation to domestic top-up tax by paragraph 4 of Schedule 18 to that Act.”

(3) In paragraph 63(1) of Schedule 36 to FA 2008 (information and inspection powers), after paragraph (cd) (as inserted by paragraph 68(3) of Schedule 14) insert—

“(ce) domestic top-up tax;”

(4) In section 206(3) of FA 2013, after paragraph (h) (as inserted by paragraph 68(4) of Schedule 14) insert—

“(i) domestic top-up tax.”

Section 316

Schedule 19 U.K. Dumping, subsidisation and safeguarding remedies

Part 1 U.K. Dumping and subsidisation remedies

Introduction U.K.

1 Schedule 4 to TCTA 2018 (dumping of goods or foreign subsidies causing injury to UK industry) is amended as follows.

Commencement Information

I136 Sch. 19 para. 1 not in force at Royal Assent, see Sch. 19 para. 17(2)

I137 Sch. 19 para. 1 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Notification etc U.K.

2 (1) In paragraph 9 (initiation of a dumping or subsidisation investigation)—

(a) after sub-paragraph (3) insert—

“(3A) Where the TRA receives an application under sub-paragraph (1)(a)(i), the TRA must notify the Secretary of State of the application before the end of the second working day after the day on which it receives the application.”;

(b) in sub-paragraph (5), in the words before paragraph (a), after “must” insert “notify the Secretary of State that it intends to initiate a dumping investigation and, after the relevant interval, must take the following steps in the order in which they are set out”;

(c) in sub-paragraph (6)—

(i) in the words before paragraph (a), after “must” insert “notify the Secretary of State that it intends to initiate a subsidisation investigation and, after the relevant interval, must take the following steps in the order in which they are set out”;

(ii) after paragraph (a) insert—

“(aa) invite the governments of the relevant foreign countries or territories to participate in consultations,”;

(iii) in paragraph (b) omit the words from “after” to “consultations,”;

(d) after sub-paragraph (6) insert—

“(6A) In sub-paragraphs (5) and (6), the “relevant interval” is the period of two working days beginning with the first working day after the day on which the TRA notifies the Secretary of State of its intention to initiate the investigation.”;

(e) after sub-paragraph (9) insert—

“(10) In this paragraph, “working day” means any day other than a Saturday, a Sunday or a day that is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.”

(2) In paragraph 10 (regulations about the conduct of a dumping or subsidisation investigation), in sub-paragraph (2)—

(a) in paragraph (i), at the end insert “or the Secretary of State”;

(b) at the end insert—

“(k) the Secretary of State requiring the TRA to reassess a proposal to terminate an investigation.”

(3) In paragraph 11 (provisional affirmative determinations and final affirmative or negative determinations), in sub-paragraph (5), at the end insert “(but see paragraph 12A for a requirement to give notice to the Secretary of State in certain cases)”.

(4) In paragraph 12 (termination of a dumping or a subsidisation investigation)—

(a) omit paragraph (b);

(b) in paragraph (c), after “20(4)(a)” insert “or the Secretary of State publishes notice of a decision under paragraph 20A(2)”.

(5) After paragraph 12 insert—

“Requirement to give notice to the Secretary of State in certain cases

12A (1) This paragraph applies where the TRA proposes to make a final negative determination.

(2) The TRA must notify the Secretary of State of its proposed determination.

(3) Where the Secretary of State has been notified in accordance with sub-paragraph (2), the Secretary of State may, within the relevant period (and subject to sub-paragraph (4)), request that the TRA reassess its proposed determination by reference to any matters specified in the request.

(4) The Secretary of State may only make a request under sub-paragraph (3) where the Secretary of State considers that—

(a) there is information that the TRA did not take into account in its investigation that is relevant to the proposed determination,

(b) the TRA has made an error in relation to its proposed determination, or

(c) exceptional circumstances make the request appropriate.

(5) The TRA must comply with a request under sub-paragraph (3).

(6) The TRA may not make its proposed determination until—

(a) the relevant period has ended, or

(b) if the Secretary of State informs the TRA within the relevant period that the Secretary of State will not make a request under sub-paragraph (3), the time when the TRA receives that information.

(7) For the purposes of this paragraph, the relevant period is the period of 21 days beginning with the day on which the TRA notifies the Secretary of State that it proposes to make the determination.”

Commencement Information

I138 Sch. 19 para. 2 not in force at Royal Assent, see Sch. 19 para. 17(2)

I139 Sch. 19 para. 2 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Provisional remedies U.K.

3 (1) In paragraph 13 (TRA’s duty to recommend requiring guarantees)—

(a) in sub-paragraph (4) omit paragraph (b) (and the “and” at the end of paragraph (a));

(b) after sub-paragraph (8) insert—

“(8A) Where the TRA makes a recommendation under sub-paragraph (3), it must advise the Secretary of State whether and why it considers that requiring importers to give a guarantee in accordance with the recommendation would meet the economic interest test (see paragraph 25).”

(2) In paragraph 15 (Secretary of State’s power to require a guarantee)—

(a) in sub-paragraph (3), for the words from “accept” to the end substitute “have regard to the TRA’s advice on whether requiring a guarantee in accordance with the recommendation would meet the economic interest test (see paragraph 25).”;

(b) after sub-paragraph (3) insert—

“(3A) Sub-paragraph (3B) applies if the recommendation is rejected.

(3B) If the Secretary of State considers that it is in the public interest to do so, the Secretary of State may decide that importers of relevant goods should be required to give a guarantee other than in accordance with the recommendation.

(3C) But the Secretary of State may make a decision under sub-paragraph (3B) only if a recommendation under paragraph 13(3) to the same effect as the decision (ignoring any restrictions in paragraph 13 on the ability of the TRA to make such a recommendation) would have complied with the requirements set out in paragraph 14.

(3D) Where the Secretary of State makes a decision under sub-paragraph (3B), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 32(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”;

(c) in sub-paragraph (4), after “rejected” insert “and the Secretary of State does not make a decision under sub-paragraph (3B)“.

Commencement Information

I140 Sch. 19 para. 3 not in force at Royal Assent, see Sch. 19 para. 17(2)

I141 Sch. 19 para. 3 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Definitive remedies U.K.

4 (1) In paragraph 17 (TRA’s duty to recommend an anti-dumping amount or countervailing amount)—

(a) in sub-paragraph (3), in the words before paragraph (a), for “may” substitute “must”;

(b) in sub-paragraph (4), in the words before paragraph (a), for “may” substitute “must”;

(c) omit sub-paragraph (5);

(d) in sub-paragraph (7)—

(i) omit “But”;

(ii) at the end insert “(but a recommendation may include two or more options in accordance with sub-paragraph (8A))”;

(e) after sub-paragraph (8) insert—

“(8A) Where the TRA considers that there are two or more options which it could recommend under sub-paragraph (3) or (4), as the case may be, in relation to relevant goods or descriptions of relevant goods, it may give the Secretary of State each of those options as part of its recommendation.

(8B) The Secretary of State may by regulations make provision requiring the TRA, in specified circumstances, to consider whether it could give the Secretary of State two or more options as part of its recommendation under sub-paragraph (3) or (4) in relation to relevant goods or descriptions of relevant goods.

(8C) Where, after considering whether it could give the Secretary of State two or more options as part of its recommendation in accordance with regulations under sub-paragraph (8B), the TRA considers that there is only one option which it could recommend under sub-paragraph (3) or (4), as the case maybe, in relation to relevant goods or descriptions of relevant goods, it must give the Secretary of State its reasons for reaching that conclusion.

(8D) Where the TRA gives the Secretary of State options, it must—

(a) give the Secretary of State its reasons for including each option, and

(b) inform the Secretary of State which option it prefers and why.

(8E) Where the TRA makes a recommendation under sub-paragraph (3) or (4) it must advise the Secretary of State whether and why it considers that applying an anti-dumping amount or a countervailing amount, as the case may be, in accordance with—

(a) the recommendation, or

(b) where the recommendation contains options given under sub-paragraph (8A), each option,

would meet the economic interest test (see paragraph 25).”;

(f) omit sub-paragraph (9);

(g) omit sub-paragraph (10).

(2) In paragraph 18 (TRA’s recommendations about an anti-dumping amount or a countervailing amount), after sub-paragraph (8) insert—

“(9) This paragraph has effect in relation to an option given by the TRA under paragraph 17(8A) as it has effect in relation to a recommendation by the TRA under paragraph 17(3) or (4).”

(3) In paragraph 19 (regulations about TRA’s recommendations), after sub-paragraph (5) insert—

“(6) Regulations under this paragraph may make any provision in relation to an option given by the TRA under paragraph 17(8A) that they may make in relation to a recommendation by the TRA under paragraph 17(3) or (4).”

(4) In the italic heading before paragraph 20 (Secretary of State’s power to accept or reject a recommendation), for “power to accept or reject” substitute “powers in relation to”.

(5) In paragraph 20—

(a) in sub-paragraph (1)—

(i) the words from “decide” to the end become paragraph (a);

(ii) at the end of that paragraph insert “, or

(b) request that the TRA reassess the recommendation, by reference to any matters specified in the request, with a view to amending or replacing the recommendation.”;

(b) after sub-paragraph (1) insert—

“(1A) Where the Secretary of State accepts a recommendation which contains options given in reliance on paragraph 17(8A), the Secretary of State must decide which of those options to adopt.”;

(c) in sub-paragraph (3), for the words from “accept” to the end substitute “have regard to the TRA’s advice on whether the application of an anti-dumping amount or a countervailing amount to goods in accordance with the recommendation, or in accordance with each option, as the case may be, would meet the economic interest test (see paragraph 25)”;

(d) in sub-paragraph (4), after “rejected” insert “and the Secretary of State does not make a decision under paragraph 20A(2)”;

(e) in sub-paragraph (5), in paragraph (a), after “recommendation” insert “, including any particular option adopted by the Secretary of State,”;

(f) after sub-paragraph (5) insert—

“(5A) The Secretary of State may only make a request under sub-paragraph (1)(b) where the Secretary of State considers that—

(a) there is information that the TRA did not take into account in its investigation that is relevant to the recommendation,

(b) the TRA has made an error in relation to its recommendation, or

(c) exceptional circumstances make the request appropriate.

(5B) Before making a request under sub-paragraph (1)(b), the Secretary of State must consult the TRA.

(5C) Where the Secretary of State makes a request under sub-paragraph (1)(b), the TRA must—

(a) comply with the request, and

(b) in reassessing its recommendation, have regard to any particular considerations which the Secretary of State may specify in the request.”

(6) After paragraph 20 insert—

“Secretary of State’s power to apply an alternative remedy

20A (1) This paragraph applies where the Secretary of State rejects a recommendation under paragraph 20.

(2) If the Secretary of State considers that it is in the public interest to do so, the Secretary of State may decide to apply an anti-dumping amount or a countervailing amount in relation to relevant goods or descriptions of relevant goods to which the TRA’s recommendation related, other than in accordance with the recommendation.

(3) But the Secretary of State may make a decision under sub-paragraph (2) only if a recommendation under paragraph 17(3) or (4) to the same effect as the decision (ignoring any restrictions in paragraph 17 on the ability of the TRA to make such a recommendation) would have complied with the requirements set out in paragraph 18.

(4) Where the Secretary of State makes a decision under sub-paragraph (2), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 32(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”

Commencement Information

I142 Sch. 19 para. 4 in force at Royal Assent for specified purposes, see Sch. 19 para. 17(1)

I143 Sch. 19 para. 4 in force at 25.8.2023 in so far as not already in force by S.I. 2023/918, reg. 2 (with reg. 3)

Reviews etc U.K.

5 (1) In paragraph 21 (reviews of continuing application of an anti-dumping amount or a countervailing amount)—

(a) in sub-paragraph (4)—

(i) after sub-paragraph (c) insert—

“(ca) provision corresponding or similar to any provision made by or under this Schedule in relation to dumping or subsidisation investigations, including any of the powers or duties of the TRA or the Secretary of State in respect of those investigations and any recommendations or decisions resulting from them;

(cb) provision conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the TRA;”;

(ii) at the end insert—

“(e) provision for the Secretary of State to provide by public notice, in a case where a review in relation to the application of an anti-dumping amount or a countervailing amount has been completed, for—

(i) the application of the amount to be treated as having expired at the end of the specified period (see paragraph 17(3) and (4)) set out in the public notice under section 13 relating to the amount;

(ii) where the application of the amount was not suspended in connection with a review, a person to be entitled to a repayment of the amount that they paid after applying for the review;

(iii) where the application of the amount was suspended in connection with a review, a person to be liable for the amount that they would have been liable to pay if the review had not taken place.”;

(b) in sub-paragraph (6)—

(i) omit the “and” at the end of paragraph (a);

(ii) after that paragraph insert—

“(aa) the TRA giving the Secretary of State options as part of a recommendation,”;

(iii) for paragraph (b) substitute—

“(b) the Secretary of State’s powers in relation to such a recommendation, and

(c) the date from which any variation or revocation may have effect, which may be a date before the date of the recommendation by the TRA or decision by the Secretary of State.”;

(c) in sub-paragraph (7)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and of the acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”;

(d) in sub-paragraph (8), after “State” insert “, or which the Secretary of State may decide to make other than in accordance with a recommendation,”;

(e) in sub-paragraph (9)—

(i) for “the TRA may recommend” substitute “the Secretary of State may decide, whether or not in response to a recommendation of the TRA,”;

(ii) for “the recommendation” substitute “the decision”;

(f) in sub-paragraph (10) for “recommendation” substitute “decision”.

(2) In paragraph 22 (variation or revocation following an international dispute decision)—

(a) in sub-paragraph (1)(b), for “the Secretary of State accepting or rejecting” substitute “the Secretary of State’s powers in relation to”;

(b) in sub-paragraph (2), at the end insert—

“(d) make provision corresponding or similar to any provision made by or under this Schedule in relation to dumping or subsidisation investigations, including any of the powers or duties of the TRA or the Secretary of State in respect of those investigations and any recommendations or decisions resulting from them;

(e) make provision conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the TRA.”;

(c) in sub-paragraph (4)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”.

(3) In paragraph 26 (suspension of anti-dumping or anti-subsidy remedies)—

(a) in sub-paragraph (1)(b), for “the Secretary of State accepting or rejecting” substitute “the Secretary of State’s powers in relation to”;

(b) in sub-paragraph (4), at the end insert—

“(e) provision corresponding or similar to any provision made by or under this Schedule in relation to dumping or subsidisation investigations, including any of the powers or duties of the TRA or the Secretary of State in respect of those investigations and any recommendations or decisions resulting from them;

(f) provision conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the TRA.”;

(c) in sub-paragraph (6)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and of the acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”.

Commencement Information

I144 Sch. 19 para. 5 not in force at Royal Assent, see Sch. 19 para. 17(2)

I145 Sch. 19 para. 5 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Revocation in the public interest U.K.

6 After paragraph 22 insert—

“Revocation in the public interest

22A (1) The Secretary of State may decide to revoke the application of an anti-dumping amount or a countervailing amount to goods in the absence of a recommendation from the TRA where the Secretary of State considers that it is in the public interest to do so.

(2) Before making a decision under sub-paragraph (1) the Secretary of State must consult such persons as the Secretary of State considers appropriate.

(3) Where the Secretary of State makes a decision under sub-paragraph (1), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 32(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”

Commencement Information

I146 Sch. 19 para. 6 not in force at Royal Assent, see Sch. 19 para. 17(2)

I147 Sch. 19 para. 6 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Power to request assistance etc U.K.

7 After paragraph 22A (as inserted by paragraph 6) insert—

“Power to request assistance etc

22B (1) The Secretary of State may request that the TRA give advice, information or other support to the Secretary of State for the purpose of allowing the Secretary of State to decide whether to make a decision under any of the following—

(a) paragraph 15(3B) (decision to require a guarantee other than in accordance with a recommendation);

(b) paragraph 20A(2) (decision to apply a final remedy other than in accordance with a recommendation);

(c) paragraph 22A(1) (decision to revoke a final remedy in the absence of a recommendation).

(2) The Secretary of State may include in a request under sub-paragraph (1) a requirement that the TRA investigate and provide a report on any matter specified in the request.

(3) Before making a request under sub-paragraph (1), the Secretary of State must consult the TRA.

(4) The TRA must comply with a request under sub-paragraph (1).”

Commencement Information

I148 Sch. 19 para. 7 not in force at Royal Assent, see Sch. 19 para. 17(2)

I149 Sch. 19 para. 7 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Part 2 U.K. Safeguarding remedies

Introduction U.K.

8 Schedule 5 to TCTA 2018 (increase in imports causing serious injury to UK producers) is amended as follows.

Commencement Information

I150 Sch. 19 para. 8 not in force at Royal Assent, see Sch. 19 para. 17(2)

I151 Sch. 19 para. 8 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Notification etc U.K.

9 (1) In paragraph 7 (initiation of a safeguarding investigation)—

(a) after sub-paragraph (4) insert—

“(4A) Where the TRA receives an application under sub-paragraph (1)(a)(i), the TRA must notify the Secretary of State of the application before the end of the second working day after the day on which it receives the application”;

(b) in sub-paragraph (6), in the words before paragraph (a), after “must” insert “notify the Secretary of State that it intends to initiate a safeguarding investigation and, after the relevant interval, must take the following steps in the order in which they are set out”;

(c) after sub-paragraph (6) insert—

“(6A) In sub-paragraph (6), the “relevant interval” is the period of two working days beginning with the first working day after the day on which the TRA notifies the Secretary of State of its intention to initiate the safeguarding investigation.”;

(d) after sub-paragraph (7) insert—

“(8) In this paragraph, “working day” means any day other than a Saturday, a Sunday or a day that is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.”

(2) In paragraph 9 (provisional affirmative determinations and final affirmative or negative determinations), in sub-paragraph (5), at the end insert “(but see paragraph 10A for a requirement to give notice to the Secretary of State in certain cases)”.

(3) In paragraph 10 (termination of a safeguarding investigation)—

(a) in paragraph (b), at the end insert “(and see paragraph 10A for a requirement to give notice to the Secretary of State before making the determination)”;

(b) in paragraph (c), after “20(3)(a)” insert “or the Secretary of State publishes notice of a decision under paragraph 19(2C) or 20(2C)”;

(4) After paragraph 10 insert—

“Requirement to give notice to the Secretary of State in certain cases

10A (1) This paragraph applies where the TRA—

(a) proposes to make a final negative determination, or

(b) proposes to make a final affirmative determination in relation to goods and to determine that there is not a recommendation which it could make under paragraph 16(3) in relation to them.

(2) The TRA must notify the Secretary of State of its proposed determination.

(3) Where the Secretary of State has been notified in accordance with sub-paragraph (2), the Secretary of State may, within the relevant period (and subject to sub-paragraph (4)), request that the TRA reassess its proposed determination by reference to any matters specified in the request.

(4) The Secretary of State may only make a request under sub-paragraph (3) where the Secretary of State considers that—

(a) there is information that the TRA did not take into account in its investigation that is relevant to the proposed determination,

(b) the TRA has made an error in relation to its proposed determination, or

(c) exceptional circumstances make the request appropriate.

(5) The TRA must comply with a request under sub-paragraph (3).

(6) The TRA may not make its proposed determination until—

(a) the relevant period has ended, or

(b) if the Secretary of State informs the TRA within the relevant period that the Secretary of State will not make a request under sub-paragraph (3), the time when the TRA receives that information.

(7) For the purposes of this paragraph, the relevant period is the period of 21 days beginning with the day on which the TRA notifies the Secretary of State that it proposes to make the determination.”

Commencement Information

I152 Sch. 19 para. 9 not in force at Royal Assent, see Sch. 19 para. 17(2)

I153 Sch. 19 para. 9 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Provisional remedies U.K.

10 (1) In paragraph 11 (TRA’s duty to recommend a provisional safeguarding amount or a provisional tariff rate quota)—

(a) in sub-paragraph (5) omit paragraph (b) (and the “and” at the end of paragraph (a));

(b) after sub-paragraph (8) insert—

“(8A) Where the TRA makes a recommendation under sub-paragraph (3), it must advise the Secretary of State whether and why it considers that applying a provisional safeguarding amount to relevant goods, or making relevant goods subject to a provisional tariff rate quota, in accordance with the recommendation, would meet the economic interest test (see paragraph 23).”

(2) In paragraph 14 (Secretary of State’s power to apply a provisional safeguarding amount)—

(a) in sub-paragraph (2), for paragraphs (a) and (b) (and the “—” before paragraph (a)) substitute “it is not in the public interest to accept it.”;

(b) after sub-paragraph (2) insert—

“(2A) In considering that, the Secretary of State must have regard to the TRA’s advice on whether applying a provisional safeguard amount to relevant goods in accordance with the recommendation would meet the economic interest test (see paragraph 23).

(2B) Sub-paragraph (2C) applies if the recommendation is rejected.

(2C) If the Secretary of State considers that it is in the public interest to do so, the Secretary of State may decide that—

(a) a provisional safeguarding amount should be applied to all the relevant goods, or to specified relevant goods, other than in accordance with the recommendation, or

(b) all the relevant goods, or specified relevant goods, should be subject to a provisional tariff rate quota for a specified period.

(2D) But the Secretary of State may make a decision under sub-paragraph (2C) only if a recommendation under paragraph 11(3) to the same effect as the decision (ignoring any restrictions in paragraph 11 on the ability of the TRA to make such a recommendation) would have complied with the requirements set out in paragraph 12 or 13, as the case may be.

(2E) Where the Secretary of State makes a decision under sub-paragraph (2C), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 31(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”;

(c) in sub-paragraph (3), after “rejected” insert “and the Secretary of State does not make a decision under sub-paragraph (2C)”.

(3) In paragraph 15 (Secretary of State’s power to subject goods to a provisional tariff rate quota)—

(a) in sub-paragraph (2), for paragraphs (a) and (b) (and the “—” before paragraph (a)) substitute “it is not in the public interest to accept it”;

(b) after sub-paragraph (2) insert—

“(2A) In considering that, the Secretary of State must have regard to the TRA’s advice on whether applying a provisional tariff rate quota to relevant goods in accordance with the recommendation would meet the economic interest test (see paragraph 23).

(2B) Sub-paragraph (2C) applies if the recommendation is rejected.

(2C) If the Secretary of State considers that it is in the public interest to do so, the Secretary of State may decide that—

(a) all the relevant goods, or specified relevant goods, should be subject to a provisional tariff rate quota, other than in accordance with the recommendation, or

(b) a provisional safeguarding amount should be applied for a specified period to all the relevant goods or, to specified relevant goods.

(2D) But the Secretary of State may make a decision under sub-paragraph (2C) only if a recommendation under paragraph 11(3) to the same effect as the decision (ignoring any restrictions in paragraph 11 on the ability of the TRA to make such a recommendation) would have complied with the requirements set out in paragraph 12 or 13, as the case may be.

(2E) Where the Secretary of State makes a decision under sub-paragraph (2C), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 31(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”;

(c) in sub-paragraph (3), after “rejected” insert “and the Secretary of State does not make a decision under sub-paragraph (2C)”.

Commencement Information

I154 Sch. 19 para. 10 not in force at Royal Assent, see Sch. 19 para. 17(2)

I155 Sch. 19 para. 10 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Definitive remedies U.K.

11 (1) In paragraph 16 (TRA’s duty to recommend a definitive safeguarding amount or tariff rate quota)—

(a) omit sub-paragraph (5)(a) (and the “and” at the end of that sub-paragraph);

(b) after sub-paragraph (10) insert—

“(10A) Where the TRA considers that there are two or more options which it could recommend under sub-paragraph (3)(a) or (b), in relation to relevant goods or descriptions of relevant goods, it may give the Secretary of State each of those options as part of its recommendation.

(10B) The Secretary of State may by regulations make provision requiring the TRA, in specified circumstances, to consider whether it could give the Secretary of State two or more options as part of its recommendation under sub-paragraph (3)(a) or (b) in relation to relevant goods or descriptions of relevant goods.

(10C) Where, after considering whether it could give the Secretary of State two or more options as part of its recommendation in accordance with regulations under sub-paragraph (10B), the TRA considers that there is only one option which it could reasonably recommend under sub-paragraph (3)(a) or (b) in relation to relevant goods or descriptions of relevant goods, it must give the Secretary of State its reasons for reaching that conclusion.

(10D) Where the TRA gives the Secretary of State options, it must—

(a) give the Secretary of State its reasons for including each option, and

(b) inform the Secretary of State which option it prefers and why.

(10E) Where the TRA makes a recommendation under sub-paragraph (3) it must advise the Secretary of State whether and why it considers that applying a definitive safeguarding amount or making relevant goods subject to a quota in accordance with—

(a) its recommendation, or

(b) where the recommendation contains options given under sub-paragraph (10A), each option,

would meet the economic interest test (see paragraph 23).”

(2) In paragraph 17 (TRA’s recommendations about a definitive safeguarding amount)—

(a) in sub-paragraph (8), at the end insert “or, where the TRA’s recommendation contained options proposing different lengths, the length adopted by the Secretary of State”;

(b) after sub-paragraph (10) insert—

“(11) This paragraph has effect in relation to an option given by the TRA under paragraph 16(10A) as it has effect in relation to a recommendation by the TRA under paragraph 16(3)(a).”

(3) In paragraph 18 (TRA’s recommendations regarding tariff rate quotas), after sub-paragraph (11) insert—

“(11) This paragraph has effect in relation to an option given by the TRA under paragraph 16(10A) as it has effect in relation to a recommendation by the TRA under paragraph 16(3)(b).”

(4) In the italic heading before paragraph 19 (Secretary of State’s power to apply a definitive safeguarding amount), for “power” substitute “powers in relation to a recommendation”.

(5) In paragraph 19—

(a) in sub-paragraph (1)—

(i) the words from “decide” to the end become paragraph (a);

(ii) at the end of that paragraph insert “, or

(b) request that the TRA reassess its recommendation, by reference to any matters specified in the request, with a view to amending or replacing the recommendation.”;

(b) after sub-paragraph (1) insert—

“(1A) Where the Secretary of State accepts a recommendation which contains options given in reliance on paragraph 16(10A), the Secretary of State must decide which of those options to adopt.”;

(c) in sub-paragraph (2), for paragraphs (a) and (b) (and the “—” before them) substitute “it is not in the public interest to accept it”;

(d) after sub-paragraph (2) insert—

“(2A) In considering that, the Secretary of State must have regard to the TRA’s advice on whether applying a definitive safeguarding amount in accordance with the recommendation, or in accordance with each option, as the case may be, would meet the economic interest test (see paragraph 23).

(2B) Sub-paragraph (2C) applies if the recommendation is rejected.

(2C) If the Secretary of State considers that it is in the public interest to do so, the Secretary of State may decide that—

(a) a definitive safeguarding amount should be applied to all the relevant goods, or to specified relevant goods, other than in accordance with the recommendation, or

(b) all the relevant goods, or specified relevant goods, should be subject to a tariff rate quota for a specified period.

(2D) But the Secretary of State may make a decision under sub-paragraph (2C) only if a recommendation under paragraph 16 to the same effect as the decision (ignoring any restrictions in paragraph 16 on the ability of the TRA to make such a recommendation) would have complied with the requirements set out in paragraph 17 or 18, as the case may be.

(2E) Where the Secretary of State makes a decision under sub-paragraph (2C), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 31(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”;

(e) in sub-paragraph (3), after “rejected” insert “and the Secretary of State does not make a decision under sub-paragraph (2C)”;

(f) in sub-paragraph (4), in paragraph (a), after “recommendation” insert “, including any particular option adopted by the Secretary of State,”;

(g) after sub-paragraph (4) insert—

“(4A) The Secretary of State may only make a request under sub-paragraph (1)(b) where the Secretary of State considers that—

(a) there is information that the TRA did not take into account in its investigation that is relevant to the recommendation,

(b) the TRA has made an error in relation to its recommendation, or

(c) exceptional circumstances make the request appropriate.

(4B) Before making a request under sub-paragraph (1)(b), the Secretary of State must consult the TRA.

(4C) Where the Secretary of State makes a request under sub-paragraph (1)(b), the TRA must—

(a) comply with the request, and

(b) in reassessing its recommendation, have regard to any particular considerations which the Secretary of State may specify in the request.”

(6) In the italic heading before paragraph 20 (Secretary of State’s power to subject goods to a tariff rate quota), for “power” substitute “powers in relation to a recommendation”.

(7) In paragraph 20—

(a) in sub-paragraph (1)—

(i) the words from “decide” to the end become paragraph (a);

(ii) at the end of that paragraph insert “, or

(b) request that the TRA reassess its recommendation with a view to amending or replacing the recommendation.”;

(b) after sub-paragraph (1) insert—

“(1A) Where the Secretary of State accepts a recommendation which contains options given in reliance on paragraph 16(10A), the Secretary of State must decide which of those options to adopt.”;

(c) in sub-paragraph (2), for paragraphs (a) and (b) (and the “—” before them) substitute “it is not in the public interest to accept it”;

(d) after sub-paragraph (2) insert—

“(2A) In considering that, the Secretary of State must have regard to the TRA’s advice on whether applying a tariff rate quota in accordance with the recommendation, or in accordance with each option, as the case may be, would meet the economic interest test (see paragraph 23).

(2B) Sub-paragraph (2C) applies if the recommendation is rejected.

(2C) If the Secretary of State considers that it is in the public interest to do so, the Secretary of State may decide that—

(a) all the relevant goods, or specified relevant goods, should be subject to a tariff rate quota, other than in accordance with the recommendation, or

(b) a definitive safeguarding amount should be applied for a specified period to all the relevant goods, or to specified relevant goods.

(2D) But the Secretary of State may make a decision under sub-paragraph (2C) only if a recommendation under paragraph 16 to the same effect as the decision (ignoring any restrictions in paragraph 16 on the ability of the TRA to make such a recommendation) would have complied with the requirements set out in paragraph 17 or 18, as the case may be.

(2E) Where the Secretary of State makes a decision under sub-paragraph (2C), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 31(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”;

(e) in sub-paragraph (3), after “rejected” insert “ and the Secretary of State does not make a decision under sub-paragraph (2C)”;

(f) in sub-paragraph (4), in paragraph (a), after “recommendation” insert “, including any particular option adopted by the Secretary of State,”;

(g) after sub-paragraph (4) insert—

“(4A) The Secretary of State may only make a request under sub-paragraph (1)(b) where the Secretary of State considers that—

(a) there is information that the TRA did not take into account in its investigation that is relevant to the recommendation,

(b) the TRA has made an error in relation to its recommendation, or

(c) exceptional circumstances make the request appropriate.

(4B) Before making a request under sub-paragraph (1)(b), the Secretary of State must consult the TRA.

(4C) Where the Secretary of State makes a request under sub-paragraph (1)(b), the TRA must—

(a) comply with the request, and

(b) in reassessing its recommendation, have regard to any particular considerations which the Secretary of State may specify in the request.”

Commencement Information

I156 Sch. 19 para. 11 in force at Royal Assent for specified purposes, see Sch. 19 para. 17(1)

I157 Sch. 19 para. 11 in force at 25.8.2023 in so far as not already in force by S.I. 2023/918, reg. 2 (with reg. 3)

Reviews etc U.K.

12 (1) In paragraph 21 (reviews)—

(a) in sub-paragraph (4), after paragraph (b) insert—

“(ba) provision corresponding or similar to any provision made by or under this Schedule in relation to a safeguarding investigation, including any of the powers or duties of the TRA or the Secretary of State in respect of those investigations and any recommendations or decisions resulting from them;

(bb) provision conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the TRA;”;

(b) in sub-paragraph (6)—

(i) omit the “and” at the end of paragraph (a);

(ii) after that paragraph insert—

“(aa) the TRA giving the Secretary of State options as part of a recommendation, and”;

(iii) in paragraph (b), for “the Secretary of State accepting or rejecting” substitute “the Secretary of State’s powers in relation to”.

(c) in sub-paragraph (7)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and of the acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”.

(d) in sub-paragraph (8), after “State” insert “, or which the Secretary of State may decide to make other than in accordance with a recommendation,”;

(e) in sub-paragraph (9), after “State” insert “, or which the Secretary of State may decide to make other than in accordance with a recommendation,”;

(f) in sub-paragraph (10)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and of the acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”.

(2) In paragraph 22 (variation or revocation following an international dispute decision)—

(a) in sub-paragraph (1)(b), for “the Secretary of State accepting or rejecting” substitute “the Secretary of State’s powers in relation to”;

(b) in sub-paragraph (2), at the end insert—

“(d) make provision corresponding or similar to any provision made by or under this Schedule in relation to safeguarding investigations, including any of the powers or duties of the TRA or the Secretary of State in respect of those investigations and any recommendations or decisions resulting from them;

(e) make provision conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the TRA.”;

(c) in sub-paragraph (4)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and of the acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”.

(3) In paragraph 24 (suspension of safeguarding remedies)—

(a) in sub-paragraph (1), in paragraph (b), for “the Secretary of State accepting or rejecting” substitute “the Secretary of State’s powers in relation to”;

(b) in sub-paragraph (4), at the end insert—

“(e) provision corresponding or similar to any provision made by or under this Schedule in relation to a safeguarding investigation, including any of the powers or duties of the TRA or the Secretary of State in respect of those investigations and any recommendations or decisions resulting from them;

(f) provision conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the TRA.”;

(c) in sub-paragraph (6)—

(i) in the words before paragraph (a), for “accepts a recommendation” substitute “decides”;

(ii) in paragraph (a), for “recommendation and of the acceptance of it” substitute “decision”;

(iii) in paragraph (c), for “recommendation” substitute “decision”.

Commencement Information

I158 Sch. 19 para. 12 not in force at Royal Assent, see Sch. 19 para. 17(2)

I159 Sch. 19 para. 12 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Revocation in the public interest U.K.

13 After paragraph 22 insert—

“Revocation in the public interest

22A (1) The Secretary of State may decide that the application of a definitive safeguarding amount to goods, or a tariff rate quota to which goods are subject, is to be revoked in the absence of a recommendation from the TRA where the Secretary of State considers that revocation is in the public interest.

(2) Before making a decision under sub-paragraph (1) the Secretary of State must consult such persons as the Secretary of State considers appropriate.

(3) Where the Secretary of State makes a decision under sub-paragraph (1), the Secretary of State—

(a) must publish notice of the decision,

(b) must notify interested parties (see paragraph 31(3)) accordingly,

(c) must lay a statement before the House of Commons setting out the reasons for making the decision, and

(d) is required under section 13 to make provision by public notice to give effect to the decision.”

Commencement Information

I160 Sch. 19 para. 13 not in force at Royal Assent, see Sch. 19 para. 17(2)

I161 Sch. 19 para. 13 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Power to request assistance etc U.K.

14 After paragraph 22A (as inserted by paragraph 13) insert—

“Power to request assistance etc

22B (1) The Secretary of State may request that the TRA give advice, information or other support to the Secretary of State for the purpose of allowing the Secretary of State to decide whether to make a decision under any of the following—

(a) paragraphs 14(2C) and 15(2C) (decisions to adopt a provisional remedy other than in accordance with a recommendation);

(b) paragraphs 19(2C) and 20(2C) (decisions to adopt a final remedy other than in accordance with a recommendation);

(c) paragraph 22A(1) (decision to revoke a final remedy in the absence of a recommendation).

(2) The Secretary of State may include in a request under sub-paragraph (1) a requirement that the TRA investigate and provide a report on any matter specified in the request.

(3) Before making a request under sub-paragraph (1), the Secretary of State must consult the TRA.

(4) The TRA must comply with a request under sub-paragraph (1).”

Commencement Information

I162 Sch. 19 para. 14 not in force at Royal Assent, see Sch. 19 para. 17(2)

I163 Sch. 19 para. 14 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

Part 3 U.K. Consequential and related provision

15 U.K. In section 13 of TCTA 2018 (dumping of goods, foreign subsidies and increases in imports)—

(a) in subsection (2)—

(i) for “accepts a recommendation by the TRA” substitute “decides”;

(ii) for “the recommendation” substitute “the decision”.

(b) in subsection (3)—

(i) for “accepts a recommendation by the TRA” substitute “decides”;

(ii) for “the recommendation” substitute “the decision”.

(c) in subsection (4)—

(i) for “accepts a recommendation by the TRA” substitute “decides”;

(ii) for “the recommendation” substitute “the decision”.

Commencement Information

I164 Sch. 19 para. 15 not in force at Royal Assent, see Sch. 19 para. 17(2)

I165 Sch. 19 para. 15 in force at 25.8.2023 by S.I. 2023/918, reg. 2 (with reg. 3)

16 (1) The Treasury or the Secretary of State may by regulations made by statutory instrument make such provision as the Treasury or the Secretary of State, as the case may be, considers appropriate in relation to trade remedies measures transitioned under Part 12 of the Trade Remedies (Dumping and Subsidisation) (EU Exit) Regulations 2019 (S.I. 2019/450), including provision— U.K.

(a) in relation to exemptions that has effect from IP completion day (or any later day);

(b) conferring functions (including functions involving the exercise of a discretion) on the Secretary of State or the Trade Remedies Authority.

(2) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of the House of Commons.

Commencement Information

I166 Sch. 19 para. 16 in force at Royal Assent for specified purposes, see Sch. 19 para. 17(1)

I167 Sch. 19 para. 16 in force at 25.8.2023 in so far as not already in force by S.I. 2023/918, reg. 2 (with reg. 3)

Part 4 U.K. Commencement

17 (1) Any power to make regulations under or by virtue of this Schedule comes into force on the day on which this Act is passed. U.K.

(2) The remaining provisions of this Schedule come into force on such day as the Secretary of State may by regulations appoint.

(3) The Secretary of State may by regulations make transitional or saving provision in connection with the coming into force of any provision of this Schedule.

(4) The power to make regulations under sub-paragraph (3) includes power to make different provision for different purposes.

(5) Regulations under this paragraph are to be made by statutory instrument.

Commencement Information

I168 Sch. 19 para. 17 in force at Royal Assent for specified purposes, see Sch. 19 para. 17(1)

I169 Sch. 19 para. 17 in force at 25.8.2023 in so far as not already in force by S.I. 2023/918, reg. 2 (with reg. 3)

Section 316

Schedule 20 U.K. Bilateral safeguarding remedies

Part 1 U.K. Amendments to TCTA 2018

1 (1) Section 13 of TCTA 2018 is amended as follows. U.K.

(2) In subsection (1)—

(a) omit the “and” at the end of paragraph (a);

(b) at the end insert “, and

(c) Schedule 5A (increase in imports as a result of free trade agreement causing serious injury to UK producers).”

(3) In subsection (2), for “Schedule 4 or 5” substitute “Schedule 4, 5 or 5A”.

(4) In subsection (3), after “Schedule 5” insert “or 5A”

(5) In subsection (4), in the words before paragraph (a), for “Schedule 4 or 5” substitute “Schedule 4, 5 or 5A”.

Commencement Information

I170 Sch. 20 para. 1 not in force at Royal Assent, see Sch. 20 para. 3(2)

I171 Sch. 20 para. 1 in force at 13.5.2024 by S.I. 2024/522, reg. 2

2 U.K. After Schedule 5 of that Act insert—

Section 13

“Schedule 5A U.K. Increase in imports as a result of free trade agreement causing serious injury to UK producers

Application of this Schedule

1 (1) Schedule 5 (increase in imports causing serious injury to UK producers) applies in relation to a relevant increase in imports subject to the following paragraphs of this Schedule.

(2) For the purposes of sub-paragraph (1) a “relevant increase in imports” occurs where—

(a) goods have been or are being, or may have been or may be being, imported into the United Kingdom in increased quantities,

(b) the importation of the goods in increased quantities was or is, or may have been or may be being, caused by the reduction or elimination of import duty as a result of a free trade agreement, and

(c) the importation of the goods in increased quantities has caused or is causing, or may have caused or may be causing, serious injury to UK producers of those goods.

(3) In sub-paragraph (2)(c) “serious injury” and “UK producers” have the meaning that they have for the purposes of Schedule 5 (see paragraphs 2 and 3 of that Schedule).

TRA and Secretary of State required to have regard to relevant free trade agreement

2 In applying the provisions of Schedule 5 in accordance with this Schedule the TRA and the Secretary of State must have regard to the relevant free trade agreement.

Meaning of importation in “increased quantities”

3 Paragraph 1 of Schedule 5 (meaning of importation in “increased quantities”) is to be read as if, in paragraph (c) of sub-paragraph (2), the words from “including provision” to the end were omitted.

Bilateral safeguarding investigation

4 Paragraph 6 of Schedule 5 (safeguarding investigation) is to be read as if, in sub-paragraph (1)—

(a) the “and” at the end of paragraph (a) were omitted;

(b) after that paragraph there were inserted—

“(aa) whether the importation of the goods in increased quantities was or is being caused by the reduction or elimination of import duty as a result of a free trade agreement, and”

Initiation of a bilateral safeguarding investigation

5 (1) Paragraph 7 of Schedule 5 (initiation of a safeguarding investigation) is to be read subject to the following modifications.

(2) Sub-paragraph (1) is to be read as if—

(a) in the words before paragraph (a), for “The TRA may initiate” there were substituted “The Secretary of State may request that the TRA initiates”;

(b) paragraph (a) were omitted;

(c) in paragraph (b)—

(i) in the words before sub-paragraph (i), for “it is satisfied that the application contains” there were substituted “the Secretary of State is satisfied that there is”;

(ii) the “and” at the end of sub-paragraph (i) were omitted;

(iii) after that sub-paragraph there were inserted—

“(ia) the importation of the goods in increased quantities was or is being caused by the reduction or elimination of import duty as a result of the relevant free trade agreement, and”;

(d) in paragraph (c)—

(i) for “the TRA” there were substituted “the Secretary of State”;

(ii) for “application” there were substituted “request”;

(e) in paragraph (d)—

(i) for “application”, in both places it appears, there were substituted “request”;

(ii) for “the TRA” there were substituted “the Secretary of State”.

(3) Sub-paragraph (2) is to be read as if—

(a) paragraph (a) were omitted;

(b) in paragraph (b), for the words from “in the case” to “the TRA” there were substituted “the Secretary of State”.

(4) Sub-paragraph (3) is to be read as if—

(a) paragraph (a) were omitted;

(b) in paragraph (b), the words “in the case” to “sub-paragraph (1)(a)(ii)” were omitted.

(5) The remaining provisions of paragraph 7 are to be read as if—

(a) in sub-paragraph (4), paragraphs (a) to (d) were omitted;

(b) sub-paragraphs (4A) and (5) were omitted;

(c) in sub-paragraph (6)—

(i) for the words before paragraph (a) there were substituted “Where the Secretary of State makes a request under sub-paragraph (1) the TRA must—”;

(ii) in paragraph (a) the words “accept the application and” were omitted;

(iii) in paragraph (b), for “of its decision to initiate” substitute “that it has initiated”;

(d) sub-paragraph (6A) were omitted;

(e) sub-paragraph (8) were omitted.

Provisional affirmative determinations and final affirmative or negative determinations

6 Paragraph 9 of Schedule 5 (provisional affirmative determinations and final affirmative or negative determinations) is to be read as if—

(a) in sub-paragraph (1)—

(i) the “and” at the end of paragraph (a) were omitted;

(ii) after that paragraph there were inserted—

“(aa) the importation of the goods in increased quantities was or is being caused by the reduction or elimination of import duty as a result of the relevant free trade agreement, and”;

(b) sub-paragraph (3) were omitted;

(c) for sub-paragraph (7) there were substituted—

“(7) Where the TRA makes a final negative determination or final negative determinations under sub-paragraph (4)—

(a) the TRA must notify the Secretary of State of the determination or determinations;

(b) the Secretary of State must notify interested parties (see paragraph 31(3)) that the Secretary of State will not apply a bilateral safeguarding remedy to the goods;

(c) the Secretary of State may produce and publish a report or update in relation to the investigation;

(d) the Secretary of State may request that the TRA produces a report or update in relation to the investigation.

(8) Where the Secretary of State makes a request under sub-paragraph (7)(d)—

(a) the TRA must produce a report or update (as the case may be) in accordance with the request, and

(b) the Secretary of State may publish the report or update (as the case may be).”.

Termination of a bilateral safeguarding investigation

7 Paragraph 10 of Schedule 5 (termination of a safeguarding investigation) is to be read as if—

(a) in paragraph (a), for “notice of that determination is published” there were substituted “the TRA notifies the Secretary of State of that determination”;

(b) in paragraph (b), for the words from “notice of that determination” to the end there were substituted “the TRA notifies the Secretary of State of its final affirmative determination in relation to the goods under paragraph 16(11)(a)”;

(c) in paragraph (c), for the words “the notice of rejection” there were substituted “notice of a decision of the Secretary of State not to apply a bilateral safeguarding remedy”.

TRA’s duty to recommend provisional measures

8 (1) Paragraph 11 of Schedule 5 (TRA’s duty to recommend a provisional safeguarding amount or provisional tariff rate quota) is to be read as if—

(a) in sub-paragraph (3), after paragraph (a) there were inserted—

“(aa) that any reduction in the rate of import duty applicable to all the relevant goods or to specified relevant goods as a result of the relevant free trade agreement should be suspended for a specified period (referred to in this Schedule as a “provisional suspension of tariff rate reduction”);”

(b) for sub-paragraph (9) there were substituted—

“(9) If the TRA determines that there is no recommendation which it could make under sub-paragraph (3)—

(a) the TRA must notify the Secretary of State of its provisional affirmative determination in relation to the goods, and

(b) the Secretary of State must notify interested parties (see paragraph 31(3)) that the Secretary of State will not apply a provisional bilateral safeguarding amount, a provisional suspension of tariff rate reduction or a provisional tariff rate quota to the goods.”

(2) In consequence of the modification made by sub-paragraph (1)(a)—

(a) references in Schedule 5 to paragraphs (a) and (b) of sub-paragraph (3) of paragraph 11 of that Schedule are to be read as references to paragraphs (a), (aa) and (b) of that sub-paragraph;

(b) references in Schedule 5 to paragraph (a) of that sub-paragraph are to be read as references to paragraph (a) or (aa) of that sub-paragraph (and accordingly references to paragraph (a) or (b) of that sub-paragraph are to be read as references to paragraph (a), (aa) or (b) of that sub-paragraph).

TRA’s recommendations about provisional measures

9 Paragraph 12 of Schedule 5 (TRA’s recommendations about a provisional safeguarding amount) is to be read as if, in sub-paragraph (2), for paragraph (a) there were substituted—

“(a) is to be such period as the TRA may determine, having regard to the relevant free trade agreement, and”

10 Paragraph 13 of Schedule 5 (TRA’s recommendations regarding provisional tariff rate quotas) is to be read as if, in sub-paragraph (2), for paragraph (a) there were substituted—

“(a) is to be such period as the TRA may determine, having regard to the relevant free trade agreement, and”

TRA’s duty to recommend a definitive measure

11 (1) Paragraph 16 of Schedule 5 (TRA’s duty to recommend a definitive safeguarding amount or tariff rate quota) is to be read as if—

(a) in sub-paragraph (3), after paragraph (a) there were inserted—

“(aa) that any reduction in the rate of import duty applicable to all the relevant goods or to specified relevant goods as a result of the relevant free trade agreement should be suspended for a specified period (referred to in this Schedule as a “definitive suspension of tariff rate reduction”);”

(b) sub-paragraphs (5), (6) and (7) were omitted;

(c) for sub-paragraph (11) there were substituted—

“(11) If the TRA determines that there is no recommendation which it could make under sub-paragraph (3)—

(a) the TRA must notify the Secretary of State of its final affirmative determination in relation to the goods,

(b) the Secretary of State must notify interested parties (see paragraph 31(3)) that the Secretary of State will not apply a definitive safeguarding amount, a definitive suspension of tariff rate reduction or a tariff rate quota to the goods.”

(2) In consequence of the modification made by sub-paragraph (1)(a)—

(a) references in Schedule 5 to paragraphs (a) and (b) of sub-paragraph (3) of paragraph 16 of that Schedule are to be read as references to paragraphs (a), (aa) and (b) of that sub-paragraph;

(b) references in Schedule 5 to paragraph (a) of that sub-paragraph are to be read as references to paragraph (a) or (aa) of that sub-paragraph (and accordingly references to paragraph (a) or (b) of that sub-paragraph are to be read as references to paragraph (a), (aa) or (b) of that sub-paragraph).

(3) In consequence of the modification made by sub-paragraph (1)(b), paragraph 21 of Schedule 5 (reviews) is to be read as if, in sub-paragraph (3), paragraph (d) were omitted.

TRA’s recommendations about definitive measures

12 Paragraph 17 of Schedule 5 (TRA’s recommendations about a definitive safeguarding amount) is to be read as if—

(a) in sub-paragraph (2), in paragraph (b), for “must not exceed 4 years” there were substituted “is to be such period as the TRA may determine, having regard to the relevant free trade agreement”.

(b) in sub-paragraph (4), paragraph (b) (and the “, and” at the end of paragraph (a)) were omitted;

(c) after sub-paragraph (5) there were inserted—

“(5A) In making a recommendation under paragraph 16(3)(a) or (aa), the TRA must have regard to any provision of the relevant free trade agreement under or by virtue of which the definitive bilateral safeguarding amount or the definitive suspension of tariff rate reduction (as the case may be) applicable to goods is to become progressively smaller as the specified period referred to in paragraph 16(3)(a) or (aa) (as the case may be) progresses.”;

(d) sub-paragraphs (7) to (10) were omitted.

13 Paragraph 18 of Schedule 5 (TRA’s recommendations regarding tariff rate quotas) is to be read as if—

(a) in sub-paragraph (2), in paragraph (b), for “must not exceed 4 years” there were substituted “is to be such period as the TRA may determine, having regard to the relevant free trade agreement”.

(b) in sub-paragraph (5), paragraph (b) (and the “, and” at the end of paragraph (a)) were omitted;

(c) after sub-paragraph (6) there were inserted—

“(6A) In making a recommendation under paragraph 16(3)(b), the TRA must have regard to any provision of the relevant free trade agreement under or by virtue of which the amount of import duty applicable to goods subject to the quota is to become progressively smaller as the specified period referred to in that paragraph progresses.”

(d) sub-paragraphs (7) to (10) were omitted.

Meaning of “international dispute decision”

14 Paragraph 22 of Schedule 5 (variation or revocation following an international dispute decision) is to be read as if, in sub-paragraph (6), for paragraph (a) there were substituted—

“(a) a decision under the dispute settlement procedures of the relevant free trade agreement, or”

No suspension of bilateral safeguarding remedies

15 Paragraph 24 of Schedule 5 (suspension of safeguarding remedies) does not apply.

Exceptions

16 Sub-paragraph (2) of paragraph 25 of Schedule 5 (exceptions) does not apply.

No restriction on successive safeguarding remedies

17 (1) Paragraph 26 of Schedule 5 (restrictions on successive safeguarding remedies) is to be read as if—

(a) in sub-paragraph (2), in the words before paragraph (a), for ““previous safeguarding remedy”” there were substituted ““previous bilateral safeguarding remedy””;

(b) for sub-paragraphs (3) to (5) there were substituted—

“(3) The Secretary of State may reject the recommendation if—

(a) the relevant free trade agreement contains provision restricting the circumstances in which a bilateral safeguarding remedy can be applied to goods to which a previous bilateral safeguarding remedy has been applied, and

(b) the Secretary of State considers that the acceptance of the recommendation would or might result in a breach of that provision.”

No interaction with anti-dumping remedies and anti-subsidy remedies

18 Paragraph 27 (interaction with anti-dumping remedies and anti-subsidy remedies) does not apply.

Registration

19 Schedule 5 applies as if after paragraph 28 (investigations regarding repayments) there were inserted—

“Registration

28A (1) The Secretary of State may publish a notice of goods—

(a) which are the subject of an investigation or other proceedings under provision made by or under this Schedule, and

(b) to which a provisional or definitive bilateral safeguarding amount or a provisional or definitive suspension of tariff rate reduction may be applied or the existing application of such an amount or reduction to which may be varied.

(2) HMRC must register goods in respect of which such a notice is published.

(3) Regulations may make provision for, or in connection with, the registration by HMRC of the goods—

(a) to which a provisional or definitive bilateral safeguarding amount or a provisional or definitive suspension of tariff rate reduction may be applied, or

(b) the existing application of a provisional or definitive bilateral safeguarding amount or a provisional or definitive suspension of tariff rate reduction to which may be varied.”

Reports and updates by the TRA and Secretary of State

20 (1) This paragraph applies where, in accordance with Schedule 5 as applied by this Schedule—

(a) the Secretary of State accepts or rejects a recommendation made by the TRA under any provision of that Schedule;

(b) the TRA determines that there is no recommendation which it could make.

(2) The Secretary of State may—

(a) produce and publish a report or update in relation to the bilateral safeguarding investigation concerned;

(b) request that the TRA produces such a report or update.

(3) Where the Secretary of State makes a request under sub-paragraph (2)(b)—

(a) the TRA must produce a report or update (as the case may be) in accordance with the request, and

(b) the Secretary of State may publish the report or update.

Secretary of State required to publish notice of decision about whether to apply remedy

21 (1) Any provision of Schedule 5 requiring the Secretary of State to publish notice of a determination of the TRA, of a recommendation under paragraph 11(3)(a), (aa) or (b) of that Schedule and of the acceptance or rejection of it is to be read instead as requiring the Secretary of State to publish notice of the Secretary of State’s decision to apply, or not to apply, a provisional bilateral safeguarding amount, a provisional suspension of tariff rate reduction, or a provisional tariff rate quota.

(2) Any provision of Schedule 5 requiring the Secretary of State to publish notice of a determination of the TRA, of a recommendation under paragraph 16(3)(a), (aa) or (b) of that Schedule and of the acceptance or rejection of it is to be read instead as requiring the Secretary of State to publish notice of the Secretary of State’s decision to apply, or not to apply, a definitive bilateral safeguarding amount, a definitive suspension of tariff rate reduction, or a tariff rate quota.

Secretary of State not required to lay statements before the House of Commons

22 The provisions of Schedule 5 imposing a requirement on the Secretary of State to lay a statement before the House of Commons do not apply in relation to any matter concerning a bilateral safeguarding investigation (and accordingly the Secretary of State is not required to lay such a statement).

Interpretation

23 (1) Paragraph 31 of Schedule 5 (interpretation) applies subject to sub-paragraph (2).

(2) In Schedule 5 as applied by this Schedule—

(a) references to a definitive safeguarding amount are to be read as references to a definitive bilateral safeguarding amount or a definitive suspension of tariff rate reduction (as the case may be);

(b) references to a provisional safeguarding amount are to be read as references to a provisional bilateral safeguarding amount or a provisional suspension of tariff rate reduction (as the case may be);

(c) references to a safeguarding investigation are to be read as references to a bilateral safeguarding investigation;

(d) references to a safeguarding remedy are to be read as references to a bilateral safeguarding remedy.

24 For the purposes of this Schedule and of Schedule 5 as applied by this Schedule—

• “bilateral safeguarding investigation” means an investigation under paragraph 6 of Schedule 5 as that provision applies by virtue of this Schedule;

• “bilateral safeguarding remedy” has the meaning given in paragraph 23(4)(a) of Schedule 5 as that provision applies by virtue of this Schedule;

• “definitive bilateral safeguarding amount” means the additional amount of import duty mentioned in paragraph 16(3)(a) of Schedule 5 as that provision applies by virtue of this Schedule.

• “definitive suspension of tariff rate reduction” has the meaning given in paragraph (aa) of paragraph 16(3) of Schedule 5 (see paragraph 11(1)(a));

• “free trade agreement” has the meaning given in section 5(1) of the Trade Act 2021;

• “provisional bilateral safeguarding amount” means the additional amount of import duty mentioned in paragraph (11)(3)(a) of Schedule 5 as that provision applies by virtue of this Schedule;

• “provisional suspension of tariff rate reduction” has the meaning given in paragraph (aa) of paragraph 11(3) of Schedule 5 (see paragraph 8(1)(a));

• “relevant free trade agreement”, in relation to a bilateral safeguarding investigation, means the free trade agreement mentioned in paragraph 6(aa) of Schedule 5 (see paragraph 4(b)).”

Commencement Information

I172 Sch. 20 para. 2 in force at Royal Assent for specified purposes, see Sch. 20 para. 3(1)

I173 Sch. 20 para. 2 in force at 13.5.2024 in so far as not already in force by S.I. 2024/522, reg. 2

Part 2 U.K. Commencement

3 (1) Any power to make regulations under or by virtue of this Schedule comes into force on the day on which this Act is passed. U.K.

(2) The remaining provisions of this Schedule come into force on such day as the Secretary of State may by regulations appoint.

(3) The Secretary of State may by regulations make transitional or saving provision in connection with the coming into force of any provision of this Schedule.

(4) The power to make regulations under sub-paragraph (3) includes power to make different provision for different purposes.

(5) Regulations under this paragraph are to be made by statutory instrument.

Commencement Information

I174 Sch. 20 para. 3 in force at Royal Assent for specified purposes, see Sch. 20 para. 3(1)

I175 Sch. 20 para. 3 in force at 13.5.2024 in so far as not already in force by S.I. 2024/522, reg. 2

Section 321

Schedule 21 U.K. Soft drinks industry levy: flavour concentrates

Introduction U.K.

1 Part 2 of FA 2017 (soft drinks industry levy) is amended as follows.

Meaning of “soft drink” and “package” U.K.

2 (1) Section 26 (“soft drink” and “package”) is amended as follows.

(2) At the end of subsection (1) insert “;

“(c) a liquid flavouring (a “flavour concentrate”) which, when processed in a specified manner in a dispensing machine, constitutes a beverage within that paragraph.”

(3) After subsection (2) insert—

“(2A) A flavour concentrate is processed in a specified manner if—

(a) it is combined with added sugar ingredients, with or without—

(i) artificial sweeteners, or

(ii) one or more other flavour concentrates; and

(b) the flavour concentrate (or combination) is prepared in a specified manner.

(2B) A “dispensing machine” is a machine designed to—

(a) combine, process or prepare ingredients so as to produce a beverage, and

(b) supply the beverage directly to a consumer.

(2C) In subsection (2A)(a), “added sugar ingredients” means anything within paragraph (a) or (b) of section 29(2).”

(4) In subsection (3)—

(a) omit the “and” at the end of paragraph (a);

(b) after paragraph (b) insert “and

(c) in the case of a soft drink within subsection (1)(c)—

(i) it is suitable to be consumed when processed in a specified manner in a dispensing machine (and without any other processing or preparation), and

(ii) it is ready for use in a dispensing machine;”.

Meaning of “prepared drinks” U.K.

3 (1) Section 27 (meaning of “prepared drink”) is amended as follows.

(2) At the end of subsection (1) insert “;

“(c) a beverage that would result from—

(i) processing a flavour concentrate within subsection (1)(c) of that section in a specified manner in a dispensing machine, and

(ii) in accordance with the relevant dispensing instructions.”

(3) In subsection (2)(b), for “subsection (3)” substitute “subsection (3)(a)”.

(4) After subsection (2) insert—

“(2A) The “relevant dispensing instructions” means—

(a) the instructions for use of the flavour concentrate provided with, or for the purposes of use with, the concentrate or a dispensing machine with which it is designed to be used;

(b) where subsection (3)(b) or (4A) applies, the dispensing instructions determined by the Commissioners.”

(5) For subsection (3) substitute—

“(3) This subsection applies where—

(a) in a case within subsection (1)(b), the packaging of the soft drink states neither the dilution ratio nor information by reference to which the dilution ratio can be calculated;

(b) in a case within subsection (1)(c), no dispensing instructions are provided with, or for the purposes of use with, the flavour concentrate or with any dispensing machine with which it is designed to be used.”

(6) After subsection (4) insert—

“(4A) This subsection applies where—

(a) dispensing instructions are provided, and

(b) it is reasonable to assume that the main purpose, or one of the main purposes, of providing those particular dispensing instructions is avoiding or reducing liability for soft drinks industry levy.”

(7) In subsection (5)—

(a) after paragraph (a) insert—

“(aa) determining dispensing instructions for the purposes of subsection (2A)(b);”;

(b) for paragraph (b) substitute—

“(b) determining whether the main purpose, or one of the main purposes, of—

(i) stating a particular dilution ratio or information, or

(ii) providing particular dispensing instructions;

is avoiding or reducing liability for soft drinks industry levy.”

Sugar content condition U.K.

4 In section 29 (sugar content condition), in subsection (1)—

(a) in the words before paragraph (a), omit “it contains”;

(b) for paragraph (a) (but not the “and” at the end) substitute—

“(a) either—

(i) it is a soft drink within section 26(1)(c), or

(ii) it contains added sugar ingredients;”;

(c) at the beginning of paragraph (b) insert “it contains”.

Exempt soft drinks U.K.

5 In section 30 (exempt soft drinks), in subsection (1)—

(a) omit the “and” at the end of paragraph (c);

(b) after paragraph (d) insert “, and

“(e) soft drinks within section 26(1)(c) (flavour concentrates) that meet such conditions as may be specified.”

Levy rates U.K.

6 After section 36 (levy rates) insert—

“36A Determining levy rate for flavour concentrates

(1) This section applies where—

(a) two or more flavour concentrates are formulated so as to be combined with one another in a dispensing machine (see section 26(2A)(a)(ii)), and

(b) each of those flavour concentrates is a chargeable soft drink.

(2) The references in section 36(1) to a litre of prepared drink are treated, in relation to each of the flavour concentrates, as references to the relevant proportion of a litre of prepared drink.

(3) Subject to subsection (4), the “relevant proportion” is—

where N is the number of flavour concentrates that are designed to be combined.

(4) The Commissioners may by regulations make provision for determining the relevant proportion (otherwise than in accordance with subsection (3)) in cases where the flavour concentrates mentioned in subsection (1)(a) are formulated so as to be combined in a dispensing machine—

(a) in unequal proportions, or

(b) in different combinations for different beverages.”

Tax credits U.K.

7 (1) Section 39 (tax credits) is amended as follows.

(2) In subsection (1), after paragraph (b) insert “;

(c) in the case of soft drinks within section 26(1)(c), the flavour concentrate—

(i) has not been combined with added sugar ingredients (but has been prepared in a specified manner), or

(ii) has been processed in a specified manner so as to result in a beverage that contains less than 5 grams of sugars per 100 millilitres of prepared drink.”

(3) In subsection (2)(a) for “exported or (as the case may be) lost or destroyed” substitute “that fall within subsection (1)(a), (b) or (c) (as the case may be)”.

Commencement U.K.

8 The amendments made by this Schedule come into force on 1 April 2023 in relation to soft drinks that are packaged in, or imported into, the United Kingdom on or after that date.

Section 325

Schedule 22 U.K. Reforms of HGV road user levy

1 U.K. The HGV Road User Levy Act 2013 is amended as follows.

2 U.K. In section 1(1) (charge to HGV road user levy), for the words “any heavy goods vehicle” to the end substitute “—

“(a) any UK heavy goods vehicle that is used or kept on a road to which this Act applies by virtue of section 3(1A)(a), and

(b) any non-UK heavy goods vehicle that is used on a road to which this Act applies by virtue of section 3(1A)(b).”

3 (1) Section 3 (roads to which this Act applies) is amended as follows. U.K.

(2) For subsection (1) substitute—

“(1A) Subject to subsection (2), this Act applies—

(a) in relation to UK heavy goods vehicles, to all public roads in the United Kingdom, and

(b) in relation to non-UK heavy goods vehicles, to any road which, under the system for assigning identification numbers to roads administered by the Secretary of State, Northern Ireland Ministers, Scottish Ministers or Welsh Ministers, has been assigned a number prefixed by A or M.”

(3) In subsection (2), in the words before paragraph (a), after “may by order provide” insert “in respect of UK heavy goods vehicles or non-UK heavy goods vehicles (or both)”.

(4) In subsection (4), for “this section” substitute “subsection (1A)(a)”.

4 U.K. In section 5(7) (payment of levy for UK heavy goods vehicles) for “paragraphs 2 to 4 of that Schedule and Tables 2 to 5” substitute “paragraph 1(3) of that Schedule and Table 1B”.

5 (1) Section 6 (payment of levy for non-UK heavy goods vehicles) is amended as follows. U.K.

(2) In subsection (2)—

(a) omit “or kept”;

(b) after “this Act applies” insert “by virtue of section 3(1A)(b)”.

(3) In subsection (9) for “paragraphs 2 to 4 of that Schedule and Tables 2 to 5” substitute “paragraph 1(3) of that Schedule and Table 1B”.

6 U.K. In section 7(2) (rebate of levy), for paragraph (c) substitute—

“(c) the person who paid the levy notifies the Secretary of State that—

(i) in the case of a UK heavy goods vehicle, the vehicle is not intended to be used or kept on a road to which this Act applies by virtue of section 3(1A)(a) at any time during the rest of the levy period, or

(ii) in the case of a non-UK heavy goods vehicle, the vehicle is not intended to be used on a road to which this Act applies by virtue of section 3(1A)(b) at any time during the rest of the levy period.”

7 U.K. In section 11 (offence of using or keeping heavy goods vehicle if levy not paid), in subsection (1), for the words before paragraph (a) substitute—

“If a person uses or keeps a UK heavy goods vehicle on a road to which this Act applies by virtue of section 3(1A)(a), or uses a non-UK heavy goods vehicle on a road to which this Act applies by virtue of section 3(1A)(b), on a day in respect of which the HGV road user levy charged in respect of the vehicle has not been paid—”.

8 (1) Section 14 (register of levy paid or due to be paid) is amended as follows. U.K.

(2) In subsection (1), for “must” substitute “may”.

(3) After subsection (1) insert—

“(1A) Subsections (2) to (5) apply in relation to any register set up and kept under subsection (1).”

(4) In subsection (4), at the end insert “but need not be accessible to all members of the public”.

9 U.K. In section 19 (interpretation), in subsection (1), in the definition of “revenue weight”, at the end insert “, subject to paragraph 5(2) of Schedule 1”.

10 (1) Schedule 1 (rates of HGV road user levy) is amended as follows. U.K.

(2) In paragraph 1, for sub-paragraph (3) substitute—

“(3) Table 1B sets out the Bands for the purposes of Tables 1 and 1A (and those Bands depend on the revenue weight of the vehicle).”

(3) Omit paragraphs 2 to 4.

(4) In paragraph 5—

(a) the existing text becomes sub-paragraph (1);

(b) in that sub-paragraph, in paragraph (a)—

(i) omit ““axle”, ”;

(ii) omit “and “tractive unit” each”;

(c) after that sub-paragraph insert—

“(2) For the purposes of this Schedule—

(a) in calculating the revenue weight of a rigid goods vehicle drawing a trailer weighing less than 4,000 kilograms, the weight of the trailer is to be ignored;

(b) in calculating the revenue weight of a rigid goods vehicle drawing a trailer weighing 4,000 kilograms or more, the weight of the trailer is to be added to the revenue weight of the vehicle.”

(5) For Table 1 substitute—

“TABLE 1: VEHICLES MEETING EURO 6 EMISSIONS STANDARDS — RATES FOR EACH BAND

Band	Daily rate	Weekly rate	Monthly rate	Half-yearly rate	Yearly rate
A	£3.00	£7.50	£15.00	£90.00	£150.00
B	£7.20	£18.00	£36.00	£216.00	£360.00
C	£9.00	£28.80	£57.60	£345.60	£576.00”.

(6) For Table 1A substitute—

“TABLE 1A: VEHICLES NOT MEETING EURO 6 EMISSIONS STANDARDS — RATES FOR EACH BAND

Band	Daily rate	Weekly rate	Monthly rate	Half-yearly rate	Yearly rate
A	£3.90	£9.75	£19.50	£117.00	£195.00
B	£9.36	£23.40	£46.80	£280.80	£468.00
C	£10.00	£37.45	£74.90	£449.40	£749.00”.

(7) After Table 1A insert—

“TABLE 1B: BANDS FOR THE PURPOSES OF TABLES 1 AND 1A

Revenue weight of vehicle	Band
More than 11,999kgs but not more than 31,000kgs	A
More than 31,000kgs but not more than 38,000kgs	B
More than 38,000kgs	C”.

(8) Omit Tables 2 to 5.

11 (1) In consequence of the amendments made by paragraph 10, in Part 8 of Schedule 1 to VERA 1994 (annual rates of duty: goods vehicles), paragraph 10 (relevant rigid goods vehicles) is amended as follows. U.K.

(2) After sub-paragraph (2) insert—

“(2A) In this paragraph, references to “the tables” are to the tables mentioned in sub-paragraph (6).”

(3) In sub-paragraph (3)—

(a) in the opening words omit “following”;

(b) in paragraph (c), for “appropriate HGV road user levy band” substitute “vehicle excise duty band”.

(4) For sub-paragraph (5) substitute—

“(5A) The “vehicle excise duty band” in relation to a vehicle is determined in accordance with the following table—

Revenue weight of vehicle		2 axle vehicle	3 axle vehicle	4 or more axle vehicle
Exceeding	Not exceeding
kgs	kgs	Band	Band	Band
11,999	15,000	B(T)	B(T)	B(T)
15,000	21,000	D(T)	B(T)	B(T)
21,000	23,000	E(T)	C(T)	B(T)
23,000	25,000	E(T)	D(T)	C(T)
25,000	27,000	E(T)	D(T)	D(T)
27,000	44,000	E(T)	E(T)	E(T)”.

(5) In each of the tables after sub-paragraph (6), in the headings to column 1, for “Appropriate HGV road user levy band” substitute “Vehicle excise duty band”.

12 U.K. The amendments made by this Schedule come into force on 1 August 2023.

Sections 331 and 332

Schedule 23 U.K. Freeports and investment zones: consequential amendments

FA 2003 U.K.

1 Part 4 of FA 2003 (stamp duty land tax) is amended as follows.

2 In section 61A—

(a) in subsection (1), for “freeport tax site” substitute “special tax site”,

(b) in subsection (5)(a), for “14 October 2027” substitute “the period of one year and 14 days beginning with the end of the applicable sunset date in relation to the special tax site in which the transaction land is situated”,

(c) in subsection (6), for the words from ““freeport tax site”” to the end substitute ““special tax site” means an area for the time being designated under section 113 of the Finance Act 2021”, and

(d) in the heading, for “freeport tax sites” substitute “special tax sites”.

3 In section 81—

(a) in subsection (1A)(aa), for “freeport tax sites” substitute “special tax sites”, and

(b) in subsection (1B)(eb)—

(i) for “freeport tax sites” substitute “special tax sites”, and

(ii) for “qualifying freeport land” substitute “qualifying land”.

4 In section 81ZA—

(a) in subsection (1), for “freeport tax sites” substitute “special tax sites”, and

(b) in subsection (3)(c), for “qualifying freeport land” substitute “qualifying land”.

5 In section 85(3), for “freeport tax sites” substitute “special tax sites”.

6 In section 86(2)(zb) and (2A), for “freeport tax sites” substitute “special tax sites”.

7 In section 87(3)(azaa) and (azab), for “freeport tax sites” substitute “special tax sites”.

8 In Schedule 6C—

(a) for paragraph 2 and the italic heading before it substitute—

“Qualifying land

2 For the purposes of this Schedule, transaction land is “qualifying land” if, on the effective date of the transaction—

(a) it is situated in a special tax site, and

(b) the purchaser intends it to be used exclusively in a qualifying manner.”,

(b) for “qualifying freeport land”, in each place (other than paragraph 2), substitute “qualifying land”,

(c) for “freeport tax site”, in each place, substitute “special tax site”,

(d) in paragraph 7—

(i) in sub-paragraph (2), for “(“the freeport consideration”)” substitute “(“the relevant consideration”)”, and

(ii) in sub-paragraphs (3) and (4), for “the freeport consideration” substitute “the relevant consideration”, and

(e) in the heading, for “freeport tax sites” substitute “special tax sites”.

CAA 2001 U.K.

9 CAA 2001 is amended as follows.

10 In section 3—

(a) in subsection (2ZZA), for “freeport tax sites” substitute “special tax sites”, and

(b) in subsection (2ZA)(b), for “freeport qualifying expenditure” substitute “special tax site qualifying expenditure”.

11 In the following provisions of Part 2 (plant and machinery allowances)—

(a) section 39,

(b) sections 45O to 45R,

(c) section 46(1), and

(d) section 52(3),

for “freeport tax site” and for “freeport tax sites” (in each place) substitute “special tax site” and “special tax sites” respectively.

12 In section 45Q—

(a) in subsection (1)(b), for “the “non-freeport part” of” substitute “the “non-qualifying part” of”, and

(b) in subsections (2) and (3), for “non-freeport part” substitute “non-qualifying part”.

13 In the following provisions of Part 2A (structures and building allowances)—

(a) section 270AA,

(b) Chapter 2A,

(c) section 270IA(5),

for “freeport qualifying expenditure”, in each place, substitute “special tax site qualifying expenditure”.

14 In the following provisions of that Part—

(a) section 270BJ(2A), and

(b) Chapter 2A,

for “freeport tax site”, in each place, substitute “special tax site”.

15 For section 573A substitute—

“573A Special tax sites

In this Act “special tax site” means an area for the time being designated under section 113 of FA 2021.”

16 In Part 2 of Schedule 1—

(a) omit the definition of “freeport tax site”, and

(b) at the appropriate place insert—

“special tax site

section 573A”

FA 2021 U.K.

17 Part 4 of FA 2021 is amended as follows.

18 In the italic heading before section 113 at the end insert “and investment zones”.

19 In the heading for section 113 (designation of freeport tax sites), for “freeport tax sites” substitute “special tax sites”.

National Insurance Contributions Act 2022 U.K.

20 The National Insurance Contributions Act 2022 is amended as follows.

21 In the italic heading before section 1, for “Freeports” substitute “Special tax sites”.

22 In section 1—

(a) in subsections (1)(b) and (6), for “freeport conditions” substitute “applicable conditions”, and

(b) in the heading, for “freeport tax sites” substitute “special tax sites”.

23 In section 2—

(a) in subsection (1)—

(i) for “The freeport conditions” substitute “The applicable conditions”,

(ii) in paragraph (a)(ii), for “5 April 2026” substitute “the applicable sunset date”, and

(iii) in paragraph (d), for “freeport tax site” substitute “special tax site”,

(b) after subsection (2) insert—

“(2A) For the purposes of this section “the applicable sunset date”, in relation to a special tax site, means —

(a) 5 April 2026, or

(b) such later date as may be specified under section 332(4)(b) of the Finance (No.2) Act 2023 as the applicable sunset date in relation to the site concerned for the purposes of the provisions mentioned in subsection (4) of that section.”,

(c) in subsection (4)(b), for “freeport tax site” substitute “special tax site”,

(d) for subsection (6) substitute—

“(6) The relevant end date is the last day of the period of three years beginning with the day after the applicable sunset date.”, and

(e) in the heading, for “Freeport conditions” substitute “Applicable conditions”.

24 In section 3—

(a) omit subsection (1),

(b) in subsection (2), for “a freeport” substitute “an applicable”,

(c) in subsection (3), for “freeport” substitute “applicable”, and

(d) in the heading, for “Freeport conditions” substitute “Applicable conditions”.

25 In section 5, in the heading, for “freeport tax sites” substitute “special tax sites”.

26 In section 12(2), omit paragraph (a).

27 In section 13(2)—

(a) omit the definition of “freeport tax site”, and

(b) at the end insert—

• ““special tax site” has the meaning given by section 113 of the Finance Act 2021 (designation of special tax sites).”

Section 346

Schedule 24 U.K. Homes for Ukraine Sponsorship Scheme: exemptions from tax

Income tax and corporation tax U.K.

1 (1) No liability to income tax or corporation tax arises in respect of a payment which is made by a local authority to a person (“S”) by reason of S—

(a) being an approved sponsor under the Homes for Ukraine Sponsorship Scheme, and

(b) providing accommodation to a person granted entry clearance or permission to stay under that scheme.

(2) This paragraph has effect in relation to payments made on or after 14 March 2022.

Annual tax on enveloped dwellings U.K.

2 (1) Part 3 of FA 2013 (annual tax on enveloped dwellings) is modified as follows.

(2) That Part has effect as if after section 133 there were inserted—

“133A Deemed property rental business: Homes for Ukraine Sponsorship Scheme

(1) A day in a chargeable period (“day X”) is to be treated as relievable in relation to a single-dwelling interest by virtue of section 133(1) (property rental business) if (ignoring this section) day X is not relievable by virtue of any of the provisions listed in section 132(3) and—

(a) in a case where the day immediately before day X was relievable in relation to a single-dwelling interest by virtue of section 133(1) (including by virtue of this section), Condition A or B is met in relation the dwelling on day X, or

(b) in a case where the day immediately before day X was not relievable in relation to a single-dwelling interest by virtue of section 133(1), Condition A is met in relation to the dwelling on day X.

(2) For the purposes of subsection (1)—

(a) Condition A is that the dwelling is exclusively occupied by an individual (or individuals) granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme;

(b) Condition B is that reasonable steps are being taken to secure that the dwelling will, without undue delay, be so occupied.

(3) A day is not relievable by virtue of this section in the case of a single-dwelling interest if on that day a non-qualifying individual is permitted to occupy the dwelling.

(4) In subsection (2)(b), “without undue delay” means without delay except so far as delay is justified by commercial considerations or cannot be avoided.”

(3) Section 138 (property developers) has effect as if for subsection (2) there were substituted—

“(2) If the property developer holds an interest for the purpose mentioned in subsection (1)(b), any additional purpose the property developer may have of—

(a) exploiting the interest as a source of rents or other receipts in the course of a qualifying property rental business (after developing the land and before reselling it), or

(b) permitting an individual granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme to occupy the dwelling,

is treated as not being a separate purpose in applying the test in subsection (1)(b).”

(4) Section 141 (property traders) has effect as if, after subsection (2), there were inserted—

“(2A) If the person holds an interest for the purpose mentioned in subsection (1)(b), any additional purpose the person may have of permitting an individual, other than a non-qualifying individual, who is granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme to occupy the dwelling is treated as not being a separate purpose in applying the test in subsection (1)(b).”

(5) Section 174 (general interpretation) has effect as if, in subsection (1), at the appropriate place, there were inserted—

• ““the Homes for Ukraine Sponsorship Scheme” means the scheme contained in paragraphs UKR 11.1 to UKR 20.2 of Appendix Ukraine Scheme to the immigration rules (within the meaning of the Immigration Act 1971);”.

(6) The modifications made by this paragraph have effect in relation to days falling in the period—

(a) beginning with 1 April 2022, and

(b) ending with such date as may be specified in regulations made by the Treasury by statutory instrument.

Stamp duty land tax U.K.

3 (1) Schedule 4A to FA 2003 (stamp duty land tax: higher rate for certain transactions) is modified as follows.

(2) Paragraph 5 (businesses of letting, trading in or redeveloping properties) has effect as if after sub-paragraph (2) there were inserted—

“(2A) In determining whether a chargeable interest has been acquired exclusively for one or more of those purposes, any intention to permit an individual, other than a non-qualifying individual, who is granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme to occupy any dwelling on the land is to be ignored.”

(3) In paragraph 5G (withdrawal of relief allowed under paragraph 5), sub- paragraph (4) has effect as if—

(a) the words from “because of a change of circumstances” to the end become paragraph (a);

(b) after that paragraph there were inserted—

“(b) any dwelling on the land is occupied by an individual granted entry clearance, or permission to stay, under the Homes for Ukraine Sponsorship Scheme, or

(c) the purchaser is taking reasonable steps to ensure that any dwelling on the land will be so occupied without delay (except so far as delay may be justified by commercial considerations or cannot be avoided)”;

(4) Paragraph 9 (interpretation) has effect as if, at the appropriate place, there were inserted—

• ““the Homes for Ukraine Sponsorship Scheme” means the scheme contained in paragraphs UKR 11.1 to UKR 20.2 of Appendix Ukraine Scheme to the immigration rules (within the meaning of the Immigration Act 1971);”.

(5) The modification made by sub-paragraph (2) has effect in relation to any land transaction the effective date of which is in the period—

(a) beginning with 31 March 2022, and

(b) ending with such date as may be specified in regulations made by the Treasury by statutory instrument.

(6) The modifications made by sub-paragraph (3) and (4) have effect in relation to any time in the period mentioned in sub-paragraph (5).

Regulations U.K.

4 A statutory instrument containing regulations under the following provisions of this Schedule may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons—

(a) paragraph 2(6)(b);

(b) paragraph 3(5)(b).