SCHEDULES
F1F2SCHEDULE 19A UNDERWRITERS: ASSESSMENT AND COLLECTION OF TAX
Sch. 19A repealed and superseded (with Sch. 19 of the amending Act) (27.7.1993 with effect for the year 1992-93 and subsequent years of assessment) by 1993 c. 34, ss. 173(2), 213, Sch. 23 Pt. III(12) Note 5
Preliminary
1
P11
In this Schedule—
“agent”, in relation to a syndicate and a year of assessment, means—
a
the person who was acting as underwriting agent for that syndicate at the end of the corresponding underwriting year; or
b
such other person as may be determined in accordance with regulations made by the Board by statutory instrument;
F3“closing year”, in relation to a year of assessment, means the year of assessment next but one following that year;
“inspector” includes any officer of the Board;
F4“managing agent”, in relation to a syndicate and a year of assessment, means—
a
the person registered as a managing agent at Lloyd’s who was acting as such for the syndicate at the end of the corresponding underwriting year, or
b
such other person as may be determined in accordance with regulations made by the Board;
“members’ agent”, in relation to a member of a syndicate and a year of assessment, means—
a
the person registered as a members’ agent at Lloyd’s who was acting as such for that member at the end of the corresponding underwriting year, or
b
if there was more than one such person acting as a members’ agent for that member at that time—
i
the person who was so acting at that time and was appointed by the member to be responsible for complying with the requirements of this Schedule and of any regulations made under section 451(1) or (1A) in connection with tax charged in accordance with section 450 on the profits of all the syndicates of which he was a member, or
ii
if no such person was so appointed, the person who was so acting at that time for the member in his capacity as a member of that syndicate, or
c
such other person as may be determined in accordance with regulations made by the Board;
“member’s profit or loss”, in relation to a member of a syndicate, means the aggregate amount of the profits or losses, as shown in the accounts of each syndicate of which he is a member and in relation to which he has the same members’ agent, arising to the member from each such syndicate (taken together) and “member’s profits” and “member’s losses” shall be construed accordingly;
“profits” includes gains;
“syndicate” means a syndicate of underwriting members of Lloyd’s formed for an underwriting year;
“syndicate profit or loss”, in relation to a syndicate, means the aggregate amount of the profits or losses arising to all the members of the syndicate (taken together), and “syndicate profits” and “syndicate losses” shall be construed accordingly.
2
References in this Schedule to profits or losses arising to a member of a syndicate are references to profits or losses which—
a
arise to him in his capacity as such a member, whether from his underwriting business or from assets forming part of a premiums trust fund; and
b
are chargeable or, as the case may be, allowable under Case I of Schedule D.
P13
Regulations under this paragraph may make provision with respect to the year of assessment next but one preceding the year of assessment in which they are made.
F5 Returns by managing agent
S.I. 1990 No.2524 reg. 3(3)coming into force 2January 1991for 1988-89and subsequent years.
2
1
An inspector may, at any time after the end of the closing year for a year of assessment, by notice in writing to the managing agent require him to deliver to the inspector, on or before the final day determined under sub-paragraph (2) below, a return of the syndicate profit or loss for the year of assessment—
a
containing such information as may be required in pursuance of the notice; and
b
accompanied by such accounts, statements and reports as may be so required.
2
The final day for the delivery of any return required by a notice under sub-paragraph (1) above is whichever is the later of—
a
the 1st September next following the end of the closing year for the year of assessment; and
b
the end of the period of three months beginning on the day following that on which the notice was served.
3
If the managing agent, having been required by a notice under sub-paragraph (1) above to deliver a return, fails to deliver the return on or before the final date for its delivery, he shall be liable to a penalty equal to the prescribed amount multiplied by the number of days on which the failure continues; and in this sub-paragraph “the prescribed amount” means £60 for each fifty members of the syndicate (counting any number of members less than fifty, and any number left over, as fifty).
4
If the managing agent fraudulently or negligently delivers an incorrect return under sub-paragraph (1) above, he shall be liable to a penalty not exceeding the prescribed amount multiplied by the number of members of the syndicate; and in this sub-paragraph “the prescribed amount” means £3,000.
5
In relation to a return required by a notice under sub-paragraph (1) above—
a
any reference in sub-paragraph (2) or (3) above to the delivery of the return is a reference to its delivery together with the accompanying documents referred to in sub-paragraph (1) above; and
b
the reference in sub-paragraph (4) above to the return being incorrect includes a reference to any of those documents being incorrect.
F6 Repayment claims by managing agent
S.I. 1990 No.2524 reg. 4coming into force 2January 1991for 1988-89and subsequent years.
2A
1
In relation to an underwriting year a managing agent may, by notice in writing at any time during the period of six years beginning with 1st March in the closing year for that year, make a claim to the inspector for the repayment of tax suffered by way of deduction on the syndicate investment income allocated to that year in accordance with the rules or practice of Lloyd’s.
2
The managing agent shall provide such information in support of the claim as the inspector may reasonably require.
3
Where an amount is repaid to the managing agent under this paragraph, he shall apportion the amount repaid between the members of the syndicate in proportion to their interests in that part of the syndicate investment income which has suffered tax by way of deduction and, where there is a syndicate profit available for distribution to the members, shall pay the amount so apportioned to the members’ agent in relation to each member within 90 days of receipt.
4
The provisions of section 824 shall not apply to any repayment of tax made under this paragraph.
Returns by members’ agent
C1F72B
1
An inspector may, at any time after the end of the closing year for that year of assessment, by notice in writing to the members’ agent require him to deliver to the inspector, on or before the final day determined under sub-paragraph (3) below, a return of the member’s profit for the year of assessment in respect of those syndicates in relation to which he is the members’ agent of the member—
a
containing such information as may be required in pursuance of the notice, and
b
accompanied by such statements and reports as may be so required, and
c
containing a statement of the amount of tax which would be payable on that profit if income tax were payable on the whole of it at the basic rate in force for the year of assessment.
2
For the purposes of the return by the members’ agent of the member’s profit—
a
there shall be added to that profit an amount representing the depreciation in value for the year of assessment of assets forming part of a premiums trust fund, and
b
there may be deducted from that profit—
i
an amount representing the appreciation in value for the year of assessment of assets forming part of a premiums trust fund.
ii
an amount in respect of disbursements and expenses wholly and exclusively laid out for the purposes of the member’s underwriting business, and of any premium paid by the member on an insurance against losses in his underwriting business, where that amount is claimed in the member’s return for the year of assessment as being deductible from that profit.
3
The final day for the delivery of any return required by a notice under sub-paragraph (1) above is whichever is the later of—
a
1st October in the year of assessment following the closing year for the year of assessment; and
b
the end of the period of three months beginning on the day following that on which the notice was served.
4
If the members’ agent, having been required by a notice under sub-paragraph (1) above to deliver a return, fails to deliver the return on or before the final day for its delivery, he shall be liable to a penalty equal to the prescribed amount multiplied by the number of days on which the failure continues; and in this sub-paragraph “the prescribed amount” means £60 for each fifty members for whom he acts and in respect of whom there is such a failure (counting any number of such members less than fifty, and any number left over, as fifty).
5
If the members’ agent fraudulently or negligently delivers an incorrect return under sub-paragraph (1) above, he shall be liable to a penalty not exceeding the prescribed amount multiplied by the number of members for whom he acts and in respect of whose returns there is such fraud or negligence; and in this sub-paragraph “the prescribed amount” means £3,000.
6
In relation to a return required by a notice under sub-paragraph (1) above—
a
any reference in sub-paragraph (1) or (3) above to the delivery of the return is a reference to its delivery together with the accompanying documents referred to in sub-paragraph (1) above; and
b
the reference in sub-paragraph (5) above to the return being incorrect includes a reference to any of those documents being incorrect.
F8 Payments on account of tax
S.I. 1990 No.2524 reg. 5coming into force 2January 1991for 1988-89and subsequent years.
3
1
In the case of a member’s profit for a year of assessment, the members’ agent shall, on or before the 1st January next following the end of the closing year for that year, pay to the collector, on account of the member’s liability to tax, the amount stated in his return for that year under paragraph 2B(1)(c) above.
2
Where an amount is paid to the collector under sub-paragraph (1) above for a year of assessment, the following provisions shall apply as between a member and that members’ agent—
a
where the amount so paid exceeds the amount deducted by the members’ agent in accounting to the member for that member’s profit, the amount of the excess shall be paid by the member to the members’ agent; and
b
where the amount so paid is less than the amount deducted by the members’ agent in accounting to the member for that member’s profit, the amount of the excess shall be paid by the members’ agent to the member.
3
Where an amount is paid to the collector under sub-paragraph (1) above for a year of assessment, the following provisions shall apply as respects the member’s liability to tax for that year—
a
where the amount in which the member is charged to tax exceeds the amount so paid, the amount of the excess shall be the amount of tax due and payable; and
b
where that amount exceeds the amount in which the member is so charged, the amount of the excess shall be treated as tax overpaid.
4
Any amount which is payable under sub-paragraph (1) above shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the date when it becomes payable until payment, whether or not that date is a non-business day within the meaning of the Bills of Exchange Act 1882, and section 90 of the Taxes Management Act 1970 shall apply for the purposes of this paragraph as it applies for the purposes of any provision of Part IX of that Act.
Assessments on members’ agent
3A
1
If the members’ agent delivers a return in accordance with paragraph 2B above but does not pay to the collector the amount of tax stated in the return in accordance with paragraph 3 above, the inspector may make an assessment on the members’ agent in that amount whether or not it has been paid when the assessment is made.
2
If for a year of assessment the inspector is dissatisfied with a return under paragraph 2B above, or there is no such return, he may make an assessment on the members’ agent to the best of his judgment.
3
Any income tax due under an assessment made by virtue of sub-paragraph (1) or (2) above shall be treated for the purposes of interest on unpaid tax as having been payable at the time when it would have been payable if a correct return had been made.
Determinations by inspector
4
1
If the inspector is satisfied that a return under paragraph 2(1) above affords correct and complete information concerning the syndicate profit or loss for a year of assessment, he shall determine that profit or loss accordingly.
2
If for a year of assessment the inspector is dissatisfied with a return under paragraph 2(1) above, or there is no such return, the inspector shall determine the syndicate profit or loss for that year to the best of his judgment.
3
If the inspector discovers that a determination under sub-paragraph (1) or (2) above—
a
understates the syndicate profits for the year of assessment; or
b
overstates the syndicate losses for that year,
he may, by a determination under this sub-paragraph, vary the first-mentioned determination accordingly.
4
Notice of a determination under this paragraph shall be served on the [managing F9] agent and shall state the time within which any appeal against the determination may be made under paragraph 5 below.
5
After notice of a determination under this paragraph has been served on the [managing F9] agent, the determination shall not be altered except in accordance with the express provisions of the Taxes Acts.
Appeals
5
1
The [managing F10] agent may appeal against a determination under paragraph 4 above by a notice of appeal in writing given to the inspector within thirty days after the date of the notice of determination.
2
An appeal under this paragraph shall be to the General Commissioners, except that the [managing F10] agent may elect (in accordance with section 46(1) of the Taxes Management Act 1970) to bring the appeal before the Special Commissioners instead of the General Commissioners; and subsections (5) to (5E) of section 31 of that Act shall apply for the purposes of an election under this sub-paragraph as they apply for the purposes of an election under subsection (4) of that section.
Modification of determinations pending appeal
6
1
Where the [managing F11] agent appeals against a determination under paragraph 4 above, then, for the purpose of establishing, in the event of a member of the syndicate appealing against an assessment made on him, the amount of tax the payment of which should, pending the determination of that appeal, be postponed under section 55 of the Taxes Management Act 1970, that section shall apply to the first-mentioned appeal with the modifications specified in sub-paragraph (2) below.
2
The modifications are as follows—
a
any reference to the notice of assessment shall be construed as a reference to the notice of determination;
b
any reference to the appellant believing that he is overcharged to tax by the assessment shall be construed as a reference to him believing that the determination overstates the syndicate profits, or understates the syndicate losses, for the year of assessment, and any reference to the appellant having grounds for so believing, or there being reasonable grounds for so believing, shall be construed accordingly;
c
any reference to a determination of the amount of tax the payment of which should be postponed pending the determination of the appeal shall be construed as a reference to a direction that the determination shall, pending the determination of the appeal, have effect for the purpose stated in sub-paragraph (1) above as if the syndicate profits there stated were reduced, or the syndicate losses there stated were increased, by such amount as may be specified in the direction, and any reference to an amount of tax so determined, or to the amount of tax which should be so postponed, shall be construed accordingly; and
d
subsections (2) and (9) and, in subsection (6), paragraphs (a) and (b) and the word “and” immediately preceding paragraph (a) shall be omitted.
Apportionments of syndicate profit or loss
7
1
Where a determination of a syndicate profit or loss for a year of assessment is made, varied or modified (whether under the foregoing provisions of this Schedule or on appeal), the inspector may, by notice in writing to the [managing F12] agent, require him to make to the inspector, within the specified period, a return apportioning, between the members of the syndicate, the syndicate profit or loss as stated in the determination as so made, varied or modified.
2
If the [managing F12] agent, having been required by a notice under sub-paragraph (1) above to deliver a return within the specified period, fails to deliver the return within that period, he shall be liable to a penalty equal to the prescribed amount multiplied by the number of days on which the failure continues; and in this sub-paragraph “the prescribed amount” means £5 for each fifty members of the syndicate (counting any number of members left over as fifty).
3
In this paragraph “the specified period” means such period, not being less than thirty days and beginning with the day following the date of the notice under sub-paragraph (1) above, as may be specified in that notice.
Individual members: effect of determinations
8
1
A determination of a syndicate profit or loss for a year of assessment (whether as originally made or as varied or modified) shall, for the purpose of determining the liability to tax of each member of the syndicate, be conclusive against that member that the syndicate profit or loss for that year is as there stated.
2
Where a determination of a syndicate profit or loss for a year of assessment is varied or modified at any time after the issue of a notice of assessment assessing any member of the syndicate to tax—
a
section 31 of the Taxes Management Act 1970 (right of appeal) and section 55 of that Act (postponement of tax) shall have effect, in relation to that member, as if any reference to the date of the notice of assessment, or the date of the issue of the notice of assessment, were a reference to the date of the variation or modification; and
b
in the case of a variation, an assessment which gives effect to the determination as varied shall not be out of time if it is made within one year of the date of the variation.
3
Sub-paragraph (2)(b) above shall not apply in the case of a variation under paragraph 4(3) above which is made later than six years after the end of the closing year.
Assessment of individual members: time limits
9
Supplemental: penalties
10
1
If it appears to an inspector or the Board that the agent is liable to a penalty under paragraph 2(3)or 7(2)above, the amount appearing to be due may be assessed by the inspector or the Board as if it were tax for the year of assessment in which the failure to make the return occurred; and, subject to the provisions of this paragraph, the provisions of the Taxes Management Act 1970relating to the assessment and collection of tax shall apply accordingly.
2
An amount assessed by way of penalty under paragraph 2(3)or 7(2)above shall be due at the end of the period of thirty days beginning with the date of the issue of the notice of assessment.
3
On an appeal against an assessment of an amount by way of penalty under sub-paragraphs (3)of paragraph 2or sub-paragraph (2)of paragraph 7above, subsections (6)to (8)of section 50of that Act shall not apply but the Commissioners—
a
may confirm the amount of the assessment or, if it appears to them that the amount assessed is greater or smaller than the penalty provided for under that sub-paragraph, may reduce it or increase it to such an amount as is appropriate having regard to the provisions of that sub-paragraph; and
b
if it appears to them that no penalty has been incurred, may set the assessment aside.
4
Where an amount has been assessed by way of penalty under sub-paragraph (3)of paragraph 2or sub-paragraph (2)of paragraph 7above and either no appeal has been brought against that assessment or the amount assessed has been confirmed or varied on appeal—
a
a certificate of an inspector or other officer of the Board that an amount is due by way of penalty under that sub-paragraph; and
b
a certificate of a collector that payment of that amount has not been made to him or, to the best of his knowledge and belief, to any other collector, or to a person acting on his behalf or on behalf of another collector,
shall be sufficient evidence that the amount mentioned in the certificates is unpaid and is due to the Crown; and any document purporting to be such a certificate as is mentioned in this sub-paragraph shall be deemed to be such a certificate unless the contrary is proved.
5
Section 100of the Taxes Management Act 1970 (procedure for recovery of penalties)shall not apply to a penalty under paragraph 2(3)or 7(2)aboveF15.
Supplemental: interest
11
1
Interest charged under paragraph 3(4)above shall be treated for the purposes of the enactments mentioned in section 69of the Taxes Management Act 1970 (interest on tax)as if it were tax charged and due and payable under an assessment.
Sch. 19A inserted (1988-89 and subsequent years) by Finance Act 1988 (c. 39), s. 58(4)(a)(5), Sch. 5