Finance Act 1990

Part I U.K. Customs and Excise and Value Added Tax

chapter I U.K. Customs and Excise

Rates of duty U.K.

1 Spirits, beer, wine, made-wine and cider. U.K.

(1) In section 5 of the M1 Alcoholic Liquor Duties Act 1979 (spirits) for “£15.77” there shall be substituted “ £17.35 ”.

(2) In section 36 of that Act (beer) for “£0.90” there shall be substituted “ £0.97 ”.

(3) For the Table of rates of duty in Schedule 1 to that Act (wine and made-wine) there shall be substituted the Table in Schedule 1 to this Act.

(4) In section 62(1) of that Act (cider) for “£17.33” there shall be substituted “ £18.66 ”.

(5) This section shall be deemed to have come into force at 6 o’clock in the evening of 20th March 1990.

Marginal Citations

M1 1979 c. 4.

2 Tobacco products. U.K.

(1) For the Table in Schedule 1 to the M2 Tobacco Products Duty Act 1979 there shall be substituted—

“ TABLE

1. Cigarettes	An amount equal to 21 per cent. of the retail price plus £34.91 per thousand cigarettes.
2. Cigars	£53.67 per kilogram.
3. Hand-rolling tobacco	£56.63 per kilogram.
4. Other smoking tobacco and chewing tobacco	£24.95 per kilogram.”

(2) This section shall be deemed to have come into force on 23rd March 1990.

Marginal Citations

M2 1979 c. 7.

3 Hydrocarbon oil. U.K.

(1) In section 6 of the M3 Hydrocarbon Oil Duties Act 1979—

(a) in subsection (1), for “£0.2044” (duty on light oil) and “£0.1729” (duty on heavy oil) there shall be substituted “ £0.2248 ” and “ £0.1902 ” respectively; and

(b) subsection (2A) (special rate of duty on petrol below 4 star) shall cease to have effect.

(2) In section 11(1) of that Act, for “£0.0077” (rebate on fuel oil) and “£0.0110” (rebate on gas oil) there shall be substituted “ £0.0083 ” and “ £0.0118 ” respectively.

(3) In section 13A(1) of that Act (rebate on unleaded petrol), for “£0.0272” there shall be substituted “ £0.0299 ”.

(4) In section 14(1) of that Act (rebate on light oil for use as furnace fuel), for “£0.0077” there shall be substituted “ £0.0083 ”.

(5) In Part I of Schedule 3 to that Act, for paragraph 10A there shall be substituted—

“10A Amending the definition of “aviation gasoline” in subsection (4) of section 6 of this Act.”

(6) Subsections (1) to (4) above shall be deemed to have come into force at 6 o’clock in the evening of 20th March 1990.

Marginal Citations

M3 1979 c. 5.

4 Pool betting duty. U.K.

(1) In section 7(1) of the M4 Betting and Gaming Duties Act 1981 (which specifies 42½ per cent. as the rate of pool betting duty), for the words “42½ per cent.” there shall be substituted the words “ 40 per cent. ”.

(2) This section shall apply in relation to bets made at any time by reference to an event taking place on or after 6th April 1990.

Marginal Citations

M4 1981 c. 63.

5 Vehicles excise duty. U.K.

(1) The M5 Vehicles (Excise) Act 1971 (“the 1971 Act”) and the M6 Vehicles (Excise) Act (Northern Ireland) 1972 (“the 1972 Act”) shall be amended as follows.

(2) In Schedule 3 to each Act (annual rates of duty on haulage vehicles)—

(a) in paragraph 1 of Part I, for the words from “according” to the end there shall be substituted the words “be the rate specified in relation to vehicles of that description in the second column of that Part.”; and

(b) for the Table set out in Part II there shall be substituted the Table set out in Part I of Schedule 2 to this Act.

(3) Part II of Schedule 2 to this Act (which amends Part I of Schedule 4 to the 1971 Act) shall have effect.

(4) Part III of Schedule 2 to this Act (which amends Part I of Schedule 4 to the 1972 Act) shall have effect.

(5) For the Tables set out in Part II of Schedule 4 to the 1971 Act there shall be substituted the Tables set out in Part IV of Schedule 2 to this Act.

(6) The Tables set out in Part IV of Schedule 2 to this Act shall also be substituted for the Tables set out in Part II of Schedule 4 to the 1972 Act, but with the following modifications—

(a) for the words “plated gross weight”, in each place where they occur, there shall be substituted the words “relevant maximum weight”, and

(b) for the words “plated train weight”, in each place where they occur, there shall be substituted the words “relevant maximum train weight”.

(7) In paragraph 2 of Schedule 4A to each Act (annual rates of duty on vehicles used for carrying or drawing exceptional loads) for “£3,100” there shall be substituted “£3,250”.

(8) This section, except subsections (3) and (4), shall apply in relation to licences taken out after 20th March 1990.

(9) Subsections (3) and (4) above shall apply in relation to licences taken out after 30th September 1990.

Marginal Citations

M5 1971 c. 10.

M6 1972 c. 10 (N.I.).

Other provisions U.K.

6 Vehicles excise duty: exemptions. U.K.

(1) Section 4 of each of the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 (exemptions) shall be amended as follows.

(2) In subsection (1) the following paragraph shall be inserted after paragraph (c)—

“(ca) veterinary ambulances;”.

(3) In subsection (1) the following paragraphs shall be inserted after paragraph (k)—

“(ka) vehicles (other than mowing machines) neither constructed nor adapted for use nor used for the carriage of a driver or passenger;

(kb) vehicles (other than ambulances) used for the carriage of disabled persons by bodies for the time being recognised for the purposes of this paragraph by the Secretary of State;”.

(4) The following subsections shall be inserted after subsection (1)—

“(1A) The Secretary of State shall recognise a body for the purposes of subsection (1)(kb) above if, on application made to him in such manner as he may specify, it appears to him that the body is concerned with the care of disabled persons.

(1B) The issue by the Secretary of State of a nil licence in respect of a mechanically propelled vehicle shall be treated, where the document is issued by virtue of paragraph (kb) of subsection (1) above, as recognition by him for the purposes of that paragraph of the body by reference to whose use of the vehicle the document is issued.

(1C) The Secretary of State may withdraw recognition of a body for the purposes of subsection (1)(kb) above if it appears to him that the body is no longer concerned with the care of disabled persons.

(1D) The reference in subsection (1B) above to the issue by the Secretary of State of a nil licence is a reference to the issue by him in accordance with regulations under this Act of a document which—

(a) is in the form of a vehicle licence, and

(b) has the word “NIL” marked in the space provided for indicating the amount of duty payable.”

(5) In subsection (2) the following definitions shall be inserted before the definition of “road construction vehicle”—

““ambulance” means a vehicle which—

(a) is constructed or adapted for, and used for no other purpose than, the carriage of sick, injured or disabled persons to or from welfare centres or places where medical or dental treatment is given; and

(b) is readily identifiable as a vehicle used for the carriage of such persons by virtue of being marked “Ambulance” on both sides;

“disabled person” means a person suffering from a physical or mental defect or disability;

“veterinary ambulance” means a vehicle which—

(a) is used for no other purpose than the carriage of sick or injured animals to or from places where veterinary treatment is given; and

(b) is readily identifiable as a vehicle used for the carriage of such animals by virtue of being marked “Veterinary Ambulance” on both sides;”.

(6) This section shall be deemed to have come into force on 21st March 1990.

7 Entry of goods on importation. U.K.

Schedule 3 to this Act (which amends the provisions of the M7 Customs and Excise Management Act 1979 about initial and supplementary entries and postponed entry) shall have effect in relation to goods imported on or after the day on which this Act is passed.

Marginal Citations

M7 1979 c. 2.

8 Spirits methylated abroad. U.K.

(1) In section 4(1) of the M8 Alcoholic Liquor Duties Act 1979, for the definition of “methylated spirits” there shall be substituted—

““methylated spirits” means—

(a) spirits mixed in the United Kingdom with some other substance in accordance with regulations made under section 77 below; or

(b) spirits mixed outside the United Kingdom with some other substance if the spirits and other substance, and the proportions in which they are mixed, are such as are prescribed by those regulations for the production of methylated spirits in the United Kingdom;”.

(2) This section shall come into force on 1st January 1991.

Marginal Citations

M8 1979 c. 4.

9 Lodgings for officers in charge of distillery. U.K.

In section 12 of the Alcoholic Liquor Duties Act 1979 (licence to manufacture spirits) subsections (6) to (9) (requirement that distiller provide lodgings for officers in charge of distillery) shall cease to have effect.

chapter II U.K. Value Added Tax

10 Registration. U.K.

(1) The M9 Value Added Tax Act 1983 shall be amended as follows.

(2) For paragraph 1(1) to (3) of Schedule 1 (registration) there shall be substituted—

“(1) Subject to sub-paragraphs (3) to (5) below, a person who makes taxable supplies but is not registered becomes liable to be registered—

(a) at the end of any month, if the value of his taxable supplies in the period of one year then ending has exceeded £25,400; or

(b) at any time, if there are reasonable grounds for believing that the value of his taxable supplies in the period of thirty days then beginning will exceed £25,400.

(2) Where a business carried on by a taxable person is transferred to another person as a going concern and the transferee is not registered at the time of the transfer, then, subject to sub-paragraphs (3) to (5) below, the transferee becomes liable to be registered at that time if—

(a) the value of his taxable supplies in the period of one year ending at the time of the transfer has exceeded £25,400; or

(b) there are reasonable grounds for believing that the value of his taxable supplies in the period of thirty days beginning at the time of the transfer will exceed £25,400.

(3) A person does not become liable to be registered by virtue of sub-paragraph (1)(a) or (2)(a) above if the Commissioners are satisfied that the value of his taxable supplies in the period of one year beginning at the time at which, apart from this sub-paragraph, he would become liable to be registered will not exceed £24,400.”

(3) In paragraph 1(4) of Schedule 1 after “(1)(a)” there shall be inserted “or (2)(a)”.

(4) In paragraph 1(5) of Schedule 1 after “sub-paragraph (1)” there shall be inserted “or (2)”.

(5) In paragraph 1(6) of Schedule 1 after “sub-paragraph (1)” there shall be inserted “or (2)”.

(6) For paragraphs 3 and 4 of Schedule 1 there shall be substituted—

“3 (1) A person who becomes liable to be registered by virtue of paragraph 1(1)(a) above shall notify the Commissioners of the liability within thirty days of the end of the relevant month.

(2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the end of the month following the relevant month or from such earlier date as may be agreed between them and him.

(3) In this paragraph “the relevant month”, in relation to a person who becomes liable to be registered, means the month at the end of which he becomes liable to be registered.

4 (1) A person who becomes liable to be registered by virtue of paragraph 1(1)(b) above shall notify the Commissioners of the liability before the end of the period by reference to which the liability arises.

(2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the period by reference to which the liability arises.

4A (1) A person who becomes liable to be registered by virtue of paragraph 1(2) above shall notify the Commissioners of the liability within thirty days of the time when the business is transferred.

(2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the time when the business is transferred.

4B Where a person becomes liable to be registered by virtue of paragraph 1(1)(a) above and by virtue of paragraph 1(1)(b) or 1(2) above at the same time, the Commissioners shall register him in accordance with paragraph 4(2) or 4A(2) above, as the case may be, rather than paragraph 3(2) above.”

(7) Section 33(1A) (registration of transferee of business) shall cease to have effect.

(8) In consequence of the amendment of paragraph 1 of Schedule 1, in section 28(1) (registration of local authorities) for “1(a)(ii)” there shall be substituted “1(1)(a)”.

(9) Subsections (2) to (5) and (8) above shall be deemed to have come into force on 21st March 1990.

(10) Subsections (6) and (7) above apply in relation to persons who become liable to be registered after 20th March 1990.

Marginal Citations

M9 1983 c. 55.

11 Bad debts. U.K.

(1) Subsection (2) below applies where—

(a) on or after 1st April 1989 a person has supplied goods or services for a consideration in money and has accounted for and paid tax on the supply,

(b) the whole or any part of the consideration for the supply has been written off in his accounts as a bad debt, and

(c) a period of [F1 one year] (beginning with the date of the supply) has elapsed.

(2) Subject to the following provisions of this section and to regulations under it the person shall be entitled, on making a claim to the Commissioners, to a refund of the amount of tax chargeable by reference to the outstanding amount.

(3) In subsection (2) above “the outstanding amount” means—

(a) if at the time of the claim the person has received no payment by way of the consideration written off in his accounts as a bad debt, an amount equal to the amount of the consideration so written off;

(b) if at that time he has received a payment or payments by way of the consideration so written off, an amount by which the payment (or the aggregate of the payments) is exceeded by the amount of the consideration so written off.

(4) A person shall not be entitled to a refund under subsection (2) above unless—

(a) the value of the supply is equal to or less than its open market value, and

(b) in the case of a supply of goods, the property in the goods has passed to the person to whom they were supplied or to a person deriving title from, through or under that person.

(5) Regulations under this section may—

(a) require a claim to be made at such time and in such form and manner as may be specified by or under the regulations;

(b) require a claim to be evidenced and quantified by reference to such records and other documents as may be so specified;

(c) require the claimant to keep, for such period and in such form and manner as may be so specified, those records and documents and a record of such information relating to the claim and to subsequent payments by way of consideration as may be so specified;

(d) require the repayment of a refund allowed under this section where any requirement of the regulations is not complied with;

(e) require the repayment of the whole or, as the case may be, an appropriate part of a refund allowed under this section where the claimant subsequently receives any payment (or further payment) by way of the consideration written off in his accounts as a bad debt;

(f) include such supplementary, incidental, consequential or transitional provisions as appear to the Commissioners to be necessary or expedient for the purposes of this section;

(g) make different provision for different circumstances.

(6) The provisions which may be included in regulations by virtue of subsection (5)(f) above may include rules for ascertaining—

(a) whether, when and to what extent consideration is to be taken to have been written off in accounts as a bad debt;

(b) whether a payment is to be taken as received by way of consideration for a particular supply;

(c) whether, and to what extent, a payment is to be taken as received by way of consideration written off in accounts as a bad debt.

(7) The provisions which may be included in regulations by virtue of subsection (5)(f) above may include rules dealing with particular cases, such as those involving part payment or mutual debts; and in particular such rules may vary the way in which the following amounts are to be calculated—

(a) the outstanding amount mentioned in subsection (2) above, and

(b) the amount of any repayment where a refund has been allowed under this section.

(8) No claim for a refund may be made under subsection (2) above in relation to a supply as regards which a refund is claimed, whether before or after the passing of this Act, under section 22 of the M10 Value Added Tax Act 1983 (existing provision for refund in cases of bad debts).

(9) Section 22 of that Act shall not apply in relation to any supply made after the day on which this Act is passed.

(10) Sections 4 and 5 of that Act shall apply for determining the time when a supply is to be treated as taking place for the purposes of construing this section.

(11) That Act shall be amended as follows—

(a) in section 39(1A)(b) after the word “above” there shall be inserted the words “or section 11 of the Finance Act 1990”;

(b) in section 40(1)(f) after the words “section 22 above” there shall be inserted the words “or section 11 of the Finance Act 1990”.

(12) In section 13(2) of the M11 Finance Act 1985, the word “and” at the end of paragraph (b) shall be omitted and after paragraph (c) there shall be inserted the words “and

(d) a refund under section 11 of the Finance Act 1990,”.

Textual Amendments

F1 Words in s. 11(1)(c) substituted(retrospectively) by Finance Act 1991 (c. 31, SIF 40:2), s. 15(1)(2).

Marginal Citations

M10 1983 c. 55.

M11 1985 c. 54.

12 Domestic accommodation. U.K.

(1) Section 14 of the Value Added Tax Act 1983 (credit for input tax against output tax) shall be amended as follows.

(2) The following subsection shall be inserted after subsection (3) (definition of “input tax”)—

“(3A) For the purposes of subsection (3)

above, where goods or services supplied to, or goods imported by, a company are used or to be used in connection with the provision of accommodation by the company, they shall not be treated as used or to be used for the purpose of any business carried on by the company to the extent that the accommodation is used or to be used for domestic purposes by—

(a) a director of the company, or

(b) a person connected with a director of the company.”

(3) The following subsection shall be inserted at the end—

“(11) For the purposes of this section “director” means—

(a) in relation to a company whose affairs are managed by a board of directors or similar body, a member of that board or similar body;

(b) in relation to a company whose affairs are managed by a single director or similar person, that director or person;

(c) in relation to a company whose affairs are managed by the members themselves, a member of the company;

and a person is connected with a director if that person is the director’s wife or husband, or is a relative, or the wife or husband of a relative, of the director or of the director’s wife or husband.”

(4) This section applies in relation to goods or services supplied, and goods imported, on or after the day on which this Act is passed.

13 Goods shipped as stores. U.K.

(1) In section 16 of the M12 Value Added Tax Act 1983 (zero-rating) the following subsection shall be inserted after subsection (6) (goods shipped for use as stores etc)—

“(6A) Subsection (6)(b)

above shall not apply in the case of goods shipped for use as stores on a voyage or flight to be made by the person to whom the goods were supplied and to be made for a purpose which is private.”

(2) This section applies in relation to supplies made after the day on which this Act is passed.

Marginal Citations

M12 1983 c. 55.

14 Supplies to groups. U.K.

(1) Section 29A of the Value Added Tax Act 1983 (supplies to groups) shall be amended as follows.

(2) In subsection (1) for “and (3)” there shall be substituted “to (3A)”.

(3) The following subsection shall be inserted after subsection (3)—

“(3A) Subsection (4)

below shall not apply to the extent that the chargeable assets consist of capital items in respect of which regulations made under section 15(3) and (4) above, and in force when the assets are transferred, provide for adjustment to the deduction of input tax.”

(4) This section shall have effect in relation to transfers of assets made on or after 1st April 1990.

15 Power to assess. U.K.

(1) In paragraph 4(2) of Schedule 7 to the M13 Value Added Tax Act 1983 after the words “so paid or credited,” there shall be inserted the words “or which would not have been so paid or credited had the facts been known or been as they later turn out to be,”.

(2) This section shall apply in relation to an amount paid or credited to a person after the day on which this Act is passed.

Marginal Citations

M13 1983 c. 55.

16 Interest on tax etc. recovered or recoverable by assessment. U.K.

(1) Section 18 of the M14 Finance Act 1985 (interest on tax etc. recovered or recoverable by assessment) shall be amended as follows.

(2) In subsection (1) for the words from “tax” to “rate” there shall be substituted the words “whole of the amount assessed shall carry interest at the prescribed rate from the reckonable date”.

(3) In subsection (3) for the words from “that tax” to “rate” there shall be substituted the words “the whole of the amount paid shall carry interest at the prescribed rate from the reckonable date”.

(4) Subsections (4) and (5) shall cease to have effect.

(5) In subsection (7) for “(4) and (5)” there shall be substituted “(1) and (3)”.

(6) This section applies in relation to assessments made on or after the day on which this Act is passed.

Marginal Citations

M14 1985 c. 54.