1A

The rates at which the duty shall be charged are—

a

£35.67 per hectolitre in the case of cider of a strength exceeding 7.5 per cent.; and

b

£23.78 per hectolitre in any other case.

13AA Restrictions on use of rebated kerosene.

1

If, on the delivery of kerosene for home use, it is intended to use the kerosene as fuel for—

a

an engine provided for propelling an excepted vehicle, or

b

an engine which is used neither for propelling a vehicle nor for heating,

a declaration shall be made to that effect and thereupon rebate shall be allowed at the rate for rebated gas oil which is then in force, instead of at the rate then in force under section 11(1)(c) above.

2

Subject to subsection (3) below, no kerosene on whose delivery for home use a rebate at the rate given by section 11(1)(c) above has been allowed shall—

a

be used as fuel for an engine provided for propelling an excepted vehicle;

b

be used as fuel for an engine which is used neither for propelling a vehicle nor for heating; or

c

be taken into the fuel supply of an engine falling within paragraph (a) or (b) above.

3

Subsection (2) above does not apply to any quantity of kerosene in respect of which there has been paid to the Commissioners an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the payment.

4

A payment under subsection (3) above shall be made in accordance with regulations made under section 24(1) below for the purposes of this section.

5

For the purposes of this section and section 13AB below—

“excepted vehicle” means a vehicle which is an excepted vehicle under any provision of Schedule 1 to this Act; and

“kerosene” means heavy oil of which more than 50 per cent. by volume distils at a temperature of 240°C or less.

6

For the purposes of this section and section 13AB below the rate for rebated gas oil which is in force at any time is the rate of duty which at that time is in force under section 6(1) above in the case of heavy oil as reduced by the rate of rebate allowable at that time under section 11(1)(b) above.

13AB Penalties for misuse of kerosene.

1

If a person uses kerosene in contravention of section 13AA(2) above—

a

the Commissioners may recover from him, in respect of the quantity of kerosene used, an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention;

b

his use of the kerosene shall attract a penalty under section 9 of the M5Finance Act 1994 (civil penalties); and

c

if he uses the kerosene with the relevant intent, he shall be guilty of an offence.

2

If a person is liable for kerosene being taken into a fuel supply of an engine in contravention of section 13AA(2) above—

a

the Commissioners may recover from him, in respect of the quantity of kerosene taken into the fuel supply, an amount equal to duty on the same quantity of gas oil at the rate for rebated gas oil which is in force at the time of the contravention;

b

his becoming so liable shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties); and

c

if he has the relevant intent in relation to the kerosene being taken into the fuel supply, he shall be guilty of an offence.

3

For the purposes of subsection (2) above, a person is liable for kerosene being taken into a fuel supply of an engine if at the time—

a

he has the charge of the engine; or

b

subject to subsection (4) below, he is the owner of the engine.

4

If a person other than the owner is for the time being entitled to possession of the engine, that other person and not the owner is liable.

5

If—

a

a person supplies kerosene having reason to believe that it will be put to a particular use, and

b

that use is one which, if a payment is not made under subsection (3) of section 13AA above, will contravene subsection (2) of that section,

his supplying the kerosene shall attract a penalty under section 9 of the M6Finance Act 1994 (civil penalties) and, if he makes the supply with the relevant intent, he shall be guilty of an offence.

6

In this section “the relevant intent” means the intent that the restrictions imposed by section 13AA(2) above shall be contravened.

7

A person guilty of an offence under this section shall be liable—

a

on summary conviction, to a penalty of the statutory maximum, or to imprisonment for a term not exceeding 6 months, or to both;

b

on conviction on indictment, to a penalty of any amount, or to a term of imprisonment not exceeding 7 years, or to both.

8

Any kerosene falling within subsection (9) or (10) below is liable to forfeiture.

9

Kerosene falls within this subsection if it is taken into a fuel supply in contravention of section 13AA(2) above.

10

Kerosene falls within this subsection if—

a

it has been supplied in circumstances in which there is reason to believe that it will be put to a particular use; and

b

that use is one which, if payment is not made under subsection (3) of section 13AA above, will contravene subsection (2) of that section.

4

The power to make a payment to a person under subsection (2) above in relation to oils that have become accidentally mixed does not apply in relation to a mixture in respect of which he is liable to pay duty under section 20AAA below.

20AAA Mixing of rebated oil.

1

Where—

a

a mixture which is leaded or unleaded petrol is produced in contravention of Part I of Schedule 2A to this Act, and

b

the mixture is not produced as a result of approved mixing,

a duty of excise shall be charged on the mixture.

2

Where—

a

a mixture of heavy oils is produced in contravention of Part II of Schedule 2A to this Act,

b

the mixture is not produced as a result of approved mixing, and

c

the mixture is supplied for use as fuel for a road vehicle or an excepted vehicle,

a duty of excise shall be charged on the mixture.

3

The person liable to pay the duty charged under subsection (1) above is the person producing the mixture.

4

The person liable to pay the duty charged under subsection (2) above is the person supplying the mixture.

5

The Commissioners may exempt a person from liability to pay duty charged under this section in respect of the production or supply of a mixture if they are satisfied—

a

that the mixture has been produced or (as the case may be) supplied accidentally; and

b

that, having regard to all the circumstances, the person should be exempted from liability to pay the duty.

6

Part III of Schedule 2A to this Act makes provision with respect to rates and amounts of duty charged under this section.

7

In this section—

• “approved mixing” has the meaning given by section 20A(5) above; and

• “excepted vehicle” means a vehicle which is an excepted vehicle under any provision of Schedule 1 to this Act.

20AAB Mixing of rebated oil: supplementary.

1

A person who—

a

produces a mixture on which duty is charged under section 20AAA(1) above, or

b

supplies a mixture on which duty is charged under section 20AAA(2) above,

must notify the Commissioners that he has done so within the period of seven days beginning with the date on which he produced or (as the case may be) supplied the mixture.

2

A person is not required to give a notification under subsection (1) above if, before he produced or (as the case may be) supplied the mixture, he notified the Commissioners that he proposed to do so.

3

Notification under subsection (1) or (2) above must be given in such form and in such manner, and must contain such particulars, as the Commissioners may direct.

4

Subject to subsection (7) below, where it appears to the Commissioners—

a

that a person has produced or supplied a mixture on which duty is charged under section 20AAA above, and

b

that he is the person liable to pay the duty,

they may assess the amount of duty due from him to the best of their judgement and notify that amount to him or his representative.

5

An assessment under subsection (4) above shall be treated as if it were an assessment under section 12(1) of the M8Finance Act 1994.

6

The Commissioners may give a direction that a person who is, or expects to be, liable to pay duty charged under section 20AAA above—

a

shall account for duty charged under that section by reference to such periods (“accounting periods”) as may be determined by or under the direction;

b

shall make, in relation to accounting periods, returns in such form and at such times and containing such particulars as may be so determined;

c

shall pay duty charged under that section at such times and in such manner as may be so determined.

7

The power to make an assessment under subsection (4) above does not apply in relation to a person who is for the time being subject to a direction under subsection (6) above.

8

Where any person—

a

fails to give a notification which he is required to give under subsection (1) above, or

b

fails to comply with a direction under subsection (6) above,

his failure shall attract a penalty under section 9 of the M9Finance Act 1994 (civil penalties).

24A Penalties for misuse of marked oil.

1

Marked oil shall not be used as fuel for a road vehicle.

2

For the purposes of this section marked oil is any hydrocarbon oil in which a marker is present which is for the time being designated by regulations made by the Commissioners under subsection (3) below.

3

The Commissioners may for the purposes of this section designate any marker which appears to them to be used for the purposes of the law of any place (whether within or outside the United Kingdom) for identifying hydrocarbon oil that is not to be used as fuel for road vehicles, or for road vehicles of a particular description.

4

For the purposes of this section marked oil shall be taken to be used as fuel for a road vehicle if, but only if, it is used as fuel for the engine provided for propelling the vehicle or for an engine which draws its fuel from the same supply as that engine.

5

Where a person uses any hydrocarbon oil in contravention of subsection (1) above, his use of the oil shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties).

6

If a person who uses any marked oil in contravention of subsection (1) above does so in the knowledge that the oil he is using is marked oil, he shall be guilty of an offence and liable—

a

on summary conviction, to a penalty of the statutory maximum, or to imprisonment for a term not exceeding 6 months, or to both;

b

on conviction on indictment, to a penalty of any amount, or to a term of imprisonment not exceeding 7 years, or to both.

7

Any marked oil which is in a road vehicle as part of the fuel supply for the engine which propels the vehicle shall be liable to forfeiture.

8

Where in any proceedings relating to this section a question arises as to the nature of any substance present at any time in any hydrocarbon oil—

a

a certificate of the Commissioners to the effect that that substance is or was a marker designated for the purposes of this section shall be sufficient, unless the contrary is shown, for establishing that fact; and

b

any document purporting to be such a certificate shall be taken to be one unless it is shown not to be.

1. Cigarettes	An amount equal to 20 per cent. of the retail price plus £62.52 per thousand cigarettes.
2. Cigars	£91.52 per kilogram.
3. Hand-rolling tobacco	£85.94 per kilogram.
4. Other smoking tobacco and chewing tobacco	£40.24 per kilogram.

3AA

A special amusement machine licence shall not be granted except where—

a

the machine with respect to which it is granted is of a description of machine for which special amusement machine licences are available;

b

such conditions as may be prescribed by regulations made by the Commissioners are satisfied in relation to the application for the licence, the machine and the person by whom the application is made; and

c

the licence is for twelve months.

3AB

Special amusement machine licences shall be available for amusement machines of each of the following descriptions—

a

machines that are not gaming machines; and

b

small prize machines.

7AA

Sub-paragraphs (4) and (5) above shall have effect where—

a

an amusement machine is provided on any premises at any time in a winter period, and

b

the provision of that machine on those premises at that time is authorised by a special amusement machine licence,

as if an amusement machine licence had been granted in respect of those premises for that winter period.

2

Regulations may provide for this Schedule to have effect in relation to special amusement machine licences with such exceptions, adaptations and modifications as may be prescribed.

3

Without prejudice to the generality of sub-paragraphs (1) and (2) above, regulations may include provision requiring—

a

a special amusement machine licence to be displayed on such premises and in such manner, and

b

the machine to which such a licence relates to bear such labels and marks,

as may be determined by directions given, in accordance with the regulations, by the Commissioners.

4A

A passenger is not a chargeable passenger in relation to a flight if under his agreement for carriage (whether or not it is evidenced by a ticket)—

a

the flight is to depart from and return to the same airport, and

b

the duration of the flight (excluding any period during which the aircraft’s doors are open for boarding or disembarkation) is not to exceed 60 minutes.

1A

For the purposes of this Act, a vehicle is not an electrically propelled vehicle unless the electrical motive power is derived from—

a

a source external to the vehicle, or

b

an electrical storage battery which is not connected to any source of power when the vehicle is in motion.

2A Electrically assisted pedal cycles

1

An electrically assisted pedal cycle is an exempt vehicle.

2

For the purposes of sub-paragraph (1) an electrically assisted pedal cycle is a vehicle of a class complying with such requirements as may be prescribed by regulations made by the Secretary of State for the purposes of this paragraph.

4EE

A steam powered vehicle is a special concessionary vehicle.

5A

A vehicle is not a recovery vehicle if it is a special concessionary vehicle.

and which is not a special concessionary vehicle.

bb

a vehicle falling within sub-paragraph (2A) or (2B),

2A

A vehicle falls within this sub-paragraph if—

a

it is designed or adapted for use for the conveyance of goods or burden of any description; but

b

it is not so used or is not so used for hire or reward or for or in connection with a trade or business.

2B

A vehicle falls within this sub-paragraph if—

a

it is designed or adapted for use with a semi-trailer attached; but

b

it is not so used or, if it is so used, the semi-trailer is not used for the conveyance of goods or burden of any description.

and

c

to any rigid goods vehicle which is used loaded only in connection with a person learning to drive the vehicle or taking a driving test,

and

c

to any tractive unit to which a semi-trailer is attached which is used loaded only in connection with a person learning to drive the tractive unit or taking a driving test,

19 Other expressions

1

In this Part “driving test” means any test of competence to drive mentioned in section 89(1) of the M19Road Traffic Act 1988.

2

For the purposes of this Part a vehicle or a semi-trailer is used loaded if the vehicle or, as the case may be, the semi-trailer is used for the conveyance of goods or burden of any description.

8

In this section “special vehicle” has the same meaning as in paragraph 4 of Schedule 1.

1A Old vehicles

1

A vehicle of a description mentioned in sub-paragraph (2) is an exempt vehicle at any time if it was constructed more than 25 years before the beginning of the year in which that time falls.

2

The descriptions of vehicles are—

a

a vehicle in respect of which no annual rate is specified by any provision of Parts II to VIII of Schedule 1;

b

a motorcycle which does not exceed 450 kilograms in weight unladen.

3

In sub-paragraph (2)(b) “motorcycle” has the same meaning as in Part II of Schedule 1.

1A Old vehicles

1

Subject to sub-paragraph (2), a vehicle is an exempt vehicle at any time if it was constructed more than 25 years before the beginning of the year in which that time falls.

2

A vehicle is not an exempt vehicle by virtue of sub-paragraph (1) if—

a

an annual rate is specified in respect of it by any provision of Part III, V, VI, VII or VIII of Schedule 1; or

b

it is a special vehicle, within the meaning of Part IV of Schedule 1, which—

i

falls within sub-paragraph (3) or (4); and

ii

is not a digging machine, mobile crane, works truck or road roller.

3

A vehicle falls within this sub-paragraph if—

a

it is designed or adapted for use for the conveyance of goods or burden of any description;

b

it is put to a commercial use on a public road; and

c

that use is not a use for the conveyance of goods or burden of any description.

4

A vehicle falls within this sub-paragraph if—

a

it is designed or adapted for use with a semi-trailer attached;

b

it is put to a commercial use on a public road; and

c

in a case where that use is a use with a semi-trailer attached, the semi-trailer is not used for the conveyance of goods or burden of any description.

5

In sub-paragraph (2) “digging machine”, “mobile crane” and “works truck” have the same meanings as in paragraph 4 of Schedule 1.

6

In sub-paragraphs (3) and (4) “commercial use” means use for hire or reward or for or in connection with a trade or business.

1A

A vehicle is an exempt vehicle when it is being used solely for the purpose of—

a

taking it (by previous arrangement for a specified time on a specified date) for a relevant re-examination, or

b

bringing it away from such a re-examination.

2A

A vehicle is an exempt vehicle when it is being used by an authorised person solely for the purpose of warming up its engine in preparation for the carrying out of—

a

a compulsory test, or

b

a relevant re-examination that is to be carried out for the purposes of an appeal relating to a determination made on a compulsory test.

6A

In this paragraph “a vehicle weight test” means any examination of a vehicle for which provision is made by regulations under—

a

section 61A of this Act,

b

section 49(1)(a) of the Road Traffic Act 1988 (tests for selecting plated weights and other plated particulars), or

c

Article 65(1)(a) of the M25Road Traffic (Northern Ireland) Order 1995.

6B

In this paragraph “a relevant re-examination” means any examination or re-examination which is carried out in accordance with any provision or requirement made or imposed for the purposes of an appeal relating to a determination made on a compulsory test or vehicle weight test.

b

it is being driven for the purposes of, or in connection with, its examination under Article 61 of the M29Road Traffic (Northern Ireland) Order 1995 in circumstances in which its use is exempted from paragraph (1) of Article 63 of that Order by regulations under paragraph (6) of that Article.

b

in Northern Ireland, has the same meaning as it has for the purposes of the Road Traffic (Northern Ireland) Order 1995 by virtue of Article 7 of that Order.

b

Article 60 of the Road Traffic (Northern Ireland) Order 1995,

b

all incidental expenses, such as commission, packing, transport and insurance costs, up to the goods’ first destination in the United Kingdom; and

c

if at the time of the importation of the goods from a place outside the member States a further destination for the goods is known, and that destination is within the United Kingdom or another member State, all such incidental expenses in so far as they result from the transport of the goods to that other destination;

and in this subsection “the goods’ first destination” means the place mentioned on the consignment note or any other document by means of which the goods are imported into the United Kingdom, or in the absence of such documentation it means the place of the first transfer of cargo in the United Kingdom.

2A

A supply by a person of services which consist of applying a treatment or process to another person’s goods is zero-rated by virtue of this subsection if by doing so he produces goods, and either—

a

those goods are of a description for the time being specified in Schedule 8; or

b

a supply by him of those goods to the person to whom he supplies the services would be of a description so specified.

; or

c

any supply of services consisting in the application to another person’s goods of a treatment or process which produces goods a supply of which would fall within paragraph (a) above.

1

Where—

a

a person carries out works to which this section applies,

b

his carrying out of the works is lawful and otherwise than in the course or furtherance of any business, and

c

VAT is chargeable on the supply, acquisition or importation of any goods used by him for the purposes of the works,

the Commissioners shall, on a claim made in that behalf, refund to that person the amount of VAT so chargeable.

1A

The works to which this section applies are—

a

the construction of a building designed as a dwelling or number of dwellings;

b

the construction of a building for use solely for a relevant residential purpose or relevant charitable purpose; and

c

a residential conversion.

1B

For the purposes of this section goods shall be treated as used for the purposes of works to which this section applies by the person carrying out the works in so far only as they are building materials which, in the course of the works, are incorporated in the building in question or its site.

1C

Where—

a

a person (“the relevant person”) carries out a residential conversion by arranging for any of the work of the conversion to be done by another (“a contractor”),

b

the relevant person’s carrying out of the conversion is lawful and otherwise than in the course or furtherance of any business,

c

the contractor is not acting as an architect, surveyor or consultant or in a supervisory capacity, and

d

VAT is chargeable on services consisting in the work done by the contractor,

the Commissioners shall, on a claim made in that behalf, refund to the relevant person the amount of VAT so chargeable.

1D

For the purposes of this section works constitute a residential conversion to the extent that they consist in the conversion of a non-residential building, or a non-residential part of a building, into—

a

a building designed as a dwelling or a number of dwellings;

b

a building intended for use solely for a relevant residential purpose; or

c

anything which would fall within paragraph (a) or (b) above if different parts of a building were treated as separate buildings.

4

The notes to Group 5 of Schedule 8 shall apply for construing this section as they apply for construing that Group.

5

The power of the Treasury by order under section 30 to vary Schedule 8 shall include—

a

power to apply any variation made by the order for the purposes of this section; and

b

power to make such consequential modifications of this section as they may think fit.

9

Schedule 9A (which makes provision for ensuring that this section is not used for tax avoidance) shall have effect.

wa

any direction or assessment under Schedule 9A;

7A

Where there is an appeal against a decision to make such a direction as is mentioned in section 83(wa), the cases in which the tribunal shall allow the appeal shall include (in addition to the case where the conditions for the making of the direction were not fulfilled) the case where the tribunal are satisfied, in relation to the relevant event by reference to which the direction was given, that—

a

the change in the treatment of the body corporate, or

b

the transaction in question,

had as its main purpose or, as the case may be, as each of its main purposes a genuine commercial purpose unconnected with the fulfilment of the condition specified in paragraph 1(3) of Schedule 9A.

a

any supply of goods consisting in fine gold, in gold grain of any purity or in gold coins of any purity; or

7

The Treasury may by order substitute for the sum for the time being specified in sub-paragraph (2)(a) above such sum, not being less than £10, as they think fit.

ab

an order under paragraph 5(7) of Schedule 4 substituting a lesser sum for the sum for the time being specified in paragraph 5(2)(a) of that Schedule;

59A Default surcharge: payments on account.

1

For the purposes of this section a taxable person shall be regarded as in default in respect of any prescribed accounting period if the period is one in respect of which he is required, by virtue of an order under section 28, to make any payment on account of VAT and either—

a

a payment which he is so required to make in respect of that period has not been received in full by the Commissioners by the day on which it became due; or

b

he would, but for section 59(1A), be in default in respect of that period for the purposes of section 59.

2

Subject to subsections (10) and (11) below, subsection (4) below applies in any case where—

a

a taxable person is in default in respect of a prescribed accounting period; and

b

the Commissioners serve notice on the taxable person (a “surcharge liability notice”) specifying as a surcharge period for the purposes of this section a period which—

i

begins, subject to subsection (3) below, on the date of the notice; and

ii

ends on the first anniversary of the last day of the period referred to in paragraph (a) above.

3

If—

a

a surcharge liability notice is served by reason of a default in respect of a prescribed accounting period, and

b

that period ends at or before the expiry of an existing surcharge period already notified to the taxable person concerned,

the surcharge period specified in that notice shall be expressed as a continuation of the existing surcharge period; and, accordingly, the existing period and its extension shall be regarded as a single surcharge period.

4

Subject to subsections (7) to (11) below, if—

a

a taxable person on whom a surcharge liability notice has been served is in default in respect of a prescribed accounting period,

b

that prescribed accounting period is one ending within the surcharge period specified in (or extended by) that notice, and

c

the aggregate value of his defaults in respect of that prescribed accounting period is more than nil,

that person shall be liable to a surcharge equal to whichever is the greater of £30 and the specified percentage of the aggregate value of his defaults in respect of that prescribed accounting period.

5

Subject to subsections (7) to (11) below, the specified percentage referred to in subsection (4) above shall be determined in relation to a prescribed accounting period by reference to the number of such periods during the surcharge period which are periods in respect of which the taxable person is in default and in respect of which the value of his defaults is more than nil, so that—

a

in relation to the first such prescribed accounting period, the specified percentage is 2 per cent.;

b

in relation to the second such period, the specified percentage is 5 per cent.;

c

in relation to the third such period, the specified percentage is 10 per cent.; and

d

in relation to each such period after the third, the specified percentage is 15 per cent.

6

For the purposes of this section the aggregate value of a person’s defaults in respect of a prescribed accounting period shall be calculated as follows—

a

where the whole or any part of a payment in respect of that period on account of VAT was not received by the Commissioners by the day on which it became due, an amount equal to that payment or, as the case may be, to that part of it shall be taken to be the value of the default relating to that payment;

b

if there is more than one default with a value given by paragraph (a) above, those values shall be aggregated;

c

the total given by paragraph (b) above, or (where there is only one default) the value of the default under paragraph (a) above, shall be taken to be the value for that period of that person’s defaults on payments on account;

d

the value of any default by that person which is a default falling within subsection (1)(b) above shall be taken to be equal to the amount of any outstanding VAT less the amount of unpaid payments on account; and

e

the aggregate value of a person’s defaults in respect of that period shall be taken to be the aggregate of—

i

the value for that period of that person’s defaults (if any) on payments on account; and

ii

the value of any default of his in respect of that period that falls within subsection (1)(b) above.

7

In the application of subsection (6) above for the calculation of the aggregate value of a person’s defaults in respect of a prescribed accounting period—

a

the amount of outstanding VAT referred to in paragraph (d) of that subsection is the amount (if any) which would be the amount of that person’s outstanding VAT for that period for the purposes of section 59(4); and

b

the amount of unpaid payments on account referred to in that paragraph is the amount (if any) equal to so much of any payments on account of VAT (being payments in respect of that period) as has not been received by the Commissioners by the last day on which that person is required (as mentioned in section 59(1)) to make a return for that period.

8

If a person who, apart from this subsection, would be liable to a surcharge under subsection (4) above satisfies the Commissioners or, on appeal, a tribunal—

a

in the case of a default that is material for the purposes of the surcharge and falls within subsection (1)(a) above—

i

that the payment on account of VAT was despatched at such a time and in such a manner that it was reasonable to expect that it would be received by the Commissioners by the day on which it became due, or

ii

that there is a reasonable excuse for the payment not having been so despatched,

or

b

in the case of a default that is material for the purposes of the surcharge and falls within subsection (1)(b) above, that the condition specified in section 59(7)(a) or (b) is satisfied as respects the default,

he shall not be liable to the surcharge and for the purposes of the preceding provisions of this section he shall be treated as not having been in default in respect of the prescribed accounting period in question (and, accordingly, any surcharge liability notice the service of which depended upon that default shall be deemed not to have been served).

9

For the purposes of subsection (8) above, a default is material to a surcharge if—

a

it is the default which, by virtue of subsection (4) above, gives rise to the surcharge; or

b

it is a default which was taken into account in the service of the surcharge liability notice upon which the surcharge depends and the person concerned has not previously been liable to a surcharge in respect of a prescribed accounting period ending within the surcharge period specified in or extended by that notice.

10

In any case where—

a

the conduct by virtue of which a person is in default in respect of a prescribed accounting period is also conduct falling within section 69(1), and

b

by reason of that conduct, the person concerned is assessed to a penalty under section 69,

the default shall be left out of account for the purposes of subsections (2) to (5) above.

11

If the Commissioners, after consultation with the Treasury, so direct, a default in respect of a prescribed accounting period specified in the direction shall be left out of account for the purposes of subsections (2) to (5) above.

12

For the purposes of this section the Commissioners shall be taken not to receive a payment by the day on which it becomes due unless it is made in such a manner as secures (in a case where the payment is made otherwise than in cash) that, by the last day for the payment of that amount, all the transactions can be completed that need to be completed before the whole amount of the payment becomes available to the Commissioners.

13

In determining for the purposes of this section whether any person would, but for section 59(1A), be in default in respect of any period for the purposes of section 59, subsection (12) above shall be deemed to apply for the purposes of section 59 as it applies for the purposes of this section.

14

For the purposes of this section references to a thing’s being done by any day include references to its being done on that day.

1A

A person shall not be regarded for the purposes of this section as being in default in respect of any prescribed accounting period if that period is one in respect of which he is required by virtue of any order under section 28 to make any payment on account of VAT.

11

For the purposes of this section references to a thing’s being done by any day include references to its being done on that day.

59B Relationship between sections 59 and 59A.

1

This section applies in each of the following cases, namely—

a

where a section 28 accounting period ends within a surcharge period begun or extended by the service on a taxable person (whether before or after the coming into force of section 59A) of a surcharge liability notice under section 59; and

b

where a prescribed accounting period which is not a section 28 accounting period ends within a surcharge period begun or extended by the service on a taxable person of a surcharge liability notice under section 59A.

2

In a case falling within subsection (1)(a) above section 59A shall have effect as if—

a

subject to paragraph (b) below, the section 28 accounting period were deemed to be a period ending within a surcharge period begun or, as the case may be, extended by a notice served under section 59A; but

b

any question—

i

whether a surcharge period was begun or extended by the notice, or

ii

whether the taxable person was in default in respect of any prescribed accounting period which was not a section 28 accounting period but ended within the surcharge period begun or extended by that notice,

were to be determined as it would be determined for the purposes of section 59.

3

In a case falling within subsection (1)(b) above section 59 shall have effect as if—

a

subject to paragraph (b) below, the prescribed accounting period that is not a section 28 accounting period were deemed to be a period ending within a surcharge period begun or, as the case may be, extended by a notice served under section 59;

b

any question—

i

whether a surcharge period was begun or extended by the notice, or

ii

whether the taxable person was in default in respect of any prescribed accounting period which was a section 28 accounting period but ended within the surcharge period begun or extended by that notice,

were to be determined as it would be determined for the purposes of section 59A; and

c

that person were to be treated as having had outstanding VAT for a section 28 accounting period in any case where the aggregate value of his defaults in respect of that period was, for the purposes of section 59A, more than nil.

4

In this section “a section 28 accounting period”, in relation to a taxable person, means any prescribed accounting period ending on or after the day on which the Finance Act 1996 was passed in respect of which that person is liable by virtue of an order under section 28 to make any payment on account of VAT.

and

d

for a person, for purposes connected with the making of any such entry or financial adjustment, to be required to provide to any prescribed person, or to retain, a document in the prescribed form containing prescribed particulars of the matters to which the entry or adjustment relates; and

e

for enabling the Commissioners, in such cases as they may think fit, to dispense with or relax a requirement imposed by regulations made by virtue of paragraph (d) above.