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Finance Act 2009

  • Explanatory Notes Table of contents

Please note:

All reference to 'Parts' and 'sections' are from the Finance Act 2009. For other versions of these Explanatory Notes, see More Resources.

  1. Introduction

    1. Section 1: Income Tax: Charge and Main Rates for 2009–10

      1. Summary

      2. Details of the Section

      3. Background Note

    2. Section 2: Income Tax: Basic Rate Limit for 2009-10

      1. Summary

      2. Details of the Section

      3. Background Note

    3. Section 3: Income Tax: Personal Allowance for 2009-10 for Those Aged under 65

      1. Summary

      2. Details of the Section

      3. Background Note

    4. Section 4: Income Tax: Reduction of Personal Allowance for Individuals With Income Exceeding £100,000

      1. Summary

      2. Details of the Section

      3. Background Note

    5. Section 5 Schedule 1: Abolition of Personal Allowances for Non-Residents

      1. Summary

      2. Details of the Schedule

      3. Background Note

    6. Section 6 Schedule 2: Additional Rate, Dividend Additional Rate, Trust Rates and Pension Tax Rates

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    7. Section 7: Corporation Tax: Charge and Main Rates for Financial Year 2010

      1. Summary

      2. Details of the Section

      3. Background Note

    8. Section 8: Small Companies’ Rates and Fractions for Financial Year 2009

      1. Summary

      2. Details of the Section

      3. Background Note

    9. Section 9 Schedule 3: Vat: Extension of Reduced Standard Rate and Anti-Avoidance Provision

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    10. Section 10: Stamp Duty Land Tax: Thresholds for Residential Property

      1. Summary

      2. Details of the Section

      3. Background Note

    11. Section 11: Rates of Duty on Alcoholic Liquor

      1. Summary

      2. Details of the Section

      3. Background Note.

    12. Section 12: Rates of Tobacco Products Duty

      1. Summary

      2. Details of the Section

      3. Background Note

    13. Section 13: Vehicle Excise Duty: Rates for 2009-10

      1. Summary

      2. Details of the Section

      3. Background Note

    14. Section 14 Schedule 4: Vehicle Excise Duty: Rates from April 2010

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    15. Section 15: Fuel Duties (Rates and Rebates from Spring 2009)

      1. Summary

      2. Details of the Section

      3. Background Note

    16. Section 16: Fuel Duties: Rates and Rebates from September 2009

      1. Summary

      2. Details of the Section

      3. Background Note

    17. Section 17 Schedule 5: Rates of Air Passenger Duty

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    18. Section 18: Standard Rate of Landfill Tax

      1. Summary

      2. Details of the Section

      3. Background Note

    19. Section 19: Rates of Gaming Duty

      1. Summary

      2. Details of the Section

      3. Background Note

    20. Section 20: Bingo Duty

      1. Summary

      2. Details of the Section

      3. Background Note

    21. Section 21: Amounts of Amusement Machine Licences

      1. Summary

      2. Details of the Section

      3. Background Note

    22. Section 22: Provisions Affecting Amount of Amusement Machine Licence Duty

      1. Summary

      2. Details of the Section

      3. Background Note

    23. Section 23 Schedule 6: Temporary Extension of Loss Carry Back Provisions

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    24. Section 24: First-Year Capital Allowances for Expenditure in 2009-2010

      1. Summary

      2. Details of the Section

      3. Background Note

    25. Section 25: Agreements to Forgo Tax Reliefs

      1. Summary

      2. Details of the Section

      3. Background Note

    26. Section 26 and Schedule 7: Contaminated and Derelict Land

      1. Summary

      2. Details of the Schedule:

      3. Background Note

    27. Section 27 and Schedule 8: Venture Capital Schemes

      1. Summary

      2. Details of the Schedule

        1. Enterprise Investment Scheme

        2. Corporate Venturing Scheme

        3. Venture Capital Trusts

      3. Background Note

    28. Section 28 Schedule 9: Preference Shares - Group Relief

      1. Summary

      2. Details of the Schedule

      3. Background Note

    29. Section 29 Schedule 10: Sale of Lessor Companies Etc - Reforms

      1. Summary

      2. Details of the Schedule

      3. Background Note

    30. Section 30 and Schedule 11: Tax Relief for Business Expenditure on Cars and Motor Cycles

      1. Summary

      2. Details of the Schedule

        1. Part 1 - Capital Allowances

          1. Plant and machinery allowances for cars and motor cycles

          2. Consequential amendments of CAA 2001

          3. Commencement and transitionals: introduction

          4. Commencement

          5. Transitionals

        2. Part 2 - Restrictions on Deductions for Hire Expenses

          1. Corporation Tax

          2. Consequential repeals

          3. Commencement

          4. Election for new regime not to apply in certain cases

      3. Background Note

    31. Section 31 Schedule 12: Notional Transfers Within a Group

      1. Summary

      2. Details of the Schedule

      3. Background Note

    32. Section 32 and Schedule 13: Stock Lending: Insolvency Etc of Borrower: Chargeable Gains

      1. Summary

      2. Details of the Schedule

        1. Section 263CA TCGA

      3. Background Note

    33. Section 33: Fscs Payments Representing Interest

      1. Summary

      2. Details of the Section

      3. Background Note

    34. Section 34 Schedule 14: Corporation Tax Treatment of Company Distributions

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Part 1 – Insertion of new Part 9A of CTA 2009

          1. Chapter 1 of Part 9A of CTA

          2. Chapter 2 of Part 9A of CTA

          3. Chapter 3 of Part 9A of CTA

            1. Exempt classes

            2. Exempt classes: anti-avoidance

          4. Chapter 4 of Part 9A CTA 2009

        2. Part 2 – Other amendments

        3. Part 3 – Commencement etc.

      4. Background Note

    35. Section 35 Schedule 15: Tax Treatment of Financing Costs and Income

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Part 1 - Overview

        2. Part 2 – Application of this Schedule

        3. Part 3 – Disallowance of Deductions

        4. Part 4 – Exemption of financing income

        5. Part 5 – Intra group financing income where payer denied deduction

        6. Part 6 – Anti-avoidance

        7. Part 7 – Financing expense amounts and financing income amounts

        8. Part 8 – The ‘tested expense amount’ and ‘tested income amount’

        9. Part 9 –Calculation of the available amount

        10. Part 10 – Other Interpretative provisions

        11. Part 11 – Consequential Amendments and Commencement

      4. Background Note

    36. Section 36: Schedule 16: Controlled Foreign Companies

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Part 1 – Abolition of Acceptable Distribution Policy Exemption

        2. Part 2 – Amendment of Exempt Activities Exemption

        3. Part 3 – Reduction in Chargeable Profits for Certain Financing Income

      4. Background Note

    37. Section 37 Schedule 17: International Movement of Capital

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Part 1 – Abolition of the Existing Regime

        2. Part 2 – Reporting Requirement

        3. Part 3 – Commencement etc.

      4. Background Note

    38. Section 38 Schedule 18: Corporation Tax: Foreign Currency Accounting

      1. Summary

      2. Details of the Schedule

      3. Background Note

    39. Section 39: Certain Distributions of Offshore Funds Taxed as Interest

      1. Summary

      2. Details of the Section

      3. Background Note

    40. Section 40 and Schedule 19: Income Tax Credits for Foreign Distributions

      1. Summary

      2. Details of the Schedule

      3. Background Note

    41. Section 41 Schedule 20: Loan Relationships Involving Connected Parties

      1. Summary

      2. Details of the Schedule

      3. Background Note

    42. Section 42: Release of Trade Etc Debts

      1. Summary

      2. Details of the Section

      3. Background Note

    43. Section 43 Schedule 21: Foreign Exchange:  Anti-Avoidance

      1. Summary

      2. Details of the Schedule

      3. Background Note

    44. Section 44 Schedule 22: Tax Treatment of Participants in Offshore Funds

      1. Summary

      2. Details of the Schedule

      3. Background

        1. Part 1 of Schedule

        2. Part 2 of the Schedule

        3. New tax regime to be in regulations

    45. Section 45: Power to Enable Dividends of Investment Trusts to Be Taxed as Interest

      1. Summary

      2. Details of the Section

      3. Background Note

    46. Section 46 Schedule 23: Insurance Companies

      1. Summary

      2. Details of the Schedule

        1. Transfers from non technical account not to be receipts

        2. No deduction for capital allocations to with-profits policy holders

        3. Limits on loss relief for addition to non-profits funds

        4. Financing-Arrangement-Funded Transfers to Shareholders (“FAFTS”) and Contingent Loans

        5. Apportionment: Foreign Business Asset

        6. Value Shifting attributable to transfer of business

      3. Background Note

        1. Example 1: Book value election

        2. Example 2: Manipulation of admissible value

        3. Example 3: Capital allocations to with-profits policy holders

        4. Financing-Arrangement-Funded Transfers to Shareholders (“FAFTS”) and Contingent Loans

        5. Apportionment: Foreign Business Asset

        6. Value Shifting attributable to transfer of business

    47. Section 47: Equalisation Reserves for Lloyd's Corporate and Partnership Members

      1. Summary

      2. Details of the Section

      3. Background Note

    48. Section 48 Schedule 24: Disguised Interest

      1. Summary

      2. Details of the Schedule

        1. Disguised Interest

        2. Shares accounted for as liabilities

      3. Background Note

    49. Section 49 and Schedule 25: Transfer of Income Streams

      1. Summary

      2. Details of the Schedule

      3. Background Note

    50. Section 50 Schedule 26: Saye Schemes

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Transfer of certain functions from HM Treasury to HMRC

        2. Removal of requirement that certain notices be sent by post

        3. Reduction of notice period for withdrawals and variations

        4. Power to provide for withdrawals and variations not to affect certain contracts

      4. Background Note

        1. SAYE schemes

        2. Administrative changes

        3. Invitations issued shortly before a change in requirements for certified savings arrangements

    51. Section 51 Schedule 27: Remittance Basis

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    52. Section 52: Exemption for Certain Non-Domiciled Persons

      1. Summary

      2. Details of the Section

      3. Background Note

    53. Section 53 and Schedule 28: Taxable Benefits: Cars

      1. Summary

      2. Details of the Schedule

        1. Abolition of “price cap”

        2. Reduction of lower threshold

        3. Electrically powered cars

      3. Background Note

    54. Section 54: Taxable Benefit of Cars: Price of Automatic Car for Disabled Employee

      1. Summary

      2. Details of the Section

      3. Background Note

    55. Section 55: Exemption of Benefit Consisting of Health-Screening and Medical Check-Up

      1. Summary

      2. Details of the Section

      3. Background Note

    56. Section 56: Meps’ Pay, Allowances and Pensions under European Parliament Statute

      1. Summary

      2. Details of the Section

      3. Background Note

    57. Section 57: Tax Underlying Dividends

      1. Summary

      2. Details of the Section

      3. Background Note

    58. Section 58 Schedule 29: Manufactured Overseas Dividends

      1. Summary

      2. Details of the Schedule

      3. Background Note

    59. Section 59: Double Taxation: Payments Made by Reference to Foreign Tax

      1. Summary

      2. Details of the Section

      3. Background Note

    60. Section 60: Double Taxation Relief Anti-Fragmentation

      1. Summary

      2. Details of the Section

      3. Background Note

    61. Section 61 and Schedule 30: Financial Arrangements Avoidance

      1. Summary

      2. Details of the Schedule

        1. Paragraph 1: Interest payments: arrangements appearing very likely to produce post-tax advantage

        2. Paragraphs 2 and 3: amounts not fully recognised for accounting purposes

        3. Paragraph 4: Loan relationships involving connected debtor and creditor where debits exceed credits

        4. Paragraph 5: Credits and debits for manufactured interest

      3. Background Note

        1. Paragraph 1:

        2. Paragraphs 2 and 3:

        3. Paragraph 4:

        4. Paragraph 5:

    62. Section 62: Transfers of Trade to Obtain Terminal Loss Relief

      1. Summary

      2. Details of the Section

      3. Background Note

    63. Section 63 Schedule 31: Sale of Lessor Companies Etc: Anti-Avoidance

      1. Summary

      2. Details of the Section

      3. Background Note

    64. Section 64 Schedule 32: Leases of Plant Or Machinery

      1. Summary

      2. Details of the Schedule

        1. Disposal values: commencement of long funding finance leases

        2. Disposal values: termination etc of long funding leases

        3. Capital receipts treated as income

        4. Transfer and long funding leaseback: restrictions on lessee’s allowances

        5. Transfer followed by hire purchase etc: restrictions on hirer’s allowances

      3. Background Note

        1. The lease and long funding leaseback schemes

        2. The sale and long funding leaseback scheme

        3. Lessees under long funding leases

        4. The “sale and leaseback” and “sale and finance leaseback” definitions

    65. Section 65 and Schedule 33: Long Funding Leases of Films

      1. Summary

      2. Details of the Schedule

      3. Background Note

    66. Section 66 and Schedule 34: Real Estate Investment Trusts

      1. Summary

      2. Details of the Schedule

      3. Background Note

    67. Section 67: Deductions for Employee Liabilities

      1. Summary

      2. Details of the Section

      3. Background Note

    68. Section 68: Employment Loss Relief

      1. Summary

      2. Details of the Section

      3. Background Note

    69. Section 69: No Loss Relief for Losses from Contracts for Life Insurance Etc

      1. Summary

      2. Details of the Section

      3. Background Note

    70. Section 70: Intangible Fixed Assets and Goodwill

      1. Summary

      2. Details of the Section

      3. Background Note

    71. Section 71: Taxable Benefit of Living Accommodation: Lease Premiums

      1. Summary

      2. Details of the Section

      3. Background Note

    72. Section 72 and Schedule 35: Special Annual Allowance Charge

      1. Summary

      2. Details of the Schedule

      3. Background Note

    73. Section 73: Financial Assistance Scheme

      1. Summary

      2. Details of the Section

      3. Background Note

    74. Section 74: Fscs Involvement in Relation to Insurance in Connection With Pensions

      1. Summary

      2. Details of the Section

      3. Background Note

    75. Section 75: Power to Make Retrospective Non-Charging Provision

      1. Summary

      2. Details of the Section

      3. Background Note

    76. Section 76 Schedule 36: Vat: Place of Supply of Services Etc

      1. Summary

      2. Details of the Schedule

      3. Background Note

      4. Annex A

        Transposition Note: Articles 2(1), (6) and (7), 3 and 4 of Directive 2008/08/EC: Amending Chapter 3 of Title V, Section 1 of Chapter 1 of Title XI and Article 196 of Directive 2006/112/ EC as regards the place of supply of services

    77. Section 77: Repayment to Those in Business in Other States

      1. Summary

      2. Details of the Section

      3. Background Note

    78. Section 78: Information Relating to Cross-Border Supplies of Services to Taxable Recipients

      1. Summary

      2. Details of the Section

      3. Background Note

        1. Annex 1

    79. Section 79: Effect of Vat Changes on Arbitration of Rent for Agricultural Holdings

      1. Summary

      2. Details of the Section

      3. Background Note

    80. Section 80: Stamp Duty Land Tax: Exercise of Collective Rights by Tenants of Flats

      1. Summary

      2. Details of the Section

      3. Background Note

    81. Section 81: Stamp Duty Land Tax: Registered Providers of Social Housing

      1. Summary

      2. Details of the Section

      3. Background Note

    82. Section 82: Stamp Duty Land Tax: Rent to Shared Ownership

      1. Summary

      2. Details of the Section

      3. Background Note

    83. Section 83 Schedule 37: Stamp Taxes in the Event of Insolvency

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Part 1

        2. Part 2

      4. Background Note

    84. Section 84 and Schedule 38: Capital Allowances for Oil Decommissioning Expenditure

      1. Summary

      2. Details of Schedule

      3. Background Note

    85. Section 85 Schedule 39: Blended Oil

      1. Summary

      2. Details of the Schedule

      3. Background Note

    86. Section 86 Schedule 40: Oil: Chargeable Gains

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    87. Section 87 Schedule 41: Oil Production Assets Put to Certain Other Uses

      1. Summary

      2. Details of Schedule

        1. Part 1: Petroleum Revenue Tax (Prt)

          1. Allowance of decommissioning and restoration expenditure

          2. Amounts which are not chargeable tariff receipts

          3. No reduction of allowable expenditure

        2. Part 2: Capital Allowances

          1. General decommissioning expenditure

          2. Commencement

      3. Background Note

    88. Section 88 Schedule 42: Former Licenses and Former Oil Fields

      1. Summary

      2. Details of the Schedule

        1. Part 1: Persons Who Cease to Be Licensees Because of Cessation Events

        2. Part 2: Areas Treated as Continuing to Be Oil Fields

      3. Background Note

    89. Section 89: Schedule 43: Abolition of Provisional Expenditure Allowance:

      1. Summary

      2. Details of the Schedule

      3. Background Note

    90. Section 90 Schedule 44: Supplementary Charge: Reduction for Certain New Oil Fields

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    91. Section 91 and Schedule 45: Oil: Miscellaneous Amendments

      1. Summary

      2. Details of the Schedule

        1. The Oil Taxation Act (OTA) 1975

        2. Ota 1983

        3. Finance Act (FA) 1993

        4. The Income and Corporation Taxes Act 1988 (ICTA)

      3. Background Note

    92. Section 92: Hmrc Charter

      1. Summary

      2. Details of the Section

      3. Background Note

    93. Section 93 and Schedule 46: Duties of Senior Accounting Officers of Large Companies

      1. Summary

      2. Details of the Schedule

      3. Background Note

    94. Section 94: Publishing Details of Deliberate Tax Defaulters

      1. Summary

      2. Details of the Section

      3. Background Note

    95. Section 95 and Schedule 47: Amendment of Information and Inspection Powers

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    96. Section 96 and Schedule 48: Extension of Information and Inspection Powers to Further Taxes

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    97. Section 97 and Schedule 49: Powers to Obtain Contact Details for Debtors

      1. Summary

      2. Details of the Schedule

      3. Background Note

    98. Section 98 and Schedule 50: Record-Keeping

      1. Summary

      2. Details of the Schedule

      3. Background Note

    99. Section 99 and Schedule 51: Time Limits for Assessments, Claims Etc

      1. Summary

      2. Details of the Schedule

      3. Background Note

    100. Section 100 Schedule 52: Recovery of Overpaid Tax Etc

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    101. Section 101 Schedule 53: Late Payment Interest on Sums Due to Hmrc

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    102. Section 102 Schedule 54: Repayment Interest on Sums to Be Paid by Hmrc

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    103. Section 103: Rates of Interest

      1. Summary

      2. Details of the Section

      3. Background Note

    104. Section 104: Interest: Supplementary

      1. Summary

      2. Details of the Section

      3. Background Note

    105. Section 105: Miscellaneous Amendments

      1. Summary

      2. Details of the Section

      3. Background Note

    106. Section 106 and Schedule 55: Penalties for Failure to Make Returns Etc

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Amount of penalty: occasional returns and annual returns

        2. Amount of penalty: CIS returns

        3. Reductions for disclosure

        4. Special reduction

        5. Interaction with other penalties and late payment surcharges

        6. Assessment

        7. Appeal

        8. Reasonable excuse

        9. Determination of penalty geared to tax liability where no return made

      4. Background Note

    107. Section 107 and Schedule 56: Penalty for Failure to Make Payments on Time

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Penalty for failure to pay tax

        2. Amount of penalty for failure to pay annual or occasional amounts

        3. Amount of penalty for failure to pay PAYE & CIS amounts

        4. Special reduction

        5. Suspension of penalty during currency of agreement for deferred payment

        6. Assessment

        7. Appeal

        8. Reasonable excuse

      4. Background Note

    108. Section 108: Suspension of Penalties During Currency of Agreement for Deferred Payment

      1. Summary

      2. Details of the Section

      3. Background Note

    109. Section 109 and Schedule 57: Amendments Relating to Penalties

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    110. Section 110 and Schedule 58: Recovery of Debts under Paye Regulations

      1. Summary

      2. Details of the Schedule

      3. Background Note

    111. Section 111: Managed Payment Plans

      1. Summary

      2. Details of the Section

      3. Background Note

    112. Section 112: Customs and Enforcement Powers: Movements between Member States

      1. Summary

      2. Details of the Section

      3. Background Note

    113. Section 113: Vat Exemption for Gaming Participation Fees

      1. Summary

      2. Details of the Section

      3. Background Note

    114. Section 114: Gaming Duty

      1. Summary

      2. Details of the Section

      3. Background Note

    115. Section 115: Remote Bingo Etc

      1. Summary

      2. Details of the Section

      3. Background Note

    116. Section 116: Meaning of "Gaming Machine" and "Gaming"

      1. Summary

      2. Details of the Section

      3. Background Note

    117. Section 117: Climate Change Levy: Taxable Commodities Ineligible for Reduced-Rate Supply

      1. Summary

      2. Details of the Section

      3. Background Note

    118. Section 118 Schedule 59: Removal of Reduced Rate Where Targets are Not Met

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

      4. Background Note

    119. Section 119 Schedule 60: Landfill Tax: Prescribed Landfill Site Activities

      1. Summary

      2. Details of the Schedule

      3. Background Note

    120. Section 120: Requirement to Destroy Registration Documents Which are Replaced

      1. Summary

      2. Details of the Section

      3. Background Note

    121. Section 121: Hydrocarbon Oil Duties: Minor Amendments

      1. Summary

      2. Details of the Section

      3. Background Note

    122. Section 122: Extension of Agricultural Property and Woodlands Relief for Eea Land

      1. Summary

      2. Details of the Section

      3. Background Note

    123. Section 123 and Schedule 61: Alternative Finance Investment Bonds

      1. Summary

      2. Details of the Section

      3. Details of the Schedule

        1. Stamp duty land tax: first transaction

        2. Stamp duty land tax: second transaction

        3. Taxation of capital gains

        4. Capital allowances

        5. Supplementary

        6. Consequential changes

      4. Background Note

    124. Section 124: Mutual Societies: Tax Consequences of Transfers of Business Etc

      1. Summary

      2. Details of the Section

      3. Background Note

    125. Section 125: National Savings: Surplus Funds

      1. Summary

      2. Details of the Section

      3. Background Note

  2. Hansard References

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Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

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