PART 4Miscellaneous and final
Insolvency
98HMRC debts: priority on insolvency
1
In section 386 of the Insolvency Act 1986 (preferential debts)—
a
in subsection (1) after “other deposits” insert “
; certain HMRC debts
”
;
b
in subsection (1B) for “or 15BB” substitute “
, 15BB or 15D
”
.
2
In Schedule 6 to that Act (preferential debts) after paragraph 15C insert—
15DCategory 9: Certain HMRC debts
1
Any amount owed at the relevant date by the debtor to the Commissioners in respect of—
a
value added tax, or
b
a relevant deduction.
2
In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020.
3
For the purposes of sub-paragraph (1)(b) a deduction is “relevant” if—
a
the debtor is required, by virtue of an enactment, to make the deduction from a payment made to another person and to pay an amount to the Commissioners on account of the deduction,
b
the payment to the Commissioners is credited against any liabilities of the other person, and
c
the deduction is of a kind specified in regulations under section 99(3) of the Finance Act 2020.
4
In this paragraph “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.
3
In section 129(2) of the Bankruptcy (Scotland) Act 2016 (asp 21) (priority in distribution: meaning of certain expressions) in the definition of “secondary preferred debt” for “paragraph 7 or 8” substitute “
any of paragraphs 7 to 8A
”
.
4
In Part 1 of Schedule 3 to that Act (list of preferred debts) after paragraph 8 insert—
8ACertain HMRC debts
1
Any amount owed at the relevant date by the debtor to the Commissioners in respect of—
a
value added tax, or
b
a relevant deduction.
2
In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020.
3
For the purposes of sub-paragraph (1)(b) a deduction is “relevant” if—
a
the debtor is required, by virtue of an enactment, to make the deduction from a payment made to another person and to pay an amount to the Commissioners on account of the deduction,
b
the payment to the Commissioners is credited against any liabilities of the other person, and
c
the deduction is of a kind specified in regulations under section 99(3) of the Finance Act 2020.
4
In this paragraph “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.
5
In Article 346 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (preferential debts)—
a
in paragraph (1) after “other deposits” insert “
; certain HMRC debts
”
;
b
in paragraph (1B) for “or 20” substitute “
, 20 or 22
”
.
6
In Schedule 4 to that Order (preferential debts) after paragraph 21 insert—
22Category 9: Certain HMRC debts
1
Any amount owed at the relevant date by the debtor to the Commissioners in respect of—
a
value added tax, or
b
a relevant deduction.
2
In sub-paragraph (1), the reference to “any amount” is subject to any regulations under section 99(1) of the Finance Act 2020.
3
For the purposes of sub-paragraph (1)(b) a deduction is “relevant” if—
a
the debtor is required, by virtue of an enactment, to make the deduction from a payment made to another person and to pay an amount to the Commissioners on account of the deduction,
b
the payment to the Commissioners is credited against any liabilities of the other person, and
c
the deduction is of a kind specified in regulations under section 99(3) of the Finance Act 2020.
4
In this paragraph “the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs.
7
The amendments made by this section do not apply in relation to any case where the relevant date is before 1 December 2020.
99HMRC debts: regulations
1
The Treasury may by regulations provide that only the following amounts are secondary preferential debts (or, in relation to Scotland, secondary preferred debts) for the purpose of a relevant provision—
a
in the case of amounts owed in respect of value added tax, amounts referable to such period as is specified in the regulations;
b
in the case of amounts owed in respect of a relevant deduction, amounts owed in respect of a deduction from a payment made during such period as is specified in the regulations.
2
In subsection (1) “relevant provision” means—
a
paragraph 15D(1) of Schedule 6 to the Insolvency Act 1986 (preferential debts: certain HMRC debts);
b
paragraph 8A(1) of Schedule 3 to the Bankruptcy (Scotland) Act 2016 (asp 21) (list of preferred debts: certain HMRC debts);
c
paragraph 22(1) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (preferential debts: certain HMRC debts).
3
The Treasury may by regulations specify kinds of deductions for the purposes of—
a
paragraph 15D(3)(c) of Schedule 6 to the Insolvency Act 1986;
b
paragraph 8A(3)(c) of Schedule 3 to the Bankruptcy (Scotland) Act 2016 (asp 21);
c
paragraph 22(3)(c) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).
4
Regulations under this section may contain transitional or supplementary provision.
5
Regulations under this section—
a
are to be made by statutory instrument;
b
are subject to annulment in pursuance of a resolution of the House of Commons.
Joint and several liability
100Joint and several liability of company directors etc
1
Schedule 13 makes provision for individuals to be jointly and severally liable, in certain circumstances involving insolvency or potential insolvency, for amounts payable to the Commissioners for Her Majesty's Revenue and Customs by bodies corporate or unincorporate.
2
A reference in Schedule 13 to a tax liability of a company does not include—
a
any tax liability that relates to a period ending before the day on which this Act is passed;
b
any tax liability (other than one that relates to a period) arising from an event or default occurring before that day.
3
For the purposes of subsection (2), a tax liability relates to a period if—
a
the liability arises in respect of a particular tax year, accounting period or other period, or
b
the amount of the liability is calculated by reference to a particular period.
4
A reference in paragraph 5 of Schedule 13 to a penalty does not include any penalty in respect of which the determination to impose the penalty, or (as the case may be) the commencement of proceedings before the tribunal for the penalty to be imposed, occurs before the day on which this Act is passed.
General anti-abuse rule
101Amendments relating to the operation of the GAAR
Schedule 14 makes—
a
provision about the procedural requirements and time limits for the making of adjustments by virtue of section 209 of FA 2013, and
b
provision amending paragraph 5 of Schedule 43C to that Act.
Compensation schemes etc
102Tax relief for scheme payments etc
Schedule 15 makes provision for tax relief in respect of—
a
payments made under or otherwise referable to the Windrush Compensation Scheme,
b
payments under the Troubles Permanent Disablement Payment Scheme, F4...
F5ba
payments made under or otherwise referable to compensation schemes established in connection with certain matters relating to Post Office Limited, and
c
other compensation payments made by or on behalf of a government, public authority or local authority.
Administration
103HMRC: exercise of officer functions
1
Anything capable of being done by an officer of Revenue and Customs by virtue of a function conferred by or under an enactment relating to taxation may be done by HMRC (whether by means involving the use of a computer or otherwise).
2
Accordingly, it follows that HMRC may (among other things)—
a
give a notice under section 8, 8A or 12AA of TMA 1970 (notice to file personal, trustee or partnership return);
b
amend a return under section 9ZB of that Act (correction of personal or trustee return);
c
make an assessment to tax in accordance with section 30A of that Act (assessing procedure);
d
make a determination under section 100 of that Act (determination of penalties);
e
give a notice under paragraph 3 of Schedule 18 to FA 1998 (notice to file company tax return);
f
make a determination under paragraph 2 or 3 of Schedule 14 to FA 2003 (SDLT: determination of penalties).
3
Anything done by HMRC in accordance with subsection (1) has the same effect as it would have if done by an officer of Revenue and Customs (or, where the function is conferred on an officer of a particular kind, an officer of that kind).
4
In this section—
“HMRC” means Her Majesty's Revenue and Customs;
references to an officer of Revenue and Customs include an officer of a particular kind, such as an officer authorised for the purposes of an enactment.
5
This section is treated as always having been in force.
6
However, this section does not apply in relation to anything mentioned in subsection (1) done by HMRC if—
a
before 11 March 2020, a court or tribunal determined that the relevant act was of no effect because it was not done by an officer of Revenue and Customs (or an officer of a particular kind), and
b
at the beginning of 11 March 2020, the order of the court or tribunal giving effect to that determination had not been set aside or overturned on appeal.
104Returns relating to LLP not carrying on business etc with view to profit
1
In TMA 1970 after section 12ABZA insert—
12ABZAAReturns relating to LLP not carrying on business etc with view to profit
1
This section applies where—
a
a person delivers a purported partnership return (“the relevant return”) in respect of a period (“the relevant period”),
b
the relevant return—
i
is made on the basis that the activities of a limited liability partnership (“the LLP”) are treated, under section 863 of ITTOIA 2005 or section 1273 of CTA 2009, as carried on in partnership by its members (“the purported partnership”), and
ii
relates to the purported partnership, but
c
the LLP does not carry on a business with a view to profit in the relevant period (and, accordingly, its activities are not treated as mentioned in paragraph (b)(i)).
2
For the purposes of the relevant enactments, treat the relevant return as a partnership return (and, accordingly, anything done under a relevant enactment in connection with the relevant return has the same effect as it would have if done in connection with a partnership return in a corresponding partnership case).
3
“Relevant enactment” means—
a
any of the following—
i
sections 12AC and 28B (enquiries into partnership returns),
ii
Part 4 of FA 2014 (follower notices and accelerated payment notices), and
b
any enactment relating to, or applying for the purposes of, an enactment within paragraph (a).
4
In relation to the relevant return, the relevant enactments apply with the necessary modifications, including in particular the following—
a
“partner” includes purported partner, and
b
“partnership” includes the purported partnership.
5
In this section—
“business” includes trade or profession;
“corresponding partnership case” means a corresponding case in which the limited liability partnership in question carries on a business with a view to profit in the relevant period;
“purported partner” means any person who was a member of the LLP in the relevant period;
“purported partnership return” means anything that—
- a
purports to be a partnership return, and
- b
is in a form, and is delivered in a way, that a partnership return could have been made and delivered in a corresponding partnership case.
2
The amendment made by subsection (1) is treated as always having been in force.
3
However, that amendment does not apply in relation to a purported partnership return if—
a
before 11 March 2020, a court or tribunal determined, in proceedings to which a limited liability partnership was a party, that the purported partnership return was not a return under section 12AA of TMA 1970, and
b
at the beginning of 11 March 2020, the order of the court or tribunal giving effect to that determination had not been set aside or overturned on appeal.
4
In Part 1 of Schedule 14 to F(No.2)A 2017 (digital reporting and record-keeping for income tax etc: amendments of TMA 1970), after paragraph 10B insert—
10BA
1
Section 12ABZAA (returns relating to LLP not carrying on business etc with view to profit) is amended as follows.
2
For subsection (2) substitute—
2
For the purposes of the relevant enactments—
a
where the relevant return purports to be a section 12AA partnership return, treat it as a section 12AA partnership return;
b
where the relevant return purports to be a Schedule A1 partnership return, treat it as a Schedule A1 partnership return,
(and, accordingly, anything done under a relevant enactment in connection with the relevant return has the same effect as it would have if done in connection with a section 12AA or Schedule A1 partnership return (as the case may be) in a corresponding partnership case).
3
In subsection (5), in the definition of “purported partnership return”—
a
in paragraph (a), for “partnership return” substitute
“ section 12AA or Schedule A1 partnership return ”;b
in paragraph (b), for “partnership return” substitute
“ section 12AA or Schedule A1 partnership return (as the case may be) ”.
5
The reference in section 61(6) of F(No.2)A 2017 (commencement) to Schedule 14 to that Act is to be read as a reference to that Schedule as amended by subsection (4) of this section.
105Interest on unpaid tax in case of disaster etc of national significance
1
Section 135 of FA 2008 (interest on unpaid tax in case of disaster etc of national significance) is amended as follows.
2
In subsection (2), for the words from “arising” to the end substitute
that—
a
arises under or by virtue of an enactment or a contract settlement, and
b
is of a description (if any) specified in the order.
3
In subsection (4)—
a
after “relief period” insert “
, in relation to a deferred amount,
”
;
b
in paragraph (b), after “revoked” insert “
or amended so that it ceases to have effect in relation to the deferred amount
”
.
4
In subsection (10)—
a
at the end of paragraph (a), omit “and”;
b
at the end of paragraph (b) insert
, and
c
may specify different dates in relation to liabilities of different descriptions.
5
The amendments made by this section have effect from 20 March 2020.
Preparing for new tax
111Preparing for a new tax in respect of certain plastic packaging
The Commissioners for Her Majesty's Revenue and Customs may make preparations for the introduction of a new tax to be charged in respect of certain plastic packaging.
Local loans
I1112Limits on local loans
1
In section 4(1) of the National Loans Act 1968 (which sets a limit on local loans made in pursuance of section 3 of that Act)—
a
for “£85 billion” substitute “
£115 billion
”
, and
b
for “£95 billion” substitute “
£135 billion
”
.
2
The Local Loans (Increase of Limit) Order 2019 (SI 2019/1317) is revoked.
3
This section comes into force on such day as the Treasury may by regulations made by statutory instrument appoint.
Other
113Interpretation
In this Act the following abbreviations are references to the following Acts—
ALDA 1979 | Alcoholic Liquor Duties Act 1979 |
CAA 2001 | Capital Allowances Act 2001 |
CTA 2009 | Corporation Tax Act 2009 |
CTA 2010 | Corporation Tax Act 2010 |
FA, followed by a year | Finance Act of that year |
F(No.2)A, followed by a year | Finance (No.2) Act of that year |
HODA 1979 | Hydrocarbon Oil Duties Act 1979 |
IHTA 1984 | Inheritance Tax Act 1984 |
ITA 2007 | Income Tax Act 2007 |
ITEPA 2003 | Income Tax (Earnings and Pensions) Act 2003 |
ITTOIA 2005 | Income Tax (Trading and Other Income) Act 2005 |
TCGA 1992 | Taxation of Chargeable Gains Act 1992 |
TCTA 2018 | Taxation (Cross-border Trade) Act 2018 |
TMA 1970 | Taxes Management Act 1970 |
TPDA 1979 | Tobacco Products Duty Act 1979 |
VATA 1994 | Value Added Tax Act 1994 |
VERA 1994 | Vehicle Excise and Registration Act 1994 |
114Short title
This Act may be cited as the Finance Act 2020.