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Finance Bill


Finance Bill
Part 1 — Excise duties

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 12    Responsibility for unlicensed amusement machines

     (1)    In section 24(5) of the Betting and Gaming Duties Act 1981 (c. 63) (penalty for

unlicensed amusement machines), for paragraph (c) (liability of person

responsible for, inter alia, issuing or exchanging coins etc for amusement

machine) substitute—

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                  “(c)                    is a person responsible for controlling the use of any

amusement machine on the premises, or”.

     (2)    In Schedule 4A to that Act (unlicensed amusement machines), for paragraph

(c) of paragraph 7(3) (which makes similar provision) substitute—

                    “(c)                      responsible for controlling the use of any amusement

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machine on the premises, or”.

 13    Rates of gaming duty

     (1)    For the Table in section 11(2) of the Finance Act 1997 (c. 16) (rates of gaming

duty) substitute—


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Table

 

Part of gross gaming yield

Rate

 
 

The first £502,500

2.5 per cent.

 
 

The next £1,115,500

12.5 per cent.

 
 

The next £1,115,500

20 per cent.

 

20

 

The next £1,953,000

30 per cent.

 
 

The remainder

40 per cent.

 

     (2)    This section has effect in relation to accounting periods beginning on or after

1st April 2003.

Vehicle excise duty

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 14    Vehicle excise duty: rates

     (1)    In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994

(c. 22) (the general rate)—

           (a)           in sub-paragraph (2) (general rate of duty except in case of vehicle with

engine with cylinder capacity not exceeding 1,549 cubic centimetres)

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for “£160” substitute “£165”;

           (b)           in sub-paragraph (2A) (general rate of duty in case of vehicle with

engine with cylinder capacity not exceeding 1,549 cubic centimetres)

for “£105” substitute “£110”.

     (2)    For the Table in paragraph 1B of that Schedule (rates of duty applicable to light

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passenger vehicles registered on or after 1st March 2001 on basis of certificate

specifying CO2 emissions figure) substitute—

 

 

Finance Bill
Part 1 — Excise duties

    14

 
 

CO2 emissions figure

Rate

 
 

(1)

(2)

(3)

(4)

(5)

 
 

Exceeding

Not

Reduced

Standard

Premium

 
  

exceeding

rate

Rate

rate

 
 

g/km

g/km

£

£

£

 

5

 

100

55

65

75

 
 

100

120

65

75

85

 
 

120

150

95

105

115

 
 

150

165

115

125

135

 
 

165

185

135

145

155

 

10

 

185

155

160

165

 

     (3)    In paragraph 1J of that Schedule (rates of duty applicable to light goods

vehicles first registered on or after 1st March 2001)—

           (a)           in paragraph (a) (vehicle which is not a lower-emission van) for “£160”

substitute “£165”;

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           (b)           in paragraph (b) (vehicle which is a lower-emission van) for “£105”

substitute “£110”.

     (4)    This section applies to any licence taken out on or after 17th April 2003 for a

period beginning on or after 1st May 2003.

 15    Disclosure for exemptions: Northern Ireland

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In section 22ZA of the Vehicle Excise and Registration Act 1994 (c. 22) (nil

licences for vehicles for disabled persons: disclosure of information) in

subsection (1)(a) (which provides that the section applies to certain

information held by the Secretary of State or a person providing services to

him) in sub-paragraphs (i) and (ii), after “the Secretary of State” insert “or a

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Northern Ireland department”.

 16    Duty at higher rate: exception for tractive units

     (1)    After section 15 of the Vehicle Excise and Registration Act 1994 insert—

       “15A            Exception for tractive units from charge at higher rate

           (1)           Where—

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                  (a)                 a vehicle licence has been taken out for a tractive unit, and

                  (b)                 the licence was taken out at a rate of vehicle excise duty

applicable to a tractive unit which is to be used with semi-

trailers with a minimum number of axles,

                         duty at a higher rate does not become chargeable under section 15 by

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reason only that while the licence is in force the tractive unit is used

 

 

Finance Bill
Part 2 — Value added tax

    15

 

with a semi-trailer with fewer axles than that minimum number, if the

condition in subsection (2) is satisfied.

           (2)           The condition is that the rate of duty at which the licence was taken out

is equal to or exceeds the rate which would have been applicable if the

revenue weight of the tractive unit had been a weight equal to the

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actual laden weight, at the time of the use, of the articulated vehicle

consisting of the tractive unit and the semi-trailer.”.

     (2)    Section 16 of that Act (which makes provision, in the case of tractive units, for

exemptions from the charge to vehicle excise duty at a higher rate on a basis

different from that set out in new section 15A) shall cease to have effect.

10

     (3)    This section has effect in relation to the use of a tractive unit on or after 9th

April 2003.

Part 2

Value added tax

 17    Requirement of evidence or security

15

     (1)    The Value Added Tax Act 1994 (c. 23) is amended as follows.

     (2)    In section 24(6)(a) (regulations about input tax etc: requirement of document-

ary evidence) after “documents” insert “or other information”.

     (3)    In paragraph 4 of Schedule 11 (power to require security and production of

documents) for sub-paragraph (1) substitute—

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                       “(1)                The Commissioners may, as a condition of allowing or repaying

input tax to any person, require the production of such evidence

relating to VAT as they may specify.

                       (1A)                If they think it necessary for the protection of the revenue, the

Commissioners may require, as a condition of making any VAT

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credit, the giving of such security for the amount of the payment as

appears to them appropriate.”.

     (4)    For sub-paragraph (2) of that paragraph substitute—

                       “(2)                If they think it necessary for the protection of the revenue, the

Commissioners may require a taxable person, as a condition of his

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supplying or being supplied with goods or services under a taxable

supply, to give security, or further security, for the payment of any

VAT that is or may become due from—

                    (a)                   the taxable person, or

                    (b)                   any person by or to whom relevant goods or services are

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supplied.

                       (3)                In sub-paragraph (2) above “relevant goods or services” means

goods or services supplied by or to the taxable person.

                       (4)                Security under sub-paragraph (2) above shall be of such amount, and

shall be given in such manner, as the Commissioners may determine.

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                       (5)                The powers conferred on the Commissioners by sub-paragraph (2)

above are without prejudice to their powers under section 48(7).”.

 

 

Finance Bill
Part 2 — Value added tax

    16

 

     (5)    In section 72(11) (penalty for supplying goods in contravention of paragraph

4(2) of Schedule 11) after “supplies” insert “or is supplied with”.

     (6)    In section 83(l) (right of appeal against requirement of security under

paragraph 4(2) of Schedule 11 etc) for “paragraph 4(2)” substitute “paragraph

4(1A) or (2)”.

5

     (7)    In section 84 (further provisions relating to appeals) after subsection (4D)

insert—

           “(4E)              Where an appeal is brought against a requirement imposed under

paragraph 4(2)(b) of Schedule 11 that a person give security, the

tribunal shall allow the appeal unless the Commissioners satisfy the

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tribunal that—

                  (a)                 there has been an evasion of, or an attempt to evade, VAT in

relation to goods or services supplied to or by that person, or

                  (b)                 it is likely, or without the requirement for security it is likely,

that VAT in relation to such goods or services will be evaded.

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           (4F)              A reference in subsection (4E) above to evading VAT includes a

reference to obtaining a VAT credit that is not due or a VAT credit in

excess of what is due.”.

     (8)    This section shall be deemed to have come into force on 10th April 2003.

 18    Joint and several liability for unpaid VAT of another trader

20

     (1)    In Part 4 of the Value Added Tax Act 1994 (c. 23) (administration, collection

and enforcement), after section 77 insert—

“Liability for unpaid VAT of another

       77A            Joint and several liability of traders in supply chain where tax unpaid

           (1)           This section applies to goods of any of the following descriptions—

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                  (a)                 telephones and any other equipment, including parts and

accessories, made or adapted for use in connection with

telephones or telecommunication;

                  (b)                 computers and any other equipment, including parts,

accessories and software, made or adapted for use in connection

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with computers or computer systems.

           (2)           Where—

                  (a)                 a taxable supply of goods to which this section applies has been

made to a taxable person, and

                  (b)                 at the time of the supply the person knew or had reasonable

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grounds to suspect that some or all of the VAT payable in

respect of that supply, or on any previous or subsequent supply

of those goods, would go unpaid,

                         the Commissioners may serve on him a notice specifying the amount of

the VAT so payable that is unpaid, and stating the effect of the notice.

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           (3)           The effect of a notice under this section is that—

                  (a)                 the person served with the notice, and

                  (b)                 the person liable, apart from this section, for the amount

specified in the notice,

 

 

Finance Bill
Part 2 — Value added tax

    17

 

                         are jointly and severally liable to the Commissioners for that amount.

           (4)           For the purposes of subsection (2) above the amount of VAT that is

payable in respect of a supply is the lesser of—

                  (a)                 the amount chargeable on the supply, and

                  (b)                 the amount shown as due on the supplier’s return for the

5

prescribed accounting period in question (if he has made one)

together with any amount assessed as due from him for that

period (subject to any appeal by him).

           (5)           The reference in subsection (4)(b) above to assessing an amount as due

from a person includes a reference to the case where, because it is

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impracticable to do so, the amount is not notified to him.

           (6)           For the purposes of subsection (2) above, a person shall be presumed to

have reasonable grounds for suspecting matters to be as mentioned in

paragraph (b) of that subsection if the price payable by him for the

goods in question—

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                  (a)                 was less than the lowest price that might reasonably be

expected to be payable for them on the open market, or

                  (b)                 was less than the price payable on any previous supply of those

goods.

           (7)           The presumption provided for by subsection (6) above is rebuttable on

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proof that the low price payable for the goods was due to circumstances

unconnected with failure to pay VAT.

           (8)           Subsection (6) above is without prejudice to any other way of

establishing reasonable grounds for suspicion.

           (9)           The Treasury may by order amend subsection (1) above; and any such

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order may make such incidental, supplemental, consequential or

transitional provision as the Treasury think fit.

           (10)          For the purposes of this section—

                  (a)                 “goods” includes services;

                  (b)                 an amount of VAT counts as unpaid only to the extent that it

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exceeds the amount of any refund due.”.

     (2)    In section 83 of that Act (appeals) after paragraph (r) insert—

                  “(ra)                    any liability arising by virtue of section 77A;”.

     (3)           In section 84(3) of that Act (appeals not to be entertained unless the VAT has

been paid or deposited, except where that would cause hardship) for “or (q)”

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substitute “, (q) or (ra)”.

     (4)    This section shall be deemed to have come into force on 10th April 2003 except

subsection (3) which applies in relation to any appeal notice of which is given

on or after the day on which this Act is passed.

 19    Face-value vouchers

40

Schedule 1 to this Act (VAT: face-value vouchers) has effect.

 20    Supplies arising from prior grant of fee simple

     (1)    In section 96 of the Value Added Tax Act 1994 (c. 23) (interpretative

 

 

Finance Bill
Part 2 — Value added tax

    18

 

provisions), after subsection (10A) (time for determining status of supplies

arising from prior grant of interest etc) insert—

           “(10B)              Notwithstanding subsection (10A) above—

                  (a)                 item 1 of Group 1 of Schedule 9 does not make exempt any

supply that arises for the purposes of this Act from the prior

5

grant of a fee simple falling within paragraph (a) of that item;

and

                  (b)                 that paragraph does not prevent the exemption of a supply that

arises for the purposes of this Act from the prior grant of a fee

simple not falling within that paragraph.”.

10

     (2)    This section applies in relation to any supply that arises for the purposes of the

Value Added Tax Act 1994 from the prior grant of a fee simple made on or after

9th April 2003.

 21    Business gifts

     (1)    In Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply

15

of goods or services), paragraph 5 (business gifts etc) is amended as follows.

     (2)    In sub-paragraph (2) (cases where sub-paragraph (1) does not apply), for

paragraph (a) substitute—

                    “(a)                      a business gift the cost of which, together with the cost of any

other business gifts made to the same person in the same

20

year, was not more than £50.”.

     (3)    After that sub-paragraph insert—

                       “(2ZA)                In sub-paragraph (2) above—

                     “business gift” means a gift of goods that is made in the course

or furtherance of the business in question;

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                     “cost”, in relation to a gift of goods, means the cost to the donor

of acquiring or, as the case may be, producing the goods;

                     “the same year”, in relation to a gift, means any period of

twelve months that includes the day on which the gift is

made.”.

30

     (4)    This section applies in relation to gifts made on or after 1st October 2003.

 22    Non-business use of business property

     (1)    In paragraph 5 of Schedule 4 to the Value Added Tax Act 1994 (matters to be

treated as supply of goods or services), after sub-paragraph (4) (non-business

use of business asset treated as supply of services) insert—

35

                       “(4A)                Notwithstanding paragraph 9(1) below, sub-paragraph (4) above

does not apply to—

                    (a)                   any interest in land,

                    (b)                                         any building or part of a building,

                    (c)                                         any civil engineering work or part of such a work, or

40

                    (d)                                         any goods incorporated or to be incorporated in a building or

civil engineering work (whether by being installed as fixtures

or fittings or otherwise).”.

     (2)    This section shall be deemed to have come into force on 9th April 2003.

 

 

Finance Bill
Part 3 — Taxes and duties on importation and exportation: penalties

    19

 

     (3)    This section does not apply in relation to any asset in respect of which the

person in question or any of his predecessors became entitled before that date

to a credit or repayment as mentioned in paragraph 5(5)(a) or 5(5)(b) of

Schedule 4 to the Value Added Tax Act 1994 (c. 23).

     (4)    In subsection (3)—

5

           (a)           “the person in question” means the person carrying on the business

referred to in sub-paragraph (4) of paragraph 5 of that Schedule;

           (b)           “predecessor” has the same meaning as in that paragraph;

           (c)           the reference to an “asset” is to anything falling within any of

paragraphs (a) to (d) of the sub-paragraph (4A) inserted into that

10

paragraph by subsection (1).

 23    Supply of electronic services in member States: special accounting scheme

     (1)    Schedule 2 to this Act (scheme enabling persons who supply certain electronic

services in any member State, but who are not established in a member State,

to account for and pay VAT in the United Kingdom on those supplies) has

15

effect.

     (2)    The amendments made by that Schedule have effect in relation to qualifying

supplies made on or after 1st July 2003.

            

Part 3

20

Taxes and duties on importation and exportation: penalties

Preliminary

 24    Introductory

     (1)    This Part makes provision for and in connection with the imposition of liability

to a penalty where a person—

25

           (a)           engages in any conduct for the purpose of evading any relevant tax or

duty, or

           (b)           engages in any conduct by which he contravenes a duty, obligation,

requirement or condition imposed by or under legislation relating to

any relevant tax or duty.

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     (2)    For the purposes of this Part “relevant tax or duty” means any of the

following—

           (a)           customs duty;

           (b)           Community export duty;

           (c)           Community import duty;

35

           (d)           import VAT;

           (e)           customs duty of a preferential tariff country.

     (3)    In this Part—

                    “appeal tribunal” means a VAT and duties tribunal;

                    “the Commissioners” means the Commissioners of Customs and Excise;

40

                    “the Community Customs Code” means Council Regulation 2913/92/

EEC establishing the Community Customs Code;

 

 

 
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