Finance Act 1996

SCHEDULE 5Landfill Tax

Part IInformation

General

1(1)Every person who is concerned (in whatever capacity) with any landfill disposal shall furnish to the Commissioners such information relating to the disposal as the Commissioners may reasonably require.

(2)The information mentioned in sub-paragraph (1) above shall be furnished within such time and in such form as the Commissioners may reasonably require.

Records

2(1)Regulations may require registrable persons to make records.

(2)Regulations under sub-paragraph (1) above may be framed by reference to such records as may be stipulated in any notice published by the Commissioners in pursuance of the regulations and not withdrawn by a further notice.

(3)Regulations may—

(a)require registrable persons to preserve records of a prescribed description (whether or not the records are required to be made in pursuance of regulations) for such period not exceeding six years as may be specified in the regulations;

(b)authorise the Commissioners to direct that any such records need only be preserved for a shorter period than that specified in the regulations;

(c)authorise a direction to be made so as to apply generally or in such cases as the Commissioners may stipulate.

(4)Any duty under regulations to preserve records may be discharged by the preservation of the information contained in them by such means as the Commissioners may approve; and where that information is so preserved a copy of any document forming part of the records shall (subject to the following provisions of this paragraph) be admissible in evidence in any proceedings, whether civil or criminal, to the same extent as the records themselves.

(5)The Commissioners may, as a condition of approving under sub-paragraph (4) above any means of preserving information contained in any records, impose such reasonable requirements as appear to them necessary for securing that the information will be as readily available to them as if the records themselves had been preserved.

(6)A statement contained in a document produced by a computer shall not by virtue of sub-paragraph (4) above be admissible in evidence—

(a)in criminal proceedings in England and Wales, except in accordance with sections 69 and 70 of the [1984 c. 60.] Police and Criminal Evidence Act 1984 and Part II of the [1988 c. 33.] Criminal Justice Act 1988;

(b)in civil proceedings in Scotland, except in accordance with sections 5 and 6 of the [1988 c. 32.] Civil Evidence (Scotland) Act 1988;

(c)in criminal proceedings in Scotland, except in accordance with Schedule 8 to the [1995 c. 46.] Criminal Procedure (Scotland) Act 1995;

(d)in civil proceedings in Northern Ireland, except in accordance with sections 2 and 3 of the [1971 c. 36 (N.I.).] Civil Evidence Act (Northern Ireland) 1971;

(e)in criminal proceedings in Northern Ireland, except in accordance with Article 68 of the [S.I. 1989/1341 (N.I.12).] Police and Criminal Evidence (Northern Ireland) Order 1989 and Part II of the [S.I. 1988/1847 (N.I.17).] Criminal Justice (Evidence, Etc.) (Northern Ireland) Order 1988.

(7)In the case of civil proceedings in England and Wales to which sections 5 and 6 of the [1968 c. 64.] Civil Evidence Act 1968 apply, a statement contained in a document produced by a computer shall not be admissible in evidence by virtue of sub-paragraph (4) above except in accordance with those sections.

Documents

3(1)Every person who is concerned (in whatever capacity) with any landfill disposal shall upon demand made by an authorised person produce or cause to be produced for inspection by that person any documents relating to the disposal.

(2)Where, by virtue of sub-paragraph (1) above, an authorised person has power to require the production of any documents from any person, he shall have the like power to require production of the documents concerned from any other person who appears to the authorised person to be in possession of them; but where any such other person claims a lien on any document produced by him, the production shall be without prejudice to the lien.

(3)The documents mentioned in sub-paragraphs (1) and (2) above shall be produced—

(a)at such place as the authorised person may reasonably require, and

(b)at such time as the authorised person may reasonably require.

(4)An authorised person may take copies of, or make extracts from, any document produced under sub-paragraph (1) or (2) above.

(5)If it appears to him to be necessary to do so, an authorised person may, at a reasonable time and for a reasonable period, remove any document produced under sub-paragraph (1) or (2) above and shall, on request, provide a receipt for any document so removed; and where a lien is claimed on a document produced under sub-paragraph (2) above the removal of the document under this sub-paragraph shall not be regarded as breaking the lien.

(6)Where a document removed by an authorised person under sub-paragraph (5) above is reasonably required for any purpose he shall, as soon as practicable, provide a copy of the document, free of charge, to the person by whom it was produced or caused to be produced.

(7)Where any documents removed under the powers conferred by this paragraph are lost or damaged the Commissioners shall be liable to compensate their owner for any expenses reasonably incurred by him in replacing or repairing the documents.

Part IIPowers

Entry and inspection

4For the purpose of exercising any powers under this Part of this Act an authorised person may at any reasonable time enter and inspect premises used in connection with the carrying on of a business.

Entry and search

5(1)Where—

(a)a justice of the peace is satisfied on information on oath that there is reasonable ground for suspecting that a fraud offence which appears to be of a serious nature is being, has been or is about to be committed on any premises or that evidence of the commission of such an offence is to be found there, or

(b)in Scotland a justice, within the meaning of section 307 of the [1995 c. 46.] Criminal Procedure (Scotland) Act 1995, is satisfied by evidence on oath as mentioned in paragraph (a) above,

he may issue a warrant in writing authorising any authorised person to enter those premises, if necessary by force, at any time within one month from the time of the issue of the warrant and search them.

(2)A person who enters the premises under the authority of the warrant may—

(a)take with him such other persons as appear to him to be necessary;

(b)seize and remove any documents or other things whatsoever found on the premises which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of a fraud offence which appears to him to be of a serious nature;

(c)search or cause to be searched any person found on the premises whom he has reasonable cause to believe to be in possession of any such documents or other things;

but no woman or girl shall be searched except by a woman.

(3)The powers conferred by a warrant under this paragraph shall not be exercisable—

(a)by more than such number of authorised persons as may be specified in the warrant,

(b)outside such times of day as may be so specified, or

(c)if the warrant so provides, otherwise than in the presence of a constable in uniform.

(4)An authorised person seeking to exercise the powers conferred by a warrant under this paragraph or, if there is more than one such authorised person, that one of them who is in charge of the search shall provide a copy of the warrant endorsed with his name as follows—

(a)if the occupier of the premises concerned is present at the time the search is to begin, the copy shall be supplied to the occupier;

(b)if at that time the occupier is not present but a person who appears to the authorised person to be in charge of the premises is present, the copy shall be supplied to that person;

(c)if neither paragraph (a) nor paragraph (b) above applies, the copy shall be left in a prominent place on the premises.

(5)In this paragraph “a fraud offence” means an offence under any provision of paragraph 15(1) to (5) below.

Arrest

6(1)Where an authorised person has reasonable grounds for suspecting that a fraud offence has been committed he may arrest anyone whom he has reasonable grounds for suspecting to be guilty of the offence.

(2)In this paragraph “a fraud offence” means an offence under any provision of paragraph 15(1) to (5) below.

Order for access to recorded information etc.

7(1)Where, on an application by an authorised person, a justice of the peace or, in Scotland, a justice (within the meaning of section 307 of the [1995 c. 46.] Criminal Procedure (Scotland) Act 1995) is satisfied that there are reasonable grounds for believing—

(a)that an offence in connection with tax is being, has been or is about to be committed, and

(b)that any recorded information (including any document of any nature whatsoever) which may be required as evidence for the purpose of any proceedings in respect of such an offence is in the possession of any person,

he may make an order under this paragraph.

(2)An order under this paragraph is an order that the person who appears to the justice to be in possession of the recorded information to which the application relates shall—

(a)give an authorised person access to it, and

(b)permit an authorised person to remove and take away any of it which he reasonably considers necessary,

not later than the end of the period of 7 days beginning with the date of the order or the end of such longer period as the order may specify.

(3)The reference in sub-paragraph (2)(a) above to giving an authorised person access to the recorded information to which the application relates includes a reference to permitting the authorised person to take copies of it or to make extracts from it.

(4)Where the recorded information consists of information contained in a computer, an order under this paragraph shall have effect as an order to produce the information in a form in which it is visible and legible and, if the authorised person wishes to remove it, in a form in which it can be removed.

(5)This paragraph is without prejudice to paragraphs 3 to 5 above.

Removal of documents etc.

8(1)An authorised person who removes anything in the exercise of a power conferred by or under paragraph 5 or 7 above shall, if so requested by a person showing himself—

(a)to be the occupier of premises from which it was removed, or

(b)to have had custody or control of it immediately before the removal,

provide that person with a record of what he removed.

(2)The authorised person shall provide the record within a reasonable time from the making of the request for it.

(3)Subject to sub-paragraph (7) below, if a request for permission to be allowed access to anything which—

(a)has been removed by an authorised person, and

(b)is retained by the Commissioners for the purposes of investigating an offence,

is made to the officer in overall charge of the investigation by a person who had custody or control of the thing immediately before it was so removed or by someone acting on behalf of such a person, the officer shall allow the person who made the request access to it under the supervision of an authorised person.

(4)Subject to sub-paragraph (7) below, if a request for a photograph or copy of any such thing is made to the officer in overall charge of the investigation by a person who had custody or control of the thing immediately before it was so removed, or by someone acting on behalf of such a person, the officer shall—

(a)allow the person who made the request access to it under the supervision of an authorised person for the purpose of photographing it or copying it, or

(b)photograph or copy it, or cause it to be photographed or copied.

(5)Subject to sub-paragraph (7) below, where anything is photographed or copied under sub-paragraph (4)(b) above the officer shall supply the photograph or copy, or cause it to be supplied, to the person who made the request.

(6)The photograph or copy shall be supplied within a reasonable time from the making of the request.

(7)There is no duty under this paragraph to allow access to, or to supply a photograph or copy of, anything if the officer in overall charge of the investigation for the purposes of which it was removed has reasonable grounds for believing that to do so would prejudice—

(a)that investigation,

(b)the investigation of an offence other than the offence for the purposes of the investigation of which the thing was removed, or

(c)any criminal proceedings which may be brought as a result of the investigation of which he is in charge or any such investigation as is mentioned in paragraph (b) above.

(8)Any reference in this paragraph to the officer in overall charge of the investigation is a reference to the person whose name and address are endorsed on the warrant concerned as being the officer so in charge.

9(1)Where, on an application made as mentioned in sub-paragraph (2) below, the appropriate judicial authority is satisfied that a person has failed to comply with a requirement imposed by paragraph 8 above, the authority may order that person to comply with the requirement within such time and in such manner as may be specified in the order.

(2)An application under sub-paragraph (1) above shall be made—

(a)in the case of a failure to comply with any of the requirements imposed by sub-paragraphs (1) and (2) of paragraph 8 above, by the occupier of the premises from which the thing in question was removed or by the person who had custody or control of it immediately before it was so removed, and

(b)in any other case, by the person who had such custody or control.

(3)In this paragraph “the appropriate judicial authority” means—

(a)in England and Wales, a magistrates' court;

(b)in Scotland, the sheriff;

(c)in Northern Ireland, a court of summary jurisdiction, as defined in Article 2(2)(a) of the [S.I. 1981/1675 (N.I.26).] Magistrates' Court (Northern Ireland) Order 1981.

(4)In England and Wales and Northern Ireland, an application for an order under this paragraph shall be made by way of complaint; and sections 21 and 42(2) of the [1954 c. 33 (N.I.).] Interpretation Act (Northern Ireland) 1954 shall apply as if any reference in those provisions to any enactment included a reference to this paragraph.

Power to take samples

10(1)An authorised person, if it appears to him necessary for the protection of the revenue against mistake or fraud, may at any time take, from material which he has reasonable cause to believe is intended to be, is being, or has been disposed of as waste by way of landfill, such samples as he may require with a view to determining how the material ought to be or to have been treated for the purposes of tax.

(2)Any sample taken under this paragraph shall be disposed of in such manner as the Commissioners may direct.

Part IIIRecovery

General

11Tax due from any person shall be recoverable as a debt due to the Crown.

Preferential and preferred debts

12(1)In the [1986 c. 45.] Insolvency Act 1986, in section 386(1) (preferential debts) the words “landfill tax,” shall be inserted after “insurance premium tax,” and in Schedule 6 (categories of preferential debts) the following paragraph shall be inserted after paragraph 3A—

“3BAny landfill tax which is referable to the period of 6 months next before the relevant date (which period is referred to below as “the 6-month period”).

For the purposes of this paragraph—

(a)where the whole of the accounting period to which any landfill tax is attributable falls within the 6-month period, the whole amount of that tax is referable to that period; and

(b)in any other case the amount of any landfill tax which is referable to the 6-month period is the proportion of the tax which is equal to such proportion (if any) of the accounting period in question as falls within the 6-month period;

and references here to accounting periods shall be construed in accordance with Part III of the Finance Act 1996.”

(2)In the [1985 c. 66.] Bankruptcy (Scotland) Act 1985, Schedule 3 (preferred debts) shall be amended as mentioned in sub-paragraphs (3) and (4) below.

(3)In paragraph 2 the following sub-paragraph shall be inserted after sub-paragraph (1A)—

“(1B)Any landfill tax which is referable to the period of six months next before the relevant date.”

(4)The following shall be inserted after paragraph 8A—

“Periods to which landfill tax referable

8B(1)For the purpose of paragraph 2(1B) of Part I of this Schedule—

(a)where the whole of the accounting period to which any landfill tax is attributable falls within the period of six months next before the relevant date (“the relevant period”), the whole amount of that tax shall be referable to the relevant period; and

(b)in any other case the amount of any landfill tax which shall be referable to the relevant period shall be the proportion of the tax which is equal to such proportion (if any) of the accounting period in question as falls within the relevant period.

(2)In sub-paragraph (1) above “accounting period” shall be construed in accordance with Part III of the Finance Act 1996.”

(5)In the [S.I. 1989/2405 (N.I. 19).] Insolvency (Northern Ireland) Order 1989, in Article 346(1) (preferential debts) the words “landfill tax” shall be inserted after “insurance premium tax” and in Schedule 4 (categories of preferential debts) the following paragraph shall be inserted after paragraph 3A—

“3BAny landfill tax which is referable to the period of 6 months next before the relevant date (which period is referred to below as “the 6-month period”).

For the purposes of this paragraph—

(a)where the whole of the accounting period to which any landfill tax is attributable falls within the 6-month period, the whole amount of that tax is referable to that period; and

(b)in any other case the amount of any landfill tax which is referable to the 6-month period is the proportion of the tax which is equal to such proportion (if any) of the accounting period in question as falls within the 6-month period;

and references here to accounting periods shall be construed in accordance with Part III of the Finance Act 1996.”

Distress and diligence

13(1)Regulations may make provision in respect of England and Wales and Northern Ireland—

(a)for authorising distress to be levied on the goods and chattels of any person refusing or neglecting to pay any tax due from him or any amount recoverable as if it were tax due from him;

(b)for the disposal of any goods or chattels on which distress is levied in pursuance of the regulations;

(c)for the imposition and recovery of costs, charges, expenses and fees in connection with anything done under the regulations.

(2)In respect of Scotland, where any tax or any amount recoverable as if it were tax is due and has not been paid, the sheriff, on an application by the Commissioners accompanied by a certificate by the Commissioners—

(a)stating that none of the persons specified in the application has paid the tax or other sum due from him,

(b)stating that payment of the amount due from each such person has been demanded from him, and

(c)specifying the amount due from and unpaid by each such person,

shall grant a summary warrant in a form prescribed by act of sederunt authorising the recovery, by any of the diligences mentioned in sub-paragraph (3) below, of the amount remaining due and unpaid.

(3)The diligences referred to in sub-paragraph (2) above are—

(a)a poinding and sale in accordance with Schedule 5 to the [1987 c. 18.] Debtors (Scotland) Act 1987;

(b)an earnings arrestment;

(c)an arrestment and action of furthcoming or sale.

(4)Subject to sub-paragraph (5) below and without prejudice to paragraphs 25 to 34 of Schedule 5 to the Debtors (Scotland) Act 1987 (expenses of poinding and sale) the sheriff officer’s fees, together with the outlays necessarily incurred by him, in connection with the execution of a summary warrant shall be chargeable against the debtor.

(5)No fee shall be chargeable by the sheriff officer against the debtor for collecting, and accounting to the Commissioners for, sums paid to him by the debtor in respect of the amount owing.

(6)Regulations may make provision for anything which the Commissioners may do under sub-paragraphs (2) to (5) above to be done by an officer of the Commissioners holding such rank as the regulations may specify.

Recovery of overpaid tax

14(1)Where a person has paid an amount to the Commissioners by way of tax which was not tax due to them, they shall be liable to repay the amount to him.

(2)The Commissioners shall only be liable to repay an amount under this paragraph on a claim being made for the purpose.

(3)It shall be a defence, in relation to a claim under this paragraph, that repayment of an amount would unjustly enrich the claimant.

(4)No amount may be claimed under this paragraph after the expiry of six years from the date on which it was paid.

(5)A claim under this paragraph shall be made in such form and manner and shall be supported by such documentary evidence as may be prescribed by regulations.

(6)Except as provided by this paragraph, the Commissioners shall not be liable to repay an amount paid to them by way of tax by virtue of the fact that it was not tax due to them.

Part IVCriminal Penalties

Criminal offences

15(1)A person is guilty of an offence if—

(a)being a registrable person, he is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of tax by him or another registrable person, or

(b)not being a registrable person, he is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of tax by a registrable person.

(2)Any reference in sub-paragraph (1) above to the evasion of tax includes a reference to the obtaining of a payment under regulations under section 51(2)(c) or (d) or (f) of this Act.

(3)A person is guilty of an offence if with the requisite intent—

(a)he produces, furnishes or sends, or causes to be produced, furnished or sent, for the purposes of this Part of this Act any document which is false in a material particular, or

(b)he otherwise makes use for those purposes of such a document;

and the requisite intent is intent to deceive or to secure that a machine will respond to the document as if it were a true document.

(4)A person is guilty of an offence if in furnishing any information for the purposes of this Part of this Act he makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular.

(5)A person is guilty of an offence by virtue of this sub-paragraph if his conduct during any specified period must have involved the commission by him of one or more offences under the preceding provisions of this paragraph; and the preceding provisions of this sub-paragraph apply whether or not the particulars of that offence or those offences are known.

(6)A person is guilty of an offence if—

(a)he enters into a taxable landfill contract, or

(b)he makes arrangements for other persons to enter into such a contract,

with reason to believe that tax in respect of the disposal concerned will be evaded.

(7)A person is guilty of an offence if he carries out taxable activities without giving security (or further security) he has been required to give under paragraph 31 below.

(8)For the purposes of this paragraph a taxable landfill contract is a contract under which there is to be a taxable disposal.

Criminal penalties

16(1)A person guilty of an offence under paragraph 15(1) above is liable—

(a)on summary conviction, to a penalty of the statutory maximum or of three times the amount of the tax, whichever is the greater, or to imprisonment for a term not exceeding six months or to both;

(b)on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years or to both.

(2)The reference in sub-paragraph (1) above to the amount of the tax shall be construed, in relation to tax itself or a payment falling within paragraph 15(2) above, as a reference to the aggregate of—

(a)the amount (if any) falsely claimed by way of credit, and

(b)the amount (if any) by which the gross amount of tax was falsely understated.

(3)A person guilty of an offence under paragraph 15(3) or (4) above is liable—

(a)on summary conviction, to a penalty of the statutory maximum (or, where sub-paragraph (4) below applies, to the alternative penalty there specified if it is greater) or to imprisonment for a term not exceeding six months or to both;

(b)on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years or to both.

(4)Where—

(a)the document referred to in paragraph 15(3) above is a return required under this Part of this Act, or

(b)the information referred to in paragraph 15(4) above is contained in or otherwise relevant to such a return,

the alternative penalty is a penalty equal to three times the aggregate of the amount (if any) falsely claimed by way of credit and the amount (if any) by which the gross amount of tax was understated.

(5)A person guilty of an offence under paragraph 15(5) above is liable—

(a)on summary conviction, to a penalty of the statutory maximum (or, if greater, three times the amount of any tax that was or was intended to be evaded by his conduct) or to imprisonment for a term not exceeding six months or to both;

(b)on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding seven years or to both;

and paragraph 15(2) and sub-paragraph (2) above shall apply for the purposes of this sub-paragraph as they apply respectively for the purposes of paragraph 15(1) and sub-paragraph (1) above.

(6)A person guilty of an offence under paragraph 15(6) above is liable on summary conviction to a penalty of level 5 on the standard scale or three times the amount of the tax, whichever is the greater.

(7)A person guilty of an offence under paragraph 15(7) above is liable on summary conviction to a penalty of level 5 on the standard scale.

(8)In this paragraph—

(a)“credit” means credit for which provision is made by regulations under section 51 of this Act;

(b)“the gross amount of tax” means the total amount of tax due before taking into account any deduction for which provision is made by regulations under section 51(2) of this Act.

Criminal proceedings etc.

17Sections 145 to 155 of the [1979 c. 2.] Customs and Excise Management Act 1979 (proceedings for offences, mitigation of penalties and certain other matters) shall apply in relation to offences under paragraph 15 above and penalties imposed under paragraph 16 above as they apply in relation to offences and penalties under the customs and excise Acts as defined in that Act.

Part VCivil Penalties

Evasion

18(1)Where—

(a)for the purpose of evading tax, a registrable person does any act or omits to take any action, and

(b)his conduct involves dishonesty (whether or not it is such as to give rise to criminal liability),

he is liable to a penalty equal to the amount of tax evaded, or (as the case may be) sought to be evaded, by his conduct; but this is subject to sub-paragraph (7) below.

(2)The reference in sub-paragraph (1)(a) above to evading tax includes a reference to obtaining a payment under regulations under section 51(2)(c) or (d) or (f) of this Act in circumstances where the person concerned is not entitled to the sum.

(3)The reference in sub-paragraph (1) above to the amount of tax evaded or sought to be evaded is a reference to the aggregate of—

(a)the amount (if any) falsely claimed by way of credit, and

(b)the amount (if any) by which the gross amount of tax was falsely understated.

(4)In this paragraph—

(a)“credit” means credit for which provision is made by regulations under section 51 of this Act;

(b)“the gross amount of tax” means the total amount of tax due before taking into account any deduction for which provision is made by regulations under section 51(2) of this Act.

(5)Statements made or documents produced by or on behalf of a person shall not be inadmissible in any such proceedings as are mentioned in sub-paragraph (6) below by reason only that it has been drawn to his attention—

(a)that, in relation to tax, the Commissioners may assess an amount due by way of a civil penalty instead of instituting criminal proceedings and, though no undertaking can be given as to whether the Commissioners will make such an assessment in the case of any person, it is their practice to be influenced by the fact that a person has made a full confession of any dishonest conduct to which he has been a party and has given full facilities for investigation, and

(b)that the Commissioners or, on appeal, an appeal tribunal have power under paragraph 25 below to reduce a penalty under this paragraph,

and that he was or may have been induced thereby to make the statements or produce the documents.

(6)The proceedings referred to in sub-paragraph (5) above are—

(a)any criminal proceedings against the person concerned in respect of any offence in connection with or in relation to tax, and

(b)any proceedings against him for the recovery of any sum due from him in connection with or in relation to tax.

(7)Where, by reason of conduct falling within sub-paragraph (1) above, a person is convicted of an offence (whether under this Part of this Act or otherwise) that conduct shall not also give rise to liability to a penalty under this paragraph.

19(1)Where it appears to the Commissioners—

(a)that a body corporate is liable to a penalty under paragraph 18 above, and

(b)that the conduct giving rise to that penalty is, in whole or in part, attributable to the dishonesty of a person who is, or at the material time was, a director or managing officer of the body corporate (a named officer),

the Commissioners may serve a notice under this paragraph on the body corporate and on the named officer.

(2)A notice under this paragraph shall state—

(a)the amount of the penalty referred to in sub-paragraph (1)(a) above (the basic penalty), and

(b)that the Commissioners propose, in accordance with this paragraph, to recover from the named officer such portion (which may be the whole) of the basic penalty as is specified in the notice.

(3)Where a notice is served under this paragraph, the portion of the basic penalty specified in the notice shall be recoverable from the named officer as if he were personally liable under paragraph 18 above to a penalty which corresponds to that portion; and the amount of that penalty may be assessed and notified to him accordingly under paragraph 32 below.

(4)Where a notice is served under this paragraph—

(a)the amount which, under paragraph 32 below, may be assessed as the amount due by way of penalty from the body corporate shall be only so much (if any) of the basic penalty as is not assessed on and notified to a named officer by virtue of sub-paragraph (3) above, and

(b)the body corporate shall be treated as discharged from liability for so much of the basic penalty as is so assessed and notified.

(5)No appeal shall lie against a notice under this paragraph as such but—

(a)where a body corporate is assessed as mentioned in sub-paragraph (4)(a) above, the body corporate may require a review of the Commissioners' decision as to its liability to a penalty and as to the amount of the basic penalty as if it were specified in the assessment;

(b)where an assessment is made on a named officer by virtue of sub-paragraph (3) above, the named officer may require a review of the Commissioners' decision that the conduct of the body corporate referred to in sub-paragraph (1)(b) above is, in whole or in part, attributable to his dishonesty and of their decision as to the portion of the penalty which the Commissioners propose to recover from him;

(c)sections 55 and 56 of this Act shall apply accordingly.

(6)In this paragraph a “managing officer”, in relation to a body corporate, means any manager, secretary or other similar officer of the body corporate or any person purporting to act in any such capacity or as a director; and where the affairs of a body corporate are managed by its members, this paragraph shall apply in relation to the conduct of a member in connection with his functions of management as if he were a director of the body corporate.

Misdeclaration or neglect

20(1)Where, for an accounting period—

(a)a return is made which understates a person’s liability to tax or overstates his entitlement to credit, or

(b)an assessment is made which understates a person’s liability to tax and, at the end of the period of 30 days beginning on the date of the assessment, he has not taken all such steps as are reasonable to draw the understatement to the attention of the Commissioners,

the person concerned is liable, subject to sub-paragraphs (3) and (4) below, to a penalty equal to 5 per cent. of the amount of the understatement of liability or (as the case may be) overstatement of entitlement.

(2)Where—

(a)a return for an accounting period overstates or understates to any extent a person’s liability to tax or his entitlement to credit, and

(b)that return is corrected, in such circumstances and in accordance with such conditions as may be prescribed by regulations, by a return for a later accounting period which understates or overstates, to the corresponding extent, that liability or entitlement,

it shall be assumed for the purposes of this paragraph that the statement made by each such return is a correct statement for the accounting period to which the return relates.

(3)Conduct falling within sub-paragraph (1) above shall not give rise to liability to a penalty under this paragraph if the person concerned furnishes full information with respect to the inaccuracy concerned to the Commissioners—

(a)at a time when he has no reason to believe that enquiries are being made by the Commissioners into his affairs, so far as they relate to tax, and

(b)in such form and manner as may be prescribed by regulations or specified by the Commissioners in accordance with provision made by regulations.

(4)Where, by reason of conduct falling within sub-paragraph (1) above—

(a)a person is convicted of an offence (whether under this Part of this Act or otherwise), or

(b)a person is assessed to a penalty under paragraph 18 above,

that conduct shall not also give rise to liability to a penalty under this paragraph.

(5)In this paragraph “credit” means credit for which provision is made by regulations under section 51 of this Act.

Registration

21(1)A person who fails to comply with section 47(3) of this Act is liable to a penalty equal to 5 per cent. of the relevant tax or, if it is greater or the circumstances are such that there is no relevant tax, to a penalty of £250; but this is subject to sub-paragraph (4) below.

(2)In sub-paragraph (1) above “relevant tax” means the tax (if any) for which the person concerned is liable for the period which—

(a)begins on the date with effect from which he is, in accordance with section 47 of this Act, required to be registered, and

(b)ends on the date on which the Commissioners received notification of, or otherwise became aware of, his liability to be registered.

(3)A person who fails to comply with section 47(4) of this Act is liable to a penalty of £250.

(4)Where, by reason of conduct falling within sub-paragraph (1) above—

(a)a person is convicted of an offence (whether under this Part of this Act or otherwise), or

(b)a person is assessed to a penalty under paragraph 18 above,

that conduct shall not also give rise to liability to a penalty under this paragraph.

Information

22(1)If a person—

(a)fails to comply with any provision of paragraph 1 or 3 above, or

(b)fails to make records as required by any provision of regulations made under paragraph 2 above,

he is liable to a penalty of £250; but this is subject to sub-paragraph (4) below.

(2)Where—

(a)a penalty (an initial penalty) is imposed on a person under sub-paragraph (1) above, and

(b)the failure which led to the initial penalty continues after its imposition,

he is (subject to sub-paragraph (4) below) liable to a further penalty of £20 for each day during which (or any part of which) the failure continues after the day on which the initial penalty was imposed.

(3)A person who fails to preserve records in compliance with any provision of regulations made under paragraph 2 above (read with that paragraph and any direction given under the regulations) is liable to a penalty of £250; but this is subject to sub-paragraph (4) below.

(4)Where by reason of a failure falling within sub-paragraph (1) or (3) above—

(a)a person is convicted of an offence (whether under this Part of this Act or otherwise), or

(b)a person is assessed to a penalty under paragraph 18 above,

that failure shall not also give rise to liability to a penalty under this paragraph.

Breach of regulations

23(1)Where regulations made under this Part of this Act impose a requirement on any person, they may provide that if the person fails to comply with the requirement he shall be liable to a penalty of £250; but this is subject to sub-paragraphs (2) and (3) below.

(2)Where by reason of any conduct—

(a)a person is convicted of an offence (whether under this Part of this Act or otherwise), or

(b)a person is assessed to a penalty under paragraph 18 above,

that conduct shall not also give rise to liability to a penalty under the regulations.

(3)Sub-paragraph (1) above does not apply to any failure mentioned in paragraph 22 above.

Walking possession agreements

24(1)This paragraph applies where—

(a)in accordance with regulations under paragraph 13(1) above a distress is authorised to be levied on the goods and chattels of a person (a person in default) who has refused or neglected to pay any tax due from him or any amount recoverable as if it were tax due from him, and

(b)the person levying the distress and the person in default have entered into a walking possession agreement.

(2)For the purposes of this paragraph a walking possession agreement is an agreement under which, in consideration of the property distrained upon being allowed to remain in the custody of the person in default and of the delaying of its sale, the person in default—

(a)acknowledges that the property specified in the agreement is under distraint and held in walking possession, and

(b)undertakes that, except with the consent of the Commissioners and subject to such conditions as they may impose, he will not remove or allow the removal of any of the specified property from the premises named in the agreement.

(3)If the person in default is in breach of the undertaking contained in a walking possession agreement, he is liable to a penalty equal to half of the tax or other amount referred to in sub-paragraph (1)(a) above.

(4)This paragraph does not extend to Scotland.

Mitigation of penalties

25(1)Where a person is liable to a penalty under this Part of this Schedule the Commissioners or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper.

(2)Where the person concerned satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for any breach, failure or other conduct, that is a factor which (among other things) may be taken into account under sub-paragraph (1) above.

(3)In the case of a penalty reduced by the Commissioners under sub-paragraph (1) above an appeal tribunal, on an appeal relating to the penalty, may cancel the whole or any part of the reduction made by the Commissioners.

Part VIInterest

Interest on under-declared tax

26(1)Sub-paragraph (2) below applies where—

(a)under section 50(1) of this Act the Commissioners assess an amount of tax due from a registrable person for an accounting period and notify it to him, and

(b)the assessment is made on the basis that the amount (the additional amount) is due from him in addition to any amount shown in a return made in relation to the accounting period.

(2)The additional amount shall carry interest for the period which—

(a)begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

(b)ends with the day before the relevant day.

(3)For the purposes of sub-paragraph (2) above the relevant day is the earlier of—

(a)the day on which the assessment is notified to the person;

(b)the day on which the additional amount is paid.

(4)Sub-paragraph (5) below applies where under section 50(2) of this Act the Commissioners assess an amount as being tax due from a registrable person for an accounting period and notify it to him.

(5)The amount shall carry interest for the period which—

(a)begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

(b)ends with the day before the relevant day.

(6)For the purposes of sub-paragraph (5) above the relevant day is the earlier of—

(a)the day on which the assessment is notified to the person;

(b)the day on which the amount is paid.

(7)Interest under this paragraph shall be payable at the rate applicable under section 197 of this Act.

(8)Interest under this paragraph shall be paid without any deduction of income tax.

(9)Sub-paragraph (10) below applies where—

(a)an amount carries interest under this paragraph (or would do so apart from that sub-paragraph), and

(b)all or part of the amount turns out not to be due.

(10)In such a case—

(a)the amount or part (as the case may be) shall not carry interest under this paragraph and shall be treated as never having done so, and

(b)all such adjustments as are reasonable shall be made, including adjustments by way of repayment by the Commissioners where appropriate.

Interest on unpaid tax etc.

27(1)Sub-paragraph (2) below applies where—

(a)a registrable person makes a return under provision made under section 49 of this Act (whether or not he makes it at the time required by such provision), and

(b)the return shows that an amount of tax is due from him for the accounting period in relation to which the return is made.

(2)The amount shall carry interest for the period which—

(a)begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

(b)ends with the day before that on which the amount is paid.

(3)Sub-paragraph (4) below applies where—

(a)under section 50(1) of this Act the Commissioners assess an amount of tax due from a registrable person for an accounting period and notify it to him, and

(b)the assessment is made on the basis that no return required by provision made under section 49 of this Act has been made by the person in relation to the accounting period.

(4)The amount shall carry interest for the period which—

(a)begins with the day after that on which the person is required by provision made under section 49 of this Act to pay tax due from him for the accounting period, and

(b)ends with the day before that on which the amount is paid.

(5)Sub-paragraph (6) below applies where—

(a)under section 50(1) of this Act the Commissioners assess an amount of tax due from a registrable person for an accounting period and notify it to him, and

(b)the assessment (the supplementary assessment) is made on the basis that the amount (the additional amount) is due from him in addition to any amount shown in a return, or in any previous assessment, made in relation to the accounting period.

(6)The additional amount shall carry interest for the period which—

(a)begins with the day on which the supplementary assessment is notified to the person, and

(b)ends with the day before that on which the additional amount is paid.

(7)Sub-paragraph (8) below applies where under section 50(2) of this Act the Commissioners assess an amount as being tax due from a registrable person for an accounting period and notify it to him.

(8)The amount shall carry interest for the period which—

(a)begins with the day on which the assessment is notified to the person, and

(b)ends with the day before that on which the amount is paid.

(9)Sub-paragraph (10) below applies where under paragraph 32 below the Commissioners—

(a)assess an amount due from a person by way of penalty under Part V of this Schedule and notify it to him, or

(b)assess an amount due from a person by way of interest under paragraph 26 above and notify it to him.

(10)The amount shall carry interest for the period which—

(a)begins with the day on which the assessment is notified to the person, and

(b)ends with the day before that on which the amount is paid.

(11)Interest under this paragraph shall be compound interest calculated—

(a)at the penalty rate, and

(b)with monthly rests;

and the penalty rate is the rate found by taking the rate at which interest is payable under paragraph 26 above and adding 10 percentage points to that rate.

(12)Interest under this paragraph shall be paid without any deduction of income tax.

(13)Where—

(a)the Commissioners assess and notify an amount as mentioned in sub-paragraph (5)(a) or (7) or (9)(a) or (b) above,

(b)they also specify a date for the purposes of this sub-paragraph, and

(c)the amount concerned is paid on or before that date,

the amount shall not carry interest by virtue of sub-paragraph (6) or (8) or (10) above (as the case may be).

(14)Sub-paragraph (15) below applies where—

(a)an amount carries interest under this paragraph (or would do so apart from that sub-paragraph), and

(b)all or part of the amount turns out not to be due.

(15)In such a case—

(a)the amount or part (as the case may be) shall not carry interest under this paragraph and shall be treated as never having done so, and

(b)all such adjustments as are reasonable shall be made, including adjustments by way of repayment by the Commissioners where appropriate.

28(1)Where a person is liable to pay interest under paragraph 27 above the Commissioners or, on appeal, an appeal tribunal may reduce the amount payable to such amount (including nil) as they think proper.

(2)Where the person concerned satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for the conduct giving rise to the liability to pay interest, that is a factor which (among other things) may be taken into account under sub-paragraph (1) above.

(3)In the case of interest reduced by the Commissioners under sub-paragraph (1) above an appeal tribunal, on an appeal relating to the interest, may cancel the whole or any part of the reduction made by the Commissioners.

Interest payable by Commissioners

29(1)Where, due to an error on the part of the Commissioners, a person—

(a)has paid to them by way of tax an amount which was not tax due and which they are in consequence liable to repay to him,

(b)has failed to claim payment of an amount to the payment of which he was entitled in pursuance of provision made under section 51(2)(c) or (d) or (f) of this Act, or

(c)has suffered delay in receiving payment of an amount due to him from them in connection with tax,

then, if and to the extent that they would not be liable to do so apart from this paragraph, they shall (subject to the following provisions of this paragraph) pay interest to him on that amount for the applicable period.

(2)The applicable period, in a case falling within sub-paragraph (1)(a) above, is the period—

(a)beginning with the date on which the payment is received by the Commissioners, and

(b)ending with the date on which they authorise payment of the amount on which the interest is payable.

(3)The applicable period, in a case falling within sub-paragraph (1)(b) or (c) above, is the period—

(a)beginning with the date on which, apart from the error, the Commissioners might reasonably have been expected to authorise payment of the amount on which the interest is payable, and

(b)ending with the date on which they in fact authorise payment of that amount.

(4)In determining the applicable period for the purposes of this paragraph, there shall be left out of account any period referable to the raising and answering of any reasonable enquiry relating to any matter giving rise to, or otherwise connected with, the person’s entitlement to interest under this paragraph.

(5)In determining for the purposes of sub-paragraph (4) above whether any period is referable to the raising and answering of such an enquiry as is there mentioned, there shall be taken to be so referable any period which begins with the date on which the Commissioners first consider it necessary to make such an enquiry and ends with the date on which the Commissioners—

(a)satisfy themselves that they have received a complete answer to the enquiry, or

(b)determine not to make the enquiry or (if they have made it) not to pursue it further;

but excluding so much of that period as may be prescribed by regulations.

(6)For the purposes of sub-paragraph (5) above it is immaterial—

(a)whether any enquiry is in fact made;

(b)whether any enquiry is or might have been made of the person referred to in sub-paragraph (1) above or of an authorised person or of some other person.

(7)The Commissioners shall only be liable to pay interest under this paragraph on a claim made in writing for that purpose.

(8)No claim shall be made under this paragraph after the expiry of six years from the date on which the claimant discovered the error or could with reasonable diligence have discovered it.

(9)Any reference in this paragraph to receiving a payment from the Commissioners includes a reference to the discharge, by way of set-off, of their liability to make it.

(10)Interest under this paragraph shall be payable at the rate applicable under section 197 of this Act.

30(1)Where—

(a)any interest is payable by the Commissioners to a person on a sum due to him under this Part of this Act, and

(b)he is a person to whom regulations under section 51 of this Act apply,

the interest shall be treated as an amount to which he is entitled by way of credit in pursuance of the regulations.

(2)Sub-paragraph (1) above shall be disregarded for the purpose of determining a person’s entitlement to interest or the amount of interest to which he is entitled.

Part VIIMiscellaneous

Security for tax

31Where it appears to the Commissioners requisite to do so for the protection of the revenue they may require a registrable person, as a condition of his carrying out taxable activities, to give security (or further security) of such amount and in such manner as they may determine for the payment of any tax which is or may become due from him.

Assessments to penalties etc.

32(1)Where a person is liable—

(a)to a penalty under Part V of this Schedule, or

(b)for interest under paragraph 26 or 27 above,

the Commissioners may, subject to sub-paragraph (2) below, assess the amount due by way of penalty or interest (as the case may be) and notify it to him accordingly; and the fact that any conduct giving rise to a penalty under Part V of this Schedule may have ceased before an assessment is made under this paragraph shall not affect the power of the Commissioners to make such an assessment.

(2)In the case of the penalties and interest referred to in the following paragraphs of this sub-paragraph, the assessment under this paragraph shall be of an amount due in respect of the accounting period which in the paragraph concerned is referred to as the relevant period—

(a)in the case of a penalty under paragraph 18 above relating to the evasion of tax, and in the case of interest under paragraph 27 above on an amount due by way of such a penalty, the relevant period is the accounting period for which the tax evaded was due;

(b)in the case of a penalty under paragraph 18 above relating to the obtaining of a payment under regulations under section 51(2)(c) or (d) or (f) of this Act, and in the case of interest under paragraph 27 above on an amount due by way of such a penalty, the relevant period is the accounting period in respect of which the payment was obtained;

(c)in the case of interest under paragraph 26 above, and in the case of interest under paragraph 27 above on an amount due by way of interest under paragraph 26 above, the relevant period is the accounting period in respect of which the tax was due;

(d)in the case of interest under paragraph 27 above on an amount of tax, the relevant period is the accounting period in respect of which the tax was due.

(3)In a case where the amount of any penalty or interest falls to be calculated by reference to tax which was not paid at the time it should have been and that tax cannot be readily attributed to any one or more accounting periods, it shall be treated for the purposes of this Part of this Act as tax due for such period or periods as the Commissioners may determine to the best of their judgment and notify to the person liable for the tax and penalty or interest.

(4)Where a person is assessed under this paragraph to an amount due by way of any penalty or interest falling within sub-paragraph (2) above and is also assessed under subsection (1) or (2) of section 50 of this Act for the accounting period which is the relevant period under sub-paragraph (2) above, the assessments may be combined and notified to him as one assessment, but the amount of the penalty or interest shall be separately identified in the notice.

(5)Sub-paragraph (6) below applies in the case of an amount due by way of interest under paragraph 27 above.

(6)Where this sub-paragraph applies in the case of an amount—

(a)a notice of assessment under this paragraph shall specify a date, being not later than the date of the notice, to which the amount of interest which is assessed is calculated, and

(b)if the interest continues to accrue after that date, a further assessment or further assessments may be made under this paragraph in respect of amounts which so accrue.

(7)If, within such period as may be notified by the Commissioners to the person liable for the interest under paragraph 27 above, the amount referred to in paragraph 27(2), (4), (6), (8) or (10) above (as the case may be) is paid, it shall be treated for the purposes of paragraph 27 above as paid on the date specified as mentioned in sub-paragraph (6)(a) above.

(8)Where an amount has been assessed and notified to any person under this paragraph it shall be recoverable as if it were tax due from him unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced.

(9)Subsection (8) of section 50 of this Act shall apply for the purposes of this paragraph as it applies for the purposes of that section.

Assessments: time limits

33(1)Subject to the following provisions of this paragraph, an assessment under—

(a)any provision of section 50 of this Act, or

(b)paragraph 32 above,

shall not be made more than six years after the end of the accounting period concerned or, in the case of an assessment under paragraph 32 above of an amount due by way of a penalty which is not a penalty referred to in sub-paragraph (2) of that paragraph, six years after the event giving rise to the penalty.

(2)Subject to sub-paragraph (5) below, an assessment under paragraph 32 above of—

(a)an amount due by way of any penalty referred to in sub-paragraph (2) of that paragraph, or

(b)an amount due by way of interest,

may be made at any time before the expiry of the period of two years beginning with the time when the amount of tax due for the accounting period concerned has been finally determined.

(3)In relation to an assessment under paragraph 32 above, any reference in sub-paragraph (1) or (2) above to the accounting period concerned is a reference to that period which, in the case of the penalty or interest concerned, is the relevant period referred to in sub-paragraph (2) of that paragraph.

(4)Subject to sub-paragraph (5) below, if tax has been lost—

(a)as a result of conduct falling within paragraph 18(1) above or for which a person has been convicted of fraud, or

(b)in circumstances giving rise to liability to a penalty under paragraph 21 above,

an assessment may be made as if, in sub-paragraph (1) above, each reference to six years were a reference to twenty years.

(5)Where after a person’s death the Commissioners propose to assess an amount as due by reason of some conduct of the deceased—

(a)the assessment shall not be made more than three years after the death, and

(b)if the circumstances are as set out in sub-paragraph (4) above, the modification of sub-paragraph (1) above contained in that sub-paragraph shall not apply but any assessment which (from the point of view of time limits) could have been made immediately after the death may be made at any time within three years after it.

Supplementary assessments

34If, otherwise than in circumstances falling within subsection (5)(b) of section 50 of this Act, it appears to the Commissioners that the amount which ought to have been assessed in an assessment under any provision of that section or under paragraph 32 above exceeds the amount which was so assessed, then—

(a)under the like provision as that assessment was made, and

(b)on or before the last day on which that assessment could have been made,

the Commissioners may make a supplementary assessment of the amount of the excess and shall notify the person concerned accordingly.

Disclosure of information

35(1)Notwithstanding any obligation not to disclose information that would otherwise apply, the Commissioners may disclose information to—

(a)the Secretary of State,

(b)the Environment Agency,

(c)the Scottish Environment Protection Agency,

(d)the Department of the Environment for Northern Ireland,

(e)a district council in Northern Ireland, or

(f)an authorised officer of any person (a principal) mentioned in paragraphs (a) to (e) above,

for the purpose of assisting the principal concerned in the performance of the principal’s duties.

(2)Notwithstanding any such obligation as is mentioned in sub-paragraph (1) above, any person mentioned in sub-paragraph (1)(a) to (f) above may disclose information to the Commissioners or to an authorised officer of the Commissioners for the purpose of assisting the Commissioners in the performance of duties in relation to tax.

(3)Information that has been disclosed to a person by virtue of this paragraph shall not be disclosed by him except—

(a)to another person to whom (instead of him) disclosure could by virtue of this paragraph have been made, or

(b)for the purpose of any proceedings connected with the operation of any provision of, or made under, any enactment in relation to the environment or to tax.

(4)References in the preceding provisions of this paragraph to an authorised officer of any person (the principal) are to any person who has been designated by the principal as a person to and by whom information may be disclosed by virtue of this paragraph.

(5)The Secretary of State shall notify the Commissioners in writing of the name of any person designated by the Secretary of State under sub-paragraph (4) above.

(6)No charge may be made for a disclosure made by virtue of this paragraph.

The register: publication

36(1)The Commissioners may publish, by such means as they think fit, information which—

(a)is derived from the register kept under section 47 of this Act, and

(b)falls within any of the descriptions set out below.

(2)The descriptions are—

(a)the names of registered persons;

(b)the addresses of any sites or other premises at which they carry on business;

(c)the registration numbers assigned to them in the register;

(d)the fact (where it is the case) that the registered person is a body corporate which under section 59 of this Act is treated as a member of a group;

(e)the names of the other bodies corporate treated under that section as members of the group;

(f)the addresses of any sites or other premises at which those other bodies carry on business.

(3)Information may be published in accordance with this paragraph notwithstanding any obligation not to disclose the information that would otherwise apply.

Evidence by certificate etc.

37(1)A certificate of the Commissioners—

(a)that a person was or was not at any time registered under section 47 of this Act,

(b)that any return required by regulations made under section 49 of this Act has not been made or had not been made at any time, or

(c)that any tax shown as due in a return made in pursuance of regulations made under section 49 of this Act, or in an assessment made under section 50 of this Act, has not been paid,

shall be sufficient evidence of that fact until the contrary is proved.

(2)A photograph of any document furnished to the Commissioners for the purposes of this Part of this Act and certified by them to be such a photograph shall be admissible in any proceedings, whether civil or criminal, to the same extent as the document itself.

(3)Any document purporting to be a certificate under sub-paragraph (1) or (2) above shall be taken to be such a certificate until the contrary is proved.

Service of notices etc.

38Any notice, notification or requirement to be served on, given to or made of any person for the purposes of this Part of this Act may be served, given or made by sending it by post in a letter addressed to that person at his last or usual residence or place of business.

39(1)This paragraph applies to directions, specifications and conditions which the Commissioners or an authorised person may give or impose under any provision of this Part.

(2)A direction, specification or condition given or imposed by the Commissioners may be withdrawn or varied by them.

(3)A direction, specification or condition given or imposed by an authorised person may be withdrawn or varied by him or by another authorised person.

(4)No direction, specification or condition shall have effect as regards any person it is intended to affect unless—

(a)a notice containing it is served on him, or

(b)other reasonable steps are taken with a view to bringing it to his attention.

(5)No withdrawal or variation of a direction, specification or condition shall have effect as regards any person the withdrawal or variation is intended to affect unless—

(a)a notice containing the withdrawal or variation is served on him, or

(b)other reasonable steps are taken with a view to bringing the withdrawal or variation to his attention.

No deduction of penalties or interest

40In section 827 of the Taxes Act 1988 (no deduction for penalties etc.) the following subsection shall be inserted after subsection (1B)—

“(1C)Where a person is liable to make a payment by way of—

(a)penalty under Part V of Schedule 5 to the Finance Act 1996 (landfill tax), or

(b)interest under paragraph 26 or 27 of that Schedule,

the payment shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.”

Destination of receipts

41All money and securities for money collected or received for or on account of the tax shall—

(a)if collected or received in Great Britain, be placed to the general account of the Commissioners kept at the Bank of England under section 17 of the [1979 c. 2.] Customs and Excise Management Act 1979;

(b)if collected or received in Northern Ireland, be paid into the Consolidated Fund of the United Kingdom in such manner as the Treasury may direct.

Set-off of amounts

42(1)Regulations may make provision in relation to any case where—

(a)a person is under a duty to pay to the Commissioners at any time an amount or amounts in respect of landfill tax, and

(b)the Commissioners are under a duty to pay to that person at the same time an amount or amounts in respect of any tax (or taxes) under their care and management.

(2)The regulations may provide that if the total of the amount or amounts mentioned in sub-paragraph (1)(a) above exceeds the total of the amount or amounts mentioned in sub-paragraph (1)(b) above, the latter shall be set off against the former.

(3)The regulations may provide that if the total of the amount or amounts mentioned in sub-paragraph (1)(b) above exceeds the total of the amount or amounts mentioned in sub-paragraph (1)(a) above, the Commissioners may set off the latter in paying the former.

(4)The regulations may provide that if the total of the amount or amounts mentioned in sub-paragraph (1)(a) above is the same as the total of the amount or amounts mentioned in sub-paragraph (1)(b) above no payment need be made in respect of the former or the latter.

(5)The regulations may include provision treating any duty to pay mentioned in sub-paragraph (1) above as discharged accordingly.

(6)References in sub-paragraph (1) above to an amount in respect of a particular tax include references not only to an amount of tax itself but also to other amounts such as interest and penalty.

(7)In this paragraph “tax” includes “duty”.

43(1)Regulations may make provision in relation to any case where—

(a)a person is under a duty to pay to the Commissioners at any time an amount or amounts in respect of any tax (or taxes) under their care and management, and

(b)the Commissioners are under a duty to pay to that person at the same time an amount or amounts in respect of landfill tax.

(2)The regulations may provide that if the total of the amount or amounts mentioned in sub-paragraph (1)(a) above exceeds the total of the amount or amounts mentioned in sub-paragraph (1)(b) above, the latter shall be set off against the former.

(3)The regulations may provide that if the total of the amount or amounts mentioned in sub-paragraph (1)(b) above exceeds the total of the amount or amounts mentioned in sub-paragraph (1)(a) above, the Commissioners may set off the latter in paying the former.

(4)The regulations may provide that if the total of the amount or amounts mentioned in sub-paragraph (1)(a) above is the same as the total of the amount or amounts mentioned in sub-paragraph (1)(b) above no payment need be made in respect of the former or the latter.

(5)The regulations may include provision treating any duty to pay mentioned in sub-paragraph (1) above as discharged accordingly.

(6)References in sub-paragraph (1) above to an amount in respect of a particular tax include references not only to an amount of tax itself but also to other amounts such as interest and penalty.

(7)In this paragraph “tax” includes “duty”.

Amounts shown as tax on invoices

44(1)Where—

(a)a registrable person issues an invoice showing an amount as tax chargeable on an event, and

(b)no tax is in fact chargeable on the event,

an amount equal to the amount shown as tax shall be recoverable from the person as a debt due to the Crown.

(2)Where—

(a)a registrable person issues an invoice showing an amount as tax chargeable on a taxable disposal, and

(b)the amount shown as tax exceeds the amount of tax in fact chargeable on the disposal,

an amount equal to the excess shall be recoverable from the person as a debt due to the Crown.

(3)References in this paragraph to an invoice are to any invoice, whether or not it is a landfill invoice within the meaning of section 61 of this Act.

Adjustment of contracts

45(1)This paragraph applies where—

(a)material undergoes a landfill disposal,

(b)a payment falls to be made under a disposal contract relating to the material, and

(c)after the making of the contract there is a change in the tax chargeable on the landfill disposal.

(2)In such a case the amount of any payment mentioned in sub-paragraph (1)(b) above shall be adjusted, unless the disposal contract otherwise provides, so as to reflect the tax chargeable on the landfill disposal.

(3)For the purposes of this paragraph a disposal contract relating to material is a contract providing for the disposal of the material, and it is immaterial—

(a)when the contract was made;

(b)whether the contract also provides for other matters;

(c)whether the contract provides for a method of disposal and (if it does) what method it provides for.

(4)The reference in sub-paragraph (1) above to a change in the tax chargeable is a reference to a change—

(a)to or from no tax being chargeable, or

(b)in the amount of tax chargeable.

46(1)This paragraph applies where—

(a)work is carried out under a construction contract,

(b)as a result of the work, material undergoes a landfill disposal,

(c)the contract makes no provision as to the disposal of such material, and

(d)the contract was made on or before 29th November 1994 (when the proposal to create tax was announced).

(2)In such a case the amount of any payment which falls to be made—

(a)under the construction contract, and

(b)in respect of the work,

shall be adjusted, unless the contract otherwise provides, so as to reflect the tax (if any) chargeable on the disposal.

(3)For the purposes of this paragraph a construction contract is a contract under which all or any of the following work is to be carried out—

(a)the preparation of a site;

(b)demolition;

(c)building;

(d)civil engineering.

Adjustment of rent etc.

47(1)This paragraph applies where—

(a)an agreement with regard to any sum payable in respect of the use of land (whether the sum is called rent or royalty or otherwise) provides that the amount of the sum is to be calculated by reference to the turnover of a business,

(b)the agreement was made on or before 29th November 1994 (when the proposal to create tax was announced), and

(c)the circumstances are such that (had the agreement been made after that date) it can reasonably be expected that it would have provided that tax be ignored in calculating the turnover.

(2)In such a case the agreement shall be taken to provide that tax be ignored in calculating the turnover.