25 February 1999
47.Section 1 introduces Schedule 1 which transfers the operational functions currently carried out by the CA on behalf of the Secretary of State. These functions in relation to contributions, SSP, SMP and contracting-out matters will, from the day appointed for the operational transfer, be carried out by the Inland Revenue. Most of the amendments in Schedule 1 substitute "Inland Revenue" for "Secretary of State".
48.Functions conferred on the Secretary of State in provisions of subordinate legislation listed in Schedule 2 are also transferred to the Inland Revenue.
49.Paragraphs 1 and 2 amend legislation relating to the payment of incentives to contracted-out occupational pension schemes under the Social Security Act 1986 by substituting "Commissioners of the Inland Revenue" for "Secretary of State" as appropriate.
50.Paragraph 3 amends section 638 ICTA which provides for restrictions on the approval of personal pension schemes. It substitutes “the Board” for “Secretary of State”.
51.Paragraph 4 amends section 649 ICTA, which provides for the tax treatment of DSS payments into personal pension schemes, to reflect the transfer from the Secretary of State to the Inland Revenue of the function of making such payments.
52.Paragraphs 5 to 9, 12, 13, 16 to 19 amend references in relevant sections of CBA to reflect the transfer of contributions, SSP and SMP functions from the Secretary of State to the Inland Revenue.
NB: Sections 1, 17 and 18 CBA and paragraphs 4, 6, 7 and 8 of Schedule 1 CBA are also amended by Schedule 3 to this Act.
53.Paragraphs 10, 11, 14 and 15 stipulate that regulations made under powers in sections 161, 162, 170 and 171 CBA (special classes – e.g. servicemen and mariners) shall be made by the Secretary of State with concurrence of the Treasury.
54.Paragraph 17 states that the Secretary of State shall make any regulations under the power in Schedule 1, paragraph 6(5) CBA in concurrence with the Inland Revenue. This follows the precedent in the regulation-making powers for Class 4 contributions, also collected alongside income tax, for ensuring an operational input to DSS policy changes.
55.Paragraph 20 inserts a new paragraph 1A into Schedule 11 CBA which requires regulations under paragraph 1 of that Schedule to be made with the concurrence of the Treasury.
56.Paragraph 21 amends section 116 (legal proceedings) so that an officer of the Revenue, not DSS, may conduct proceedings in relation to section 114 (fraudulent evasion of contributions).
57.Paragraphs 22 to 24 transfer functions relating to recovery of unpaid contributions from the Secretary of State to the Inland Revenue.
58.Paragraphs 25 to 27 state that the Secretary of State shall make any regulations under powers in sections 125, 130 and 132 relating to SSP and SMP in concurrence with the Inland Revenue.
59.Paragraphs 28 to 30 amend sections 162, 163 and 165 SSAA 1992 to reflect the transfer of functions relating to the NIF.
NB: Sections 162, 163 and 165 are also amended by Schedule 3 to this Act.
60.Paragraph 31 allows applications for a National Insurance number to continue to be made through the contributions route or the benefits route as appropriate.
61.Paragraph 32 inserts a definition of "Inland Revenue" into the SSAA 1992. It means "the Commissioners of Inland Revenue".
62.Paragraphs 33 to 63 make amendments to relevant sections of the PSA to reflect the transfer of operational functions for the contracting-out of SERPS by way of rebates of contributions from the Secretary of State to the Inland Revenue.
63.Paragraph 64 adds the Inland Revenue to the provisions of section 5(3) of the Statutory Sick Pay Act 1994 to ensure that any expenses incurred as a consequence of the provisions of that Act may be paid out of money provided by Parliament.
64.Paragraphs 65 and 66 make amendments to relevant sections of the Jobseekers Act 1995 to reflect the transfer of functions from the Secretary of State to the Inland Revenue.
NB: Section 27 of the Jobseekers Act is also amended by Schedule 3 to this Act.
65.Paragraphs 67 and 68 make amendments to sections 107 and 108 of the Pensions Act 1995 to reflect the transfer of functions from the Secretary of State to the Inland Revenue.
66.Schedule 2 lists provisions of secondary legislation which confer on the Secretary of State functions that are to be transferred to the Inland Revenue.
67.This section effects the transfer to Treasury Ministers and the Inland Revenue of policy functions of the Secretary of State in relation to contributions and the NIF. The transfers are to come into effect from an appointed day.
68.In tax legislation, regulation-making functions are generally reserved to the Treasury where they affect matters such as the existence or size of a tax liability. Regulation-making powers relating to administrative functions are generally transferred to the Board of Inland Revenue. This Act provides for the same general divide in relation to contributions. So the regulations relating to policy functions transferred would be made by the Treasury, although the Inland Revenue would be responsible both for advising Ministers on policy and for its operational implementation.
69.Paragraph 1 transfers to the Treasury powers in section 1 to make regulations relating to the basic structure of the contributions regime, the rates of different categories of contributions and who is liable to pay them.
70.Paragraphs 2 and 3 transfer powers concerning earners and earnings. These are to be exercised in concurrence with the Secretary of State since there are implications for the contributory benefits system.
71.Paragraphs 4 to 15 transfer to the Treasury powers in sections 6 to 14 CBA to make regulations concerning liability and calculation of different categories of contributions.
72.Paragraph 16 requires the Inland Revenue rather than the Secretary of State to pay Class 4 contributions and related interest into the Northern Ireland NIF.
73.Paragraphs 17 and 18 remove DSS involvement in regulating incidental matters concerning Class 4 contributions, which is collected together with Schedule D tax.
74.Paragraph 19 confirms that regulations concerning the contributions regime fall to the Treasury, whilst regulations concerning earnings factors, which are benefit- related, are retained by the Secretary of State.
75.Paragraph 20 transfers a power to make regulations, inserted by section 54 SSA, allowing wrongly paid contributions to count for benefit purposes.
76.Paragraph 21 amends the power to make regulations about what sums are to be treated as earnings so that it shall be exercised by the Treasury in concurrence with the Secretary of State. This takes account of potential implications for benefits.
77.Paragraphs 22 to 28 transfer regulation-making powers in regard to special classes of contributors, such as servicemen. Because of potential effects on benefit entitlements they are all to be exercised by the Treasury in concurrence with the Secretary of State.
78.Paragraphs 29 and 30 amend sections 175 and 176 (which cover regulation-making procedures) to include provisions where the Treasury or Inland Revenue have powers to make regulations.
79.Paragraphs 31 to 35 transfer to the Inland Revenue powers in Schedule 1 paragraphs 1 to 6 CBA to make regulations about the detail of payment methods etc.
80.Paragraph 36 retains the apportionment between tax and contributions of any penalties collected under powers in Schedule 1 paragraph 7 CBA.
81.Paragraphs 37 and 38 transfer to the Treasury the powers to set rates of penalties under paragraphs 7A and 7B of Schedule 1 CBA.
82.Paragraph 39 transfers most of the list of regulation-making powers in Schedule 1, paragraph 8 to the Treasury. The power conferred by paragraph 8(1)(d) which concerns entitlement to benefits stays with the Secretary of State.
83.Paragraphs 40 and 41 transfer regulation-making powers in paragraphs 9 and 11 of Schedule 1 to the Treasury.
84.Paragraphs 42 and 43 provide that powers in sections 14 and 15 relating to SSP and SMP are to be exercised by the Secretary of State in concurrence with the Inland Revenue.
85.Paragraphs 44 to 50 amend references in sections 141 to 147 SSAA 1992 which relate to periodic review of, and reports to Parliament on, the balance in the NIF. All such responsibilities are transferred from the Secretary of State to the Treasury.
86.Paragraphs 51 and 52 transfer functions relating to the administration of the NIF from the Secretary of State to the Inland Revenue.
87.Paragraph 53 provides that the NIF shall meet the administrative costs of statistical enquiries whether they are commissioned by the Inland Revenue or the Secretary of State.
88.Paragraph 54’s amendments of section 165 should be read together with the amendments in paragraph 30 of Schedule 1 to the Act. Both the Inland Revenue and the Secretary of State have roles in making adjustments between the NIF and the Consolidated Fund which reflect their respective responsibilities post-transfer.
89.Paragraph 55 amends section 166 because the Treasury will take over responsibility for receiving the report of the Government Actuary on the state of the NIF.
90.Paragraph 56 amends section 177 to ensure that the Joint Authority, (consisting of the Secretary of State for Social Security and the Department of Health and Social Services for Northern Ireland), which co‑ordinates the social security system across the United Kingdom, will continue to be able to make adjustments between the Great Britain and Northern Ireland NIFs once those Funds have been transferred to the control and management of the Inland Revenue.
91.Paragraphs 57 and 58 amend sections 189 and 190 (about regulation-making procedures) to include regulations made by the Treasury or the Inland Revenue.
92.Paragraph 59 amends Schedule 7 so that regulations making provision consequential on regulations under section 5 CBA (earnings limits) fall outside the remit of the Social Security Advisory Committee.
93.Paragraph 60 amends section 2 to transfer to the Treasury functions relating to payments into the NIF.
94.Paragraphs 61 to 64 transfer functions relating to the employers’ National Insurance “contributions holiday” from the Secretary of State to the Treasury and Inland Revenue as appropriate.
95.Paragraph 65 amends section 88 of the Northern Ireland Act 1998 so that the new Joint Authority, which will co-ordinate the social security system across the UK and which will include also the Chancellor of the Exchequer, will be able to make adjustments between the Great Britain and Northern Ireland NIFs once those Funds are under the control and management of the Inland Revenue. (See also paragraph 90 above.)
96.This section describes how the Inland Revenue will carry out its new functions.
97.Contributions are brought into the definition of “inland revenue” as set out in section 39 of the Inland Revenue Regulation Act 1890 (IRRA). From this it follows that section 13 of that Act places a duty on the Inland Revenue to collect contributions. Placing contributions under the care and management of the Inland Revenue allows the duty to “collect every part of inland revenue” to be tempered by considerations of efficiency and cost to the public purse.
98.Where the Inland Revenue is collecting contributions it will continue to give due weight to preserving an individual’s contribution record. There is no intention to relax the joint guidance in Departmental instruction manuals for Inland Revenue and CA staff. This sets out the limited circumstances in which discretion over calculation of contributions arrears can be exercised and requires staff to allocate contributions to an employee’s record wherever practicable.
99.Several sections of the IRRA set out in section 3(3) do not need to apply to contributions. In some cases, comparable legislation already exists in relation to contributions. In other cases, the section no longer applies to income tax and would not be suitable in relation to contributions.
100.Receipts from contributions do not form part of general government receipts. They are paid into the NIF under section 162 of SSAA 1992. Section 3(4) excepts contributions from the requirement on the Inland Revenue to pay all receipts into the Consolidated Fund.
101.The section adds the transferred functions to the matters covered by the confidentiality declarations signed by Inland Revenue staff and the tax appeal Commissioners. All those concerned with the administration of inland revenue sign a declaration that they will not disclose information received in the course of their duties, apart from certain specified purposes. One of those purposes is currently for the purpose of a prosecution relating to inland revenue. Section 3(5) permits disclosure for purposes of prosecutions relating to the Inland Revenue’s new areas of responsibility such as contributions.
102.At present the Inland Revenue is specifically given a power of care and management by paragraph 6(2) Schedule 2 CBA to allow it to remit interest charged on overdue Class 4 contributions. As section 3(1) gives Inland Revenue powers of care and management in relation to contributions as a whole this specific provision is no longer required. Section 3(6) repeals it.
103.Section 4 and Schedule 4 concern methods of enforcing the recovery of unpaid contributions. They enable summary proceedings to be taken in the magistrates’ courts in the same way and to the same extent as they can for tax debts. They also permit authorised officers of the Board who are not lawyers to appear in proceedings in the county courts (in England, Wales and Northern Ireland) and in the sheriff court in Scotland.
104.These provisions do not apply to contributions which should at present be paid to the Inland Revenue along with tax. The recovery of those contributions is already aligned with the tax rules.
105.Section 4 provides that Schedule 4 has effect for the recovery of contributions (plus related interest or penalties) which fall into defined categories. As noted above, the contributions affected are those which are not already payable to the Collector of Taxes along with income tax. They include Class 1A contributions (on employees’ car benefits) where an employer opts to pay them outside the arrangements for Class 1 contributions which run alongside the PAYE tax system and Class 2 contributions (the flat rate contributions paid by the self-employed).
106.Paragraph 1 of Schedule 4 defines an ‘authorised officer’ as one authorised by the Board (of Inland Revenue) for the purposes of the provision in the Schedule where the expression occurs.
107.Paragraph 2 sets out the rules for recovering contributions in a magistrates’ court. These are modelled closely on section 65 of the TMA which sets out the equivalent provisions for tax.
108.Paragraph 2(1) provides that an amount of contributions, or interest or penalties on those contributions, is recoverable by summary proceedings as a civil debt so long as the amount does not exceed the ‘prescribed sum’. That sum is defined in Paragraph 2(5) as the sum specified for the purposes of the equivalent tax provision (currently £2,000).
109.Paragraph 2(2) enables more than one amount of contributions to be recovered by way of the same legal document and that an error in respect of one such amount does not prejudice the claim in respect of the others.
110.Paragraph 2(3) provides for the time by which proceedings must be commenced. Generally, that is not later than the first anniversary of the date on which the contributions, interest or penalties in question fell due. But for Class 2 contributions that date is the last day of the tax year (ending on 5 April) following that in which the contributions and related interest or penalties fell due.
111.Paragraph 2(4) modifies paragraph 2(1) in its application to Northern Ireland.
112.Paragraph 3 makes provision about the recovery of contributions, interest and penalties in proceedings in the county courts.
113.Paragraph 3(1) enables any sum due by way of contributions, interest or penalties to be recovered in the county courts in England, Wales and Northern Ireland by proceedings commenced in the name of an authorised officer.
114.Paragraph 3(2) provides expressly that those proceedings may be conducted in England and Wales by an authorised officer who is not a barrister or solicitor.
115.Paragraph 3(3) and (4) provides for the application of paragraph 3 in Northern Ireland.
116.Paragraph 4 makes in relation to Scotland provision which is equivalent to that in paragraph 3.
117.Paragraph 5 ensures that Class 1 and 1A contributions, or related interest or penalties, can be recovered without distinguishing the amounts due in respect of particular employees.
118.Current powers of inspection available to DSS officers are set out in section 110 of SSAA 1992. Section 110 is amended to remove from its ambit issues which are being transferred from the Secretary of State to the Inland Revenue.
119.This Schedule sets out in the new section 110ZA the equivalent powers which will be available to Inland Revenue officers when visiting places of business to check on or enforce transferred matters. Initially these will be the former staff of the CA who will become officers of the Inland Revenue when functions are transferred. To align with existing tax sanctions, failure to produce information or documents when required to do so by such an officer will cease to be a criminal offence but instead will attract a civil penalty.
120.Annex B to these Notes shows sections 110 to 111 of SSAA 1992 as amended by the Act.
121.It will still be possible for the Secretary of State to make arrangements with the Inland Revenue for officers to undertake inspections for benefit purposes when they visit premises which they can inspect for their own purposes.
122.The Schedule also makes amendments to sections 111 to 121 SSAA 1992 to transfer operational responsibility for enforcement matters from the Secretary of State to the Inland Revenue.
123.Paragraph 1 ensures that, instead of criminal penalties, civil penalties for failure to supply information or documents and for fraudulently or negligently supplying incorrect information or documents, set out in section 98 TMA, apply where information or documents are requested under section 110ZA, as they apply for tax purposes.
124.Where there is a failure to provide the information the penalty is initially up to £300. A failure thereafter exposes a person to a further penalty of up to £60 a day so long as the failure continues. This mirrors the existing tax penalty. Where incorrect information is fraudulently or negligently provided the penalty is up to £3,000. The tax appeal Commissioners, an independent tribunal, have the ultimate say in setting the level of penalties having regard to the precise circumstances.
125.Paragraph 2 amends section 110 of the SSAA 1992. The existing provision permits the Secretary of State for Social Security to enter into arrangements with other government departments whose officers are entitled to inspect premises for their own purposes. Under those arrangements, those officers can be allowed to use the powers in section 110 for the purposes of that section. In other words, they can deputise for the Secretary of State’s own staff in the use of those powers.
126.The replacement makes it clear that the Secretary of State can make arrangements of this nature with the Inland Revenue. This will ensure that the current role of CA inspectors in carrying out visits to employers’ premises to check on compliance with legislation which other DSS Agencies administer may continue after transfer of functions. Visits of this kind may be made, for example, to check the details of earnings given by a person claiming an income-related benefit.
127.Paragraphs 2(3) and (4) ensure that the powers in section 110 cannot be used by DSS officials in relation to functions which will be transferred from the Secretary of State to the Inland Revenue by the Act.
128.Paragraph 3 is at the core of the changes. It introduces a new section 110ZA into the SSAA 1992 which sets out the powers of officers of the Inland Revenue in relation to the functions taken over. The section is modelled closely on the existing section 110. However, no provision is made in the new section for the exercise by the Inland Revenue of those powers in relation to the functions which stay with the DSS. That is left to arrangements under the revised section 110(5).
129.Section 110ZA(1) provides that the Inland Revenue may authorise any of its officers to exercise the powers conferred by the section for the purpose of the enactments set out in sub-section (7). They are the CBA (insofar as it relates to contributions, SSP and SMP), the SSAA 1992 and Part III of the PSA (which regulates employers’ private occupational pension schemes).
130.This parallels the existing power of the Secretary of State for Social Security in relation to his own officials. Initially the officers authorised by the Inland Revenue will largely be the former members of the CA who currently use the powers conferred by section 110 SSAA 1992.
131.Section 110ZA(2) sets out the powers of the officers so authorised. The subsection provides that the powers are to be exercised for the purpose of the legislation set out above. There are three powers mirroring those in the existing section 110.
132.First, officers have a right to enter at any reasonable time premises liable to inspection under the new section. This does not bestow any power to enter by force. The premises are defined in section 110ZA(3) as those where staff are employed, where a trade or business is carried on, where business records are kept or where pension schemes are administered. But private residences can only be inspected where a trade or business is carried on from them and is not also carried on from other (commercial) premises.
133.This description of premises liable to inspection departs from that in section 110(3) of the SSAA 1992 in favour of the one in section 110B(5) (as inserted by section 12 of the Social Security Administration Fraud Act 1997 (SSA(F)A 1997)) in connection with inspection to check entitlement to housing benefit. The new formulation further constrains the circumstances in which private residences can be inspected.
134.Secondly, officers are entitled to make whatever examination and enquiry is necessary to ascertain whether the legislation referred to above is being complied with in those premises.
135.Thirdly, officers may require answers to questions relating to the application of the legislation from any person on the premises who is believed to be liable to pay contributions or a contributions equivalent premium.
136.Section 110ZA(4) requires that officers authorised by the Inland Revenue under subsection (1) must carry a certificate of their authorisation and must produce it when asked.
137.Section 110ZA(5) requires the persons defined in subsection (6) to provide an authorised officer with information and to produce documents which he or she may reasonably require for the purpose of checking whether contributions, SSP, SMP or a contributions equivalent premium have been correctly paid.
138.Under the equivalent provision in section 110(7) a person need not supply information or documents if to do so would incriminate himself or herself, or a spouse. There is no similar provision in section 110ZA because under the new section there is no criminal sanction for failing to do so.
139.The persons who can be required to supply information or documents are defined in section 110ZA(6) as employers, persons carrying on an employment agency, a trustee or manager of a personal or occupational pensions scheme, their employees or their agents.
140.Section 110ZA(7) sets out the legislation to which the new section applies.
141.Section 110ZA(8) provides that a ‘contributions equivalent premium’ includes its predecessor a ‘state scheme premium’ payable before 6 April 1997.
142.Paragraph 4 ensures that the existing criminal sanction in section 111 for failing to co-operate in one way or another with officers exercising their powers under section 110 does not apply where the powers are exercised by Inland Revenue officers. That is the case whether the powers are exercised by Inland Revenue officers under section 110ZA or under section 110(5) by virtue of arrangements between the Secretary of State for Social Security and the Inland Revenue.
143.Paragraph 4 also ensures that no distinction is drawn in the application of the civil penalties rules (attracted by virtue of the amendment of section 98 TMA made by paragraph 1) depending on whether officers are acting under section 110ZA or section 110(5).
144.Paragraphs 5 and 7 to 11 change references to the Secretary of State to the Inland Revenue in relevant sections of SSAA 1992.
145.Paragraph 12 inserts into section 162 new subsections (4ZA) and (4ZB) which ensure that any penalties imposed under section 110ZA or section 111(4) SSAA 1992 will be paid into the NIF even though other penalties charged under section 98 TMA are treated as tax due.
146.The close relationship between contributions and other social security functions of the DSS means that, following the transfer of the CA to the Inland Revenue, it will be essential for each department to have access to certain information held by the other. Section 6 introduces Schedule 6 which provides for existing flows of information to take place across revised inter-departmental boundaries, for specified purposes. Annex C to these Notes shows sections 121E to 122E of SSAA 1992 as amended by this Schedule.
147.The Inland Revenue has a well established duty, judicially approved, of taxpayer confidentiality. Information identifying taxpayers is only released to other government departments in accordance with explicit statutory gateways. Schedule 6 inserts new gateways and amends existing ones so that the Inland Revenue and DSS can exchange the information necessary to carry out their functions.
148.For example, the Benefits Agency (BA) needs data held by the CA on contribution records, in order to pay benefits accurately. At present, the CA and the BA can pool information, since they fall under the same Secretary of State. The BA will still need access to contribution records once the CA transfers to the Inland Revenue. Otherwise it cannot do its job. So Schedule 6 ensures this access. It does not provide for new, additional exchanges of information.
149.Schedule 6 does not provide for general pooling of data across the new Inland Revenue/DSS boundary. Nor does it provide new scope for tax data to pass to DSS and its agencies, or beyond.
150.Taxpayer confidentiality is buttressed by a criminal sanction for unauthorised disclosure of information by Inland Revenue staff (in section 182 Finance Act 1989). Schedule 6 extends the sanction to disclosures relating to the new Inland Revenue tasks.
151.The SSAA 1992 provisions on exchange of information were substantially extended by the SSA(F)A 1997. So Annex C to these Notes shows how the "exchange of information" provisions in SSAA 1992 will read after amendment by this Act.
152.Paragraph 1 inserts a new section 121E into SSAA 1992. (Sections 121A to D were introduced by sections 63 (recovery of contributions) and 64 (liability of directors for company's contributions) of the SSA.) The new section 121E will give DSS (and DHSS (NI)) a mandatory right of access to contributions, SSP and SMP information - but not tax information. Disclosed information may be used only for social security, child support and war pensions purposes (which includes checking the security of National Insurance numbers as well as validating benefit claims).
153.Paragraph 1 also inserts a new section 121F. This provides for the reverse mandatory exchange, from the Secretary of State or his contractors to the Inland Revenue and their contractors. The disclosable DSS data is about social security, child support and war pensions. It is disclosable only for contributions, SSP and SMP functions.
154.Paragraph 2 amends the revised version of section 122 SSAA 1992, inserted by section 1 of SSA(F)A 1997. This is about discretionary release by the Inland Revenue or Customs and Excise to DSS (or DHSS (NI)) of tax data for fraud prevention, and for checking the accuracy of benefits and other social security records. Subsection (1)(a) of section 122 makes clear that section 122 applies only to tax information: since disclosure of contributions, SSP and SMP information will now be covered by section 121E.
155.Paragraph 3 inserts a new section 122AA. This is drafted in language echoing that of section 122 as originally enacted (power to allow the Inland Revenue to disclose tax information to DSS.) Section 122AA will allow the Inland Revenue to disclose contributions, SSP and SMP information to four specified government bodies – the Health and Safety Executive, the Government Actuary’s Department, the Office for National Statistics and the Occupational Pensions Regulatory Authority - for use for the functions of those bodies. This maintains, for example, current information flows
about industrial mortality
for actuarial calculations about the NIF
for statistical analysis about contributors
to help with regulation of pensions.
156.Paragraph 4 repeals section 122A SSAA 1992. Section 122A was inserted by the SSA(F)A 1997. It provides for discretionary disclosure by Inland Revenue to DSS and DHSS(NI) and is therefore overtaken by the mandatory disclosure provided under the new section 121E inserted by paragraph 1 of this Schedule.
157.Paragraph 5 amends section 122B SSAA 1992 by removing contributions from its ambit.
158.Paragraph 6 tidies up the definition in Schedule 4 SSAA 1992 of "persons employed in social security administration". Section 123 and Schedule 4 SSAA 1992 provide a criminal offence for unauthorised disclosure of social security information. Protection under section 123 is no longer needed, since Inland Revenue staff are subject to separate criminal sanction for disclosure of both tax and social security information (see the description below of paragraph 8 and section 182 of the Finance Act 1989).
159.Paragraph 7 maintains current information flows, across the new departmental boundary, for pensions purposes.
160.Paragraph 8 allows the Inland Revenue to disclose pensions information to the same recipients as DSS can now. The new section 158A(1A) of the PSA echoes the language of section 158A(1).
161.Section 158A was inserted by Schedule 6 paragraph 9 Pensions Act 1995. It provides a table of persons to whom pensions information may be disclosed, for listed functions. The persons to whom DSS may disclose pensions information are
The Treasury
The Bank of England
The Pensions Regulatory Authority
The Pensions Compensation Board
The Friendly Societies Commission
The Building Societies Commission
An Inspector appointed by the Secretary of State for functions under sections 94 or 177 of the Financial Services Act 1986 (FSA)
A person authorised to exercise powers under section 106 of the FSA
A designated agency or transferee body or a competent authority (within the meaning of the FSA)
A recognised self-regulating organisation, recognised professional body, recognised investment exchange or recognised clearing house (within the meaning of the FSA).
162.This list may be amended by the Secretary of State by order. And an order may put conditions on disclosures to people on this list. By virtue of the new section 158A(1A), the Inland Revenue will be able to make the same disclosures. Future changes to the list in subsection (1) of section 158A, or to the conditions of disclosure, will read through to disclosures by the Inland Revenue.
163.Paragraph 9 extends the criminal sanction in section 182 Finance Act 1989 which applies to Inland Revenue staff and others involved in tax administration for unauthorised disclosure of tax information. It will also apply to disclosure of information about "social security functions" held by such staff in the carrying out of their duties.
164.The tax sanction applies to unauthorised disclosure of tax information about identifiable people. This is extended to disclosure of contributions, SSP and SMP information in respect of identifiable people. "Social security functions" are defined, but only for the purpose of this section, to cover contributions, SSP, SMP and pensions functions, not just of the Inland Revenue and their contractors but of the tax appeal Commissioners.
165.Paragraph 10 removes the powers in section 110 Finance Act 1997 for DSS to supply the Inland Revenue with information about social security contributions because the new section 121F inserted by paragraph 1 of this Schedule supplants the section 110 references.
166.This section provides for the Inland Revenue to use data held for one of its functions for the purpose of other functions. For example information held in connection with contributions may be used for the purposes of tax functions. The section covers the pooling of information held for the purposes of tax and for the purposes of functions relating to contributions, SSP and SMP which are to be transferred to the Inland Revenue from the Secretary of State.
167.This provision mirrors that in section 3 of SSA which allows the Secretary of State to pool data held for the purposes of functions relating to social security, child support and war pensions. It does not provide for pooling of Inland Revenue and DSS data across the new departmental boundary.