Legislation – Finance Act 2021

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Introduction

PART 1
Income tax, corporation tax and capital gains tax

1 Income tax charge for tax year 2021-22

2 Main rates of income tax for tax year 2021-22

3 Default and savings rates of income tax for tax year 2021-22

4 Starting rate limit for savings for tax year 2021-22

5 Basic rate limit and personal allowance for future tax years

6 Charge and main rate for financial years 2022 and 2023

7 Small profits rate chargeable on companies from 1 April 2023

8 Increase in the rate of diverted profits tax

9 Super-deductions and other temporary first-year allowances

10 Further provision about super-deductions etc

11 Reduced super-deduction

12 Disposal of assets where super-deduction made

13 Disposal of assets where SR allowance made

14 Counteraction where arrangements are contrived etc

15 Extension of temporary increase in annual investment allowance

16 Meaning of “general decommissioning expenditure”

17 Extensions of plant or machinery leases for reasons related to coronavirus

18 Temporary extension of periods to which trade losses may be carried back

19 R&D tax credits for SMEs

20 Extension of social investment tax relief for further two years

21 Workers’ services provided through intermediaries

22 Payments on termination of employment

23 Cash equivalent benefit of a zero-emissions van

24 Enterprise management incentives

25 Cycles and cyclist’s safety equipment

26 Exemption for coronavirus tests

27 Optional remuneration arrangements: statutory parental bereavement pay

28 Freezing the standard lifetime allowance

29 Collective money purchase benefits

30 Construction industry scheme

31 Covid-19 support scheme: working households receiving tax credits

32 Self-employment income support scheme

33 Deduction where business rates etc repaid

34 Repeal of provisions relating to the Interest and Royalties Directive

35 Payments made to victims of modern slavery etc

36 Hybrid and other mismatches

37 Relief for losses etc

38 Corporate interest restriction: minor amendments

39 Northern Ireland Housing Executive

40 Annual exempt amount

41 Hold-over relief for foreign-controlled companies

PART 2
Plastic packaging tax

42 Plastic packaging tax

43 Charge to plastic packaging tax

44 Liability to pay plastic packaging tax

45 Rate

46 Payment

47 Chargeable plastic packaging components

48 Meaning of “plastic packaging component”

49 Meaning of “plastic” and “recycled plastic”

50 Time of importation

51 Plastic packaging components intended for export

52 Exempt plastic packaging components

53 Tax credits

54 The register

55 Liability to register: producers and importers

56 Notification of liability and registration

57 Cancellation of registration

58 Correction of the register

59 Notices imposing secondary or joint and several liability

60 Measurement of weight etc

61 Payment, collection, recovery

62 Reviews and appeals

63 Records

64 Information and evidence

65 Security for tax

66 Unincorporated bodies

67 Service

68 Statements for business customers

69 Tax representatives of non-resident taxpayers

70 Adjustment of contracts

71 Groups of companies

72 Prevention of artificial separation of business activities: directions

73 Prevention of artificial separation of business activities: effect of directions

74 Death, incapacity or insolvency of person carrying on a business: regulations

75 Transfer of business as a going concern: regulations

76 Isle of Man: import and export of chargeable plastic packaging components

77 Fraudulent evasion

78 Misstatements

79 Conduct involving evasions or misstatements

80 Penalty for contravening relevant requirements

81 Criminal proceedings

82 Minor and consequential amendments

83 Interpretation

84 Regulations

85 Commencement etc

PART 3
Other taxes

86 Rate bands etc for tax years 2021-22 to 2025-26

87 Temporary period for reduced rates on residential property

88 Increased rates for non-resident transactions

89 Relief from higher rate charge for certain housing co-operatives etc

90 Relief for certain housing co-operatives

91 Repayment to certain housing co-operatives: 2020-21 chargeable period

92 Extension of temporary 5% reduced rate for hospitality and tourism sectors

93 Temporary 12.5% reduced rate for hospitality and tourism sectors

94 Extending digital record-keeping for VAT purposes to all businesses

95 Distance selling: Northern Ireland

96 Distance selling: power to make further provision

97 Supply of imported works of art etc

98 Continuing effect of principle preventing the abuse of the VAT system

99 Deferring VAT payment by reason of the coronavirus emergency

100 Refunds to S4C

101 Steel removed to Northern Ireland

102 Restriction of use of rebated diesel and biofuels

103 Rates of tobacco products duty

104 Rates for light passenger or light goods vehicles, motorcycles etc

105 Rebates where higher rate of duty paid

106 HGV road user levy (extension of suspension)

107 Rates of air passenger duty from 1 April 2022

108 Amounts of gross gaming yield charged to gaming duty

109 Rates of climate change levy from 1 April 2022 to 31 March 2023

110 Rates of climate change levy from 1 April 2023

111 Rates of landfill tax

112 Repeal of carbon emissions tax

PART 4
Miscellaneous and final

113 Designation of freeport tax sites

114 Capital allowances for freeport tax sites

115 Relief from stamp duty land tax for freeport tax sites

116 Penalties for failure to make returns etc

117 Penalties for failure to pay tax

118 Penalties for failure to make returns etc or pay tax: consequential provision

119 Follower notice penalties

120 Late payment interest and repayment interest: VAT

121 Promoters of tax avoidance schemes

122 Disclosure of tax avoidance schemes

123 Penalties for enablers of defeated tax avoidance

124 The GAAR and partnerships

125 Licensing authorities: requirements to give or obtain tax information

126 Financial institution notices

127 Collection of tax debts

128 Miscellaneous amendments of Schedule 36 to FA 2008

129 International arrangements for exchanging information on the gig economy

130 Unauthorised removal or disposal of seized goods

131 Temporary approvals etc pending review or appeal

132 Replacement of LIBOR with incremental borrowing rate

133 Tax consequences of reform etc of LIBOR and other reference rates

134 Powers of the Treasury to amend legislation relating to banks

135 Interpretation

136 Short title

SCHEDULES

SCHEDULE 1 Small profits rate for non-ring fence profits

SCHEDULE 2 Temporary extension of periods to which trade losses may be carried back

SCHEDULE 3 R&D tax credits for SMEs

SCHEDULE 4 R&D tax credits for SMEs: Northern Ireland companies

SCHEDULE 5 Pension schemes: collective money purchase benefits

SCHEDULE 6 Construction industry scheme: amendments

SCHEDULE 7 Hybrid and other mismatches

SCHEDULE 8 Relief from corporation tax for losses and other amounts

SCHEDULE 9 Plastic packaging tax: secondary liability and assessment notices and joint and several liability notices

SCHEDULE 10 Plastic packaging tax: recovery and overpayments

SCHEDULE 11 Plastic packaging tax: reviews and appeals

SCHEDULE 12 Plastic packaging tax: information and evidence

SCHEDULE 13 Plastic packaging tax: groups of companies

SCHEDULE 14 Plastic packaging tax: assessment of penalties under section 80

SCHEDULE 15 Plastic packaging tax: amendments of other legislation

SCHEDULE 16 SDLT: increased rates for non-resident transactions

SCHEDULE 17 SDLT (relief from higher rate charge for certain housing co-operatives etc): minor and consequential amendments

SCHEDULE 18 VAT and distance selling: Northern Ireland

SCHEDULE 19 Deferring VAT payment by reason of the coronavirus emergency

SCHEDULE 20 Customs duty: steel products

SCHEDULE 21 Restriction of use of rebated diesel and biofuels

SCHEDULE 22 Capital allowances for freeport tax sites

SCHEDULE 23 Relief from stamp duty land tax for freeport tax sites

SCHEDULE 24 Penalties for failure to make returns etc

SCHEDULE 25 Penalties for deliberately withholding information

SCHEDULE 26 Penalties for failure to pay tax

SCHEDULE 27 Schedules 24 to 26: consequential provision

SCHEDULE 28 Follower notice penalties

SCHEDULE 29 Late payment interest and repayment interest: VAT

SCHEDULE 30 Amendments of Part 5 of FA 2014

SCHEDULE 31 Disclosure of tax avoidance schemes

SCHEDULE 32 The GAAR and partnerships

SCHEDULE 33 Licensing authorities: requirements to give or obtain tax information

SCHEDULE 34 Information powers: miscellaneous amendments

PART 1Income tax, corporation tax and capital gains tax

Capital allowances: other measures

(1)

In Part 2 of CAA 2001, Chapter 6A (interpretation of provisions about long funding leases) has effect subject to the following modifications.

(2)

Section 70YB (long funding operating lease: extension of term of lease) has effect as if, in subsection (1), at the beginning there were inserted “Subject to section 70YCA (extension of term of lease for reasons related to coronavirus),”.

(3)

Section 70YC (extension of term of lease that is not a long funding lease) has effect as if, in subsection (1), at the beginning there were inserted “Subject to section 70YCA (extension of term of lease for reasons related to coronavirus),”.

(4)

That Chapter has effect as if after section 70YC there were inserted—

(1)

Sections 70YB(1) and 70YC(1) (extension of lease terms) do not apply in any case where subsection (2) applies (but see subsection (3)).

(2)

This subsection applies where, in relation to a relevant lease—

(a)

on or after 1 January 2020, there is (or was) a change in the payments under the lease that would have been payable on or before 30 June 2021,

(b)

the effect of the change is that the term of the lease is extended (and, were it not for this section, section 70YB(1) or 70YC(1) would apply),

(c)

the change would not have been made if it were not for coronavirus,

(d)

after the change, the consideration for the lease is substantially the same as, or less than, the consideration for the lease before the change,

(e)

there is no other substantive change to the terms of the lease, and

(f)

the lessor and lessee have not made any arrangement in connection with any changes to capital allowances relating to the lease and arising as a result of the change mentioned in paragraph (a).

(3)

But subsection (2) does not apply where, in relation to a relevant lease, the lessor or the lessee elects that subsection (2) does not apply.

(4)

The Treasury may by regulations substitute for the second date for the time being specified in subsection (2)(a) such other date as they consider appropriate.

(5)

In this section—

“coronavirus” has the same meaning as in the Coronavirus Act 2020 (see section 1(1) of that Act);

“relevant lease” means—

(a)

a long funding operating lease, or

(b)

a plant or machinery lease that is not a long funding lease.

70YCBElections under section 70YCA

(1)

An election under section 70YCA must be made by notice to an officer of Revenue and Customs no later than the end of the period of 21 months beginning with the day after the day on which the change mentioned in section 70YCA(2)(a) occurred.

(2)

But an election under that section is of no effect unless—

(a)

the party making the election notifies the other party to the lease of the election, and

(b)

the notice under subsection (1) is accompanied by a copy of the notification given to the other party.

(3)

A notice under subsection (1) must include such information as may be specified (whether generally or specifically) by an officer of Revenue and Customs.

(4)

An election under section 70YCA is irrevocable.

(5)

Where a party to the lease makes or amends a tax return for a period in which the change mentioned in section 70YCA(2)(a) occurred, that party must include with that return or amended return a copy of any election made under that section in respect of the lease.

(6)

The following provisions do not apply to an election under section 70YCA—

(a)

section 42 of, and Schedule 1A to, TMA 1970 (claims and elections for income tax purposes);

(b)

paragraphs 54 to 60 of Schedule 18 to FA 1998 (claims and elections for corporation tax purposes).

(7)

References in this section to a tax return, in the case of an election for the purposes of a trade, profession or business carried on by persons in partnership, are to be read, in relation to those persons, as references to a return under section 12AA of TMA 1970 (partnership returns).”