Finance Act 2011

• Citation: 2011 c. 11
• Sections: 766

Section 1 Charge and main rates for 2011-12

(1) Income tax is charged for the tax year 2011-12.

(2) For that tax year—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(c) the additional rate is 50%.

Section 2 Basic rate limit for 2011-12

(1) For the tax year 2011-12 the amount specified in section 10(5) of ITA 2007 (basic rate limit) is replaced with “ £35,000 ” .

(2) Accordingly section 21 of that Act (indexation of limits), so far as relating to the basic rate limit, does not apply for that tax year.

Section 3 Personal allowance for 2011-12 for those aged under 65

(1) For the tax year 2011-12 the amount specified in section 35(1) of ITA 2007 (personal allowance for those aged under 65) is replaced with “ £ 7,475 ” .

(2) Accordingly section 57 of that Act (indexation of allowances), so far as relating to the amount specified in section 35(1) of that Act, does not apply for that tax year.

Section 4 Main rate for financial year 2011

(1) In section 2(2)(a) of FA 2010 (main corporation tax rate for financial year 2011 on profits other than ring fence profits), for “27%” substitute “ 26% ” .

(2) The amendment made by this section is treated as having come into force on 1 April 2011.

Section 5 Charge and main rate for financial year 2012

(1) Corporation tax is charged for the financial year 2012.

(2) For that year the rate of corporation tax is—

(a) 24% on profits of companies other than ring fence profits, and

(b) 30% on ring fence profits of companies.

(3) In subsection (2) “ ring fence profits ” has the same meaning as in Part 8 of CTA 2010 (see section 276 of that Act).

Section 6 Small profits rate and fractions for financial year 2011

(1) For the financial year 2011 the small profits rate is—

(a) 20% on profits of companies other than ring fence profits, and

(b) 19% on ring fence profits of companies.

(2) For the purposes of Part 3 of CTA 2010, for that year—

(a) the standard fraction is 3/200ths, and

(b) the ring fence fraction is 11/400ths.

(3) In subsection (1) “ ring fence profits ” has the same meaning as in Part 8 of that Act (see section 276 of that Act).

Section 7 Increase in rate of supplementary charge

(1) In section 330 of CTA 2010 (supplementary charge in respect of ring fence trades), in subsection (1), for “20%” substitute “ 32% ” .

(2) The amendment made by subsection (1) has effect in relation to accounting periods beginning on or after 24 March 2011 (but see also subsection (3)).

(3) Subsections (4) to (10) apply where a company has an accounting period beginning before 24 March 2011 and ending on or after that date (“the straddling period”).

(4) For the purpose of calculating the amount of the supplementary charge on the company for the straddling period—

(a) so much of that period as falls before 24 March 2011, and so much of that period as falls on or after that date, are treated as separate accounting periods, and

(b) the company's adjusted ring fence profits for the straddling period are apportioned to the two separate accounting periods in proportion to the number of days in those periods.

(5) But if the basis of apportionment in subsection (4)(b) would work unjustly or unreasonably in the company's case, the company may elect for its profits to be apportioned on another basis that is just and reasonable and specified in the election.

(6) The amount of the supplementary charge on the company for the straddling period is the sum of the amounts of supplementary charge that would, in accordance with subsections (4) and (5), be chargeable on the company for those separate accounting periods.

See also sections 330A and 330B of CTA 2010 (which have effect in relation to the separate accounting period consisting of so much of the straddling period as falls on or after 24 March 2011).

(7) In relation to the straddling period—

(a) the Instalment Payments Regulations apply as if the amendment made by subsection (1) had not been made, but

(b) those Regulations also apply separately, in accordance with subsection (8), in relation to the increase in the amount of any supplementary charge on the company for that period that arises as a result of that amendment.

(8) In the separate application of those Regulations under subsection (7)(b), those Regulations have effect as if, for the purposes of those Regulations—

(a) the straddling period were an accounting period beginning on 24 March 2011,

(b) supplementary charge were chargeable on the company for that period, and

(c) the amount of that charge were equal to the increase in the amount of the supplementary charge for the straddling period that arises as a result of the amendment made by subsection (1).

(9) Any reference in the Instalment Payment Regulations to the total liability of a company is, accordingly, to be read—

(a) in their application as a result of subsection (7)(a), as a reference to the amount that would be the company's total liability for the straddling period if the amendment made by subsection (1) had not been made, and

(b) in their application as a result of subsection (7)(b), as a reference to the amount of the supplementary charge on the company for the deemed accounting period under subsection (8)(a).

(10) For the purposes of the Instalment Payment Regulations—

(a) a company is to be regarded as a large company as respects the deemed accounting period under subsection (8)(a) if (and only if) it is a large company for those purposes as respects the straddling period, and

(b) any question whether a company is a large company as respects the straddling period is to be determined as it would have been determined if the amendment made by subsection (1) had not been made.

(11) In this section—

“ adjusted ring fence profits ” has the same meaning as in section 330 of CTA 2010;

“ the Instalment Payments Regulations ” means the Corporation Tax (Instalment Payments) Regulations 1998 ( S.I. 1998/3175);

“ supplementary charge ” means any sum chargeable under section 330(1) of CTA 2010 as if it were an amount of corporation tax.

Section 8 Annual exempt amount

(1) Section 3 of TCGA 1992 (annual exempt amount) is amended as follows.

(2) For subsection (2) substitute—

(2) The exempt amount for a tax year is £10,600.

(3) For subsections (3) and (4) substitute—

(3) If there is a relevant increase in RPI in relation to a tax year—

(a) the exempt amount is to be increased in accordance with Steps 1 and 2, and

(b) subsection (2) has effect from then on (for that and subsequent tax years) as if it referred to the increased amount,

unless Parliament otherwise determines.

(3A) There is a relevant increase in RPI in relation to a tax year if the retail prices index for the September before the start of the tax year is higher than it was for the previous September.

(3B) Steps 1 and 2 are—

Step 1 Increase the exempt amount for the previous tax year by the same percentage as the percentage of the relevant increase in RPI.

Step 2 If the result of Step 1 is not a multiple of £100, round it up to the nearest multiple of £100.

(4) If there is a relevant increase in RPI in relation to a tax year, the Treasury must before the start of that tax year make an order showing the amount arrived at as a result of Steps 1 and 2.

(4) The amendment made by subsection (2) has effect for the tax year 2011-12 and subsequent tax years.

(5) For the tax year 2011-12, section 3(3) of TCGA 1992 (indexation) does not apply.

(6) The amendment made by subsection (3) has effect for the tax year 2012-13 and subsequent tax years.

Section 9 Entrepreneurs' relief

(1) In section 169N of TCGA 1992 (amount of relief: general)—

(a) in subsection (4) for “£5 million” substitute “ £10 million ” , and

(b) in subsection (4A) for “£5 million” substitute “ £10 million ” .

(2) The amendments made by this section have effect in relation to qualifying business disposals occurring on or after 6 April 2011.

Section 10 Plant and machinery writing-down allowances

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) In section 56 (amount of allowances and charges), in subsection (1) for “20%” substitute “ 18% ” .

(3) In section 104D (writing-down allowances: special rate expenditure)—

(a) in subsection (1) for “10%” substitute “ 8% ” , and

(b) after that subsection insert—

(1A) But, in relation to special rate expenditure incurred wholly for the purposes of a ring fence trade in respect of which tax is chargeable under section 330(1) of CTA 2010 (supplementary charge in respect of ring fence trades), the amount of the writing-down allowance to which a person is entitled for a chargeable period is 10% of the amount by which AQE exceeds TDR.

(4) Accordingly—

(a) in the heading for section 104D, after “ at ” insert “ 8% or ” , and

(b) in sections 56(2)(a) and 104E(1)(a), before “10%” insert “ 8% or ” .

(5) Part 10 of Schedule 22 to FA 2000 (companies within tonnage tax: capital allowances in respect of ship leasing), as it has effect (by virtue of section 57(9) of this Act) in relation to expenditure incurred before 1 January 2011, is amended as follows.

(6) In each of the following provisions, for “20%” (in each place) substitute “ 18% ”

(a) paragraph 94(3)(a) and (4),

(b) paragraph 95(4),

(c) paragraph 97(2) and (3),

(d) paragraph 98(8), and

(e) paragraph 99(2) and (5).

(7) In each of the following provisions, for “10%” substitute “ 8% ”

(a) paragraph 94(3)(b) and (4),

(b) paragraph 95(4),

(c) paragraph 97(2), (3) and (4),

(d) paragraph 98(8), and

(e) paragraph 99(2).

(8) The amendments made by this section have effect in relation to—

(a) chargeable periods beginning on or after the relevant day, and

(b) chargeable periods beginning before, and ending on or after, the relevant day.

(9) But in respect of a chargeable period within subsection (8)(b), they have effect as if—

(a) in section 56(1) of CAA 2001 and the provisions of Schedule 22 to FA 2000 mentioned in subsection (6), references to 18% were references to X%, and

(b) in section 104D(1) of CAA 2001 and the provisions of Schedule 22 to FA 2000 mentioned in subsection (7), references to 8% were references to Y%.

(10) For the purposes of subsection (9)—

(11) Where X or Y would be a figure with more than 2 decimal places, it is to be rounded up to the nearest second decimal place.

(12) In subsection (10)—

BRD is the number of days in the chargeable period before the relevant day,

ARD is the number of days in the chargeable period on and after the relevant day, and

CP is the number of days in the chargeable period.

(13) The relevant day is—

(a) for corporation tax purposes, 1 April 2012, and

(b) for income tax purposes, 6 April 2012.

Section 11 Annual investment allowance

(1) Section 51A of CAA 2001 (entitlement to annual investment allowance) is amended as follows.

(2) In subsection (5) (maximum allowance), for “£100,000” substitute “ £25,000 ” .

(3) In subsection (8) (power to amend maximum allowance), for “other” substitute “ greater ” .

(4) The amendment made by subsection (2) has effect in relation to expenditure incurred on or after the relevant day.

(5) Subsections (6) and (7) apply in relation to a chargeable period (“the actual chargeable period”) which—

(a) begins before the relevant day, and

(b) ends on or after that day.

(6) The maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the sum of each maximum allowance that would be found if—

(a) the period beginning with the first day of the chargeable period and ending with the day before the relevant day, and

(b) the period beginning with the relevant day and ending with the last day of the chargeable period,

were treated as separate chargeable periods.

(7) But, so far as concerns expenditure incurred on or after the relevant day, the maximum allowance under section 51A of CAA 2001 for the actual chargeable period is the maximum allowance, calculated in accordance with subsection (6), for the period mentioned in paragraph (b) of that subsection.

(8) Subsections (6) and (7) are also to apply for the purpose of determining the maximum allowance under section 51K of CAA 2001 (operation of annual investment allowance where restrictions apply) in a case where one or more chargeable periods in which the relevant AIA qualifying expenditure is incurred are chargeable periods within subsection (5), but the modifications in subsections (9) to (11) are to apply.

(9) There is to be taken into account for the purpose mentioned in subsection (8) only chargeable periods of one year or less (whether or not they are chargeable periods within subsection (5)), and if there is more than one such period, only that period which gives rise to the greatest maximum allowance.

(10) For the purposes of subsection (9) any chargeable period—

(a) which is longer than a year, and

(b) which ends in the tax year 2012-13,

is to be treated as being a chargeable period of one year ending at the same time as it actually ends.

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) Nothing in subsections (8) to (11) affects the operation of sections 51M and 51N of that Act.

(13) In this section “ the relevant day ” means—

(a) for corporation tax purposes, 1 April 2012, and

(b) for income tax purposes, 6 April 2012.

Section 12 Short-life assets

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) In section 86 (short-life asset pool)—

(a) in subsection (2), for “four-year” (in each place) substitute “ relevant ” ,

(b) for subsection (3) substitute—

(3) In this Chapter “ the relevant cut-off ” means—

(a) if any of the qualifying expenditure incurred on the provision of the short-life asset was incurred before the designated day, the fourth anniversary of the end of the relevant chargeable period, and

(b) in any other case, the eighth anniversary of the end of the relevant chargeable period.

(3A) In subsection (3)—

“ the designated day ” means—

for corporation tax purposes, 1 April 2011, and

for income tax purposes, 6 April 2011;

“ the relevant chargeable period ” means—

the chargeable period in which the qualifying expenditure was incurred on the provision of the short-life asset, or

if the qualifying expenditure was incurred in different chargeable periods, the first chargeable period in which any of the qualifying expenditure was incurred.

(c) in subsection (4), for “four-year” substitute “ relevant ” .

(3) In section 65 (the final chargeable period), in subsection (3), for “four-year” substitute “ relevant ” .

(4) In section 87 (short-life assets provided for leasing), in subsection (1)—

(a) in paragraph (b), for “four-year” substitute “ relevant ” , and

(b) in paragraph (c), for “4 years” substitute “ 8 years ” .

(5) In section 89 (disposal to connected person), in subsections (1) and (5), for “four-year” (in each place) substitute “ relevant ” .

(6) In Schedule 1 (defined expressions)—

(a) at the appropriate place insert—

(b) omit the entry for “four-year cut-off (in Chapter 9 of Part 2)”.

Section 13 Rates of alcoholic liquor duties

(1) ALDA 1979 is amended as follows.

(2) In section 5 (rate of duty on spirits), for “£23.80” substitute “ £25.52 ” .

(3) In section 36(1AA)(a) (standard rate of duty on beer), for “£17.32” substitute “ £18.57 ” .

(4) In section 62(1A) (rates of duty on cider)—

(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for “£217.83” substitute “ £233.55 ” ,

(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for “£50.22” substitute “ £53.84 ” , and

(c) in paragraph (c) (rate of duty per hectolitre in any other case), for “£33.46” substitute “ £35.87 ” .

(5) For the table in Schedule 1 substitute—

TABLE OF RATES OF DUTY ON WINE AND MADE-WIN

WINE OR MADE-WINE OF A STRENGTH NOT EXCEEDING 22 PER CENT

WINE OR MADE-WINE OF A STRENGTH EXCEEDING 22 PER CENT

(6) The amendments made by this section are treated as having come into force on 28 March 2011.

Section 14 General beer duty: reduced rate for lower strength beer

(1) Part 3 of ALDA 1979 (beer) is amended as follows.

(2) In section 36 (general beer duty), in subsection (1AA) (rates of duty)—

(a) before paragraph (a) insert—

(za) in the case of beer that is of a strength which exceeds 1.2 per cent but does not exceed 2.8 per cent, £9.29 per hectolitre per cent of alcohol in the beer;

(b) in paragraph (a), after “that” insert “ is of a strength which exceeds 2.8 per cent and ” ,

(c) in paragraph (b), after “small brewery beer” insert “ that is of a strength which exceeds 2.8 per cent and is ” , and

(d) in paragraph (c), after “small brewery beer” insert “ that is of a strength which exceeds 2.8 per cent and is ” .

(3) For the italic heading immediately preceding section 36A substitute “ Beer from small breweries ” .

(4) In section 36D (rate of general beer duty for small brewery beer from singleton breweries)—

(a) in subsection (2), after “section” insert “ , unless the beer is within section 36(1AA)(za) (rate for lower strength beer) ” , and

(b) in the heading after “ beer ” insert “ (other than lower strength beer) ” .

(5) In section 36F (rate of general beer duty for small brewery beer from co-operated breweries)—

(a) in subsection (2), after “section” insert “ , unless the beer is within section 36(1AA)(za) (rate for lower strength beer) ” , and

(b) in the heading after “ beer ” insert “ (other than lower strength beer) ” .

(6) Immediately above section 36H (power to vary reduced rate provisions) insert as an italic heading “ Power to vary rates ” .

(7) The amendments made by this section come into force on 1 October 2011.

Section 15 New high strength beer duty

(1) Schedule 1 contains provision for and in connection with a duty of excise on high strength beer.

(2) The Commissioners for Her Majesty's Revenue and Customs are responsible for the collection and management of that duty.

Section 16 Rates of tobacco products duty

(1) For the table in Schedule 1 to TPDA 1979 substitute—

TABLE

(2) The amendment made by this section is treated as having come into force at 6 pm on 23 March 2011.

Section 17 Rates of gaming duty

(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—

TABLE

(2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2011.

Section 18 Amusement machine licence duty

(1) In section 23(2) of BGDA 1981 (amount of duty payable on amusement machine licence), for the table substitute—

TABLE

(2) The amendment made by this section has effect in relation to cases where the application for the amusement machine licence is received by the Commissioners for Her Majesty's Revenue and Customs after 4 pm on 25 March 2011.

Section 19 Fuel duties: rates of duty and rebates from 23 March 2011

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.5895” substitute “ £0.5795 ” ,

(b) in paragraph (aa) (aviation gasoline), for “£0.3835” substitute “ £0.3770 ” ,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6867” substitute “ £0.6767 ” , and

(d) in paragraph (c) (heavy oil), for “£0.5895” substitute “ £0.5795 ” .

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2615” substitute “ £0.2470 ” , and

(b) in paragraph (b) (other road fuel gas), for “£0.3304” substitute “ £0.3161 ” .

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1088” substitute “ £0.1070 ” , and

(b) in paragraph (b) (gas oil), for “£0.1133” substitute “ £0.1114 ” .

(5) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1088” substitute “ £0.1070 ” .

(6) In section 14A(2) (rebate on certain biodiesel), for “£0.1133” substitute “ £0.1114 ” .

(7) The amendments made by this section are treated as having come into force at 6 pm on 23 March 2011.

Section 20 Fuel duties: rates of duty and rebates from 1 January 2012

(1) HODA 1979 is amended as follows.

(2) In section 6(1A) (main rates)—

(a) in paragraph (a) (unleaded petrol), for “£0.5795” substitute “ £0.6097 ” ,

(b) in paragraph (aa) (aviation gasoline), for “£0.3770” substitute “ £0.3966 ” ,

(c) in paragraph (b) (light oil other than unleaded petrol or aviation gasoline), for “£0.6767” substitute “ £0.7069 ” , and

(d) in paragraph (c) (heavy oil), for “£0.5795” substitute “ £0.6097 ” .

(3) In section 8(3) (road fuel gas)—

(a) in paragraph (a) (natural road fuel gas), for “£0.2470” substitute “ £0.2907 ” , and

(b) in paragraph (b) (other road fuel gas), for “£0.3161” substitute “ £0.3734 ” .

(4) In section 11(1) (rebate on heavy oil)—

(a) in paragraph (a) (fuel oil), for “£0.1070” substitute “ £0.1126 ” , and

(b) in paragraph (b) (gas oil), for “£0.1114” substitute “ £0.1172 ” .

(5) In section 14(1) (rebate on light oil for use as furnace fuel), for “£0.1070” substitute “ £0.1126 ” .

(6) In section 14A(2) (rebate on certain biodiesel), for “£0.1114” substitute “ £0.1172 ” .

(7) The amendments made by this section come into force on 1 January 2012.

Section 21 VED rates for light passenger vehicles, light goods vehicles, motorcycles etc

(1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2) In paragraph 1 (general)—

(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder not exceeding 1,549cc), for “£205” substitute “ £215 ” , and

(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£125” substitute “ £130 ” .

(3) In paragraph 1B (graduated rates of duty for light passenger vehicles)—

(a) for the tables substitute—

RATES PAYABLE ON FIRST VEHICLE LICENCE FOR VEHICLE

RATES PAYABLE ON ANY OTHER VEHICLE LICENCE FOR VEHICLE

(b) in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—

(a) in column (3), in the last two rows, “250” were substituted for “435” and “ 450 ” , and

(b) in column (4), in the last two rows, “260” were substituted for “445” and “ 460 ” .

(4) In paragraph 1J (VED rates for light goods vehicles)—

(a) in paragraph (a), for “£200” substitute “ £210 ” , and

(b) in paragraph (b), for “£125” substitute “ £130 ” .

(5) In paragraph 2(1) (VED rates for motorcycles)—

(a) in paragraph (a), for “£15” substitute “ £16 ” ,

(b) in paragraph (b), for “£33” substitute “ £35 ” ,

(c) in paragraph (c), for “£50” substitute “ £53 ” , and

(d) in paragraph (d), for “£70” substitute “ £74 ” .

(6) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2011.

Section 22 VED rates for certain goods vehicles without road-friendly suspension

(1) Part 8 of Schedule 1 to VERA 1994 (rates for goods vehicles) is amended as follows.

(2) In—

(a) paragraph 9(1) (rigid vehicles exceeding 3,500 kilograms revenue weight in case of which pollution requirements are not satisfied), and

(b) paragraph 9A(2) (rigid vehicles exceeding that weight in case of which pollution requirements are satisfied),

after “(3)” insert “ and paragraph 11D ” .

(3) In—

(a) paragraph 11(1) (tractive units exceeding 3,500 kilograms revenue weight in case of which pollution requirements are not satisfied), and

(b) paragraph 11A(2) (tractive units exceeding that weight in case of which pollution requirements are satisfied),

for “paragraph 11C” substitute “ paragraphs 11C and 11D ” .

(4) In paragraph 11C(2) (tractive units between 41,000 and 44,000 kilograms revenue weight, with 3 or more axles and used for conveyance of semi-trailers with 3 or more axles and usable on public road in accordance with law immediately before 21 March 2000), for “The” substitute “ Subject to paragraph 11D, the ” .

(5) After paragraph 11C insert—

Certain vehicles without road-friendly suspension

(11D)

(1) This paragraph applies to goods vehicles which do not have road-friendly suspension.

(2) A goods vehicle does not have road-friendly suspension if any driving axle of the vehicle has neither—

(a) an air suspension (that is, a suspension system in which at least 75 per cent of the spring effect is caused by an air spring), nor

(b) a suspension which is regarded as being equivalent to an air suspension for the purposes under Annex II of Council Directive 96/53/ EC .

(3) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which has—

(a) a revenue weight of 15,000 kilograms, and

(b) two axles,

is £238.

(4) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which—

(a) is a vehicle with respect to which the reduced pollution requirements are satisfied,

(b) has a revenue weight of 21,000 kilograms, and

(c) has three axles,

is £193.

(5) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which—

(a) is a vehicle with respect to which the reduced pollution requirements are satisfied,

(b) has a revenue weight of not less than 23,000 kilograms but less than 26,000 kilograms, and

(c) has three axles,

is £299.

(6) The annual rate of vehicle excise duty applicable to a rigid goods vehicle to which this paragraph applies and which—

(a) is a vehicle with respect to which the reduced pollution requirements are satisfied,

(b) has a revenue weight of 27,000 kilograms, and

(c) has four or more axles,

is £314.

(7) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which has two axles and either—

(a) has a revenue weight of 25,000 kilograms, or

(b) is a vehicle with respect to which the reduced pollution requirements are satisfied and has a revenue weight exceeding 25,000 kilograms but less than 28,000 kilograms,

is £266.

(8) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which—

(a) has a revenue weight of 28,000 kilograms,

(b) has two axles, and

(c) is to draw semi-trailers with two or more axles,

is £177.

(9) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which—

(a) is a vehicle with respect to which the reduced pollution requirements are satisfied,

(b) has a revenue weight of 31,000 kilograms,

(c) has two axles, and

(d) is to draw semi-trailers with two or more axles,

is £403.

(10) The annual rate of vehicle excise duty applicable to a tractive unit to which this paragraph applies and which—

(a) is a vehicle with respect to which the reduced pollution requirements are satisfied,

(b) has a revenue weight of 36,000 kilograms,

(c) has three axles, and

(d) is to draw semi-trailers with two or more axles,

is £394.

(11) The annual rate of vehicle excise duty applicable to a vehicle to which paragraph 11C and this paragraph apply and which—

(a) is a vehicle with respect to which the reduced pollution requirements are satisfied, and

(b) has a revenue weight less than 44,000 kilograms,

is £464.

(12) This paragraph does not apply to a vehicle for which the annual rate of duty is determined under paragraph 9(2) or 11(2).

(6) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2011.

Section 23 Rates of climate change levy

(1) In Schedule 6 to FA 2000 (climate change levy), for the table in paragraph 42(1) substitute—

TABLE

(2) The amendment made by this section has effect in relation to supplies treated as taking place on or after 1 April 2012.

Section 24 Rate of aggregates levy

(1) Section 16 of FA 2010 (increase in rate of aggregates levy from 1 April 2011) is repealed.

(2) Accordingly, the amendment made by section 20 of FA 2008 (increase in rate of aggregates levy from 1 April 2009) continues to have effect in relation to aggregate subjected to commercial exploitation on or after 1 April 2011.

(3) This section is treated as having come into force on 31 March 2011.

Section 25 Standard rate of landfill tax

(1) In section 42(1)(a) and (2) of FA 1996 (amount of landfill tax), for “£56” substitute “ £64 ” .

(2) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2012.

Section 26 Employment income provided through third parties

Schedule 2 contains provision about steps which are taken in pursuance of, or which have some other connection with, arrangements concerned with the provision of rewards or recognition or loans in connection with current, former or prospective employments.

Section 27 Tainted charity donations

Schedule 3 contains provision about gifts and other disposals to charities and community amateur sports clubs.

Section 28 Amounts not fully recognised for accounting purposes

Schedule 4 contains amendments of Parts 5 and 7 of CTA 2009 (loan relationships and derivative contracts) relating to cases where amounts are not fully recognised for accounting purposes.

Section 29 Loan relationships involving connected debtor and creditor

1 In section 418 of CTA 2009 (loan relationships involving connected debtor and creditor where debits exceed credits), in subsection (2), after “creditor company” insert “ or any company connected with it ” .

(2) In section 419 of that Act (section 418: supplementary), after subsection (6) insert—

(6A) References in section 418 to a company bringing debits or credits into account under or for the purposes of this Part include bringing debits or credits into account under or for the purposes of this Part in determining the chargeable profits of the company (or in determining that there were no such profits) for the purposes of Chapter 4 of Part 17 of ICTA (controlled foreign companies).

(3) The amendments made by this section have effect in relation to loan relationships to which a company is a party (or to which it is treated as a party under section 418(6A) of CTA 2009) on or after 6 December 2010.

(4) But amounts are to continue to be brought into account for the purposes of Part 5 of CTA 2009 disregarding those amendments if the amounts relate to a time before that day.

Section 30 Group mismatch schemes

Schedule 5 contains provision about group mismatch schemes.

Section 31 Company ceasing to be member of group: availability of relief

(1) Section 179 of TCGA 1992 (company ceasing to be member of group: post-appointed day cases) is amended as follows.

(2) In subsection (2A)—

(a) for “Where” substitute “ Subsection (2AA) applies where ” , and

(b) for paragraphs (c) and (d) and the words following those paragraphs substitute—

(c) at the time company A ceases to be a member of the first group there is a connection between that group and the group of companies of which company A becomes a member on leaving the first group ( “ the second group ” ), and

(d) subsequently—

(i) company A ceases to be a member of the second group, or

(ii) (before sub-paragraph (i) applies) there ceases to be a connection between the two groups.

(3) After that subsection insert—

(2AA) Where this subsection applies—

(a) in a case within subsection (2A)(d)(ii), for the purposes of this section (other than subsection (2A)) as it applies as respects the acquisition, company A and any associated company are to be treated as having ceased to be members of the second group at the time the connection between the two groups ceases,

(b) subsection (1) has effect in relation to company A's ceasing to be a member of the second group as if it had been the second group of which both companies had been members at the time of the acquisition, and

(c) subsection (2) may operate to prevent subsection (1) applying by virtue of paragraph (b), unless subsection (2AB) applies.

(2AB) This subsection applies if company A's ceasing to be a member of the first group at the same time as one or more associated companies forms part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of a liability to corporation tax.

(4) In subsection (2B) for “if, at the time when company A ceases to be a member of the second group” substitute “ at a particular time if, at that time, ” .

(5) The amendments made by this section have effect in relation to a company in any case in which the time of the company's ceasing to be a member of the first group is on or after 23 March 2011.

Section 32 Leasing businesses

Schedule 6 contains provision about leasing businesses carried on by companies alone or in partnership.

Section 33 Long funding finance leases

(1) Chapter 6 of Part 2 of CAA 2001 (which includes provision about lessees under long funding leases) is amended as follows.

(2) In section 70C (long funding finance lease: amount of capital expenditure), after subsection (4) insert—

(4A) But where the minimum lease payments include a relievable amount, the present value of that amount must be excluded in determining the commencement PVMLP.

(4B) An amount (“amount X”) is a relievable amount if—

(a) an arrangement is in place under which all or part of any residual amount (as defined in section 70YE) is guaranteed by the lessee or a person connected with the lessee,

(b) amount X is within the minimum lease payments because of that arrangement (see subsection (1)(a) of that section), and

(c) it is reasonable to assume that, were amount X to be incurred under the arrangement, relief would be available as a result (beyond relief, by virtue of this section and section 70E, because amount X is within those minimum lease payments).

(4C) In deciding for the purposes of subsection (4B)(c) whether relief would be available as a result, no account is to be taken of—

(a) any part of the arrangement other than the part by virtue of which all or part of the residual amount is guaranteed, or

(b) any other arrangement connected with the arrangement or forming part of a set of arrangements that includes the arrangement.

(3) In section 70D (long funding finance lease: additional expenditure: allowances for lessee), after subsection (1) insert—

(1A) Any increase attributable to a relievable amount is to be ignored for the purposes of subsection (1)(d).

(1B) Subsections (4B) and (4C) of section 70C apply (with any necessary modifications) for the purposes of this section as for the purposes of that section.

(4) In section 70E (disposal events and disposal values), in subsection (2C)(b), after “section 70YE)” insert “ other than any relievable payment ” .

(5) In that section, after subsection (2D) insert—

(2DA) A payment (“payment X”) is a relievable payment if—

(a) an arrangement is in place under which all or part of any residual amount (as defined in section 70YE) is guaranteed by the lessee or a person connected with the lessee,

(b) payment X is within the minimum lease payments because of that arrangement (see subsection (1)(a) of that section), and

(c) it is reasonable to assume that relief would be available as a result of making payment X (beyond relief, by virtue of section 70C or 70D and this section, because payment X is within those minimum lease payments).

(2DB) For the purposes of subsection (2DA)(c)—

(a) “ relief ” has the meaning given in section 70C, and

(b) subsection (4C) of that section applies as it applies for the purposes of subsection (4B)(c) of that section.

(6) The amendments made by subsections (2) and (3) have effect in cases where the arrangement is entered into on or after 9 March 2011.

(7) The amendments made by subsections (4) and (5) have effect in relation to payments made on or after 9 March 2011 (regardless of when the arrangement was entered into).

Section 34 Investment companies

Schedule 7 contains provision about investment companies.

Section 35 Reduction in childcare relief for higher earners

Schedule 8 contains provision for reducing childcare relief for higher earners.

Section 36 Childcare: salary sacrifice etc and the national minimum wage

(1) In section 270A of ITEPA 2003 (limited exemption for qualifying childcare vouchers), after subsection (5) insert—

(5A) Where the scheme under which the vouchers are provided involves—

(a) relevant salary sacrifice arrangements, or

(b) relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

(5B) In subsection (5A)—

“ relevant salary sacrifice arrangements ” means arrangements (whenever made) under which the employees for whom the vouchers are provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the vouchers;

“ relevant flexible remuneration arrangements ” means arrangements (whenever made) under which the employees for whom the vouchers are provided agree with the employer that they are to be provided with the vouchers rather than receive some other description of employment income;

“ relevant low-paid employees ” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.

(2) In section 318A of that Act (exemption for childcare other than employer-provided care), after subsection (5) insert—

(5A) Where the scheme under which the care is provided involves—

(a) relevant salary sacrifice arrangements, or

(b) relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

(5B) In subsection (5A)—

“ relevant salary sacrifice arrangements ” means arrangements (whenever made) under which the employees for whom the care is provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the care;

“ relevant flexible remuneration arrangements ” means arrangements (whenever made) under which the employees for whom the care is provided agree with the employer that they are to be provided with the care rather than receive some other description of employment income;

“ relevant low-paid employees ” means any of the employer's employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage.

(3) The amendments made by this section have effect for the tax year 2005-06 and subsequent tax years.

Section 37 Accommodation expenses of MPs

(1) In section 292 of ITEPA 2003 (accommodation expenses of MPs), after subsection (4) insert—

(5) The reference in subsection (1) to a payment made to a member of the House of Commons under section 5(1) of the Parliamentary Standards Act 2009 includes a payment made under that section to another person at the direction of a member (see section 6(7) of that Act).

(2) The amendment made by this section has effect in relation to payments made under section 5(1) of the Parliamentary Standards Act 2009 on or after 1 November 2010.

Section 38 Experts seconded to European Union bodies

(1) In Chapter 8 of Part 4 of ITEPA 2003 (employment income: special kinds of employment), after section 304 insert—

Experts seconded to other European Union bodies

(304A)

(1) No liability to income tax arises in respect of any subsistence allowances paid by a relevant EU body to persons who, because of their expertise in matters relating to the subject matter of the functions of the relevant EU body, have been seconded to the body by their employers.

(2) Each of the following is a “relevant EU body”—

(a) the European Medicines Agency, established as the European Agency for the Evaluation of Medicinal Products by Council Regulation ( EEC ) No 2309/93 of 22 July 1993,

(b) the European Police College, established by Council Decision of 20 September 2005 (2005/681/ JHA ),

(c) the European Banking Authority, established by Regulation (EU) No 1093/2010 of 24 November 2010, and

(d) any other body established by an EU instrument which is designated as a relevant EU body for the purposes of this section by an order made by the Treasury.

(2) The amendment made by this section has effect in relation to subsistence allowances paid in respect of periods beginning on or after 1 January 2011.

Section 39 Employment income: exemption for fees relating to monitoring schemes

(1) In Chapter 11 of Part 4 of ITEPA 2003 (employment income: miscellaneous exemptions), after section 326 insert—

Monitoring schemes

Fees relating to monitoring schemes relating to vulnerable persons

(326A)

(1) No liability to income tax arises by virtue of the payment or reimbursement of a fee in respect of an application to join the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007 (asp 14) (scheme to collate and disclose information about individuals working with vulnerable persons).

(2) The Treasury may by order amend subsection (1) so as—

(a) to add to the fees covered by that subsection a fee of a specified kind payable in connection with a scheme for England and Wales or Northern Ireland which corresponds to the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007, or

(b) to amend or remove a reference to a fee added under paragraph (a).

(2) The amendment made by this section has effect for the tax year 2010-11 and subsequent tax years.

Section 40 Individual investment plans for children

(1) Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) is amended in accordance with subsections (2) to (5).

(2) In section 694 (income from individual investment plans), after subsection (1) insert—

(1A) In subsection (1) “ income of an individual from investments under a plan ” includes income from investments which is treated as the individual's income by virtue of section 629 (income paid to relevant children of settlor).

(3) After section 695 insert—

Investment plans for children

(695A)

(1) This section applies where investment plan regulations provide that income of a child from investments under a plan (a “child plan”) is exempt from income tax (either wholly or to such extent as is specified in the regulations).

(2) In addition to any provision which may be made by virtue of any other provision of this Chapter, investment plan regulations may—

(a) specify descriptions of persons by whom investments may be made for a child,

(b) provide that withdrawals may be made only in the circumstances specified in the regulations, and

(c) provide that, in the case of a child who is under 16, the plan managers may act only on the direction of a person of a description specified in the regulations.

(3) They may also provide—

(a) that any assignment of, or agreement to assign, investments under a child plan, and any charge on or agreement to charge any such investments, is void,

(b) that, on the bankruptcy of a child with investments under a child plan, the entitlement to those investments does not pass to any trustee or other person acting on behalf of the child's creditors, and

(c) that, where a contract is entered into by or on behalf of a child who is 16 or over in connection with a child plan under which investments are held—

(i) by the child, or

(ii) by another child in relation to whom the child has parental responsibility,

the contract has effect as if the child had been 18 or over when it was entered into.

(4) Where, by virtue of provision made in investment plan regulations under subsection (2)(a), investments are made for a child under a child plan, for the purposes of this Chapter the child is treated as having made those investments.

(5) In this section—

“ assignment ” includes assignation, and “ assign ” is to be construed accordingly;

“ bankruptcy ”, in relation to a child, includes the sequestration of the child's estate;

“ charge on or agreement to charge ” includes a right in security over or an agreement to create a right in security over;

“ child ” means an individual under 18;

“ parental responsibility ” means—

parental responsibility within the meaning of the Children Act 1989 or the Children (Northern Ireland) Order 1995, or

parental responsibilities within the meaning of the Children (Scotland) Act 1995;

and any reference to investments being held by a child includes a reference to investments being held by plan managers on behalf of the child by virtue of section 696(1).

(4) In section 699 (non-entitlement to exemption), at the end insert—

(9) In this section references to an investor include an individual entitled to an exemption given by investment plan regulations by virtue of section 694(1A).

(5) In section 701 (general and supplementary powers), at the end insert—

(6) In this section references to an investor include an individual entitled to an exemption given by investment plan regulations by virtue of section 694(1A).

(6) In section 151 of TCGA 1992 (personal equity plans), in subsection (2)—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) for the words from “but with” to the end substitute

but with the following modifications—

(a) any reference to income tax is to be read as a reference to capital gains tax,

(b) the reference in section 695A(1) to the case where regulations provide that income of a child from investments under a plan is exempt from income tax is to be read as a reference to the case where regulations provide that a child who invests under a plan is entitled to relief from capital gains tax in respect of the investments,

(c) the reference in section 695A(4) to that Chapter is to be read as a reference to this section, and

(d) that Chapter has effect as if sections 699(9) and 701(6) were omitted.

Section 41 Gift aid: increase of limits on total value of benefits associated with gifts

(1) In section 418 of ITA 2007 (gifts to charities by individuals: restrictions on associated benefits), in subsection (3), for “£500” substitute “ £2,500 ” .

(2) In section 197 of CTA 2010 (gifts to charities by companies: restrictions on associated benefits), in subsection (3), for “£500” substitute “ £2,500 ” .

(3) Accordingly, omit section 60(1)(b) of FA 2007.

(4) The amendments made by subsections (1) and (3) have effect in relation to gifts made on or after 6 April 2011.

(5) The amendment made by subsection (2) has effect in relation to gifts made in an accounting period ending on or after 1 April 2011.

Section 42 Enterprise investment scheme: amount of relief

(1) Part 5 of ITA 2007 (enterprise investment scheme) is amended in accordance with subsections (2) to (4).

(2) In section 158 (form and amount of EIS relief), in subsection (2A) for “20%” substitute “ 30% ” .

(3) In the following provisions for “EIS rate” substitute “ EIS original rate ”

(a) section 209(3);

(b) section 210(1)(b);

(c) section 213(2);

(d) section 220(1)(b);

(e) section 224(2);

(f) section 229(1)(b).

(4) After section 256 insert—

Meaning of “the EIS original rate”

(256A) In this Part “ the EIS original rate ”, in relation to EIS relief, means the EIS rate for the tax year for which the EIS relief was obtained.

(5) In Schedule 4 to that Act (index of defined expressions), at the appropriate place insert—

(6) This section comes into force on such day as the Treasury may by order appoint.

(7) The amendments made by this section have effect in relation to the tax year 2011-12 and subsequent tax years.

(8) But where the EIS relief attributable to shares was obtained for the tax year 2007-08 or an earlier tax year, the references to the EIS original rate in the provisions mentioned in paragraph (a) to (f) of subsection (3) are to be read as references to 20%.

Section 43 Relief for expenditure on R&D by SMEs

(1) Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.

(2) Chapter 2 (relief for small or medium-sized enterprises (“SMEs”)) is amended in accordance with subsections (3) to (6).

(3) In section 1044 (additional deduction in calculating profits of trade), in subsection (8), for “75%” substitute “ 100% ” .

(4) In section 1045 (alternative treatment for pre-trading expenditure: deemed trading loss), in subsection (7), for “175%” substitute “ 200% ” .

(5) In section 1055 (tax credit: meaning of “Chapter 2 surrenderable loss”), in subsection (2)(b), for “175%” substitute “ 200% ” .

(6) In section 1058 (amount of tax credit), in subsection (1)(a), for “14%” substitute “ 12.5% ” .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12) This section comes into force on such day as the Treasury may by order appoint.

(13) The amendments made by this section have effect in relation to expenditure incurred on or after 1 April 2011.

Section 44 Value shifting

Schedule 9 contains provision about value shifting.

Section 45 Company ceasing to be member of a group

Schedule 10 contains provision about the consequences, for the purposes of corporation tax on chargeable gains, of a company ceasing to be a member of a group.

Section 46 Pre-entry losses

Schedule 11 contains provision about losses accruing to a company before the time when it becomes a member of a group of companies and losses accruing on assets held by a company at such a time.

Section 47 Controlled foreign companies

Schedule 12 contains provision in relation to controlled foreign companies.

Section 48 Profits of foreign permanent establishments etc

Schedule 13 contains provision about the profits of foreign permanent establishments of UK resident companies etc.

Section 49 Meaning of “investment trust”

(1) Chapter 4 of Part 24 of CTA 2010 (investment trusts) is amended as follows.

(2) For section 1158 (meaning of “investment trust” in the Corporation Tax Acts) substitute—

Meaning of “investment trust”

(1158)

(1) For the purposes of the Corporation Tax Acts a company is an “investment trust” with respect to an accounting period if—

(a) conditions A to C are met throughout the period, and

(b) the company is approved for the period by the Commissioners for Her Majesty's Revenue and Customs (see section 1159).

(2) Condition A is that the business of the company consists of investing its funds in shares, land or other assets with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds.

(3) Condition B is that the shares making up the company's ordinary share capital (or, if there are such shares of more than one class, those of each class) are admitted to trading on a regulated market.

(4) For this purpose “ regulated market ” has the same meaning as in Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments (see Article 4.1(14)).

(5) Condition C is that the company is not—

(a) a venture capital trust (within the meaning of Part 6 of ITA 2007), or

(b) a company UK REIT (within the meaning of Part 12 of this Act).

(6) The Treasury may by regulations provide—

(a) for one or both of conditions A and B to be treated as met in the cases, and subject to any conditions, specified in the regulations, and

(b) for the period for which the condition or conditions are treated as met.

(7) The Treasury may also by regulations amend subsection (3) or (4).

(8) A statutory instrument containing the first regulations under subsection (6) may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(9) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

(3) For section 1159 (conditions for approval) substitute—

Approval

(1159)

(1) The Treasury may by regulations make provision about the approval of a company for an accounting period for the purposes of section 1158(1)(b), including provision about—

(a) applications for approval,

(b) the determination of applications for approval,

(c) requirements to be met by the company while approved,

(d) the withdrawal of approval by notice, or

(e) the consequences of the withdrawal of approval.

(2) The regulations may, in particular—

(a) include provision under which an application for approval—

(i) is to be made by reference to the accounting period in which the application is made or such earlier or later accounting period as may be specified in the application, and

(ii) is to constitute an application for approval for that and all subsequent accounting periods,

(b) specify the form and content of, and information to accompany, an application,

(c) permit or require the Commissioners to grant or refuse an application where conditions specified in the regulations are met (or appear to the Commissioners to be met) in relation to the company,

(d) permit or require the Commissioners to withdraw approval where—

(i) conditions specified in the regulations are met (or appear to the Commissioners to be met) in relation to the company, or

(ii) the company has failed to comply with requirements imposed by the regulations,

(e) include provision prohibiting a company from which approval has been withdrawn from reapplying, or

(f) include provision under which approval may or must be withdrawn in relation to an accounting period that ends before the notice withdrawing approval is given.

(3) Regulations under this section—

(a) may make different provision for different cases or purposes, and

(b) may make incidental, consequential, supplementary or transitional provision.

(4) A statutory instrument containing the first regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(5) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

(6) In this section “ the Commissioners ” means the Commissioners for Her Majesty's Revenue and Customs.

(4) Omit sections 1160 to 1165 (which relate to the interpretation of the provisions replaced by this section).

(5) In Schedule 4 (index of defined expressions), omit the following entries—

“company (in Chapter 4 of Part 24)”

“scheme of reconstruction (in Chapter 4 of Part 24)”

“shares (in Chapter 4 of Part 24)”.

(6) The amendments made by this section have effect in relation to accounting periods beginning on or after such day as the Treasury may by order appoint.

Section 50 Power to make provision about treatment of transactions

In Part 13 of CTA 2010 (special types of company etc), after Chapter 3 insert—

Investment trusts

Power to make provision about treatment of transactions

(622A)

(1) The Treasury may by regulations provide that a transaction of a specified kind entered into by an investment trust is to be treated for the purposes of the Corporation Tax Acts as entered into by it otherwise than in the course of a trade.

(2) Regulations under this section—

(a) may make different provision for different cases or purposes, and

(b) may make incidental, consequential, supplementary or transitional provision.

(3) A statutory instrument containing the first regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(4) Any other statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

(5) In this section “ specified ” means specified in regulations under this section.