Office of Public Sector Information
(1) Income tax shall be charged for the year 1990-91, and—
(a) the basic rate shall be 25 per cent.;
(b) the basic rate limit shall be £20,700;
(c) the higher rate shall be 40 per cent.; and
(d) section 1(4) of the Taxes Act 1988 (indexation of basic rate limit) shall not apply.
(2) In sections 1(5) and 257C(2) of the Taxes Act 1988, for the words from “between” to the end there shall be substituted the words “during the period beginning with 6th April and ending with 17th May in the year of assessment.”
(3) In section 828 of that Act (orders and regulations), in subsection (4), for “257(11)” there shall be substituted “257C”.
(4) Subsections (2) and (3) above shall have effect for the year 1990-91 and subsequent years of assessment.
In section 265(1) of the Taxes Act 1988, for “£540” there shall be substituted “£1,080”.
Corporation tax shall be charged for the financial year 1990 at the rate of 35 per cent.
(1) For the financial year 1990—
(a) the small companies' rate shall be 25 per cent., and
(b) the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be one-fortieth.
(2) In section 13(3) of that Act (limits of marginal relief), in paragraphs (a) and (b)—
(a) for “£150,000” there shall be substituted “£200,000”, and
(b) for “£750,000” there shall be substituted “£1,000,000”.
(3) Subsection (2) above shall have effect for the financial year 1990 and subsequent financial years; and where by virtue of that subsection section 13 of the Taxes Act 1988 has effect with different relevant maximum amounts in relation to different parts of a company’s accounting period, then for the purposes of that section those parts shall be treated as if they were separate accounting periods and the profits and basic profits of the company for that period shall be apportioned between those parts.
(1) The following section shall be inserted after section 155 of the Taxes Act 1988—
(1) Where a benefit consists in the provision for the employee of care for a child, section 154 does not apply to the benefit to the extent that it is provided in qualifying circumstances.
(2) For the purposes of subsection (1) above the benefit is provided in qualifying circumstances if—
(a) the child falls within subsection (3) below,
(b) the care is provided on premises which are not domestic premises,
(c) the condition set out in subsection (4) below or the condition set out in subsection (5) below (or each of them) is fulfilled, and
(d) in a case where the registration requirement applies, it is met.
(3) The child falls within this subsection if—
(a) he is a child for whom the employee has parental responsibility,
(b) he is resident with the employee, or
(c) he is a child of the employee and maintained at his expense.
(4) The condition is that the care is provided on premises which are made available by the employer alone.
(5) The condition is that—
(a) the care is provided under arrangements made by persons who include the employer,
(b) the care is provided on premises which are made available by one or more of those persons, and
(c) under the arrangements the employer is wholly or partly responsible for financing and managing the provision of the care.
(6) The registration requirement applies where—
(a) the premises on which the care is provided are required to be registered under section 1 of the [1948 c. 53.] Nurseries and Child-Minders Regulation Act 1948 or section 11 of the [1968 c. 34(N.I.)] Children and Young Persons Act (Northern Ireland) 1968, or
(b) any person providing the care is required to be registered under section 71 of the [1989 c. 41.] Children Act 1989 with respect to the premises on which it is provided;
and the requirement is met if the premises are so registered or (as the case may be) the person is so registered.
(7) In subsection (3)(c) above the reference to a child of the employee includes a reference to a stepchild of his.
(8) In this section—
“care” means any form of care or supervised activity, whether or not provided on a regular basis, but excluding supervised activity provided primarily for educational purposes;
“child” means a person under the age of eighteen;
“domestic premises” means any premises wholly or mainly used as a private dwelling;
“parental responsibility” has the meaning given in section 3(1) of the Children Act 1989.”
(2) In section 154(2) of the Taxes Act 1988 for the words “section 155” there shall be substituted the words “sections 155 and 155A”.
(3) This section applies for the year 1990-91 and subsequent years of assessment.
(1) In Schedule 6 to the Taxes Act 1988 (taxation of directors and others in respect of cars) for Part I (tables of flat rate cash equivalents) there shall be substituted—
| Cylinder capacity of car in cubic centimetres | Age of car at end of relevant year of assessment | ||
|---|---|---|---|
| Under 4 years | 4 years or more | ||
| 1400 or less | £1,700 | £1,150 | |
| More than 1400 but not more than 2000 | £2,200 | £1,500 | |
| More than 2000 | £3,550 | £2,350 | |
| Original market value of car | Age of car at end of relevant year of assessment | ||
|---|---|---|---|
| Under 4 years | 4 years or more | ||
| Less than £6,000 | £1,700 | £1,150 | |
| £6,000 or more but less than £8,500 | £2,200 | £1,500 | |
| £8,500 or more but not more than £19,250 | £3,550 | £2,350 | |
| Original market value of car | Age of car at end of relevant year of assessment | ||
|---|---|---|---|
| Under 4 years | 4 years or more | ||
| More than £19,250 but not more than £29,000 | £4,600 | £3,100 | |
| More than £29,000 | £7,400 | £4,900” | |
(2) This section shall have effect for the year 1990-91 and subsequent years of assessment.
Schedule 4 to this Act (which contains provisions about sums paid in respect of travelling expenses) shall have effect.
(1) In section 202(7) of the Taxes Act 1988 (which limits to £480 the deductions attracting relief) for “£480” there shall be substituted “£600”.
(2) This section shall have effect for the year 1990-91 and subsequent years of assessment.
(1) For the purposes of this section, a gift to a charity by an individual (“the donor”) is a qualifying donation if—
(a) it is made on or after 1st October 1990,
(b) it satisfies the requirements of subsection (2) below, and
(c) the donor gives an appropriate certificate in relation to it to the charity.
(2) A gift satisfies the requirements of this subsection if—
(a) it takes the form of a payment of a sum of money;
(b) it is not subject to a condition as to repayment;
(c) it is not a covenanted payment to charity;
(d) it does not constitute a sum falling within section 202(2) of the Taxes Act 1988 (payroll deduction scheme);
(e) neither the donor nor any person connected with him receives a benefit in consequence of making it or, where the donor or a person connected with him does receive a benefit in consequence of making it, the relevant value in relation to the gift does not exceed two and a half per cent. of the amount of the gift and the amount to be taken into account for the purposes of this paragraph in relation to the gift does not exceed £250;
(f) it is not conditional on or associated with, or part of an arrangement involving, the acquisition of property by the charity, otherwise than by way of gift, from the donor or a person connected with him;
(g) the sum paid is not less than £600;
(h) the sum paid does not, when aggregated with any other qualifying donations already made by the donor in the relevant year of assessment, exceed £5,000,000; and
(i) the donor is resident in the United Kingdom at the time the gift is made.
(3) The reference in subsection (1)(c) above to an appropriate certificate is a reference to a certificate which is in such form as the Board may prescribe and contains statements to the following effect—
(a) that the gift satisfies the requirements of subsection (2) above, and
(b) that, either directly or by deduction from profits or gains brought into charge to tax in the relevant year of assessment, the donor has paid or will pay to the Board income tax of an amount equal to income tax at the basic rate for the relevant year of assessment on the grossed up amount of the gift.
(4) For the purposes of subsections (2)(e) above and (5) below, the relevant value in relation to a gift is—
(a) where there is one benefit received in consequence of making it which is received by the donor or a person connected with him, the value of that benefit;
(b) where there is more than one benefit received in consequence of making it which is received by the donor or a person connected with him, the aggregate value of all the benefits received in consequence of making it which are received by the donor or a person connected with him.
(5) The amount to be taken into account for the purposes of subsection (2)(e) above in relation to a gift to a charity is an amount equal to the aggregate of—
(a) the relevant value in relation to the gift, and
(b) the relevant value in relation to each gift already made to the charity by the donor in the relevant year of assessment which is a qualifying donation for the purposes of this section.
(6) Where a gift is a qualifying donation, the Income Tax Acts, except Part IX of the Taxes Act 1988 (annual payments), shall have effect, in their application to the donor, as if the making of the gift were the making of a covenanted payment to charity of an amount equal to the grossed up amount of the gift, being a payment falling to be made at the time the gift is made.
(7) Where the payment which the donor is treated by virtue of subsection (6) above as making would, if in fact made, be payable wholly or partly out of profits or gains brought into charge to income tax, they shall be assessed and charged with income tax on the donor without distinguishing the payment and in respect of so much of them as is equal to the payment and may be deducted in computing his total income the donor shall be charged at the appropriate rate.
(8) Where the payment which the donor is treated by virtue of subsection (6) above as making would, if in fact made, not be payable or not be wholly payable out of profits or gains brought into charge to income tax, the donor shall be assessable and chargeable with income tax at the appropriate rate on the payment, or on so much of it as would not be payable out of profits or gains brought into charge to income tax.
(9) For the purposes of subsections (7) and (8) above the appropriate rate is the basic rate for the year of assessment in which, in accordance with subsection (6) above, the payment falls to be made.
(10) The receipt by a charity of a gift which is a qualifying donation shall be treated for the purposes of the Tax Acts, in their application to the charity, as the receipt, under deduction of income tax at the basic rate for the relevant year of assessment, of an annual payment of an amount equal to the grossed up amount of the gift.
(11) Section 839 of the Taxes Act 1988 applies for the purposes of subsections (2) and (4) above.
(12) For the purposes of this section—
(a) “charity” has the same meaning as in section 506 of the Taxes Act 1988 and includes each of the bodies mentioned in section 507 of that Act;
(b) “covenanted payment to charity” has the meaning given by section 660(3) of the Taxes Act 1988;
(c) “relevant year of assessment”, in relation to a gift, means the year of assessment in which the gift is made;
(d) references, in relation to a gift, to the grossed up amount are to the amount which after deducting income tax at the basic rate for the relevant year of assessment leaves the amount of the gift; and
(e) references to profits or gains brought into charge to income tax are to profits or gains which are treated for the purposes of section 348 of the Taxes Act 1988 as brought into charge to income tax.
(1) Section 339 of the Taxes Act 1988 (charges on income: donations to charity) shall be amended as follows.
(2) In subsection (1) after the word “payment” there shall be inserted the words “of a sum of money”.
(3) In subsection (2) the words “and is not a close company” shall be omitted.
(4) The following subsections shall be inserted after subsection (3)—
“(3A) A payment made by a close company is not a qualifying donation if it is of a sum which leaves less than £600 after deducting income tax under subsection (3) above.
(3B) A payment made by a close company is not a qualifying donation if—
(a) it is made subject to a condition as to repayment, or
(b) the company or a connected person receives a benefit in consequence of making it and either the relevant value in relation to the payment exceeds two and a half per cent. of the amount given after deducting tax under section 339(3) or the amount to be taken into account for the purposes of this paragraph in relation to the payment exceeds £250.
(3C) For the purposes of subsections (3B) above and (3D) below, the relevant value in relation to a payment to a charity is—
(a) where there is one benefit received in consequence of making it which is received by the company or a connected person, the value of that benefit;
(b) where there is more than one benefit received in consequence of making it which is received by the company or a connected person, the aggregate value of all the benefits received in consequence of making it which are received by the company or a connected person.
(3D) The amount to be taken into account for the purposes of subsection (3B)(b) above in relation to a payment to a charity is an amount equal to the aggregate of—
(a) the relevant value in relation to the payment, and
(b) the relevant value in relation to each payment already made to the charity by the company in the accounting period in which the payment is made which is a qualifying donation within the meaning of this section.
(3E) A payment made by a close company is not a qualifying donation if it is conditional on, or associated with, or part of an arrangement involving, the acquisition of property by the charity, otherwise than by way of gift, from the company or a connected person.
(3F) A payment made by a company is not a qualifying donation unless the company gives to the charity to which the payment is made a certificate in such form as the Board may prescribe and containing—
(a) in the case of any company, a statement to the effect that the payment is one out of which the company has deducted tax under subsection (3) above, and
(b) in the case of a close company, a statement to the effect that the payment satisfies the requirements of subsections (3A) to (3E) above.
(3G) A payment made by a company is not a qualifying donation if the company is itself a charity.”
(5) The following subsection shall be inserted after subsection (7)—
“(7A) In subsections (3B) to (3E) above references to a connected person are to a person connected with—
(a) the company, or
(b) a person connected with the company;
and section 839 applies for the purposes of this subsection.”
(6) This section applies in relation to payments made on or after 1st October 1990.
(1) In section 338 of the Taxes Act 1988 (allowance of charges on income and capital) in subsection (2) for the words “to section 339” there shall be substituted the words “to sections 339 and 339A”.
(2) In section 339 of that Act (charges on income: donations to charity) subsection (5) shall be omitted and in subsection (9) for “(5)” there shall be substituted “(4)”.
(3) The following section shall be inserted after section 339 of that Act—
(1) If in a particular accounting period of a company the company has no associated company, a qualifying donation made by the company in that period shall not be allowable under section 338 by virtue of subsection (2)(b) of that section to the extent that, when taken together with any qualifying donations already made by the company in that period, the amount given, after deducting income tax under section 339(3), exceeds £5 million.
(2) If in a particular accounting period of a company the company has one or more associated companies, a qualifying donation made by the company in that period shall not be allowable under section 338 by virtue of subsection (2)(b) of that section to the extent that, when taken together with any qualifying donations already made by the company in that period, the amount given, after deducting income tax under section 339(3), exceeds the appropriate fraction of £5 million.
(3) Subsection (1) or (2) above shall not apply where—
(a) the company concerned is not a close company in the accounting period concerned, and
(b) in that period the maximum amount allowable under section 338 by virtue of subsection (2)(b) of that section (“the allowable maximum”) is (apart from this subsection) less than a sum equal to 3 per cent. of the dividends paid on the company’s ordinary share capital in that period (“the relevant sum”);
and in such a case the allowable maximum in that period shall be the relevant sum.
(4) For the purposes of subsection (2) above, the appropriate fraction is a fraction whose numerator is one and whose denominator is one plus the number of associated companies.
(5) In applying subsections (1) to (4) above to any accounting period of a company, an associated company shall be disregarded if—
(a) it has not carried on any trade or business at any time in that accounting period (or, if an associated company during part only of that accounting period, at any time in that part of that accounting period), or
(b) it is a charity throughout that accounting period (or, if an associated company during part only of that accounting period, throughout that part of that accounting period).
(6) In determining for the purposes of this section how many associated companies a company has got in an accounting period or whether a company has an associated company in an accounting period, an associated company shall be counted even if it was an associated company for part only of the period, and two or more associated companies shall be counted even if they were associated companies for different parts of the period.
(7) For an accounting period of less than 12 months the figure of £5 million specified in subsections (1) and (2) above shall be proportionately reduced.
(8) For the purposes of this section a company is an associated company of another at a particular time if at that time one of the two has control of the other or both are under the control of the same person or persons; and in this subsection “control” shall be construed in accordance with section 416.”
(4) This section applies in relation to accounting periods ending on or after 1st October 1990.
(1) After section 326 of the Taxes Act 1988 there shall be inserted—
(1) Subject to the provisions of section 326B, any interest or bonus payable on a deposit account in respect of a period when it is a tax-exempt special savings account shall not be regarded as income for any income tax purpose.
(2) An account is a “tax-exempt special savings account” for the purposes of this section if the conditions set out in subsections (3) to (9) below and any further conditions prescribed by regulations made by the Board are satisfied when the account is opened; and subject to section 326B it shall continue to be such an account until the end of the period of five years beginning with the day on which it is opened, or until the death of the account-holder if that happens earlier.
(3) The account must be opened on or after 1st January 1991 by an individual aged 18 or more.
(4) The account must be with a building society or an institution authorised under the [1987 c. 22.] Banking Act 1987.
(5) The account must be identified as a tax-exempt special savings account and the account-holder must not simultaneously hold any other such account (with the same or any other society or institution).
(6) The account must not be a joint account.
(7) The account must not be held on behalf of a person other than the account-holder.
(8) The account must not be connected with any other account held by the account-holder or any other person; and for this purpose an account is connected with another if—
(a) either was opened with reference to the other, or with a view to enabling the other to be opened on particular terms, or with a view to facilitating the opening of the other on particular terms, and
(b) the terms on which either was opened would have been significantly less favourable to the holder if the other had not been opened.
(9) There must not be in force a notice given by the Board to the society or institution prohibiting it from operating new tax-exempt special savings accounts.
(1) A tax-exempt special savings account shall cease to be such an account if at any time after it is opened any of the conditions set out in subsections (4) to (8) of section 326A, or any further condition prescribed by regulations made by the Board, is not satisfied, or if any of the events mentioned in subsection (2) below occurs.
(2) The events referred to in subsection (1) above are—
(a) the deposit of more than £3,000 in the account during the period of 12 months beginning with the day on which it is opened, more than £1,800 in any of the succeeding periods of 12 months, or more than £9,000 in total;
(b) a withdrawal from the account which causes the balance to fall below an amount equal to the aggregate of—
(i) all the sums deposited in the account before the time of the withdrawal, and
(ii) an amount equal to income tax at the basic rate on any interest or bonus paid on the account before that time (and for this purpose the basic rate in relation to any interest or bonus is the rate that was the basic rate when the interest or bonus was paid);
(c) the assignment of any rights of the account-holder in respect of the account, or the use of such rights as security for a loan.
(3) If at any time an account ceases to be a tax-exempt special savings account by virtue of subsection (1) above, the Income Tax Acts shall have effect as if immediately after that time the society or institution had credited to the account an amount of interest equal to the aggregate of any interest and bonus payable in respect of the period during which the account was a tax-exempt special savings account.
(1) The Board may make regulations—
(a) prescribing conditions additional to those set out in section 326A which must be satisfied if an account is to be or remain a tax-exempt special savings account;
(b) making provision for the giving by the Board to building societies and other institutions of notices prohibiting them from operating new tax-exempt special savings accounts, including provision about appeals against the giving of notices;
(c) requiring building societies and other institutions operating or proposing to operate tax-exempt special savings accounts to give information or send documents to the Board or to make documents available for inspection;
(d) making provision as to the transfer of tax-exempt special savings accounts from one building society or institution to another;
(e) generally for supplementing the provisions of sections 326A and 326B.
(2) The reference in section 326A to a deposit account shall be taken to include a reference to a share account with a building society, and accordingly that section, section 326B and subsection (1) above shall apply to such an account with the necessary modifications.”
(2) In the Table in section 98 of the [1970 c. 9.] Taxes Management Act 1970 (penalties for failure to comply with notices etc), in each column, before “regulations under section 333” there shall be inserted—
“regulations under section 326C;”.
(3) In section 149B of the [1979 c. 14.] Capital Gains Tax Act 1979, for subsection (4) there shall be substituted—
“(4) Any bonus to which section 326 (certified contractual savings schemes) or 326A (tax-exempt special savings accounts) of the Taxes Act 1988 applies shall be disregarded for all purposes of the enactments relating to capital gains tax.”
In section 326 of the Taxes Act 1988 (income tax relief for SAYE)—
(a) in subsection (1), after paragraph (b) there shall be inserted the words “or
(c) in respect of money paid to an institution authorised under the [1987 c. 22.] Banking Act 1987,”;
(b) in that subsection, for the words “be disregarded” onwards there shall be substituted the words “not be regarded as income for any income tax purpose.”;
(c) in subsection (2), after the words “building society” there shall be inserted the words “or an institution authorised under the Banking Act 1987”; and
(d) after subsection (3) there shall be inserted—
“(4) In this section “certified contractual savings scheme” means, in relation to an institution authorised under the Banking Act 1987, a scheme—
(a) providing for periodical contributions by individuals for a specified period, and
(b) certified by the Treasury as corresponding to a scheme certified under subsection (2) above, and as qualifying for exemption under this section.”
Finance Act 1990