(4) The “applicable period” in a case falling within paragraph (a) or (b) of subsection (1) above is the period—
(a) beginning with the appropriate commencement date, and
(b) ending with the date on which the Commissioners authorise payment of the amount on which the interest is payable.
(5) In subsection (4) above, the “appropriate commencement date”—
(a) in a case where an amount would have been due from the person by way of value added tax in connection with the relevant return, had his input tax and output tax been as stated in that return, means the date on which the Commissioners received payment of that amount; and
(b) in a case where no such payment would have been due from him in connection with that return, means the date on which the Commissioners would, apart from the error, have authorised payment of the amount on which the interest is payable;
and in this subsection “the relevant return” means the return in which the person accounted for, or (as the case may be) ought to have claimed credit for, the amount on which the interest is payable.
(6) The “applicable period” in a case falling within paragraph (c) of subsection (1) above is the period—
(a) beginning with the date on which the payment is received by the Commissioners, and
(b) ending with the date on which they authorise payment of the amount on which the interest is payable.
(7) The “applicable period” in a case falling within paragraph (d) of that subsection is the period—
(a) beginning with the date on which, apart from the error, the Commissioners might reasonably have been expected to authorise payment of the amount on which the interest is payable, and
(b) ending with the date on which they in fact authorise payment of that amount.
(8) In determining in accordance with subsection (4), (6) or (7) above the applicable period for the purposes of subsection (1) above, there shall be left out of account any period referable to the raising and answering of any reasonable inquiry relating to any matter giving rise to, or otherwise connected with, the person’s entitlement to interest under this section.
(9) The Commissioners shall only be liable to pay interest under this section on a claim made in writing for that purpose.
(10) No claim shall be made under this section after the expiry of six years from the date on which the claimant discovered the error or could with reasonable diligence have discovered it.
(11) In this section—
(a) any reference to receiving a payment from the Commissioners includes a reference to the discharge, by way of set-off, of their liability to make it; and
(b) any reference to a return is a reference to a return required to be made in accordance with paragraph 2 of Schedule 7 to this Act.
(12) This section confers a right to interest in respect of periods before as well as after its coming into force.
(1) Any interest payable by the Commissioners (whether under an enactment or instrument or otherwise) to a person on a sum due to him under or by virtue of—
(a) any provision of this Act,
(b) section 25 of the [1985 c. 54.] Finance Act 1985, or
(c) section 24 of the [1989 c. 26.] Finance Act 1989,
shall be treated as an amount due to him by way of credit under section 14(5) above.
(2) Subsection (1) above shall be disregarded for the purpose of determining a person’s entitlement to interest or the amount of interest to which he is entitled.”
(2) In section 40(1) of that Act (which specifies the matters in respect of which an appeal lies to a value added tax tribunal against a decision of the Commissioners) after paragraph (h) there shall be inserted—
“(ha) any liability of the Commissioners to pay interest under section 38A above or the amount of interest so payable;”.
(1) In section 14 of the Finance Act 1985 (serious misdeclaration or neglect resulting in understatements or overclaims) in subsection (1) (liability to penalty equal to a percentage of the tax which would have been lost) for “30 per cent.” there shall be substituted “20 per cent.”
(2) Subject to subsection (3) below, this section shall apply where a penalty is assessed on or after 20th March 1991 in relation to a prescribed accounting period beginning on or after 1st April 1990.
(3) This section shall not apply in the case of a supplementary assessment if the original assessment was made before 20th March 1991.
(1) In section 5A of the [1983 c. 53.] Car Tax Act 1983 (relief where vehicle leased to the handicapped) after subsection (2) (which imposes a charge to tax where vehicle supplied by the lessor in certain circumstances) there shall be inserted—
“(2A) Subsection (2)(b) above shall not apply where at the time of the supply the lessor is—
(a) a charity, or
(b) a person used by a charity for the purpose of making supplies which attract relief under this section.”
(2) This section shall apply in relation to supplies made on or after the day on which this Act is passed.
(1) Section 7 of the [1983 c. 53.] Car Tax Act 1983 (remission of tax on certain vehicles) shall be amended as follows.
(2) After subsection (4) there shall be inserted—
“(4A) Regulations under this Act may make provision for enabling the Commissioners to remit the tax on a chargeable vehicle or, if the tax has been paid, to repay it, subject in either case to such conditions as they think necessary for the protection of the revenue, where—
(a) subsection (4B) below applies, and
(b) such other conditions are satisfied as may be prescribed by the regulations.
(4B) This subsection applies where a person registered under this Act—
(a) makes the vehicle in the United Kingdom and appropriates it to his own use,
(b) imports the vehicle into the United Kingdom and registers it, or
(c) acquires the vehicle in the United Kingdom in an unused condition from another,
and, at the time he appropriates, registers or, as the case may be, acquires the vehicle, he intends it to be used only by him or on his behalf and only for the purposes of commercial or industrial research.”
(3) In subsection (5) (conditions which may be imposed) after “subsection (4)” there shall be inserted “or (4A)”.
(4) In subsection (6) (recovery of tax where breach of condition)—
(a) for “has been remitted on a vehicle under subsection (4) above” there shall be substituted “on a vehicle has been—
(a) remitted under subsection (4) above, or
(b) remitted or repaid under subsection (4A) above,”;
(b) after “remission” there shall be inserted “or, as the case may be, an amount of tax equal to that repaid”.