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(1) Schedule 6 to this Act (which makes provision for a new tax that is to be known as climate change levy) shall have effect.
(2) Schedule 7 to this Act (climate change levy: consequential amendments) shall have effect.
(3) Part V of Schedule 6 to this Act (registration for the purposes of climate change levy) shall not come into force until such date as the Treasury may appoint by order made by statutory instrument; and different days may be appointed under this subsection for different purposes.
Income tax shall be charged for the year 2000-01, and for that year—
(a) the starting rate shall be 10%,
(b) the basic rate shall be 22%, and
(c) the higher rate shall be 40%.
(1) Section 1A of the Taxes Act 1988 (application of lower rate or Schedule F ordinary rate to income from savings and distributions) is amended as follows.
(2) In subsection (1)(b) (income of individuals to which those rates do not apply), after the words “is not” insert “—
(i) savings income falling within section 1(2)(aa), or
(ii)”.
(3) After subsection (1) insert—
“(1AA) In subsection (1)(b)(i) above “savings income” means income to which this section applies other than—
(a) income chargeable under Schedule F, or
(b) equivalent foreign income falling within subsection (3)(b) below and chargeable under Case V of Schedule D.”.
(4) This section has effect for the year 2000-01 and subsequent years and shall be deemed to have had effect for the year 1999-00.
(1) In section 4 of the Taxes Act 1988 (construction of references in Income Tax Acts to deduction of tax), after subsection (1A) (which provides for deduction at lower rate from savings and distributions) insert—
“(1B) To the extent that section 118E (paying and collecting agents: deduction of tax) applies in relation to foreign dividend income—
(a) subsections (1) and (1A) above shall not apply, and
(b) any provision of that section of the kind mentioned in subsection (1) above shall be construed as referring to deduction or payment of income tax at the Schedule F ordinary rate in force for the relevant year of assessment.
For this purpose “foreign dividend income” means any such dividend or other distribution of a company not resident in the United Kingdom as would be chargeable under Schedule F if the company were resident in the United Kingdom.”.
(2) This section has effect for the year 2000-01 and shall be deemed to have had effect for the year 1999-00.
(1) In section 257AA(2) of the Taxes Act 1988 (which specifies the amount by reference to which the children’s tax credit is calculated) for “£4,160” substitute “£4,420”.
(2) This section has effect for the year 2001-02 and subsequent years of assessment.
Corporation tax shall be charged for the financial year 2001 at the rate of 30%.
For the financial year 2000—
(a) the small companies' rate shall be 20%, and
(b) the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be one fortieth.
(1) In section 4 of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 (rates of capital gains tax), after subsection (1AA) insert—
“(1AB) If (after allowing for any deductions in accordance with the Income Tax Acts) an individual has no income for a year of assessment or his total income for the year is less than the starting rate limit, then—
(a) if the amount on which he is chargeable to capital gains tax does not exceed the unused part of his starting rate band, the rate of capital gains tax in respect of gains accruing to him in the year shall be equivalent to the starting rate;
(b) if the amount on which he is chargeable to capital gains tax exceeds the unused part of his starting rate band, the rate of capital gains tax in respect of such gains accruing to him in the year as correspond to the unused part shall be equivalent to the starting rate.
(1AC) The references in subsection (1AB) above to the unused part of an individual’s starting rate band are to the amount by which the starting rate limit exceeds his total income (as reduced by any deductions made in accordance with the Income Tax Acts).”.
(2) This section has effect for the year 2000-01 and subsequent years of assessment.
(1) Where in accordance with a scheme approved under section 202 of the Taxes Act 1988 (donations to charity: payroll deduction scheme) an agent is to pay to a charity any sum which—
(a) is withheld by an employer from a payment which an employee is entitled to receive; and
(b) is paid by the employer to the agent,
the agent shall, within a period prescribed by regulations made by the Treasury, pay a supplement equal to 10% of that sum to the charity.
(2) On a claim made by an agent in such form as the Board may prescribe, the Board shall pay to the agent out of money provided by Parliament—
(a) such amounts as are required—
(i) to fund the payment of supplements falling to be paid by him; or
(ii) to reimburse him for supplements paid by him the payment of which has not been so funded; and
(b) in the case of an agent which is a charity, an amount which is equal to 10% of the aggregate of sums which—
(i) are withheld and paid as mentioned in paragraphs (a) and (b) of subsection (1) above; and
(ii) are sums to which the agent is itself entitled in its capacity as a charity.
(3) The Treasury may by regulations make provision—
(a) requiring agents to notify the Board of any failures of theirs to comply with subsection (1) above, and of the reasons for those failures;
(b) requiring agents to keep records of supplements paid by them under that subsection; and
(c) for the assessment and recovery under the Taxes Acts of amounts paid to agents under subsection (2) above which ought not to have been so paid.
The regulations may contain such supplementary and incidental provision as appears to the Treasury necessary or expedient.
(4) In this section—
“agent” means any such person or charity as is mentioned in subsection (4) of section 202 of the Taxes Act 1988;
“employee” and “employer” shall be construed in accordance with subsection (1) of that section;
“charity” has the same meaning as in section 506 of that Act and includes each of the bodies mentioned in section 507 of that Act;
“the Taxes Acts” has the same meaning as in the [1970 c. 9.] Taxes Management Act 1970.
(5) In section 202 of the Taxes Act 1988—
(a) in subsection (6), the words “must not be paid by the employee under a covenant” shall cease to have effect;
(b) subsection (7) shall cease to have effect; and
(c) in subsection (11), in the definition of “charity”, after “section 506” there shall be inserted “and includes each of the bodies mentioned in section 507”.
(6) Subsections (1) to (4) above shall have effect in relation to supplements or other amounts payable in respect of sums withheld on or after 6th April 2000 and before 6th April 2003; and no claim under subsection (2) above shall be entertained if made on or after 6th April 2004.
(7) Subsection (5) above shall have effect in relation to sums withheld on or after 6th April 2000.
(1) Section 25 of the [1990 c. 29.] Finance Act 1990 (donations to charity by individuals) shall be amended in accordance with subsections (2) to (7) below.
(2) In subsection (1)(c), for “an appropriate certificate” there shall be substituted “an appropriate declaration”.
(3) In subsection (2)—
(a) paragraphs (c) and (g) shall cease to have effect;
(b) in paragraph (e), for “two and a half per cent of the amount of the gift” there shall be substituted “the limit imposed by subsection (5A) below”; and
(c) for paragraph (i) there shall be substituted—
“(i) either—
(i) at the time the gift is made, the donor is resident in the United Kingdom or performs duties which by virtue of section 132(4)(a) of the Taxes Act 1988 (Crown employees serving overseas) are treated as being performed in the United Kingdom; or
(ii) the grossed up amount of the gift would, if in fact made, be payable out of profits or gains brought into charge to income tax or capital gains tax.”.
(4) For subsection (3) there shall be substituted—
“(3) The reference in subsection (1)(c) above to an appropriate declaration is a reference to a declaration which—
(a) is given in such manner as may be prescribed by regulations made by the Board; and
(b) contains such information and such statements as may be so prescribed.
(3A) Regulations made for the purposes of subsection (3) above may—
(a) provide for declarations to have effect, to cease to have effect or to be deemed never to have had effect in such circumstances and for such purposes as may be prescribed by the regulations;
(b) require charities to keep records with respect to declarations given to them by donors; and
(c) make different provision for declarations made in a different manner.”.
(5) After subsection (5) there shall be inserted—
“(5A) The limit imposed by this subsection is—
(a) where the amount of the gift does not exceed £100, 25 per cent of the amount of the gift;
(b) where the amount of the gift exceeds £100 but does not exceed £1,000, £25;
(c) where the amount of the gift exceeds £1,000, 2.5 per cent of the amount of the gift.
(5B) Where a benefit received in consequence of making a gift—
(a) consists of the right to receive benefits at intervals over a period of less than twelve months;
(b) relates to a period of less than twelve months; or
(c) is one of a series of benefits received at intervals in consequence of making a series of gifts at intervals of less than twelve months,
the value of the benefit shall be adjusted for the purposes of subsection (4) above and the amount of the gift shall be adjusted for the purposes of subsection (5A) above.
(5C) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a gift which is one of a series of gifts made at intervals of less than twelve months, the amount of the gift shall be adjusted for the purposes of subsection (5A) above.
(5D) Where the value of a benefit, or the amount of a gift, falls to be adjusted under subsection (5B) or (5C) above, the value or amount shall be multiplied by 365 and the result shall be divided by—
(a) in a case falling within subsection (5B)(a) or (b) above, the number of days in the period of less than twelve months;
(b) in a case falling within subsection (5B)(c) or (5C) above, the average number of days in the intervals of less than twelve months;
and the reference in subsection (5B) above to subsection (4) above is a reference to that subsection as it applies for the purposes of subsection (2)(e) above.
(5E) In determining whether a gift to a charity falling within subsection (5F) below is a qualifying donation, there shall be disregarded the benefit of any right of admission received in consequence of the making of the gift—
(a) to view property the preservation of which is the sole or main purpose of the charity; or
(b) to observe wildlife the conservation of which is the sole or main purpose of the charity;
but this subsection shall not apply unless the opportunity to make gifts which attract such a right is available to members of the public.
(5F) A charity falls within this subsection if its sole or main purpose is the preservation of property, or the conservation of wildlife, for the public benefit.
(5G) In subsection (5E) above “right of admission” refers to admission of the person making the gift (or any member of his family who may be admitted because of the gift) either free of the charges normally payable for admission by members of the public, or on payment of a reduced charge.”.
(6) For subsections (6) to (9) there shall be substituted—
“(6) Where any gift made by the donor in a year of assessment is a qualifying donation, then, for that year—
(a) the Income Tax Acts and the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 shall have effect, in their application to him, as if—
(i) the gift had been made after deduction of income tax at the basic rate; and
(ii) the basic rate limit were increased by an amount equal to the grossed up amount of the gift;
(b) the provisions mentioned in subsection (7) below shall have effect, in their application to him, as if any reference to income tax which he is entitled to charge against any person included a reference to the tax treated as deducted from the gift; and
(c) to the extent, if any, necessary to ensure that he is charged to an amount of income tax and capital gains tax equal to the tax treated as deducted from the gift, he shall not be entitled to relief under Chapter I of Part VII of the Taxes Act 1988;
but paragraph (a)(ii) above shall not apply for the purposes of any computation under section 550(2)(a) or (b) of that Act (relief where gain charged at a higher rate).
(7) The provisions referred to in subsection (6)(b) above are—
(a) section 289A(5)(e) of the Taxes Act 1988 (relief under enterprise investment scheme);
(b) section 796(3) of that Act (credit for foreign tax); and
(c) paragraph 1(6)(f) of Schedule 15B to that Act (venture capital trusts).
(8) Where the tax treated as deducted from a gift by virtue of subsection (6) above exceeds the amount of income tax and capital gains tax with which the donor is charged for the year of assessment, the donor shall be assessable and chargeable with income tax at the basic rate on so much of the gift as is necessary to recover an amount of tax equal to the excess.
(9) In determining for the purposes of subsection (8) above the total amount of income tax and capital gains tax with which the donor is charged for the year of assessment, there shall be disregarded—
(a) any tax charged at the basic rate by virtue of—
(i) section 348 of the Taxes Act 1988 (read with section 3 of that Act); or
(ii) section 349 of that Act (read with section 350 of that Act);
(b) any tax treated as having been paid under—
(i) section 233(1)(a) of that Act (taxation of certain recipients of distributions);
(ii) section 249(4)(a) of that Act (stock dividends treated as income); or
(iii) section 547(5)(a) of that Act (method of charging life policy gain to tax);
(c) any relief to which section 256(2) of that Act applies (relief by way of income tax reduction);
(d) any relief under—
(i) section 347B of that Act (relief for maintenance payments);
(ii) section 788 of that Act (relief by agreement with other countries); or
(iii) section 790(1) of that Act (unilateral relief);
(e) any set off of tax deducted, or treated as deducted, from income other than—
(i) tax treated as deducted from income by virtue of section 421(1)(a) of that Act (taxation of borrower when loan released etc); or
(ii) tax treated as deducted from a relevant amount within the meaning of section 699A of that Act (untaxed sums comprised in the income of an estate) except to the extent that the relevant amount is or would be paid in respect of a distribution chargeable under Schedule F; and
(f) any set off of tax credits.
(9A) For the purposes of sections 257(5) and 257A(5) of the Taxes Act 1988 (age related allowances), the donor’s total income shall be treated as reduced by the aggregate amount of gifts from which tax is treated as deducted by virtue of subsection (6) above.”.
(7) In subsection (12), paragraphs (b) and (e) and the word “and” immediately preceding paragraph (e) shall cease to have effect.
(8) In subsections (1)(b) and (3)(b) of section 257BB of the Taxes Act 1988 (transfer of relief under section 257A where relief exceeds income), after “section 256(2)(b)” there shall be inserted “(read with section 25(6)(c) of the [1990 c. 29.] Finance Act 1990 where applicable)”.
(9) In paragraph 4(1)(b) of Schedule 13B to that Act (children’s tax credit), after “section 256(2)(b)” there shall be inserted “(read with section 25(6)(c) of the [1990 c. 29.] Finance Act 1990 where applicable)”.
(10) This section has effect in relation to—
(a) gifts made on or after 6th April 2000 which are not covenanted payments; and
(b) covenanted payments falling to be made on or after that date;
and any regulations made under subsection (3) of section 25 of the [1990 c. 29.] Finance Act 1990 (as substituted by subsection (4) above) within three months of the passing of this Act may be so made as to apply to any payments in relation to which this section has effect.
(1) Section 339 of the Taxes Act 1988 (charges on income: donations to charity) shall be amended in accordance with subsections (2) to (8) below.
(2) In subsection (1), for paragraph (a) there shall be substituted—
“(a) a payment which, by reason of any provision of the Taxes Acts (within the meaning of the Management Act) except section 209(4), is to be regarded as a distribution; and”.
(3) Subsections (2), (3), (3A), (3F), (6), (7) and (8) shall cease to have effect.
(4) In subsection (3B)(b), for “two and a half per cent. of the amount given after deducting tax under section 339(3)” there shall be substituted “the limit imposed by subsection (3DA) below”.
(5) After subsection (3D) there shall be inserted—
“(3DA) The limit imposed by this subsection is—
(a) where the amount of the payment does not exceed £100, 25 per cent of the amount of the payment;
(b) where the amount of the payment exceeds £100 but does not exceed £1,000, £25;
(c) where the amount of the payment exceeds £1,000, 2.5 per cent of the amount of the payment.
(3DB) Where a benefit received in consequence of making a payment—
(a) consists of the right to receive benefits at intervals over a period of less than twelve months;
(b) relates to a period of less than twelve months; or
(c) is one of a series of benefits received at intervals in consequence of making a series of payments at intervals of less than twelve months,
the value of the benefit shall be adjusted for the purposes of subsection (3C) above and the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
(3DC) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a payment which is one of a series of payments made at intervals of less than twelve months, the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
(3DD) Where the value of a benefit, or the amount of a payment, falls to be adjusted under subsection (3DB) or (3DC) above, the value or amount shall be multiplied by 365 and the result shall be divided by—
(a) in a case falling within subsection (3DB)(a) or (b) above, the number of days in the period of less than twelve months;
(b) in a case falling within subsection (3DB)(c) or (3DC) above, the average number of days in the intervals of less than twelve months;
and the reference in subsection (3DB) to subsection (3C) above is a reference to that subsection as it applies for the purposes of subsection (3B) above.”.
(6) For subsection (4) there shall be substituted—
“(4) Where a company gives a sum of money to a charity, the gift shall in the hands of the charity be treated for the purposes of this Act as if it were an annual payment.”.
(7) For subsection (7AA) there shall be substituted—
“(7AA) Where—
(a) a qualifying donation to a charity is made by a company which is wholly owned by a charity, and
(b) the company makes a claim for the donation, or any part of it, to be deemed for the purposes of section 338 to be a charge on income paid in an accounting period falling wholly or partly within the period of nine months ending with the date of the making of the donation,
the donation or part shall be deemed for those purposes to be a charge on income paid in that accounting period, and not in any later period.
A claim under this subsection must be made within the period of two years immediately following the accounting period in which the donation is made, or such longer period as the Board may allow.”.
(8) In subsection (9), the words “in subsections (1) to (4) above includes” shall cease to have effect.
(9) In subsection (1) of section 209 of the Taxes Act 1988 (meaning of “distribution”), for “section 339(6) and any other express exceptions” there shall be substituted “any express exceptions”.
(10) In subsection (2)(a) of section 338 of that Act (allowance of charges on income and capital), after “company” there shall be inserted “or payments falling within paragraph (b) below”.
(11) This section has effect in relation to payments made on or after 1st April 2000; and—
(a) so much of an accounting period as falls before that date; and
(b) so much of it as falls after 31st March 2000,
shall be treated as separate accounting periods for the purposes of the amendment made by subsection (5) above.
(1) In subsection (5)(b) of section 338 of the Taxes Act 1988 (allowances of charges on income and capital), for “a covenanted donation to charity” there shall be substituted “a qualifying donation”.
(2) In section 347A of that Act (annual payments and interest: general rule), subsections (2)(b), (7) and (8) shall cease to have effect.
(3) In subsection (3) of section 348 of that Act (payments out of profits or gains brought into charge to income tax: deductions of tax), at the end there shall be inserted “or to any payment which is a qualifying donation for the purposes of section 25 of the [1990 c. 29.] Finance Act 1990”.
(4) In subsection (1) of section 349 of that Act (payments not out of profits or gains brought into charge to income tax, and annual interest), at the end there shall be inserted “or to any payment which is a qualifying donation (within the meaning of section 339) or a qualifying donation for the purposes of section 25 of the [1990 c. 29.] Finance Act 1990”.
(5) In subsection (6) of section 505 of that Act (charities: general), the words “and, for this purpose, all covenanted payments to charity (within the meaning of section 347A(7)) shall be treated as a single item” shall cease to have effect.
(6) In subsection (9) of section 660A of that Act (income arising under a settlement where settlor retains an interest), for paragraph (b) there shall be substituted—
“(b) qualifying donations for the purposes of section 25 of the Finance Act 1990.”.
(7) Section 59 of the [1989 c. 26.] Finance Act 1989 (covenanted subscriptions) shall cease to have effect.
(8) Where a deed of covenant executed by an individual before 6th April 2000 provides for the payment of specified amounts, any amount payable under the deed on or after that date shall be determined as if the individual were entitled to deduct tax from that amount at the basic rate.
(9) This section shall have effect in relation to covenanted payments—
(a) falling to be made by individuals on or after 6th April 2000; or
(b) made by companies on or after 1st April 2000.
(1) In section 48 of the [1998 c. 36.] Finance Act 1998 (gifts of money for relief in poor countries), subsections (3), (6) and (7) shall cease to have effect.
(2) In subsection (4) of that section—
(a) in paragraph (a), after “made” there shall be inserted “before 6th April 2000”;
(b) after paragraph (b) there shall be inserted—
“(bb) the subsequent gift, or at least one of the subsequent gifts, is made on or after 6th April 2000;”; and
(c) in paragraph (c), for “appropriate certificate” there shall be substituted “appropriate declaration”.
(3) In subsection (8) of that section, for the definition of “relevant gift” there shall be substituted—
““relevant gift” means a gift to which this section applies—
(a) which satisfies the requirements of subsection (2) of section 25 of the [1990 c. 29.] Finance Act 1990 (as amended by section 39 of the Finance Act 2000); or
(b) which would satisfy those requirements if paragraph (e) of that subsection were disregarded.”.
(1) After section 587A of the Taxes Act 1988 there shall be inserted—
(1) Subsections (2) and (3) below apply where, otherwise than by way of a bargain made at arm’s length, an individual, or a company which is not itself a charity, disposes of the whole of the beneficial interest in a qualifying investment to a charity.
(2) On a claim made in that behalf to an officer of the Board—
(a) the relevant amount shall be allowed—
(i) in the case of a disposal by an individual, as a deduction in calculating his total income for the purposes of income tax for the year of assessment in which the disposal is made;
(ii) in the case of a disposal by a company, as a charge on income for the purposes of corporation tax for the accounting period in which the disposal is made; and
(b) no relief in respect of the disposal shall be given under section 83A or any other provision of the Income Tax Acts;
but paragraph (a)(i) above shall not apply for the purposes of any computation under section 550(2)(a) or (b).
(3) The consideration for which the charity’s acquisition of the qualifying investment is treated by virtue of section 257(2) of the 1992 Act as having been made—
(a) shall be reduced by the relevant amount; or
(b) where that consideration is less than that amount, shall be reduced to nil.
(4) Subject to subsections (5) to (7) below, the relevant amount is an amount equal to—
(a) where the disposal is a gift, the market value of the qualifying investment at the time when the disposal is made;
(b) where the disposal is at an undervalue, the difference between that market value and the amount or value of the consideration for the disposal.
Finance Act 2000