Made | 20th July 2007 | ||
Laid before Parliament | 23rd July 2007 | ||
Coming into force | 6th August 2007 |
(2) In this Part of this Schedule references to section 688A, however expressed, are references to section 688A of ITEPA.
Relevant contributions debts of managed service companies
29B.
—(1) A managed service company has a relevant contributions debt if—
(2) Condition A is met if—
(3) Condition B is met if—
(4) Condition C is met if—
(5) Condition D is met if—
(6) Condition E is met if—
Transfer of debt of managed service company
29C.
—(1) This paragraph applies if—
(2) HM Revenue and Customs may make a direction authorising the recovery of the specified amount from the persons specified in section 688A(2) (managed service companies: recovery from other persons).
(3) Upon the making of a direction under sub-paragraph (2), the persons specified in section 688A(2) become jointly and severally liable for the relevant contributions debt, but subject to what follows.
(4) HM Revenue and Customs may not recover the specified amount from any person in accordance with a direction made under sub-paragraph (2) until they have served a notice (a "transfer notice") on the person in question (the "transferee").
(5) If an officer of Revenue and Customs is of the opinion that it is appropriate to do so, HM Revenue and Customs may accept an amount less than the specified amount (the "lower amount") from a transferee; but this acceptance shall not prejudice the recovery of the specified amount from any other transferee.
(6) HM Revenue and Customs may not serve a transfer notice on a person mentioned in section 688A(2)(c), or on a paragraph (c) associate, if the relevant contributions debt is incurred before 6th January 2008.
(7) HM Revenue and Customs may not serve a transfer notice on a person mentioned in section 688A(2)(c), or on a paragraph (c) associate, unless an officer of Revenue and Customs certifies that, in his opinion, it is impracticable to recover the specified amount from persons mentioned in paragraphs (a) and (b) of section 688A(2) and from paragraph (b) associates.
(8) In determining, for the purposes of sub-paragraph (7), whether it is impracticable to recover the specified amount from the persons mentioned in paragraphs (a) and (b) of section 688A(2) and from paragraph (b) associates the officer of Revenue and Customs may have regard to all managed service companies in relation to which a person is a person mentioned in paragraph (a) or (b) of section 688A(2) or a paragraph (b) associate.
(9) In determining which of the persons mentioned in section 688A(2)(c) and which of the paragraph (c) associates are to be served with transfer notices and the amount of those notices, HM Revenue and Customs must have regard to the degree and extent to which those persons are persons who (directly or indirectly) have encouraged or been actively involved in the provision by the managed service company of the services of the individual mentioned in that provision.
Time limits for issue of transfer notices
29D.
—(1) A transfer notice must be served before the end of the period specified in this paragraph.
(2) Sub-paragraphs (3) to (7) apply if the transfer notice is served on a person mentioned in paragraph (a) or (b) of section 688A(2) or on a paragraph (b) associate.
(3) In a case in which condition A in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which the decision became final and conclusive.
(4) In a case in which condition B in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs received the return delivered under paragraph 22.
(5) In a case in which condition C in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs prepare the certificate under paragraph 14(1).
(6) In a case in which condition D in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs serve notice to the employer under paragraph 15(1).
(7) In a case in which condition E in paragraph 29B is met, the transfer notice must be served before the end of a period of 12 months beginning with the date on which HM Revenue and Customs carry out the inspection of the employer's contribution records under paragraph 26.
(8) If the transfer notice is served on a person mentioned in paragraph (c) of section 688A(2), or on a paragraph (c) associate, the transfer notice must be served before the end of a period of there months beginning with the date on which the officer of Revenue and Customs certifies the matters specified in paragraph 29C(7).
Contents of transfer notice
29E.
—(1) A transfer notice must contain the following information—
(l) the specified amount;
(m) the tax periods to which the specified amount relates;
(n) if the tax periods to which the specified amount relates are comprised in more than one tax year, the apportionment of the specified amount among those tax years;
(o) the address to which payment must be sent;
(p) the address to which an appeal must be sent.
(2) The transfer notice may specify the lower amount if HM Revenue and Customs are prepared to accept the lower amount from the transferee.
(3) The transfer notice must also contain a statement, made by the officer of Revenue and Customs serving the notice, that in his opinion the specified amount is irrecoverable from the managed service company within a reasonable period.
Payment of the specified amount
29F.
—(1) If a transfer notice is served, the transferee must pay the specified amount to HM Revenue and Customs at the address specified in the transfer notice.
(2) The transferee must pay the specified amount within 30 days beginning with the date on which the transfer notice is served (the "specified period").
(3) If a transfer notice is served on a person mentioned in paragraph (a) or (b) of section 688A(2), or on a paragraph (b) associate, the specified amount carries interest from the reckonable date until the date on which payment is made.
(4) If a transfer notice is served on a person mentioned in paragraph (c) of section 688A(2), or on a paragraph (c) associate, the specified amount carries interest from the day following the expiry of the specified period until the date on which payment is made.
Appeals
29G.
—(1) A transferee may appeal against the transfer notice.
(2) A notice of appeal must—
(3) The grounds of appeal are any of the following—
(4) Sub-paragraph (3)(a) is subject to paragraph 29H(4).
(5) The appeal is to the Special Commissioners.
Procedure on appeals
29H.
—(1) On an appeal the Special Commissioners shall uphold or quash the transfer notice.
(2) The general rule in sub-paragraph (1) is subject to the following qualifications.
(3) In the case of the ground of appeal specified in paragraph 29G(3)(a), the Special Commissioners shall investigate the matter and shall—
(4) If the Special Commissioners determine the amount of the relevant contributions debt of a managed service company under sub-paragraph (3), that amount is conclusive as to the amount of that relevant contributions debt in any later appeal relating to that debt.
(5) In the case of the ground of appeal specified in paragraph 29G(3)(f), the Special Commissioners may reduce the amount specified in the transfer notice to an amount determined in accordance with the equation—
RA = | × | AS | |
TP |
(7) In the case of the ground of appeal specified in paragraph 29G(3)(k), the Special Commissioners may reduce the amount specified in the transfer notice to such amount as in their opinion is just and reasonable.
Withdrawal of transfer notices
29J.
—(1) A transfer notice shall be withdrawn if the Special Commissioners quash it.
(2) A transfer notice may be withdrawn if, in the opinion of an officer of Revenue and Customs, it is appropriate to do so.
(3) If a transfer notice is withdrawn, HM Revenue and Customs must give written notice of that fact to the transferee.
Application of Part 6 of the Taxes Management Act 1970
29K.
—(1) For the purposes of this Chapter, Part 6 of the Taxes Management Act 1970 (collection and recovery)[9] applies as if—
and that Part of that Act applies with the modification specified in sub-paragraph (2) and any other necessary modifications.
(2) Summary proceedings for the recovery of the specified amount may be brought in England and Wales or Northern Ireland at any time before the end of a period of 12 months beginning immediately after the expiry of the period mentioned in paragraph 29F(2).
(3) The specified amount is one cause of action or one matter of complaint for the purposes of proceedings under sections 65, 66 and 67 of the Taxes Management Act 1970 (magistrates' courts, county courts and inferior courts in Scotland).
(4) But sub-paragraph (3) does not prevent the bringing of separate proceedings for the recovery of each of the amounts which the transferee is liable to pay for any tax period.
Repayment of surplus amounts
29L.
—(1) This paragraph applies if the amounts paid to HM Revenue and Customs in respect of a relevant contributions debt exceed the specified amount.
(2) HM Revenue and Customs shall repay the difference on a just and equitable basis and without unreasonable delay.
(3) Interest on any sum repaid shall be paid in accordance with paragraph 18 (payment of interest on repaid earnings-related contributions).".
Mike Eland
Dave Hartnett
Two of the Commissioners for Her Majesty's Revenue and Customs
20th July 2007
[3] The functions of the Commissioners of Inland Revenue ("the former Commissioners") were transferred to the Commissioners for Her Majesty's Revenue and Customs by section 5 of the Commissioners for Revenue and Customs Act 2005 (c. 11). Section 50 of that Act provides that, insofar as is appropriate in consequence of section 5, a reference to the former Commissioners (in whatever terms) in other enactments is to be read as a reference to the Commissioners for Her Majesty's Revenue and Customs.back
[4] S.I. 2001/1004: there are amendments, but none is relevant for present purposes.back
[6] Section 61B was inserted by paragraph 4 of Schedule 3 to the Finance Act 2007 (c. 11).back
[7] Section 688A was inserted by paragraph 6 pf Schedule 3 to the Finance Act 2007.back
[8] Regulation 156(3) of S.I. 2001/1004 provides a rule of construction for the application in Northern Ireland of references to enactments not applying there.back