Finance Act 1994 (c. 9)

(The document as of February, 2008)

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(7) On an appeal against a determination under section 100 of this Act of a penalty under subsection (2) or (4) above, neither section 50(6) to (8) nor section 100B(2) of this Act shall apply but the Commissioners may--

(a) if it appears to them that, throughout the period of default, the representative partner had a reasonable excuse for not delivering the return, set the determination aside; or

(b) if it does not so appear to them, confirm the determination.

(8) In this section--

"the filing date" means the day specified in the notice under section 12AA(2) or (3) of this Act;
"the period of default", in relation to any failure to deliver a return, means the period beginning with the filing date and ending with the day before that on which the return was delivered;
"relevant partner" means a person who was a partner at any time during the period in respect of which the return was required. "

27 (1) In subsection (1) of section 95 of the Management Act (incorrect return or accounts for income tax or capital gains tax), for the words "section 8 or 8A or 9 of this Act (or any of those sections" there shall be substituted the words "section 8 or 8A of this Act (or either of those sections".

(2) In subsection (3) of that section, the words from "and the references" to the end shall cease to have effect.

28 After section 95 of the Management Act there shall be inserted the following section--

" 95A Incorrect partnership return or accounts

(1) This section applies where, in the case of a trade, profession or business carried on by two or more persons in partnership--

(a) a partner (the representative partner)--

(i) delivers an incorrect return of a kind mentioned in section 12AA of this Act, or

(ii) makes any incorrect statement or declaration in connection with such a return, or

(iii) submits to an officer of the Board any incorrect accounts in connection with such a return, and

(b) either he does so fraudulently or negligently, or his doing so is attributable to fraudulent or negligent conduct on the part of a relevant partner.

(2) Each relevant partner shall be liable to a penalty not exceeding the difference between--

(a) the amount of income tax or corporation tax payable by him for the relevant period (including any amount of income tax deducted at source and not repayable), and

(b) the amount which would have been the amount so payable if the return, statement, declaration or accounts made or submitted by the representative partner had been correct;

and in determining each such penalty, regard shall be had only to the fraud or negligence, or the fraudulent or negligent conduct, mentioned in subsection (1(b) above.

(3) Where, in respect of the same return, statement, declaration or accounts, penalties under subsection (2) above are determined under section 100 of this Act as regards two or more relevant partners--

(a) no appeal against the determination of any of those penalties shall be brought otherwise than by the representative partner;

(b) any appeal by that partner shall be a composite appeal against the determination of each of those penalties; and

(4) In this section--

"relevant partner" means a person who was a partner at any time during the relevant period;
"relevant period" means the period in respect of which the return was made. "

29 After section 97 of the Management Act there shall be inserted the following section--

" 97AA Failure to produce documents under section 19A

(1) Where a person fails to comply with a notice or requirement under section 19A(2) or (3) of this Act, he shall be liable, subject to subsection (4) below--

(a) to a penalty which shall be £50, and

(b) if the failure continues after a penalty is imposed under paragraph (a) above, to a further penalty or penalties not exceeding the relevant amount for each day on which the failure continues after the day on which the penalty under that paragraph was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).

(2) In subsection (1)(b) above "the relevant amount" means--

(a) in the case of a determination of a penalty by an officer of the Board under section 100 of this Act, £30;

(b) in the case of a determination of a penalty by the Commissioners under section 100C of this Act, £150.

(3) An officer of the Board authorised by the Board for the purposes of section 100C of this Act may commence proceedings under that section for any penalty under subsection (1)(b) above, notwithstanding that it is not a penalty to which subsection (1) of section 100 of this Act does not apply by virtue of subsection (2) of that section.

(4) No penalty shall be imposed under subsection (1) above in respect of a failure within that subsection at any time after the failure has been remedied. "

30 (1) For subsection (2) of section 98B of the Management Act (European Economic Interest Groupings) there shall be substituted the following subsections--

" (2) Subsections (2A) to (4) below apply where a grouping or member of a grouping required by a notice given under section 12A of this Act to deliver a return or other document fails to comply with the notice.

(2A) The grouping or member shall be liable to a penalty not exceeding £300 multiplied by the number of members of the grouping at the time of the failure to comply.

(2B) If, on an application made to them by an officer of the Board, the General or Special Commissioners so direct, the grouping or member shall be liable, for each day on which the failure continues after the day on which the grouping or member is notified of the direction (but excluding any day for which a penalty under this subsection has already been imposed), to a further penalty or penalties not exceeding £60 multiplied by the number of members of the grouping at the end of that day. "

(2) In subsection (3) of that section, for the words "subsection (2)" there shall be substituted the words "subsection (2A) or (2B)".

(3) In subsection (4) of that section, for the words "subsection (2)" there shall be substituted the words "subsections (2A) and (2B)".

31 (1) In subsection (1) of section 100B of the Management Act (appeals against penalty determinations), after the words "subject to" there shall be inserted the words "sections 93, 93A and 95A of this Act".

(2) At the beginning of subsection (2) of that section there shall be inserted the words "Subject to sections 93(8) and 93A(7) of this Act".

32 In subsection (2) of section 103 of the Management Act (time limit for penalties), for the words "the end of the chargeable period" there shall be substituted the words "the 31st January next following the chargeable period".

33 After section 103 of the Management Act there shall be inserted the following section--

" 103A Interest on penalties

A penalty under any of the provisions of Part II or VA or this Part of this Act shall carry interest at the rate applicable under section 178 of the [1989 c. 26.] Finance Act 1989 from the date on which it becomes due and payable until payment. "

Interpretation

34 (1) In subsection (1) of section 118 of the Management Act (interpretation), after the definition of "return" there shall be inserted the following definitions--

" "successor", in relation to a person who has made and delivered a return under section 12AA of this Act, and "predecessor" and "successor", in relation to the successor of such a person, shall be construed in accordance with section 12AC(6) of this Act; " .

(2) Subsection (3) of that section (effect of assessments in partnership name) shall cease to have effect.

(3) Sub-paragraph (2) above, so far as it relates to partnerships whose trades, professions or businesses are set up and commenced before 6th April 1994, has effect as respects the year 1997-98 and subsequent years of assessment.

Claims etc. not included in returns

35 After Schedule 1 to the Management Act there shall be inserted the following Schedule--

" Schedule 1A Claims etc. not Included in Returns

Preliminary

1 In this Schedule--

"claim" means a claim, election or notice as respects which this Schedule applies;
"partnership claim" means a claim made in accordance with section 42(6)(b) of this Act;
"profits" has the same meaning as in section 42 of this Act;
"relevant partner", in relation to a partnership claim, means any person who was a partner at any time during the period in respect of which the claim is made;
"successor", in relation to a person who--
(a)
has made a partnership claim, but
(b)
is no longer a partner or is otherwise no longer available,

means such other partner who may at any time be nominated for the purposes of this paragraph by the majority of the partners at that time, and "predecessor" and "successor", in relation to a person so nominated, shall be construed accordingly.

Making of claims

2 (1) Subject to any provision in the Taxes Acts for a claim to be made to the Board, every claim shall be made to an officer of the Board.

(2) No claim requiring the repayment of tax shall be made unless the claimant has documentary proof that the tax has been paid by deduction or otherwise.

(3) A claim shall be made in such form as the Board may determine.

(4) The form of claim shall provide for a declaration to the effect that all the particulars given in the form are correctly stated to the best of the information and belief of the person making the claim.

(5) The form of claim may require--

(a) a statement of the amount of tax which will be required to be discharged or repaid in order to give effect to the claim;

(b) a return of profits to be made in support of the claim; and

(6) In the case of a claim made by or on behalf of a person who is not resident, or who claims to be not resident or not ordinarily resident or not domiciled, in the United Kingdom, an officer of the Board or the Board may require a statement or declaration in support of the claim to be made by affidavit.

Amendments of claims

3 (1) Subject to sub-paragraph (2) below--

(a) at any time before the end of the period of nine months beginning with the day on which a claim is made, an officer of the Board may by notice to the claimant so amend the claim as to correct any obvious errors or mistakes in the return (whether errors of principle, arithmetical mistakes or otherwise); and

(b) at any time before the end of the period of twelve months beginning with the day on which the claim is made, the claimant may amend his claim by notice to an officer of the Board.

(2) No amendment of a claim may be made under sub-paragraph (1) above at any time during the period--

(a) beginning with the day on which an officer of the Board gives notice of his intention to enquire into the claim, and

(b) ending with the day on which the officer's enquiries into the claim are completed.

Giving effect to claims and amendments

4 (1) An officer of the Board or the Board shall, as soon as practicable after a claim other than a partnership claim is made, or such a claim is amended under paragraph 3 above, give effect to the claim or amendment by discharge or repayment of tax.

(2) An officer of the Board or the Board shall, as soon as practicable after a partnership claim is made, or such a claim is amended under paragraph 3 above, give effect to the claim or amendment, as respects each of the relevant partners, by discharge or repayment of tax.

Power to enquire into claims

5 (1) An officer of the Board may enquire into--

(a) a claim made by any person, or

(b) any amendment made by any person of a claim made by him,

if, before the end of the period mentioned in sub-paragraph (2) below, he gives notice in writing of his intention to do so to that person or, in the case of a partnership claim, any successor of that person.

(2) The period referred to in sub-paragraph (1) above is the period ending with the quarter day next following the first anniversary of the day on which the claim or amendment was made; and the quarter days for the purposes of this subsection are 31st January, 30th April, 31st July and 31st October.

(3) A claim or amendment which has been enquired into under sub-paragraph (1) above shall not be the subject of a further notice under that sub-paragraph.

Power to call for documents for purposes of enquiries

6 (1) This paragraph applies where an officer of the Board gives notice under paragraph 5 above to any person (the claimant) of his intention to enquire into--

(a) a claim made by the claimant, or

(b) any amendment made by the claimant of such a claim.

(2) For the purpose of enquiring into the claim or amendment, the officer may at the same or any subsequent time by notice in writing require the claimant, within such time (which shall not be less than 30 days) as may be specified in the notice--

(a) to produce to the officer such documents as are in the claimant's possession or power and as the officer may reasonably require for the purpose of determining whether and, if so, the extent to which the claim or amendment is incorrect, and

(b) to furnish the officer with such accounts or particulars as he may reasonably require for that purpose.

(3) Subsections (3) to (11) of section 19A of this Act apply for the purposes of this paragraph as they apply for the purposes of that section; and those subsections as so applied shall have effect as if any reference to subsection (2) of that section were a reference to sub-paragraph (2) above.

(4) Where this paragraph applies in relation to a partnership claim, any reference in this paragraph to the claimant includes a reference to any predecessor or successor of his.

Amendments of claims where enquiries made

7 (1) This paragraph applies where an officer of the Board gives notice under paragraph 5(1) above to any person (the claimant) of his intention to enquire into--

(a) a claim made by the claimant, or

(b) any amendment made by the claimant of such a claim.

(2) At any time in the period of 30 days beginning with the day on which the officer's enquiries are completed, the claimant may so amend his claim--

(a) as to eliminate or make good any excess or deficiency which, on the basis of the conclusions stated in the officer's notice under sub-paragraph (4) below, is an excess or deficiency which could be made good or eliminated under sub-paragraph (3) below; or

(b) as to give effect to any amendments to the claim which he has notified to the officer.

(3) If, at any time in the period of 30 days beginning immediately after the period mentioned in sub-paragraph (2) above, the officer is of opinion that--

(a) the claimant's claim is excessive or insufficient, and

(b) in a case falling within sub-paragraph (1)(b) above, the excess or deficiency is attributable (wholly or partly) to the claimant's amendment,

the officer may by notice to the claimant so amend the claim as to eliminate or make good the excess or deficiency or, where paragraph (b) above applies, so much of the excess or deficiency as is so attributable.

(4) Subject to sub-paragraph (5) below, the officer's enquiries shall be treated as completed at such time as he by notice--

(a) informs the claimant that he has completed his enquiries, and

(b) states his conclusions as to the amount which should be the amount of the claimant's claim.

(5) Subsections (6) and (7) of section 28A of this Act apply for the purposes of sub-paragraph (4) above as they apply for the purposes of subsection (5) of that section.

(6) Where this paragraph applies in relation to a partnership claim, any reference in this paragraph to the claimant includes a reference to any predecessor or successor of his.

Giving effect to such amendments

8 (1) An officer of the Board or the Board shall, within 30 days of a claim other than a partnership claim being amended under paragraph 7(2) or (3) above, give effect to the amendment by making such adjustment as may be necessary, whether--

(a) by way of assessment on the claimant, or

(b) by discharge of tax or, on proof to the satisfaction of the officer or the Board that any tax has been paid by the claimant by deduction or otherwise, by repayment of tax.

(2) An officer of the Board or the Board shall, within 30 days of a partnership claim being amended under paragraph 7(2) or (3) above, give effect to the amendment, as respects each of the relevant partners, by making such adjustment as may be necessary, whether--

(a) by way of assessment on the partner, or

(b) by discharge of tax or, on proof to the satisfaction of the officer or the Board that any tax has been paid by the partner by deduction or otherwise, by repayment of tax.

(3) An assessment made under sub-paragraph (1) or (2) above shall not be out of time if it is made within the time mentioned in that sub-paragraph.

Appeals against such amendments

9 (1) An appeal may be brought against an amendment made under paragraph 7(3) above by giving written notice to the officer within 30 days of the amendment being made.

(2) Where, in the case of such an appeal, the issues arising include--

(a) any question arising under section 278 of the principal Act (personal reliefs for non-residents);

(b) any question of residence, ordinary residence or domicile; or

the time for bringing the appeal shall be three months from the making of the amendment under paragraph 7(3) above.

(3) On an appeal under this paragraph, the Commissioners may vary the amendment appealed against whether or not the variation is to the advantage of the appellant.

(4) Where an amendment made under paragraph 7(3) above is varied, whether by the Commissioners or by the order of any court, paragraph 8 above shall (with the necessary modifications) apply in relation to the variation as it applied in relation to the amendment. "

36 (1) In paragraph 1 of Schedule 2 to the Management Act (jurisdiction in appeals on claims)--

(a) in sub-paragraph (1), for the words "the decision of an inspector on a claim" there shall be substituted the words "an amendment of a claim"; and

(b) in sub-paragraphs (1A) and (1B), for the words "the inspector or other officer of the Board" there shall be substituted the words "the officer of the Board".

(2) In paragraph 2 of that Schedule, for the words "from a decision of an inspector on a claim", in both places where they occur, there shall be substituted the words "against an amendment of a claim".

(3) For paragraph 3 of that Schedule there shall be substituted the following paragraph--

" Supplemental

3 Any reference in this Schedule to an amendment of a claim is a reference to such an amendment made under paragraph 6(3) of Schedule 1A to this Act. "

Part II Amendments of Taxes Act 1988

Time limits for claims under section 96

37 (1) In subsection (8) of section 96 of the Taxes Act 1988 (farming and market gardening: relief for fluctuating profits)--

(a) for the words "two years after the end of" there shall be substituted the words "twelve months from the 31st January next following"; and

(b) for the words "before the end of" there shall be substituted the words "before the 31st January next following".

(2) This paragraph has effect where the first of the two years of assessment to which the claim relates is the year 1996-97 or any subsequent year.

Interest on Schedule E tax

38 In subsection (2)(dd) of section 203 of the Taxes Act 1988 (PAYE), the words from "(being not less" to "due)" shall cease to have effect.

Time limits for claims under sections 534 and 537A

39 In subsection (5) of section 534 of the Taxes Act 1988 (relief for copyright payments etc.), for the words from "and such a claim" to the end there shall be substituted the words "and such a claim may be made at any time not later than seven years from the 31st January next following the year of assessment in which the work's first publication occurs."

40 In subsection (5) of section 537A of the Taxes Act 1988 (relief for payments in respect of designs), for the words from "and such a claim" to "eight years after" there shall be substituted the words "and such a claim may be made at any time not later than seven years from the 31st January next following the year of assessment in which".

Repayment supplements: income tax

41 (1) For subsection (1) of section 824 of the Taxes Act 1988 (repayment supplements: individuals and others) there shall be substituted the following subsection--

" (1) Subject to the following provisions of this section, a repayment made by the Board or an officer of the Board of any of the following, namely--

(a) an amount paid on account of income tax under section 59A of the Management Act;

(b) any income tax paid by or on behalf of an individual for a year of assessment;

(d) a penalty incurred by an individual under any of the provisions of that Act,

shall be increased under this section by an amount (a "repayment supplement") equal to interest on the amount repaid at the rate applicable under section 178 of the [1989 c. 26.] Finance Act 1989 for the period (if any) between the relevant time and the date on which the order for the repayment is issued. "

(2) For subsection (3) of that section there shall be substituted the following subsection--

" (3) For the purposes of subsection (1) above--

(a) if the repayment is of an amount paid on account of income tax, the relevant time is either the date on which the amount became due and payable in accordance with section 59A of the Management Act or, if later, the date on which the amount was paid;

(b) if the repayment is of income tax, the relevant time is either the 31st January next following the year of assessment for which the tax was charged or, if later, the date on which the tax was paid; and

(c) if the repayment is of a penalty or surcharge, the relevant timee is either the date following the expiry of 30 days from the date on which the penalty or surcharge was incurred or imposed or, if later, the date on which the penalty or surcharge was paid. "

(3) The following shall cease to have effect, namely--

(a) subsection (5) of that section;

(b) in subsection (9) of that section the words "a partnership" and the words "(within the meaning of section 111 of the Finance Act 1989)"; and

(4) This paragraph, so far as it relates to partnerships whose trades, professions or businesses are set up and commenced before 6th April 1994, has effect as respects the year 1997-98 and subsequent years of assessment.

Interest on tax overpaid

42 In subsection (2) of section 826 of the Taxes Act 1988 (interest on tax overpaid), for the words "section 10" there shall be substituted the words "section 59D of the Management Act (payment of corporation tax)".

Time limits for elections under Schedule 5

43 (1) In sub-paragraph (3) of paragraph 2 of Schedule 5 to the Taxes Act 1988 (farming: election for the herd basis), for the words from "not later" to the end there shall be substituted the following paragraphs--

" (a) in the case of an election by a person chargeable to income tax, not later than twelve months from the 31st January next following the qualifying year of assessment;

(b) in the case of an election on behalf of persons in partnership, not later than twelve months from the 31st January next following the year of assessment in which the qualifying period of account ends; and

(c) in the case of an election by a person chargeable to corporation tax, not later than two years from the end of the qualifying accounting period. "

(2) In sub-paragraph (4) of that paragraph, for paragraphs (a) and (b) there shall be substituted the following paragraphs--

" (a) in a case falling within sub-paragraph (3)(a) above, for the qualifying year of assessment and all subsequent years;

(b) in a case falling within sub-paragraph (3)(b) above, for the qualifying period of account and all subsequent periods of account; and

(c) in a case falling within sub-paragraph (3)(c) above, for the qualifying accounting period and all subsequent accounting periods. "

(3) After that sub-paragraph there shall be inserted the following sub-paragraphs--

" (5) Where, in a case falling within sub-paragraph (3)(a) above, the commencement year immediately precedes the qualifying year of assessment, sub-paragraph (4)(a) above shall have effect as if the reference to the qualifying year of assessment were a reference to the commencement year.

(6) In this paragraph--

"commencement year", in relation to a person chargeable to income tax, means the year of assessment in which his trade is set up and commenced;
"period of account", in relation to persons in partnership, means any period for which accounts are drawn up;
"qualifying accounting period", in relation to a person chargeable to corporation tax, means the first accounting period during the whole or part of which it kept a production herd of the class in question;
"qualifying period of account", in relation to persons in partnership, means the first period of account during the whole or part of which those persons kept such a herd;
"qualifying year of assessment", in relation to a person chargeable to income tax, means the first year of assessment after the commencement year for which the amount of profits or gains or losses in respect of his farming is computed for tax purposes by reference to the facts of a period during the whole or part of which he kept such a herd. "

(4) In paragraph 6 of that Schedule, for sub-paragraphs (2) to (4) there shall be substituted the following sub-paragraphs--

" (2) An election for the herd basis made by virtue of sub-paragraph (1) above shall only be valid if made--

(a) in the case of an election by a person chargeable to income tax, not later than twelve months from the 31st January next following the qualifying year of assessment;

(c) in the case of an election by a person chargeable to corporation tax, not later than two years from the end of the qualifying accounting period.

(3) An election for the herd basis made by virtue of sub-paragraph (1) above shall, notwithstanding paragraph 2(4) above, have effect--

(a) in a case falling within sub-paragraph (2)(a) above, for the qualifying year of assessment and all subsequent years;

(b) in a case falling within sub-paragraph (2)(b) above, for the qualifying period of account and all subsequent periods of account; and

(c) in a case falling within sub-paragraph (2)(c) above, for the qualifying accounting period and all subsequent accounting periods.

(4) In this paragraph--

"period of account", in relation to persons in partnership, means any period for which accounts are drawn up;
"qualifying accounting period", in relation to a person chargeable to corporation tax, means the first accounting period in which the compensation is relevant;
"qualifying period of account", in relation to persons in partnership, means the first period of account in which the compensation is relevant;
"qualifying year of assessment", in relation to a person chargeable to income tax, means the first year of assessment for which the amount of profits or gains or losses in respect of his farming falls to be computed for tax purposes by reference to the facts of a period in which the compensation is relevant. "

Part III Amendments of other enactments

Setting of rates of interest

44 In subsection (2)(f) of section 178 of the [1989 c. 26.] Finance Act 1989 (setting of rates of interest), for the words "sections 86, 86A, 87, 87A, and 88" there shall be substituted the words "sections 59C, 86, 86A, 87, 87A, 88 and 103A".

Class 4 contributions

45 In subsection (1) of section 16 of the [1992 c. 4.] Social Security Contributions and Benefits Act 1992 (application of Income Tax Acts to class 4 contributions), for paragraph (b) there shall be substituted the following paragraph--

" (b) the provisions of Part VA (payment of tax) and Part X (penalties) of the Taxes Management Act 1970, " .

Repayment supplements: capital gains tax

46 (1) In subsection (1) of section 283 of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 (repayment supplements)--

(a) for the words from "for which" to "that year of assessment" there shall be substituted the words "a repayment of that tax is made by the Board or an officer of the Board", and

(b) for the words "the end of the tax month in which" there shall be substituted the words "the date on which".

(2) For subsection (2) of that section there shall be substituted the following subsection--

" (2) For the purposes of subsection (1) above, the relevant time is either the 31st January next following the year of assessment for which the tax was payable or, if later, the date on which the tax was paid. "

(3) In subsection (4) of that section, for the words from "partnership" to "section 701(9) of that Act)" there shall be substituted the words "trust or".

(4) Subsection (5) of that section shall cease to have effect.

Section 218.

SCHEDULE 20 Changes for facilitating self-assessment: transitional provisions and savings

Assessment under Cases I and II of Schedule D

1 (1) Subject to paragraph 3(2) below, this paragraph applies in the case of a trade, profession or vocation set up and commenced before 6th April 1994 and continuing after 5th April 1997.

(2) The basis period for the year 1996-97 shall be as follows--

(a) where an accounting date falls within the year, the period of twelve months ending with that accounting date; and

(b) in any other case, the period of twelve months ending with 5th April 1997.

(3) Where the basis period for the year 1996-97 is given by paragraph (b) of sub-paragraph (2) above, section 62 of the Taxes Act 1988 shall have effect in relation to the accounting change by virtue of which that paragraph applies as if that change were made in the first year of assessment in which accounts are made up to the new date.

(4) In this paragraph "accounting date" and "the new date" have the same meanings as in section 62 of the Taxes Act 1988.

2 (1) Subject to paragraph 3(2) and (4) below, this paragraph applies in the case of a trade, profession or vocation set up and commenced before 6th April 1994 and continuing after 5th April 1997.

(2) Subject to sub-paragraph (3) below, sections 60 to 63A of the Taxes Act 1988 shall have effect in relation to the year 1996-97 as if they required income tax under Case I or II of Schedule D to be charged on the appropriate percentage of the aggregate of--

(a) the full amount of the profits or gains of the basis period for that year, and

(b) the full amount of the profits or gains of the relevant period.

(3) Where, in the case of the year 1995-96, the period on the profits or gains of which income tax is chargeable under Case I or II of Schedule D is that year, sub-paragraph (2) above shall have effect as if for the words from "the appropriate percentage" to the end there were substituted the words "the full amount of the profits or gains of that year".

(4) Section 63A of the Taxes Act 1988 shall have effect as if the amount of profits or gains of the basis period for the year 1997-98 which arise before 6th April 1997 were an overlap profit for the purposes of that section.

(5) In this paragraph--

"the appropriate percentage" means the following expressed as a percentage, that is, 365 divided by the number of days in the basis period for the year 1996-97 and the relevant period taken together;
"the relevant period" means the period which--
(a)
begins immediately after the end of the period on the profits or gains of which tax is chargeable for the year 1995-96, and
(b)
ends immediately before the beginning of the basis period for the year 1996-97.

3 (1) In the case of a trade, profession or vocation set up and commenced before 6th April 1994 and ceasing before 6th April 1997, sections 60 to 63 of the Taxes Act 1988 shall have effect as if sections 200 to 205 of this Act had not been enacted.

(2) If, in the case of a trade, profession or vocation set up and commenced before 6th April 1994 and ceasing on or after 6th April 1997 but before 6th April 1998, an officer of the Board so directs--

(a) paragraphs 1 and 2 above shall not apply, and

(b) sections 60 to 63 of the Taxes Act 1988 shall have effect as if sections 200 to 205 of this Act had not been enacted.

(3) Sub-paragraph (4) below applies where, in the case of a trade, profession or vocation set up and commenced before 6th April 1994 and ceasing on or after 6th April 1998 but before 6th April 1999, the profits or gains arising in the year 1996-97 exceed--

(a) the amount on which income tax has been charged for that year; or

(b) the amount on which income tax would have been charged for that year if no deduction or set-off under section 385 of the Taxes Act 1988 had been allowed.

(4) Notwithstanding anything in sections 60 to 63A of the Taxes Act 1988, if an officer of the Board so directs, income tax for the year 1996-97 shall be charged instead, but subject to any deduction or set-off under section 385 of that Act, on the amount of the profits or gains arising in that year.

(5) All such adjustments shall be made, whether by way of an assessment to tax or a reduction or discharge of such an assessment or otherwise, as may be necessary to give effect to a direction under sub-paragraph (2) or (4) above.

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