Office of Public Sector Information
(1) Income tax shall be charged for the year 1991-92, and—
(a) the basic rate shall be 25 per cent.,
(b) the basic rate limit shall be £23,700, and
(c) the higher rate shall be 40 per cent.
(2) In accordance with subsection (1)(b) above, section 1(4) of the Taxes Act 1988 (indexation) shall not apply for the year 1991-92.
(1) Section 257C(1) of the Taxes Act 1988 (indexation), so far as relating to section 257A(1) of that Act (married couple’s allowance), shall not apply for the year 1991-92.
(2) Section 257A(1) of that Act shall apply for the year 1991-92 as if the amount specified in it were “£1,720”.
(1) The rate at which corporation tax is charged for the [1990 c. 29.] financial year 1990 shall be 34 per cent. (and not 35 per cent. as provided by section 19 of the Finance Act 1990).
(2) For the financial year 1990 the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be nine four-hundredths (and not one fortieth as provided by section 20 of the Finance Act 1990).
(3) All such adjustments shall be made, whether by way of discharge or repayment of tax or otherwise, as may be required in consequence of the provisions of this section.
Corporation tax shall be charged for the financial year 1991 at the rate of 33 per cent.
(1) For the financial year 1991—
(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 fiftieth.
(2) In section 13(3) of that Act (limits of marginal relief), in paragraphs (a) and (b)—
(a) for “£200,000” there shall be substituted “£250,000”, and
(b) for “£1,000,000” there shall be substituted “£1,250,000”.
(3) Subsection (2) above shall have effect for the financial year 1991 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.
For the year 1991-92 the qualifying maximum defined in section 367(5) of the Taxes Act 1988 (limit on relief for interest on certain loans) shall be £30,000.
(1) At the end of section 353 of the Taxes Act 1988 (certain interest payments to be deducted from or set off against income) there shall be added—
“(4) In computing for the purposes of excess liability the total income of a person for any year of assessment, no deduction shall be allowed in respect of any amount of interest which falls to be deducted or set off under subsection (1) above by virtue of section 355(1)(a), 356(1) or 365.
(5) In subsection (4) above, “excess liability” means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate, to the exclusion of any higher rate.”
(2) In section 369 of that Act (mortgage interest relief at source) in subsection (3) (charge to tax at basic rate on an amount equal to that which falls to be deducted in computing total income) after the words “in computing his total income” there shall be inserted the words “(otherwise than for the purposes of excess liability)”; and after that subsection there shall be inserted—
“(3A) In computing for the purposes of excess liability the total income of a person for any year of assessment, no deduction shall be allowed in respect of any amount of relevant loan interest to which this section applies.
(3B) In this section “excess liability” means the excess of liability to income tax over what it would be if all income tax were charged at the basic rate, to the exclusion of any higher rate.”
(3) The amendment made by subsection (1) above shall not apply in relation to interest which falls to be deducted or set off under section 353(1) of that Act by virtue of paragraph (a) of subsection (5) of section 354 of that Act (relief for bridging loans etc) in any case where—
(a) the loan on which the interest is payable is the loan referred to in that paragraph as “the first-mentioned loan”; and
(b) the loan referred to in paragraph (b) of that subsection as “the other loan” was made before 6th April 1991.
(4) The amendments made by subsection (2) above shall not apply in relation to an amount of interest which is relevant loan interest (within the meaning of section 369 of that Act) by virtue of section 371 of that Act (second loans) in any case where—
(a) the loan on which the interest is payable is the loan referred to in subsection (1) of that section as “the first loan”; and
(b) the loan which is, for the purposes of that subsection, “the other loan” was made before 6th April 1991.
(5) Where the loan mentioned in paragraph (b) of subsection (3) above or, as the case may be, of subsection (4) above was made on or after 6th April 1991, it shall be treated for the purposes of the subsection in question as made before that date if it is proved by written evidence—
(a) that the loan was made in pursuance of an offer made before that date and that the offer either was in writing or was evidenced by a note or memorandum made by the lender before that date, and
(b) that the loan was used to defray money applied in pursuance of a binding contract entered into before that date.
(6) The enactments mentioned in Schedule 6 to this Act shall have effect for the year 1991-92 and subsequent years of assessment with the amendments there specified.
(7) Subsections (1) to (5) above shall have effect in relation to payments of interest made on or after 6th April 1991 (whenever falling due).
(1) Section 354(3) of the Taxes Act 1988 (interest eligible for relief in the case of a caravan only if the caravan is large or certain conditions presupposing domestic rating are met) shall cease to have effect.
(2) This section shall have effect for the year 1991-92 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 | £2,050 | £1,400 | ||
| More than 1400 but not more than 2000 | £2,650 | £1,800 | ||
| More than 2000 | £4,250 | £2,850 | ||
| Under 4 years | 4 years or more | |
|---|---|---|
| Less than £6,000 | £2,050 | £1,400 |
| £6,000 or more but less than £8,500 | £2,650 | £1,800 |
| £8,500 or more but not more than £19,250 | £4,250 | £2,850 |
| Under 4 years | 4 years or more | |
|---|---|---|
| More than £19,250 but not more than £29,000 | £5,500 | £3,700 |
| More than £29,000 | £8,900 | £5,900” |
(2) This section shall have effect for the year 1991-92 and subsequent years of assessment.
(1) In section 154(2) of the Taxes Act 1988, in paragraph (b) (which excludes from the general charge on benefits in kind any benefits chargeable under the provisions there specified) after the words “section 157, 158,” there shall be inserted “159A,”.
(2) After section 159 of that Act there shall be inserted—
(1) Where in any year in the case of a person employed in employment to which this Chapter applies a mobile telephone is made available (without any transfer of the property in it) either to that person or to others who are members of his family or household, and—
(a) it is so made available by reason of his employment and it is in that year available for his or their private use, and
(b) the benefit of the mobile telephone is not (apart from this section) chargeable to tax as the employee’s income,
there is to be treated as emoluments of the employment, and accordingly chargeable to income tax under Schedule E, an amount equal to whatever is the cash equivalent of that benefit in that year.
(2) The cash equivalent of a benefit taxable under this section in any year shall be £200 for each mobile telephone made available in that year, but subject to the following provisions of this section.
(3) If for any year—
(a) there is no private use of the mobile telephone, or
(b) the employee is required to, and does, make good to the person providing the benefit the full cost of any private use of the mobile telephone,
then the cash equivalent of the benefit for that year is nil.
(4) If the mobile telephone is unavailable for any part of a year, the cash equivalent of the benefit for that year shall be reduced by an amount which bears to that specified in subsection (2) above for that year the proportion which the number of days in the year on which the mobile telephone is unavailable bears to 365.
(5) For the purposes of subsection (4) above, a mobile telephone is to be regarded as “unavailable” on any day if, and only if—
(a) it is not made available as mentioned in subsection (1) above until after that day, or
(b) it ceases to be so available before that day, or
(c) it is incapable of being used at all throughout a period of not less than 30 consecutive days of which that day is one.
(6) Where different mobile telephones are made available on different days in a year, the employee shall be treated for the purposes of this section as if the same mobile telephone (or, in a case where two or more mobile telephones are made available concurrently, the same mobile telephones) had been made available on each of those days.
(7) The Treasury may by order taking effect from the beginning of any year commencing after the making of the order increase or further increase the amount specified in subsection (2) above.
(8) For the purposes of this section—
(a) “mobile telephone” means wireless telegraphy apparatus designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a telephone which is connected to a public telecommunication system (within the meaning of the [1984 c. 12.] Telecommunications Act 1984) but which is not physically connected to a land-line and—
(i) includes any such apparatus provided in connection with a car, notwithstanding that the car is made available as mentioned in section 157, but
(ii) does not include a cordless telephone or a telepoint telephone, whether or not provided in connection with a car;
(b) “cordless telephone” means wireless telegraphy apparatus—
(i) designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a wireless extension to a telephone, and
(ii) used only as such an extension to a telephone that is physically connected to a land-line;
(c) “telepoint telephone” means wireless telegraphy apparatus used for the purpose of a short-range radio communications service utilising frequencies between 864 and 868 megahertz (inclusive);
(d) “private use”, in relation to a mobile telephone, means any use of the telephone to make calls, other than calls made wholly, exclusively and necessarily in the performance of the duties of the employment;
(e) “full cost”, in relation to any private use of a mobile telephone, means the aggregate of—
(i) the cost of any telephone calls which constitute private use of the mobile telephone; and
(ii) any other cost of the benefit provided, determined in accordance with the provisions of section 156(2) and (5) to (7) as they would apply if the benefit were chargeable to tax under section 154;
(f) an employee who accepts a call on the footing that the cost of the call will be charged to the person providing the benefit shall be treated as if the employee had made the call.”
(3) The amendments made by this section shall have effect for the year 1991-92 and subsequent years of assessment.
(1) In section 161(1) of the Taxes Act 1988 (no charge for beneficial loan if cash equivalent does not exceed £200) for “£200” there shall be substituted “£300”.
(2) This section shall have effect for the year 1991-92 and subsequent years of assessment.
(1) This section applies where—
(a) on or after 6th April 1992 an individual resident in the United Kingdom makes a payment in respect of a qualifying course of vocational training,
(b) the payment is made in respect of an allowable expense,
(c) the payment is made in connection with the individual’s own training,
(d) at the time the payment is made, the individual has not received in relation to the course, and is not entitled to receive in relation to it, any public financial assistance of a description specified in regulations made by the Treasury for the purposes of this paragraph, and
(e) the individual is not entitled to claim any relief or deduction in respect of the payment under any other provision of the Income Tax Acts.
(2) The payment shall be deducted from or set-off against the income of the individual for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (3) to (5) below apply.
(3) In such cases and subject to such conditions as the Board may specify in regulations, relief under subsection (2) above shall be given in accordance with subsections (4) and (5) below.
(4) An individual who is entitled to such relief in respect of a payment may deduct and retain out of it an amount equal to income tax on it at the basic rate for the year of assessment in which it is made.
(5) The person to whom the payment is made—
(a) shall accept the amount paid after deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made, and
(b) may, on making a claim, recover from the Board an amount equal to the amount deducted.
(6) The Treasury may make regulations providing that in circumstances prescribed in the regulations—
(a) an individual who makes, in respect of a qualifying course of vocational training, a payment in respect of an allowable expense shall cease to be and be treated as not having been entitled to relief under subsection (2) above in respect of the payment or such part of it as may be determined in accordance with the regulations; and
(b) he or the person to whom the payment was made (depending on the terms of the regulations) shall account to the Board for tax from which relief has been given on the basis that the individual was so entitled.
(7) Regulations under subsection (6) above may include provision adapting or modifying the effect of any enactment relating to income tax in order to secure the performance of any obligation imposed under paragraph (b) of that subsection.
(8) In subsection (1)(a) above, the reference to an individual resident in the United Kingdom includes an individual performing duties which are treated by virtue of section 132(4)(a) of the Taxes Act 1988 as performed in the United Kingdom.
(9) For the purposes of this section, a payment made in respect of a qualifying course of vocational training is made in respect of an allowable expense if—
(a) it is made in respect of fees payable in connection with undertaking the course, including fees payable for assessment purposes, or
(b) it is made in respect of fees payable in connection with the making, as a result of having undertaken the course, of any entry in an official register or any award.
(10) In this section, “qualifying course of vocational training” means any programme of activity capable of counting towards a qualification—
(a) accredited as a National Vocational Qualification by the National Council for Vocational Qualifications, or
(b) accredited as a Scottish Vocational Qualification by the Scottish Vocational Education Council,
except a qualification at the highest of the levels defined by the Council referred to in paragraph (a) or (b) above (as the case may be).
(1) The Board may by regulations—
(a) provide that a claim under section 32(2) or (5)(b) above shall be made in such form and manner, shall be made at such time, and shall be accompanied by such documents, as may be prescribed;
(b) make provision, in relation to payments in respect of which a person is entitled to relief under section 32 above, for persons who provide vocational training courses to give, in such circumstances as may be prescribed, certificates of payment in such form as may be prescribed to such persons as may be prescribed;
(c) provide that a person who provides (or has at any time provided) training courses which are (or were) qualifying courses of vocational training for the purposes of section 32 above shall comply with any notice which is served on him by the Board and which requires him within a prescribed period to make available for the Board’s inspection documents (of a prescribed kind) relating to such courses;
(d) provide that persons of such description as may be prescribed shall, within a prescribed period of being required to do so by the Board, furnish to the Board information (of a prescribed kind) about training courses which are qualifying courses of vocational training for the purposes of section 32 above;
(e) make provision generally as to administration in connection with section 32 above.
(2) The words “Regulations under section 33 of the Finance Act 1991” shall be added at the end of each column in the Table in section 98 of the [1970 c. 9.] Taxes Management Act 1970 (penalties for failure to furnish information etc.).
(3) The following provisions of the [1970 c. 9.] Taxes Management Act 1970, namely—
(a) section 29(3)(c) (excessive relief),
(b) section 30 (tax repaid in error etc.),
(c) section 88 (interest), and
(d) section 95 (incorrect return or accounts),
shall apply in relation to the payment of an amount claimed under section 32(5)(b) above to which the claimant was not entitled as if it had been income tax repaid as a relief which was not due.
(4) In sections 257B(2), 257D(8) and 265(3) of the Taxes Act 1988, after paragraph (d) there shall be inserted “, or
(e) on account of any payments to which section 32(4) of the Finance Act 1991 applies.”
(5) In subsection (1) above, “prescribed” means prescribed by or, in relation to form, under the regulations.
(1) Section 590 of the Taxes Act 1988 (conditions for approval of retirement benefits schemes) shall be amended as follows.
(2) In subsection (3)(a) for the words “or, if the employee is a woman, 55, and not later than 70” there shall be substituted the words “and not later than 75”.
(3) The following subsection shall be inserted after subsection (4)—
“(4A) In subsection (3)(c) above “benefits” does not include any benefits for whose payment the scheme makes provision in pursuance of any obligation imposed by legislation relating to social security.”
(4) This section shall have effect in relation to a scheme not approved by the Board before the day on which this Act is passed.
The following section shall be inserted after section 591 of the Taxes Act 1988—
(1) Subsection (2) below applies where on or after 17th April 1991 regulations are made for the purposes of section 591 (“section 591 regulations”) which contain provisions restricting the Board’s discretion to approve a retirement benefits scheme by reference to any circumstances other than the benefits provided by the scheme (“relevant provisions”).
(2) Any retirement benefits scheme approved by the Board by virtue of section 591 before the day on which the section 591 regulations come into force shall cease to be approved by virtue of that section at the end of the period of 36 months beginning with that day if at the end of that period the scheme—
(a) contains a provision of a prohibited description, or
(b) does not contain a provision of a required description,
unless the description of provision is specified in regulations made by the Board for the purposes of this subsection.
(3) For the purposes of this section, a provision contained in a scheme shall not be treated as being of a prohibited description by reason only of the fact that it authorises the retention of an investment held immediately before the day on which the section 591 regulations are made.
(4) In determining for the purposes of this section whether any provision contained in a scheme is of a required description, the fact that it is framed so as not to require the disposal of an investment held immediately before the day on which the section 591 regulations are made shall be disregarded.
(5) In this section—
(a) references to a provision of a prohibited description are to a provision of a description specified in the relevant provisions of the section 591 regulations as a description of provision which, if contained in a retirement benefits scheme, would prevent the Board from approving the scheme by virtue of section 591;
(b) references to a provision of a required description are to a provision of a description specified in the relevant provisions of the section 591 regulations as a description of provision which must be contained in a retirement benefits scheme before the Board may approve the scheme by virtue of section 591.”
(1) The following section shall be inserted after section 591A of the Taxes Act 1988—
(1) If in the opinion of the Board the facts concerning any approved scheme or its administration cease to warrant the continuance of their approval of the scheme, they may at any time by notice to the administrator, withdraw their approval on such grounds, and from such date (which shall not be earlier than the date when those facts first ceased to warrant the continuance of their approval or 17th March 1987, whichever is the later), as may be specified in the notice.
(2) Where an alteration has been made in a retirement benefits scheme, no approval given by the Board as regards the scheme before the alteration shall apply after the date of the alteration unless—
(a) the alteration has been approved by the Board, or
(b) the scheme is of a class specified in regulations made by the Board for the purposes of this paragraph and the alteration is of a description so specified in relation to schemes of that class.”
(2) Accordingly, in section 590 of the Taxes Act 1988 subsections (5) and (6) shall be omitted.
(3) The amendments made by subsections (1) and (2) above shall be deemed always to have had effect.
(4) The [1970 c. 24.] Finance Act 1970 shall be deemed always to have had effect—
(a) with the omission of section 19(3) and (4), and
(b) with the insertion after section 20 of a section 20A in the same form as section 591B of the Taxes Act 1988 (with the omission before 17th March 1987 of the words from “(which shall not” to “whichever is the later)”).
(1) In section 171(1) of the Taxes Act 1988 (one half of certain profit-related pay exempt from income tax) for “One half” there shall be substituted “The whole”.
(2) This section shall have effect in relation to profit-related pay paid by reference to profit periods beginning on or after 1st April 1991.
(1) The Taxes Act 1988 shall be amended as follows.
(2) In Part III of Schedule 9 (requirements applicable to savings-related share option schemes) in paragraphs 19(b) and 20 for “pensionable age” there shall be substituted “the specified age”.
(3) In Schedule 10 (further provisions relating to profit sharing schemes) in sub-paragraph (b) of paragraph 2 and in sub-paragraph (c)(ii) of paragraph 3 for “pensionable age” there shall be substituted “the relevant age”, and at the end of each of those paragraphs there shall be inserted— “In this paragraph, the reference to the relevant age is a reference, in the case of a scheme approved before the day on which the Finance Act 1991 was passed, to pensionable age and, in the case of a scheme approved on or after that day, to the specified age.”
(4) In section 187(2) (definitions for the purposes of provisions relating to employee share schemes) after the definition of “shares” there shall be inserted—
““specified age”, in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme;”.
(5) In Part II of Schedule 9 (requirements generally applicable to employee share schemes) after paragraph 8 there shall be inserted—
“8A (1) In the case of a savings-related share option scheme or a profit sharing scheme, the scheme must specify what age is to be the specified age for the purposes of the scheme.
(2) The age specified—
(a) must be the same for men and women, and
(b) must be not less than 60 and not more than 75.”
(6) Subsections (2) and (5) above shall have effect in relation to a scheme not approved before the day on which this Act is passed.
(1) In Schedule 9 to the Taxes Act 1988 (requirements by reference to which share option schemes approved) for paragraph 29 there shall be substituted—
“29 (1) The price at which scheme shares may be acquired by the exercise of a right obtained under the scheme—
(a) must be stated at the time the right is obtained, and
(b) except where stated under provision included in the scheme pursuant to sub-paragraph (2) below, must not be manifestly less than the market value of shares of the same class at the material time.
Finance Act 1991