Deductions at source - CIOT - The Chartered Institute of Taxation

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Tax Law Rewrite Deduction at Source CIOT comments 14 November 200513.3 We repeat our previous comments concerning the phrase “place of abode”.14 Clause 4714.1 Q3: We welcome the clarification, but think it would be better placed closer tothe definition of “relevant payment of yearly interest” rather than left as anorphan provision.15 Clause 4815.1 Q4: We see no need for the inclusion of clause 48(3)(b).15.2 Q5: If the Building Societies do not need to rely upon this explicit exemption forqualifying deposit rights, then it would be better to remove such references.16 Clause 4916.1 Q6: We welcome this clarification, but think that the Explanatory Notes wouldbenefit by the addition of a paragraph explaining why this is not a change(referring perhaps to the current practice and any comments of the BSA).16.2 We note that the origins of this clause are not shown at all.17 Clause 5317.1 This clause is a vast improvement on ICTA section 50(3).17.2 Q7: We welcome the label “gross-paying government securities”. Whilst ithardly trips off the tongue, it does have the advantage of “doing what it says inthe tin”.17.3 Q8: We agree that the parenthetical words in ICTA section 50(A1) add nothingand can be safely removed.18 Clause 5418.1 We welcome the omission of the words currently in ICTA section 51(2) “for thepurposes of making issues from the Consolidated Fund of Northern Ireland”.18.2 The modifications made by subsection (4) would be more logically placed insection 55 (where one has to ensure that there is no modification of themeaning of “The Treasury” as used by clause 54).18.3 Additionally, the words “those section” in paragraph (b) require an additional “s”.19 Clause 5519.1 We note that the current legislation refers to an “application”. Whilst we do notobject to this term, we wonder whether it is more akin to an “election” insofar asthe Registrar has no discretion to refuse any application validly made.However, we note that to change the wording might lead to difficulties with theTMA provisions concerning the making (and revoking) of elections.P/bc/subsfinal/tlr 4 14.11.05
Tax Law Rewrite Deduction at Source CIOT comments 14 November 200520 Clause 5720.1 The references in subsections (1), (2)(c) and (4) to Her Majesty use lower-caseaitches.21 Clause 5921.1 We share the concern raised at the Consultative Committee meeting inSeptember 2005 that the phrase “arises in the UK” is meaningless (or, at best,unclear) in the context of a payment. We note that terminology is used,however, in section 347A(2A)(a) (as inserted by ITTOIA). Nevertheless, theExplanatory Notes explain more clearly what is meant by the clause – that thepayment has a UK source.21.2 It would be useful if the Explanatory Notes made an explicit reference to theprovisions in Chapter 10 dealing with unauthorised unit trusts.22 Clause 6022.1 Q9: We welcome the simplification proposed by the transfer of the collectionmechanism to Self Assessment.23 Clause 6123.1 We feel that it would be just as easy (and clearer for readers) if the closingwords of subsection (2) repeated the wording of clause 60(1)(c) rather thanmerely referred to it.23.2 We would also prefer all the conditions within that subsection to be included inone list. Currently, the subsection reads: If X then Y only if Z. It would beclearer if it were of the form, Not Y if (X and Not Z).23.3 We would prefer subsection (4) to be split across two subsections.24 Clause 6224.1 Whilst we are not keen on the use of assumptions, etc, we wonder whether thewords “were it not for the person whose income it is” would be better replacedby the less opaque “if it were received by an individual”.25 Clause 6325.1 The provisions referred to in the origins shown under subsection (4) do notappear to include any reference to corporation tax.25.2 We also note that the conditions in subsections (2) to (4) are not labelled assuch. We wonder whether this is an oversight or whether there are differenttypes of conditions – those that are labelled A, B, C etc and those that are not.26 Clause 6426.1 The origins to subsection (1) refer to ICTA, s349(7) and the provision in FA2004, which inserted s349(7). Section 349(7) was, however, substituted byITTOIA.P/bc/subsfinal/tlr 5 14.11.05
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Deductions at source - CIOT - The Chartered Institute of Taxation

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