These Regulations may be cited as the Income and Corporation Taxes (Electronic Communications) (Amendment) Regulations 2009 and come into force on 1st January 2010.

They amend the Income and Corporation Taxes (Electronic Communications) Regulations 2003 as described in the Schedule.

Mike Eland

Dave Hartnett

Two of the Commissioners for Her Majesty's Revenue and Customs

7th December 2009

Regulation 1—interpretation, etc

1

After regulation 1(2), insert—

“(2A)    The provision these Regulations make for company tax returns relates to Schedule 18 to the Finance Act 1998 (corporation tax—company tax returns, etc), consequently where they refer to—

(a)    “company tax return”, it has the meaning in paragraph 3 of that Schedule,

(b)    “return period”, it means the period for which a company tax return is required under paragraph 5 of that Schedule,

(c)    “amendment”, it has the meaning in paragraph 15 of that Schedule, and

(d)    “filing date”, it has the meaning in paragraph 14 of that Schedule (but it has the meaning in paragraph 35(2) when in connection with a company tax return for an “outstanding period” in paragraph 35(1)).

(2B)    The “extra time” in connection with the filing date mentioned in regulation 3(8)(c) refers to a stage—

(a)    for which there is an excuse for late delivery of the company tax return under paragraph 19 of Schedule 18 to the Finance Act 1998 (delivery of accounts to registrar of companies in time); or,

(b)    arising under section 117(2) of that Act in conjunction with section 118(2) of the Management Act (further time allowed by the Board, reasonable excuse for being late, etc).”.

2

At the end of regulation 1(3), start a new line and continue—

“Such references shall be construed in accordance with section 135(8) of the Finance Act 2002 (mandatory e-filing) when in connection with a company tax return.”.

Regulation 2—scope

3

In regulation 2(1)(a)(iv), after “1998” insert “(and in connection with which they also make specific provision for mandatory e-filing of company tax returns as mentioned in regulation 1(3))”.

4

In regulation 2(1)(b), after “provisions” insert “, or the making of any payment in connection with the operation of section 87A of the Management Act (interest on overdue corporation tax etc), and they apply in such a way that the corporation tax-related payments in regulation 3(2C) are subject to the mandatory electronic payment envisaged by section 204 of the Finance Act 2003”.

Regulation 3 and its heading

5

Change regulation 3's heading to “Use of electronic communications”.

6

After regulation 3(1), insert—

“(1A)    Paragraph (1) does not apply to a company tax return delivered by, or a corporation tax-related payment made by, electronic communications under paragraphs (2A) to (2C).”.

7

After regulation 3(2), insert—

“(2A)    Such a person must use electronic communications to deliver a company tax return, and in doing so need only satisfy the second to fourth of those conditions.

This paragraph only applies to a company tax return delivered on 1 April 2011 or later, relating to a return period ending on 1 April 2010 or later.

It does not apply to an amendment to such a company tax return.

(2B)    The payer must use electronic communications to make the corporation tax-related payments in paragraph (2C), and in doing so need only satisfy the second and third of those conditions (excluding those in paragraphs (4)(a) (authenticating identity) and (4)(c) (authenticating information)).

This paragraph only applies to payments made on 1 April 2011 or later.

The Board need not accept such payments tendered in breach of this paragraph.

(2C)    Paragraph (2B) applies to payment of each of the following—

(a)    any amount of corporation tax that must be calculated as payable under paragraph 8 of Schedule 18 to the Finance Act 1998 (calculation of corporation tax payable);

(b)    any amount treated as such under regulation 5 or 5A of the Corporation Tax (Instalment Payments) Regulations 1998;

(c)    any interest payable on overdue corporation tax etc under section 87A of the Management Act and regulation 7 of those Regulations;

(d)    a flat-rate penalty for failing to deliver a company tax return by the filing date under paragraph 17 of that Schedule;

(e)    a tax-related penalty for failing to deliver a company tax return for an accounting period under paragraph 18 of that Schedule.”.

8

In regulation 3(5), after “Regulations” insert “, and Extensible Business Reporting Language (XBRL), Inline XBRL and other electronic data handling techniques are among the forms that may be so approved”.

9

After regulation 3(7), insert—

“(8)    The conditions mentioned in paragraph (2A) (company tax returns) are to be taken to be satisfied in connection with that paragraph only where the Board is satisfied about one or more of the following—

(a)    there are no contraventions or failures to comply;

(b)    the accumulated contraventions or failures to comply do not undermine the purpose of that paragraph (delivery of company tax returns by approved electronic means);

(c)    at least one of the contraventions or failures to comply was necessary in order to deliver the company tax return by the filing date or within any extra time arising, despite genuine efforts not to undermine that purpose.

(9)    The consequences of contravening or failing to comply with paragraph (2A) (company tax returns) are—

(a)    that the Board must accept delivery of the return, but only if satisfied about paragraph (8)(b) or (8)(c), or about both; otherwise,

(b)    the Board must disregard the return and treat it as not having been delivered.

(10)    Electronic communications need not be used to deliver a company tax return while the company required to deliver it by the notice under paragraph 3(1) of Schedule 18 to the Finance Act 1998 is—

(a)    the subject of a winding-up order,

(b)    having its affairs, business and property managed by an administrator, or

(c)    in administrative receivership.

The expressions “winding-up order”, “administrator” and “in administrative receivership” each has the same meaning here as it does in section 81 of the Value Added Tax Act 1994 (insolvency procedures, etc).

(11)    Paragraph (2A) (company tax returns) does not apply to the use of electronic communications in a way incompatible with the beliefs of a religious society or order of which—

(a)    all the company's directors (and, if there is one, the company's secretary) are practising members, or

(b)    all the individuals in the unincorporated association are such members.”.

10

After regulation 3, insert—

(1)    Paragraph (2) applies instead of section 70A of the Management Act to each of the corporation tax-related payments in regulation 3(2C) tendered by cheque, but only if the Board receives that cheque on 1 April 2011 or later and that cheque is paid on its first presentation by the Board to the banker on whom it is drawn.

(2)    The payment is to be treated as made on the second business day after the day on which the Board received that cheque.

(3)    For these purposes, a “business day” is any day except—

(a)    Saturday, Sunday, Good Friday or Christmas Day;

(b)    a bank holiday under the Banking and Financial Dealings Act 1971;

(c)    a day appointed by Royal proclamation as a public fast or thanksgiving day;

(d)    a day declared by an order under section 2 of the Banking and Financial Dealings Act 1971 to be a non-business day.”.

Regulation 5—effect of delivering information by means of electronic communications

11

In regulation 5(1), after “satisfied” insert “or, but only in the case of the conditions mentioned in regulation 3(2A) (electronic delivery of company tax returns), are taken to be satisfied under regulation 3(8)”.

Regulation 10—use of unauthorised means of electronic communications

12

In regulation 10(2)(b), after “approved” insert “, if necessary, ”.

13

After regulation 10(2), insert—

“(3)    A company tax return delivered under regulation 3(2A) by means of electronic communications must meet standards of accuracy and completeness set by a specific or general direction given by the Board.

The Board may treat failure to meet those standards as failure to deliver that return.”.

These Regulations amend the Income and Corporation Taxes (Electronic Communications) Regulations 2003 (SI 2003/282) with the following effects.

Company tax returns for corporation tax return periods ending on 1 April 2010 or later must be delivered electronically as of 1 April 2011. The means of doing so must be those approved by HM Revenue & Customs, whose set standards of accuracy and completeness must be met.

Corporation tax, and related interest and penalties, must be paid electronically as of 1 April 2011. If such payments are tendered, accepted and paid by cheque, they will be treated as made on the second business day after when the cheque is received.

The existing general rules for electronic returns and payments are unchanged.

A full Impact Assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available from the HMRC website at http://www.hmrc.gov.uk/better-regulation/ia.htm and is annexed to the Explanatory Memorandum which is available alongside the instrument on the OPSI website.