Finance (No. 2) Act 1979
| Year | 1979 |
Finance (No. 2) Act 1979
1979 CHAPTER 47
An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.
[26th July 1979]
Most Gracious Sovereign,
We , Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty's public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Part I
Value Added Tax and Excise Duties
1 Increase of value added tax.
(1) As from 18th June 1979—
(a ) section 17 of the Finance (No. 2) Act 1975 and Schedule 7 to that Act (higher rate of value added tax) shall cease to have effect; and
(b ) in section 9(1) of the Finance Act 1972 (standard rate of value added tax) for the words ‘eight per cent.’ there shall be substituted the words ‘fifteen per cent.’.
(2) Subsection (1)(a ) above does not affect Note (7) of Group 9 or item 1 of Group 17 of Schedule 4 to the said Act of 1972 (which contain exceptions from zero-rating expressed by reference to items in Schedule 7 to the said Act of 1975).
(3) Subsection (1)(b ) above does not affect the rate of tax on any supply of telephone services provided by the Post Office or the District Council of Kingston upon Hull by means of their public switched telephone exchange systems, being services in respect of which—
(a ) the Post Office issue a tax invoice which includes a rental charge for a rental quarter beginning before 1st November 1979; or
(b ) the Council issue a tax invoice which includes a rental charge for a rental period beginning before that date or charges for calls made in a period ending before 1st September 1979.
In this subsection ‘tax invoice’ has the same meaning as in section 7 of the said Act of 1972.
(4) Where a supply in fact made wholly or partly before the said 18th June, or a supply which, apart from the other provisions of the said section 7, would be treated as so made by subsection (2) or (3) of that section, is treated under those other provisions as made on or after that date, the person making the supply may account for and pay tax on the supply or, as the case may be, on the relevant part of it as if the rate of tax had not been increased by subsection (1)(b ) above.
(5) Where a person avails himself of subsection (4) above in relation to a supply in respect of which he is required by regulations to issue a tax invoice, any provision of the regulations requiring the amount of tax chargeable or the rate of tax to be stated in the invoice shall be construed as referring to the amount and rate that apply by virtue of that subsection.
2 Hydrocarbon oil etc.
(1) In section 6(1) of the Hydrocarbon Oil Duties Act 1979 (duty of 0.0660 a litre in case of light oil and 0.0770 a litre in case of heavy oil) for ‘0.0660’ and ‘0.0770’ there shall be substituted respectively ‘0.0810’ and ‘0.0920’.
(2) In section 11(1)(b ) of that Act (rebate on aviation turbine fuel and heavy oil other than kerosene at rate of 0.0055 a litre less than the rate at which duty is for the time being chargeable) for ‘0.0055’ there shall be substituted ‘0.0066’.
(3) In section 14(1) of that Act (rebate on light oil delivered to approved person for use as furnace fuel at rate of 0.0055 a litre less than the rate at which duty is charged) for ‘0.0055’ there shall be substituted ‘0.0066’.
(4) This section shall be deemed to have come into force at 6 o'clock in the evening of 12th June 1979.
3 Tobacco products.
(1) In paragraph 1 of the Table in Schedule 1 to the Tobacco Products Duty Act 1979 (duty on cigarettes) for ‘30 per cent.’ and ‘9.00’ there shall be substituted respectively ‘21 per cent.’ and ‘11.77’.
(2) This section shall come into force on 13th August 1979.
4 Continuation of regulator powers.
4. In section 2(2) of the Excise Duties (Surcharges or Rebates) Act 1979(which provides that no order under section 1 of that Act shall be made or continue in force after the end of August 1979) for the words ‘August 1979’ there shall be substituted the words ‘August 1980’.
Part II
Income Tax, Corporation Tax and Capital Gains Tax
5 Charge of income tax. for 1979-80.
(1) Income tax for the year 1979-80 shall be charged at the basic rate of 30 per cent.; and—
(a ) in respect of so much of an individual's total income as does not exceed 750 at the rate of 25 per cent.;
(b ) in respect of so much of an individual's total income as exceeds 10,000 at such higher rates as are specified in the Table below; and
(c ) in respect of so much of the investment income included in an individual's total income as exceeds 5,000 at the additional rate of 15 per cent.
Table
| Part of excess over 10,000 | Higher rate |
| The first 2,000 | 40 per cent. |
| The next 3,000 | 45 per cent. |
| The next 5,000 | 50 per cent. |
| The next 5,000 | 55 per cent. |
| The remainder | 60 per cent. |
(2) This section has effect in substitution for section 1(1) of the Finance Act 1979 but does not require any change to be made in the amounts deductible or repayable under section 204 of the Taxes Act (pay as you earn) before 6th October 1979.
6 Rate of advance corporation tax for financial year 1979.
6. The rate of advance corporation tax for the financial year 1979 shall be three-sevenths.
7 Corporation tax: small companies.
(1) The fraction mentioned in subsection (2) of section 95 of the Finance Act 1972 (marginal relief for small companies) shall for the financial year 1978 be three-twentieths.
(2) For the financial year 1978 and subsequent financial years subsection (3) of the said section 95 shall have effect with the substitution for any reference to 50,000 of a reference to 60,000 and with the substitution for any reference to 85,000 of a reference to 100,000.
(3) Where by virtue of subsection (2) above the said section 95 has effect with different relevant amounts in relation to different parts of the same accounting period, those parts shall be treated for the purposes of that section as if they were separate accounting periods and the profits and income of the company for that period (as defined in that section) shall be apportioned between those parts.
8 Alteration of personal reliefs.
(1) Sections 8 and 14 of the Taxes Act shall have effect with the following amendments instead of those specified in section 1(2) of the Finance Act 1979 .
(2) In section 8 (personal reliefs)—
(a ) in subsection (1)(a ) (married) for ‘1,535’ there shall be substituted ‘1,815’;
(b ) in subsection (1)(b ) (single) and (2) (wife's earned income relief) for ‘985’ there shall be substituted ‘1,165’;
(c ) in subsection (1A) (age allowance) for ‘2,075’ and ‘1,300’ there shall be substituted ‘2,455’ and ‘1,540’ respectively;
(d ) in subsection (1B) (income limit for age allowance) for ‘4,000’ there shall be substituted ‘5,000’.
(3) In section 14(2) (additional relief for widows and others in respect of children) for ‘550’ there shall be substituted ‘650’.
9 Exemption of pensions in respect of death due to war service etc.
(1) Payments of pensions or allowances to which this section applies shall not be treated as income for any purposes of the Income Tax Acts.
(2) This section applies to—
(a ) any pension or allowance payable by or on behalf of the Department of Health and Social Security under so much of any Order in Council, Royal Warrant, order or scheme as relates to death due to—
(i) service in the armed forces of the Crown or war-time service in the merchant navy, or
(ii) war injuries;
(b ) any pension or allowance at similar rates and subject to similar conditions which is payable by the Ministry of Defence in respect of death due to peacetime service in the armed forces of the Crown before 3rd September 1939; and
(c ) any pension or allowance which is payable under the law of a country other than the United Kingdom and is of a character substantially similar to a pension or allowance falling within paragraph (a ) or (b ) above.
(3) Where a pension or allowance falling within subsection (2) above is withheld or abated by reason of the receipt of another pension or allowance not falling within that subsection, there shall be treated as falling within that subsection so much of the other pension or allowance as is equal to the pension or allowance that is withheld or, as the case may be, to the amount of the abatement.
(4) This section applies for the year 1979-80 and...
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