Finance Act 2002

Cited as:2002 c. 23
Jurisdiction:UK Non-devolved


Finance Act 2002

2002 CHAPTER 23

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.

[24th July 2002]

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 to 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:—

1 Excise duties

Part 1

Excise duties

Tobacco products duty

Tobacco products duty

S-1 Rates of tobacco products duty

1 Rates of tobacco products duty

(1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 (c. 7) substitute—

Table

1. Cigarettes

An amount equal to 22 per cent of the retail price plus 94.24 per thousand cigarettes

2. Cigars

137.26 per kilogram

3. Hand-rolling tobacco

98.66 per kilogram

4. Other smoking tobacco and chewing tobacco

60.34 per kilogram

(2) This section shall be deemed to have come into force at 6 o'clock in the evening of 17th April 2002

Alcoholic liquor duties

Alcoholic liquor duties

S-2 Rates of duty on cider

2 Rates of duty on cider

(1) In section 62(1A) of the Alcoholic Liquor Duties Act 1979 (c. 4) (rates of duty on cider)—

(a) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent that is not sparkling cider), for ‘39.21’ substitute ‘38.43’;

(b) in paragraph (c) (rate of duty per hectolitre in any other case), for ‘26.13’ substitute ‘25.61’.

(2) This section shall be deemed to have come into force on 28th April 2002.

S-3 Duty on beverages made with spirits to be at spirits rate

3 Duty on beverages made with spirits to be at spirits rate

(1) Omit section 1(9) of the Alcoholic Liquor Duties Act 1979 (under which alcoholic beverages of a strength between 1.2 and 5.5 per cent made with spirits are treated as not being spirits, unless of a description specified by Treasury order).

(2) This section shall be deemed to have come into force on 28th April 2002.

S-4 Reduced rates of duty on beer from small breweries

4 Reduced rates of duty on beer from small breweries

(1) Schedule 1 to this Act (which makes provision for the excise duty on beer to be charged at reduced rates on beer produced in small breweries) has effect.

(2) Subject to subsection (3), subsection (1) shall be deemed to have come into force on 1st June 2002.

(3) So far as relating to—

(a) the insertion by paragraph 2 of that Schedule of the new section 36H of the Alcoholic Liquor Duties Act 1979, and

(b) paragraph 3 of that Schedule,

subsection (1) comes into force on the day on which this Act is passed.

Hydrocarbon oil duties

Hydrocarbon oil duties

S-5 Biodiesel

5 Biodiesel

(1) The Hydrocarbon Oil Duties Act 1979 (c. 5) is amended as follows

(2) After section 2 insert—

S-2AA

2AA

‘2AA Biodiesel

(1) In this Act ‘biodiesel’ means diesel quality liquid fuel—

(a) that is produced from biomass or waste cooking oil,

(b) the ester content of which is not less than 96.5% by weight, and

(c) the sulphur content of which does not exceed 0.005% by weight or is nil.

(2) In subsection (1)—

(a) ‘diesel quality’ means capable of being used for the same purposes as heavy oil;

(b) ‘liquid’ does not include any substance that is gaseous at a temperature of 15C and under a pressure of 1013.25 millibars;

(c) ‘biomass’ means vegetable and animal substances constituting the biodegradable fraction of—

(i) products, wastes and residues from agriculture, forestry and related activities, or

(ii) industrial and municipal waste.’.

(3) In section 2A (power to amend definitions), after subsection (1) insert—

(1A) The Treasury may by order made by statutory instrument amend the definition for the purposes of this Act of ‘biodiesel’.’.

(4) After section 6 (excise duty on hydrocarbon oil) insert—

S-6AA

6AA

‘6AA Excise duty on biodiesel

(1) A duty of excise shall be charged on the setting aside for a chargeable use by any person, or (where it has not already been charged under this section) on the chargeable use by any person, of biodiesel.

(2) In subsection (1) ‘chargeable use’ means use—

(a) as fuel for any engine, motor or other machinery, or

(b) as an additive or extender in any substance so used.

(3) The rate of duty under this section shall be 0.2582 a litre.

S-6AB

6AB

6AB Excise duty on blends of biodiesel and heavy oils

(1) A duty of excise shall be charged on bioblend—

(a) imported into the United Kingdom, or

(b) produced in the United Kingdom and delivered for home use from a refinery or from other premises used for the production of hydrocarbon oil or from any bonded storage for hydrocarbon oil, not being bioblend chargeable with duty under paragraph (a) above.

This is subject to subsection (6) below.

(2) In this Act ‘bioblend’ means any mixture that is produced by mixing—

(a) biodiesel, and

(b) heavy oil not charged with the excise duty on hydrocarbon oil.

(3) The rate at which the duty shall be charged on any bioblend shall be a composite rate representing—

(a) in respect of the proportion of the bioblend that is hydrocarbon oil, the rate that would be applicable to the bioblend if it consisted entirely of heavy oil of the description that went into producing the bioblend, and

(b) in respect of the proportion of the bioblend that is biodiesel, the rate that would be applicable to the bioblend if it consisted entirely of biodiesel.

(4) The references in subsection (3) above to the proportions of—

(a) hydrocarbon oil, and

(b) biodiesel,

are to the proportions by volume to the nearest 0.001%.

(5) If the Commissioners are not satisfied as to the proportion of biodiesel in any bioblend, the rate of duty chargeable shall be the rate that would be applicable to the bioblend if it consisted entirely of heavy oil of the description that went into producing the bioblend.

(6) Where imported bioblend is removed to a refinery, the duty chargeable under subsection (1) above shall, instead of being charged at the time of the importation of the bioblend, be charged on the delivery of any goods from the refinery for home use and shall be the same as that which would be payable on the importation of like goods.

S-6AC

6AC

6AC Application to biodiesel and bioblend of provisions relating to hydrocarbon oil

(1) The Commissioners may by regulations provide for—

(a) references in this Act, or specified references in this Act, to hydrocarbon oil to be construed as including references to—

(i) biodiesel;

(ii) bioblend;

(b) references in this Act, or specified references in this Act, to duty on hydrocarbon oil to be construed as including references to duty under—

(i) section 6AA above;

(ii) section 6AB above;

(c) biodiesel, or bioblend, to be treated for the purposes of such of the following provisions of this Act as may be specified as if it fell within a specified description of hydrocarbon oil.

(2) Where the effect of provision made under subsection (1) above is to extend any power to make regulations, provision made in exercise of the power as extended may be contained in the same statutory instrument as the provision extending the power.

(3) In this section ‘specified’ means specified by regulations under this section.

(4) Regulations under this section may make different provision for different cases.

(5) Paragraph (b) of subsection (1) above shall not be taken as prejudicing the generality of paragraph (a) of that subsection.’.

(5) Schedule 2 to this Act contains minor and consquential amendments of the Hydrocarbon Oil Duties Act 1979 (c. 5).

(6) Subsection (4), and subsection (5) so far as relating to paragraphs 2 and 4(1) of that Schedule, have effect in relation to biodiesel that—

(a) is set aside for chargeable use (as defined in the section 6AA inserted by subsection (4)) after such date as the Commissioners of Customs and Excise may by order made by statutory instrument appoint, or

(b) not having been so set aside, is the subject of such chargeable use after that date,

and has not been set aside for chargeable use under section 6A of that Act (fuel substitutes) on or before that date.

(7) Subsection (4), and subsection (5) so far as relating to paragraph 2 of that Schedule, have effect in relation to bioblend that—

(a) is imported into the United Kingdom after the date appointed under subsection (6)(a), or

(b) not having been so imported—

(i) is produced in the United Kingdom and delivered for home use after that date, and

(ii) has not been set aside for chargeable use under section 6A of that Act (fuel substitutes) on or before that date.

(8) Subsection (5)—

(a) so far as relating to paragraph 3 of that Schedule, comes into force on the day after the date appointed under subsection (6)(a),

(b) so far as relating to paragraph 5 of that Schedule, applies to mixtures produced after the date appointed under subsection (6)(a), and

(c) so far as relating to paragraph 7 of that Schedule, comes into force on such day as the Commissioners of Customs and Excise may by order made by statutory instrument appoint.

S-6 Regulating trade in rebated heavy oil etc

6 Regulating trade in rebated heavy oil etc

(1) Schedule 3 to this Act has effect

(2) In that Schedule—

Part 1 makes provision for regulating trade in certain heavy oil on which rebate of excise duty has been allowed, and

Part 2 amends provisions of the Hydrocarbon Oil Duties Act 1979 relating to rebates.

(3) Subject...

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