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HMRC internal manual

Bank Levy Manual

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HM Revenue & Customs
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Introduction: Structure: steps for determining the amount of the bank levy: provisions for periods that fall wholly or partly before 1 January 2012 or 1 January 2013

Paragraph 7 of Schedule 19

Paragraph 7 contains special provisions for chargeable periods that fall wholly or partly before 1 January 2012, including provisions for chargeable periods that started before 1 January 2011. See below.

Paragraph 7 was amended by Finance Act 2012, so that with effect from 1 January 2013 the rules for dealing with chargeable periods that fall wholly or partly before 1 January 2012 have been replaced with new rules that apply to chargeable periods that fall wholly of partly before 1 January 2013.

The amendment simplifies the rules relating to chargeable periods falling wholly or partly before 1 January 2013 showing the various rates and periods to which they apply in the form of a table (see BKLM154700). These rules apply from 1 January 2013 and details of how to apply them can be found at: below.

Chargeable periods that fall wholly or partly before 1 January 2012

Where any part of the chargeable period falls within 2012, Step 7 is substituted as follows:

  1. calculate the proportion of the chargeable period falling between 1 January 2011 and 28 February 2011 as a percentage: X%
(X% = Number of days in chargeable period falling between 1 January 2011 and 28 February 2011/Total number of days in the chargeable period x 100)  
  1. calculate the proportion of the chargeable period falling between 1 March 2011 and 30 April 2011 as a percentage: Y%
(Y% = Number of days in chargeable period falling between 1 March 2011 and 30 April 2011/Total number of days in the chargeable period x 100)  
  1. calculate the proportion of the chargeable period falling between 1 May 2011 and 31 December 2011 as a percentage: Z%
(Z% = Number of days in chargeable period falling between 1 May 2011 and 31 December 2011/Total number of days in the chargeable period x 100)  
  1. if the period starts pre-1 January 2011 ensure that any part of the period relating to prior to 1 January 2011 is ignored
  2. charge X%, Y% and Z% of the amount of long term equity or liabilities (determined in Step 5 or 6 ensuring the chargeable period has been adjusted if it started pre-1 January 2011) at the appropriate rates set out in paragraph 7(2) and the balance if any at 0.044%
  3. charge X%, Y% or Z% of the amount of short term liabilities (determined in Step 5 or 6 ensuring the chargeable period has been adjusted if it started pre-1 January 2011) at the appropriate rates set out in paragraph 7(2) and the balance (if any) at 0.088%.

If the chargeable period starts before 1 January 2011, Steps 6 (see BKLM154600) and 7 (see BKLM154700) are calculated as if the chargeable period started on 1 January 2011.

Chargeable periods that fall wholly or partly before 1 January 2013

These rules come into force on 1 January 2013 and the rates of bank levy and the period to which they apply (‘the rate period’) are now shown in the form of a table.

Rate Period Rate for chargeable equity and long term liabilities Rate for short term chargeable liabilities
     
1 January 2011 - 28 February 2011 0.025% 0.05%
1 March 2011 - 30 April 2011 0.05% 0.1%
1 May 2011 - 31 December 2011 0.0375% 0.075%
1 January 2012 - 31 December 2012 0.044% 0.088%
1 January 2013 onwards 0.0525% 0.105%

The method for calculating the bank levy using the table is as follows:

  1. Calculate the proportion of each rate period (as shown in the first column of the table) falling into the chargeable period as a percentage: P%
  2. For each rate period charge P% of the long term chargeable equity and liabilities at the bank levy rate shown in the second column.
  3. For each rate period charge P% of the short term chargeable equity and liabilities at the bank levy rate shown in the third column.
  4. Add together the results for each rate period that falls within the chargeable period to give the amount of the bank levy.

The rules relating to chargeable periods starting before 1 January 2011 remain unaltered. Any part of the chargeable period starting before 1 January 2011 is ignored and the bank levy is calculated as if the chargeable period started on 1 January 2011.