Government drop majority of Finance Bill

The selection of amendments for today's Finance Bill committee stage debate shows that the Government plan to remove a majority of the Finance Bill - 72/135 clauses and 18/29 schedules. - following discussions with the Opposition.
[NB. This blog has been corrected 26/4/17 to reflect that the original schedule 17 has been dropped from the Bill]

This is in line with a call by CIOT in a letter to the Chancellor (see press statement), copied to the Shadow Chancellor, sent on Wednesday last week, in which CIOT President Bill Dodwell warned of the risks of rushing through a large number of tax changes without any real parliamentary scrutiny.

Clauses dropped include those on Making Tax Digtal, corporate loss relief and interest deductibility, VAT in relation to fulfilment houses and penalties for enablers of defeated tax avoidance schemes.

It is likely that most if not all of the provisions dropped will return in a Bill after the election, regardless of who wins the election.

Committee stage debate will be limited to just four hours early afternoon today (Tuesday 25th April).

While this isn't an ideal way to take a Finance Bill through Parliament the Government and Opposition both deserve praise for agreeing to take the most controversial and/or complex provisions out of the Bill so they can get the further scrutiny they merit when Parliament returns after the election. 

The full list of what is in and what is out of the Bill follows -

PART 1

 

DIRECT TAXES

 

CHAPTER 1

 

CHARGE AND PRINCIPAL RATES

 

Income tax charge and rates

 

1 Income tax charge for tax year 2017-18

IN

2 Main rates of income tax for tax year 2017-18

IN

3 Default and savings rates of income tax for tax year 2017-18

IN

4 Starting rate limit for savings for tax year 2017-18

IN

5 Dividend nil rate for tax year 2018-19 etc

OUT

6 Corporation tax charge for financial year 2018

IN

CHAPTER 2

 

INCOME TAX

 

Employment income

 

7 Workers’ services provided to public sector through intermediaries  (+ schedule 1)

IN

8 Optional remuneration arrangements (+ schedule 2)

IN

9 Taxable benefits: time limit for making good

OUT

10 Taxable benefits: ultra-low emission vehicles

OUT

11 Taxable benefits: asset made available without transfer

IN

12 Pensions advice

OUT

13 Legal expenses etc

OUT

14 Termination payments etc: amounts chargeable on employment income

OUT

15 PAYE settlement agreements

OUT

Pensions

 

16 Money purchase annual allowance

OUT

17 Overseas pensions (+ schedule 3)

IN

18 Pensions: offshore transfers (+ schedule 4)

IN

Trading and property businesses income

 

19 Calculation of profits of trades and property businesses (+ schedule 5)

OUT

20 Trading and property allowances (+ schedule 6)

OUT

Investment income

 

21 Deduction of income tax at source (+ schedule 7)

IN

22 Life insurance policies: recalculating gains on part surrenders etc

OUT

23 Personal portfolio bonds

OUT

Reliefs relating to investments

 

24 EIS and SEIS: the no pre-arranged exits requirement

OUT

25 VCTs: follow-on funding

OUT

26 VCTs: exchange of non-qualifying shares and securities

OUT

27 Social investment tax relief  (+ schedule 8)

OUT

28 Business investment relief

OUT

CHAPTER 3

 

CORPORATION TAX

 

Corporation tax reliefs

 

29 Carried-forward losses  (+ schedule 9)

OUT

30 Losses: counteraction of avoidance arrangements

OUT

31 Corporate interest restriction  (+ schedule 10)

OUT

32 Museum and gallery exhibitions  (+ schedule 11)

OUT

33 Grassroots sport

OUT

34 Profits from the exploitation of patents: cost-sharing arrangements

OUT

Hybrids and other mismatches

 

35 Permitted taxable periods of payees and deductions for amortisation

OUT

Northern Ireland

 

36 Trading profits taxable at the Northern Ireland rate (+ schedule 12)

OUT

CHAPTER 4

 

CHARGEABLE GAINS

 

37 Exemption from attribution of carried interest gains

OUT

38 Elections in relation to assets appropriated to trading stock

OUT

39 Substantial shareholding exemption

OUT

40 Substantial shareholding exemption: institutional investors

OUT

CHAPTER 5

 

PROVISIONS RELATING TO MORE THAN ONE TAX

 

Domicile, overseas property etc

 

41 Deemed domicile: income tax and capital gains tax (+ schedule 13)

OUT

42 Deemed domicile: inheritance tax

OUT

43 Settlements and transfer of assets abroad: value of benefits  (+ schedule 14)

OUT

44 Inheritance tax on overseas property representing UK residential property (+ schedule 15)

OUT

Employee shareholder shares

 

Clauses 45-47

IN

Disguised remuneration

 

48 Employment income provided through third parties (+ schedule 16)
However Schedule 17 has been dropped from the Bill (correction added 14.00, 26/4/17)

IN
OUT

49 Trading income provided through third parties  (+ schedule 18)

OUT

50 Disguised remuneration schemes: restriction of income tax relief

OUT

51 Disguised remuneration schemes: restriction of corporation tax relief

OUT

Capital allowances

 

52 First-year allowance for expenditure on electric vehicle charging points

OUT

Transactions in UK land

 

53 Disposals concerned with land in United Kingdom

OUT

Co-ownership authorised contractual schemes

 

Clauses 54-56

OUT

PART 2

 

INDIRECT TAXES

 

VAT

 

57 VAT: zero-rating of adapted motor vehicles etc (+ schedule 19)

IN

Insurance premium tax

 

58 IPT: standard rate

IN

59 IPT: anti-forestalling provision

IN

Landfill tax

 

60 Landfill tax: taxable disposals

OUT

Air passenger duty

 

61 Air passenger duty: rates of duty from 1 April 2017

IN

62 Air passenger duty: rates of duty from 1 April 2018

OUT

Petroleum revenue tax

 

63 Petroleum revenue tax: elections for oil fields to become non-taxable

OUT

Vehicle excise duty

 

64 VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc

IN

Alcohol duties

 

65 Alcoholic liquor duties: rates

IN

Gaming duties

 

66 Gaming duty: rates

OUT

67 Remote gaming duty: freeplay

OUT

Tobacco products

 

68 Tobacco products duty: rates

IN

69 Tobacco products duty: minimum excise duty

IN

70 Tobacco products manufacturing machinery: licensing scheme

OUT

PART 3

 

SOFT DRINKS INDUSTRY LEVY

 

71-107 (+ schedules 20-23)

IN

PART 4

 

FULFILMENT BUSINESSES 

 

108-119 (+ schedule 24)

OUT

PART 5

 

ADMINISTRATION, AVOIDANCE AND ENFORCEMENT

 

Reporting and record-keeping

 

120 Digital reporting and record-keeping for income tax etc  (+ schedule 25)

OUT

121 Digital reporting and record-keeping for income tax etc: further amendments

OUT

122 Digital reporting and record-keeping for VAT

OUT

Enquiries

 

123 Partial closure notices (+ schedule 26)

OUT

Avoidance etc

 

124 Errors in taxpayers’ documents

OUT

125 Penalties for enablers of defeated tax avoidance (+ schedule 27)

OUT

126 Disclosure of tax avoidance schemes: VAT and other indirect taxes (+ schedule 28)

OUT

127 Promoters of tax avoidance schemes: threshold conditions etc

IN

128 Requirement to correct certain offshore tax non-compliance (+ schedule 29)

OUT

129 Penalty for transactions connected with VAT fraud etc

OUT

Customs enforcement powers

 

130 Power to enter premises and inspect goods

OUT

131 Power to search vehicles or vessels

OUT

Information

 

132 Data-gathering from money service businesses

OUT

PART 6

 

FINAL

 

133 Northern Ireland welfare payments: updating statutory reference

OUT

134 Interpretation

IN

135 Short title

IN

 

Also worth noting is that the Government has tabled some amendments. Leaving aside a few related to clauses being deleted from the Bill, these cover –
Schedule 2 (Optional remuneration amendments) – amendments 11-12
Schedule 3 (Overseas pensions) – amendments 13-29
Schedule 4 (Pensions: offshore transfers) – amendments 30-56
Schedule 16 (Employment income provided through third parties) – amendment 57

George Crozier
Head of External Relations, CIOT

 

 

Posted in: Finance Bill 2017
0 comments | Post a comment