Press release: Finance Bill announcement helpful but questions remain

The Government have announced that the Summer Finance Bill will not be published until September, but they have provided some information about the content of the Bill and when measures will take effect.1

Commenting, CIOT President John Preston said:

“Taxpayers and their advisers have been waiting with bated breath for news of the measures dropped from the pre-election Finance Bill, especially those due to take effect from April 2017. Today’s announcement that the measures will all be reintroduced in more or less the same form, from the initially planned commencement dates, will therefore provide some guidance on the basis on which they should be working and planning.

“However, taxpayers and their advisers will naturally still have questions on the detail of the measures including cases where quarterly payments are required before legislation is passed.

“A number of amendments to the previous bill were known to be required to make the legislation work effectively and fairly, especially in relation to the interest deductibility rules, and it is hoped that these will be included in the bill published in September.

“Taxpayers would be helped further if HMRC could publish updated draft guidance on the Bill’s provisions over the summer.

“Introducing legislation retrospectively like this is clearly not ideal, but the timing of the Finance Bill and the election left the government in a quandary with no perfect options. Looking forward, the move to an autumn Budget and winter Finance Bill, with a promise it will be passed before measures take effect the following April, should mean that this will be the last time we have this problem.”

Clauses dropped from the pre-election bill and expected to be brought back include those on Making Tax Digital (although the implementation date for income tax is being postponed), corporate loss relief and interest deductibility, deemed domicile, VAT in relation to fulfilment houses and penalties for enablers of defeated tax avoidance schemes.


Notes to editors

1. The Government’s statement issued today states that:

The Finance Bill introduced in March 2017 provided for a number of changes to tax legislation that were withdrawn from the Bill after the calling of the general election. The then-Financial Secretary to the Treasury confirmed at the point they were withdrawn that there was no policy change and that these provisions would be legislated for at the first opportunity in the new Parliament.

The Government confirms that intention. It expects to introduce a Finance Bill as soon as possible after the summer recess containing the withdrawn provisions. Where policies have been announced as applying from the start of the 2017-18 tax year or other point before the introduction of the forthcoming Finance Bill, there is no change of policy and these dates of application will be retained. Those affected by the provisions should continue to assume that they will apply as originally announced.

The Finance Bill to be introduced will legislate for policies that have already been announced. In the case of some provisions that will apply from a time before the Bill is introduced, technical adjustments and additions to the versions contained in the March Bill will be made on introduction to ensure that they function as intended. To maximise certainty about the exact provisions that will apply, the Government is today publishing updated draft provisions.

Click here for full statement

2. The Government have published updated draft clauses for provisions taking effect before the Bill is introduced, where technical adjustments and additions to the previous legislation are being made to ensure that the clauses function as intended:

Carried forward losses and counteraction of avoidance arrangements - updated legislation
Corporate interest restriction - updated legislation
Deemed domicile: Income Tax and Capital Gains Tax - updated legislation
Employment income provided through third parties - updated legislation
Hybrid and other mismatches - updated legislation
Inheritance Tax on overseas property representing UK residential property - updated legislation
Substantial Shareholding Exemption: institutional investors - updated legislation

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