Finance Bill 2015 goes through all its stages in the House of Commons this afternoon, just one day after the Bill was published.
How will the day be timetabled?
The Government passed a timetable motion yesterday. Simplified, it means:
12.40pm – 2nd reading debate starts – runs for 2 hours – David Gauke and Chris Leslie expected to lead, Shabana Mahmood and a Treasury minister to wind up
2.40pm (earlier in the unlikely event of running out of second reading speakers) – Committee of Whole House starts – runs for 4 hours – in the following order -
These are the clause / amendment groupings with text of amendments –
Clause 66 (Value added tax)
Clause stand part + Clause 67 stand part + New Clause 1
New clause 1, from Labour, reads:
“Report on impact of value added tax
(1) The Chancellor of the Exchequer shall, within three months of the passing of this Act, publish a report on the impact of the increase in the standard rate of VAT which took effect from 4 January 2011.
(2) The report must estimate the impact of the increase in the standard rate of value added tax on - (a) living standards; (b) small businesses; (c) the fairness of the taxation system; and (d) economic growth.”
Clause 1 (Income tax: charge and rates)
Amendment 1 + Clause stand part + Clauses 2 to 5 stand part
Amendment 1, from Labour, reads:
Clause 1, page 2, line 1, at end insert –
“(3) The Chancellor of the Exchequer shall, within three months of the passing of this Act, publish a report on the impact of setting the additional rate of income tax at 50 per cent.
(4) The report must estimate the impact of setting the additional rate for 2015-16 at 45 per cent and at 50 per cent on the amount of income tax currently paid by someone with a taxable income of – (a) £150,000 per year; and (b) £1,000,000 per year.”
Clause 6 (Corporation tax: charge and rates)
Amendment 2 + Clause stand part
Amendment 2, from Labour, reads:
Clause 6, page 3, line 39, at end insert -
“(3) The Chancellor of the Exchequer shall undertake a review, within six months of the passing of this Act, of the impact of a cut of one per cent to the main rate of Corporation Tax for financial year 2016, with particular reference to -
(a) the impact on businesses with fewer than 50 employees;
(b) the impact on investment by businesses with fewer than 50 employees; and
(c) alternative tax measures, including non-domestic rates, which would have a greater benefit for businesses with fewer than 50 employees.
(4) The Chancellor of the Exchequer must publish the report of the review and lay the report before the House.”
Clauses 7 to 24 (Income tax: general)
Clause 7 stand part + Clauses 8 to 20 stand part + 3 + Clause 21 stand part + Clauses 22 to 24 stand part + Schedule 1 stand part + New Clause 2
Amendment 3 has been tabled by Caroline Lucas (Green) and Andrew George (Lib Dem), and reads:
Clause 21, page 24, line 46, at end insert—
This Part shall not come into force until the Chancellor of the Exchequer has published a report on the impact of including “carried interest” in the definition of “management fee” in section 809EZA.”
Member’s explanatory statement: This Amendment would delay implementation of changes to legislation that would allow private equity fund managers who have formed Limited Liability Partnerships to avoid “carried interest” being taxed as ordinary income until the Chancellor of the Exchequer has published a report on the impact of including “carried interest” in the definition of “management fee”.
New clause 2 has been tabled by Caroline Lucas (Green) and Andrew George (Lib Dem), and reads:
“Income tax treatment of private equity fund securities
(1) The Chancellor of the Exchequer shall, within three months of the passing of this Act, publish a report on the impact of changing the income tax treatment of employment-related securities where the employment relates to the operations of a collective investment scheme the sole or main purpose of which is to invest in unquoted shares or securities.
(2) The report mentioned in subsection (1) must in particular assess the impact of treating as employment income of the employee for the tax year in which it arises any sum arising in respect of such a security (being a sum not otherwise charged to income tax) which (whether in connection with a disposal or otherwise) directly or indirectly represents profits or gains on investments made for the purposes of the scheme.
(3) For the purposes of subsections (1) and (2) “employment-related securities”, “the employment” and “the employee” have the meanings indicated in section 421B(8) of the Income Tax (Earnings and Pensions) Act 2003 and “collective investment scheme” has the meaning given in section 420(2) of the Income Tax (Earnings and Pensions) Act 2003.”
Member’s explanatory statement: This New Clause would require the Chancellor to report on the impact of changing the law so that ‘carried interest’ is taxed as ordinary income, and therefore at a higher rate, for private equity fund managers.
Clauses 25 to 33 (Corporation tax: general)
Clause 25 stand part + Clauses 26 to 33 + Schedules 2 and 3 stand part
Clauses 34 to 51 (Income tax, corporation tax and capital gains tax: other provisions)
Clause 34 stand part + Clauses 35 to 51 + Schedules 4 to 14 stand part
Clauses 52 to 65 and 68 to 76 (Excise duties and other duties other than VAT)
Clause 52 stand part + Clauses 53 to 65 and 68 to 76 + Schedule 15 stand part
Clauses 77 to 116 (Diverted profits tax)
Clause 77 stand part + Clauses 78 to 116 + Schedule 16 stand part
Clauses 117 to 127 (Other and final provisions)
Clause 117 stand part + Clauses 118 to 127 + Schedules 17 to 21 stand part
Debate will conclude after four hours of committee stage – at 6.40pm (later if there are any statements)
All this means there will be relatively little consideration of the actual contents of the Bill, even in the context of the time available. Committee stage is likely to focus on Labour's new clause and amendments and debate may well not get beyond clause 6 before the guillotine falls and the rest of the clauses have to be passed (or voted down, which is while theoretically possible, won't happen due to the Government's majority) without debate.
The Bill is expected to go to the Lords tomorrow for their customary one hour of debate (Lords are not able to amend Finance Bills) before gaining Royal Assent.
CIOT Head of External Relations
Wednesday 25 March 2015