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
By George Crozier