Finance Bill 2021-22 published

The Bill also extends some tax reliefs in the arts sector, keeps the Annual Investment Allowance at £1 million for a further year and introduces a range of measures to tackle promoters of tax avoidance schemes.

At 194 pages the Bill is among the shorter Finance Bills of recent years, narrowly beaten by only the 2018 (192 pages) and 2020 (186 pages) bills since 2010.

The two new taxes introduced by the Bill are: 

• A Residential Property Developer Tax (RPDT) on the profits that companies and corporate groups derive from UK residential property development, at 4% on profits exceeding an annual allowance of £25 million (to be introduced April 2022); The money raised will fund measures to address unsafe cladding.
• An Economic Crime (Anti-Money Laundering) Levy which will be paid by firms regulated for anti-money laundering purposes, including accountancy and law firms, financial institutions, estate agents and casinos; the levy will be a fixed amount based on the firm’s size, ranging from £10,000 to £250,000, with firms whose UK revenue is less than £10.2 million a year exempt.

Changes to corporate taxation in the Bill include:

• A decrease from eight per cent to three per cent in the corporation tax surcharge on banks
• Keeping the Annual Investment Allowance at £1 million for a further year
• New obligations on large businesses to notify HMRC where they have taken a tax position that is uncertain
• A new regime for the taxation of qualifying asset holding companies, designed to remove barriers to the establishment of these companies in the UK
• Extension of a number of tax reliefs in the arts/creative sector
• Reforms to the UK’s Tonnage Tax regime aimed at bringing more shipping firms to the UK

Changes to employment and other personal taxes in the Bill include:

• Reforms to tax calculations for unincorporated businesses (that is, self-employed sole traders and partnerships), known as basis period reform, which will result in a significant acceleration of tax payments by businesses affected by the change
• A 1.25 per cent increase in the income tax rates charged on dividend income
• Extending the deadline for reporting and payment of Capital Gains Tax on the disposal of UK land and property from 30 days to 60 days from completion

Other measures in the Bill include:

• A range of measures to tackle promoters of tax avoidance schemes, particularly those not resident in the UK
• A power for ministers to make temporary modifications to income tax and national insurance reliefs on employee expenses and benefits-in-kind through regulations, in the event of future disasters or emergencies of national significance
• An increase in the normal minimum pension age to 57 from 6 April 2028
• New penalties and powers for HMRC to tackle tax evasion through electronic sales suppression

The lengthiest measures in the Bill are:

• Qualifying asset holding companies (34 pages)
• Residential Property Developer Tax (22 pages)
• Large businesses: notification of uncertain tax treatment (15 pages)
• Abolition of basis periods (14 pages)

The Bill’s second reading will take place on Tuesday 16 November.

Further information

Finance Bill 2021-22

The Bill’s explanatory notes 

Government press release

CIOT press release

George Crozier, 4 November 2021