Finance Bill 2023-24 published

1 Dec 2023

Finance Bill 2023-24 has been published, including making ‘full expensing’ permanent and creating a new merged research and development (R&D) tax credit. It will also make changes to the cash basis and create a new offence for promoters of tax avoidance schemes who fail to obey a ‘stop notice’.

Business measures in the Bill include -

  • Permanent full expensing for expenditure on plant and machinery (clause 1)
  • Merging the current R&D Expenditure Credit and SME schemes and creating a new scheme for R&D intensive SMEs (clause 2 and schedule 1)
  • Reform of audio-visual tax reliefs – a new above-the-line Audio-Visual Expenditure Credit will replace the Film Tax Relief, High-End TV Tax Relief, Animation Tax Relief and Children’s TV Tax Relief (clause 3 and schedule 2)
  • Extension of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) to 2035 (clause 11)
  • Amendments to OECD Pillar 2 legislation (multinational top-up tax and domestic top-up tax) to ensure UK remains compliant with GloBE rules (clause 22 and schedule 12)

Personal and employment tax measures in the Bill include -

  • Abolition of the pensions lifetime allowance charge (clause 14 and schedule 9)
  • Making use of the cash basis default for non-incorporated businesses, requiring an opt-out to use the accruals basis, plus some other changes to the cash basis (clause 16 and schedule 10)

Tax compliance and administration measures in the Bill include –

  • Increase in maximum term of imprisonment for tax fraud (clause 31)
  • New criminal offence of continuing to promote an avoidance scheme after receiving a ‘Stop Notice’ (clause 33 and schedule 13)
  • Require businesses to provide more information to HMRC via income tax self-assessment and real-time returns completed by employers (including on employee hours, dividend income and start/end dates of self-employment) (clause 35)
  • Enable regulations to be made partially applying the new penalty regime to taxpayers who volunteer to test Making Tax Digital (clause 36)

A date for the Bill’s second reading has not yet been set but it is likely to be in week commencing 11 December, with the Bill’s committee stage taking place in January and Royal Assent coming in February.

In a statement accompanying the Bill’s publication, Financial Secretary to the Treasury, Nigel Huddleston, said: “This Bill marks our next step in making the UK into the best place in the world to do business - and that’s the way we grow our economy and drive up living standards for all.”

Bill and related documents here.