Overview

The Finance (No. 2) Bill is a UK government bill that amends various aspects of tax law, primarily focused on income tax, corporation tax, and indirect taxes such as VAT and insurance premium tax. A significant part of the bill introduces a new Soft Drinks Industry Levy (SDIL) aimed at reducing sugar consumption.

Description

The bill comprises three parts. Part 1 adjusts income tax rates for 2017-18, corporation tax for 2018, and makes various changes to income tax rules regarding workers' services, remuneration, overseas pensions, and employee shareholder shares. It also increases the standard rate of insurance premium tax to 12% and adjusts rates for air passenger duty, vehicle excise duty, alcoholic liquor duties, and tobacco products duty. It also modifies provisions relating to tax avoidance schemes.

Part 2 establishes the Soft Drinks Industry Levy (SDIL), a tax on soft drinks with high sugar content. The levy is charged per litre of the prepared drink and has different rates depending on the sugar content. Exemptions are provided for small producers and certain types of drinks. The bill details the chargeable events, liability for payment, registration requirements, and penalties for non-compliance. It also sets up a register of producers and packagers and includes provisions for tax credits and appeals.

Part 3 is the final part, defining abbreviations used throughout the bill and giving the short title as the Finance Act 2017.

Government Spending

The bill's impact on government spending is complex. While the SDIL is expected to generate revenue, the exact figures are not specified in the provided text. Other changes, such as adjustments to tax rates and allowances, could lead to either increases or decreases in government revenue depending on their impact on taxpayer behaviour.

Groups Affected

• Individuals: Changes to income tax rates, allowances, and benefits will directly affect individual taxpayers. The SDIL will impact consumers of sugary drinks.
• Businesses: Corporations will be affected by changes in corporation tax and indirect tax rates. Businesses producing and selling soft drinks will be significantly affected by the SDIL. Producers and packagers will need to comply with new registration and reporting requirements.
• Public Sector: Changes to rules regarding workers' services provided through intermediaries will affect the public sector.
• Pension Schemes: The bill introduces changes to the taxation of overseas pensions and transfers between pension schemes, impacting both UK and overseas pension schemes and their members.

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