Overview

The Finance (No. 2) Bill is a UK government bill that introduces a new tax on sugary drinks, modifies income tax and corporation tax rates, and adjusts various indirect taxes like insurance premium tax, air passenger duty, vehicle excise duty, alcohol duties, and tobacco duties. It also includes provisions to tackle tax avoidance and makes changes to pension regulations regarding offshore transfers.

Description

Part 1: Direct and Indirect Taxes This part makes adjustments to income tax rates for the tax year 2017-18 (basic rate 20%, higher rate 40%, additional rate 45%) and the corporation tax charge for the financial year 2018. It also makes several other amendments including changes to the taxation of workers' services provided through intermediaries, optional remuneration arrangements, taxable benefits, overseas pensions, and the deduction of income tax at source. There are also various amendments to indirect taxes.

Part 2: Soft Drinks Industry Levy This part establishes a new levy on the soft drinks industry, impacting drinks with high sugar content. The levy aims to reduce sugar consumption and generate revenue. It will affect producers and importers of sugary drinks with various levels of the levy depending on the sugar content per litre of the prepared drink, with exemptions for small producers and certain types of drinks. The bill outlines registration requirements, chargeable events, liability for payment, rates of levy, exemptions and tax credits, and penalties for non-compliance, including fraudulent evasion. The legislation also includes provisions for record-keeping, administration, and enforcement.

Part 3: Final This section details interpretations of abbreviations used throughout the bill and designates the bill as the Finance Act 2017.

Government Spending

The bill is expected to increase government revenue through the new soft drinks industry levy and changes to indirect taxes. The exact figures are not specified in the provided text, but it's anticipated that the sugary drinks levy will generate significant income. The impact on overall government spending may be offset by the increase in revenue.

Groups Affected

• Individuals: Changes in income tax rates, the new sugary drinks levy (as consumers), and adjustments to pension regulations will impact individuals.
• Businesses: Businesses will be affected by changes in corporation tax, indirect taxes, and the soft drinks industry levy (if they produce or import sugary drinks).
• Public Sector: The bill impacts how workers' services provided through intermediaries to public sector entities are taxed.
• Pension Schemes: The bill will affect those with overseas pension schemes, particularly regarding transfers and tax implications.
• Insurers: Increased insurance premium tax rates.
• Airlines: Increased air passenger duty rates.
• Motor Vehicle Industry: Changes to vehicle excise duty rates and zero-rating of adapted vehicles for disabled people.
• Alcohol and Tobacco Industries: Changes to alcohol and tobacco duty rates.
• Tax Avoidance Scheme Promoters: The bill's amendments affect the threshold conditions for identifying tax avoidance scheme promoters.

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