Overview

This Finance Bill makes numerous amendments to existing tax laws in the UK, covering direct and indirect taxes, administration, avoidance, and enforcement. It introduces new reliefs, alters existing tax rates, and clarifies various aspects of tax legislation, primarily focusing on modernizing tax reporting and tackling tax avoidance schemes.

Description

The bill introduces several key changes. It amends the Income Tax (Earnings and Pensions) Act 2003, adjusting time limits for making good taxable benefits and revising the tax treatment of ultra-low emission vehicles. A new exemption for pensions advice is introduced, and the deduction for employee liabilities is expanded to include certain legal expenses. The bill significantly revises the tax treatment of termination payments, introduces changes to PAYE settlement agreements, and modifies the money purchase annual allowance. It updates rules around dividends, life insurance policies, Enterprise Investment Schemes (EIS), Seed Enterprise Investment Schemes (SEIS), Venture Capital Trusts (VCTs), and business investment relief. Changes are made to the calculation of profits for trades and property businesses, including provisions for cash basis accounting. The bill also introduces amendments to corporation tax, including provisions for carried-forward losses and counteracting avoidance arrangements, as well as a new corporate interest restriction.

Further changes impact indirect taxes, specifically Air Passenger Duty, Petroleum Revenue Tax, gaming duty, remote gaming duty, and tobacco products manufacturing machinery licensing. Significant provisions relate to the administration, avoidance, and enforcement of tax, including digital reporting and record-keeping requirements for income tax and VAT. Finally, the bill includes provisions on deemed domicile for income tax, capital gains tax, and inheritance tax, plus various other technical amendments.

Government Spending

The bill's impact on government spending is complex and depends on the specific changes and their effect on tax revenue. No overall figures on the net effect are provided within the bill text. The changes could lead to increased or decreased revenue depending on the success of new anti-avoidance measures and the adjustments to tax rates and allowances.

Groups Affected

• Employees: Affected by changes to taxable benefits, pensions advice, legal expenses, termination payments, and PAYE settlement agreements.
• Employers: Affected by changes to taxable benefits, pensions advice, legal expenses, termination payments, and PAYE settlement agreements.
• Investors: Affected by changes to dividend taxation, EIS, SEIS, VCTs, and social investment tax relief.
• Businesses: Affected by changes to corporation tax, carried-forward losses, interest restrictions, and digital reporting requirements.
• Individuals (self-employed): Affected by changes to the calculation of profits, cash basis accounting, and trading allowances.
• Property Businesses: Affected by changes to the calculation of profits, allowances, and cash basis accounting.
• Airlines: Affected by changes to Air Passenger Duty rates.
• Oil and Gas Companies: Affected by changes to Petroleum Revenue Tax.
• Gambling Companies: Affected by changes to gaming duty and remote gaming duty.
• Tobacco Companies: Affected by changes to tobacco products manufacturing machinery licensing.
• Fulfilment Businesses: New regulations on third-country goods fulfilment businesses will impact businesses operating in this sector.
• Those with offshore assets: The bill introduces measures targeting offshore tax non-compliance, affecting individuals and businesses with offshore holdings.
• Museums and Galleries: A new tax relief scheme is introduced for the production of exhibitions.

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