Overview

The Finance (No. 2) Bill is a UK government bill that makes various changes to tax laws, affecting both direct and indirect taxes. These changes include adjustments to income tax rates and allowances, corporation tax rates, and various stamp duties and excise duties. It also introduces new rules concerning disguised remuneration and clarifies existing rules on areas such as settlements and partnerships.

Description

The bill is divided into three parts. Part 1 deals with direct taxes, including:

• Income Tax: Changes to rates (basic, higher, additional), allowances, and the treatment of termination payments, seafarers' earnings, and benefits in kind (diesel cars).
• Corporation Tax: Adjustments to rates, research and development expenditure credit, and rules concerning intangible fixed assets and transactions between related parties.
• Pensions: Amendments to regulations concerning pension schemes.
• Investments: Changes to Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), and Venture Capital Trust (VCT) reliefs, focusing on risk-to-capital and knowledge-intensive companies.
• Partnerships: New rules concerning bare trusts and indirect partners. The bill aims to clarify the taxation of partnerships, including how profits and losses are shared.
• Double Taxation Relief: Amendments to counter tax avoidance and clarify the treatment of foreign tax credits.
• Disguised Remuneration: New rules to tackle tax avoidance schemes relating to employment and trading income provided through third parties.

Part 2 covers indirect taxes, such as:

• Value Added Tax (VAT): Amendments concerning online marketplaces and VAT refunds to public authorities.
• Stamp Duty Land Tax (SDLT): Changes to higher rates for additional dwellings and the introduction of relief for first-time buyers.
• Landfill Tax: Expansion of the tax to include disposals of material at sites other than landfill sites.
• Excise Duties: Adjustments to air passenger duty and vehicle excise duty (VED) rates.

Part 3 includes miscellaneous and final provisions, such as:

• Customs enforcement powers: Strengthened powers for officers to enter premises and inspect goods.
• Updating of statutory references: Updates to reflect changes in legislation and regulations, particularly concerning CO2 emissions figures.

Government Spending

The bill's impact on government spending is not explicitly stated within the provided text. However, changes to tax rates and allowances will likely alter government revenue, potentially increasing or decreasing overall spending depending on the success of revenue generation from the changes made.

Groups Affected

• Individuals: Changes to income tax rates and allowances, as well as SDLT, will directly affect individuals' tax liabilities.
• Businesses: Amendments to corporation tax, VAT, and excise duties will impact businesses' tax burdens.
• Pension Schemes: Changes to pension scheme regulations affect pension providers and scheme members.
• Investors: Amendments to EIS, SEIS, and VCT reliefs will affect investors in these schemes.
• Partnerships: The revised partnership tax rules will have implications for partners and their tax liabilities.
• Online Marketplaces: New VAT rules will affect operators of online marketplaces and sellers using those platforms.
• Banks: Amendments to the bank levy will alter the tax paid by banks.
• Public Authorities: Changes to VAT refunds and other provisions will impact public authorities' finances.
• First-time buyers: New SDLT relief specifically targets first-time buyers.
• Oil and Gas companies: Amendments to oil activities taxation.

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