Overview

The Finance (No. 3) Bill is a UK government bill that makes numerous amendments to the law relating to taxation, including direct taxes (income tax and corporation tax), other taxes (stamp duty, VAT, excise duties etc.), a new carbon emissions tax, and administration and enforcement procedures. It also includes provisions related to EU withdrawal and reviews of tax avoidance and other policy impacts.

Description

This bill covers a wide range of tax changes. Key areas include:

• Direct Taxes: Updates income tax rates and allowances, introduces changes to the taxation of employee benefits (cars, vans, workplace charging), alters the tax treatment of social security income, and makes significant changes to capital gains tax (CGT) rules for non-UK residents, international tax issues (offshore receipts, profit fragmentation, diverted profits tax, hybrid mismatches), corporation tax (losses, interest restrictions) and capital allowances.
• Other Taxes: Amends stamp duty land tax (SDLT) rules, particularly for first-time buyers and additional dwellings, introduces changes to SDLT and stamp duty reserve tax (SDRT) for transfers of listed securities, alters VAT rules on vouchers and group eligibility, and modifies excise duties on alcohol and tobacco.
• Carbon Emissions Tax: Establishes a new carbon emissions tax for regulated installations, outlining the charge mechanism, reporting requirements, and administrative powers.
• Administration and Enforcement: Extends time limits for assessments related to offshore matters for income tax, CGT and inheritance tax, introduces provisions for security deposits for the construction industry scheme and corporation tax, modifies provisions on international tax agreements and double taxation disputes, and strengthens international tax enforcement capabilities.
• Miscellaneous and Final: Revokes rules for regulatory capital securities and makes new provisions for hybrid capital instruments. It contains provisions dealing with EU withdrawal and several reviews of the bill's impact.

Government Spending

The bill is expected to impact government spending through changes in tax revenue. Specific figures are not provided in the bill text itself; the overall effect on government spending will depend on the success of the tax changes in raising revenue and the cost of implementing the new carbon emissions tax and administration changes. Reviews mandated by the bill are intended to analyze these impacts.

Groups Affected

• Individuals: Changes to income tax rates, allowances, and treatment of employee benefits will affect all taxpayers. Non-UK residents face significant changes to CGT rules.
• Companies: Corporation tax rates, allowances, and international tax rules are altered, impacting all companies, particularly those with international operations. The new carbon emissions tax will affect companies operating regulated installations.
• Charities: Changes to gift aid and the exemption for small trades could impact their income and operations.
• Construction Industry: The introduction of security deposit provisions may affect businesses in this sector.
• Financial Institutions: SDLT and stamp duty exemptions relating to resolution procedures affect this sector.
• Oil and Gas Industry: Transferable tax history rules will significantly impact this industry.
• Gaming Industry: Changes to remote gaming duty will impact revenue and profitability.

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