Overview

The Finance (No. 2) Bill makes various provisions relating to finance, including changes to income tax, corporation tax, capital gains tax, alcohol duty, and the introduction of a multinational and domestic top-up tax. It also includes miscellaneous amendments to other taxes and tax administration.

Description

The bill covers a wide range of tax-related matters. Significant changes include altering income tax rates for 2023-24, adjusting corporation tax rates for 2024, introducing temporary full expensing for plant and machinery, and abolishing the lifetime allowance charge for pensions. The bill also introduces new reliefs for small alcohol producers, and makes significant changes to the taxation of multinational corporations through the introduction of a multinational top-up tax and a domestic equivalent. Further provisions cover alcohol duty, stamp duty land tax, value added tax, environmental taxes, and various administrative and procedural matters related to tax collection and enforcement. The bill also includes clauses related to the Homes for Ukraine scheme and the abolition of the Office of Tax Simplification.

Government Spending

The bill's impact on government spending is complex and multifaceted. While some provisions, such as the increased annual allowance for pensions, may increase government outlays, others, like the introduction of the multinational top-up tax and changes to alcohol duty, are intended to increase government revenue. Precise figures are not provided in the bill text.

Groups Affected

• Individuals: Changes to income tax rates, pension rules (lifetime allowance, annual allowance, money purchase allowance), and the alcohol duty will directly affect individuals.
• Businesses: Corporation tax changes, capital allowances, research and development tax reliefs, and the alcohol duty will affect businesses. Multinational corporations will be particularly impacted by the introduction of multinational top-up tax. Small businesses may benefit from certain reliefs.
• Pensioners: Abolition of the lifetime allowance charge will impact those with substantial pension savings.
• Alcohol producers: Small producers may benefit from reduced alcohol duty; larger producers may be negatively impacted. Wholesalers of alcohol face new regulations and potential penalties.
• Multinational corporations: The introduction of multinational top-up tax is designed to affect companies with global operations.
• Charities and Community Amateur Sports Clubs: The definition of charity and CASC will be limited to UK-based organizations only.
• Farmers: The tax treatment of lump sum exit scheme payments will be impacted.
• Individuals sponsoring Ukrainians: The Homes for Ukraine Sponsorship Scheme is addressed concerning tax exemptions.

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