Overview

The Finance (No. 3) Bill is a UK government bill that modifies various taxes, duties, and allowances for the tax year 2011-12 and beyond. It aims to raise revenue and implement anti-avoidance measures, affecting numerous aspects of the UK tax system.

Description

The bill makes significant changes to income tax, corporation tax, capital gains tax, and various excise duties. Key income tax changes include setting the basic rate at 20%, higher rate at 40%, and additional rate at 50%, with adjustments to the basic rate limit and personal allowance. Corporation tax rates are adjusted for 2011 and 2012, with changes to the small profits rate and supplementary charge. The annual exempt amount for capital gains tax is set at £10,600 for 2011-12, with subsequent years subject to RPI inflation. Entrepreneurs' relief is increased. Capital allowances are modified, including reductions in plant and machinery writing-down allowances and changes to the annual investment allowance and short-life assets. Excise duties are altered for alcohol, tobacco, gaming, and fuel. The bill includes numerous anti-avoidance provisions targeting various schemes, impacting areas like employment income, charitable donations, loan relationships, and leasing businesses. Significant changes are also made to pension taxation, introducing adjustments to benefits, annual allowances, and lifetime allowances, as well as a bank levy and modifications to value added tax, climate change levy, aggregates levy, and stamp duty land tax.

Government Spending

The bill is projected to increase government revenue through increased tax rates and anti-avoidance measures. Specific figures on the overall impact on government spending are not readily available in the provided text but the overall effect is expected to be an increase in government revenue.

Groups Affected

• Individuals: Changes to income tax rates, personal allowances, capital gains tax, pension allowances, and various excise duties will impact individuals' tax liabilities. Higher earners will see a reduction in childcare relief.
• Businesses: Corporation tax rate changes, capital allowances modifications, anti-avoidance measures, and changes to VAT, climate change levy, and aggregates levy will affect business taxation.
• Banks and Financial Institutions: The introduction of a bank levy significantly impacts these institutions.
• Charities: Anti-avoidance measures target tainted charity donations, potentially affecting tax relief and repayments.
• Pension Scheme Members: Changes to pension taxation, including benefits, annual allowance charges, and lifetime allowance charges, will significantly affect pension scheme members.
• MPs: Changes to the taxation of their accommodation expenses.
• Leasing Businesses: Anti-avoidance provisions impacting leasing companies and long-funding finance leases.

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