Overview

This Finance Bill proposes significant changes to UK tax laws, impacting income tax, corporation tax, capital gains tax, excise duties, and value-added tax (VAT). It also introduces a new high-income child benefit charge, reforms the taxation of insurance companies and friendly societies, and makes provisions for a bank levy and a new tax on high-value residential properties.

Description

The bill is extensive, covering numerous areas of taxation. Key changes include:

Income Tax

• Changes to income tax rates and allowances for 2012-13 and subsequent years.
• Introduction of a high-income child benefit charge.
• Various anti-avoidance measures relating to loss relief and agricultural expenses.
• Specific tax treatment for income from the 2013 Champions League final for non-UK resident overseas team employees and contractors.
• Clarification of the tax treatment of car security features and termination payments to MPs.

Corporation Tax

• Reduction in the main corporation tax rate.
• Changes to corporation tax rates for financial years 2012 and 2013.
• New provisions concerning the taxation of profits arising from the exploitation of patents.
• Amendments to corporation tax relief for research and development expenditure.
• Tax treatment of financing costs and income.
• Amendments to group relief and company distributions.
• Specific provisions for insurance companies and long-term business, including a new I-E (Income-Expense) basis for taxing life assurance business.
• Changes to the taxation of friendly societies.

Capital Gains Tax

• Changes to the annual exempt amount.
• Amendments concerning foreign currency bank accounts.
• New regulations concerning collective investment schemes.
• Changes to roll-over relief.

Excise Duties

• Changes to the rates of tobacco products duty, alcoholic liquor duties, hydrocarbon oil duties, air passenger duty, and gambling duties.

Value Added Tax (VAT)

• Changes to the categorisation of supplies.
• Introduction of an anti-forestalling charge to VAT.
• Various amendments relating to supplies by public bodies and other VAT administration matters.

Other Taxes

• Changes to the standard rate of landfill tax.
• Amendments to the climate change levy.
• Amendments to inheritance tax rate bands.
• Introduction of a bank levy.
• Amendments to stamp duty land tax.
• Provisions regarding controlled foreign companies and foreign permanent establishments.
• A new tax on ownership of high-value residential properties or dwellings.

Government Spending

The bill's impact on government spending is complex and multifaceted. While some tax changes might lead to increased revenue (e.g., the new high-income child benefit charge and bank levy), others could reduce revenue (e.g., various tax reliefs and exemptions). Precise figures are not provided in the bill text itself, requiring further analysis.

Groups Affected

• High-income earners: Affected by the new high-income child benefit charge and potentially other tax changes.
• Individuals: Impacted by changes to income tax rates, allowances, and capital gains tax.
• Businesses: Affected by changes to corporation tax rates, capital allowances, and anti-avoidance measures.
• Insurance companies and friendly societies: Significantly impacted by the reforms to their taxation.
• Charities: Potentially affected by changes to gift aid relief.
• Owners of high-value residential properties: Subject to a new tax on high-value properties.
• Banks: Subject to the new bank levy.
• Armed forces personnel: Affected by changes to employment income exemptions.
• Tax agents: Subject to new regulations on dishonest conduct.

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