Which parts of the Finance Bill have survived?

25 April 2017

By the time that you read this is it likely that the Finance Bill will have completed all of its progress through the House of Commons - the usual process of scrutiny being a victim of the general election, with all of the normal stages that a Bill passes through being compressed into a single day.

As we suggested in last week's briefing the Chancellor has not attempted to get the whole of the Bill through and has dropped whole swathes of the legislation. We can't give a complete list (which is available here) but we pick out some of the highlights.

The main principle seems to have been that clauses which will apply to 2017-18 have been retained but clauses relating to future years have been dropped. For example the clauses setting tax rates for 2017-18 remain but the clause setting the dividend rate for 2018-9 has gone. The new rules for salary sacrifice, which come into effect from 6 April 2017 are retained but the new rules for termination payments, which were to come into force from 6 April 2018 have gone.

Last week we speculated about the clauses giving effect to Making Tax Digital, in the light of the concerns expressed by the opposition. Perhaps as a result of this (we don't know) they have also been dropped. We were also interested to see that the requirement to correct any offshore tax non-compliance, which we have commented on here before, has always been dropped, as has the charge on loans from Employee Benefit Trusts outstanding on 5 April 2019. Those of you with a sweet tooth should note, however, that the sugar tax has been retained in its entirety!

So what happens next?  Royal Assent to what remains of the Bill will be received on Thursday before Parliament is dissolved and the Act will become law. As far as we can see this expedited enactment will not result in legislation taking effect earlier than planned because the surviving measures were due to come into effect from 6 April this year anyhow (though we have to confess that we have not scrutinised every line of the bill again this morning so there could possibly be some surprises). As far as the clauses which have been dropped much will depend on what happens after the election. If there is a return of a Conservative government we would expect that the clauses will be reinstated in a summer finance bill. If there is a change of government all bets are off.

For more information please get in touch with Andrew Hubbard, or your usual RSM contact.

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