Finance Bill shrinks in the parliamentary wash-up as PM announces snap election
The announcement of a snap general election to take place on 8 June 2017 had an immediate impact on some of the most eye-catching announcements from the Spring Budget, with the parliamentary wash-up seeing key clauses dropped from the Finance Bill.
Making Tax Digital, as well as changes to the Money Purchase Annual Allowance and Dividend Tax Allowance all fell victim to the need to secure the passage of the Bill through Parliament before it was dissolved ahead of the election.
Confirming the move to MPs, Financial Secretary to the Treasury, Jane Ellison said: “The Bill is progressing on the basis of consensus and therefore, at the request of the Opposition, we are not proceeding with a number of clauses.
“However, there has been no policy change. These provisions will make a significant contribution to the public finances, and the Government will legislate for the remaining provisions at the earliest opportunity, at the start of the new Parliament.”
Making Tax Digital, which should it proceed will see most businesses, landlords and self-employed people having to report to HM Revenue & Customs (HMRC) on a quarterly basis, has proven highly controversial within the accountancy profession.
Concerns raised include the potential costs to businesses of putting the software in place to comply with the measures and the tight timetable for implementation.
However, the Government seems undeterred, with Ms Ellison telling MPs: “The Government remain committed to the digital future of the tax system, a principle widely accepted on both sides of the House.”
Plans to cut the tax-free dividend allowance also failed to make the cut in Parliament. This would have seen the allowance cuts from £5,000 to £2,000 from April 2018.
The reduction in the Money Purchase Annual Allowance from £10,000 to £4,000 announced at the Spring Budget had taken effect on 6 April 2017, but was dropped from the bill.
It would have further restricted the amount of relief on pension contributions, where an individual has flexibly accessed their pension pot.
The Chartered Institute of Taxation (CIOT) says the clauses removed from the Finance Bill have seen it shrink from 762 pages to approximately 140.
The organisation’s president, Bill Dodwell, said: “If the original bill was the weight of a family sized turkey, the act which gains royal assent later this week will be more of a ‘turkey crown for one’ portion. However, going through 140 pages of legislation in barely two hours is still less than ideal. Hopefully this will be last time there is a need for such a compacted process.”
Other measures which were dropped from the Bill before it became the Finance Act 2017 include:
- the new £1,000 trading and property allowances;
- the pension advice allowance; several reforms to the status of non-doms, including reducing the deemed domicile limit by two years to 15 of 20 years;
- the increase in income tax exemption for employer-funded pension advice to £500; and
- the right of people who make disproportionate gains on investment bonds to request for their tax bills to be reassessed on a just and reasonable basis.
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- HMRC launches revamped CEST IR35 off-payroll working tool
- New Advisory Fuel Rates
- VAT receipts reach record level of £133 billion
- Around half of the UK’s SMEs admit to making errors on taxes
- Late payments a huge drain on SMEs
- The end of the help-to-buy ISA – What’s next?
- HMRC urges taxpayers to be vigilant ahead of self-assessment deadline
- Keeping workplace gifts tax-free this Christmas
- Annual R&D spend in the UK reaches £25 billion
- Countdown to the 31 January Self-Assessment Tax Return deadline begins
- Grant scheme opportunities for electric vehicle charging infrastructure at work
- Spanish holiday home owners cautioned over post-Brexit tax impact
- Businesses and contractors offered clarity on IR35
- Pension holders to be refunded £54 million of overpaid tax
- Newly cohabiting parents warned over new tax charge
- HMRC trialling self-assessment checks to help local authorities to recover council tax
- Overseas employees potentially face double NICs liability following a no-deal Brexit
- New figures show a sharp increase in Inheritance Tax (IHT) receipts
- Non-VAT-registered businesses need EORI number to trade with EU customers and suppliers post-Brexit
- 25,000 companies receive penalties for the late filing of accounts in just one month
- HM Revenue & Customs has started carrying out PAYE tax investigations remotely
- Wages rise at the fastest rate in a decade
- Renovated homes that have been empty for two years can qualify for a reduced rate of VAT
- Government delays introduction of VAT reverse charge!
- Making a voluntary disclosure to HMRC
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- Boots, Asda and Specsavers push back against business rates
- Half of all SMEs make VAT return mistakes
- Tax investigations reap in £13 billion for the treasury
- How to tell if an email is fraudulent
- Government’s draft IR35 legislation contains important changes
- Construction businesses only have weeks left to prepare for the VAT reverse charge
- HMRC outlines changes to Capital Gains Tax treatment on second homes
- Summer childcare costs cooldown with Tax-Free Childcare
- Employment Allowance to be restricted from next year
- Principal Private Residence Relief and Lettings Relief changes due in April 2020
- New figures show that a quarter of estates paying Inheritance Tax (IHT) are investigated by HMRC
- Wealthiest UK families save nearly £700 million a year in Inheritance Tax
- Taxpayers’ bills delayed by payment on account errors
- SMEs unaware of £1 million annual investment allowance
- Businesses encouraged to increase readiness for no-deal Brexit
- Value of UK SMEs reach £3 trillion
- More than 150 chief financial officers and senior finance executives personally fined by HMRC last year
- Remember to pay the annual data protection charge
- Incorporation no longer automatically resets the two year requirement for sole traders
- Government confirms that HMRC will get a higher priority when firms go bust
- MTD for VAT - relaxation on posting supplier statements
- Significant lack of awareness around gifting rules for IHT
- EIS and SEIS tax relief funding passes £2.1 billion
- New code launched to help protect victims of sophisticated banking fraud
- Revenue tests new trigger to increase the accuracy of PAYE codes
- Pass on up to £950,000 tax-free in 2019-20
- Beware the Employer Compliance Check Questionnaire
- Employers must comply with new payslip rules
- Additional year to prepare for Making Tax Digital for taxes other than VAT
- IR35: off-payroll working rules set to change next year
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- Invoice fraud cost UK firms £93 million last year
- Businesses get to grips with new employment costs
- Spring Statement 2019
- National Living Wage to rise next month
- Are you making full use of the generous R&D relief scheme?
- Tribunal finds in favour of Middlesbrough FC in low pay claim
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- New advisory fuel rates for company car users
- Delay in issuing Self-Assessment penalty notifications
- Making Tax Digital productivity boost expected to be worth billions to UK SMEs
- Automatic Enrolment contributions to increase
- HM Revenue & Customs drops insistence that all company directors must submit tax returns
- Late payers to be flagged up to businesses under new proposals
- Just over half of businesses are prepared for Making Tax Digital
- Entrepreneurs’ Relief changes fail to meet up to the test
- Payroll sector prepares for key changes in 2019/20
- Taxpayers treated unfairly by HMRC, says House of Lords report
- Taxpayers offered online tool to assess their self-assessment requirement
- Tax rates rise twice as fast in the UK than the international average
- An end to the Entrepreneurs’ Relief ‘dilutions dilemma’?
- Brexit uncertainty sends small business confidence to a seven-year low
- Debt recovery costs small businesses an average of £9,000
- Smaller estates should not have to file IHT paperwork, says Office for Tax Simplification
- Big increase in P2P lending
- 180,500 first-time buyers benefit from relief on Stamp Duty Land Tax (SDLT)
- Italian e-invoicing requirements make Making Tax Digital look like a walk in the park
- House of Lords calls for a delay to Making Tax Digital
- UK takes second spot for tax compliance in G20
- Unwrapping Christmas tax gifts
- National Living Wage to rise in April 2019
- Entrepreneurs’ Relief rules to be tightened
- Research reveals Inheritance Tax hotspots across the UK
- R&D Tax Credit system to be reviewed in light of fraudulent claims
- HM Revenue & Customs to review and rework some 2016-17 self-assessment tax returns following error
- Payee names to be required for bank transfers in effort to combat fraud and errors