26.04.17 Finance Bill 2017 Amendments – Government remove majority of clauses

Following a debate in the House of Commons on 25^th April 2017, the draft Finance Bill 2017 (‘the bill’) has had the majority of its clauses removed, shortening the draft legislation from its original 776-page long document to 156 pages. The Bill must now complete its passage through Parliament before receiving Royal Assent.

See a summary of some of the clauses that have been removed from the Bill;

• Clause 5 – Dividend nil rate for tax year 2018-19 etc - The proposed reduction to the tax-free dividend allowance, from £5,000 to £2,000 will not go ahead
• Clause 9 – Taxable benefits: time limit for making good
• Clause 14 – Termination payments etc: amounts chargeable on employment income
• Clause 15 – PAYE settlement agreements
• Clauses 120 – 122 relating to “Making Tax Digital”. However, during the House of Commons debate, MP Kirsty Blackman stated “… it would be better to bring it back following the general election. We did not feel we had adequate time to scrutinise those changes and I appreciate the Government taking that measure out of the Bill.”
• Clause 125 – Penalties for enablers of defeated tax avoidance
• Schedule 17 – Employment income provided through third parties loans etc outstanding on 5 April 2019

Clause 7 (now clause 6) remains which sees the introduction of Chapter 10, Part 2 of the Income Tax (Earnings and Pensions) Act 2003 which details the IR35 reform that changes the tax treatment for intermediaries (typically PSCs) caught by IR35 if the end-user is a public authority.

A new clause is to be added with regard to “Review of international best practice in relation to tax avoidance and tax evasion” which states that, within two months of the passing of the legislation, the Chancellor of the Exchequer must commission a review of international best practice by Governments and tax collection authorities in relation to the prevention and reduction of tax avoidance arrangements and combatting tax evasion.

See the amended draft of the Bill here.

Click here to read the full debate that took place in the House of Commons on the 25^th April 2017.

Aspire Comment

It has been suggested that the changes to the Finance Bill 2017 have been made in order to achieve the consensus that the Finance Bill requires to receive Royal Assent prior to the general election.

We can’t assume that the clauses which have been removed at this stage will be permanently reprieved.

If any of the changes to the Finance Bill murky your understanding of how the legislation may impact you, then please give Aspire a call.