September was a busy month for legislation with the publication on 8 September of the Finance Bill (2017-19) followed by draft clauses for Finance (No. 2) Bill (2017-19) on 13 September. Hopefully next year the volume of legislation will be reduced, as we move to the new pattern of a single Budget every autumn.
Finance Bill (2017-2019)
Finance Bill (2017-19) includes almost all of the clauses that were dropped from the March 2017 Finance Bill, which was drastically stripped back following the announcement of the June general election. It will become Finance (No. 2) Act 2017 when it is passed in due course as, confusingly, while it is the first Finance Bill of the current Parliamentary session it will become the second Finance Act of the current calendar year.
As much of the content has been previously published there will not be a formal consultation period. The highlights from this bill include:
- Legislation to enable Making Tax Digital through the requirement to keep digital records. Further regulations concerning MTD have been published in draft.
- The introduction of the two new £1,000 allowances for trading and property business income from 2017-18.
- The extension of the cash basis for property businesses, which will now be the default position for unincorporated property businesses from 2017-18 provided their cash receipts are under £150,000 for the year.
- The reduction in the dividend nil rate from £5,000 to £2,000 from 2018-19.
- Changes to the taxation of termination payments from 2018-19.
- A major reform of the provisions for non-domiciled individuals taking effect from 2017-18.
- Penalties for enablers of defeated tax avoidance schemes, which will apply from Royal Assent.
- Reliefs for employer funded legal advice and indemnity insurance from 2017-18.
- The reduction in the money purchase annual allowance from 2017-18.
Draft Clauses for Finance (No. 2) Bill (2017-19)
Although we have had Bills in March, June and September, this is the second Bill of the current Parliamentary session running from 2017 to 2019 – hence the distinguishing number two. Draft clauses were published on 13 September for consultation. Responses are requested by 25 October. The Autumn Budget will take place on 22 November and the topics below are expected to be included in what will then become Finance Act 2018:
- Tackling disguised remuneration – avoidance schemes.
- Termination payments: removal of foreign service relief.
- Partnership taxation: proposals to clarify tax treatment.
- Offshore trusts: anti-avoidance.
- Bank Levy: changes to scope and administration.
- Income Tax: debt traded on a multilateral trading facility.
- Landfill Tax: Disposals not made at landfill sites.
- Pensions Tax registration.