Finance Bill to be streamlined to pass before the UK general election

Following the Spring Budget in March this year, a further draft Finance (No. 2) Bill 2017 was published. It is one of the longest Finance Bills to date, containing a number of difficult concepts and some controversial changes.

Before Theresa May announced that there would be a general election in the UK on 8 June 2017, the Finance Bill 2017 was due to pass through Parliament in the usual way, with likely enactment in the summer. However, the call for an election has disrupted due Parliamentary process. The government has been forced to decide whether to try to push the Bill through Parliament in its current form before Parliament is dissolved for the election, or withdraw many of the more controversial clauses,  to be considered by the new government post-8 June.

It has been announced today that a substantial number of clauses will be dropped from the Finance Bill 2017, including those on Making Tax Digital, corporate loss relief, interest deductibility and domicile changes. We understand it is Parliament’s expectation that most of these provisions will be reintroduced to the Parliamentary table after the election in another Bill, when there will be time to give them proper consideration.

The Financial Secretary to the Treasury 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. The Government remain committed to the digital future of the tax system, a principle widely accepted on both sides of the House. We recognise the need for the House to consider such measures properly, …. That is why we have decided to pursue those measures in a Finance Bill in the next Parliament, in the light of the pressures on time that currently apply.”

This is not an ideal way to take a Finance Bill through Parliament and will undoubtedly cause some concern for businesses and individuals gearing up to implement these new rules. However, if these provisions were pushed through without due consideration and consultation we could have found ourselves with further uncertainty, which would need to be addressed with future legislative amendments.

To discuss any of the matters raised in this article, please contact one of our experts.