It appears that up to 72 clauses in Finance Bill have been put on hold until after the election, and there’s speculation that some could be dropped permanently. And the Westminster rumour mill has it that after the election Phil is finished in May’s eyes following serval budget clangers.
The FT reports that more than half the Finance Bill has been delayed, put on hold until after the UK general election, including a Phillip Hammond’s measures to increase dividend taxes, a major on overhaul of the non-dom rules, and plans to force small to medium sized businesses to keep digital tax records.
72 of the 135 clauses were removed to enable the legislation to be pushed through parliament in just two hours, dramatically reducing the size of the Bill, which is said to be one of the longest Finance Bills in history – so much for the Conservative’s pledge of a bonfire of red tape!
Of interest to many landlords, and anyone with company and investment income outside of tax shelters, will be the dropping of the measure to cut the annual tax-free allowance on dividend income from £5,000 to £2,000. This was forecast to generate almost £1bn in extra tax a year by 2020.
Another shelved measure is one to charge inheritance tax on UK property held in offshore trusts and the planned HMRC scheme to require businesses and self-employed workers to file quarterly tax returns online each year named “making tax digital”.
Labour opposition MPs would have made it difficult to pass through many of the clauses on the nod, prompting Chancellor Hammond to comment that Labour’s insistence on dropping his planned anti-avoidance tax measures just would “give the lie to everything that they’re saying about being tough on tax avoidance and evasion”, though a Treasury minister told MPs that the government would still legislate for the postponed measures, which would make a significant contribution to the public finances, “at the earliest possible opportunity at the start of the next parliament”.
Bill Dodwell, president of the Chartered Institute of Taxation, called on the government “to make a clear statement about whether (if re-elected) all of the clauses dropped will be reintroduced on the original timetable”.
Frank Haskew, head of the tax faculty at the ICAEW, an accountancy institute, commenting on the fact that some of the measures being in force already, has said that the uncertainty created by some of these measures being implemented before they become law was a longstanding problem, although it was likely to be solved when the Budget was moved to the autumn. “It is hugely unsatisfactory to be subject to rules when you have not got the legislation in force.”
Finance Bill 2017: legislation and explanatory notes here
Budget 2017: Finance Bill Drops 70 Budget Clauses https://t.co/tvXfJNLLcE
— LandlordZONE (@LandlordZONE) May 3, 2017