The Finance Bill 2017, following the March budget, was the longest Finance Bill for many years even after the U-Turns on NIC increases. That, however, has now changed due to the snap calling of a General Election.
Any proposed legislation is lost when an election is held if it is not enacted before Parliament stands down. It is usual, therefore, when an election is called for the main parties to get together to agree what should be passed. In the case of the Finance Bill, the clauses that can go through is a very much truncated version were agreed on 24th April.
The clauses concerning Making Tax Digital, previously clauses 120 to 122, have been dropped. Also dropped are the introduction of penalties for enablers of tax avoidance schemes, as well as the more specialist areas of “non-doms”, and the restrictions on certain corporate interest and carry forward of losses.
The remainder of the Finance Bill went through all of its parliamentary stages on 25th April so that it could become the Finance Act 2017 before the dissolution of parliament on 3rd May.
But fear not, brave hearts! Whoever won the General Election in June will certainly introduce a Finance Bill 2017 No 2 later in the year. This, of course, is not news. It had already been announced that 2017 was going to be the final Spring Budget, as these are to be replaced by Autumn Budgets, the first being in Autumn 2017. Therefore, we were already looking forward to and expecting a 2nd Finance Act. We will need to wait to see whether all of the “lost clauses” in the current Act are reintroduced and, if so, whether they form a new (& 3rd) Finance Bill 2017 or whether they are simply reintroduced as part of the new Autumn Budget.
Whatever happens, one thing seems probable. No party is currently proposing to extend the freeze on National Insurance Rates into the new parliamentary term, so the U-Turn on Class 4 NIC increases is almost certain to become a full circle!
Start saving, folks!
WatkinsonBlack have considerable experience in all areas of taxation and businesss services, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.