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The missing 80% of the 2017 Finance Bill

There seems to be no sign of the 80% of the Bill that got dropped - what now?

When the General Election was called in April 80% of the longest Finance Bill there had ever been was dropped - Jane Ellison MP said in the only debate that took place on 25 April that the government would bring back the remainder after the General Election.  In the chaos following the result it seems that the other 80% has gone missing as there is no sign of it being set down in Parliament before they go on the summer hols from July 20th.  They come back on September 5th but then go off to Conference on the 16th of September and don't finish that until after the 5th October.  The worry is that quite a few measures were supposed to be implemented from 6 April 2017  the new rules for domicile for example.  If a taxpayer has been resident for 16 years out of the previous 20 is he or she still, able to use the remittance basis or will the legislation come back from 6 April 2017 and deem them to be domiciled in the UK? What happens if that person dies before the Bill comes back?  How much can a person who has retired already put into pension products annually - £4,000 or £10,000?  What about making tax digital?  I'm sure the politicians think getting themselves sorted is more important than this sort of detail but surely some sort of guidance is urgently needed here?  Has anyone got any idea from internal rumous in either Treasury or HMRC what is happening and what will happen? - I hope that is not a rhetorical question by the way...

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10th Jul 2017 11:44

I've heard two things:
1. A tax sweetner may be announced in the Autumn to keep voters happy
2. MTD has to be postponed as they need to devote all IT coding resources at sorting out the current problems with tax return submission.

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to Rebecca Cave
10th Jul 2017 12:17

Thanks - I don't know about a sweetener to keep voters happy - what about those of us who need to provide advice on current taxation issues! It does seem odd that the government and HMRC are silent on the disappearing Bill - maybe we'll get the answer on 18th July - Chancellor's questions...

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to Rebecca Cave
10th Jul 2017 16:53

taxwriter wrote:

I've heard two things:
1. A tax sweetner may be announced in the Autumn to keep voters happy

Politics isn't in my skill set but isn't it a bit late for that?

Or are we already thinking about the next election?

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By Eric T
10th Jul 2017 13:55

I truly, truly hope that the postponement of MTD is genuinely going to happen.

I don't often say prayers before bed time but every night I've offered up a little prayer that MTD might somehow just melt away.

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to Eric T
12th Jul 2017 12:35

Wholly agree. This must be one of the worst efforts ever proposed by HMRC. Their reasoning for introducing it are totally spurious - they will not raise additional revenue - in fact the tax take could fall as loads of self employed fall out of the system. In addition clients' accountancy costs would increase substantionally (that is assuming accountants could cope with the additional work - most can barely cope once a year) thus reducing taxable profits.
God help accountants if their clients try to do some of the work and expect us to sort things out at the year end.

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10th Jul 2017 14:04

I forgot to point out that Jane Ellison lost her seat in the election and her place seems to be taken by Mel Stride - presumably he has to take on board the technical nature of the legislation to pilot it through parliamentary debates...

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to Paulsoper
10th Jul 2017 16:52

He won't do it himself. Ministers have no real knowledge of the roles to which they're allocated. The detailed stuff is done by minions.

One minute you can be Secretary of State for Wales, next minute Minister for Brexit. By the time they've got a bit of a grasp of their jobs, there's been a reshuffle and there's another job to learn.

Minister Without Portfolio is always a cracker. We haven't had one for a few years now - presumably the Government is well-placed for portfolios at the moment.

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to lionofludesch
10th Jul 2017 17:25

To be fair, in recent years the practice of both parties has been to keep ministers in their roles for longer. I agree that Cabinet musical chairs used to be a near-annual event.

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to lionofludesch
10th Jul 2017 17:36

If you look at the debate in Hansard the unlucky minister charged with piloting the Bill through does have to have quite a detailed knowledge of what is in it and why, Jane Ellison in her one day demonstrated this quite well.

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to Paulsoper
12th Jul 2017 13:15

I'm tipping they just tell the minister the HMRC side.

So they can trot out the platitudes.

They know nothing about software (fobbed off onto software firms) or the effect on businesses (wasted time and effort providing figures to people who - apparently - aren't going to look at them).

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10th Jul 2017 16:11

Based on the Parliamentary processes, does anyone have a view on the latest date on which a short FB could be published and still enacted before the summer recess?

My perspective is a publishing one. We have three Claritax Books titles ready to go off to the printers but I am holding them back in case there are some last minute changes. In 2010, the FB was published on 1 April and was passed on 8 April, using the so-called wash-up rules. But that process proved contentious, and it is difficult to envisage any controversial legislation going through in the next 10 days.

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to raychidell
10th Jul 2017 17:41

The Finance Bill would not be short - we had that one before the election, 156 pages instead of 776, although much of the Bill that became the Finance Act 2017, passed on 27 April 2017, was to do with the Soft Drinks Industry Levy. The government promise was that the rest of the Bill - the missing 80% would come back after the election. Even if the Chancellor does bring forward a Finance Bill on the 18th when it is his turn to answer parliamentary questions it does not need to passed before the summer recess. I expect that he will use his Q&A session to announce the date of the Autumn Budget and it increasingly looks as though the missing 80% may get reintroduced after that Autmn Budget - leaving taxpayers and their advisers scratching their heads until that gets passed.

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to Paulsoper
12th Jul 2017 11:05

Ray I agree with Paul.The distinction between then and now is that 2010 was passed under the agreed 'wash up' procedures whereas of course the omitted clauses in 2017 contain controversial measures,hence their removal in April !

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to Paulsoper
12th Jul 2017 11:14

Thanks Paul

My thinking (re a short FB) was that they would not be able to get all the controversial stuff through at the moment, but might enact a shorter Bill to put through those measures to which there would be little opposition.

So MTD might be out of the window but accelerated allowances for electric charging points might go through on the nod. (But I suppose, in that case, they might have kept it in back in the spring.)

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to raychidell
12th Jul 2017 12:03

Ray mine was the winning bid in a charity auction for lunch for two next week with my MP at the House of Commons .... so will get the inside story and let you know !

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to Brian Ogilvie
12th Jul 2017 12:17

That will be great - many thanks. And bon appetit!

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10th Jul 2017 16:39

Unlikely to be before they come back from their holidays.

They get longer than schoolkids so I expect we'll be seeing something around Christmas. Just before they go on holiday.

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13th Jul 2017 08:42

In the past when a chancellor announced a Finance Bill provision would start from date xx then there was a reasonable expectation it would eventually go through when the bill became law. If a clause failed then whatever changes that had been implemented would have to be rolled back.

As there isn't even a bill now to be debated then the status of these items is that they are the chancellor's wishes. There is no legal standing for them and so they cannot be upheld. It seems to me unless they are going to introduce retrospective legislation any changes not enacted by the reduced Finance Act are dead and need to be reintroduced.

The new domicile rules have no legal foundation and will be contrary to existing statute. A court can only apply the law and I cannot see any judge ignoring an existing law to impose a suggestion from the chancellor that never made it onto the statute books.

I'm not a solicitor but the above has always been my understanding of how the law in the UK works.

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to coolmanwithbeard
13th Jul 2017 09:13

Let us suppose that HMRC do introduce a Finance Bill later this year which has retrospective effect so that from 6 April 2017 the legal definition of domicile for taxation purposes is changed (which is what the original Bill proposed to do as it would not have become law until next Thursday). However a taxpayer who is affected by the change dies before this new Bill is introduced so that at the date of his death the law is still as it is at present. There were objections to the original Bill that the delay in changing the rules on Domicile were problematic - they look unsurmountable now!

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to Paulsoper
13th Jul 2017 09:43

On a smaller scale, there'll be few objections to exemption from taxation for businesses with a turnover of <£1000.

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to Paulsoper
14th Jul 2017 09:49

I agree and we have to remember that all the stuff that was ditched before the election was stuff that needed debate and possibly changing to get it through. So even if reintroduced in a new finance bill it may not become law or may not look the same when passed. If TM crashes and burns and we either get a new Cons leader or another election then it's all even less likely.

I guess I stick by what I said before until it's in the statute books it's not law and your (notional) dead taxpayer's relatives would have to settle his estate and his tax position under the old laws; unless someone knows different?

Yes we have a tradition that such changes are announced and put in place and confirmed by the Finance Act. It seems to me that if they are dropped from that act then the goodwill introduction of them should also cease. The government chose to drop them based on an election it called.

It seems to me they have the same disregard for law as HMRC when their guidance that doesn't reflect law either.

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to coolmanwithbeard
14th Jul 2017 09:57

The Government's attitude has always been "we're the Government and we can do as we like."

No change there over the last few centuries.

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13th Jul 2017 13:07

"The government has also re-confirmed that all policies originally announced to start from April 2017 will be effective from that date."

https://www.gov.uk/government/news/next-steps-on-the-finance-bill-and-ma...

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to Justin Bryant
13th Jul 2017 13:12

Justin Bryant wrote:

"The government has also re-confirmed that all policies originally announced to start from April 2017 will be effective from that date."

If passed.

Which is now more doubtful.

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13th Jul 2017 14:25

Well I was right about the MTD postponement. I guessed a year , - but 2 years and completely voluntary for small businesses!
https://www.accountingweb.co.uk/tax/hmrc-policy/stripped-back-mtd-delaye...

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13th Jul 2017 14:26

MTD for income tax has been deferred to at least 2020 - see https://www.gov.uk/government/news/next-steps-on-the-finance-bill-and-ma.... But what about MTD for VAT - will we still be required to digitise every transaction? If so, we're still going to have loads to do. But maybe MTD for VAT is just another name for the existing online VAT returns?

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