Finance (no. 2) Bill 2017 will be published on 8 September. We expect it to contain most, but not all of the provisions which were dropped from the first Finance Bill 2017 in April.
A written statement to House of Commons from the finance secretary to the Treasury Mel Stride, says the Finance Bill will be published on Friday, but we don’t know exactly when; the Bill could appear online late in the afternoon.
The announcement also says the explanatory notes to the Bill will be placed in the House of Commons and House of Lords libraries on 12 September. So we may have to wait until Monday to read the plain English translation of the proposed law.
What to expect
We know the new Finance Bill will contain draft provisions relating to at least 48 different areas of tax and benefits which are listed in this note on Finance Bill resolutions. Many of those provisions have been rehashed from the first Finance Bill 2017, which was a record 776 pages long when it was published in March 2017.
However, to get agreement across all political parties, drastic cuts had to be made to allow a much shorter Finance Act 2017 (155 pages) to be passed by Parliament on 27 April 2017 in advance of the general election.
When will it pass?
The government will want to pass this Finance Bill as quickly as possible, certainly before the next Budget, which is due to be held sometime in November.
However, the date of Royal Assent (the day the Bill becomes an Act), is largely irrelevant as at least 34 provisions will take effect retrospectively from 1st or 6th April 2017, or from a date even earlier, as was originally planned.
Those retrospective provisions will include:
- Cash basis for landlords
- Property income allowance of £1,000
- Trading income allowance of £1,000
- Deemed domicile regime for non-doms
- MPAA restricting pension contributions to £4,000
- Carry forward of corporate losses
- Changes to EIS, SEIS and VCT
- Tax relief for pensions advice for employees
What’s not there?
Like the Macavity the mystery cat, the legislation for Making Tax Digital is unlikely to be found in Finance (no. 2) Bill 2017.
The first Bill included a significant amount of draft law for MTD for business, but only in respect of income tax reporting. As MTD for income tax is now timetabled to start sometime in 2020, it would be putting the cart before the horse to pass the income tax law for MTD before the VAT provisions are hammered out.
MTD for VAT reporting has a proposed commencement date of 1 April 2019, but I have seen no indication that HMRC has thought through exactly how the MTD provisions will apply to the variety of VAT registered businesses from; sole traders, to small and large partnerships, small companies and large multinationals. It’s a big ask to design legislation which will fit all those types of businesses.
I sincerely hope that a comprehensive consultation paper will be issued in advance of the publication of draft legislation for MTD in relation to VAT, but I am not holding my breath.
About Rebecca Cave
Consulting tax editor for Accountingweb.co.uk. I also co-author several annual tax books for Bloomsbury Professional and write newsletters for other publishers.