Second Finance Act pushed into autumn but measures effective April 2017
All measures dropped from the Finance Act including loss relief and non dom changes in the run-up to the election will be reinstated in a Second Finance Bill which will be introduced as soon as possible after the summer recess when MPs return to parliament
13 Jul 2017
MPs are due to returm from the summer recess for a week on 5 September before the conference season starts on 14 September and will then return to the house on 9 October.
The second Finance Bill will legislate for all policies that were included in the pre-election Finance Bill but had to be dropped in the wash-up Finance Act 2017 enacted before the snap general election in June.
Finance Act 2017 was a slimmed down version of the planned legislation, stripping out all but the most critical changes to tax rates and reliefs, and removing any complex tax changes due to the lack of time for effective scrutiny in parliament and through select committees.
The government has also re-confirmed that all policies originally announced to start from April 2017 will be effective from that date, including the changes to non dom rules and loss relief reform.
A Treasury spokesperson told CCH Daily: ‘Today we are publishing the draft legislation for [second] Finance Bill 2017 and it will go through the scrutiny process. All measures removed in the wash-up Bill will be reinstated and all retrospective measures will apply from the original effective date of April 2017.’
There had been hope that some of the more complex measures such as wide-ranging loss relief reforms which will hit the largest companies would be deferred until 2018, but the Treasury confirmed that ‘noting is being deferred, except for Making Tax Digital’.
James Hender, partner and head of private wealth at Saffery Champness, said: ‘Many will have hoped to see the new Finance Bill published before the summer recess, but the outcome of the general election, as well as the ongoing Brexit negotiations, have meant the government has had its hands doubly full.
‘The policies announced pre-election that were at risk of falling into the ether will be backdated to April 2017 and this will provide greater certainty for those affected. Many taxpayers, particularly non-domiciled individuals, may end up paying more tax under the new rules but they should now have more of a framework to plan their finances going forward.’
Draft legislation for the Second Finance Bill will be issued today.
Report by Sara White