Finance (No. 2) Bill 2016/2017 was published last month and began its progress through Parliament having already had its first reading in the House of Commons on 14 March. Supporting explanatory notes to the Bill are also available.

The Bill contains draft legislation on some significant changes to the UK tax regime including the introduction of the new £1,000 property and trading income tax free allowances announced at Budget 2016. Changes to the corporation tax regime also feature with measures such as the new legislation governing the deductibility of corporate interest and reforms to the corporation tax loss relief rules.

The proposed change to the NI corporation tax regime also features at clause 36 and schedule 12. The new concept of deemed domicile for inheritance tax, capital gains tax and income tax is also included with complex transitional rules to be considered. And HMRC’s current flagship project, Making Tax Digital, appears in clauses 120–22 and schedule 25.

A number of tax consultations were also opened together with the publication of several consultation outcomes as follows:-

Consultation outcomes

• Double Taxation Treaty Passport scheme review
• Tackling the hidden economy: sanctions
• Tackling the hidden economy: conditionality
• Tax-advantaged venture capital schemes – streamlining the advance assurance service
• Stamp duty land tax: changes to the filing and payment process
• Partnership taxation: proposals to clarify tax treatment
• Reducing the money purchase annual allowance

Consultations launched

• Red diesel call for evidence
• Alcohol structures
• Tax treatment of heated tobacco products
• Taxation of employee expenses call for evidence
• VAT: Tackling fraud on goods sold online – update on split payment
• Landfill Tax: Extending the scope to illegal disposals
• Making Tax Digital: sanctions for late submission and late payment
• Non-resident companies chargeable to income tax and non-resident capital gains tax
• VAT fraud in labour provision in construction sector
• Withholding tax exemption for debt traded on a Multilateral Trading Facility

An overview of the legislation required to implement the provisions set out in Making Tax Digital: Bringing Business Tax into the Digital Age has also been published together with the draft guidance/legislation in several areas relevant to the Finance Bill:-

• Draft guidance for all the tackling disguised remuneration changes affecting employers and employees in the 2017/2018 tax year and a technical update on changes to the measures to tackle disguised remuneration tax avoidance schemes since Autumn Statement 2016
• Draft legislation to reform the regime for disclosure of indirect tax avoidance schemes, and widen its scope to include all indirect taxes
• Draft guidance about a new statutory exemption of £500 in a tax year for pensions advice provided to employees from the 2017/2018 tax year
• Draft guidance on changes to tax rules for calculating taxable value of the benefit of an asset provided to an employee, member of their family or household, for private use from 2017/2018 tax year
• Draft guidance for changes to the tax treatment of benefits in kind where an employee ‘makes good’ the benefit in kind from 2017/2018 tax year.
• Draft guidance on changes to tax rules where an employer funds costs or pays for legal indemnity insurance for employees for proceedings related to their employment from 2017/2018 tax year
• Draft guidance on changes to tax and Class 1A National Insurance contributions treatment of benefits in kind from the 2017/2018 tax year