Finance Bill 2017: government legislates for new tax changes

5 Dec 2016 01:08 PM

Finance Bill 2017 continues the government’s commitment to tackle tax evasion and avoidance and support business through the tax system.

Following the Autumn Statement, the government has published draft tax legislation to implement policies announced at Budget 2016, Autumn Statement 2015 and Summer Budget 2015.

Finance Bill 2017 continues the government’s commitment to tackle tax evasion and avoidance and support business through the tax system.

At the most recent Autumn Statement the government provided incentives and support to encourage business and social investment, greener cars and the roll out of broadband infrastructure by:

• confirming that corporation tax will be cut to 17% by 2020 helping over a million companies invest and create jobs
• increasing the amount that social enterprises can raise through Social Investment Tax Relief
• introducing a one year tax break for companies investing in charge-points for electric vehicles and making sure the cleanest company cars are taxed the least
• providing a new 100% business rates relief for new full-fibre infrastructure

Finance Bill 2017 will put into action further measures that will tackle tax evasion, avoidance and aggressive tax planning by:

• preventing the use of disguised remuneration schemes which help people avoid National Insurance and income tax
• introducing a new penalty for those who enable the use of tax avoidance schemes that are later defeated by HMRC
• creating a new legal requirement to correct a past failure to pay UK tax on offshore accounts and investments with tough new sanctions for those who fail to do so
• strengthening sanctions and penalties attached to illicit tobacco

As well, the government is looking to go further by consulting on a new requirement for the creators of offshore structures to register them with HMRC.

The Bill will include draft legislation for the government’s new soft drinks industry levy which will help tackle childhood obesity by encouraging companies to reduce added sugar in the drinks they sell.

Finally, the government will introduce measures to ensure that the tax base is sustainable and fair by updating the rules around how companies claim tax deductions for interest expenses and losses, and reforming the rules around salary sacrifice.

Jane Ellison, Financial Secretary to the Treasury, said:

We are recognised as having one of the world’s most effective tax regimes and this government is acting to ensure it continues to provide certainty for businesses, fairness for workers and a sound tax base to fund productivity boosting investment.

The UK is forecast to be the fastest growing major advanced economy in the world this year and we are making sure we are prepared to meet the challenges and seize the opportunities presented by Brexit.

The consultation on draft legislation published yesterday (5 December 2016) will run until 1 February 2017, with final details being confirmed in Budget 2017 and legislation introduced in the corresponding Finance Bill.