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In the 2016 Budget the Government announced that legislation would be introduced in Finance Bill 2016 to ensure that if there was a specific statutory provision for calculating the tax charge on a benefit-in-kind, this had to be used.[1] This meant that where an employee received something from their employer on the same terms as a member of the public, there would still be a taxable benefit based on the statutory provisions for calculating the charge. The measure was a technical change to the wording of the legislation to ensure clarity. At the time the Government stated that this did not represent any change to existing policy, and that the Exchequer impact will be negligible.[2]

Nevertheless, this clause was one of those from the Bill selected for debate by the Committee of the Whole House. The Government tabled a number of amendments to provide further clarification to confirm the Government’s policy intention, and simplify part of the existing legislation, as suggested by some external commentators following publication of the Finance Bill.[3] In the event the measure proved uncontroversial, and was agreed, with the Government’s amendments, without division.[4]

Notes : 

[1]    Budget 2016, HC 901, March 2016 para 2.36. Provision to this effect was initially made by clause 7 of the Finance Bill 2016. It now forms s7 of FA2016.

[2]    HM Revenue & Customs, Income Tax: preventing liability to charge being removed from certain taxable benefits in kind : tax information & impact note, March 2016

[3]    Letter from David Gauke MP to Rob Marris MP regarding the proposed Government amendments and new clauses to the current Finance Bill (Commons Library Deposited paper DEP2016-0563, 14 June 2016).

[4]    HC Deb 27 June 2016 cc67-90

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