This paper discusses the way that Parliament scrutinises the Government's proposals for taxation, set out in the annual Budget statement. It looks at how this procedure may be affected by the timing of a General Election, and the decision in 2017 to move the Budget from the Spring to the Autumn. It also provides some suggestions for further reading.
Each year the Chancellor of the Exchequer presents the Budget, which contains all the tax measures for the year ahead. Traditionally the Budget has been in March, prior to the start of the tax year on 6 April. The statutory provisions to give effect to these tax measures are set out in a single Bill: the annual Finance Bill. It has been the practice in recent years for Chancellors to make tax announcements twice a year, using the Pre-Budget Report or Autumn Statement as a second fiscal event. In his Autumn Statement on 23 November 2016 the Chancellor Philip Hammond announced that from autumn 2017 the Government would present a single autumn Budget, to allow for greater Parliamentary scrutiny of Budget measures ahead of their implementation.
For more details see, The Budget and the annual Finance Bill, Commons Library briefing CBP813, 6 October 2017.
Autumn Budget 2017
On 22 November 2017 Mr Hammond presented the Conservative Government’s fourth Budget – the first to be presented in the Autumn. The Budget report – HC 587 – and associated documents are collated on Gov.uk. Three key sources are:
- the Treasury’s Policy Costings document;
- the Treasury’s Impact on Households document; and,
- the series of Tax Information and Impact notes published by HMRC, dealing with each of the tax measures announced, collated in the Overview of Tax Legislation & Rates document published by HM Treasury & HM Revenue & Customs.
Commons Briefing Papers are available on the context for the Autumn Budget (CBP 8144, 17 November 2017), and a summary of the measures announced (CBP 8153, 22 November 2017), and the day after the Budget the IFS published its post-Budget briefing.
The Treasury Committee published its report on the Autumn Budget on 22 January 2018.
On 12 September the Government had announced the date of the Autumn Budget, confirming that it would introduce a Finance Bill after this (HM Treasury press notice, 12 September 2017). At this time the Government published a number of draft clauses to be included in the forthcoming Finance Bill, in line with previous practice in recent years for publishing much of the Bill in draft for consultation (Draft legislation for Finance (No.2) Bill – Written Statement, HCWS113, 6 September 2017).
Finance (No.2) Bill 2017
The Bill had its Second Reading on 11 December. On 18 & 19 December the House debated selected clauses of the Bill – which were agreed without amendment. The remainder of the Bill was considered by Public Bill Committee over six sittings from 9 to 16 January 2018. During the Committee stage the Government tabled four sets of amendments to three clauses & schedules: clause 17 & Schedule 5 (Venture Capital Trusts: further amendments); clause 24 & Schedule 8 (Corporate interest restriction); clause 35 & Schedule 10 (Settlements: anti-avoidance etc). Explanatory notes to these amendments were published by HM Treasury. These were all agreed without a vote. One amendment tabled by the Opposition, to correct a typo in clause 38 (Online marketplaces), was also agreed. None of the other amendments and new clauses that were tabled by the Opposition and debated in Committee were agreed, but were either withdrawn or rejected following a vote.
The remaining stages of the Bill in the Commons are scheduled for 21 February 2018. The Government has tabled amendments to three clauses: clause 9 (Benefits in kind: diesel cars); clause 44 (Vehicle Excise Duty: rates); and, clause 13 & schedule 3 (Pensions schemes). Explanatory notes have been published by HM Treasury.
Library briefing material on the Finance Bill
It is long-standing practice for there not to be a single impact assessment on the annual Finance Bill. As noted, HMRC publish tax information & impact notes on individual Budget measures (see PQ6549, 6 September 2017). Similarly, given the scale and scope of the annual Finance Bill, the Library does not publish a single paper on the Bill, but generally publishes briefing material relating to those clauses selected for debate by the Committee of the Whole House. As noted above, this debate took place on 18 & 19 December 2017.
Taxation of banking, Commons Briefing paper CBP5251, 5 January 2018
Tax avoidance: recent developments, Commons Briefing paper CBP7948, 14 December 2017.
In the latter case, further historical background is given in two other papers:
Tax avoidance: a General Anti-Abuse Rule, CBP6265, 11 December 2017.
Tax avoidance: a General Anti-Avoidance Rule – background history (1990-2010), CBP2956, 13 April 2017.
The Public Sector Equality Duty and Equality Impact Assessments, Commons Briefing paper CBP6591, 15 December 2017.
This note sets out the rules regarding the tax treatment of alcohol and tobacco purchases made by passengers, and sets out proposals the Government has published for reforming these rules in the context of Brexit, and the UK’s departure from the EU single market.
This note lists a series of key documents on taxation.