A summary of the announcements in the Chancellor's September 2022 fiscal statement and links to analysis and 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 then 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. Initially the Government had planned that the 2019 Budget would be presented on 6 November 2019, but this was deferred, due to the timing of the General Election held the following month, to 11 March 2020.
For details see, The Budget and the annual Finance Bill, Commons Library briefing CBP813, 13 March 2020.
On 11 March the Chancellor Rishi Sunak presented the Johnson Government’s first Budget.
- the Treasury’s Policy Costings document;
- the Treasury’s Impact on Households document, and,
- HMRC’s series of Tax Information and Impact notes, dealing with each of the tax measures announced, collated in the Overview of Tax Legislation & Rates
Commons Briefing Papers are available on the context for the 2020 Budget (CBP 8842, 5 March 2020), and a summary of the measures announced (CBP 8849, 11 March 2020). The Institute for Fiscal Studies published its post-Budget briefing on 12 March; this included some analysis of the permanent tax changes announced in the Budget. The Treasury Committee held three evidence sessions on the Budget over 17-20 March; details are on its site.
Finance Bill 2019-21
Introduction & Second Reading
As is common practice, the Government had published draft provisions to be included in the Finance Bill last summer. Some of these followed earlier consultation exercises, others provided for certain technical changes, while a third group were to have immediate or retrospective effect. Following confirmation of the date of the Budget, the Financial Secretary, Jesse Norman, gave a written statement on 25 February. He announced that the Finance Bill would be published a few days after the Budget, and added that the Government remained “committed to legislating those measures published in July 2019, subject to confirmation at Budget 2020.”
Initially the Bill’s Second Reading had been set for Wednesday 22 April, but on 21 April the Leader of the House announced that this would be delayed to Monday 27 April. Following Second Reading, it is general practice for selected clauses from the Bill to be debated by the Committee of the Whole House over two days at the start of the Bill’s Committee stage. However, the Government laid a programme motion which the House approved at the conclusion of the Bill’s Second Reading, which dispensed with this. The Bill was considered in its entirety by Public Bill Committee over nine sittings from 4 June to 18 June.
As is normal practice, at the time of Budget the Government published the series of Ways and Means Resolutions, which the House must approve before the introduction of the Finance Bill. Broadly speaking these resolutions allow for provisions to be included in the Bill that will impose a new tax, renew an annual tax, or to increase or widen the burden of an existing tax. They are formally moved at the end of the debates on the Budget, and usually there is a vote on a number of these reflecting the major or most controversial aspects of the Budget.
It is important to add that a Finance Bill would be regarded as exceeding its proper scope if it imposed a tax which was not to be charged until after the close of the current financial year. To avoid this limitation, Ministers will present one or more Procedure Resolutions, if the Bill is going to contain provisions of this type. There are more details on this in the guide to Parliamentary procedure, Erksine May 25th edition 2019 para 36.39 (‘Scope of Finance Bills’), and in The Budget and the annual Finance Bill, Commons Briefing Paper CBP813, 13 March 2020.
The Government has included provision in the Bill to amend the way the IR35 rules work in the private sector, a reform initially announced by the then Chancellor Philip Hammond in the 2018 Budget (HC Deb 29 October 2018 c661). Although this reform has been quite controversial, the Government reiterated its view, in the 2020 Budget, that, “it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in Finance Bill 2020 … as previously announced.” (Budget 2020, HC 121, March 2020 para 2.178).
Initially it was anticipated this change would take effect from April 2020, but at the conclusion of the debates on the Budget on 17 March, Treasury Minister Steve Barclay announced that the Government had taken the decision to defer the implementation of the reform to the off-payroll working rules for one year, to April 2021, adding that “the Government will … shortly table an additional resolution confirming that we will reintroduce the off-payroll working rules provisions by amending the Bill, with a commencement date of the 6 April 2021” (HC Deb 17 March 2020 cc905-6).
The Finance Bill 2019-21 (Bill 114 of 2019-21) was published on the same day as the Minister’s statement, but the Bill as initially published did not include provision to implement this reform. On 19 May the House approved the ways and means resolution to enable to allow it to add a new clause and Schedule to this effect (HC Deb 19 May 2020 cc542-554). HMRC also published an explanatory note on this measure: Finance Bill 2020: Public Bill Committee, 5 June 2020. In turn the Government tabled a new clause and Schedule to the Bill, and this was agreed in Public Bill Committee, unamended and without a division, on 18 June. On completion of the Committee stage, these provisions now form clause 7 and Schedule 1 of Finance Bill 2019-21 [Bill 142 of 2019‑21]. Apart from this the only other changes made were three minor Government amendments to the provisions in the Bill regarding the 2019 Loan Charge (clauses 14-20 of Bill 114 of 2019-21).
Report Stage & Third Reading
The remaining stages of the Bill took place on 1 and 2 July.
The Government tabled seven new clauses (NC19-25 & NC32, with one new Schedule) for consideration on Report. HM Treasury has published explanatory notes and tax information notes on each of these provisions: Finance Bill 2020: Report stage, 29 June 2020. Links to these impact assessments are copied below:
- Corporation Tax/Income Tax – Taxation of Coronavirus Support Payments, 25 June 2020 [New Clause 19 & New Schedule 1]
- Pensions Tax: COVID-19 related changes to protected pension age, 25 June 2020 [New Clause 20]
- Modifications of the statutory residence test in connection with the coronavirus, 25 June 2020 [New Clause 21]. This is accompanied by, Technical Note: Modifications of the Statutory Residence Test in connection with coronavirus, 25 June 2020
- Income tax: Future Fund – Seed Enterprise Investment Scheme and Enterprise Investment Scheme relief, 25 June 2020 [New Clause 22]
- Amending section 135 Finance Act 2008 in relation to disapplication of interest and surcharges on liabilities deferred due to the coronavirus pandemic, 25 June 2020 [New Clause 23]
- Stamp Duty Land Tax/ Higher rates for Additional Dwellings / Refunds and Exceptional Circumstances, 25 June 2020 [New Clause 24]
- HGV Levy Suspension, 25 June 2020 [New Clause 25]
- Enterprise Management Incentives (EMI) – Amendment of working time requirements, 29 June 2020 [New Clause 32]
The House agreed a Ways & Means Resolution to allow these new clauses to be added to the Bill on 1 July, before the start of the Report Stage; and these were agreed, without a division, on 2 July. No other amendments were made to the Bill prior to its Third Reading. The Finance Act 2020 received Royal Assent on 22 July (Votes & Proceedings, No.91, 22 July 2020).
Library briefing material on the Finance Bill
It is long-standing practice for there not to be a single impact assessment on the Bill; as noted, HMRC publish tax information & impact notes on individual Budget measures. Similarly, given the scale and scope of the annual Finance Bill, the Library does not publish a single paper on the Bill, but aims to publish briefing material relating to the clauses selected for debate by the Committee of the Whole House. As noted, the Bill was considered in its entirety in Public Bill Committee. Briefing papers on those measures that have generated most interest following the Budget are published below:
The 2019 Loan Charge, CBP8811, 6 July 2020
Capital gains tax : recent developments, CBP5572, 12 June 2020
Digital Services Tax, CBP8719, 3 April 2020
Personal Service Companies & IR35, CBP5976, 6 July 2020
Retrospective taxation, CBP4369, 8 April 2020
Tax avoidance and tax evasion, CBP7948, 18 April 2020
Tax avoidance: a General Anti-Abuse Rule, CBP6265, 17 April 2020
 HMT, Chancellor Letter to the Treasury Select Committee on the Budget, 25 October 2019; HMT press notice, Chancellor launches Budget process to usher in ‘decade of renewal’, 7 January 2020
 Written Statement HCWS1713, 11 July 2019; HM Treasury press notice, Finance Bill 2019-20: government publishes draft legislation, 11 July 2019. This draft legislation is on Gov.uk.
House of Commons Library publications on the rising cost of living in the UK, including causes of inflation, the effect on households, and Government support.
This briefing sets out the background to the Chancellor’s fiscal statement, which is expected on 23 September 2022.