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.

In 2011 the Coalition Government reformed the Parliamentary timetable, moving the Queen’s Speech and the beginning of the annual session to the spring.  In turn provision was made to allow for the Finance Bill to be carried over from one session to the next to ensure that this did not substantially reduce the amount of time available for its scrutiny.

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 in 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.

Mr Hammond presented the last Spring Budget on 8 March 2017, and the first Autumn Budget on 22 November 2017. Following this, the Government published details of a revised annual Budget timetable for policy announcements, consultations, and the passage of legislation. As this explained, “under the new cycle of a single fiscal event each year, most tax policies will continue to be developed through an established cycle, whereby a policy announcement at the Budget is followed by a policy consultation, the publishing of draft legislation, and proposals are finally legislated in the next Finance Bill. However, to reflect the move of the Budget from spring to autumn, the timing of this cycle will change. Policies will be announced at the Budget in the autumn, and consulted on in winter and over the spring. Draft legislation will then be published in July for technical consultation ahead of the Finance Bill being introduced in the autumn.”[1]

Over the last two years this timetable has been affected by the timing of the 2019 General Election and the Covid-19 pandemic. In the first case the 2019 Budget, planned for 6 November, was deferred to 11 March 2020.[2] In the second case, the Chancellor’s presentation of three economic statements over 2020, resulted in the  Budget being postponed to 3 March 2021.[3]

For further details see, The Budget and the annual Finance Bill, Commons Library briefing CBP813, 4 March 2021.

Budget 2021

On 3 March the Chancellor Rishi Sunak presented the Johnson Government’s second Budget.[4] The Budget report – HC 1226 – and associated documents are collated on, including:

Commons Briefing Papers are available on the context for the 2021 Budget (CBP 9136, 25 February 2021), and a summary of the measures announced (CBP 9154, 3 March 2021).

The Institute for Fiscal Studies published its post-Budget briefing on 4 March; this included some analysis of the impact of the Budget on household finances, and the major changes announced to business tax.

The Treasury Committee held three evidence sessions on the Budget on Monday 8, Wednesday 10 and Thursday 11 March (the Chancellor gave evidence at the last of these). The Committee has also published written evidence it received on the Budget from the Chartered Institute of Taxation (BGT0001), the Institute of Chartered Accountants of Scotland (BGT0002), and the Association of Accounting Technicians (BGT0003).

The Government published a number of tax consultations and calls for evidence on 23 March.[5] Full details are given in, Tax policies and consultations (Spring 2021), CP404, March 2021. The current status of ongoing and closed tax consultations is provided by the Treasury’s public tax tracker.

Finance Bill 2021

Introduction & Second Reading

The Finance (No.2) Bill 2019-21 was published on 11 March. The Bill’s Explanatory Notes and full details of the Bill’s scrutiny to date are collated on its Bill page on the Parliament site. The Bill received a second reading on Tuesday 13 April (HC Deb 13 April 2021 cc189-277).

At the conclusion of the second reading debate, the House agreed a motion to carry over the Bill to the new Session if proceedings on the Bill had not been completed by the end of the 2019-21 Session.


Committee of the Whole House

Generally selected clauses from the Bill are debated by the Committee of the Whole House over two days at the start of the Bill’s Committee stage.  In the case of the current Bill, these debates occurred on Monday 19 and Tuesday 20 April.

The selection of clauses considered in these debates was set out in a programme motion, agreed by the House at the conclusion of the Bill’s second reading on 13 April. These are listed below, with links to the relevant tax information & impact notes for each:

Clauses 1 to 5 (income tax charge, rates etc)

Income Tax Personal Allowance and the basic rate limit from 6 April 2022 to 5 April 2026, 3 March 2021

Clauses 6 to 14 and Schedule 1 (corporation tax charge and rates, rate of diverted profits tax and capital allowances: super-deductions etc)

Corporation Tax charge and rates from 1 April 2022 and Small Profits Rate and Marginal Relief from 1 April 2023, 3 March 2021

Change to the Diverted Profits Tax rate from 1 April 2023, 3 March 2021

New temporary tax reliefs on qualifying capital asset investments from 1 April 2021, 3 March 2021

Clauses 24 to 26 (employment income: provisions relating to coronavirus)

Enterprise Management Incentives extension of time-limited exception to working time requirements, 3 March 2021

Easement for employer provided cycles exemption, 3 March 2021

Extension to the Income Tax and National Insurance contributions exemption for employer provided and employer-reimbursed coronavirus antigen tests, 3 March 2021

Clause 28 (pensions: freezing the standard lifetime allowance)

Setting the standard Lifetime Allowance from 2021 to 2022 to 2025 to 2026, 3 March 2021

Clause 30 and Schedule 6 (construction industry scheme)

Changes to tackle Construction Industry Scheme abuse, 25 March 2021

Clauses 31 to 33 (coronavirus support payments etc)

Income Tax and coronavirus (COVID-19) support scheme: working households receiving tax credits, 3 March 2021

Updates to tax charges when a person is no longer eligible to Self-Employment Income Support Scheme payments & Updates to taxation of the Self-Employment Income Support Scheme grants for Income Tax, 3 March 2021

Tax deductibility of business rates repayment, 3 March 2021

Clause 36 and Schedule 7 (corporation tax: hybrid and other mismatches)

Changes to the hybrid and other mismatches regime for Corporation Tax, 3 March 2021

Clause 40 (capital gains tax: annual exempt amount)

Maintaining the annual exempt amount for Capital Gains Tax, 3 March 2021

Clause 41 (capital gains tax: hold-over relief for foreign controlled companies)

Capital Gains Tax relief for gifts of business assets, 3 March 2021

Clause 86 (inheritance tax: rate bands for tax years 2021-22 to 2025‑26)

Inheritance Tax nil rate band and residence nil rate band thresholds from 6 April 2021, 3 March 2021

Clauses 87 to 89 and Schedules 16 and 17 (stamp duty land tax)

Extension of the temporary increase to the Stamp Duty Land Tax nil rate band for residential properties, 3 March 2021

New reliefs from Annual Tax on Enveloped Dwellings and Stamp Duty Land Tax for housing co-operatives, 3 March 2021

See also, HMRC, Budget 2021: Overview of tax legislation and rates, 3 March 2021 (“1.58: Non-UK Resident SDLT”)

Clauses 90 and 91 (annual tax on enveloped dwellings)

New reliefs from Annual Tax on Enveloped Dwellings and Stamp Duty Land Tax for housing co-operatives, 3 March 2021

Clauses 92 to 96 and Schedule 18 (value added tax)

Introduction of a new reduced rate of VAT for hospitality, holiday accommodation and attractions, 3 March 2021

Extension of Making Tax Digital for VAT, 3 March 2021

Legislating for the VAT deferral new payment scheme and deterrent, 3 March 2021

See also, HMRC, Budget 2021: Overview of tax legislation and rates, 3 March 2021 (“1.54 S4C Section 33 VATA”)

Clause 97 and Schedule 19 (customs duty)

Northern Ireland Steel Import Duty, 3 March 2021

Clauses 109 to 111 and Schedules 21 and 22 (freeports)

Designation of Freeport tax sites, 3 March 2021

Enhanced capital allowance for plant and machinery in Freeports & Enhanced Structures and Buildings allowances in Freeports, 3 March 2021

Stamp Duty Land Tax relief for Freeports, 3 March 2021

Clause 115 and Schedule 27 (follower notice penalties)

See, HMRC, Budget 2021: Overview of tax legislation and rates, 3 March 2021 (“1.62: Follower Notices and Penalties”)

Clauses 117 to 120 and Schedules 29 to 31 (avoidance)

See, HMRC, Budget 2021: Overview of tax legislation and rates, 3 March 2021 (“1.61: Tackling promoters of tax avoidance”)

Clause 121 and Schedule 32 (conditionality)

New tax checks on licence renewal applications in England and Wales, 3 March 2021

Clauses 128 to 130 (banking)

The tax impact of the withdrawal of LIBOR and other benchmark rates, 12 November 2020

Powers to amend interpretation and other provisions relating to banks, 3 March 2021.


The Government tabled a series of amendments for consideration for this stage of the Bill: to Clause 36 and Schedule 7 (Corporation tax: hybrid and other mismatches), and to, Clause 111 and Schedule 22 (Relief from stamp duty land tax for freeport sites). The Treasury published explanatory notes for these amendments (Finance Bill 2021: Committee of the Whole House, 15 April 2021). In turn these amendments were agreed when the House considered these provisions (see, HC Deb 19 April 2021 cc692-806; and, HC Deb 20 April 2021 cc890-951).

Public Bill Committee

The remaining provisions of the Bill were considered by Public Bill Committee over four sittings, on 22 and 27 April 2021.

The Government tabled four amendments for consideration by the Committee: to Clause 18 and Schedule 2 (Temporary extension of periods to which trade losses may be carried back), to Clause 29 and Schedule 5 (Pension schemes: collective money purchase benefits), and to Clause 116 and Schedule 28 (Late payment interest and repayment interest: VAT) – and published explanatory notes for these amendments (Finance Bill 2021: Public Bill Committee, 20 April 2021; see also Proposed Government amendments to the Finance (No. 2) Bill – letter from the Minister to the Public Bill Committee, 22 April 2021). All four were agreed without division. The Committee also debated a number of amendments and one new clause tabled by the Opposition, but all of these were withdrawn after debate – so no further amendments were made to the Bill.

Report Stage and Third Reading

The remaining stages of the Bill in the House of Commons took place on 24 May.

The Government tabled a series of amendments as well as four new clauses for consideration at Report stage (Finance Bill 2021: Report stage, 18 May 2021). As well as explanatory notes on these provisions, the Government also published four further tax information & impact notes on the measures it wished to add to the Bill:

New temporary tax reliefs on qualifying capital asset investments from 1 April 2021, 18 May 2021

Implementation of e-Commerce VAT changes in Northern Ireland, 18 May 2021

Value Added Tax: Continued application of the principle of abuse, 18 May 2021

Value Added Tax: Amendment to the valuation rules for works of art, antiques and collectors’ items subject to the overseas goods measure, 18 May 2021

The House agreed these amendments and new clauses, without a division (HC Deb 24 May 2021 cc60-192). No other amendments were made to the Bill prior to its Third Reading (HC Deb 24 May 2021 cc193-200).

The Finance Act 2021 received Royal Assent on 10 June 2021 (Votes & Proceedings No.15, 10/6/2021).

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.[6] 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 those clauses selected for debate by the Committee of the Whole House.

Budget 2021: personal allowance & higher rate threshold, CBP9186, 2 April 2021

Corporate tax reform, CBP9178, 2 April 2021

Coronavirus: Self-Employment Income Support Scheme, CBP8879, 22 April 2021

Inheritance Tax, CBP93, 8 April 2021

Pension tax relief – the annual and lifetime allowances, CBP5901, 12 March 2021

Stamp duty land tax on residential property, CBP7050, 28 March 2021

Tax avoidance and tax evasion, CBP7948, 13 April 2021

Taxation in the construction industry, CBP814, 15 March 2021

UK Government policy on freeports, CBP8823, 19 March 2021

VAT on tourism, CBP6812, 28 March 2021.


[1]     HM Treasury, The new Budget timetable and the tax policy making process, 6 December 2017

[2]     HC Deb 11 March 2020 cc278-293

[3]     HC Deb 3 March 2021 cc251-262

[4]     HC Deb 3 March 2021 cc251-262. HM Treasury press notice, Budget 2021 sets path for recovery, 3 March 2021

[5]     HM Treasury press notice, Government strengthens tax policymaking with over 30 updates, consultations and documents published, 23 March 2021. Written Statement HCWS873, 23 March 2021

[6]     see PQ6549, 6 September 2017

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