26 April 2017
In our recent blog on Making Tax Digital we warned that the Finance Bill – the piece of legislation intended to bring into force the government’s tax changes, including those announced at the recent Budget – might be reduced in size so that it can go through all its parliamentary stages and become the Finance Act 2017 ahead of the general election. This has now been confirmed. Much of the most complex legislation is being dropped, including the corporate tax measures, the changes for non-doms and the Making Tax Digital clauses.
What does this mean in practice (particularly as some of this legislation was due to take effect from 6 April)? While we don’t have a crystal ball, the answer is probably ‘very little’. The likelihood is that the relevant legislation will be laid before parliament again after the election with a second Finance Act following later in the year. The provisions that were due to take effect at the start of the tax year were backdated anyway and it is likely that this backdating will just be extended (such that the commencement date will remain the same). It is possible that those responsible for the drafting will take the opportunity to review the legislation and perhaps make the odd amendment or correction. There is just an outside chance of more significant tweaking or deferral, but – subject to any announcement to the contrary from HMRC – our advice to clients is that they should assume that the original provisions will take effect on time and as originally provided. That advice probably still holds even if the current opinion polls are wrong and a change of government becomes a real possibility.
We will of course keep you updated as soon as more information is available. If you have any questions with regard to this blog, please contact me or your local UHY tax expert.
