Introduction
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 reform did not substantially reduce the amount of time available for the Bill’s 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 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 details see, The Budget and the annual Finance Bill, Commons Library briefing CBP813, 6 October 2017.
The Spring 2017 Budget
Mr Hammond presented the last Spring Budget on 8 March 2017. The Budget report - HC 1025 - and associated documents are collated on Gov.uk. Among these documents 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 Treasury & HMRC.
Further to this material, Commons Briefing Papers are available on the context for the Budget (CBP 7913, 3 March 2017), and its major features (CBP 7919, 17 March 2017). In the latter case this was updated following the Chancellor’s statement on 15 March that the Government would not proceed with an increase in the rates of Class 4 NICs that had been announced in the Budget (HC Deb 15 March 2017 cc420-1; HM Treasury, Letter from the Chancellor to the Chair of the Treasury Select Committee, 15 March 2017).
The Finance (No.2) Bill 2016-17
Following the Spring 2017 Budget, the Finance (No.2) Bill 2016/17 was published on 20 March 2017. The explanatory notes to the Bill were published on Gov.uk; HM Revenue & Customs collated links to supporting documents on the Bill on its site.
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. The selection of clauses is set out in a programme motion, generally presented at the conclusion of the Second Reading debate. However, following the Prime Minister's announcement, on 18 April, of the Government's intention to call a General Election on 8 June, the House completed all of the remaining stages of the Bill in the Commons on Tuesday 25 April (HC Deb cc1013-59). With cross-party support the Government removed a series of clauses from the Bill, with the intention of legislating for these at the start of the new Parliament.
On 13 July the Government confirmed, in a written statement, that a second Finance Bill, containing all of the measures that had initially been dropped, would be introduced to this effect “as soon as possible after the summer recess” (Finance Bill: Written Statement, HCWS47, 13 July 2017). As noted in this statement, HMRC published updated draft provisions for a small number of clauses which would be amended, as well as a list of all provisions that will continue to apply from the start of the 2017 to 2018 tax year or other point before the introduction of the forthcoming Finance Bill.
The Finance Bill 2017-19
Prior to the formal presentation of the Finance Bill, the House has to agree a series of ‘Ways and Means’ Resolutions, relating to the measures that will be in the Bill. Normally this occurs at the end of the Budget debates that the House has after the Budget statement – as happened on 14 March 2017. As the Government’s second Finance Bill is a new one, the House approved a second series of resolutions on 6 September (HC Deb 6/9/2017 cc196-275). This is why the Bill itself was not published beforehand. The Treasury published a short note, setting out what each of these resolutions cover (on the Parliament site), an updated version of the note previously published in July.
The Commons Briefing paper on Budgetary procedure, cited above, discusses some previous examples of where a General Election has interrupted this process – such as in 2010, when the incoming Coalition Government introduced two Finance Bills in the same year: the first in July, after its ‘emergency’ Budget, for its key policy priorities, and the second, in the autumn, containing a series of technical measures that the Labour Government had decided not to introduce before the Election. In the second case, the House had to approve a second list of ways and means resolutions on 15 September that year.
In turn the Finance Bill 2017-19 was published on Friday 8 September (HM Treasury press notice, 8 September 2017; Finance Bill: Written Statement, HCWS107, 5 September 2017), and had its Second Reading on Tuesday 12 September (HC Deb 12/9/207 cc668-764). On 11 October the Committee of the Whole House debated selected clauses of the Bill, and in turn, the remainder of the Bill was considered by Public Bill Committee in six sittings over 17-24 October. Only two amendments were made to the Bill - both to the provision in Clause 28 relating to the substantial shareholdering exemption (SSE), and tabled by the Government; these were agreed without a vote. An explanatory note on their purpose has been published by the Treasury.
The Bill's Report stage and Third Reading occurred on 31 October. The House agreed to a number of Government amendments: first to clause 16 (Calculation of profits of trades and property businesses), and second to clause 29 (Deemed domicile: income tax and capital gains tax); again details have been published by the Treasury on Gov.uk. No other changes were made to the Bill, and the Finance (No.2) Act 2017 received Royal Assent on 16 November.
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 (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 will generally publish briefing material relating to the clauses selected for debate by the Committee of the Whole House. A list of these notes, as prepared for the first Finance Bill 2017, is given below.
Making Tax Digital, CBP7949, 17 July 2017 +
Personal service companies: recent debate, CBP5976, 23 June 2017 *
Tax avoidance: recent developments, CBP7948, 26 April 2017 +
Tax avoidance: a General Anti-Abuse Rule, CBP6265, 14 April 2017
Tax avoidance: a General Anti-Avoidance Rule - background history (1997-2010), CBP2956, 13 April 2017
The Soft Drinks Industry Levy, CBP7876, 12 April 2017 *
Alcohol taxation and the pub trade, CBP1373, 6 April 2017 *
Insurance Premium Tax, CBP1425, 3 April 2017 *
* Provisions retained in Finance Act 2017
+ Provisions included in Finance Bill 2017-19
Further material published for the debate by the Committee of the Whole House on selected clauses of Finance Bill 2017-19 - which occurred on 11 October:
Corporation tax in Northern Ireland, CBP7078, 28 September 2017.
Taxation of termination payments, CBP8084, 3 October 2017.
Taxation of non-domiciles: recent developments, CBP8099, 6 October 2017.
Taxation of non-domiciles: the 2008 reforms, CBP4604, 6 October 2017.