Spring Finance Bill 2023
The Finance Bill was published on 23 March 2023.
Finance Bill published on 23 March 2023
Spring Finance Bill 2023 (official title: Finance (No 2) Bill (Session 2022-23)) was published on 23 March 2023. A number of measures in the Bill have been given temporary legal effect through the passing of the Budget resolutions in Parliament on 21 March. The Bill had its second reading on 29 March and will now move forward to the committee stage. As is usual, this will start with a ‘Committee of the whole House’ scheduled for 18 and 19 April where a small selection of clauses will be discussed, including full expensing for plant and machinery, pensions changes and Pillar Two. The remaining clauses will be looked at by the Public Bill Committee finishing on 23 May 2023. Dates for the report stage and third reading are not yet confirmed. This article highlights some of the more significant measures in the Bill and signposts where you can find additional commentary.
The Finance Bill was accompanied by explanatory notes and a dedicated page has also been set up on GOV.UK with supporting information. In this edition of Tax Matters Digest you can find articles on the following Finance Bill measures:
- Full expensing for capital expenditure on plant and machinery;
- Legislation to implement Pillar Two in the UK (i.e. the multinational top-up tax and domestic top-up tax);
- Changes to limits on tax free pension savings and removal of the lifetime allowance charge; and
- Legislation that increases flexibility and simplifies certain tax-advantaged employee share options.
Some other measures of note in the Finance Bill include:
- The introduction of the Electricity Generator Levy (EGL), and changes to the Energy Profits Levy (EPL) to introduce a new investment allowance at a rate of 80 percent for oil and gas companies for investment in the de-carbonisation of upstream petroleum production activities. Both of these were announced at Autumn Statement 2022 (see previous article). As expected the EGL will be charged at 45 percent and apply to revenues above £75 per MWh and apply to certain groups generating electricity from nuclear, renewable and biomass sources. The Finance Bill legislation includes a number of updates to the grouping provisions and the treatment of joint ventures as compared to the draft released late last year. It also clarifies previous uncertainties including the ability to treat certain companies as transparent;
- New mandatory transfer pricing documentation rules for UK members of large multinationals for accounting periods beginning on or after 1 April 2023. Affected companies will need to submit a Master File and UK Local File(s) within 30 days of a request from HMRC;
- Various amendments to research and development (R&D) tax reliefs including extending relief to expenditure on data and cloud computing costs from 1 April 2023, and the introduction of a requirement to provide additional information with R&D claims from 1 August 2023 (see previous article);
- Changes to the definitions of a ’Charity’ and a ‘Community Amateur Sports Club’ for UK tax purposes so that only UK charities are eligible for charitable tax reliefs. This measure, together with draft legislation, was announced at the Spring Budget (see previous article); and
- Increase in alcohol duty rates under a revised structure on all alcoholic products produced in, or imported into, the UK in line with the RPI and an increase in the new Draught Relief.
