Spring Finance Bill 2023 completes Commons stages

MPs sat for the report stage for the Finance (No. 2) Bill 2022-23 (Spring Finance Bill) on 20 June 2023. A number of government amendments were passed and the third reading of the Bill took place immediately after the report stage, completing the passage of the Bill through the House of Commons. Because it is a ‘Money Bill’ the House of Lords cannot make any changes so the text of the Bill is now final. This means that for UK GAAP and IFRS purposes the Spring Finance Bill is substantively enacted. The Government has also announced that ‘Legislation Day’, when draft clauses for the next Finance Bill are published, will be 18 July 2023.

The Government tabled a number of amendments to the Spring Finance Bill at report stage:

• Insertion of New Clause 4 to clarify the commencement date of domestic top-up tax will be 31 December 2023, to align with multinational top-up tax;
• Insertion of Clause 5 which removes a restriction on the exercise by HMRC of civil information powers. This is designed to provide certainty for data-providers in complying with requests for communications data when requested by a public authority;

• Amendments to Clause 7 to ensure that the provisions for determining the amount of a balancing charge for the purposes of plant or machinery on which full expensing or the 50 percent first-year allowance have been claimed work as originally intended;
  
• Amendments to Clause 12 to ensure the Energy Profits Levy de-carbonisation allowance and relief for operating expenditure in the existing investment allowance work as intended for onshore activities and activities in Northern Ireland;
• Amendment to Clause 23 to clarify the tax treatment of stand-alone pension lump sums where the maximum tax-free amount is exceeded;
• Amendment to Clause 51 to ensure alcoholic products produced overseas and imported into the UK are not excluded from draught relief;
• Amendment to Clause 292 (Electricity Generator Levy) to clarify the treatment of participants in a qualifying joint venture that have an amount of the joint venture undertaking’s exceptional receipts which are covered by its revenue allowance attributed to them. It ensures those receipts are chargeable on the participant in all cases; and
• Amendment to Clause 314, to clarify how VAT is to be accounted for in relation to the deposit amounts that are not repaid as part of the deposit scheme.

All of these amendments were passed at report stage and no other changes were made to the Bill. A summary of what the Bill contained at publication was shared in a previous edition of Tax Matters Digest. The Bill will now pass through the House of Lords before moving on for Royal Assent. At the time of writing no dates had been published for these final stages.

The most significant accounting issues that arise now the Bill is substantively enacted relate to the BEPS Pillar Two Minimum Tax legislation. As mentioned previously, the International Accounting Standards Board (IASB) has published amendments to IAS 12 to provide companies with a temporary mandatory relief from deferred tax accounting for the impact of the top-up tax and to require them to provide new disclosures in accounting periods when Pillar Two is substantively enacted but before it applies. The UK Endorsement Board discussed these IAS 12 amendments at a Board Meeting on 22 June 2023 and adoption of the revised standard for use by UK companies is expected shortly.

For further information please contact:

• Tim Sarson
• Sharon Baynham