Autumn Finance Bill completes Commons stages

After a few government amendments the Bill is now ‘substantively enacted’

Finance Bill now substantively enacted

On 5 February 2024, the report stage and third reading for Finance Bill 2023-2024 took place in the House of Commons. As expected, some government amendments tabled to the research and development (R&D) and creative industries provisions in the Bill were passed as well as a government tabled new clause to introduce the new investment exemption for the electricity generator levy. No other amendments were made. The Bill has now moved to the House of Lords but, as it is a ‘Money Bill’, this is a formality only and no further changes can be made. This means that, for UK GAAP and IFRS purposes, the Finance Bill is ‘substantively enacted’.

HMRC published explanatory notes for the government amendments on 29 January 2024. These amendments cover three topics.

Electricity generator levy (EGL)

Draft legislation was published on 18 December 2023 to introduce an exemption from EGL for receipts from electricity generation from new investments in generating stations if the decisive commitment to undertake the project was made on or after 22 November 2023. The new clause is identical to the draft published on 18 December. Our earlier article provides details on the new exemption.

R&D tax relief

The Finance Bill introduces a single new merged R&D tax relief regime confirmed at the Autumn Statement and discussed in our earlier article. Government amendments were made in two areas to prevent unintended consequences. The first was in relation to the ‘R&D intensity ratio’ where the amendments were to prevent double counting. The second was to introduce a new transitional provision to prevent dual claims or gaps in entitlement.

Creative sector relief

The Finance Bill introduces reforms to the audio-visual creative tax reliefs with the introduction of the Audio-Visual Expenditure Credit and Video Games Expenditure Credit confirmed at the Autumn Statement and discussed in our earlier article. The government amendments were focused on the administration of the regime and related to introducing consequences for non-compliance into the information requirements.

The Finance Bill will now complete its formalities in the House of Lords on 21 February 2024 before receiving Royal Assent, the date of which had not been confirmed at the time of writing.