The UK Treasury has announced the tax measures (noted below) that are likely to be included in the next Finance Bill. Advance notice of the legislation is in accordance with the Tax Policy Making Framework, although the final contents of the Bill will be a decision for the Chancellor of the Exchequer. Early publication of the proposals allows time for technical consultation and warns taxpayers of future tax policy changes.
The United Kingdom's tax authority, His Majesty's Revenue and Customs (HMRC), has published draft legislation and associated documents relating to the following areas and topics.
Individual income tax
- Extending the time limit to notify a grant of options under the enterprise management incentive scheme.
- Abolishing the pensions lifetime allowance.
- Making amendments to tax relief at source for pension contributions.
Corporation tax
- Additional tax reliefs for research and development (R&D) intensive small and medium-sized enterprises and potential merged R&D schemes.
- Administrative changes to creative industry tax reliefs.
- Clarifications of the rules for cultural tax reliefs.
- Reform of audiovisual creative tax reliefs to expenditure credits.
- Increasing the capital allowance limits for leasing into tonnage tax.
- Tonnage tax elections to include third party ship managers.
- Tax exemption for corporate recipients of compensation payments under the Post Office compensation schemes.
- Further amendments to the real estate investment trust regime.
Inheritance tax
- Changes to the geographical scope of agricultural property relief and woodlands relief.
Vehicle excise duty
- Exemption for Ukrainian vehicles in the United Kingdom.
Miscellaneous
- Change to data HMRC collects from customers.
- Dealing with promoters of tax avoidance.
- Increasing the maximum prison term for tax fraud from 5 to 7 years.
- Multinational top-up tax: adoption of the undertaxed profits rule and other amendments.
If enacted, most of the legislative measures will come into force from January or April 2024. Consultation on the draft legislation ends on 12 September 2023.