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Julia Irvine 21 Jun 2017 05:31pm

Raft of tax legislation announced in Queen's Speech

The government announced today in the Queen’s Speech that it would be issuing three Finance Bills over the next two years to implement budget decisions, including a Summer Finance Bill 2017 which, it said, would cover a range of tax measures including those to tackle avoidance

However, it did not elaborate further on the content of the Bill, leaving tax practitioners at a loss. As RSM tax partner George Bull said in his weekly tax brief, this Summer Bill could in principle be published very soon but there is as yet no suggested date or content.

“We very much hope that the Summer Finance Bill 2017 will include detailed measures in respect of individuals who are not domiciled in the UK and in respect of HMRC’s project to make tax digital,” he said.

The changes to the taxation of non-doms went out of the window as a result of cross-party agreement in the run-up to the general election, even though they were due to come into effect on 6 April 2017. As a result, many non-doms had already acted on the draft legislation, Bull said. They had sold assets on the basis of a proposed rebasing relief and brought funds to the UK on the back of a proposed cleansing relief.

Both reliefs were withdrawn, leaving the non-doms who relied on them potentially facing large tax bills.

“On the face of it, it would be a simple matter for the government to reinstate the draft legislation in full, and for it to be enacted with a commencement date of 6 April 2017,” Bull commented.

“This would provide certainty to all concerned and would reflect the way that many non-doms acted in good faith to prepare for the expected introduction of this new legislation.

“However, as the saying goes, that was then and this is now. It is not beyond the bounds of political possibility that other parties in parliament might wish to reopen the debate on the non-dom legislation and change it, perhaps making it even tougher than it already is.”

Bull also took the opportunity to urge government not to rush Making Tax Digital (MTD) through without giving parliament proper time to scrutinise the legislation. And he called on MPs to take advantage of the Queen’s Speech debates to “challenge the ministers responsible for HMRC to explain why they are allowing inaccurate software to be used this year, and what they will do to guarantee that MTD will achieve its tax-raising objectives without imposing impossible and contradictory demands in businesses and individuals”.

While the Summer Finance Bill got a title and the sketchiest content details, the other two Finance Bills got no more than a passing mention. Presumably, they will follow in Autumn 2017 and 2018.

The government also said in the Queen’s Speech that there would be a technical Bill to ratify several minor EU agreements, as well as other ones to be announced in due course, to effect the UK’s withdrawal from the EU.

In addition, there would be a separate raft of other legislation which might not require primary legislation

The government also announced that there would be a National Insurance contributions (NICs) Bill to enact the changes announced in the 2016 Budget and the Autumn Statement. This is likely to cover the abolition of class 2 NICs and disguised remuneration.

The government made it clear that it would not revisit the reform of self-employed NICs that proved so controversial in the last Budget.

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