Finance Bill delayed until 2019

Political divisions and extensive debate of the government’s Brexit deal mean that Finance Bill 2018-19 (FB 2018-19) failed to pass beyond the committee stage before the parliamentary Christmas recess and will remain without royal assent until the new year

FB 2018-19 was published on 7 November 2018 following Chancellor Philip Hammond’s Budget announcement and was intended to be passed through parliament and receive royal assent before the end of the year. However, debate over the government’s proposed deal with the EU meant that time was not available to debate the Bill. The Houses rose on 20 December 2018 and will not sit until 7 January 2019.

The progress of FB 2018-19 has been repeatedly hampered by tabled amendments and the extended discussions of the government’s proposed Brexit deal with the EU. The Democratic Unionist Party’s (DUP) abstention from several key debates allowed Labour to push through two amendments in late November 2018.

The first called for a report on how clause 83 on cross-border tax arrangements 'is to be exercised in the case of a negotiated withdrawal from the EU, and in the unlikely circumstances of a no-deal situation'.

The second required the Chancellor to publish a review on the effect 'on households with different levels of income, on child poverty, people with protected characteristics and on a regional basis’ of nine measures that tackle fraud, avoidance and unfair outcomes.

A new clause proposed by the Scottish National Party (SNP), calling for a review of the tax avoidance clauses and the impact of extended time limits on low-income families, was also passed. In the ninth sitting on 11 December 2018, Labour MP Annelise Dodds pushed for further amendments to support this clause, citing Low Incomes Tax Reform Group (LITRG) concerns ‘about the impact of these changes on low income, unrepresented taxpayers’.

The Bill has also been criticised on several different points, with Lord Forsyth, the chair of the House of Lords economic affairs finance bill sub-committee writing to the Chancellor to express misgivings about the lack of consultation over changes to offshore time limits, calling them ‘unnecessary and undesirable’. In addition, John Cullinane, tax policy director at CIOT, warned that without prior public consultation, changes such as those made to the annual investment allowance (AIA) risked undermining the confidence of businesses.

Report by James Bunney

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