Following the 2017 Budget on 8 March 2017, the Government published the Finance (No.2) Bill 2016/17 on 20 March 2017. Due to the timing of the General Election, the Bill completed all its remaining stages in the Commons on 25 April, in 'wash up' before Dissolution. In light of the abbreviated timetable for the Bill's scrutiny, the Government removed a significant number of clauses, to be introduced in a Finance Bill later this year. This second Finance Bill was published on 8 September and had its Second Reading on 12 September.
Each year the Chancellor of the Exchequer presents the Budget, which contains all the tax measures for the year ahead. Traditionally the Budget has been in March, prior to the start of the tax year on 6 April. The statutory provisions to give effect to these tax measures are set out in a single Bill: the annual Finance Bill. In 2011 the Coalition Government reformed the Parliamentary timetable, moving the Queen’s Speech and the beginning of the annual session to the spring. In turn provision was made to allow for the Finance Bill to be carried over from one session to the next to ensure that this reform did not substantially reduce the amount of time available for the Bill’s scrutiny.
It has been the practice in recent years for Chancellors to make tax announcements twice a year, using the Pre-Budget Report or Autumn Statement as a second fiscal event. In his Autumn Statement on 23 November 2016 the Chancellor Philip Hammond announced that from autumn 2017 the Government would present a single autumn Budget, to allow for greater Parliamentary scrutiny of Budget measures ahead of their implementation. For more details see, The Budget and the annual Finance Bill, Commons Library briefing CBP813, 13 April 2017.
The Spring 2017 Budget
Further to this material, Commons Briefing Papers are available on the context for the Budget (CBP 7913, 3 March 2017), and its major features (CBP 7919, 17 March 2017). In the latter case this was updated following the Chancellor’s statement on 15 March that the Government would not proceed with an increase in the rates of Class 4 NICs that had been announced in the Budget (HC Deb 15 March 2017 cc420-1; HM Treasury, Letter from the Chancellor to the Chair of the Treasury Select Committee, 15 March 2017).
The Finance (No.2) Bill 2016-17
Following the Spring 2017 Budget, the Finance (No.2) Bill 2016/17 was published on 20 March 2017. The explanatory notes to the Bill were published on Gov.uk; HM Revenue & Customs collated links to supporting documents on the Bill on its site.
Generally selected clauses from the Bill are debated by the Committee of the Whole House over two days at the start of the Bill’s Committee stage. The selection of clauses is set out in a programme motion, generally presented at the conclusion of the Second Reading debate. However, following the Prime Minister's announcement, on 18 April, of the Government's intention to call a General Election on 8 June, the House completed all of the remaining stages of the Bill in the Commons on Tuesday 25 April (HC Deb cc1013-59). With cross-party support the Government removed a series of clauses from the Bill, with the intention of legislating for these at the start of the new Parliament.
On 13 July the Government confirmed, in a written statement, that a second Finance Bill, containing all of the measures that had initially been dropped, would be introduced to this effect “as soon as possible after the summer recess” (Finance Bill: Written Statement, HCWS47, 13 July 2017). As noted in this statement, HMRC published updated draft provisions for a small number of clauses which would be amended, as well as a list of all provisions that will continue to apply from the start of the 2017 to 2018 tax year or other point before the introduction of the forthcoming Finance Bill.
The Finance Bill 2017-19
Prior to the formal presentation of the Finance Bill, the House has to agree a series of ‘Ways and Means’ Resolutions, relating to the measures that will be in the Bill. Normally this occurs at the end of the Budget debates that the House has after the Budget statement – as happened on 14 March 2017. As the Government’s second Finance Bill is a new one, the House approved a second series of resolutions on 6 September (HC Deb 6/9/2017 cc196-275). This is why the Bill itself was not published beforehand. The Treasury published a short note, setting out what each of these resolutions cover (on the Parliament site), an updated version of the note previously published in July.
The Commons Briefing paper on Budgetary procedure, cited above, discusses some previous examples of where a General Election has interrupted this process – such as in 2010, when the incoming Coalition Government introduced two Finance Bills in the same year: the first in July, after its ‘emergency’ Budget, for its key policy priorities, and the second, in the autumn, containing a series of technical measures that the Labour Government had decided not to introduce before the Election. In the second case, the House had to approve a second list of ways and means resolutions on 15 September that year.
In turn the Finance Bill 2017-19 was published on Friday 8 September (HM Treasury press notice, 8 September 2017; Finance Bill: Written Statement, HCWS107, 5 September 2017), and had its Second Reading on Tuesday 12 September (HC Deb 12/9/207 cc668-764).
The Autumn 2017 Budget
As noted above, it is the Government's intention to present its first autumn Budget later this year - on 22 November (HM Treasury press notice, 12 September 2017). In turn a Finance Bill will be introduced after the Budget. The Government published draft clauses for this Bill on 13 September, in line with previous practice in recent years for publishing much of the Bill in draft for consultation (Draft legislation for Finance (No.2) Bill - Written Statement, HCWS113, 6 September 2017).
Library briefing material on the Finance Bill
It is long-standing practice for there not to be a single impact assessment on the Bill; as noted, HMRC publish tax information & impact notes on individual Budget measures (see PQ6549, 6 September 2017). Similarly, given the scale and scope of the annual Finance Bill, the Library does not publish a single paper on the Bill, but will generally publish briefing material relating to the clauses selected for debate by the Committee of the Whole House. A list of these notes, as prepared for the first Finance Bill 2017, is given below.
Making Tax Digital, CBP7949, 17 July 2017 +
Personal service companies: recent debate, CBP5976, 23 June 2017 *
Tax avoidance: recent developments, CBP7948, 26 April 2017 +
Tax avoidance: a General Anti-Abuse Rule, CBP6265, 14 April 2017
Tax avoidance: a General Anti-Avoidance Rule - background history (1997-2010), CBP2956, 13 April 2017
The Soft Drinks Industry Levy, CBP7876, 12 April 2017 *
Alcohol taxation and the pub trade, CBP1373, 6 April 2017 *
Insurance Premium Tax, CBP1425, 3 April 2017 *
* Provisions retained in Finance Act 2017
+ Provisions included in Finance Bill 2017-19
Further material for the forthcoming debate by the Committee of the Whole House on selected clauses of Finance Bill 2017-19 - which is scheduled for 11 October - will be published here:
Corporation tax in Northern Ireland, CBP7078, 28 September 2017.
Taxation of termination payments, CBP8084, 3 October 2017.
Taxation of non-domiciles: recent developments, CBP8099, 6 October 2017.
Taxation of non-domiciles: the 2008 reforms, CBP4604, 6 October 2017.
Commons Debate packs CDP-2017-0114
Author: Antony Seely