Short Pre-Election UK Finance Bill Published

Amanda Banks, Tax-news.com, London

02 April 2001

The UK government published its Finance Bill on Friday last week, which will bring the measures from last month's budget into law. With just 292 pages and 108 clauses it is less than half the size of last year's mammoth 597-page Finance Bill, and includes only some of the budget's changes, so that it can be passed before Parliament is prorogued in advance of the election due this spring.

If the election had been called for May, it's unlikely that the Bill would have made it through the parliamentary process, since its second reading is due in parliament on April 9. The parliamentary draughtsmen evidently knew more than the rest of us when they selected the Bill's clauses! If the Finance Bill gets lost due to an election, the government then pushes through a short bill with just a few vital clauses, reckoning to return to outstanding measures after the election is won.

The bill that has been published contains electorally-interesting measures such as the increase in the 10% lower income tax band, the reduction in the levy on ultra-low sulphur fuel and the replacement of betting tax by a tax on bookmakers' profits. As opposed to previous finance bills this year's bill does not focus heavily on business taxation laws, whose complexity has been severely criticised by the business and finance sectors. Measures such as the capital gains tax on corporate share transactions, the taxation of intellectual property and the tax credit for research and development have been put on hold for futher consultation.

The reaction of tax professionals was one of relief. Francesca Lagerberg of the Institute of Chartered Accountants of England and Wales (ICAEW) told the Financial Times: 'There is not a real hot spot in the bill like the change to double tax relief for multinational companies was last year, so it is not likely to be so contentious.'

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