Finance (No. 2) Bill

Session 2012 - 13
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Other Bills before Parliament

Finance (No. 2) Bill

Finance (No. 2) Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 1 — Charges, rates etc
1

A
Bill
To
Grant certain duties, to alter other duties, and to amend the law relating to the
National Debt and the Public Revenue, and to make further provision in
connection with finance.
Most Gracious Sovereign
WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the
United Kingdom in Parliament assembled, towards raising the necessary
supplies to defray Your Majesty’s public expenses, and making an addition to the
public revenue, have freely and voluntarily resolved to give and to grant unto Your
Majesty the several duties hereinafter mentioned; and do therefore most humbly
beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most
Excellent Majesty, by and with the advice and consent of the Lords Spiritual and
Temporal, and Commons, in this present Parliament assembled, and by the authority
of the same, as follows:—
Part 1
Income Tax, Corporation Tax and Capital Gains Tax
Chapter 1
Charges, rates etc
Income tax
5
1
Charge for 2013-14
Income tax is charged for the tax year 2013-14.

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Finance (No. 2) Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 1 — Charges, rates etc
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Personal allowance for 2013-14 for those born after 5 April 1948
(1)
For the tax year 2013-14 the amount specified in section 35(1) of ITA 2007
(personal allowance for those born after 5 April 1948) is replaced with “£9,440”.
(2)
Accordingly section 57 of that Act (indexation of allowances), so far as relating
to the amount specified in section 35(1) of that Act, does not apply for that tax
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year.
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Basic rate limit for 2013-14
(1)
For the tax year 2013-14 the amount specified in section 10(5) of ITA 2007 (basic
rate limit) is replaced with “£32,010”.
(2)
Accordingly section 21 of that Act (indexation of limits), so far as relating to the
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basic rate limit, does not apply for that tax year.
Corporation tax
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Charge and main rate for financial year 2014
(1)
Corporation tax is charged for the financial year 2014.
(2)
For that year the rate of corporation tax is—
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(a)
21% on profits of companies other than ring fence profits, and
(b)
30% on ring fence profits of companies.
(3)
In subsection (2) “ring fence profits” has the same meaning as in Part 8 of CTA
2010 (see section 276 of that Act).
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Small profits rate and fractions for financial year 2013
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(1)
For the financial year 2013 the small profits rate is—
(a)
20% on profits of companies other than ring fence profits, and
(b)
19% on ring fence profits of companies.
(2)
For the purposes of Part 3 of CTA 2010, for that year—
(a)
the standard fraction is 3/400ths, and
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(b)
the ring fence fraction is 11/400ths.
(3)
In subsection (1) “ring fence profits” has the same meaning as in Part 8 of that
Act (see section 276 of that Act).
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Main rate for financial year 2015
(1)
For the financial year 2015 the rate of corporation tax is 20% on profits of
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companies other than ring fence profits.
(2)
In subsection (1) “ring fence profits” has the same meaning as in Part 8 of CTA
2010 (see section 276 of that Act).

Finance (No. 2) Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 2 — Income tax: general
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Capital allowances
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Temporary increase in annual investment allowance
(1)
In relation to expenditure incurred during the period of two years beginning
with 1 January 2013, section 51A of CAA 2001 (entitlement to annual
investment allowance) has effect as if in subsection (5) for “£25,000” there were
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substituted “£250,000”.
(2)
Schedule 1 contains provision about chargeable periods which straddle 1
January 2013 or 1 January 2015.
Chapter 2
Income tax: general
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Exemptions and reliefs
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London Anniversary Games
(1)
An accredited competitor who performs an Anniversary Games activity is not
liable to income tax in respect of any income arising from the activity if the non-
residence condition is met.
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(2)
The following are Anniversary Games activities—
(a)
competing at the Anniversary Games, and
(b)
any activity that is performed during the games period the main
purpose of which is to support or promote the Anniversary Games.
(3)
The non-residence condition is that—
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(a)
the accredited competitor is non-UK resident for the tax year 2013-14,
or
(b)
the accredited competitor is UK resident for the tax year 2013-14 but the
year is a split year as respects the competitor and the activity is
performed in the overseas part of the year.
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(4)
Section 966 of ITA 2007 (deduction of sums representing income tax) does not
apply to any payment or transfer which gives rise to income benefiting from
the exemption under subsection (1).
(5)
In this section—
“accredited competitor” means a person to whom an accreditation card in
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the athletes’ category has been issued by the company named UK
Athletics Limited which was incorporated on 16 December 1998;
“the Anniversary Games” means the British Athletics London
Anniversary Games held at the Olympic Stadium in London in July
2013;
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“the games period” means the period—
(a)
beginning with 21 July 2013, and
(b)
ending with 29 July 2013;
“income” means employment income or profits of a trade, profession or
vocation (including profits treated as arising as a result of section 13 of
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ITTOIA 2005).

Finance (No. 2) Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 2 — Income tax: general
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(6)
This section is treated as having come into force on 6 April 2013.
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Glasgow Commonwealth Games
(1)
An accredited competitor who performs a Commonwealth Games activity is
not liable to income tax in respect of any income arising from the activity if the
non-residence condition is met.
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(2)
The following are Commonwealth Games activities—
(a)
competing at the Glasgow Commonwealth Games, and
(b)
any activity that is performed during the games period the main
purpose of which is to support or promote the Glasgow
Commonwealth Games or any future Commonwealth Games.
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(3)
The non-residence condition is that—
(a)
the accredited competitor is non-UK resident for the tax year in which
the Commonwealth Games activity is performed, or
(b)
the accredited competitor is UK resident for the tax year in which the
activity is performed but the year is a split year as respects the
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competitor and the activity is performed in the overseas part of the
year.
(4)
Section 966 of ITA 2007 (deduction of sums representing income tax) does not
apply to any payment or transfer which gives rise to income benefiting from
the exemption under subsection (1).
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(5)
In this section—
“accredited competitor” means a person to whom a Glasgow 2014
accreditation card in the athletes’ category has been issued by the
company named Glasgow 2014 Limited which was incorporated on 11
June 2007;
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“the games period” means the period—
(a)
beginning with 4 March 2014, and
(b)
ending with 3 September 2014;
“the Glasgow Commonwealth Games” means the Commonwealth Games
held in Scotland in 2014;
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“income” means employment income or profits of a trade, profession or
vocation (including profits treated as arising as a result of section 13 of
ITTOIA 2005).
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Expenses of elected representatives
(1)
After section 293A of ITEPA 2003 insert—
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“293B
UK travel expenses of other elected representatives
(1)
No liability to income tax arises in respect of a payment to which this
section applies if it is expressed to be made in respect of relevant UK
travel expenses.
(2)
This section applies to payments—
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(a)
made to members of the Scottish Parliament under section 81(2)
of the Scotland Act 1998,
(b)
made to members of the National Assembly for Wales under
section 20(2) of the Government of Wales Act 2006 or to a

Finance (No. 2) Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 2 — Income tax: general
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member of the Welsh Assembly Government under section
53(2) of that Act, or
(c)
made to members of the Northern Ireland Assembly under
section 47(2) of the Northern Ireland Act 1998.
(3)
In this section “relevant UK travel expenses” means expenses
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necessarily incurred on journeys of the following kinds within the
United Kingdom—
(a)
journeys within subsection (4) made by the member that are
necessary for the performance of his or her duties as a member;
(b)
if the member shares caring responsibilities with a spouse or
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partner, journeys made by the spouse or partner between the
constituency or region and the member’s parliamentary home.
(4)
The journeys referred to in subsection (3)(a) are those—
(a)
between the constituency or region and the Parliament or
Assembly to which the member belongs,
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(b)
between the constituency or region and the member’s
parliamentary home, or
(c)
within the constituency or region, but not excluded by
subsection (5).
(5)
A journey is excluded if—
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(a)
in the case of a member who has only one local office, it is
between the member’s local home and that office, and
(b)
in any other case, it is between the member’s local home and the
principal local office.
(6)
In this section—
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“constituency or region”, in relation to a member, means the
constituency or region which the member represents and the
area within 20 miles of the boundary of that constituency or
region;
“local office”, in relation to a member, means an office which is
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situated in the constituency or region and occupied by the
member for the purposes of performing duties as a member;
“the member’s local home” means a residence of the member
situated in the constituency or region;
“the member’s parliamentary home” means the member’s only or
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main residence in the area comprising—
(a)
the main site of the Parliament or Assembly to which the
member belongs, and
(b)
the area within 20 miles of that site;
“principal local office”, in relation to a member, means the local
40
office most frequently occupied by the member for the purposes
of performing duties as a member.
(7)
A person has “caring responsibilities” if the person—
(a)
has parental responsibility for a dependent child aged under 17
or for a child aged 17 or 18 who is in full-time education, or
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(b)
is the primary carer for a family member in receipt of—
(i)
attendance allowance,
(ii)
disability living allowance at the middle or highest rate
for personal care,

Finance (No. 2) Bill
Part 1 — Income Tax, Corporation Tax and Capital Gains Tax
Chapter 2 — Income tax: general
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(iii)
the daily living component of personal independence
payment, or
(iv)
constant attendance allowance at or above the
maximum rate with an industrial injuries disablement
benefit, or the basic (full day) rate with a war
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disablement pension.
(8)
The Treasury may by order amend the definition of “caring
responsibilities” in subsection (7).”
(2)
The amendment made by this section has effect in relation to payments made
on or after 6 April 2013.
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Exemption from income tax of contributions to pension schemes
(1)
In Chapter 9 of Part 4 of ITEPA 2003 (exemptions from income tax for pension
provision), in section 308 (exemption of contributions to registered pension
scheme), at the end insert “in respect of the employee”.
(2)
The amendment made by this section has effect for the tax year 2013-14 and
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subsequent tax years.
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Childcare exemptions: meaning of disabled child
(1)
In section 318B of ITEPA 2003 (childcare: meaning of “disabled” etc), in
subsection (3)(a), after “allowance” insert “or personal independence
payment”.
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(2)
The amendment made by this section has effect for the tax year 2013-14 and
subsequent tax years.
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Income tax exemption for universal credit
(1)
In section 677(1) of ITEPA 2003 (UK social security benefits wholly exempt
from tax), in Part 1 of Table B (benefits payable under primary legislation),
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insert at the appropriate place—

“Universal
WRA 2012
Part 1

credit

Any provision made for

Northern Ireland which

30

corresponds to Part 1 of WRA

2012”

(2)
The amendment made by this section has effect for the tax year 2013-14 and
subsequent tax years.
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Tax advantaged employee share schemes
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Schedule 2 amends the SIP code, the SAYE code, the CSOP code and the EMI
code.