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:—
Income tax is charged for the tax year 2013-14.
Finance (No. 2) BillPage 2
(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
5to the amount specified in section 35(1) of that Act, does not apply for that tax
year.
(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)
10Accordingly section 21 of that Act (indexation of limits), so far as relating to the
basic rate limit, does not apply for that tax year.
(1) Corporation tax is charged for the financial year 2014.
(2) 15For that year the rate of corporation tax is—
(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).
(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) 25the standard fraction is 3/400ths, and
(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).
(1)
30For the financial year 2015 the rate of corporation tax is 20% on profits of
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) BillPage 3
(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
5investment allowance) has effect as if in subsection (5) for “£25,000” there were
substituted “£250,000”.
(2)
Schedule 1 contains provision about chargeable periods which straddle 1
January 2013 or 1 January 2015.
(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.
(2) 15The 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—
(a)
20the 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.
(4)
25Section 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
30the 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;
35“the games period” means the period—
beginning with 21 July 2013, and
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
40ITTOIA 2005).
Finance (No. 2) BillPage 4
(6) This section is treated as having come into force on 6 April 2013.
(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
5non-residence condition is met.
(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
10Commonwealth Games or any future Commonwealth Games.
(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
15activity is performed but the year is a split year as respects the
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
20the exemption under subsection (1).
(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
25June 2007;
“the games period” means the period—
beginning with 4 March 2014, and
ending with 3 September 2014;
“the Glasgow Commonwealth Games” means the Commonwealth Games
30held in Scotland in 2014;
“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).
(1) 35After section 293A of ITEPA 2003 insert—
(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) 40This section applies to payments—
(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) BillPage 5
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)
5In this section “relevant UK travel expenses” means expenses
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)
10if the member shares caring responsibilities with a spouse or
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
15Assembly to which the member belongs,
(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) 20A journey is excluded if—
(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) 25In this section—
“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;
30“local office”, in relation to a member, means an office which is
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;
35“the member’s parliamentary home” means the member’s only or
main residence in the area comprising—
the main site of the Parliament or Assembly to which the
member belongs, and
the area within 20 miles of that site;
40“principal local office”, in relation to a member, means the local
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
45or for a child aged 17 or 18 who is in full-time education, or
(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) BillPage 6
(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
5benefit, or the basic (full day) rate with a war
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
10on or after 6 April 2013.
(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)
15The amendment made by this section has effect for the tax year 2013-14 and
subsequent tax years.
(1)
In section 318B of ITEPA 2003 (childcare: meaning of “disabled” etc), in
subsection (3)(a), after “allowance” insert “or personal independence
20payment”.
(2)
The amendment made by this section has effect for the tax year 2013-14 and
subsequent tax years.
(1)
In section 677(1) of ITEPA 2003 (UK social security benefits wholly exempt
25from tax), in Part 1 of Table B (benefits payable under primary legislation),
insert at the appropriate place—
| “Universal credit |
WRA 2012 | Part 1 |
| Any provision made for 30Northern Ireland which 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.
Schedule 2 amends the SIP code, the SAYE code, the CSOP code and the EMI
code.
Finance (No. 2) BillPage 7
(1)
Chapter 4 of Part 8 of ITA 2007 (reliefs: annual payments and patent royalties)
is amended in accordance with subsections (2) and (3).
(2)
In section 448 (relief for individuals), in subsection (1)(b) omit “or 903(5)” and
5“and patent royalties”.
(3)
In section 449 (relief for other persons), in subsection (1)(b) omit “or 903(6)” and
“and patent royalties”.
(4) Accordingly, that Act is amended as follows—
(a)
in section 2 (overview of Act), in subsection (8)(c) omit “and patent
10royalties”,
(b)
in section 24 (reliefs deductible at Step 2), in subsection (1)(b) omit “and
patent royalties”, and
(c)
in the heading for Chapter 4 of Part 8 of that Act omit “AND PATENT
ROYALTIES”.
(5)
15The amendments made by this section have effect in relation to payments
made on or after 5 December 2012.
Schedule 3 contains provision limiting the deductions which may be made at
Step 2 of the calculation in section 23 of ITA 2007 (calculation of income tax
20liability).
Schedule 4 contains provision enabling the profits of a trade, profession or
vocation to be calculated on the cash basis.
Schedule 5 contains provision enabling persons carrying on a trade, profession
or vocation to claim deductions for certain expenses at a fixed rate.
30Schedule 6 contains provision about employment income in cases where duties
are performed in the UK and overseas.
Schedule 7 contains provision about the application of the remittance basis in
relation to exempt property.
Finance (No. 2) BillPage 8
(1) ITA 2007 is amended as follows.
(2)
In section 809K (sections 809L to 809Z6: introduction), in subsection (2)(e), for
“809V” substitute “809UA”.
(3) 5Before section 809V (but after the italic heading) insert—
(1)
Subsection (2) applies to income or chargeable gains of an individual
if—
(a)
the income or gains would (but for subsection (2)) be regarded
10as remitted to the United Kingdom by virtue of the bringing of
money to the United Kingdom,
(b)
the money is brought to the United Kingdom by way of direct
payments to the Commissioners on account of income tax,
(c)
the tax year (“tax year 2”) in respect of which the payments on
15account are made is a tax year for which section 809H
(remittance basis charge for long-term UK resident) does not
apply as respects the individual, and
(d)
that section applied as respects the individual for the previous
tax year (“tax year 1”).
(2)
20The relevant amount of income or chargeable gains is to be treated as
not remitted to the United Kingdom if money equal to the relevant
amount is taken offshore by—
(a) the 15 March following the end of tax year 2, or
(b)
such later date as the Commissioners may allow on a claim
25made by the individual.
(3) A claim under subsection (2)(b)—
(a)
may be made only if the individual has made and delivered a
return under section 8 of TMA 1970 for tax year 2 and
reasonably expects to receive from the Commissioners a
30repayment of tax paid in respect of that tax year, and
(b)
may be made no later than the 5 April following the end of tax
year 2.
(4)
Money that is taken offshore in accordance with subsection (2) is to be
treated as having the same composition of kinds of income and capital
35as the money used to make the payments on account.
(5)
In this section “the relevant amount” means the lower of the
following—
(a)
the amount brought to the United Kingdom as mentioned in
subsection (1)(b), and
(b)
40the applicable amount (as defined in section 809H) for tax year
1.”
(4)
In section 809Z9(11) (taking proceeds etc offshore or investing them:
modification of general provisions)—
(a)
for “section 809VB(2) but in that case” substitute “sections 809UA(2)
45and 809VB(2), but in those cases”, and
Finance (No. 2) BillPage 9
(b)
at the beginning of paragraph (b) insert “in the case of section
809VB(2),”.
(5)
The amendments made by this section have effect in relation to payments on
account made in respect of the tax year 2012-13 and subsequent tax years.
(1)
In Chapter 8 of Part 2 of ITEPA 2003 (application of provisions to workers
under arrangements made by intermediaries), in section 49 (engagements to
which Chapter applies), for subsection (1)(c) substitute—
“(c) the circumstances are such that—
(i)
10if the services were provided under a contract directly
between the client and the worker, the worker would be
regarded for income tax purposes as an employee of the
client or the holder of an office under the client, or
(ii)
the worker is an office-holder who holds that office
15under the client and the services relate to the office.”
(2) This section has effect for the tax year 2013-14 and subsequent tax years.
(1)
Section 139 of ITEPA 2003 (car with CO2 figure: the appropriate percentage) is
amended in accordance with subsections (2) to (6).
(2) 20In subsection (2), after “the relevant threshold” omit “for the year”.
(3) For subsection (2)(a) substitute—
“(a)
if the car’s CO2 emissions figure does not exceed 50 grams per
kilometre driven, 5%,
(aa)
if the car’s CO2 emissions figure exceeds 50 grams per kilometre
25driven but does not exceed 75 grams per kilometre driven, 9%,
and”.
(4) In subsection (2)(b), for “11%” substitute “13%”.
(5) In subsection (3)—
(a) after “the relevant threshold” omit “for the year”, and
(b) 30for “12%” substitute “14%”.
(6) In subsection (4)—
(a) after “the relevant threshold” (in both places) omit “for the year”, and
(b) in paragraph (b), for “35%” substitute “37%”.
(7)
Section 140 of that Act (car without CO2 figure: the appropriate percentage) is
35amended in accordance with subsections (8) to (11).
(8) In the Table in subsection (2), for “35%” substitute “37%”.
(9) For subsection (3)(a) substitute—
“(a)
5% if the car cannot in any circumstances emit CO2 by being
driven, and”.
(10) 40In subsection (3)(b), for “35%” substitute “37%”.
(11) Omit subsection (3A).