Finance Bill: Committee of Whole House preview

Documents relating to the Bill can be found here. These include the Bill itself, explanatory notes, amendments and briefing papers from the House of Commons Library.

Clauses for debate

The clauses and schedules below have been selected for debate in Committee of whole House. These are listed in the order in which they are expected to be considered on the day, along with relevant amendments and new clauses that have been proposed by opposition MPs.

These clauses and schedules will be considered in three broad groups, each of which are allocated a maximum of two hours for debate by MPs. Not all of this time may be needed, but this means that MPs will have a maximum of six hours to debate those parts of the Bill that have been selected for Committee of whole House.

It is expected that Committee of whole House proceedings will be concluded in a single sitting. This is expected to begin after 12.30pm once any urgent questions or statements have concluded. Following this, the remainder of the Bill will be considered by a Public Bill Committee. These proceedings are expected to conclude no later than Thursday 18 January.

Group 1

Part 1: Income Tax and Corporation Tax

Clause 1: Permanent full expensing etc for expenditure on plant or machinery

Clause 2 and Schedule 1: New regime for research and development carried out by companies

Clause 1 makes permanent full expensing for expenditure on plant and machinery equipment. Clause 2 and Schedule 1 provides for a new, merged research and development (R&D) scheme replacing the current R&D scheme for small or medium-sized (SME) businesses and the R&D Expenditure Credit for larger companies.

The Liberal Democrats have proposed amendment 1, which would require water companies to demonstrate how they will use capital allowances to prevent sewerage discharges in order to benefit from full expensing.

Labour have tabled New Clause 1, requiring the government to publish a review of the costs of all changes to R&D reliefs in the current parliament.

The Lib Dems New Clause 3 would require the government to produce an impact assessment of the Bill’s new regime for research and development carried out by companies, examining the impact on business investment and economic growth.

Labour New Clause 6 would require the Chancellor to conduct a review of business taxes and reliefs, and to make recommendations on how to increase certainty and investment.

Group 2

Part 2: Other taxes (specifically: Pillar Two)

Clause 21 and Schedule 12: Ensuring consistency of Parts 3 and 4 of F(No.2)A 2023 with OECD rules etc.

Clause 21 and Schedule 12 amends Finance (No.2) Act 2023 amends the implementation of the multinational top-up tax and domestic top-up tax, the UK version of the OECD Pillar 2 rules.

Lib Dem New Clause 4 would require the government to produce an assessment of the impact of the Bill’s “Pillar Two” measures to understand whether the measures have been successful in achieving their policy aims.

Part 3: Miscellaneous and Final (specifically; Evasion, avoidance etc)

Clause 31: Increase in maximum terms of imprisonment for tax offences

Clause 32 and Schedule 13: Disqualification of directors etc promoting tax avoidance schemes

Clause 31 doubles the maximum term of imprisonment to 14 years for the most egregious tax fraud. Clause 32 and Schedule 13 introduces a new power that will allow HMRC to apply to disqualify directors and other persons involved in the promotion of tax avoidance schemes.

Clause 33: Promoters of tax avoidance: failure to comply with stop notice etc

Clause 34: Construction industry scheme: gross payment status

Clause 33 introduces new offences relating to failure to comply with stop notices used in the Promoters of Tax Avoidance Schemes (POTAS) scheme.

Clause 34 makes changes to the Construction Industry Scheme (CIS), expanding the grounds for immediate removal of Gross Payment Status (GPS) for cases of fraud involving VAT, Corporation Tax Self Assessment, Income Tax Self Assessment and PAYE. It adds compliance with VAT obligations to the GPS compliance test for checks made on or after 6 April 2024.

Labour New Clause 2 would require the Chancellor to publish details of the sentences given and stop notices issued in each of the last five years to tackle evasion and avoidance, as well as the revenue expected to be generated from the measures to tackle evasion and avoidance in this Act in each of the next five years.

Lib Dem New Clause 5 would require the government to produce an assessment of the impact of the Bill’s tax evasion and avoidance measures, examining whether the capacity and ability of HMRC was sufficient to properly enforce the measures.

Labour New Clause 7 would require the Chancellor to review the effectiveness of measures to prevent fraud involving taxpayers’ money and to compare them with other measures and those taken in other countries.

Group 3

Part 2: Other taxes (Miscellaneous VAT and excise measures)

Clause 25: Rebate on heavy oil and certain bioblends used for heating

Clause 27: Interpretation of VAT and excise law

Clause 25 reverses the exclusion from the list of ‘excepted machines’ that can use rebated fuel since 1 April 2022, of machines and appliances that use heavy oil (other than gas oil), or bioblends that do not contain gas oil, for commercial heating.

Clause 27 clarifies how VAT and excise legislation should be interpreted in light of changes made by the Retained EU Law (Revocation and Reform) Act 2023.