Finance Bill – Report Stage preview

You can read our reports on the Bill’s previous stages here:

Committee of whole house (11 January 2024)

Public Bill Committee (19 January 2024)

The Bill, explanatory notes and notices of amendments can all be accessed here.

Background

At report stage, MPs will consider amendments and new clauses brought forward by the government that are intended to bring clarity to certain parts of the bill and ensure that they work in practice once implemented. These are expected to be agreed.

MPs will also consider new clauses tabled by the opposition frontbench (Labour) and by individual backbench MPs. These amendments would require the government to undertake various reviews and impact assessments of measures contained in the Bill. These are not expected to pass.

A summary of the government and non-government amendments can be found below, grouped by subject matter.

Government new clauses and amendments

Electricity generator levy

Government new clause 5 amends Part 5 of the Finance (No.2) Act 2023 by introducing an exemption from the Electricity Generator Levy for new generating plant where no substantive decision to proceed with the project had been made before the day of the Autumn Statement.

Research & Development

Government amendments 1 & 2 deals with two cases in which double-counting might otherwise arise in calculating expenditure for the purpose of determining whether the R&D intensity threshold is met.

Government amendment 3 will ensure only one company can claim relief in certain transitional situations where more than one company is involved in the same R&D but not both or not all of them have become subject to the changes made by Part 1 of Schedule 1.

In written evidence ahead of the Committee of whole debate earlier this month, CIOT had recommended that the Bill be amended to provide greater clarity on the treatment of subcontracting.

Creative sector reliefs

Government amendments 4,5&6 allow regulations imposing information requirements for creative sector relief to provide for consequences of non-compliance short of the total invalidity of the claim (for instance, by making a claim invalid only so far as it relates to certain items of expenditure).

Opposition new clauses and amendments

Fraud and evasion

New clause 1 from the Labour frontbench would require a review of the effectiveness of measures included the Bill in preventing fraud involving taxpayers’ money and to compare these with other measures and the approach taken in other countries.

New clause 3 would require publication of details of sentences and stop notices issued in the last 5 years to tackle evasion and avoidance, and the revenue expected to be generated over the next 5 years because of the measures contained in this Bill.

Research and development

New clause 2 would require a review setting out the costs of all changes to research and development reliefs in the current parliament.

Inequalities

New clause 4 from Labour backbencher Debbie Abrahams would require the Chancellor to review the public health, inequality and poverty effects of the Act within six months of its passing.

Full expensing

New clause 6 will require the Chancellor to publish an assessment of the impact on investment and growth from  making full expensing permanent.

Air Passenger Duty

New clause 7 will require the Chancellor to publish a review of the multipliers used to calculate the higher rates of air passenger duty, and to propose options for introducing a multiplier to link the higher rate and the reduced rate within the domestic band.