New Finance Bill means 20 new taxes since 2000

The two new taxes in the new Finance Bill are:

• A Residential Property Developer Tax (RPDT) on the profits that companies and corporate groups derive from UK residential property development, at four per cent on profits exceeding an annual allowance of £25 million (to be introduced April 2022); The money raised will fund measures to address unsafe cladding.
• An Economic Crime (Anti-Money Laundering) Levy which will be paid by firms regulated for anti-money laundering purposes, including accountancy and law firms, financial institutions, estate agents and casinos; the levy will be a fixed amount based on the firm’s size, ranging from £10,000 to £250,000, with firms whose UK revenue is less than £10.2 million a year exempt.

Other measures in the new Finance Bill include:

• Reforms to tax calculations for unincorporated businesses (that is, self-employed sole traders and partnerships), known as basis period reform, which will result in a significant acceleration of tax payments by businesses affected by the change
• New obligations on large businesses to notify HMRC where they have taken a tax position that is uncertain
• Keeping the Annual Investment Allowance at £1 million for a further year
• A 1.25 per cent increase in the income tax rates charged on dividend income
• A decrease from eight per cent to three per cent in the corporation tax surcharge on banks
• Extension of a number of tax reliefs in the arts sector
• A range of measures to tackle promoters of tax avoidance schemes, particularly those not resident in the UK

Commenting on the two new taxes, John Cullinane, Director of Public Policy at the Chartered Institute of Taxation, said:

“Since the turn of the century governments of all political complexions have been adding new taxes to the statute book at an average of one a year. This is a one way conveyor belt – they have not got rid of any non-temporary taxes this century.

“The number of new taxes would be even higher if we included some new environmental sources of income such as the Renewables Obligation, which do count towards the ‘National Accounts Taxes’ totals in government tables. Also, we are only counting taxes introduced by the UK Government. If Scottish and Welsh taxes were included this would add at least four further new taxes to the total.

“We should not just keep adding to the number of taxes the UK has. The Chancellor referred eight times in his speech to tax simplification but we could be set for six new taxes in the space of a couple of years – as many as in the previous eight years. Adding six new taxes to the tax code is not simplification!

“While some of these new taxes are niche measures that will be paid only by a small number of large businesses, the new Health and Social Care Levy will be paid by millions. If the Government goes ahead with an online sales tax, which they will shortly be consulting on, this would add another significant new tax, with accompanying burdens on those expected to pay and administer it. This includes HMRC, whose services to taxpayers and their agents are already under severe strain.”

Notes for editors

1. The full list of new taxes introduced by the UK Government since 2000 (or planned), as put together by CIOT, is:

• Climate change levy - 2001
• Aggregates levy - 2002
• Stamp Duty Land Tax (stamp duty on property) – 2003
• Pre-owned assets tax - 2005
• Non-domicile levy – 2008
• Community Infrastructure Levy - 2008
• Bank payroll tax (also known as Bankers bonus tax) – 2009 (one off tax)
• Bank levy - 2011
• Annual tax on enveloped dwellings – 2013
• High Income Child Benefit Charge - 2013
• Diverted profits tax - 2015
• Apprenticeship levy - 2017
• Soft drinks industry levy – 2018
• Loan charge – 2019 (one-off tax)
• Digital services tax – 2020
• Plastic packaging tax - 2022
• Health and social care levy – 2023
• Building Safety Levy (being legislated for in current Building Safety Bill)
• Residential Property Developer Tax (being legislated for in current Finance Bill)
• Economic crime levy (being legislated for in current Finance Bill)
• Online sales tax (being consulted on)

This list includes only UK Government taxes and not those of the devolved administrations. It does not include excise duties and some new environmental sources of income such as the Renewables Obligation, even though they are included within the ‘National Accounts Taxes’ totals in OBR tables. It has been put together by CIOT rather than taken from an official government source so we cannot guarantee its completeness.