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It was rather good to see such a modest Finance Bill last week. Other than a few Finance Acts which swept up essential measures before a general election I think that this will become the shortest Finance Act of my lifetime. I’m sure that the same won’t be said of the act we are promised next spring.
The bill (which may have become law by the time you read this) is largely uncontroversial in giving effect to the measures announced in the Autumn Statement. What did interest me was that it sets rates for several years in the future – for example, the higher rate limit will be £125,140 for all tax years up to 2027-28. By that time, we will have had a general election and a new government (of whatever persuasion) may have a very different view about rates and allowances and could repeal these measures. In reality, setting things out so far ahead is largely symbolic.
Income tax is, of course, a temporary tax which has to be re-imposed every year, so clauses setting rates for the future presuppose that there will still be an income tax. That is probably not an unreasonable assumption, but perhaps the time has come to bite the bullet and legislate for it to be made permanent. I suspect the reason this has not been done is that the current system requires an annual act to reimpose the tax.
Given the pressures on the parliamentary timetable, the Treasury might lose the opportunity for an act in some years if there was no legislative need for one.
What would life be without at least one Finance Act a year? Answers on a postcard please.
If you do one thing...
Read the updated guidance for agents who need to register clients with HMRC (see tinyurl.com/hmrcregclient).
