The triggering of an early general election by Theresa May has resulted in a rush to try to get Finance Bill 2017 (which implements measures announced by the Chancellor during the last Budget / Autumn Statement) through Parliament before the House is dissolved next Wednesday.
Clearly at nearly 800 pages long the draft bill would not stand any chance of being passed in this time. As a result the government has dropped a considerable amount of the measures. Clauses dropped include:
At first glance, the decision to drop some of these measures, such as the reduction in the dividend exemption, might be seen as good news. However, many clients will have planned their affairs under the assumption that certain changes would take effect on 6 April 2017. Whilst the government has said it intends to reintroduce measures at the earliest opportunity – assuming the Conservatives are re-elected – there is uncertainty regarding whether the original timetable will stand. Amongst some of the practical issues are:
Commentators appear to be divided on whether the commencement of the measures which have been dropped is likely to be deferred or if the government will stick to the original timetable. We contacted HMRC for guidance, but as the civil service is now effectively in purdah they are not able to provide a definitive answer.
The advice to all clients is to seek advice before undertaking any actions which have been planned on the basis of the new rules coming into force. In some cases the conclusion may be to delay action until the position is clarified.
Clearly there will also be situations where action has already been taken. We would hope that the Government will ensure that taxpayers are not unfairly prejudiced as a result of the delay to the Finance Bill caused by the early election. The Chartered Institute of Tax has pressed the government for guidance as soon as possible, so we will provide a further update on any developments.
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