Treasury commits to publishing draft Finance Bill 2018 by July
The Treasury has confirmed the new fiscal calendar, highlighting that the Budget will be the primary fiscal event, supported by a Spring Statement on 13 March and release of draft legislation in July
6 Dec 2017
Under the new cycle of a single fiscal event each year, most tax policies will continue to be developed through an established cycle, whereby a policy announcement at the Budget is followed by a policy consultation, the publishing of draft legislation, and proposals are finally legislated in the next Finance Bill.
In recent years, the former Autumn Statement had morphed into a mini Budget, frequently ending up with the release of more new policies and tax changes than the actual Budget.
The government is keen to stop this happening in future and has reiterated that although there will be a Spring Statement, it will only be an opportunity to publish consultations, including early-stage consultation or calls for evidence, before specific measures are announced (or the government decides not to proceed) at the following Budget.
As a result, policies will only be announced at the Budget in the autumn, and then consulted on in winter and over the spring.
The Chancellor Philip Hammond has confirmed to the Treasury Committee that the next Spring Statement is slated for 13 March 2017.
Draft legislation will be published in July for technical consultation ahead of the Finance Bill being introduced in the autumn giving proper parliamentary time for adequate scrutiny by MPs and the Treasury Committee.
The Treasury said that ‘an autumn Budget will ensure that tax changes are announced well in advance of the start of the tax year in which they will take effect, giving parliament more time to scrutinise proposed changes and taxpayers more time to prepare.
‘It will also allow the government to make fiscal decisions on the basis of a forecast informed by the full range of economic and fiscal data published between spring and autumn.’
Since 2010, the government has published over 50 calls for evidence on tax policy. The government has also published more legislation in draft, to try to ensure that drafting reflects stakeholders’ responses on technical aspects before it is formally introduced in parliament.
The snap general election in June 2017 led to a truncated Finance Act 2017, with policy ripped out of the Bill in the rush to pass it before the election.
Mel Stride, financial secretary to the Treasury, said: ‘Open and collaborative consultation ensures any policy changes are well targeted and that the likely impacts are better understood. That is why we are giving taxpayers and professionals in the field more time to adapt to new rules and to give us their views on the design of tax policy.’
The role of the statutory body, the independent Office of Tax Simplification (OTS), will continue to be maintained and it is currently working on a number of projects to simplify tax, including a review of the VAT system, and business thresholds, an area which is considered problematic as the current £85,000 threshold is seen as a cliff edge by the OTS, deterring companies from growing.
Since it was set up in 2010, the OTS, which is tasked with reviewing UK tax law, has made a number of recommendations to improve the current tax system, including:
- introducing several reforms to employee benefits and expenses, reducing administrative burdens by around £25m per annum;
- the abolition of circa 40 reliefs, leading to the removal of over 100 pages of legislation; and
- introducing the cash basis for micro-businesses affecting over 1.1m trading and property businesses.
Treasury policy paper, The new Budget timetable and the tax policy making process, issued 6 December 2017