17:53 - The House divided: - Ayes: 174 / Noes: 292 - Question accordingly negatived.
18:07 - The House divided: - Ayes: 172 / Noes: 283 - Question accordingly negatived.
18:18 - The House divided: - Ayes: 175 / Noes: 292 - Question accordingly negatived.
18:38 - divided: - Ayes: 292 / Noes: 161 - Question accordingly agreed to.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Judith Cummins)
With this it will be convenient to discuss the following:
Government new clause 6—Offshore income gains: savings.
Government new clause 7—Pensions: abolition of the lifetime allowance charge.
New clause 1—Report on fairness and scope of the loan charge settlement opportunity—
“(1) HM Revenue and Customs must, within 12 months of the passing of this Act, lay before the House of Commons a report on the operation and impact of any loan charge settlement opportunity established under section 25 of this Act.
(2) The report under subsection (1) must in particular consider—
(a) whether the terms of the settlement opportunity are available to individuals who have previously settled or fully paid liabilities arising from disguised remuneration loan arrangements,
(b) whether the terms of the settlement opportunity are available to individuals with disguised remuneration loan arrangements falling outside the loan charge years specified in Part 7A of the Income Tax (Earnings and Pensions) Act 2003,
(c) the extent to which any differences in treatment between these groups and those eligible for the settlement opportunity affect perceptions of fairness, and
(d) the potential impact of such perceptions on future tax compliance and trust in the tax system.
(3) The report must include—
(a) an assessment of whether extending more favourable settlement terms to the groups described in subsection (2)(a) and (b) would improve fairness and consistency, and
(b) any recommendations HMRC consider appropriate in light of that assessment.”
This new clause would require HMRC to report on the operation and fairness of the new loan charge settlement opportunity. It would consider whether more favourable terms are, or should be, available to those who have a already settled or fully paid liabilities, and to those with arrangements outside the loan charge years.
New clause 2—Report on implementation customer service standards in relation to sections 253 to 258—
“(1) The Commissioners must, within six months of the commencement of sections 253 to 258, lay before the House of Commons a report setting out—
(a) customer service standards for persons granted exemptions under regulations made under paragraph 14 or 15 of Schedule A1 to the Taxes Management Act 1970, including—
(i) maximum waiting times for telephone helpline calls,
(ii) minimum call answering rates,
(iii) maximum response times for written correspondence, and
(iv) availability of in-person support;
(b) measures taken to ensure adequate staffing and resources to meet those standards;
(c) data on actual performance against those standards in each quarter; and
(d) remedial action to be taken where standards are not met.
(2) The customer service standards published under subsection (1) must ensure that persons granted exemptions under regulations made under paragraph 14 or 15 of Schedule A1 to the Taxes Management Act 1970 can access support through non-digital channels with service levels comparable to those historically provided before the introduction of Making Tax Digital.
(3) The Commissioners must publish an annual report on compliance with the customer service standards established under subsection (1), and lay a copy of the report before the House of Commons.”
This new clause would require HMRC to establish and publish customer service standards for tax payers exempted from Making Tax Digital requirements due to digital exclusion.
New clause 3—Report on winter fuel payment charge and related compliance and collection measures—
“(1) The Commissioners for HM Revenue and Customs must lay before the House of Commons a report on the operation and effects of the charge applied to winter fuel payments where an individual’s income exceeds the relevant threshold, including the compliance and collection arrangements introduced under section 55 and Schedule 10 in relation to that charge.
(2) The report under subsection (1) must in particular consider—
(a) the effect of the charge on people whose income exceeds the threshold by a small amount, and any resulting behavioural impacts,
(b) the administrative complexity and proportionality of introducing a tapered abatement for winter fuel payments,
(c) the potential effect of updating section 7 of the Taxes Management Act 1970 so that a winter fuel payment charge becomes a notifiable liability for tax assessment purposes, including the operation of penalties for failure to notify, and the interaction with existing exceptions for liabilities reflected in PAYE tax coding adjustments or where a taxpayer has already been issued a notice to file a self-assessment return, and
(d) the operation and effectiveness of any new PAYE regulation provisions that allow winter fuel payment charges to be collected via tax code adjustments in year, and which allow HMRC to repay any overpaid income tax related to the charge via the tax code within the same year.”
This new clause would require HMRC to report to Parliament on the operation of the winter fuel payment charge, including its effect on people whose income exceeds the threshold by a small amount. The report would also cover the implications of updating section 7 of the Taxes Management Act 1970 to make winter fuel payment charge liabilities notifiable for tax assessment purposes.
New clause 4—Implementing the prohibition of the promotion of certain tax avoidance arrangements—
“(1) The Treasury must, within six months of the passing of this Act, consult and report on—
(a) how to ensure the regulations specified under section 156(2) of this Act can address the potential for harm to individuals and small businesses from the promotion online and via social media of tax avoidance arrangements by professionals and by social media tax influencers,
(b) the potential for detriment to individuals who are liable for tax arising from such promotions, and
(c) what steps HMRC should take to inform the public of the risks posed by online tax avoidance arrangements.
(2) The Chancellor of the Exchequer must lay before Parliament a report on the outcome of the consultation under subsection (1), including the steps they plan to take to address any issues identified.
(3) In this section, “tax influencer” means an individual who—
(a) is not a tax professional,
(b) promotes, markets or otherwise encourages participation in a tax avoidance arrangement, and
(c) does so by means of a social media service, where that promotion is carried out—
(i) in the course of a business or trade, or
(ii) in consideration of, or in expectation of, any payment or other benefit, whether from a promoter of the arrangement or from the social media service, or
(iii) with the intention of increasing engagement with, or the monetisation of, content relating to the arrangement.”
New clause 8—Impact of section 84 (General betting duty charge on remote bets)—
“The Chancellor of the Exchequer must, before 1 April 2027, lay before the House of Commons an impact assessment on the potential effects of the implementation of section 84 of this Act on the size of the illegal betting market.”
This new clause would require the Chancellor of the Exchequer to undertake an impact assessment on the potential effects of implementation of section 84 on the illegal betting market.
New clause 9—Impact of changes to gambling duties on the economy of Gibraltar—
“The Chancellor of the Exchequer must, before 1 April 2027, lay before the House of Commons an impact assessment on the potential effects of the implementation of sections 83 and 84 of this Act on the economy of Gibraltar.”
This new clause would require the Chancellor of the Exchequer to undertake an impact assessment on the potential effects of implementation of sections 83 and 84 on the economy of Gibraltar.
New clause 10—Review of operation of the carbon border adjustment mechanism—
“(1) The Treasury must, each calendar year for five years following the passing of this Act, undertake a review of the operation of—
(a) Part 5, and
(b) Schedules 16 to 19.
(2) A review undertaken under subsection (1) must be conducted in accordance with sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015.
(3) A review undertaken under subsection (1) must be completed as soon as reasonably practicable after the calendar year to which it relates.
(4) The Treasury must lay before Parliament a copy of each review carried out under this section as soon as reasonably practicable following the completion of the review.”
This new clause would place a duty on the Chancellor to conduct a post-implementation review of the operation of the carbon border adjustment mechanism one year after the implementation of the UK CBAM and every subsequent year.
New clause 11—Uprating of allowance amounts for agricultural property—
“The Chancellor of the Exchequer must, within six months of the passing of this Act, undertake and publish an assessment of the potential merits of uprating annually the relief allowance amount for agricultural property by the change in the value of agricultural land.”
New clause 12—Review of anti-forestalling provisions relating to Agricultural Property Relief—
“(1) The Treasury must conduct a review of the effects of the anti-forestalling provisions relating to Agricultural Property Relief.
(2) The review must, in particular, consider the effects of those provisions on—
(a) succession planning and intergenerational transfer of agricultural land and businesses,
(b) the viability and continuity of family-run farms,
(c) food security and domestic agricultural production,
(d) land management, environmental stewardship, and the condition of the countryside, and
(e) the availability of agricultural land for active farming.
(3) In conducting the review, the Treasury must consult such persons as it considers appropriate, including representatives of the agricultural sector.
(4) The Treasury must lay before the House of Commons a copy of the report within 12 months of the coming into force of the anti-forestalling provisions under this Act.”
New clause 13—Review of impact of Act on complexity of the tax system and administrative burdens—
“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report setting out the impact of the measures contained within this Act on the complexity of the tax system and the costs of tax administration.
(2) The report under subsection (1) must identify the measures in this Act which—
(a) add to the complexity of the tax system;
(b) reduce the complexity of the tax system;
(c) increase the number of individuals, businesses or other organisations liable for tax or for tax reporting;
(d) reduce the number of individuals, businesses or other organisations liable for tax or for tax reporting;
(e) increase the resources required for HM Revenue and Customs to administer the tax system and ensure compliance; and
(f) reduce the resources required for HM Revenue and Customs to administer the tax system and ensure compliance.
(3) The report must include an assessment of the impact of this Act on the complexity of the tax system, and on the time and cost of tax administration and compliance, for each of the following groups—
(a) pensioners;
(b) taxpayers on low incomes;
(c) personal taxpayers as a whole;
(d) self-employed people;
(e) microbusinesses;
(f) small and medium-sized businesses;
(g) large businesses;
(h) personal representatives who administer a person’s estate after their death;
(i) professional tax advisers; and
(j) HM Revenue and Customs.”
This new clause would require the Chancellor to conduct an assessment of the impact of the Act on the complexity of the tax system and on the time and cost of tax administration for taxpayers and their representatives, and for HMRC.
New clause 14—Review of impact on unemployment and youth employment—
“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report reviewing the impact of the provisions of this Act on levels of unemployment in the UK.
(2) The report under subsection (1) must, in particular, assess—
(a) the impact of the provisions of this Act on overall unemployment levels;
(b) the impact on employment levels for persons aged 16 to 24;
(c) the impact on rates of economic inactivity among young people;
(d) the effect on youth participation in apprenticeships, training, and entry-level employment;
(e) regional variations in youth unemployment arising from the provisions of this Act; and
(f) the impact on sectors with high levels of youth employment, including hospitality, retail, and the creative industries.
(3) The report must include an assessment of—
(a) the extent to which changes made by this Act have affected hiring decisions by small and medium-sized enterprises;
(b) any disproportionate impact on disadvantaged young people, including those from low-income households or with disabilities; and
(c) projected impacts over a three-year period following the passing of this Act.
(4) The Chancellor of the Exchequer must, following publication of the report under subsection (1), make a statement setting out what steps, if any, the Government proposes to take in response to its findings.”
This new clause requires the Chancellor to review and report on the impact of the Act on unemployment, with particular regard to young people aged 16 to 24.
New clause 15—Notification of taxpayers affected by frozen thresholds—
“(1) HM Revenue and Customs must take reasonable steps to identify individuals who, as a result of—
(a) the freezing of the starting rate limit for savings under section 9 of this Act, or
(b) the freezing of the personal allowance or the basic rate limit under section 10 of this Act, will—
(i) become liable to income tax for the first time, or
(ii) become liable to income tax at a higher rate than in the previous tax year.
(2) HM Revenue and Customs must ensure that each individual identified under subsection (1) is provided with a written notification before the start of the relevant tax year.
(3) A notification under subsection (2) must—
(a) explain that the individual’s tax liability is affected by the freezing of income tax thresholds,
(b) state whether the individual will pay income tax for the first time or move into a higher tax band, and
(c) provide information on where the individual can obtain further guidance about their tax position.
(4) HM Revenue and Customs must publish, no later than six months after the end of each affected tax year, a report setting out—
(a) the number of individuals notified under this section,
(b) the number of individuals who became income taxpayers for the first time as a result of sections 9 and 10, and
(c) the number of individuals who moved into a higher tax band as a result of those sections.
(5) In this section “written notification” includes electronic communication.”
This new clause would require HM Revenue and Customs to notify individuals who, as a result of the freezing of income tax thresholds in the Act, will pay income tax for the first time or move into a higher tax band.
New clause 16—Review of the impact of tax changes on household finances—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of changes introduced by sections 9,10 and 69 on household finances.
(2) The assessment must evaluate how households across different income levels are affected by these changes.”
This new clause requires the Chancellor of the Exchequer to assess and publish a report on how the freezing of tax thresholds to 2030-31 impacts households at various income levels.
New clause 17—Report on impact of sections 9, 10 and 69—
“Within three months of this Act being passed, the Chancellor of the Exchequer must lay before the House of Commons a report setting out—
(a) the number of taxpayers who will pay income tax at each rate during each tax year between 2026-27 and 2030-31 under sections 9, 10 and 69,
(b) the number of those taxpayers who are pensioners or are of State Pension Age,
(c) comparative figures for each tax year since 2020-21,
(d) comparative projected figures for each tax year to 2034-35, and
(e) comparative figures with a scenario under which normal uprating policy had been implemented for financial years 2020-21 through 2030-31.”
This new clause requires the Chancellor of the Exchequer to assess how many people will be in each income tax bracket from 2026-27 through to 2030-31, together with comparative figures before and after that period.
New clause 18—Review of the effect of sections 63 to 68—
“(1) HM Treasury must carry out a review of the effect of sections 63 to 68 of this Act (Pension interests).
(2) The review under subsection (1) must include an assessment of—
(a) the impact of those sections on individuals’ pension savings and beneficiaries, including on estate values and inheritance tax liabilities,
(b) the administrative effects on personal representatives, pension scheme administrators, and HM Revenue and Customs, and
(c) any behavioural effects on how pensions are used during life and on death.
(3) HM Treasury must lay before the House of Commons a report setting out the findings of the review under subsection (1) no later than six months after the date on which sections 63 to 68 come into force.”
This new clause would require HM Treasury to review and report on the effects of Clauses 63 to 68 of the Bill, which introduce inheritance tax charges on unused pension funds and death benefits, including their impacts on individuals, administrators, and behaviour, and to publish the findings to Parliament.
New clause 19—Administration of inherited pension pots—
“(1) HM Revenue and Customs must review the tax administration arrangements relating to inherited pension pots.
(2) The purpose of the review under subsection (1) is to ensure that—
(a) inheritance tax and related tax checks do not cause unreasonable delays in the payment of pension death benefits to beneficiaries, and
(b) bereaved families are able to receive pension benefits within a reasonable period following a member’s death.
(3) In carrying out the review, HM Revenue and Customs must have regard to—
(a) the cumulative administrative burden placed on personal representatives, pension scheme administrators, and beneficiaries,
(b) the interaction between inheritance tax reporting, clearance processes, and pension scheme payment rules, and
(c) any evidence of prolonged delays in the payment of inherited pension benefits.
(4) HM Revenue and Customs must publish the outcome of the review, including any proposed changes to its processes or guidance, within 12 months of the passing of this Act.”
This new clause would require the Government to address delays in the payment of inherited pension pots by reviewing HMRC’s tax administration processes, with the aim of preventing prolonged waiting periods for bereaved families.
New clause 20—Review of cumulative impact on the hospitality sector—
“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before the House of Commons a report assessing the cumulative impact on the hospitality sector of—
(a) the measures contained in section 86 of this Act, and
(b) changes to taxation and business costs affecting that sector introduced outside this Act since 2020.
(2) For the purposes of subsection (1)(b), changes to taxation and business costs include, but are not limited to—
(a) changes to employer National Insurance contribution rates or thresholds,
(b) changes to business rates, including reliefs and revaluations, and
(c) any other fiscal measures which materially affect operating costs for hospitality businesses.
(3) A report under subsection (1) must include an assessment of the impact of the matters listed in that subsection on—
(a) levels of employment across the United Kingdom within the hospitality sector,
(b) the number of hospitality businesses ceasing to trade,
(c) the number of new hospitality businesses established, and
(d) the financial sustainability of hospitality businesses.
(4) In this section, “the hospitality sector” means persons or businesses operating in the provision of food, drink, accommodation, or related services.”
This new clause would require the Chancellor of the Exchequer to assess and report on the cumulative impact on the hospitality sector of alcohol duty measures in the Act alongside wider fiscal changes, including employer National Insurance contributions and business rates.
Amendment 1, page 2, line 7, leave out clause 4.
This amendment removes the increase in dividend rates from the Bill.
Amendment 2, page 2, line 16, leave out clause 5.
This amendment removes the new savings rates of income tax from the Bill.
Amendment 3, page 2, line 21, leave out clause 6.
This amendment removes the new rates of income tax on property income from the Bill.
Amendment 4, page 4, line 31, leave out clause 7.
This amendment removes the property rates of income tax for 2027-28 from the Bill.
Amendment 5, page 5, line 20, leave out clause 10.
This amendment removes the freeze in income tax thresholds from the Bill.
Amendment 112, in clause 13, page 6, line 13, leave out from “means—” to “fifteenth” on line 16.
Amendment 113, page 6, line 20, leave out from “(1)” to end of line 23 and insert
“for “£3 million” substitute “£6 million””.
Amendment 114, page 6, line 27, leave out subsection (3)(d).
Amendment 115, page 7, line 1, leave out from “(1)” to end of line 4 and insert
“for “£30 million” substitute “£120 million””.
Amendment 116, page 7, line 5, leave out from “(2)” to end of line 13 and insert
“for “£30 million” substitute “£120 million””.
Amendment 117, page 7, line 10, leave out from “(1)” to end of line 13 and insert “for “250” substitute “500””.
Amendment 118, page 7, line 14, leave out from “(2)” to end of line 15 and insert “for “250” substitute “500””.
Amendment 119, page 7, line 25, leave out from “15 years” to end of line 27.
Amendment 120, page 7, line 28, leave out subsection (7).
Amendment 121, page 8, line 28, leave out sub-paragraph (4).
Amendment 122, in clause 14, page 8, line 36, leave out from “(5A))” to “, and” in line 38 and insert “, £20 million”.
Amendment 123, page 8, line 40, leave out from “company” to end of line 1 on page 9, and insert “, £10 million.”
Amendment 124, page 9, line 5, leave out from “section 252A)” to “, and” in line 7, and insert “, £40 million”.
Amendment 125, page 9, line 10, leave out from “company” to end of line 11 and insert “, £24 million.”
Amendment 126, page 9, line 15, leave out from “section 252A)” to “, and” in line 17 and insert “, £40 million”.
Amendment 127, page 9, line 19, leave out from “company” to end of line 21 and insert “, £24 million.”
Amendment 128, page 9, line 24, leave out sub-paragraph (b).
Amendment 129, page 9, line 38, leave out “that is not a specified Northern Ireland company”.
Amendment 130, page 10, line 4, leave out “that is not a specified Northern Ireland company”.
Amendment 131, page 10, line 10, leave out leave out subsections (6) and (7) and insert—
“(6) In section 186 (the gross assets requirement)—
(a) in subsection (1)(a) for “£15 million” substitute “£30 million”
(b) in subsection (1)(b) for “£16 million” substitute “£35 million”
(c) in subsection (2)(a) for “£15 million” substitute “£30 million”
(d) in subsection (2)(b) for “£16 million” substitute “£35 million””
Amendment 132, in clause 15, page 10, line 30, leave out from “(6A))” to “, and” in line 32 and insert “, £20 million”.
Amendment 133, page 10, line 34, leave out from “company” to end of line 36 and insert “, £10 million.”
Amendment 134, page 11, line 4, leave out from “section 331A)” to “, and” in line 6 and insert “, £40 million”.
Amendment 135, page 11, line 8, leave out from “company” to end of line 10 and insert “, £24 million.”
Amendment 136, page 11, line 14, leave out from “section 331A)” to “, and” in line 16 and insert “, £40 million;”.
Amendment 137, page 11, line 18, leave out from “company” to end of line 20 and insert “, £24 million.”
Amendment 138, page 11, line 23, leave out subsection (6)(b).
Amendment 139, page 11, line 34, leave out leave out subsections (7) and (8) and insert—
“(6) In section 297 (the gross assets requirement)—
(a) in subsection (1)(a) for “£15 million” substitute “£30 million”
(b) in subsection (1)(b) for “£16 million” substitute “£35 million”
(c) in subsection (2)(a) for “£15 million” substitute “£30 million”
(d) in subsection (2)(b) for “£16 million” substitute “£35 million””.
Government amendments 12 to 14.
Amendment 6, page 78, line 4, leave out clause 62.
This amendment removes the changes to the thresholds for Agricultural Property Relief and Business Property Relief from the Bill.
Amendment 7, page 78, line 11, leave out clause 63.
This amendment removes the imposition of inheritance tax on pension interest.
Government amendments 15 to 47.
Amendment 9, in clause 74, page 91, line 25, at end insert—
“(7) The Treasury must make regulations under subsection (1) within 60 days of the passing of this Act.
(8) Before making regulations under subsection (1), the Treasury must consult—
(a) organisations representing infected and affected individuals,
(b) the Infected Blood Compensation Authority, and
(c) bereaved families of victims who have died awaiting compensation.
(9) The regulations made under subsection (1) must make provision for identifying and assisting the estates of deceased victims in claiming inheritance tax relief, including—
(a) outreach to known affected families,
(b) assistance with evidence gathering where medical records have been destroyed,
(c) clear and accessible guidance in plain language, and
(d) a dedicated helpline staffed by trained caseworkers familiar with the infected blood scandal.
(10) The Treasury must, within 6 months of regulations under this section coming into force, and every 6 months thereafter, lay before Parliament a report on—
(a) the number of victims who have died since the previous report while awaiting compensation,
(b) the number of estates that have received inheritance tax relief,
(c) the average time taken to process claims for relief,
(d) any identified barriers preventing families from accessing their entitlement, and
(e) steps taken to expedite outstanding infected blood compensation claims.”
This amendment requires the Chancellor of Exchequer to make regulations under this section within 60 days of Royal Assent. It requires mandatory consultation with those directly affected, and a support service to help bereaved families navigate the system. It also places a six-monthly reporting requirement on the Government.
Amendment 10, page 94, line 4, leave out clause 77.
This amendment would maintain the existing zero-rating for the purposes of VAT on the full value of the lease of a vehicle to a disabled person supplied through the Motability Scheme.
Amendment 11, page 96, line 6, leave out clause 78.
This amendment would maintain insurance premium tax relief for all vehicles let to a disabled person and supplied through the Motability Scheme.
Amendment 101, page 103, line 29, leave out clause 86.
Government amendments 48 to 53.
Government amendments 56 to 61.
Amendment 8, page 442, line 2, leave out schedule 12.
This amendment would remove the changes to Agricultural Property Relief and Business Property Relief from the Bill.
Amendment 109, in schedule 12, page 442, line 20, leave out from “and” to end of line 23 and insert—
“(c) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”.
This amendment would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 110, page 442, line 29, leave out from “and” to end of line 32 and insert—
“(c) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% trust relief allowance available in relation to that occasion (see sections 124G to 124K),”.
This amendment would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 111, page 443, line 9, leave out from “and” to end of line 12 and insert—
“(b) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”.
This amendment would apply 100% agricultural property trust relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 89, page 444, line 16, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 102, page 444, line 16, after “£2.5 million” insert
“plus
(aa) the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
This amendment, and Amendments 103 to 107, would allow landlords to access 100% relief from inheritance tax where they have let land or farms to tenant farmers on secure agreements under the Agricultural Holdings Act 1986 or on agreements under the Agricultural Tenancies Act 1995 for 10 years or more.
Amendment 90, page 449, line 36, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 103, page 449, line 36, after “£2.5 million” insert
“plus
(aa) the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
See Amendment 102.
Amendment 91, page 450, line 25, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 104, page 450, line 25, after “£2.5 million” insert
“plus the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995”.
See Amendment 102.
Amendment 67, page 450, line 27, leave out “30 October 2024” and insert “1 March 2027”.
This amendment, along with Amendments 68 to 87 would remove the transition period in respect of the changes to agricultural property and business property relief and delay the implementation date so that the changes would take effect for transfers made after 1 March 2027.
Amendment 95, page 450, line 27, leave out “30 October 2024” and insert “6 April 2026”.
This amendment, with Amendments 96 to 100, would remove the transition period in respect of the changes to agricultural property and business property relief so that the changes take effect for transfers made from 6 April 2026.
Amendment 68, page 451, line 6, leave out “30 October 2024” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 96, page 451, line 6, leave out “30 October 2024” and insert “6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 92, page 451, line 22, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 105, page 451, line 22, after “£2.5 million” insert
“plus
(aa) the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
See Amendment 102.
Amendment 93, page 453, line 15, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 106, page 453, line 15, after “£2.5 million” insert
“plus the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995”.
See Amendment 102.
Amendment 94, page 453, line 17, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 107, page 453, line 17, after “£2.5 million” insert
“plus the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
See Amendment 102.
Amendment 69, page 453, line 23, leave out “30 October 2024” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 97, page 453, line 23, leave out “30 October 2024” and insert “6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 108, page 454, line 40, at end insert
“(But see subsection (2A).)
(2A) If the Treasury estimates that the value of agricultural land has increased by more than the percentage increase in the consumer prices index during the same period, then it must instead make an order by statutory instrument amending each relief allowance amount relating to agricultural property by the percentage increase in the value of agricultural land.”
Government amendments 54 and 55.
Government amendments 62 to 64.
Amendment 88, page 458, line 31, at end insert—
“(1A) In Section 227, leave out subsection (3)(a) and insert—
“(a) if the chargeable transfer was made on death and to the extent that it qualified for relief under Chapters I or II of part V of this Act, eighteen months after the end of the month in which the death occurred, or
(b) if the chargeable transfer was made on death and to the extent that it did not qualify for relief under Chapters I or II of part V of this Act, six months after the end of the month in which the death occurred, and””
This amendment would defer the period for the payment of inheritance tax on assets qualifying for payment by instalments by 12 additional months.
Amendment 70, page 460, line 8, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 71, page 460, line 9, leave out sub-paragraphs (2) and (3).
See explanatory statement for Amendment 67.
Amendment 98, page 460, line 9, leave out sub-paragraphs (2) to (4).
See explanatory statement for Amendment 95.
Government amendments 65 and 66.
Amendment 72, page 460, line 23, leave out “sub-paragraph (3) will not apply” and insert
“the transfer will prove to be an exempt transfer”.
See explanatory statement for Amendment 67.
Amendment 73, page 460, line 27, leave out from “paragraph” to end of paragraph 17(5)(b) and insert
“comes into force on 1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 99, page 460, line 27, leave out from “paragraph” to end of paragraph 17(5)(b) and insert
“comes into force on 6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 74, page 460, line 34, leave out “30 October 2024” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 100, page 460, line 34, leave out “30 October 2024” and insert “6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 75, page 460, line 37, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 76, page 460, line 39, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 77, page 460, line 41, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 78, page 461, line 2, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 79, page 461, line 9, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 80, page 461, line 14, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 81, page 461, line 22, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 82, page 461, line 26, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 83, page 461, line 37, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 84, page 461, line 42, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 85, page 463, line 19, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 86, page 463, line 26, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 87, page 463, line 32, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Dan Tomlinson
I am glad to return to the Commons to debate the Finance Bill on Report. Although I am sure that it would have been of interest to Members on both sides of the House, I am also glad that we have not just had a set of two 45-minute debates on the Ways and Means motions. The opportunity was there, but I am glad that Members did not take it in full. We now have ample time for this important Report stage.
I thank Members on both sides of the House for their contributions in Committee. I thank in particular the shadow Exchequer Secretary to the Treasury, the hon. Member for North West Norfolk (James Wild), for his scrutiny and challenge, and for the invitation to his wonderful constituency, which I hope to take up one day. As yet, no other Opposition Front Bencher has offered me such an enticing prospect as a visit to their constituency, but I look forward to those invitations.
Before I turn to individual amendments, I wish to reflect briefly on the Budget that was delivered in November by my right hon. Friend the Chancellor of the Exchequer. That Budget took fair and necessary decisions to deliver on the Government’s promise of change, to support cuts in the cost of living, to enable NHS waiting lists to continue falling, and to ensure that our national debt fell as a share of GDP and that borrowing falls over the course of this Parliament. As the Chancellor said in this place yesterday and on Monday, Government borrowing—public sector net borrowing—has fallen from 5.2% to 4.3% of GDP, which is a fall of 1 percentage point. That is very significant and means that our borrowing is coming down, as part of our plan to bring stability back to the public finances.
Sir Ashley Fox (Bridgwater) (Con)
Does the Minister acknowledge that debt reduction is taking place only because the Government have increased taxes by £66 billion? That contrasts with the tax rise of £7 billion that the Labour party promised in its manifesto. Could he explain the huge discrepancy between that manifesto promise and what the Government are imposing on our constituents?
Dan Tomlinson
I ask the hon. Member to consider whether his party wishes to identify £66 billion of expenditure cuts or borrow £66 billion more. I do not think that either option is what the British public want; they want us to bring borrowing down and get public finances under control, after they were spun out of control by Liz Truss and the previous Government. The public understand the need for fair and responsible increases in taxation to ensure that we can invest in our public services and in the future of our country.
Chris Vince (Harlow) (Lab/Co-op)
On taxation, does the Minister agree that this Labour Government’s decisions have meant increased spending on the NHS? A number of my Harlow constituents are self-employed, and the really long waits in A&E and for hospital operations were having a huge impact on their businesses and on their household finances.
Dan Tomlinson
I strongly agree with my hon. Friend. I thank him for making his representations again and for his ability to mention Harlow in his interventions. It is a fantastic part of the country, not too far from my constituency in north London, and I know just how strongly he seeks to represent it and to make sure that the public services in his patch—the local hospitals and schools—get the investment they need. That is why he and I are able to proudly support this Government’s decisions to bring the public finances back into good order, as well as to invest in our public services and to get borrowing down.
Of course, though, since the Budget, and particularly in recent days, the world has changed. As the Chancellor set out last week in responding to the Office for Budget Responsibility’s spring forecast, it is more important than ever that the Government continue to deliver on our economic plan. The choices that we have made at previous Budgets will fix long-standing issues in the taxation system, restore economic and fiscal stability, and lay the economic foundations that we need for higher growth and higher living standards across our fantastic country.
The Bill legislates to deliver on those choices, all while sticking to our commitment not to raise the main rates of income tax, employee national insurance contributions or VAT. We are also providing stability for businesses by keeping to important commitments in our corporate tax road map to keep our corporation tax rate at 25%—the lowest in the G7—rather than having it chop and change up and down, like it did during previous Administrations.
I thank all those who have submitted written evidence throughout the Bill’s passage. Following concerns raised by professional bodies and concerns discussed in the Public Bill Committee, I would like to take this opportunity to reiterate my reassurances to the sector that measures that directly impact tax advisers are intended to create a fairer tax advice market. I have heard concerns that tax advisers might be penalised if they file a client’s tax return late when their client has not provided their approval for filing the return on time. I want to clarify that these powers are not designed to penalise responsible tax advisers who act in good faith, and in that specific scenario, a tax adviser would not be penalised under His Majesty’s Revenue and Customs’ stronger powers. The Government are committed to ensuring that the tax system works effectively for everyone, which is why we are introducing a number of amendments on Report to ensure that the tax system is working effectively and as intended.
I turn to the first group of Government amendments. New clause 5 removes specific provisions that could prevent offshore income gains from being designated under the temporary repatriation facility, or TRF, to ensure that they can be designated as intended. The amendments also simplify the existing treatment of offshore non-reporting funds held by offshore structures for all taxpayers. New clause 6 introduces transitional provisions for offshore income gains arising before 6 April 2025.
Following the abolition of the lifetime allowance, new clause 7, as we were just discussing, ensures that multiple different regimes do not apply, providing clarity for pension schemes and members. It ensures that any necessary regulations can have a retrospective effect back to 6 April 2024, clarifies the scope of the original power, extends the power by a further three months and ensures that regulations are subject to the affirmative parliamentary procedure.
The Government are making a number of minor and technical amendments to help provide greater clarity and address important points that have been raised by stakeholders, particularly during the passage of the Bill. These amendments simply put the original legislative intent beyond doubt.
Amendments 12 and 13 ensure that clause 23 will apply only to general earnings for the tax year 2026-27 and subsequent tax years that are paid on or after 6 April 2026. Amendment 14 tightens the existing provisions under clause 24 to ensure that those rules do not catch legitimate agency structures.
Amendments 48 and 51 remove legislation that is not necessary under clause 43 and ensure that the TRF legislation works as intended, so that beneficiaries from overseas trusts are able to make designations in connection with offshore income gains.
Amendments 49, 50 and 52 are consequential amendments to schedule 3 and clause 43. They remove references to omitted legislation and insert wording to clarify reference to the Taxation of Chargeable Gains Act 1992.
Amendment 53 to clause 49 makes clear that a person concluding contracts on behalf of a non-resident company must be present in the UK when concluding those contracts in order to create a permanent establishment in the UK.
Amendments 56 to 61 to schedule 11 concern the rules preventing fund managers from circumventing the revised carried interest tax regime. These amendments ensure that the provision operates as intended, where two connected persons work in the same business, with each connected person only taxed on their own carried interest.
Sir Ashley Fox
It sounds as if the Minister is adding many, many extra pages to our tax code. What provisions will he be bringing forward to shorten and simplify the tax code?
Dan Tomlinson
The hon. Gentleman raises an important point. We need to do all that we can to ensure that we are simplifying our tax code in order to make it easier for tax advisers, individuals and businesses. I have also asked that question, but I am reassured by my officials—I am sure that the hon. Member could consult Hansard too—that this is a typical number of amendments to be made to a Finance Bill. This is a long Finance Bill, but there are a whole range of important changes that the Government wish to introduce and to make progress on. I am sure Members from all parties have enjoyed poring over the changes to the tax legislation. I do take his point about simplification, though; it is something that I wish to focus on. If hon. Members have good ideas in that space, they would genuinely be welcome to write to me.
Mr Joshua Reynolds (Maidenhead) (LD)
On the simplification of our tax system, I do not see in the Government amendments any changes to the loan charge system, as we proposed in Committee, meaning that people who have already settled their loan charge will be excluded from the changes being introduced. Does the Minister agree that one consequence of this might be that when something like this comes up in the future, people will not want to settle with the Government because they will think that a better deal will be coming up? Would it not be a simpler tax system to say that we could retrospectively apply some of these changes?
Dan Tomlinson
I thank the hon. Gentleman for his intervention and for his engagement in the Public Bill Committee. The loan charge is an important issue. I focused on it after receipt of Ray McCann’s independent review into the loan charge, which was commissioned by my predecessor. The scope of that review and the decisions made by the Government are such that only those who are directly affected by the loan charge will have the opportunity to take up the new settlement that was recommended by McCann, to which the Government have added a £5,000 further deduction. The Government’s position was that, because the loan charge was an exceptional decision made by the previous Government, it was right that the changes proposed by McCann would apply only to that group. There will be those who engaged in the use of disguised remuneration schemes from before 2010, and with them, as with all taxpayers, this Government are very clear that individuals do have a responsibility to pay their tax.
Amendments 54 and 55, and 62 to 66, are minor amendments to the definitions of business property qualifying for relief. They ensure that the replacement property provisions relating to reorganisation or amalgamation of unquoted shares reflect the new legislation, and that unquoted securities, such as loan notes, continue to qualify for relief only where they are part of a controlling interest in a company.
Amendments 15 to 47 to clauses 63 to 67 make a series of minor technical changes to ensure that the provisions on inheritance tax and pensions operate as intended. These ensure that excluded and exempt benefits are not subject to inheritance tax, nor to the new withholding and payment notices.
I am sure that Members from all parts of the House have enjoyed that run-through of those minor and technical amendments. I can provide them with the good news that that run-through has now concluded. I sincerely hope and expect that the proposed amendments will ensure that the legislation that was set out, and that has been discussed and scrutinised, works as intended, and that HMRC—the organisation that I am proud to be the Minister with responsibility for—has the powers to responsibly collect tax and revenue, which funds the vital public services on which our country relies.
I therefore commend new clauses 5, 6 and 7 and Government amendments 12 to 66 to the House, and I look forward to hon. Members’ contributions.
Dan Tomlinson
I thank all Members for their contributions at this stage of the Bill’s passage—we are almost there. I will take some time to respond directly to the amendments that have been discussed today.
I will first address amendments 1 to 4, 5 and 7, which were spoken to by the shadow Exchequer Secretary, the hon. Member for North West Norfolk (James Wild). Amendments 1 to 4 would remove the increase in dividend, savings and property income tax rates; amendment 5 would prevent income tax thresholds from staying at their current levels until 2030; and amendment 7 would remove reforms to the inheritance tax treatment of pensions. Based on costings that have been certified by the OBR, the direct impact of these amendments would cumulatively reduce forecast revenue raised in 2029-30—the year of relevance for our fiscal rules—by a whopping £12 billion. These amendments therefore pose a significant risk to the sustainability of our public finances and to our ability to fund the NHS and the public services that we all rely on. I therefore urge the House to reject them.
Sir Ashley Fox
Would the Minister concede that if that was offset by £12 billion less welfare spending, there would not be any threat to the sustainability of the finances?
Dan Tomlinson
If the Conservatives had credible plans and a credible history of reining in welfare spending, then I would, of course, be interested in taking them seriously. However, it was the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), who was the Work and Pensions Secretary when the welfare budget exploded. We are now trying to get on top of that.
I will not address new clauses 15 to 19 directly. The Government have set out our position on them at previous stages, although I do urge the House to reject them today.
I will now turn to the points raised by the hon. and learned Member for North Antrim (Jim Allister) around amendments 112 to 139, which would have the effect of removing the distinction between the options available in respect of “specified Northern Ireland companies” and other companies from clauses 13, 14 and 15. The hon. and learned Gentleman has made his views known very clearly both today and on Second Reading. I will make the same point that the Economic Secretary to the Treasury made on Second Reading: as he will be aware—although he did not, I believe, mention this in his speech —service companies are able to benefit from the increase in the threshold. It is the Government’s understanding that there are very few, if any, goods and electricity companies in Northern Ireland that are close to the current enterprise management incentive limits, and we therefore think there will be minimal impact from these companies being subject to the previous scheme limits.
Jim Allister
Is the Minister saying to the House that the criterion here is to look at each region and see who is near the thresholds, and then to magically increase those that are? Surely the truth is that the Minister is not increasing the threshold because he has handed the power to do so to a foreign jurisdiction.
Dan Tomlinson
I am just stating a fact, which is that there are few—if any—businesses near the relevant thresholds. The hon. and learned Member made the point that the Government’s decision may be hampering growth and investment; I do not think that is the case. I am proud to be a member of a Government who are seeking to deepen and strengthen our ties with the European Union so that we in this country can increase our productivity through better flowing trade, working together with our partners. I therefore urge the House to reject amendments 112 to 139.
Amendments 6 and 8 relate to the changes to business property relief and agricultural property relief as raised by the shadow Exchequer Secretary as well as the hon. Members for Weald of Kent (Katie Lam) and for Keighley and Ilkley (Robbie Moore). If we were to adopt those amendments, we would weaken the public purse by about £300 million a year. It would also leave a status quo that contributes to the very largest estates paying lower average effective inheritance tax rates than the smallest estates. I therefore urge the House to reject those amendments.
The hon. Member for Keighley and Ilkley asked for clarity on payment deadlines in the inheritance tax system. The Government’s position is that the six-month point is the right one. It has applied for a long time, and it is not our position to change that timeline when these changes come into force.
Robbie Moore
I note that that is the Government’s position, but what level of assessment have they done of the negative implications of having just a six-month period as opposed to extending that to 18 months? From the engagement that Opposition Members have had with many stakeholders, we have found that the consequences are huge. What assessments have the Government done in relation to this specific issue?
Dan Tomlinson
I am sure this issue was considered before the policy was announced, and I have considered it too since I have been in post. It is worth pointing out that HMRC already offers several payment options to help personal representatives pay inheritance tax. That allows banks, building societies or investment providers to pay some or all the inheritance tax due from the deceased person’s accounts before probate is granted. There are a range of ways available to people to enable them to pay IHT within six months. I therefore urge the House to reject amendment 88.
Dan Tomlinson
The president of the National Farmers Union mentioned in his speech to the farmers’ conference just a few weeks ago that he was glad of my engagement with farmers—he personally called out that engagement. I took a trip to the constituency of my hon. Friend the Member for Hexham (Joe Morris), after being invited there by him, and I was glad to meet farmers there and learn about their experiences.
Amendments 89 to 94 seek to exclude the value of any joint interest in certain agricultural business tenancies from the £2.5 million allowance for 100% relief. It is worth pointing out that the drafting of the amendments risks those tenancies falling outside the allowance entirely so that, rather than providing 100% relief, the Government are concerned that the drafting would mean that the relief might well be capped at 50% for those with joint tenancies. That is certainly a reason to reject those amendments.
Dan Tomlinson
If the right hon. Member will forgive me, I will make progress, having spoken for eight minutes already.
Amendments 102 to 107 would mean that unlimited 100% agricultural property relief would be available on agricultural land rented out for at least 10 years. The Government’s position is that the House should reject these amendments.
The hon. Member for Witney (Charlie Maynard) also spoke to new clause 11. The Government have decided on a range of thresholds that will continue to be frozen until the end of the decade. We have made the decision across the piece, as was mentioned earlier, to sustainably and fairly raise revenue to fund our public services and get borrowing down. I therefore urge the House to reject amendments 102 to 107. I will not address in detail new clause 12 or amendments 67 to 87, 95 to 100 and 108 to 111, as the Government have set out their position on those amendments at previous stages, and I urge the House to reject them.
My hon. Friends the Members for Stoke-on-Trent Central (Gareth Snell), and for Halesowen (Alex Ballinger), both made important contributions on the amendments relating to gambling duty. I have twice met the Minister from Gibraltar mentioned by my hon. Friend the Member for Stoke-on-Trent Central and have been in correspondence with him. I understand that there are significant impacts on the economy in Gibraltar, and I hope to keep engaging on and discussing that.
Gareth Snell
I am glad about the Minister’s meetings, but while he is at the Dispatch Box, will he give an assurance that there are no future surprises and no significant tax-change announcements planned that will disproportionately affect areas such as Gibraltar as a result of their dependence on certain industries?
Dan Tomlinson
We will, of course, continue to engage with Ministers in Gibraltar. It would not be appropriate for me to write future Budgets at this Dispatch Box today, but we have made a significant change when it comes to gambling taxation. Rather than make further changes, the Government will monitor the impact of that change. I also thank my hon. Friend the Member for Halesowen for his contributions and representations.
The hon. Member for Aberdeen North (Kirsty Blackman) made a helpful speech— with not much notice, I understand. She raised the matter of alcohol duty. It is worth pointing out that the uprating in alcohol duty just keeps the revenue in line with inflation. We have seen reductions in alcohol consumption, driven not by the tax staying in line with inflation, but changes in consumers’ consumption habits. I therefore urge the House to reject amendment 101 and new clause 20.
Graham Stuart
The Minister has overcome his natural reluctance, and I am grateful to him. A lot of people get confused about the BPR tax changes. If there was £10 million in a company that someone inherited, and it was subject to those changes, the claim is that they would only have to pay £2 million in tax, but in fact the money to pay that tax has to be extracted from the company, so the person who inherits it, rather than the company, pays it. Will the Minister confirm that? In other words, if the money was taken out in the form of dividends, it would be £3.3 million, instead of £2 million, and that would have a very real impact on a small company. In fact, it could be existential.
Dan Tomlinson
I will not get into specific worked examples. The general point is that the Government have made changes both to business property relief and to agricultural property relief, in order to raise additional revenue from the very wealthiest estates. We have sought to do that because we want to put fairness into our tax system.
The CBAM was mentioned by the Opposition, and by my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell). I thank him for his strong advocacy for his constituency, and the thousand people who work in the refinery there. The Government said at the Budget that we recognise the important role that refineries play in our energy security, and we are now considering the feasibility and impact of including refined products in the CBAM in future. It is very complicated, and there would be knock-on impacts on other sectors if the Government were to proceed with that. I have met representatives from the sector recently, and I will continue to engage with them.
Finally, I turn to new clause 4, which requires the Chancellor to report on how the regulations in the prohibition address the harm to individuals and businesses from online tax avoidance promotion, and the steps that His Majesty’s Revenue and Customs should take to inform the public of the risk posed by online tax avoidance. I thank my hon. Friend the Member for Walthamstow (Ms Creasy) for raising the important issue of avoidance promotion. I agree with her that it is appalling that these individuals promote tax avoidance schemes and get away with it. It causes misery to those caught up in the schemes, and deprives our public services of vital revenue. The Government are taking action via this Finance Bill to crack down on them.
I confirm to the House that the measures introduced in clauses 156 to 162 apply equally to those promoting avoidance schemes online, including on social media, and to those promoting them through more traditional routes. I can also confirm that the promoter action notice in clauses 163 to 173 will also apply.
I would also like to reassure my hon. Friend that we are publishing guidance on these matters, and I will ensure that it is clear throughout that the Government’s intention is to capture anyone who is promoting tax avoidance. This includes social media influencers who are making a monetary gain through clicks, as highlighted by my hon. Friend, and I would welcome her engagement in developing the guidance.
Ms Creasy
I thank all the MPs across the House—except those in the obvious party—who understand the risks to our constituents from this advice. It is very welcome to see a Government respond so quickly to social media problems, unlike the last one; we remember payday lending and the “buy now, pay later” lenders. The Minister talks about issuing guidance. Does he have a rough timeline for when that guidance will be available? I guess what I am really asking, on behalf of the millions of people who have been ripped off, is when Samuel Leeds will get a knock on the door from the taxman.
Dan Tomlinson
I look forward to working with my hon. Friend, and other Members who are interested in this topic, to make sure that we move as quickly as we possibly can. Let me thank all Members for their contributions during this this debate.
Question put and agreed to.
New clause 5 accordingly read a Second time, and added to the Bill.
New Clause 6
Offshore income gains: savings
“(1) This section applies in relation to an offshore income gain arising to the trustees of a settlement in a case where Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad) applies in relation to that gain for the tax year 2025-26 or any subsequent tax year because of the amendments made by section (Offshore income gains).
(2) If the offshore income gain arose in a tax year before the tax year 2025-26 and, by reason of that offshore income gain or a part of it, an offshore income gain was treated as arising in a tax year before the tax year 2025-26 to an individual under paragraphs (2) to (5) of regulation 20 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001)—
(a) Chapter 2 of Part 13 of ITA 2007 is to be treated as not applying in relation to the offshore income gain arising to the trustees or that part of that gain, and
(b) references in section 734 of ITA 2007 to chargeable gains treated as accruing to an individual are to be treated as including the offshore income gain treated as arising to the individual.
(3) An individual is not chargeable to income tax under Chapter 2 of Part 13 of ITA 2007 on income treated as arising to the individual under section 732 of ITA 2007 by reason of the offshore income gain to the extent that the income, without the amendments made by section (Offshore income gains)(1) and (2)(b)—
(a) would have been treated as arising to that individual under paragraphs (2) to (5) of regulation 20 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), and
(b) would have been non-chargeable income (see subsections (4), (5) and (6)).
(4) The income would have been non-chargeable income if, without the amendments made by section (Offshore income gains)(1) and (2)(b)—
(a) the income would have been treated as arising by reason of—
(i) the matching of a capital payment received (or treated as received) by the individual before 6 April 2008 with an offshore income gain arising on or after 6 April 2025, or
(ii) the matching of a capital payment received (or treated as received) by the individual on or after 6 April 2025 with an offshore income gain arising before 6 April 2008, and
(b) paragraph 100 of Schedule 7 to FA 2008 would have applied to the income.
(5) The income would have been non-chargeable income to the extent that, without the amendments made by section (Offshore income gains)(1) and (2)(b), it would have exceeded the relevant proportion of income—
(a) which would have been treated as arising to the individual by reason of—
(i) the matching of a capital payment received (or treated as received) by the individual on or after 6 April 2008 with an offshore income gain arising on or after 6 April 2025, or
(ii) the matching of a capital payment received (or treated as received) by the individual on or after 6 April 2025 with an offshore income gain arising on or after 6 April 2008, and
(b) to which paragraph 101 of Schedule 7 to FA 2008 would have applied,
and, for that purpose, “relevant proportion” has the meaning given by sub-paragraphs (9) to (18) of paragraph 126 of that Schedule as they would have been modified by sub-paragraph (3) of paragraph 101 of that Schedule.
(6) The income would have been non-chargeable income to the extent that, without the amendments made by section (Offshore income gains)(1) and (2)(b), it would have exceeded the relevant proportion of income—
(a) which would have been treated as arising to the individual by reason of—
(i) the matching of a capital payment received (or treated as received) by the individual on or after 6 April 2008 with an offshore income gain arising on or after 6 April 2025, or
(ii) the matching of a capital payment received (or treated as received) by the individual on or after 6 April 2025 with an offshore income gain arising on or after 6 April 2008,
(b) to which paragraph 102 of Schedule 7 to FA 2008 would have applied, and
(c) to which paragraph 101 of that Schedule would not have applied,
and, for that purpose, “relevant proportion” has the meaning given by sub-paragraphs (4) to (7) of paragraph 127 of that Schedule as they would have been modified by sub-paragraph (4) of paragraph 102 of that Schedule.
(7) Subsection (3) does not prevent Chapter 2 of Part 13 of ITA 2007 from having effect as though the income not chargeable to tax under that subsection had been charged to tax under section 731 of that Act.
(8) Accordingly—
(a) in the application of section 733(1) of ITA 2007 to the individual for subsequent tax years, the amount of that income will be deducted at Step 2 and at paragraph (a) of Step 5, and
(b) in the application of section 733(1) of ITA 2007 to any other individual for subsequent tax years, the amount of that income will be deducted at paragraph (b) of Step 5.
(9) In section 733 of ITA 2007, after subsection (2D) insert—
“(2E) See subsections (7) and (8) of section (Offshore income gains: savings) of FA 2026 (offshore income gains: savings relating to amendments made by section (Offshore income gains) of that Act) for special provision about income that is treated as arising under section 732 but that is not chargeable to income tax under subsection (3) of that section.”
(10) This section—
(a) is to be treated as having come into force on 6 April 2025;
(b) has effect for the tax year 2025-26 and subsequent tax years.” —(Dan Tomlinson.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 7
Pensions: abolition of the lifetime allowance charge
“(1) Paragraph 134 of Schedule 9 to FA 2024 (power to make further provision in connection with the abolition of the lifetime allowance charge) is amended as follows.
(2) In sub-paragraph (2)—
(a) for paragraph (b) substitute—
“(b) have effect for the tax years 2024-25 and 2025-26 (as well as subsequent tax years);”;
(b) in paragraph (d), at the end insert“(including any provision that could be made under paragraph 133)”.
(3) In sub-paragraph (3) omit “that increase any person’s liability to tax”.
(4) In sub-paragraph (4), for “5 April” substitute “30 June”.” —(Dan Tomlinson.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 11
Uprating of allowance amounts for agricultural property
“The Chancellor of the Exchequer must, within six months of the passing of this Act, undertake and publish an assessment of the potential merits of uprating annually the relief allowance amount for agricultural property by the change in the value of agricultural land.”—(Charles Maynard.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move, That the Bill be now read the Third time.
The Budget in November was a Budget to build a stronger, more secure economy. It contained fair and necessary choices to deliver the public’s priorities by cutting the cost of living, cutting debt and borrowing, cutting child poverty, and cutting NHS waiting lists. At its heart were three deliberate pro-growth choices. First, by choosing to maintain economic stability and getting inflation and interest rates down, we gave businesses the confidence to invest and our economy the room to grow. Secondly, by choosing to reject austerity, we protected over £120 billion of additional investment in growth-driving infrastructure. Thirdly, by choosing to back the fast-growing British companies of the future, we supported the investment, the innovation and the economic dynamism that will increase growth, raise living standards, and boost the country’s prosperity in the next decade and beyond. The measures in the Bill deliver on those choices by introducing tax levers to unlock investment, back our wealth creators and attract talent by sticking to commitments in the corporate tax road map to provide certainty for businesses, and by doubling the limits for our enterprise tax incentives so that scale-ups can attract the capital and talent that they need in order to grow.
The Bill contains a series of other responsible decisions on tax, and that is because, at the time of the Budget, the Government faced choices. We could have made the reckless choice to abandon our fiscal rules and let borrowing and debt increase, but instead we made the pro-growth choice to get borrowing, debt and inflation down, more than doubling our headroom. We could have made the irresponsible choice and returned to austerity, cutting public services as the Conservative party did and undermining capital investment, but instead we made the pro-growth choice to protect the investment in Britain’s infrastructure and to build a better, stronger, more secure economy.
In line with our commitment to fiscal responsibility, the Bill maintains income tax thresholds for employees and the self-employed at the current levels for a further three years, from April 2028 until April 2031. It also contains measures to strengthen the integrity of the tax system by closing loopholes and removing barriers. That includes reforms to collect more unpaid taxes and to modernise the tax system to make it easier for taxpayers to get their tax right first time. We are introducing new powers to close in on promoters of marketed tax avoidance, and to challenge those who knowingly engage in fraudulent business in the construction industry. Alongside the measures announced in the 2024 Budget, the measures in the Bill to close the tax gap will bring the total revenue from tax gap measures announced in this Parliament to £10 billion in 2029-30.
I wholeheartedly thank all Members, on both sides of the House, for their contributions during the Bill’s passage. The Bill contains the right choices for the public finances, the right choices on investment, the right choices for businesses and for working people, the right choices for our public services, and the right choices for Britain. For those reasons, I commend it to the House.