Coalition Government Budget 2010 – Second Finance Bill publishedMonday, July 19th, 2010
The Government has published draft legislation for a further Finance Bill that will be introduced to Parliament in the autumn. The Bill consists mainly of technical tax measures inherited from the previous government and the purpose of publishing the details now is to obtain comments on whether or not the legislation will work as intended.
Confusingly, this third Finance Bill during 2010 will be known as the Finance (No. 2) Bill 2010 and, if enacted during 2010, will become the Finance (No. 3) Act 2010. Bills with the same title are numbered within each Parliamentary session, whereas Acts are numbered within each calendar year.
- The Finance Bill 2010 was published on 1 April 2010 and became the Finance Act 2010 on 8th April 2010. It contains the legislation for some of the proposals announced by the previous Government in the Pre-Budget Report on 9 December 2009 and in the Budget on 24 March 2010.
- The second Finance Bill 2010 – actually the first in the current Parliamentary session – was published on 1 July 2010 and contains draft legislation for some of the proposals announced by the Chancellor in his Budget on 22 June. When enacted it will be the Finance (No. 2) Act 2010.
- The Finance (No. 2) Bill 2010, the draft sections for which have just be issued, will be published in the autumn and, if enacted before the end of 2010, will be the Finance (No. 3) Act 2010.
A total of 32 draft sections have been issued for this new Bill, few of which have direct relevance for payroll. Those of interest are:
- The Enterprise Management Incentives scheme is extended to companies with a permanent establishment in the UK, or companies with a group member that has a permanent establishment in the UK.
- The Pensions Act 2008 is amended so that the NEST scheme becomes an occupational pension scheme, allowing it to register as such for tax purposes.
- The Seafarer’s earnings deduction is extended to residents of the European Economic Area.
There is still no reference anywhere to the planned change to the wording of the tax exemption for childcare vouchers, excluding lower-paid employees from the “generally available” condition.