Finance Act 2017

JurisdictionEngland & Wales
Citation2017 c. 10


Finance Act 2017

2017 Chapter 10

An Act to grant certain duties, to alter other duties, and to amend the law relating to the national debt and the public revenue, and to make further provision in connection with finance.

[27 April 2017]

Most Gracious Sovereign

WE, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards raising the necessary supplies to defray Your Majesty’s public expenses, and making an addition to the public revenue, have freely and voluntarily resolved to give and to grant unto Your Majesty the several duties hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

1 Direct and indirect taxes

Part 1

Direct and indirect taxes

Income tax charge and rates

Income tax charge and rates

S-1 Income tax charge for tax year 2017-18

1 Income tax charge for tax year 2017-18

Income tax is charged for the tax year 2017-18.

S-2 Main rates of income tax for tax year 2017-18

2 Main rates of income tax for tax year 2017-18

For the tax year 2017-18 the main rates of income tax are as follows—

(a) the basic rate is 20%;

(b) the higher rate is 40%;

(c) the additional rate is 45%.

S-3 Default and savings rates of income tax for tax year 2017-18

3 Default and savings rates of income tax for tax year 2017-18

(1) For the tax year 2017-18 the default rates of income tax are as follows—

(a)

(a) the default basic rate is 20%;

(b)

(b) the default higher rate is 40%;

(c)

(c) the default additional rate is 45%.

(2) For the tax year 2017-18 the savings rates of income tax are as follows—

(a)

(a) the savings basic rate is 20%;

(b)

(b) the savings higher rate is 40%;

(c)

(c) the savings additional rate is 45%.

S-4 Starting rate limit for savings for tax year 2017-18

4 Starting rate limit for savings for tax year 2017-18

(1) For the amount specified in section 12(3) of ITA 2007 (starting rate for savings) substitute “£5000”.

(2) The amendment made by subsection (1) has effect in relation to the tax year 2017-18 and subsequent tax years.

(3) Section 21 of ITA 2007 (indexation), so far as relating to the starting rate limit for savings, does not apply in relation to the tax year 2017-18 (but this section does not override that section for subsequent tax years).

Corporation tax charge

Corporation tax charge

S-5 Corporation tax charge for financial year 2018

5 Corporation tax charge for financial year 2018

Corporation tax is charged for the financial year 2018.

Income tax: general

Income tax: general

S-6 Workers’ services provided to public sector through intermediaries

6 Workers’ services provided to public sector through intermediaries

Schedule 1 makes provision about workers’ services provided to the public sector through intermediaries.

S-7 Optional remuneration arrangements

7 Optional remuneration arrangements

Schedule 2 makes provision about optional remuneration arrangements.

S-8 Taxable benefits: asset made available without transfer

8 Taxable benefits: asset made available without transfer

(1) ITEPA 2003 is amended as follows.

(2) In section 205 (cost of taxable benefit subject to the residual charge: asset made available without transfer)—

(a)

(a) in subsection (1), for paragraph (a) substitute—

“(a) the benefit consists in an asset being made available for private use, and”,

(b)

(b) after subsection (1) insert—

“(1A) In this section and section 205A, “private use” means private use by the employee or a member of the employee’s family or household.

(1B) For the purposes of subsection (1) and sections 205A and 205B, an asset made available in a tax year for use by the employee or a member of the employee’s family or household is to be treated as made available throughout the year for private use unless—

(a) at all times in the year when it is available for use by the employee or a member of the employee’s family or household, the terms under which it is made available prohibit private use, and

(b) no private use is made of it in the year.

(1C) The cost of the taxable benefit is—

(a) the annual cost of the benefit determined in accordance with subsection (2), less

(b) any amount required to be deducted by section 205A (deduction for periods when asset unavailable for private use).

(1D) In certain cases, the cost of the taxable benefit is calculated under this section in accordance with section 205B (reduction of cost of taxable benefit where asset is shared).”, and

(c)

(c) in subsection (2), in the words before paragraph (a), for “cost of the taxable” substitute “annual cost of the”.

(3) After section 205 insert—

“ 205A. Deduction for periods when asset unavailable for private use(1) A deduction is to be made under section 205(1C)(b) if the asset mentioned in section 205(1) has been unavailable for private use on any day during the tax year concerned.(2) For the purposes of this section an asset is “unavailable” for private use on any day if—(a) that day falls before the day on which the asset is first available to the employee,(b) that day falls after the day on which the asset is last available to the employee,(c) for more than 12 hours during that day the asset—(i) is not in a condition fit for use,(ii) is undergoing repair or maintenance,(iii) could not lawfully be used,(iv) is in the possession of a person who has a lien over it and who is not the employer, not a person connected with the employer, not the employee, not a member of the employee’s family and not a member of the employee’s household, or(v) is used in a way that is neither use by, nor use at the direction of, the employee or a member of the employee’s family or household, or(d) on that day the employee—(i) uses the asset in the performance of the duties of the employment, and(ii) does not use the asset otherwise than in the performance of the duties of the employment.(3) The amount of the deduction is given by—(U) / (Y) * Awhere—U is the number of days, in the tax year concerned, on which the asset is unavailable for private use,Y is the number of days in that year, andA is the annual cost of the benefit of the asset determined under section 205(2).(4) The reference in subsection (2)(a) to the time when the asset is first available to the employee is to the earliest time when the asset is made available, by reason of the employment and without any transfer of the property in it, for private use.(5) The reference in subsection (2)(b) to the time when the asset is last available to the employee is to the last time when the asset is made available, by reason of the employment and without any transfer of the property in it, for private use.

205B. Reduction of cost of taxable benefit where asset is shared(1) This section applies where the cost of an employment-related benefit (“the taxable benefit”) is to be determined under section 205.(2) If, for the whole or part of the tax year concerned, the same asset is available for more than one employee’s private use at the same time, the total of the amounts which are the cost of the taxable benefit for each of those employees is to be limited to the annual cost of the benefit of the asset determined in accordance with section 205(2).(3) The cost of the taxable benefit for each employee is determined by taking the amount given by section 205(1C) and then reducing that amount on a just and reasonable basis.(4) For the purposes of this section, an asset is available for an employee’s private use if it is available for private use by the employee or a member of the employee’s family or household.”

(4) In section 365 (deductions where employment-related benefit provided)—

(a) in subsection (1)—

(i) omit the “and” at the end of paragraph (a), and

(ii) after that paragraph insert—

“(aa) the cost of the benefit was determined under section 204 or 206, and”,

(b) in subsection (3), for “sections 204 to 206” substitute “section 204 or 206”, and

(c) in the heading, for “employment-related benefit” substitute “certain employment-related benefits”.

(5) The amendments made by this section have effect for the tax year 2017-18 and subsequent tax years.

S-9 Overseas pensions

9 Overseas pensions

Schedule 3 makes provision about—

(a) registered pension schemes established outside the United Kingdom, and

(b) payments made in respect of overseas pension entitlement.

S-10 Pensions: offshore transfers

10 Pensions: offshore transfers

Schedule 4 contains provision about charging income tax—

(a) where payments are made in respect of overseas pensions, and

(b) on transfers to qualifying recognised overseas pension schemes.

S-11 Deduction of income tax at source

11 Deduction of income tax at source

Schedule 5 makes provision about deduction of income tax at source.

Employee shareholder shares

Employee shareholder shares

S-12 Employee shareholder shares: amount treated as earnings

12 Employee shareholder shares: amount treated as earnings

(1) In section 226A of ITEPA 2003 (amount treated as earnings)—

(a)

(a) in subsection (2), for “calculated in accordance with subsection (3)” substitute “equal to the market value of the shares”;

(b)

(b) omit subsection (3);

(c)

(c) in subsection (6), omit “and sections 226B to 226D”;

(d)

(d) in subsection (7), after “subsection (1)” insert “(but not subsection (2))”.

(2) Omit sections 226B to 226D of ITEPA 2003 (deemed payment).

(3) In consequence of subsection (2), in ITEPA 2003 omit the following—

(a)

(a) section 479(3A);

(b)

(b) section 531(3A);

(c)

(c) section 532(4A).

(4) In consequence of subsection (2), in CTA 2009 omit the following—

(a)

(a) in section 1005, the definition of “employee shareholder share”;

(b)

(b) section 1009(6);

(c)

(c) in section 1010(1), “and, in the case of employee shareholder shares, section 1038B”;

(d)

(d) in section 1011(4)(b), “(but see...

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