Finance Act 2019

JurisdictionUK Non-devolved
Citation2019 c. 1


Finance Act 2019

2019 Chapter 1

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.

[12 February 2019]

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 taxes

PART 1

Direct taxes

Charge to tax

Charge to tax

S-1 Income tax charge for tax year 2019-20

1 Income tax charge for tax year 2019-20

Income tax is charged for the tax year 2019-20.

S-2 Corporation tax charge for financial year 2020

2 Corporation tax charge for financial year 2020

Corporation tax is charged for the financial year 2020.

Income tax rates, allowances and limits

Income tax rates, allowances and limits

S-3 Main rates of income tax for tax year 2019-20

3 Main rates of income tax for tax year 2019-20

For the tax year 2019-20 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-4 Default and savings rates of income tax for tax year 2019-20

4 Default and savings rates of income tax for tax year 2019-20

(1) For the tax year 2019-20 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 2019-20 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-5 Basic rate limit and personal allowance

5 Basic rate limit and personal allowance

(1) For the tax years 2019-20 and 2020-21, the amount specified in section 10(5) of ITA 2007 (basic rate limit) is “£37,500”.

(2) For the tax years 2019-20 and 2020-21, the amount specified in section 35(1) of ITA 2007 (personal allowance) is “£12,500”.

(3) In consequence of the amendment made by subsection (2), omit section 4 of F(No.2)A 2015 (which has effect only if the personal allowance is less than £12,500).

(4) Omit the following (which relate to the link between the personal allowance and the national minimum wage)—

(a)

(a) sections 57(8), 57A and 1014(5)(b)(iia) of ITA 2007, and

(b)

(b) section 3 of F(No.2)A 2015.

(5) In consequence of the provision made by this section—

(a)

(a) section 21 of ITA 2007 (indexation of basic rate limit and starting rate limit for savings) does not apply in relation to the basic rate limit, and

(b)

(b) section 57 of ITA 2007 (indexation of allowances) does not apply in relation to the amount specified in section 35(1) of that Act,

for the tax years 2019-20 and 2020-21.

S-6 Starting rate limit for savings for tax year 2019-20

6 Starting rate limit for savings for tax year 2019-20

Section 21 of ITA 2007 (indexation) does not apply in relation to the starting rate limit for savings for the tax year 2019-20 (so that the starting rate limit for savings remains at £5,000 for that tax year).

Employment and social security income

Employment and social security income

S-7 Optional remuneration arrangements: arrangements for cars and vans

7 Optional remuneration arrangements: arrangements for cars and vans

(1) ITEPA 2003 is amended as follows.

(2) In section 120A (optional remuneration arrangements: benefit of a car)—

(a)

(a) in subsection (3)(b), for the words from “the amount” to “year is” substitute “the total foregone amount in connection with the car for the tax year is”, and

(b)

(b) after subsection (3) insert—

“(4) In this section, and in section 121A, the total foregone amount in connection with the car for a tax year is the total of—

(a) the amount foregone (see section 69B) with respect to the benefit of the car for that year, and

(b) the amount foregone (see section 69B) with respect to each other benefit that—

(i) is connected with the car,

(ii) is provided in that year for the employee, or a member of the employee’s household, pursuant to optional remuneration arrangements, and

(iii) is neither the provision of a driver nor the provision of fuel.”

(3) In section 121A (optional remuneration arrangements: method of calculating relevant amount)—

(a)

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

Step 1

Take the total foregone amount in connection with the car for the tax year (see section 120A(4)).”, and

(b)

(b) in subsection (2)—

(i) for ““amount foregone” under” substitute ““total foregone amount” for the purposes of”, and

(ii) for “the benefit of the car” substitute “a benefit mentioned in section 120A(4)(a) or (b)”.

(4) In section 132A (capital contributions by employee: optional remuneration arrangements)—

(a)

(a) for subsection (3) substitute—

“(3) The amount of the deduction allowed in any tax year is found by—

(a) first multiplying the capped amount by the appropriate percentage, and

(b) then multiplying the result by the availability factor.”, and

(b)

(b) after subsection (4) insert—

“(4A) For the purposes of subsection (3), “the availability factor” is given by the formula—

(Y−U) / (Y)

where—

Y is the number of days in the tax year, and

U is the number of days in the tax year on which the car is unavailable.

(4B) For the purposes of subsection (4A), the car is unavailable on any day if the day—

(a) falls before the first day on which the car is available to the employee,

(b) falls after the last day on which the car is available to the employee, or

(c) falls within a period of 30 days or more throughout which the car is not available to the employee.”

(5) In section 154A (optional remuneration arrangements: benefit of a van)—

(a)

(a) in subsection (2)(b), for the words from “the amount” to “section 69B)” substitute “the total foregone amount in connection with the van”,

(b)

(b) in subsection (3), for step 1 substitute—

Step 1

Take the total foregone amount in connection with the van for the tax year.”,

(c)

(c) in subsection (7), for “the benefit of the van” substitute “a benefit mentioned in subsection (8)(a) or (b)”, and

(d)

(d) after subsection (7) insert—

“(8) In this section the total foregone amount in connection with the van for a tax year is the total of—

(a) the amount foregone (see section 69B) with respect to the benefit of the van for that year, and

(b) the amount foregone (see section 69B) with respect to each other benefit that—

(i) is connected with the van,

(ii) is provided in that year for the employee, or a member of the employee’s household, pursuant to optional remuneration arrangements, and

(iii) is neither the provision of a driver nor the provision of fuel.”

(6) In section 239 (exemptions for payments and benefits relating to taxable cars, vans and exempt HGVs), in subsection (3)—

(a)

(a) after “by virtue of” insert “section 120A (optional remuneration arrangements: benefit of a car),”, and

(b)

(b) before “or section 160” insert “, section 154A (optional remuneration arrangements: benefit of a van)”.

(7) The amendments made by this section have effect for the tax year 2019-20 and subsequent tax years.

S-8 Exemption for benefit in form of vehicle-battery charging at workplace

8 Exemption for benefit in form of vehicle-battery charging at workplace

(1) In Chapter 3 of Part 4 of ITEPA 2003 (employment income: travel-related exemptions), after section 237 insert—

“ 237A. Vehicle-battery charging(1) No liability to income tax arises in respect of the provision, at or near an employee’s workplace, of facilities for charging a battery of a vehicle used by the employee (including a vehicle used by the employee as a passenger).(2) Subsection (1) applies only if the facilities are made available generally to the employer’s employees at that workplace.(3) In this section—“facilities”—(a) includes electricity, but(b) does not include workplace parking,“taxable”, in relation to a car or van, has the meaning given by section 239(6),“vehicle” means a vehicle—(a) to which Chapter 2 applies (see section 235), and(b) which is neither a taxable car nor a taxable van, and“workplace parking” has the meaning given by section 237(3).”

(2) The amendment made by subsection (1) has effect for the tax year 2018-19 and subsequent tax years.

S-9 Exemptions relating to emergency vehicles

9 Exemptions relating to emergency vehicles

(1) Section 248A of ITEPA 2003 (emergency vehicles) is amended in accordance with subsections (2) and (3).

(2) In subsection (1)—

(a)

(a) in paragraph (a), for “for the person’s private use” substitute “mainly for use for the person’s business travel”;

(b)

(b) in paragraph (b), omit “engaged in on-call”.

(3) In subsection (8)—

(a)

(a) in the opening words, omit “engaged in on-call”;

(b)

(b) in paragraph (a), for “it” substitute “the vehicle”;

(c)

(c) omit paragraph (b) (and the “and” before it).

(4) In section 205 of ITEPA 2003 (cost of the benefit: asset made available without transfer), after subsection (4) insert—

“(5) Where the asset is an emergency vehicle, the expense of providing fuel for it in a tax year is not an additional expense by virtue of subsection (4) so long as—(a) the person incurring that expense incurs no expense in that tax year in the provision of fuel for the vehicle which is used for the employee’s private travel (“private fuel expense”), or(b) all private fuel expense that the person does incur in that tax year is made good by the employee on or before 6 July following the tax year.

(6) For the purposes of this...

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