Tax changes highlighted for Finance Bill 2021

Draft legislation for inclusion in Finance Bill 2021 has been published, including measures to tackle abuse in R&D Tax Credit claims and the Construction Industry Scheme, as well as introducing a new plastic packaging tax 

The measures cover:

• Preventing abuse of Research and Development tax relief for small and medium-sized enterprises
• Introduction of a new plastic packaging tax
• Changes to tackle Construction Industry Scheme abuse
• The tax impact of the withdrawal of LIBOR and other benchmark rates
• Amendments to the hybrid and other mismatches regime for Corporation Tax

The consultation on draft clauses will close on 7 January 2021.

In a separate move, the government has extended the £1m Annual Investment Allowance until 1 January 2022 as part of a series of policy announcements..

Other draft legislation for this Finance Bill was published on 21 July 2020, covering:

• Changes to the treatment of termination payments and post-employment notice pay for Income Tax
• Income Tax changes to the van benefit charge from 6 April 2021
• Pension schemes: collective money purchase benefits
• Changes to working time requirements for Enterprise Management Incentives
• Technical amendments to the Corporate Interest Restriction for Corporation Tax
• New rates of Stamp Duty Land Tax for non-UK residents from 1 April 2021
• New reliefs from Annual Tax on Enveloped Dwellings and Stamp Duty Land Tax for housing co-operatives
• Amendment to the VAT refund scheme to include the S4C television channel
• New proposals for tackling promoters and enablers of tax avoidance schemes
• New tax checks on licence renewal applications
• Amendments to HMRC's civil information powers

At that point, the Bill was expected to be Finance Bill 2020-21 and this was reflected in the published documents, but the draft legislation will now be in the 2021 Bill

Budget 2021

The final contents of Finance Bill 2021 will be subject to confirmation at Budget 2021.

The Permanent Secretary at HM Treasury, Sir Tom Scholar, has confirmed that the next Budget will be held in March 2021. The date was revealed during a Public Accounts Committee meeting, although the exact date in March has not yet been announced.

HMRC keeps a list of ongoing tax policy consultations.