If you’ll excuse the pun, laundering is usually a dirty word in the world of finance but thanks to parliamentary ‘wash-up’ I think I can get away with using it just this once.
Thanks to Mrs May’s desire to go to the polls in June the ‘usual channels’ have been active trying to negotiate a peaceful settlement on those bills which they no longer have time to pass through parliament in the usual way. Most notably the Finance Bill.
What’s all this about ‘wash-up’ and ‘usual channels’?
Cribbing directly from those ever-helpful parliamentary research papers:
Public bills cannot be carried over from one parliament to the next in the same way that they can be carried over from one session to the next within the lifetime of a parliament. The period of the last few days of a parliament, during which unfinished business must be agreed by both Houses or lost at dissolution, is known as ‘wash-up’.
During this period, because there is not enough time to complete parliamentary consideration in the usual way, the Government is reliant on the cooperation of the Opposition to secure its legislation. The Government and the Opposition reach agreements on the bills—or parts of bills—that should be hurried through their remaining parliamentary stages to reach the statute book before dissolution.
In other words the government has run out of time and has to do a deal to secure the legislation they want. Simple.
And what has this to do with the Finance Bill?
As is so often the case, the annual Finance Bill was so complicated this year that there was little hope of reaching agreement about everything before dissolution. However, the Treasury could not afford to have the Bill fail so into the unusual channels it went, shedding 614 pages in the process.
What was cut?
Pensions: The expansion of tax exemption for the cost of pension advice provided to employees, which should have come into force this April, has been dropped. This means that the limit remains at £150 for this tax year.
Electric Vehicles: First year capital allowances on electric vehicle charging points wont be available thanks to the amended Act.
Property & Trading Allowances: Two £1,000 allowances aimed at the gig-economy (potentially including some AirBNB style activity) by former Chancellor George Osborne failed to make the cut.
Making Tax Digital: This may not be gone for good, but the timeline of switching to quarterly reporting and online returns from 2018 is surely unachievable since being dropped from the Bill.
IR35: A version of this troublesome set of rules for off-payroll contractors was due to arrive in the public sector, but has been shelved for the time being.
Non-doms: A whole host of changes relating to non-domiciled individuals have been delayed, although it is likely these will simply be delayed rather than scrapped – leading to even more uncertainty about this tax year.
And many, many more…..
The delays to Making Tax Digital is likely to be the most interesting for letting agents, however it looks like we are in for an uncertain year in tax terms.