The Spring Finance Bill 2023 (SFB 2023) was published on 23 March 2023.
Officially known as the Finance (No 2) Bill, because it is the second Finance Bill of the 2022–23 Parliamentary session, it was also referred to as the SFB 2023 in Spring Budget 2023.
As noted above, SFB 2023 is the second Finance Bill published in the 2022–23 Parliamentary session, with the first bill being the Autumn Finance Bill 2022 (AFB 2022) (which was subsequently enacted in January as Finance Act 2023 (FA 2023). SFB 2023 has had its first reading and will continue its progress through Parliament. It is 478 pages long, with 352 clauses and 24 schedules. Explanatory notes to SFB 2023 have been published alongside it.
SFB 2023 contains legislation for:
measures for which draft legislation was first published on 20 July 2022. This included (among other things) draft legislation for:
- the UK’s multinational top-up tax that implements the main charging provision contained within the OECD’s Model Rules for Pillar Two (ie the top-up tax for UK parent entities with non-UK subsidiaries)
- new transfer pricing documentation requirements for UK businesses
- changes to the qualifying asset holding companies (QAHCs) regime
- reform of R&D tax relief to allow expenditure on data licences and cloud computing services as well as a range of measures to tackle abuse, improve compliance, and correct anomalies, including a requirement for companies to inform HMRC in advance of their intention to make an R&D relief claim, and
- restricting certain extended time limit claims for double tax relief calculated by reference to the foreign nominal rate of tax
residual measures announced at Autumn Statement but not legislated for in FA 2023 such as measures:
- introducing a UK domestic top-up tax (ie a top-up tax applying to entities located in the UK) that is analogous to the OECD’s Pillar Two top-up tax
- amending the energy profits levy
- introducing the electricity generator levy (for which draft legislation was previously published on 20 December 2022), and
- expanding the scope and availability of the company share option plan and the seed enterprise investment scheme (both originally announced in the Growth Plan 2022 and two of only four announcements made in the Growth Plan that survived the emergency unravelling of the growth plan), and
additional measures announced at Spring Budget including (among other things):
- pensions tax changes
- introducing full expensing capital allowances for main rate assets for three years starting from 1 April 2023 and permanently increasing the limit of the annual investment allowance of £1m for qualifying expenditure on plant and machinery incurred from 1 April 2023
- introducing investment zones
- a new elective accruals basis for carried interest
- changes to the corporate interest restriction
- amendments to the genuine diversity of ownership condition for the purposes of the QAHC, real estate investment trust (REIT) and non-resident CGT rules
- enhancements to the REIT regime
- amendments to the enterprise management incentive option grant process, and
- changes to notification periods and assessment and claim time limits for chargeable gains to prevent HMRC from being out of time to assess tax due on gains when an asset is disposed of under an unconditional contract but the transfer doesn’t occur until after the ordinary notification period
The extensive length of SFB 2023 is explained by the very limited scope of FA 2023 and the fact that it consolidates draft legislation from Legislation Day and subsequent fiscal events.
The SFB 2023 published on 23 March 2023 does not include any measures for the new additional relief for R&D intensive SMEs even though that relief is expected to take effect from April 2023. Draft legislation for that additional relief is expected to be published in summer 2023. Similarly, draft legislation to merge the R&D expenditure credit and SME R&D schemes is expected to be published for technical consultation in summer 2023.
