Key Facts

• The Finance Bill's program motion does not allow for oral evidence sessions.
• Part of a Finance Bill is considered by the whole House, with another part scrutinized in Public Bill Committee.
• Pre-legislative consultation includes publishing more than 250 pages of draft clauses before introducing the Bill to Parliament.
• Clause 1 legislates the charge for income tax for 2023-24.
• Clauses 2 sets main rates at 20% (basic), 40% (higher), and 45% (additional).
• Clause 3 sets savings rates for UK taxpayers.
• The starting rate limit for savings is maintained at £5,000 for individuals with low earned income of less than £17,570.
• Approximately £268 billion is expected to be raised from income tax in 2023-24.
• Around 95% of savers pay no tax on their savings income due to various tax reliefs.
• The thresholds have been frozen until 2028, dragging many more people into paying higher levels of income tax.
• 8 million people will be affected by fiscal drag in 2027-28.
• One in four teachers and one in eight nurses will become higher-rate taxpayers by 2027.
• The Prime Minister pays an effective rate of 22% on earnings.
• People face marginal tax rates of up to 60% due to fiscal drag.
• The Treasury Committee is conducting an inquiry into spiky marginal tax rates and cliff edges.
• The personal allowance threshold is set at £12,570 per year.
• More than 3 million people will be taken out of tax by 2023-24 due to increased thresholds.
• About 30% of individuals do not pay tax as a result of the personal allowance increase.
• The UK higher rate threshold is £50,270, protecting most from paying the higher rate of income tax.
• Average median earnings for an employee are £28,000 per year.
• The Office for Budget Responsibility (OBR) forecasts that frozen thresholds will drag 2.1 million people into the higher rate of tax.
• CSOP limit increased from £30,000 to £60,000.
• Changes allow future adjustments by regulations.
• EMI scheme administrative requirements are simplified.
• Changes support an estimated 4,700 SMEs and 45,000 employees annually.
• Clauses apply to schemes granted on or after April 6, 2023.
• CSOP limit is doubled from £30,000 to £60,000.
• Removal of the “worth having” condition for CSOP.
• Changes to CSOP rules announced by previous Chancellor in September 2022.
• Additional compliance work cost expected to be £570,000.
• Clause 17 removes requirements for employer companies when granting EMI options.
• The clause clarifies income tax exemption for payments made under the Jobs Growth Wales Plus scheme.
• The scheme was introduced by the Welsh Government to replace traineeships and Jobs Growth Wales programmes.
• Participants receive training allowances of up to £30 a week, £55 a week, or national minimum wage depending on the strand.
• Qualifying care relief thresholds are being increased from £10,000 to £18,140 annually for foster carers.
• An additional £375 to £450 per week is provided for each person cared for.
• The measure benefits more than 33,000 individuals who look after an estimated 58,000 foster children.
• Trustees and personal representatives do not have individual tax allowances.
• HMRC operates a narrow concession to avoid reporting small amounts of untaxed savings income.
• Amendment introduces a £500 tax-free amount for trusts with income up to £500, affecting about one in seven estates.
• For groups of trusts, the limit is reduced to a minimum of £100 per trust.
• The changes will take around 8,000 trusts and estates out of income tax and reporting.
• The clause implements the Government’s response to the “Income tax: Low income trusts and estates” consultation conducted by HMRC between April and July 2022.
• The amendment clarifies that property comprised in a settlement cannot be held for pension purposes under Schedule 1C to TCGA 1992.
• CIOT raised concerns about the administrative burden on beneficiaries receiving modest amounts of income from trusts.
• Clauses 30 and 31 were announced on 15 December 2022.
• Clause 30 will increase receipts by £50 million to £60 million per annum.
• Clause 31 amends section 92 of the Finance Act 2012.
• Clause 32 prevents additional tax charges when an insurer's liabilities are written down.
• Clause 33 extends circumstances for annuity reductions without incurring unauthorised payments charges.
• Clause 30 addresses a possible tax mismatch in BLAGAB reinsurance rules.
• Clause 31 resolves uncertainty regarding the scope of section 92 of the Finance Act 2012 for life insurance companies.
• The Exchequer impact is estimated at £15 million for 2022-23, increasing to £55 million annually from 2024-25.
• The corporate interest restriction rules have increased corporation tax receipts by over £1 billion annually since April 2017.
• Five changes protect the Exchequer's position, including preventing groups from reallocating disallowed financing costs and ensuring charities cannot benefit from tax relief for finance costs incurred in exempt activities.
• Amendment 5 concerns the definition of an insurance company for corporate interest restriction rules, supported by the Association of British Insurers.
• HMRC, businesses and their advisers have identified issues with current rules.
• Changes are made to protect the Exchequer and reduce unfair outcomes and administrative burdens on affected businesses.
• The amendment inserts a new definition in section 494 of TIOPA 2010 regarding insurance companies under foreign laws similar to UK regulations.