Key Facts

• The measure protects £830 million of revenue from tax avoidance.
• From 2016-17 to 2021-22, HMRC brought in £10 billion through transfer pricing compliance activities.
• Clause 37 and schedule 5 require UK businesses to prepare OECD standardised documentation.
• The changes will prevent new claims for foreign nominal rate credit on dividends received before the introduction of distribution exemption in 2009.
• The clause aims to prevent UK tax avoidance through share-for-share exchanges involving UK-resident non-domiciles.
• The Chartered Institute of Taxation suggests including trustees within affected definitions to close exploitation gaps.
• New section 138ZA(1)(d) refers to legal rather than beneficial ownership, raising concerns about avoidance opportunities.
• The measure is expected to raise just one twentieth of the £3.2 billion lost annually through non-dom tax status over five years.
• Non-doms receive around £10.9 billion in offshore income annually.
• Non-dom status provides an average tax break of £420,000 per individual.
• Research shows only 0.3% of non-doms would leave if the remittance basis scheme were abolished.
• In 2021, non-UK domiciled taxpayers paid almost £7.9 billion in UK income tax, capital gains tax, and national insurance contributions.
• Non-doms invested more than £6 billion in the UK using the business investment relief scheme introduced in 2012.
• Non-domiciled taxpayers contribute £7.9 billion in UK taxes annually.
• The University of Warwick research is scrutinised for its lack of recognition of the global mobility of high-earning individuals.
• Labour's position proposes a modern, short-term scheme for temporary residents.
• Clause 39 affects around 2,700 sole trader farmers, farming partnerships and companies receiving payments from the lump sum exit scheme.
• Amendment 6 corrects an issue with time limits for transferring assets between spouses or civil partners after separation.
• The elective basis of taxation for carried interest will help asset managers claim double tax relief in other jurisdictions more easily.
• Clause 43 ensures roll-over relief and private residence relief are available to members of limited liability partnerships and Scottish partnership members.
• Clause 39 clarifies tax treatment of payments under the lump sum exit scheme as capital receipts.
• A total of 2,706 farmers applied to the lump sum exit scheme by 30 September 2022 with 511 applications withdrawn or rejected.
• The Department for Environment, Food and Rural Affairs is conducting five pilots to support new farming entrants.
• Clause 41 extends no gain, no loss transfers between separating spouses up to three years.
• The Office of Tax Simplification recommended extending the no gain, no loss window on separation and divorce.
• Clause 42 introduces a new elective basis for taxing carried interest earlier than under current rules with an Exchequer impact of £80 million this year followed by £10 million annually in forecast years.
• Clause 44 defines what is meant by “alcoholic product”.
• Clauses 45 and 46 provide for determining alcohol strength and amending categories of alcohol products respectively.
• The reform package costs £155 million in 2022-23 and £880 million across the scorecard period.
• Up to 10,000 businesses will be impacted by changes in how they calculate duty on their products.
• The term 'alcoholic product' includes spirits, beers, ciders, wines, and any fermented products with an alcoholic strength over 1.2%.
• Schedule 6 provides detailed definitions for each category of alcoholic products.
• Clause 45 sets out how to measure the alcohol strength (ABV) at a temperature of 20°C.
• The new alcohol taxation system will come into effect on August 1.
• HMRC is ready to implement the changes seamlessly.
• OBR expects alcohol revenue of £13.1 billion this year, rising to £15.8 billion by 2027-28.
• There are transitional arrangements for 18 months before full ABV levels come into force.
• Cider is taxed less than other alcoholic beverages despite having the same alcohol content.
• The Scottish whisky industry is concerned about rate changes.
• 77 clauses relate to changes to alcohol duty.
• There are concerns over the lack of specific explanations for each clause in the explanatory notes.
• HMRC regulations and guidance will follow the Bill.
• The reforms were first mentioned in 2020.
• Sparkling wine pays 28% more duty than still wine despite having similar alcohol content.
• A transitional arrangement is provided for still wines from fresh grapes with an alcohol content between 11.5% and 14.5% to ease the transition.
• Draft relief applies to all alcohol below 8.5%.
• Producers of super-strength ciders above 8.5% will pay more duty, but those producing fruit ciders will pay less.
• Clause 61 - Mergers: general provisions.
• Clauses 62 to 71 will also stand part of the Bill.
• Around 10,000 UK businesses produce, import or supply alcohol.
• Small producer relief will cost £155 million in 2022-23 and £880 million across the scorecard period.
• A merger of two small producers is called a post-merger production group with a transition phase for three years following the merger.
• Clauses 72 to 81 reproduce existing exemptions and reliefs from alcohol duty.
• The Alcoholic Liquor Duties Act 1979 and Finance Act 1995 will be repealed in part.
• Hand sanitizer is exempt under clause 76(2).
• Clauses 82 to 89 make changes to the Alcohol Liquor Duties Act 1979 and sections of the Finance Act 1995.
• New alcohol duty rates and reliefs will take effect from 2023, but commencement dates for approval changes are not specified.
• Clauses simplify and standardise approval processes for all alcohol producers regardless of product type.
• Clauses 90 to 97 reproduce an existing exemption from excise duty on denatured alcohol.
• The exemption is for use in products not intended for human consumption, such as paint fillers and cosmetics.
• No policy changes are made; the clauses aim to modernise and simplify legislation without altering the operation of the exemption.
• Clauses 98 to 107 and schedule 10 consolidate requirements for the wholesaling of controlled alcoholic products.
• Clause 101 requires HMRC to maintain a publicly available register of approved wholesalers.
• The measures aim to simplify alcohol duty legislation by consolidating it into one place.
• The Finance Act 1994 is amended by clause 108 and schedule 11.
• Clause 113 lists repealed legislation including the Alcoholic Liquor Duties Act 1979.
• Clause 115 offers a temporary period of eighteen months for treating wine between 11.5% and 14.5% ABV as if it were 12.5% ABV.
• Clause 116 provides a temporary exemption from new alcohol duty regime for cider producers making less than 70 hectolitres annually.
• Clause 115 sets an 18-month transitional period for wine producers.
• Current relief for cider is extended until the new approvals process begins.
• The approvals process for cider comes into force after other parts of the Bill.