Key Facts

• Amendment 15 proposes changes to the transitional provisions for the AIA.
• The amendment aims to prevent smaller businesses from being disadvantaged when the AIA reverts to £200,000 on January 1, 2022.
• Clause 15 extends the temporarily increased level of the AIA until December 31, 2021.
• Companies operating oilfields must decommission wells and infrastructure at field end.
• Tax relief for decommissioning expenditure is part of the UK’s overall oil and gas fiscal regime.
• The clause supports approximately 260,000 jobs in the sector.
• To date, the industry has paid around £350 billion in production taxes.
• Amendment would allow extend carry back rule for losses in UK furnished holiday letting businesses.
• New clause proposes a review by the Chancellor on the effects of provisions within six months of the Act’s passage.
• Review must estimate impact on tax avoidance, evasion, and revenues.
• Clause 18 and schedule 2 extend loss carry-back rules from one year to three years.
• Unincorporated businesses can carry back up to £2 million in trading losses incurred in tax years 2020-21 and 2021-22.
• Incorporated businesses can carry forward similar amounts for accounting periods ending in financial years 2020 and 2021.
• HMRC expects around 130,000 companies to benefit from the policy.
• The cap applies proportionately across groups but not for smaller businesses carrying back less than £200,000 of losses.
• Clause 18 and schedule 2 provide a temporary extension of trading loss carry-back rules from one year to three years.
• The extension applies to losses up to £2 million for a 12-month period, both for companies and unincorporated businesses.
• Amendment made: in schedule 2, page 101, line 34, leave out sub-paragraph (5).
• Relief under Part 1 of Schedule 2 is not available to furnished holiday lettings businesses treated as a trade under section 127 of the Income Tax Act 2007.
• Amendment 23 seeks to change the end date from 6 April 2023 to 6 April 2026.
• The amendment aims to extend the social investment tax relief by two more years.
• Social investment tax relief (SITR) was introduced in 2014.
• SITR originally had sunset provisions until April 2019, extended to April 2021, now further extended until April 2023.
• Since 2014, 110 social enterprises have raised £11.2 million through SITR.
• Concerns exist about the complexity and low take-up of SITR, particularly for smaller organisations.
• Social Investment Tax Relief (SITR) has been in place since 2014-15.
• Between 2014 and 2018-19, about 110 social enterprises raised £11.2 million through SITR investment.
• Charities received £1.4 billion in gift aid in 2019-20 compared to £11 million for SITR since its introduction.
• Off-payroll working rules prevent contractors from avoiding tax through personal service companies.
• Changes transferred responsibility to clients for determining rule application, effective from April 2021 in private sectors.
• A targeted anti-avoidance rule is introduced to prevent exploitation of conditions.
• Clause 22 amends the Income Tax (Earnings and Pensions) Act 2003.
• It applies to individuals whose employment terminates on or after April 6, 2021.
• The clause affects non-residents who have worked in the UK during their notice period.
• Clause 27 includes statutory parental bereavement pay in optional remuneration arrangements.
• New clause 2 requires a report by April 1, 2022, to assess the impact of section 27.
• The report will consider take-up rates, tax avoidance impacts, and productivity levels.
• Clause 29 and schedule 5 enable collective money purchase pension schemes to operate as UK registered pension schemes.
• Amendments 17 and 18 address potential tax consequences in Northern Ireland.
• New clause 9 would require a review of the impact of section 29 and schedule 5 within 24 months of commencement.
• Clause 29 relates to the tax treatment of collective defined contribution (CDC) schemes introduced by the Pension Schemes Act 2021.
• Willis Towers Watson actuaries suggest that a CDC scheme will produce, on average, 70% more for an individual than a defined contribution scheme and 40% more than a defined benefit scheme according to the CWU.
• The first CDC scheme is expected to be launched later this year by Royal Mail.
• Clause 37 amends corporate loss relief rules introduced in 2017.
• The amendment protects revenue by preventing excessive loss relief.
• Some 99% of companies are not financially affected by the carried-forward loss restriction due to the £5 million allowance.
• Clause 39 exempts the Northern Ireland Housing Executive from corporation tax.
• This brings the situation in Northern Ireland into line with England, Wales, and Scotland.
• The exemption ensures that the Northern Ireland Housing Executive faces the same tax treatment as other housing authorities across the UK.