Finance (No. 2) Bill 2017 — Second Reading — 18 Apr 2017 at 21:19

The majority of MPs voted to raise the threshold for paying higher rate income tax, to introduce a Soft Drinks Industry Levy, to restrict the national insurance benefits of remuneration other than via salary and for other changes to the tax system.

MPs were considering a Finance Bill^[1].

The motion supported by the majority of MPs in this vote was:

• That the Bill be now read a Second time.

The Bill:

• imposes an income tax for the tax year 2017-18. (Parliament has to explicitly decide if to levy an income tax each year.^[2])
• keeps income tax rates unchanged for 2017-18 at a basic rate of 20%, higher rate of 40%; and additional rate applying to income over £150,000 per year of 45 (the "basic rate limit" was raised from £32,400 to £33,500 for 2016-16 in section 2 of the Finance Act 2016, consequently raising the higher rate threshold to £45,000, and section 3 of the Finance Act 2016 had raised the income tax free personal allowance to £11,500 for 2017-18].)
• continues an exemption from income tax applying to the first £5,000 of savings interest.
• reduces the nil rate applying to dividend income from £5,000 to £2,000 for tax year 2018 onwards.
• does not change the rate of Corporation Tax for the financial year 2018 from that set at 19% via section 7 of the Finance (No 2) Act 2015.
• establishes a new tax called the Soft Drinks Industry Levy; at rates of £0.24 per litre for drinks with at least 8 grams of sugars per 100ml; and £0.18 per litre for those with a lower sugar content.
• removes the income tax relief and hence also the national insurance contributions relief which applied to the first £2,000 worth of employee shareholder shares, and also removes the capital gains tax exemption from such shares where an agreement was entered into on or after 1 December 2016.
• restricts the national insurance benefits of "salary sacrifice arrangements" or "optional remuneration arrangements".
• rises in taxes on alcohol and tobacco
• makes no changes in fuel duties

The support for the second reading of the Bill enabled it to continue on its path to becoming law.

• [1] Parliament's webpage on the Finance (No. 2) Bill 2017
• [2] Explanatory notes to the Finance Bill

Debate in Parliament |