Finance (No. 2) Bill — Decline Second Reading — 13 Apr 2021 at 20:17

The majority of MPs voted for a range of tax and pensions provisions including keeping key income tax rates and thresholds unchanged and to increase the main rate of Corporation Tax from 19 to 25% from 2023.

MPs were considering the Finance (No. 2) Bill.^[1][2][3]

Specifically MPs were considering a motion:

• That the Bill be now read a Second time.

An amendment was proposed:

• That this House
• declines to give a Second Reading to the Finance (No. 2) Bill because it derives from a Budget that failed to guarantee a pay rise for NHS workers after their unparalleled service over the last year;
• because it undermines the country’s economic recovery, targeting household finances by freezing income tax allowances before increasing the rate of corporation tax;
• because it does nothing to mitigate the effect on family finances of the sharp council tax rise in April;
• because it contains measures connected with a cut to social security later in the year; and
• because it fails to set out the ambitious plan for jobs and growth that is needed to help the country emerge strongly from the worst economic crisis of any major economy.

The motion rejected by a majority of MPs in this vote was:

• That the amendment be made.

Notably the "amendment" was presented in the form of a new motion, rather than as an amendment to the original motion.

The Bill included provisions:

• to impose income tax during the tax year 2021-22.
• to set the 2021-22 rates for income tax at: Basic rate - 20%; Higher rate - 40%; Additional rate - 45%. (No change on the previous year).
• to increase the tax rates on taxed dividend income.
• to retain the threshold for starting to tax interest on savings at £5,000.
• to set the thresholds for starting to pay income tax, and for starting to pay income tax at the higher rate at £12,570 and £37,700 respectively for 2022-2026.
• to set the main rate of Corporation Tax for the financial year 2022 at 19% and the main rate of corporation tax for the financial year 2023 at 25%

The rates for starting to pay income tax, and for starting to pay income tax at the higher rate, for 2021-22 were £12,570 and £37,700 respectively, so were unchanged.^[4]

The main rate of Corporation Tax had been 19% since 2017.^[5]

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• [1] Parliament's webpage on the Finance (No. 2) Bill, Parliament.uk
• [2] The Finance (No. 2) Bill (as introduced 11 March 2021), Parliament.uk
• [3] Explanatory notes to the Finance (No. 2) Bill, Parliament.uk
• [4] Income Tax rates and allowances for current and past years, Gov.uk
• [5] Rates and allowances for Corporation Tax, HMRC, Gov.uk

Debate in Parliament |