Autumn Statement 2023 and Finance Bill 2023-24
The Finance Bill 2023-24 was introduced on 27 November 2023. It received Royal Assent on 22 February 2024.
On 22 November 2023 the Chancellor Jeremy Hunt presented the Autumn Statement to the House, alongside the Office for Budget Responsibility’s Economic and Fiscal Outlook.
In his statement to the House the Chancellor announced a series of tax measures, some of which are included in the Finance Bill 2023-24. Parliament.uk has a dedicated webpage for the Bill.
HM Revenue and Customs (HMRC) published the overview of tax legislation and rates (OOTLAR) on the day of the Autumn Statement. Chapter 1 of the document sets out all the measures that are in the Finance Bill 2023-24. Chapter 2 sets out other measures announced in the Autumn Statement, which are not included in the Bill.
Key publicationsThe Autumn Statement (PDF) and associated documents are published on Gov.uk, including:
- the Treasury’sPolicy Costings document (PDF)
- the Treasury’sImpact on Households document (PDF)
- HMRC’sTax Information and Impact notes, dealing with each of the tax measures to be included in the forthcoming Finance Bill
- Annex A of HMRC’s overview of tax legislation and rates provides tables of tax rates and allowances for the tax years 2023/24 and 2024/25
Following the Chancellor’s statement the Government introduced 37 ways and means resolutions (PDF) which cover the measures to be included in the Finance Bill. This is a procedural step that is needed before the Government can publish a Finance Bill.
The Commons debated the Ways and Means resolutions on 22, 23 and 27 November. Formally, the debate takes place on the first in the list of resolutions: in this case, the one relating to the “rates of tobacco products duty.” (PDF). However, MPs debated the wider contents of the Autumn Statement, as well as the broader UK economic and fiscal context.
At the end of the debate on 27 November 2023, the House voted on the Ways and Means resolutions. The House did not divide on any of them. Following this, the Finance Bill 2023-24 was introduced and received its first reading.
Contents of the BillThe Government has published separate tax information and impact notes (TIINs) on each measure included in the Finance Bill in Chapter 1 of its overview of tax legislation and rates (OOTLAR).
An overwhelming majority of proposals included in the Bill had already been published by the Government in July 2023. The Government aims to publish draft tax legislation in advance, so that technical consultation can happen before the Finance Bill is introduced.
The two measures that have gathered most interest in the Bill are:
- The abolition of the pensions lifetime allowance. HMRC has published a tax information and impact note (TIIN) to explain the policy. The Library has also published a research briefing on pension tax relief: The annual allowance and lifetime allowance.
- The announcement that capital allowance full expensing would be made permanent. HMRC has published a TIIN to describe the impact of the policy. The measure is also discussed in the Library research briefing on corporate tax reform.
The Bill’s second reading took place on Wednesday 13 December 2023. There was agreement among party representatives on some measures included by the Bill. However, overall support for the Bill largely differed by party membership. Opening the debate, Financial Secretary to the Treasury Nigel Huddleston said the Bill would “support British business, [… and] improve and simplify [the] tax system, which will ensure it is fit for purpose.”
Shadow Financial Secretary James Murray (Labour and Co-op) welcomed some measures included in the Bill, saying that Labour had called for them to be introduced. However, he also commented on the wider economic situation, for instance by focussing on the UK’s tax burden, which he said is “on track to be the highest since the second world war.” He added that the Government had chosen not to close the non-domiciled tax regime, making non-doms therefore “protected from [the] Government’s tax rises on much on their income.” He said that Labour would not oppose the Bill’s second reading, but that they would welcome scrutiny at Committee stage.
Speaking for the Scottish National Party, Drew Hendry moved an amendment to decline to give the Bill a second reading, “while approving the changes to taxation of tobacco […] and full expensing being made permanent”, as the Bill had not introduced VAT reductions on the hospitality and tourism sectors, and had not included “measures through the tax system [to] alleviate poverty.” Drew Hendry’s speech focussed more on what was not included in the Bill, such as measures to tackle high rents, mortgages, food bills, and the non-domiciled tax regime, which the SNP argued was not addressed in the Bill.
Similarly, the Liberal Democrats did not support the Bill. Spokesperson Sarah Olney concurred that several issues the UK is facing were not addressed in the Finance Bill, such as health care, the tax burden, and the cost of living crisis.
Concluding, Exchequer Secretary to the Treasury Gareth Davies said the Bill would mean companies “will pay less tax if they invest more”, as well as simplifying tax reliefs, and making the tax system fairer. Alongside responding to MPs’ contributions, he concluded by saying that the Bill would deliver “growth, investment, work and reward.”
Drew Hendry’s amendment to decline the Bill’s second reading was negatived on division (46 ayes to 296 noes). The Bill’s second reading was agreed to, also on division (291 ayes to 54 noes).
Committee stageFollowing the Bill’s second reading, the Commons agreed to a programme motion for the discussion of the Bill in committee. The House agreed that the following measures would be discussed in a Committee of the Whole House:
Clauses of the Finance Bill committed to a Committee of the Whole House
Measure
Clauses of the Bill
HMRC impact assessment
Permanent full expensing
Clause 1
Permanent full expensing, 22 November 2023
The new regime for Research and Development
Clause 2 and Schedule 1
Research & Development (R&D) tax relief reforms, 23 November 2022
Pillar Two
Clause 21 and Schedule 12
Multinational top-up tax and domestic top-up tax amendments, 22 November 2023
Rebate on heavy oil and certain bioblends used for heating
Clause 25
Duty for heavy oil and bioblends for heating, 22 November 2023
Interpretation of VAT and excise law
Clause 27
Interpretation of VAT and excise law, 20 October 2023
Tax evasion and tax avoidance
Clauses 31 to 34 and Schedule 13
Dealing with promoters of tax avoidance, 23 November 2023, and Increasing the maximum prison term for tax fraud, 22 November 2023
Source: House of Commons Votes and Proceedings, 13 December 2023
The remaining clauses were debated in a Public Bill Committee.
Committee of the Whole HouseThe Committee of the Whole House stage of the Bill took place on 10 January 2024.
During the debate, whilst supporting the proposal to make full expensing permanent, Shadow Financial Secretary James Murray (Labour and Co-op) said that businesses’ long term planning had been made difficult due to the Government’s “chopping and changing [of] business taxes and reliefs year after year.” He expressed similar thoughts on changes to Research and Development tax reliefs. Speaking for the SNP, Drew Hendry added that although measures such as making full expensing permanent were welcome, they did not address what he argued was a big cause of damage to businesses, which was Brexit.
The Committee divided on a new clause tabled by James Murray mandating the Government to “publish a review of the implementation costs of the measures in section 2” (relating to Research and Development). The Committee negatived the new clause.
On tax evasion and avoidance, Opposition parties tabled three new clauses to require the Government to carry out assessments or write reports on (PDF):
- The average sentence and range of sentences given for offences in clause 31 of the Bill (tabled by the official Opposition)
- The impact of the clauses relating to tax avoidance and evasion on HMRC’s compliance activities (tabled by Sarah Olney, Liberal Democrat spokesperson)
- The effectiveness of the measures relating to tax avoidance and evasion in “combating fraud involving taxpayers’ money” (tabled by Sarah Olney, Liberal Democrat spokesperson)
All the new clauses were negatived by the Committee on division.
Public Bill CommitteeAt the Public Bill Committee stage of the Finance Bill (which took place on 16 January 2024), Committee members moved three new clauses (PDF):
- A clause requiring the Government to publish an assessment of the impact of the Bill a year after its passage on compliance with climate change targets (moved by Drew Hendry, SNP spokesperson)
- A clause requiring the Government to publish an assessment of the impact of the Bill six months after its passage on the public finances, the cost of living for households in the UK, and on lower income households (moved by Drew Hendry, SNP spokesperson)
- A clause requiring the Government to review the impact of the Bill within six months of its passage on public health, inequality, and poverty across the UK (moved by Debbie Abrahams)
All the proposed new clauses were negatived on division. (PDF)
The Bill therefore finished the Public Committee Stage without amendment.
Remaining stagesThe Bill returned to the floor of the House on Monday 5 February 2024, where it received its Report Stage and third reading.
During this debate, the Opposition moved new clause 6, which would have mandated the Government to publish an impact of the changes to full expensing on business investment and economic growth. The new clause was negatived on division (185 ayes to 285 noes). The Opposition also moved new clause 7, which would have mandated the Government to review how the higher rates of Air Passenger Duty are calculated, including a different calculation to calculate the higher and reduced rates for the domestic band. This clause was also negatived on division (182 ayes to 289 noes).
The House divided on the third reading of the Bill, which was agreed to (283 ayes to 39 noes).
The Bill’s webpage on parliament.uk has published a list of amendments ahead of the remaining stages. The deadline for Members to table amendments is Wednesday 31 January 2024.
HMRC has published explanatory notes and Tax Information and Impact Notes (TIINs) for government amendments and new clauses that will be moved at the Report Stage of the Bill.
The Bill received Royal Assent on 22 February 2024 and became the Finance Act 2024.
Library briefing material on the Finance BillIt is long-standing practice for there not to be a single impact assessment on the Finance Bill (see PQ 6549, 6 September 2017). Similarly, given the scale and scope of the Finance Bill, the Library does not publish a single briefing on the Bill. Relevant material will be added to this page when they are available.
A cut in the rate of National Insurance contributions (NICs)In his statement the Chancellor announced a cut in the main rate of National Insurance contributions (NICs) paid by employees (‘primary Class 1 NICs’), and the main rate paid by the self-employed (‘Class 4 NICs’).
Separate legislation was introduced on 23 November 2023 to give effect to these changes. The National Insurance Contributions (Reduction in Rates) Bill 2023-24 undertook all its remaining Commons stages on 30 November 2023. The Library research briefing on the Bill has more background information on this.
Treasury Committee sessionsThe Treasury Select Committee held three oral evidence sessions on the Autumn Statement:
- A session in the morning of 28 November 2023 with Richard Hughes (the Chair of the OBR), Professor Miles Davis, and Tom Josephs (members of the Budget Responsibility Committee)
- A session in the afternoon of 28 November 2023 with Dr Jumana Saleheen (Chief Economist and Head of Investment Strategy Group at Vanguard Europe), Torsten Bell (Chief Executive of the Resolution Foundation), Paul Johnson (Director of the Institute for Fiscal Studies) and Dr Zubaida Haque (Deputy Director and Head of Research and Policy at the Women’s Budget Group)
- A session in the morning of 29 November 2023 with the Chancellor and William Macfarlane (Director of Strategy, Planning and Budget at HM Treasury) Further information
Both the Institute for Fiscal Studies and the Resolution Foundation have published briefings on the Autumn Statement.
Library briefings are available on the context of the Autumn Statement, the main measures announced and the latest economic forecasts, and a summary of initial reactions to the statement. A Library Insight, What is the Autumn Statement?, gives a short summary of what happens during and after this fiscal event.