Basic rate limit and personal allowance

Part of Finance (No. 3) Bill – in the House of Commons at 4:42 pm on 19th November 2018.

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Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chair, Standing Orders Committee 4:42 pm, 19th November 2018

With this it will be convenient to discuss the following:

Clauses 5 and 6 stand part.

Clauses 8 to 10 stand part.

Clause 38 stand part.

That schedule 15 be the Fifteenth schedule to the Bill.

Clauses 39 to 42 stand part.

New clause 1—Additional rate threshold and supplementary rate—

“The Chancellor of the Exchequer must, no later than 5 April 2019, lay before the House of Commons a distributional analysis of—

(a) the effect of reducing the threshold for the additional rate to £80,000, and

(b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000.”

New clause 2—Impact of provisions of section 5 on child poverty and equality—

“(1) The Chancellor of the Exchequer must review the impact of the provisions of section 5 and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider the impact of the changes made by section 5 on—

(a) households at different levels of income,

(b) people with protected characteristics (within the meaning of the Equality Act 2010),

(c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,

(d) different parts of the United Kingdom and different regions of England, and

(e) levels of relative and absolute child poverty in the United Kingdom.

(3) In this section—

‘parts of the United Kingdom’ means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

‘regions of England’ has the same meaning as that used by the Office for National Statistics.”

New clause 3—Review of the effectiveness of entrepreneurs’ relief—

“(1) Within twelve months of the passing of this Act, the Chancellor of the Exchequer must review the effectiveness of the changes made to entrepreneurs’ relief by Schedule 15, against the stated policy aims of that relief.

(2) A review under this section must consider—

(a) the overall number of entrepreneurs in the UK,

(b) the annual cost of entrepreneurs’ relief,

(c) the annual number of claimants per year,

(d) the average cost of relief paid per claim, and

(e) the impact on productivity in the UK economy.”

New clause 7—Review of changes to entrepreneurs’ relief—

“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to entrepreneur’s relief by Schedule 15 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the effects of the provisions on business investment,

(b) the effects of the provisions on employment, and

(c) the effects of the provisions on productivity.

(3) In this section—

‘parts of the United Kingdom’ means—

(a) England,

(b) Scotland,

(c) Wales, and

(d) Northern Ireland;

‘regions of England’ has the same meaning as that used by the Office for National Statistics.”

This new clause would require a review of the impact on investment of the changes made to entrepreneurs’ relief which extend the minimum qualifying period from 12 months to 2 years.

New clause 8—Review of geographical effects of provisions of section 9—

“The Chancellor of the Exchequer must review the differential geographical effects of the changes made by section 9 and lay a report of that review before the House of Commons within six months of the passing of this Act.”

This new clause would require a geographical impact assessment of income tax exemptions relating to private use of an emergency vehicle.

New clause 9—Report on consultation on certain provisions of this Act—

“(1) No later than two months after the passing of this Act, the Chancellor of the Exchequer must lay before the House of Commons a report on the consultation undertaken on the provisions in subsection (2).

(2) Those provisions are—

(a) section 5,

(b) section 6,

(c) section 8,

(d) section 9,

(e) section 10,

(f) Schedule 15,

(g) section 39

(h) section 40,

(i) section 41, and

(j) section 42.

(3) A report under this section must specify in respect of each provision listed in subsection (2)—

(a) whether a version of the provision was published in draft,

(b) if so, whether changes were made as a result of consultation on the draft, and

(c) if not, the reasons why the provision was not published in draft and any consultation which took place on the proposed provision in the absence of such a draft.”

This new clause would require a report on the consultation undertaken on certain provisions of this Act – alongside new clauses 11, 13 and 15.

New clause 18—Review of public health and poverty effects of Basic Rate Limit and Personal Allowance—

“(1) The Chancellor of the Exchequer must review the public health and poverty effects of the provisions of section 5 to this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.

(2) A review under this section must consider—

(a) the effects of those provisions on the levels of relative and absolute poverty in the UK,

(b) the effects of those provisions on life expectancy and healthy life expectancy in the UK, and

(c) the implications for the public finances of the public health effects of those provisions.”

New clause 19—Personal allowance

“The Chancellor of the Exchequer must, no later than 5 April 2019, lay before the House of Commons an analysis of the distributional and other effects of a personal allowance in 2019-20 of £12,750.”

This new clause would require a distributional analysis of the effect of increasing the personal allowance to £12,750.