A Finance Act is the headline fiscal (budgetary) legislation enacted by the UK Parliament, containing multiple provisions as to taxes, duties, exemptions and reliefs at least once per year, and in particular setting out the principal tax rates for each fiscal year.
In the UK, the Chancellor of the Exchequer delivers a Budget speech on Budget Day, outlining changes in spending, as well as tax and duty. The changes to tax and duty are passed as law, and each year form the respective Finance Act. Additional Finance Acts are also common and are the result of a change in governing party due to a general election, a pressing loophole or defect in the law of taxation, or a backtrack with regard to government spending or taxation.
The rules governing the various taxation methods are contained within the relevant taxation acts. Capital Gains Tax legislation, for example, is contained within Taxation of Chargeable Gains Act 1992. The Finance Act details amendments to be made to each one of these Acts. The main taxes are Excise Duties, Value Added Tax, Income Tax, Corporation Tax, and Capital Gains Tax.
Excise duties are inland duties levied on articles at the time of their manufacture.
See main article: People's Budget. The Finance (1909–10) Act 1910 resulted in a significant net increase in taxation, and it also requisitioned a survey dubbed by right-wing journalists the "Lloyd George's Domesday land-survey", in particular entailing the 1910–1915 valuation maps.
Each property and related right under and over land (hereditament) in England and Wales was surveyed and valued, so Increment Value Duty based on land value could be levied when any property was sold. The initial rate was 20% of the increase in land-value between the date of the survey and the date of sale (capital gain). Exemptions included farmland and plots smaller than 50acres. This tax was substantively altered by the repeal of s. 67 by the Finance Act 1920 which superseded it.[1]
As part of the survey, landowners had to fill in a form, and the resulting records are extremely useful for local history.
The records today consist of:
The valuation maps and books are kept in local record offices, and the other items are in the National Archives at Kew, London (field books in series IR58; working maps in series IR121 to IR135 according to region and each region has up to 22 different districts).
| Short Title: | Finance Act 1920 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties of Customs and Inland Revenue (including Excise), to alter other duties, and to amend the Law relating to Customs and Inland Revenue (including Excise), and the National Debt, and to make further provision in connection with Finance. |
| Year: | 1920 |
| Citation: | 10 & 11 Geo. 5. c. 18 |
| Royal Assent: | 4 August 1920 |
| Status: | amended |
| Original Text: | https://www.legislation.gov.uk/ukpga/Geo5/10-11/18/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 1920 |
| Collapsed: | yes |
This included a new "Duty on licences for mechanically propelled vehicles" (Vehicle Excise Duty, which went into the Road Fund until 1936), repealed "customs duties on motor spirit and motor spirit dealers licence duties", and introduced "Provisions as to spirits used for generating mechanical power", along with other provisions related to income tax and tax on alcohol.[2]
| Short Title: | Finance Act 1946 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the Public Revenue and the National Debt, and to make further provision in connection with Finance. |
| Year: | 1946 |
| Citation: | 9 & 10 Geo. 6. c. 64 |
| Royal Assent: | 1 August 1946 |
| Status: | partially_repealed |
| Original Text: | https://www.legislation.gov.uk/ukpga/Geo6/9-10/64/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 1946 |
| Collapsed: | yes |
The 1946 act established the National Land Fund and much of National Savings and Investments.[3]
| Short Title: | Finance Act 1948 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance. |
| Year: | 1948 |
| Citation: | 11 & 12 Geo. 6. c. 49 |
| Royal Assent: | 30 July 1948 |
| Original Text: | https://www.legislation.gov.uk/ukpga/Geo6/11-12/49/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 1948 |
| Collapsed: | yes |
The 1948 act established the "Special Contribution", which was a one-off wealth tax.
| Short Title: | Finance Act 1963 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt, and the Public Revenue, and to make further provision in connection with Finance. |
| Year: | 1963 |
| Citation: | 1963 c. 25 |
| Royal Assent: | 31 July 1963 |
| Status: | amended |
| Original Text: | https://www.legislation.gov.uk/ukpga/1963/25/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 1963 |
| Collapsed: | yes |
The 1963 act abolished Schedule A of income tax, which was a tax on the imputed rent of owner-occupiers. It also abolished the land tax.[4]
See main article: Finance Act 1965. The 1965 act introduced corporation tax and capital gains tax.
| Short Title: | Finance Act 1972 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance. |
| Year: | 1972 |
| Citation: | 1972 c. 41 |
| Royal Assent: | 27 July 1972 |
| Status: | amended |
| Original Text: | https://www.legislation.gov.uk/ukpga/1972/41/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 1972 |
| Collapsed: | yes |
The 1972 act introduced value added tax.
| Short Title: | Finance Act 1977 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance. |
| Year: | 1977 |
| Citation: | 1977 c. 36 |
| Status: | amended |
| Original Text: | https://www.legislation.gov.uk/ukpga/1977/36/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 1977 |
| Collapsed: | yes |
The Finance Act 1977 abolished the last remaining tithes payable to the Church of England or Church in Wales.[5]
See main article: Finance Act 2000. The Finance Act 2000 increased the Climate Change Levy.
See main article: Finance Act 2010. This act shortly before the 2010 United Kingdom general election, passed as set out by the Labour Party adjusted the rates of the main taxes, in particular introducing on income tax the 50% 'additional rate' band.[6]
The act also reversed a prospective rise enacted in the Finance Act 2007 of the inheritance tax nil rate band threshold from £325,000 to £350,000 which would have applied from 6 April 2010, thus, emphasising a degree of redistribution, the tax instead continues to apply to death estates that do not benefit from any exemptions (such as spouse nil-rate-bands) and consist of a property valued at 25% above the national average.
See main article: Finance (No.2) Act 2010. This act of 27 July 2010 under the Coalition Government reduced the headline rate of Capital Gains Tax to 18%.[7]
The act increased the general rate of VAT from 17.5% to 20% (while cutting it for imported goods and materials from 28.58% to 25%).
| Short Title: | Finance (No. 3) Act 2010 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance. |
| Year: | 2010 |
| Citation: | 2010 c. 33 |
| Royal Assent: | 16 December 2010 |
| Status: | amended |
| Original Text: | https://www.legislation.gov.uk/ukpga/2010/33/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance (No. 3) Act 2010 |
| Collapsed: | yes |
Enacted on 16 December 2010 this Act extended foster care relief, extended the applicability of venture capital schemes to companies with a "permanent establishment" in the UK "in financial health", modified the meaning of "distribution" in the Corporation Tax Acts, addressed the income tax treatment of seafarer's income, adjusted treatment of REITs:, modified rules as to EEA/UK consortium claims for group relief, introduced first-year allowances for zero-emission goods vehicles, adjusted for VAT purposes treatment of non-business use of business assets, amended penalties for failure to make payments on time and returns on time, proceduralised recovery of overpaid stamp duty and petroleum revenue tax, modified compliance checks as to excise duties, and clarified the tax treatment of asbestos compensation settlements in relation to the three main taxes.[8]
| Short Title: | Finance Act 2020 |
| Type: | Act |
| Parliament: | Parliament of the United Kingdom |
| Long Title: | An Act to grant certain duties, to alter other duties, and to amend the law relating to the national debt and the public revenue, and to make further provision in connection with finance. |
| Year: | 2020 |
| Citation: | 2020 c. 14 |
| Royal Assent: | 22 July 2020 |
| Status: | amended |
| Original Text: | https://www.legislation.gov.uk/ukpga/2020/14/enacted |
| Use New Uk-Leg: | yes |
| Uk-Leg Title: | Finance Act 2020 |
| Collapsed: | yes |
The Finance Act 2020 (c. 14) was enacted on 22 July 2020. Part 2 provides for the introduction of a Digital Services Tax.[9]
See also: Enacting formula.