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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 A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...
.


Overview

In the UK, the
Chancellor of the Exchequer The chancellor of the Exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and head of HM Treasury, His Majesty's Treasury. As one of the four Great Offices of State, the Ch ...
delivers a Budget speech on Budget Day, outlining changes in spending, as well as tax and
duty A duty (from "due" meaning "that which is owing"; fro, deu, did, past participle of ''devoir''; la, debere, debitum, whence "debt") is a commitment or expectation to perform some action in general or if certain circumstances arise. A duty may ...
. 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 general election is a political voting election where generally all or most members of a given political body are chosen. These are usually held for a nation, state, or territory's primary legislative body, and are different from by-elections ( ...
, a pressing loophole or defect in the law of taxation, or a backtrack with regard to government spending or taxation. However, a repeal order can also be made by
statutory instrument In many countries, a statutory instrument is a form of delegated legislation. United Kingdom Statutory instruments are the principal form of delegated or secondary legislation in the United Kingdom. National government Statutory instrumen ...
. 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 file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
,
Value Added Tax A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the en ...
,
Income Tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Ta ...
,
Corporation Tax A corporate tax, also called corporation tax or company tax, is a direct tax imposed on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed a ...
, and
Capital Gains Tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...
.


Excise

Excise duties file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
are inland duties levied on articles at the time of their manufacture. *Alcoholic liquor duties **
Alcoholic Liquor Duties Act 1979 Alcoholism is, broadly, any drinking of alcohol that results in significant mental or physical health problems. Because there is disagreement on the definition of the word ''alcoholism'', it is not a recognized diagnostic entity. Predomina ...
* Hydrocarbon Oil Duty ** Hydrocarbon Oil Duties Act 1979 *Tobacco products duty **
Tobacco Products Duty Act 1979 Tobacco is the common name of several plants in the genus ''Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the chie ...
*Gaming duty **
Finance Act 1997 The Finance Act 1997 is an Act of Parliament, Act of the Parliament of the United Kingdom enacting the 1997 United Kingdom Budget. The ''Chancellor of the Exchequer'' delivers the annual budget speech outlining changes in spending, tax, duty and ...
(rates of gaming duty) *Amusement Machine Licence Duty **
Betting and Gaming Duties Act 1981 Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three elem ...
*
Vehicle Excise Duty Vehicle Excise Duty (VED; also known as "vehicle tax", "car tax", and more controversially as " road tax", and formerly as a "tax disc") is an annual tax that is levied as an excise duty and which must be paid for most types of powered vehicles whi ...
** Vehicle Excise and Registration Act 1994


Specific finance acts


Finance Act 1910

The Finance (1909–10) Act 1910 resulted in a significant net increase in taxation, and it also requisitioned a survey dubbed by
right-wing Right-wing politics describes the range of Ideology#Political ideologies, political ideologies that view certain social orders and Social stratification, hierarchies as inevitable, natural, normal, or desirable, typically supporting this pos ...
journalists the "
Lloyd George David Lloyd George, 1st Earl Lloyd-George of Dwyfor, (17 January 1863 – 26 March 1945) was Prime Minister of the United Kingdom from 1916 to 1922. He was a Liberal Party politician from Wales, known for leading the United Kingdom during ...
's
Domesday Domesday Book () – the Middle English spelling of "Doomsday Book" – is a manuscript record of the "Great Survey" of much of England and parts of Wales completed in 1086 by order of King William I, known as William the Conqueror. The manusc ...
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 . This tax was substantively altered by the repeal of s. 67 by the Finance Act 1920 which superseded it. As part of the survey, landowners had to fill in a form, and the resulting records are extremely useful for
local history Local history is the study of history in a geographically local context, often concentrating on a relatively small local community. It incorporates cultural and social aspects of history. Local history is not merely national history writ small ...
. The records today consist of: * working maps * valuation maps * valuation books * field books. 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).


Finance Act 1920

This included a new "Duty on licences for mechanically propelled vehicles" (
Vehicle Excise Duty Vehicle Excise Duty (VED; also known as "vehicle tax", "car tax", and more controversially as " road tax", and formerly as a "tax disc") is an annual tax that is levied as an excise duty and which must be paid for most types of powered vehicles whi ...
, 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.


Finance Act 1946

The 1946 Act established the National Land Fund and much of
National Savings and Investments National Savings and Investments (NS&I), formerly called the Post Office Savings Bank and National Savings, is a state-owned savings bank in the United Kingdom. It is both a non-ministerial government department and an executive agency of HM Tr ...
.


Finance Act 1948

The 1948 Act established the "Special Contribution", which was a one-off
wealth tax A wealth tax (also called a capital tax or equity tax) is a tax on an entity's holdings of assets. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and pension plans, ownershi ...
.


Finance Act 1965

The 1965 Act introduced
corporation tax A corporate tax, also called corporation tax or company tax, is a direct tax imposed on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed a ...
and
capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...
.


Finance Act 1972

The 1972 Act introduced
value added tax A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the en ...
.


Finance Act 1977

The Finance Act 1977 abolished the last remaining
tithe A tithe (; from Old English: ''teogoþa'' "tenth") is a one-tenth part of something, paid as a contribution to a religious organization or compulsory tax to government. Today, tithes are normally voluntary and paid in cash or cheques or more ...
s payable to the
Church of England The Church of England (C of E) is the established Christian church in England and the mother church of the international Anglican Communion. It traces its history to the Christian church recorded as existing in the Roman province of Brit ...
or
Church in Wales The Church in Wales ( cy, Yr Eglwys yng Nghymru) is an Anglican church in Wales, composed of six dioceses. The Archbishop of Wales does not have a fixed archiepiscopal see, but serves concurrently as one of the six diocesan bishops. The pos ...
.


Finance Act 2000

The Finance Act 2000 increased the
Climate Change Levy The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom. Scope and purpose Introduced on 1 April 2001 under the Finance Act 2000, it was forecast to cut annual emissions by 2.5 million tonnes b ...
.


Finance Act 2010

This Act shortly before the
2010 United Kingdom general election The 2010 United Kingdom general election was held on Thursday 6 May 2010, with 45,597,461 registered voters entitled to vote to elect members to the House of Commons. The election took place in 650 constituencies across the United Kingdom und ...
, 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. The Act also reversed a prospective rise enacted in the Finance Act 2007 of the
inheritance tax An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died. International tax law distinguishes between an e ...
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.


Finance (No. 2) Act 2010

This Act of 27 July 2010 under the
Coalition Government A coalition government is a form of government in which political parties cooperate to form a government. The usual reason for such an arrangement is that no single party has achieved an absolute majority after an election, an atypical outcome in ...
reduced the headline rate of
Capital Gains Tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...
to 18%. The Act increased the general rate of VAT from 17.5% to 20% (while cutting it for imported goods and materials from to 28.58% to 25% ).


Finance (No. 3) Act 2010

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.


Finance Act 2020

The Finance Act 2020 (2020 chapter 14) was enacted on 22 July 2020. Part 2 provides for the introduction of a Digital Services Tax.UK Legislation
Finance Act 2020, part 2
accessed 29 September 2020


Full title of the act including preamble and enacting formula


See also

*
Economic history of the United Kingdom The economic history of the United Kingdom relates the economic development in the British state from the absorption of Wales into the Kingdom of England after 1535 to the modern United Kingdom of Great Britain and Northern Ireland of the early ...
* History of the English fiscal system *
List of short titles This is a list of stock short titles that are used for legislation in one or more of the countries where short titles are used. It is also a list of articles that list or discuss legislation by short title or subject. * Act of Uniformity * Adminis ...


Notes and references

;Notes ;References {{UK legislation Finance in the United Kingdom Law of the United Kingdom