Contents of Finance (No. 2) Act 2023: the act received Royal Assent on 11 July 2023
Part 1 Income tax, corporation tax and capital gains tax
1.Income tax charge for tax year 2023-24
2.Main rates of income tax for tax year 2023-24
3.Default and savings rates of income tax for tax year 2023-24
4.Freezing starting rate limit for savings for tax year 2023-24
Corporation tax charge and rates
5.Charge and main rate for financial year 2024
6.Standard small profits rate and fraction for financial year 2024
7.Temporary full expensing etc for expenditure on plant or machinery
8.Annual investment allowance to remain at £1M beyond temporary period
9.First-year allowance for expenditure on electric vehicle charge points
Other reliefs relating to businesses
10.Relief for research and development
11.Treatment of profits from patents etc: small profits rate of corporation tax
12.Energy (oil and gas) profits levy: de-carbonisation allowance
13.Museums and galleries exhibition tax relief: extension of sunset date
14.Extension of the temporary increase in theatre tax credit etc
15.Seed enterprise investment scheme: increase of limits etc.
16.CSOP schemes: share value limit and share class
17.Enterprise management incentives: restricted shares and declarations
18.Lifetime allowance charge abolished
19.Certain lump sums to be taxed at marginal rate
21.Money purchase annual allowance
23.Modification of certain existing transitional protections
24.Collective money purchase arrangements
25.Relief relating to net pay arrangements
26.Payments under Jobs Growth Wales Plus
27.Power to clarify tax treatment of devolved social security benefits
28.Qualifying care relief: increase in individual’s limit
Estates in administration and trusts
29.Estates in administration and trusts
Provisions relating to insurance
30.Transfer of basic life assurance and general annuity business
31.Certain re-insurance sums not to count as deemed I-E receipts
32.Insurers in difficulties: write-down orders for corporation tax purposes
33.Insurers in difficulties: write-down orders in case of pension schemes
Miscellaneous corporation tax matters
34.Corporate interest restriction
36.Share exchanges involving non-UK incorporated close companies
37.Records relating to transfer pricing
38.Double taxation relief: foreign nominal rates
39.Payments to farmers under the lump sum exit scheme etc
40.Contracts completed after ordinary notification period
41.Separated spouses and civil partners
42.Carried interest: election to pay tax as scheme profits arise
43.Relief on disposal of joint interests in land
243.Relief on disposal of joint interests in land
Chapter 1 Charge to alcohol duty
44.Meaning of “alcoholic product”
46.Categories of alcoholic products: regulations
49.Excise duty point and payment
50.Qualifying draught products: reduced rates
51.Alcoholic products qualifying for draught relief
52.Repackaging qualifying draught products
53.Repackaging in contravention of section 52 (2)
Chapter 3 Small producer relief
54.Small producer relief: discounted rates
55.Small producer alcoholic products
57.“Alcohol production amount” etc
59.Duty discount for small producer alcoholic products
60.Assessments where incorrectly low rate of alcohol duty applied
61.Mergers: general provisions
62.Modified “small production premises” test
64.Adjusted post-merger amount
65.Early termination of merger transition period
69.“Producer”, “production premises”, “group premises” etc
71.Index of defined expressions: Chapter 3
Chapter 4 Other reliefs and exemptions
72.Exemption: production for personal consumption
78.Authorised use for certain purposes
79.Imported goods not for human consumption
80.Restrictions on use of certain articles
81.Further provision about remission and repayment
Chapter 5 Regulated activities and approvals
82.Approval requirement: producers
83.Supplementary provision about approvals
84.Exemption: production for personal consumption
85.Exemption: research and experiments
87.Post-duty point dilution of alcoholic products
88.Alcoholic products regulations
91.Licence to manufacture and deal wholesale in denatured alcohol
92.Regulations relating to denatured alcohol
94.Defaults in respect of denatured alcohol: possession of excess alcoholic products
95.Defaults in respect of denatured alcohol: supply and use of denatured alcohol
97.Prohibition of use of denatured alcohol etc as beverage or medicine
Chapter 7 Wholesaling of controlled alcoholic products
99.Further provision relating to definitions
100.Approval to carry on controlled activity
101.The register of approved wholesalers
102.Regulations relating to approval, registration and controlled activities
103.Restriction on buying controlled alcoholic products wholesale
107.Index of defined expressions: Chapter 7
109.Forfeiture: supplementary provision
110.Removal of goods: application of section 95 of CEMA 1979
Chapter 9 repeals, further amendments and transitional provisions
Repeals and further amendments
114.Minor and consequential amendments
116.Temporary provision: cider
117.Interpretation of this Part
118.Regulations: supplementary and general
Part 3 Multinational top-up tax
Chapter 1 Introduction and charge
121.Introduction to multinational top-up tax
123.Amount charged by reference to “top-up amounts”
124.How to calculate top-up amounts and attribute them
125.Administration of multinational top-up tax
Chapter 2 Qualifying multinational groups and their members
126.Meaning of “multinational group” and “ultimate parent”
Qualifying multinational groups
129.Qualifying multinational groups
130.Change in composition of multinational group
131.Whether de-merged groups meet the revenue threshold
Chapter 3 Effective tax rate of members of a multinational group in a territory
Chapter 4 Calculation of adjusted profits of members of a multinational group
Adjusted profits of a member of a multinational group
133.Adjusted profits of a member of a multinational group
134.Underlying profits as determined for statements of ultimate parent
135.Underlying profits of permanent establishments
136.Underlying profits accounts
137.No amounts outside of profit and loss account to be included
Adjustments of underlying profits
138.Profits adjusted to be before tax
139.Profits adjusted to be profits before consolidation adjustments to eliminate intragroup transactions
140.Profits adjusted to be profits before certain purchase accounting adjustments
141.General exclusion of dividends
142.Excluded equity gain or loss
143.Included revaluation method gain or loss
144.Adjustments for asymmetric foreign currency income and losses
145.Exclusion of expenses for illegal payments, fines and penalties
146.Adjustment for changes in accounting policies and prior period errors
148.Treatment of qualifying refundable tax credits
149.Arm’s length requirement for certain transactions
150.Transactions between members of a multinational group: differences with accounting for tax
151.Adjustments for companies in distress
152.Adjustments where life assurance business carried on
153.Exclusion of certain insurance reserve movement expense
154.Exclusion of qualifying intra-group financing arrangement expenses
155.Qualifying tier one capital
156.Exclusion of international shipping profits
157.Core international shipping profits
158.Ancillary international shipping profits
Adjustments only applicable to permanent establishments
159.Permanent establishment income and expense attribution
160.Attribution of losses between permanent establishment and main entity
Elections to treat certain amounts differently
161.Election to use realisation principle
162.Election to reflect deductions for stock-based compensation
163.Election to spread certain capital gains over five years
164.Election to exclude intra-group transactions
165.Election to have excluded equity gains and losses included
166.Election in relation to hedging currency risk in ownership interests
Dealing with transparency and entities subject to qualifying dividend regime
167.Underlying profits of hybrids
168.Underlying profits of transparent and reverse hybrid entities
169.Certain non tax resident entities to be treated as flow-through entities
170.Adjustments for ultimate parent that is a flow-through entity
171.Ultimate parent subject to qualifying dividend regime
172.Application of section 171 to members in the same territory as the ultimate parent
174.Amount of covered tax balance
175.Amounts excluded from covered tax balance
176.Amounts to be reflected in covered tax balance
178.Reallocation of tax expense
179.Controlled foreign company tax regimes
181.Distributions from other members of a group
Dealing with deferred tax assets etc
182.Total deferred tax adjustment amount
183.Qualifying foreign tax credits (substitute loss carry forward assets)
184.Recaptured deferred tax liabilities
185.Inclusion of existing deferred tax assets and liabilities on entry into regime
186.Deferred tax assets recorded at less than minimum rate
187.Election for losses to be treated as special loss deferred tax assets
188.Further provision about elections under section 187
Eligible distribution tax systems: deemed taxes
189.Deemed distribution tax election
190.Deemed distribution tax amount
191.Reduction of recapture amount
192.Recalculation where member leaves the group
Chapter 6 Calculation of top-up amounts
193.Calculation of top-up amounts
194.Total top-up amount for a territory
195.Substance based income exclusion
197.Eligible tangible asset amount
198.Eligible payroll costs and eligible tangible asset amount: permanent establishments and flow-through entities
199.Election to treat total top-up amount as nil
Chapter 7 Allocating top-up amounts to responsible members
200.Top-up amounts multiplied by inclusion ratio
202.Covered taxes balance less than nil when members in a territory have a profit
203.Additional top-up amounts where covered taxes less than expected
204.Allocation of collective additional amount under section 203 to members
205.Election to carry forward and reduce collective additional amount
Additional top-up amounts on recalculations
206.Additional top-up amounts where recalculations required
207.Allocation of collective additional amounts under section 206 to members
208.Member joining or leaving multinational group
209.When transfer of controlling interest treated as acquisition of assets and liabilities
210.Transfer of assets or liabilities from a member of a multinational group
211.Transfer of assets or liabilities to a member of a multinational group
212.Meaning of “qualifying reorganisation”
Elections in relation to investment entities
213.Investment entity tax transparency election
214.Taxable distribution method election
215.Undistributed income amount
216.Election where assets and liabilities adjusted to fair value for tax purposes
217.Post filing adjustments of covered taxes
218.Effect of rate changes to deferred tax expense
219.Adjustment where covered taxes not paid
Chapter 9 Special provision for investment entities, joint venture groups and minority-owned members
220.Top-up amount of investment entity
221.Substance based income exclusion for investment entity
222.Investment entity effective tax rate
224.Additional top-up amounts of investment entities
225.Attribution of top-up amounts and additional top-up amounts to responsible member
227.Application of Part to joint venture groups
Application to multi-parent groups
230.Meaning of terms and concepts used in this Part
232.Permanent establishments treated as entities
233.Treatment of protected cell companies
234.Governmental, international and non-profit entities
235.Pension funds and pension services entities
236.Investment funds and investment entities
237.Intermediate and partially-owned parent members
238.Tax transparency of entities
Provision relating to location of entities
240.Location of flow-through entities and permanent establishments
242.Ownership interests and controlling interests
243.Calculating percentage ownership interests of a specific entity or individual
244.Calculating percentage ownership interests of a class
245.Calculating percentage ownership interests: excluded entities
246.Calculating percentage direct and indirect ownership interests
247.Timing of transfers of interests
248.Exclusion of indirect interests held through ultimate parent
Financial statements and accounting period
249.Consolidated financial statements
250.Acceptable accounting standards
252.Application to sovereign wealth funds
253.Disqualified and qualified refundable imputation taxes
256.Qualifying domestic top-up tax
257.Qualifying undertaxed profits tax
Chapter 11 General and miscellaneous provision
261.Index of defined expressions
262.Power to amend to ensure consistency with Pillar Two
264.Multinational top-up tax to apply from 31 December 2023
265.Introduction to domestic top-up tax
Chapter 2 Charge to domestic top-up tax
271.Election to make one member of a group liable for amounts charged
Chapter 3 Application of multinational top-up tax provisions
272.Determining top-up amounts of entity that is a member of a group
273.Determining top-up amounts of entity that is not a member of a group
274.Application of section 262
275.Application of Schedule 14
276.Application of transitional provision
277.Index of defined expressions
278.Domestic top-up tax to apply from 31 December 2023
Part 5 Electricity generator levy
279.Charge on exceptional generation receipts
280.Key concepts (generating undertaking etc)
Calculation of exceptional generation receipts
285.Exceptional generation fuel costs
286.Exceptional revenue sharing costs
Groups, partnerships and joint ventures
288.Lead member of a group and its qualifying periods
289.Liability of members of groups
290.Election for members with significant minority shareholding to pay levy
Attribution and surrender of amounts: joint ventures and significant minority shareholders
293.Non-chargeable amounts of joint venture to be attributed to participants
294.Generation acquired and supplied by JV participants
295.Arrangements that reflect receipts (JV participants)
296.Generation acquired and supplied by significant minority shareholders
297.Arrangements that reflect receipts (significant minority shareholders)
299.Amount that may be surrendered and use of that amount
Treatment of company as transparent as alternative to attribution and surrender
300.Election to treat certain companies as transparent
301.Effect of company being transparent
302.General application of corporation tax administration
304.Requirement to provide information about payments
305.Claims to shortfall amounts
306.Application of Part 5A of TMA 1970 and Instalment Payments Regulations
307.Application of Part 5 of CTA 2010 for the purposes of determining interests
310.Interaction of electricity generator levy with corporation tax
311.Regulations under this Part
312.Minor definitions relating to electricity market
314.Transactions funded with the assistance of a public subsidy
316.Dumping, subsidisation and safeguarding remedies
317.Rulings as to method of valuation of goods
318.Discharging goods from free-circulation procedure subject to guarantee
320.Rates of tobacco products duty
324.Rates of vehicle excise duty
325.Reform of HGV road user levy
326.End of exempt period for HGV road user levy
328.Rates of climate change levy
329.Rate of plastic packaging tax
330.Aggregates levy: exemptions and exploitation
Part 7 Miscellaneous and final
Freeports and investment zones
333.Right to repayment of income tax to be inalienable
334.Late payment interest on value added tax
335.Penalties for failure to pay value added tax
336.VAT credits: repayment interest due where evidence not provided
337.Insurance premium tax: power to make regulations about notifications
338.Penalties for failure to make payments of plastic packaging tax on time
Management of customs and excise
340.Approved aerodromes: minor and consequential amendments
342.Licensing authorities: requirements to give or obtain tax information
343.Section 342: consequential amendments
Charities and community amateur sports clubs
344.Definition of “charity” restricted to UK charities
345.Definition of “community amateur sports club” restricted to UK clubs
Homes for Ukraine Sponsorship Scheme
347.Abolition of the Office of Tax Simplification
348.Pension benefits and inheritance tax
349.International arrangements for exchanging information
350.Payment of unclaimed money in court into the Consolidated Fund
351.Financial sanctions regulations: prohibition on certain payments by HMRC
Schedules
Relief for research and development
Estates in administration and trusts
Corporate interest restriction etc.
Records relating to transfer pricing
Categories of alcoholic products: interpretation
Qualifying draught products: reduced rates
Small producer alcoholic products: duty discount
Penalties for contraventions of alcohol wholesaling provisions
Alcohol duty: reviews and appeals
Alcohol duty: minor and consequential amendments
Administration of multinational top-up tax
Multinational top-up tax: elections
Multinational top-up tax: transitional provision
Index of expressions defined or explained in Parts 3 and 4
Administration of domestic top-up tax
Dumping, subsidisation and safeguarding remedies
Bilateral safeguarding remedies
Soft drinks industry levy: flavour concentrates
