A Finance Act is the headline fiscal (budgetary) legislation enacted by the

UK Parliament The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body of the United Kingdom, and may also legislate for the Crown Dependencies and the British Overseas Territories. It meets at the Palace of ...

, 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 (also known as a 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. La ...

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 the head of HM Treasury, His Majesty's Treasury. As one of the four Great Offices of State, t ...

delivers a Budget speech on Budget Day, outlining changes in spending, as well as

tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

and

duty A duty (from "due" meaning "that which is owing"; , past participle of ; , whence "debt") is a commitment or expectation to perform some action in general or if certain circumstances arise. A duty may arise from a system of ethics or morality, e ...

. 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 an electoral process to choose most or all members of a governing body at the same time. They are distinct from By-election, by-elections, which fill individual seats that have become vacant between general elections. Gener ...

, 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 Taxation of Chargeable Gains Act 1992 (c. 12) is an act of Parliament which governs the levying of capital gains tax in the United Kingdom. This is a tax on the increase in the value of an asset between the date of purchase and the date of sa ...

. 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 or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...

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. Tax ...

Corporation Tax A corporate tax, also called corporation tax or company tax or corporate income tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but i ...

, 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. In South Africa, capital g ...

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 the continued Alcoholic beverage, drinking of alcohol (drug), alcohol despite it causing problems. Some definitions require evidence of Substance dependence, dependence and Drug withdrawal, withdrawal. Problematic use of alco ...

* Hydrocarbon Oil Duty **

Hydrocarbon Oil Duties Act 1979 In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons are examples of group 14 hydrides. Hydrocarbons are generally colourless and hydrophobic; their odor is usually faint, and may b ...

*Tobacco products duty ** Tobacco Products Duty Act 1979 *Gaming duty ** Finance Act 1997 (rates of gaming duty) *Amusement Machine Licence Duty ** Betting and Gaming Duties Act 1981 * Vehicle Excise Duty **

Vehicle Excise and Registration Act 1994 A vehicle () is a machine designed for self-propulsion, usually to transport people, cargo, or both. The term "vehicle" typically refers to land vehicles such as human-powered vehicles (e.g. bicycles, tricycles, velomobiles), animal-powered tr ...

Specific finance acts

Finance Act 1910

The

Finance (1909-10) Act 1910 The 1909/1910 People's Budget was a proposal of the Liberal government that introduced unprecedented taxes on the lands and incomes of Britain's wealthy to fund new social welfare programmes, such as non-contributary old age pensions under Old ...

( 10 Edw. 7. & 1 Geo. 5. c. 8) resulted in a significant net increase in taxation, and it also requisitioned a survey dubbed by

right-wing Right-wing politics is the range of political ideologies that view certain social orders and hierarchies as inevitable, natural, normal, or desirable, typically supporting this position based on natural law, economics, authority, property ...

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. A Liberal Party (United Kingdom), Liberal Party politician from Wales, he was known for leadi ...

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 at the behest of William the Conqueror. The manuscript was originally known by ...

land-survey", in particular entailing the 1910–1915

valuation map Valuation may refer to: Economics *Valuation (finance), the determination of the economic value of an asset or liability **Real estate appraisal, sometimes called ''property valuation'' (especially in British English), the appraisal of land or bui ...

s. Each property and related right under and over land (hereditament) in England and Wales was surveyed and valued, so

Increment Value Duty Increment value duty was a UK tax based on The Finance (1909-1910) Act (10 Edw. VII, c.8) - the People's Budget - in response to the unequal ownership of land in the early 20th century. The tax was based on the increase in value of property due t ...

based on

land value Real estate appraisal, home appraisal, property valuation or land valuation is the process of assessing the value of real property (usually market value). The appraisal is conducted by a licensed appraiser. Real estate transactions often require ...

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 history, cultural and social history, social aspects of history. Local history is not mer ...

. 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 National archives are the archives of a country. The concept evolved in various nations at the dawn of modernity based on the impact of nationalism upon bureaucratic processes of paperwork retention. Conceptual development From the Middle Ages i ...

Kew Kew () is a district in the London Borough of Richmond upon Thames. Its population at the 2011 census was 11,436. Kew is the location of the Royal Botanic Gardens ("Kew Gardens"), now a World Heritage Site, which includes Kew Palace. Kew is ...

, 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

The Finance Act 1920 ( 10 & 11 Geo. 5. c. 18) 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.

Finance Act 1946

The Finance Act 1946 ( 9 & 10 Geo. 6. c. 64) established the

National Land Fund The National Land Fund of the United Kingdom was a sum of money held by HM Treasury for the purpose of securing culturally significant property for the nation as a memorial to the dead of World War II. It was created in 1946. Proposed by Chancel ...

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 T ...

Finance Act 1948

The Finance Act 1948 ( 11 & 12 Geo. 6. c. 49) 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 or an entity's net worth. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and ...

Finance Act 1963

The Finance Act 1963 (c. 25) abolished Schedule A of

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. Tax ...

, which was a tax on the

imputed rent Imputed rent is the rental price an individual would pay for an asset they own. The concept applies to any capital good, but it is most commonly used in housing markets to measure the rent homeowners would pay for a housing unit equivalent to the ...

of owner-occupiers. It also abolished the

land tax A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. Some economists favor LVT, arguing it does not cause economic inefficiency, and helps reduce economic inequali ...

Finance Act 1965

The Finance Act 1965 (c. 25) introduced

corporation tax A corporate tax, also called corporation tax or company tax or corporate income tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but i ...

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. In South Africa, capital g ...

Finance Act 1972

The Finance Act 1972 (c. 41) introduced

value added tax A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...

Finance Act 1977

The Finance Act 1977 (c. 36) 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. Modern tithes are normally voluntary and paid in money, cash, cheques or v ...

s payable to the

Church of England The Church of England (C of E) is the State religion#State churches, established List of Christian denominations, Christian church in England and the Crown Dependencies. It is the mother church of the Anglicanism, Anglican Christian tradition, ...

Church in Wales The Church in Wales () 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 position is currently held b ...

Finance Act 2000

The Finance Act 2000 (c. 17) 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 ...

Finance Act 2010

Shortly before the

2010 United Kingdom general election The 2010 United Kingdom general election was held on Thursday 6 May 2010, to elect 650 Members of Parliament (or MPs) to the House of Commons of the United Kingdom, House of Commons. The first to be held after the minimum age for candidates was ...

, the

Finance Act 2010 The Finance Act 2010 (c. 13) is an act of the Parliament of the United Kingdom enacting the March 2010 United Kingdom Budget. The ''Chancellor of the Exchequer'' delivers the annual budget speech outlining changes in spending, tax, duty and oth ...

(c. 13) 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 (c. 11) of the

inheritance tax International tax law distinguishes between an estate tax and an 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 pro ...

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

The Finance (No. 2) Act 2010 (c. 31) under the

Coalition Government A coalition government, or coalition cabinet, is a government by political parties that enter into a power-sharing arrangement of the executive. Coalition governments usually occur when no single party has achieved an absolute majority after an ...

reduced the headline rate of

to 18%. 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%).

Finance (No. 3) Act 2010

Enacted on 16 December 2010, the Finance (No. 3) Act 2010 (c. 33) 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 (No. 2) Act 2017

The Finance (No. 2) Act 2017 (c. 14) was enacted on 16 November 2017. The act implements tax measures laid out in the November 2017 United Kingdom budget.

Finance Act 2020

The Finance Act 2020 (c. 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

Notes and references

Notes

References

{{Finance Acts Finance in the United Kingdom Law of the United Kingdom United Kingdom Acts of Parliament 1948 United Kingdom Acts of Parliament 1946 United Kingdom Acts of Parliament 1920 United Kingdom Acts of Parliament 1910