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Finance Act 2021 receives early Royal Assent


Published: 15 Jun 2021 Update History

It had been anticipated that Finance Act 2021 would receive Royal Assent in July, but it took place on 10 June. Extended loss carry-back, super deduction and many other measures come into force.

Royal Assent of Finance Act 2021 was granted on 10 June 2021. The Act contains key pieces of legislation that ICAEW’s Tax Faculty made representations upon.

Many of the measures contained in the Act have different start dates to Royal Assent. For example, the extended loss-carry back provisions apply to trading losses arising in company accounting periods ending between 1 April 2020 and 31 March 2022 and trading losses of unincorporated businesses of the 2020/21 and 2021/22 tax years.

However, it was not possible to make a claim under these new rules or for HMRC to issue repayments before Royal Assent happened. HMRC is now expected to update its guidance on the mechanism for making de minimis claims (standalone or group company with losses capable of providing relief up to a maximum of £200,000).

Another big-ticket item contained in the Act is the 130% super deduction for companies. ICAEW called for an extension of this provision to leasing assets and this was partially granted by virtue of an amendment at the report stage of the Bill which allows claims to be made for expenditure on “background plant and machinery” contained within leased buildings.

Royal Assent also triggers amendments to HMRC’s civil information powers by introducing a financial institution notice (FIN), which makes it easier for HMRC to obtain information about a taxpayer from a third party, such as the taxpayer’s bank or building society. ICAEW expressed concern that there is no requirement for HMRC to obtain prior approval from the taxpayer or tribunal before it issues a FIN and this removes a major safeguard for taxpayers.

Royal Assent will also prompt the issue of commencement orders to bring into force some of the provisions contained in the Act, for example:

  • the plastic packaging tax;
  • penalties for late filing of returns;
  • penalties for late payment of tax; and
  • VAT late payment and repayment interest.

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