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Draft Finance Bill 2022-23: indirect tax measures

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Published: 21 Jul 2022 Update History

The draft legislation, released on 20 July, includes numerous pre-announced measures, except for the government’s response on alcohol duty.

Insurance premium tax: power to make regulations by reference to notices

HMRC is being given the power to make regulations that will permit it to move insurance premium tax (IPT) forms from secondary legislation and into a public notice.

This change follows a 2021 consultation. It will enable HMRC to amend IPT forms without the need to legislate with the intention that this change will allow HMRC to respond more quickly when changes are required.

Further details:

Air passenger duty: banding reforms from April 2023

The government has published draft legislation to reform air passenger duty (APD) banding and rates from 1 April 2023. The legislation will introduce a new domestic band for APD for flights within the UK as well as an ultra long-haul band. The ultra long-haul band will cover destinations with capitals located more than 5,500 miles from London.

The draft legislation sets the rates for the new bands and updates the rates for the existing bands. The reduced rate for the domestic band will be £6.50, while the standard rate will be £13.

The short-haul (Band A) and long-haul (Band B) rates will be increased by the retail price index, with the standard rates set, with effect from 1 April 2023, at £26 and £191 respectively. The standard rate for the new ultra long-haul band (Band C) will be £200.

Further details:

Aggregates levy: changes affecting aggregate from construction sites

The government has published draft legislation that will make two changes to the treatment of aggregate extracted during construction.

Currently, aggregates levy legislation provides an exemption for aggregate that is returned, unmixed, to the site from which it is won. The proposed legislation will limit this exemption to specific circumstances. Under the draft legislation, this exemption will only apply to aggregate returned to the original site “for a purpose connected to winning aggregate or other minerals”, for example, building haul roads or ramps.

The second change is the introduction of a new exemption for aggregate arising unavoidably as a by-product of construction. This is a general exemption that replaces several existing exemptions for unavoidable by-product from specific types of construction.

These changes are due to take effect from 1 April 2023.

Further detail:

Soft drinks industry levy: concentrates mixed with sugar when dispensed

The government has published draft legislation with the intention of closing a “minor loophole” within the soft drinks industry levy.

The measure extends the definition of soft drinks liable to the levy to include “packaged concentrates which are mixed with sugar when dispensed from a soft drink fountain machine”.

The change is due to take effect from 1 April 2023.

Further details:

Amendment to the Customs and Excise Management Act (CEMA) 1979 – control of movement of aircraft into and out of the United Kingdom

The government has published draft legislation which will:

  • put in place a process for HMRC to grant, amend and revoke approval governing the movement of people and goods through aerodromes that are not customs and excise airports; and
  • requires affected aerodromes to be approved and comply with their terms of approval.

Approvals under this legislation will not be put into practice until 1 January 2024 onwards.

Further details:

Alcohol duty reform

Although the government consulted on alcohol duty reform between October 2021 and January 2022, there has not yet been any announcement regarding this.

The consultation included policies on:

  • changes to duty structures;
  • new rates for some products sold on draught;
  • extension of small producer reliefs; and
  • simplification of the administrative regime.

In the written ministerial statement accompanying the draft Finance Bill legislation, the government announced that it is still considering the consultation feedback and will respond in the autumn.

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