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Finance (No.2) Act 2023 receives Royal Assent


Published: 18 Jul 2023 Update History

Finance (No. 2) Act 2023 received Royal Assent on 11 July, bringing into law various tax measures with effect from that date. Full expensing, the abolition of the pension lifetime allowance charge, and many other measures come into force.

Royal Assent of Finance (No. 2) Act 2023 was granted on 11 July 2023. Many of the measures contained in the Act have different start dates to Royal Assent. 

For example:  

  • temporary full expensing applies for qualifying expenditure incurred on or after 1 April 2023 but before 1 April 2026; 
  • no pension lifetime allowance charge arises for the tax year 2023/24 or any subsequent tax year, but new limits on the tax-free amount of lump sums from funds exceeding the lifetime allowance are introduced; and
  • the new multinational top-up and domestic top-up taxes have effect in relation to accounting periods commencing on or after 31 December 2023. 

However, there are a few measures that apply from the date of Royal Assent. These include: 

  • a new regulation-making power to amend the legislative table of taxable social security payments to add new social security benefits created by devolved administrations (see s27);
  • regulation-making powers contained in Part 2 of the Act relating to the reform of alcohol duty (see s120);
  • changes to the quarterly instalment provisions for large and very large companies to include the electricity generator levy. Although the levy applies from 1 January 2023, payments will fall due for payment only after 11 July 2023. The first instalment falling due after Royal Assent must be increased by any amounts of the levy that would have been due in earlier instalments for the accounting period (see s306);
  • the introduction of review and appeal rights concerning HMRC’s power to require financial guarantees to be given for duty amounts payable on imported goods (see s318); 
  • a measure to ensure that payments from an authorised reclaim fund are treated for the purposes of income tax as if they were from the pension asset that was initially transferred (see s348);
  • clarifying how the removal of a restriction on the exercise of civil information powers in the Act applies to requests made before the date of Royal Assent. Penalties imposed for contravening a requirement prior to Royal Assent have no effect and repayments can be claimed (see s352);
  • some of the changes to the corporate interest restriction – namely in respect of pre-trading finance costs, appointment of reporting companies, and HMRC determinations (see Pt 3, Sch 3). Revised statements must be submitted within 30 days of Royal Assent to be treated as received on time (see Pt 4, Sch 3);
  • regulation-making powers in respect of dumping, subsidisation, and safeguarding remedies (see para 17, Sch 19); and
  • regulation-making powers in respect of bilateral safeguarding remedies of the UK and its free trade agreement partners (see para 3, Sch 20).  
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