Finance Bill 2021-22 – changes you need to know about

New inclusions in the Finance Bill 2021-22

The normal minimum pension age (NMPA) is to change from 55 to 57 in April 2028. This means you have to wait an extra two years before you can draw benefits from your pension scheme without incurring unauthorised payment charges. However, there will be exemptions – notably for people who are members of uniformed public service pension schemes and those with unqualified rights to take their pension below the age of 57.

Also on the topic of pensions, the legislation addresses something called the ‘Scheme Pays’ deadline. ‘Scheme Pays’ is when you ask your pension scheme to settle annual allowance charges from previous years by reducing future benefits. The change will extend the reporting and payment deadline during which you can do this.

Additional measures include sanctions to tackle tobacco duty evasion, along with powers to tackle electronic sales suppression. The latter refers to the fraudulent practice of using technology to artificially reduce reported sales and thus tax liabilities.

Policy announcements

In addition to the new legislation, the government also made a number of policy announcements. In brief, upcoming legislation will ensure that payments made by the London Capital & Finance Compensation Scheme will not be subject to Capital Gains Tax. Similarly, new laws will ensure that payments made by local authorities to families are not subject to income tax. These include payments from the Covid Winter Grant Scheme, Covid Local Grant Scheme and other similar schemes.

New Making Tax Digital publication

Finally, the government announced the publication of a new report, entitled ‘Impact of Making Tax Digital for VAT’. This looks at the extent to which MTD for VAT is achieving its objectives. To find out more about Making Tax Digital visit this page where you can read and download our MTD guide.