7 March 2025
The remaining Commons stages of Finance Bill 2024-25 took place on 3 March 2025. During the Report Stage debate, the only amendments accepted were those tabled by the government last week (see previous Business Tax Briefing for details). MPs then voted to give the Finance Bill its Third Reading.
The Bill has now moved to the House of Lords where it had its First Reading on 4 March 2025. The Lords’ version of the Finance Bill, reflecting all amendments made during the Bill’s passage through the House of Commons, has been published. This will effectively be the text of Finance Act 2025, as the Lords cannot change the Bill. Remaining Lords stages are scheduled for 19 March 2025, after which the Bill will be sent for Royal Assent.
HM Treasury has launched a new consultation on how the taxation of UK offshore oil and gas will respond to future price shocks. The current energy profits levy, introduced in 2022, is a temporary measure set to expire in 2030 (or earlier if market prices return to below benchmark levels sooner). The government intends to enact a permanent replacement mechanism that will form an integral part of the oil and gas taxation regime but to apply only when there are unusually high prices. The consultation seeks stakeholder views on a number of policy options, including whether such a mechanism should use a revenue-based model or a profit-based model, and how to determine ‘unusually high prices’ for the purposes of setting the mechanism’s thresholds. The consultation is open until 28 May 2025.
On 20 February 2025, the Scottish parliament passed a statutory resolution setting the rates of income tax applicable to the non-savings non-dividend income of Scottish resident individuals for the tax year 2025/26 (6 April 2025 – 5 April 2026). The rates and bands approved by MSPs were those originally proposed by the Scottish government in its Budget of 4 December 2024.
Similarly, on 3 March 2025, the Welsh Senedd agreed a motion setting the applicable rates for the non-savings non-dividend income of Welsh resident individuals for 2025/26. In line with the proposals in the Welsh draft Budget in December 2024, the rates approved mean that Welsh taxpayers will continue to pay the same income tax in 2025/26 as their counterparts in England and Northern Ireland. Unlike in Scotland, the Senedd does not have the power to vary tax bands or change the number of rates. In the Budget debate, Finance Secretary Mark Drakeford MS stated his intention “to commission an external review of our current income tax powers, exploring, for example, the more flexible set of powers available to the Scottish Parliament, as well as other reform possibilities”.
HM Treasury have made the Taxes (Interest Rate) (Amendment) Regulations 2025 (SI 2025/270). The regulations will increase the official rate of interest that is used, inter alia, for the purposes of calculating any taxable benefit-in-kind for employees and directors arising on low-interest employment-related loans. The regulations will increase the generally applicable rate from 2.25% to 3.75% with effect from 6 April 2025. This figure had been set at 2.25% since 6 April 2023.
The accompanying explanatory memorandum includes a reminder of the government’s Autumn Budget 2024 announcement that, from 6 April 2025, the Treasury may increase or decrease the official rate of interest during a tax year, as appropriate, following quarterly reviews of market rates by HMRC.
The Gambling Levy Regulations 2025 (SI 2025/213) have been made, requiring holders of operating licences issued under the Gambling Act 2005 to pay an annual levy to the Gambling Commission. The Regulations will come into force on 6 April 2025. The levy rate ranges from 0.1% to 1.1% of Gross Gambling Yield, depending on the nature of the licence. Levy periods will in general run for 12 months from 1 April each year, with payment in respect of each levy period due on the following 1 October. However, the first levy period for most operators will be the nine months starting from 1 July 2024, to reflect how the Gambling Commission collects the relevant data. The Gambling Commission has indicated that it intends to publish guidance on the calculation, payment, collection, and enforcement of the levy before 6 April 2025. (Contact: Matt Davies)
The next EMEA Dbriefs tax webcast is on Wednesday 12 March 2025 at 12.00 GMT/13.00 CET. In Withholding Tax for UK borrowers, our panel will discuss increasing administrative requirements, HMRC scrutiny, and developing case law in relation to the obligation to withhold UK tax on cross-border interest payments. The webcast will also look at the UK domestic withholding tax rules and exemptions, relevant international developments, and commonly encountered challenges seen in practice.