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UK Act of Parliament
2023
United Kingdom
Finance (No. 2) Act 2023 (made full expensing permanent)
At a glance
Enforced by
What's here
24 compliance obligations, 6 practical guides across 2 topics · 3 journeys
Penalty landscape
6 of 24 obligations carry an unlimited fine. 4 carry different penalties and 14 have no criminal penalty — flagged in the list below.
Who this Act binds
Business-side actors with duties under this Act, ranked by how often they appear.
- Any Person 15
- Trader 3
- Manufacturer 1
Plus 5 non-business duties on Crown ministers, regulators, local authorities or tribunals — shown collapsed under each section below.
Step-by-step journeys using this legislation
Walkthroughs that take you from a real business situation to compliance.
Relevant guidance
Practical guides for businesses affected by this Act, ordered by how closely they engage with it.
Supporting — topic alignment
2 guidesMentioned in related content
4 guidesOther Acts binding the same actors
For each actor bound by this Act, the other UK Acts that bind them most often. Useful for understanding the full compliance landscape facing each role.
Any Person also bound by 749 other Acts (top 5 shown)
- Human Medicines Regulations 2012 2012 110 duties
- Licensing Act 2003 2003 105 duties
- Merchant Shipping Act 1995 1995 97 duties
- Road Traffic Act 1988 1988 95 duties
- Air Navigation Order 2016 2016 86 duties
Traders also bound by 219 other Acts (top 5 shown)
- Value Added Tax Regulations 1995 1995 952 duties
- TULRCA 1992 1992 39 duties
- Companies Act 2006 2006 39 duties
- Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 2013 39 duties
- The Customs (Import Duty) (EU Exit) Regulations 2018 2018 33 duties
Manufacturers also bound by 82 other Acts (top 5 shown)
- Toys (Safety) Regulations 2011 2011 27 duties
- Radio Equipment Regulations 2017 2017 25 duties
- Medical Devices Regulations 2002 2002 23 duties
- Lifts Regulations 2016 2016 22 duties
- Electromagnetic Compatibility Regulations 2016 2016 21 duties
What this Act requires
Sections that create concrete duties on businesses or carry penalties. Procedural and definitional sections are folded into the “Browse other sections” expander at the bottom of each group. Click any section title to read the source text on legislation.gov.uk.
Part 1 — Income tax, corporation tax and capital gains tax
Browse 43 other sections in this Part — procedural / definitional / commencement
Income tax charge for tax year 2023-24
Main rates of income tax for tax year 2023-24
Default and savings rates of income tax for tax year 2023-24
Freezing starting rate limit for savings for tax year 2023-24
Charge and main rate for financial year 2024
Standard small profits rate and fraction for financial year 2024
Temporary full expensing etc for expenditure on plant or machinery
Annual investment allowance to remain at £1M beyond temporary period
First-year allowance for expenditure on electric vehicle charge points
Relief for research and development
Treatment of profits from patents etc: small profits rate of corporation tax
Energy (oil and gas) profits levy: de-carbonisation allowance
Museums and galleries exhibition tax relief: extension of sunset date
Extension of the temporary increase in theatre tax credit etc
Seed enterprise investment scheme: increase of limits etc.
CSOP schemes: share value limit and share class
Enterprise management incentives: restricted shares and declarations
Lifetime allowance charge abolished
Certain lump sums to be taxed at marginal rate
Annual allowance increased
Money purchase annual allowance
Annual allowance: tapering
Modification of certain existing transitional protections
Collective money purchase arrangements
Relief relating to net pay arrangements
Payments under Jobs Growth Wales Plus
Power to clarify tax treatment of devolved social security benefits
Qualifying care relief: increase in individual’s limit
Estates in administration and trusts
Transfer of basic life assurance and general annuity business
Certain re-insurance sums not to count as deemed I-E receipts
Insurers in difficulties: write-down orders for corporation tax purposes
Insurers in difficulties: write-down orders in case of pension schemes
Corporate interest restriction
Investment vehicles
Share exchanges involving non-UK incorporated close companies
Records relating to transfer pricing
Double taxation relief: foreign nominal rates
Payments to farmers under the lump sum exit scheme etc
Contracts completed after ordinary notification period
Separated spouses and civil partners
Carried interest: election to pay tax as scheme profits arise
Relief on disposal of joint interests in land
Part 2 — Alcohol Duty
Alcohol duty: charge
- Pay alcohol duty on produced or imported alcoholic products Trader
Repackaging in contravention of section 52 (2)
Unlimited fine- Repackage draught alcohol without proper duty compliance Any Person
Duty discount for small producer alcoholic products
- Calculate and apply the correct Small Producer Relief discount on alcohol duty Manufacturer
Assessments where incorrectly low rate of alcohol duty applied
Other duties (1) — Crown / regulator
- HMRC must assess and notify you of any alcohol duty shortfalls Statutory regulator
Authorised use for certain purposes
Unlimited fine- Apply for duty-free spirits for medical or scientific use Any Person
Imported goods not for human consumption
Other duties (1) — Crown / regulator
- HMRC may waive alcohol duty on spirits used in non-food goods Statutory regulator
Mixing alcoholic products
10 years imprisonment- Do not mix alcoholic products unless an exemption applies Any Person
Post-duty point dilution of alcoholic products
- Do not dilute alcoholic products after the duty point to reduce tax Any Person
Penalties and forfeiture
Unlimited fine- Fail to comply with denatured‑alcohol licence or regulations Any Person
Prohibition of use of denatured alcohol etc as beverage or medicine
Fine up to £1,000- Use denatured alcohol for beverage or medicine Any Person
Approval to carry on controlled activity
7 years imprisonment Amended 2 times- Obtain approval before carrying out a controlled activity Any Person
The register of approved wholesalers
Amended 2 timesOther duties (1) — Crown / regulator
- HMRC must maintain a public register of approved alcohol wholesalers Statutory regulator
Regulations relating to approval, registration and controlled activities
Amended 2 timesOther duties (1) — Crown / regulator
- HMRC may regulate alcohol wholesaling and impose wholesaler duties Statutory regulator
Restriction on buying controlled alcoholic products wholesale
Amended 2 times- Only buy wholesale alcohol from approved UK or Isle of Man suppliers Any Person
Offences
Amended 2 timesPenalties
7 years imprisonment Amended 2 times- Violate alcohol wholesaling regulations Any Person
Groups
Amended 2 timesIndex of defined expressions: Chapter 7
Amended 2 timesReviews and appeals
Amended 2 timesForfeiture: supplementary provision
Amended 2 timesRemoval of goods: application of section 95 of CEMA 1979
Amended 2 timesDrawback
Amended 2 timesDuty stamps
Unlimited fine Amended 3 timesOther duties (1) — Crown / regulator
- HMRC must administer duty stamps for alcoholic liquors Statutory regulator
Repeals
Amended 2 timesMinor and consequential amendments
Amended 2 timesTemporary provision: wine
Amended 2 timesTemporary provision: cider
Amended 2 timesInterpretation of this Part
Amended 1 timeRegulations: supplementary and general
Amended 1 timeRegulations: procedure
Amended 4 timesCommencement
Amended 1 timeBrowse 46 other sections in this Part — procedural / definitional / commencement
Meaning of “alcoholic product”
Alcoholic strength
Categories of alcoholic products: regulations
Rates
Excise duty point and payment
Qualifying draught products: reduced rates
Alcoholic products qualifying for draught relief
Repackaging qualifying draught products
Small producer relief: discounted rates
Small producer alcoholic products
Small production premises
“Alcohol production amount” etc
Exclusions
Mergers: general provisions
Modified “small production premises” test
Modified duty discount
Adjusted post-merger amount
Early termination of merger transition period
Subsequent mergers
Simultaneous mergers
Demergers
“Producer”, “production premises”, “group premises” etc
Connected persons
Index of defined expressions: Chapter 3
Exemption: production for personal consumption
Research and experiments
Spoilt alcoholic products
Alcoholic ingredients
Imported medical articles
Flavourings
Restrictions on use of certain articles
Further provision about remission and repayment
Approval requirement: producers
Supplementary provision about approvals
Exemption: production for personal consumption
Exemption: research and experiments
Alcoholic products regulations
Penalties and forfeiture
Denatured alcohol
Licence to manufacture and deal wholesale in denatured alcohol
Regulations relating to denatured alcohol
Defaults in respect of denatured alcohol: possession of excess alcoholic products
Defaults in respect of denatured alcohol: supply and use of denatured alcohol
Inspection of premises etc
Definitions
Further provision relating to definitions
Part 3 — Multinational top-up tax
Introduction to multinational top-up tax
Amended 2 timesChargeable persons
Amended 6 times- Determine if you are liable for multinational top-up tax Any Person
Charge to multinational top-up tax
Amended 2 timesHow to calculate top-up amounts etc
Amended 2 timesExcluded entities
Amended 6 timesResponsible members
Amended 16 timesChange in composition of multinational group
Amended 2 timesWhether de-merged groups meet the revenue threshold
Amended 4 timesEffective tax rate
Amended 2 timesUnderlying profits of permanent establishments
Amended 2 timesProfits adjusted to be before tax
Amended 1 timeProfits adjusted to be profits before certain purchase accounting adjustments
Amended 3 timesGeneral exclusion of dividends
Amended 1 timeExcluded equity gain or loss
Amended 1 timeAdjustments for asymmetric foreign currency income and losses
Amended 1 timeAdjustment for changes in accounting policies and prior period errors
Amended 1 timeAccrued pension expense
Amended 1 timeTreatment of tax credits
Amended 1 timeMeaning of qualifying refundable tax credits
Amended 2 timesTransferable tax credits
Amended 2 timesValue of marketable transferable tax credits: originator
Amended 2 timesValue of marketable transferable tax credits: purchaser
Amended 2 timesArm’s length requirement for certain transactions
Amended 1 timeTransactions between members of a multinational group: differences with accounting for tax
Amended 3 timesAdjustments for companies in distress
Amended 8 timesAdjustments where life assurance business carried on
Amended 2 timesExclusion of certain insurance reserve movement expense
Amended 1 timeQualifying tier one capital
Amended 1 timePermanent establishment income and expense attribution
Amended 8 timesElection to spread certain capital gains over five years
Amended 4 timesElection to have excluded equity gains and losses included
Amended 4 timesUnderlying profits of transparent ... entities
Amended 21 timesCertain non tax resident entities to be treated as flow-through entities
Amended 3 timesAdjustments for ultimate parent that is a flow-through entity
Amended 9 timesUltimate parent subject to qualifying dividend regime
Amended 2 timesCovered taxes
Amended 1 timeAmount of covered tax balance
Amended 3 timesAmounts excluded from qualifying current tax expense
Amended 2 timesAmounts to be reflected in qualifying current tax expense
Amended 3 timesMeaning of “non-marketable transferable tax credits”
Amended 3 timesValue of non-marketable transferable tax credits: originator
Amended 3 timesValue of non-marketable transferable tax credits: purchaser
Amended 3 timesTax credits etc allocated under tax equity partnerships
Amended 3 timesFlow-through tax benefits: proportional amortisation method
Amended 3 timesFlow-through tax benefits: subtraction method
Amended 3 timesClawback of earlier qualifying flow-through tax benefits
Amended 3 timesPermanent establishments
Amended 1 timeReallocation of tax expense
Amended 10 timesControlled foreign company tax regimes
Amended 5 timesBlended CFC regimes
Amended 18 timesSection 180: further provision
Amended 18 timesTotal deferred tax adjustment amount
Amended 4 timesQualifying foreign tax credits (substitute loss carry forward assets)
Amended 7 timesAlternative to section 183 where carry forward of credits not permitted
Amended 7 timesInclusion of existing deferred tax assets and liabilities on entry into regime
Amended 7 timesDeferred tax assets recorded at less than minimum rate
Amended 2 timesElection for losses to be treated as special loss deferred tax assets
Amended 2 timesTotal top-up amount for a territory
Amended 2 timesSubstance based income exclusion
Amended 5 timesEligible payroll costs
Amended 8 timesEligible tangible asset amount
Amended 15 timesOperating leases
Amended 15 timesElection to treat certain top-up amounts as nil
Amended 9 timesInclusion ratio
Amended 5 timesAdditional top-up amounts where covered taxes less than expected
Amended 4 timesElection to carry forward and reduce collective additional amount
Amended 5 timesAdditional top-up amounts where recalculations required
Amended 29 timesTransfer of assets or liabilities from a member of a multinational group
Amended 1 timeTransfer of assets or liabilities to a member of a multinational group
Amended 4 timesMeaning of “qualifying reorganisation”
Amended 1 timeInvestment entity tax transparency election
Amended 1 timeUndistributed income amount
Amended 1 timeElection where assets and liabilities adjusted to fair value for tax purposes
Amended 1 timePost filing adjustments of covered taxes
Amended 12 timesTop-up amount of investment entity
Amended 4 timesSubstance based income exclusion for investment entity
Amended 1 timeInvestment entity effective tax rate
Amended 1 timeAdjustments
Amended 6 timesJoint venture group
Amended 5 timesApplication of Part to joint venture groups
Amended 9 timesMinority owned members
Amended 1 timeMulti-parent groups
Amended 1 timeMeaning of potentially undertaxed
Amended 1 timeUntaxed amounts
Amended 1 timeAllocation of untaxed amount to members
Amended 1 timeAmount allocated to the United Kingdom
Amended 1 timeAllocation to qualifying members
Amended 1 timeElection to make one member of a group liable for untaxed amounts
Amended 1 timeNumber of employees
Amended 1 timeValue of tangible fixed assets
Amended 1 timeJoint ventures
Amended 1 timeReferences to responsible members
Amended 1 timeMeaning of entity
Amended 5 timesPermanent establishments treated as entities
Amended 12 timesPartnerships
Amended 12 timesPension funds and pension services entities
Amended 1 timeInvestment funds and investment entities
Amended 4 timesIntermediate and partially-owned parent members
Amended 2 timesTax transparency of entities
Amended 2 timesLocation of entities
Amended 4 timesLocation of flow-through entities and permanent establishments
Amended 3 timesPillar Two territories
Amended 12 timesOwnership interests and controlling interests
Amended 2 timesCalculating percentage ownership interests of a class
Amended 1 timeCalculating percentage ownership interests: excluded entities
Amended 1 timeCalculating percentage direct and indirect ownership interests
Amended 1 timeTiming of transfers of interests
Amended 1 timeExclusion of indirect interests held through ultimate parent
Amended 1 timeConsolidated financial statements
Amended 2 timesApplication to sovereign wealth funds
Amended 1 timeDisqualified and qualified refundable imputation taxes
Amended 5 timesUse of currency
Amended 2 timesPillar Two rules
Amended 5 timesQualifying domestic top-up tax
Amended 11 timesQualifying domestic top-up tax treated as not accruing where contested etc
Amended 11 timesQualifying undertaxed profits tax
Amended 3 timesOther definitions
Amended 3 timesTransitional provision and safe harbours
Amended 1 timePower to amend to ensure consistency with Pillar Two
Amended 2 timesBrowse 59 other sections in this Part — procedural / definitional / commencement
Administration of multinational top-up tax
Meaning of “multinational group” and “ultimate parent”
Qualifying multinational groups
Adjusted profits of a member of a multinational group
Underlying profits as determined for statements of ultimate parent
Underlying profits accounts
No amounts outside of profit and loss account to be included
Use of substituted values
Profits adjusted to be profits before consolidation adjustments to eliminate intragroup transactions
Included revaluation method gain or loss
Exclusion of expenses for illegal payments, fines and penalties
Exclusion of qualifying intra-group financing arrangement expenses
Exclusion of international shipping profits
Core international shipping profits
Ancillary international shipping profits
Attribution of losses between permanent establishment and main entity
Election to use realisation principle
Election to reflect deductions for stock-based compensation
Election to exclude intra-group transactions
Election in relation to hedging currency risk in ownership interests
Underlying profits of hybrids
Application of section 171 to members in the same territory as the ultimate parent
Distributions from other members of a group
Cross-border allocation of current tax under cross-crediting regime
Cross-border allocation of deferred tax assets and liabilities
Recaptured deferred tax liabilities
Further provision about elections under section 187
Deemed distribution tax election
Deemed distribution tax amount
Reduction of recapture amount
Recalculation where member leaves the group
Calculation of top-up amounts
Eligible payroll costs and eligible tangible asset amount: permanent establishments
Power to make provision about treatment of payroll costs and assets
Eligible payroll costs: flow-through entities
Eligible tangible asset amount: flow-through entities
Eligible payroll costs and eligible tangible asset amount: flow-through ultimate parent
Top-up amounts multiplied by inclusion ratio
Covered taxes balance less than nil when members in a territory have a profit
Allocation of collective additional amount under section 203 to members
Allocation of collective additional amounts under section 206 to members
Member joining or leaving multinational group
When transfer of controlling interest treated as acquisition of assets and liabilities
Taxable distribution method election
Effect of rate changes to deferred tax expense
Adjustment where covered taxes not paid
Additional top-up amounts of investment entities
Attribution of top-up amounts and additional top-up amounts to responsible member
Meaning of terms and concepts used in this Part
Treatment of protected cell companies
Governmental, international and non-profit entities
Calculating percentage ownership interests of a specific entity or individual
Acceptable accounting standards
Accounting periods
Meaning of country-by-country report
Meaning of “connected”
Index of defined expressions
Regulations
Multinational top-up tax to apply from 31 December 2023
Part 4 — Domestic top-up tax
Qualifying entities
Amended 4 timesDTT excluded entities
Amended 11 timesSecuritisation companies in a group treated as not consolidated
Amended 11 timesChargeable persons
Amended 2 times- Determine if your business is liable for domestic top-up tax Any Person
Amount charged
Amended 4 times- Calculate and pay Domestic Top-up Tax Any Person
Election to make one member of a group liable for amounts charged
Amended 3 timesDetermining top-up amounts of entity that is a member of a group
Amended 13 timesTreatment of covered bond vehicles
Amended 13 timesDetermining top-up amounts of entity that is not a member of a group
Amended 7 timesReferences to Pillar Two rules
Amended 7 timesEffect of becoming subject to Pillar Two rules
Amended 7 timesDividends from protected cell companies
Amended 7 timesApplication of section 262
Amended 1 timeApplication of transitional provision
Amended 4 timesBrowse 6 other sections in this Part — procedural / definitional / commencement
Introduction to domestic top-up tax
Permanent establishments
Partnerships
Application of Schedule 14
Index of defined expressions
Domestic top-up tax to apply from 31 December 2023
Part 5 — Electricity generator levy
Key concepts (generating undertaking etc)
Amended 2 timesLiability of members of groups
- Pay the Electricity Generator Levy for all group members Any Person
Requirement to provide information about payments
Unlimited fine- Notify HMRC when paying the Electricity Generator Levy Trader
Definitions in this Part
Amended 1 timeBrowse 32 other sections in this Part — procedural / definitional / commencement
Charge on exceptional generation receipts
Benchmark amount
Attribution of generation
Generation receipts
Allowable costs
Exceptional generation fuel costs
Exceptional revenue sharing costs
Groups
Lead member of a group and its qualifying periods
Election for members with significant minority shareholding to pay levy
Qualifying partnerships
Qualifying joint ventures
Non-chargeable amounts of joint venture to be attributed to participants
Generation acquired and supplied by JV participants
Arrangements that reflect receipts (JV participants)
Generation acquired and supplied by significant minority shareholders
Arrangements that reflect receipts (significant minority shareholders)
Surrender of shortfalls
Amount that may be surrendered and use of that amount
Election to treat certain companies as transparent
Effect of company being transparent
General application of corporation tax administration
Company tax returns
Claims to shortfall amounts
Application of Part 5A of TMA 1970 and Instalment Payments Regulations
Application of Part 5 of CTA 2010 for the purposes of determining interests
Anti-avoidance
Information sharing
Interaction of electricity generator levy with corporation tax
Regulations under this Part
Meaning of “qualifying new generating plant”
Minor definitions relating to electricity market
Part 6 — Other taxes
End of exempt period for HGV road user levy
Unlimited fine- Use or keep an HGV without paying the road user levy Any Person
Browse 16 other sections in this Part — procedural / definitional / commencement
Transactions funded with the assistance of a public subsidy
Deposit schemes
Dumping, subsidisation and safeguarding remedies
Rulings as to method of valuation of goods
Discharging goods from free-circulation procedure subject to guarantee
Excepted machines etc
Rates of tobacco products duty
Flavour concentrates
New bands and rates
Northern Ireland rates
Rates of vehicle excise duty
Reform of HGV road user levy
Rates of landfill tax
Rates of climate change levy
Rate of plastic packaging tax
Aggregates levy: exemptions and exploitation
Part 7 — Miscellaneous and final
Browse 23 other sections in this Part — procedural / definitional / commencement
Designation of sites
Sunset date for reliefs
Right to repayment of income tax to be inalienable
Late payment interest on value added tax
Penalties for failure to pay value added tax
VAT credits: repayment interest due where evidence not provided
Insurance premium tax: power to make regulations about notifications
Penalties for failure to make payments of plastic packaging tax on time
Approval of aerodromes
Approved aerodromes: minor and consequential amendments
Temporary approvals etc
Licensing authorities: requirements to give or obtain tax information
Section 342 : consequential amendments
Definition of “charity” restricted to UK charities
Definition of “community amateur sports club” restricted to UK clubs
Exemptions from tax
Abolition of the Office of Tax Simplification
Pension benefits and inheritance tax
Payment of unclaimed money in court into the Consolidated Fund
Financial sanctions regulations: prohibition on certain payments by HMRC
Communications data
Interpretation
Short title
Schedules
Rates of alcohol duty
- Pay the correct rate of alcohol duty based on product type and strength Trader
Administration of multinational top-up tax
- Register your multinational group for top-up tax and appoint a filing member Any Person
Browse 23 other Schedules — structural / supplementary
Relief for research and development
Investment vehicles
Penalties for contraventions of alcohol wholesaling provisions
Alcohol duty: duty stamps
Multinational top-up tax: transitional provision
Administration of domestic top-up tax
Bilateral safeguarding remedies
Reforms of HGV road user levy
Homes for Ukraine Sponsorship Scheme: exemptions from tax
Estates in administration and trusts
Corporate interest restriction etc.
Records relating to transfer pricing
Categories of alcoholic products: interpretation
Qualifying draught products: reduced rates
Small producer alcoholic products: duty discount
Alcohol duty: reviews and appeals
Alcohol duty: minor and consequential amendments
Multinational top-up tax: elections
Multinational top-up tax: safe harbours
Index of expressions defined or explained in Parts 3 and 4
Dumping, subsidisation and safeguarding remedies
Soft drinks industry levy: flavour concentrates
Freeports and investment zones: consequential amendments
Official guidance
Authoritative sources published by regulators or government explaining this legislation.
- Register for Alcohol Duty (APPA) — HMRC (opens in a new tab) Detailed Guidance
- How to work out your Alcohol Duty rates if you're eligible for Small Producer Relief (opens in a new tab) Detailed Guidance
- Check if you're eligible for Small Producer Relief on Alcohol Duty (opens in a new tab) Detailed Guidance
- The Alcohol Wholesaler Registration Scheme (AWRS) (opens in a new tab) Detailed Guidance
- Apply for an Alcoholic Products Producer Approval (APPA) (opens in a new tab) Detailed Guidance
- Check if you need an Alcoholic Products Producer Approval (APPA) (opens in a new tab) Detailed Guidance
- Alcohol Duty Rates (opens in a new tab) Detailed Guidance
- Reform of Alcohol Duty Rates and Reliefs (opens in a new tab) Publication
Enforcement and responsible bodies
The regulators that administer or enforce this legislation.
HM Revenue & Customs
Tax collection, customs duties, national insurance, tax credits, and enforcement of the National Minimum Wage. Regulates all UK businesses for tax compliance …
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Find other UK business legislation with related guidance.
Regulators
Learn more about the bodies that enforce this legislation.