In a previous article we noted that most key principles of the new pensions tax regime, as set out last December in Inland Revenue Condoc 2 and later more succinctly in Inland Revenue Budget Note BN39, are recognisable in the Finance Bill (Bill 127).

This article draws attention to the changes that have been made to the legislation since it was first published on 8 April 2004 (as Bill 89). The House of Commons Standing Committee, which concluded its examination on 24 June 2004, made many amendments. The Bill had its Third Reading debate in the Commons yesterday, and some further amendments and new clauses were tabled. The Treasury has published a full list of those proposed by the Government. (Opposition parties and even the occasional Labour backbencher try to amend Government Bills as well, but almost never succeed. Their best hope, it seems, is that the Government will grudgingly acknowledge an overwhelming case for such an amendment, undertake to think about it, and then come back with an amendment of its own to achieve the same effect.)

The Finance Bill of course covers a great many issues unrelated to pensions. The relevant material is in Part 4 (now clauses 146 - 278 inclusive), and Schedules 28 - 34 and 40 part 3 (repeals). The amendments made in Standing Committee have caused extensive re-numbering of clauses and paragraphs.

Many of those amendments are technical, and do not significantly alter the principles by which the new tax regime will operate. The same is generally true of the 15 sets of draft Regulations on pensions simplification which have appeared so far on the Inland Revenue website. However, the Government has chosen to put a great deal of the detail into the Bill itself. Primary legislation can be notoriously difficult to amend, compared to Statutory Instruments (Regs). Add to this the fact that debating time allocated to this Bill will be tightly constrained by the need to obtain Royal Assent this month, for fiscal reasons, and the paramount need for very close attention to detail at this critical stage becomes stark.

Most of the significant changes apply to Schedule 34, which covers the transitional provisions, including primary and enhanced protection of pre-A Day accrued rights. This somewhat tortuous part of the Bill is now more so.