The Queen’s Speech was delivered on 11 May 2021, outlining the Government’s legislative agenda and associated policies. The speech can be read here, with full briefing notes here, including a full list of Bills.

There were a number of Bills that will be of interest to CTG members, in particular:

• Subsidy Control Bill – this will implement the outcome of the recent consultation which is designed to create a new UK subsidy control regime to replace state aid. CTG’s response to the consultation can be read here.
• Charities Bill – mainly to implement the Law Commission report on technical issues in charity law. There is limited relevance to tax here, but it is worth noting this important piece of wider charities legislation
• Dormant Assets Bill – this should unlock more dormant assets and make it easier to distribute the funding to environmental and social causes.
• National Insurance Contributions Bill – this formalises the NICs relief for veterans this year and also includes provision to protect those self isolating due to COVID. Tax avoidance measures are also being tightened up

The Planning Bill may yet also include provisions relating to the replacement of the Community Infrastructure Levy.

Subsidy Control Bill

“Measures will be introduced to ensure that support for businesses reflects the United Kingdom’s strategic interests and drives economic growth.”

The purpose of the Bill is to:

• Implement a domestic UK subsidy control regime that reflects our strategic interests and particular national circumstances, providing a legal framework within which public authorities make subsidy decisions.

The main benefits of the Bill would be:

• Creating our own subsidy control system now that we are no longer bound by the EU’s burdensome State Aid rules.
• Enabling public authorities to deliver subsidies that are tailored and bespoke for local needs to support the UK’s economic recovery and deliver Government priorities, such as increasing UK R&D investment and achieving net zero.
• Empowering local authorities, public bodies, and central and devolved governments to design subsidies that deliver strong benefits for the UK taxpayer and local communities.
• Providing certainty and confidence to businesses investing in the UK, by protecting against subsidies that risk causing distortive or harmful economic impacts, including to the UK’s internal market.
• Enabling the UK to meet its international commitments on subsidy control, including its international commitments at the World Trade Organisation and in Free Trade Agreements.

The main elements of the Bill are:

• Creating a consistent set of UK-wide principles that public authorities must follow when granting subsidies.
• Exempting categories of subsidies from certain obligations of the regime or leaving out of scope entirely.
• Prohibiting and placing conditions on certain types of subsidies which are at a particularly high risk of distorting markets.
• Obligating public authorities to upload information on subsidies to a new UK-wide, publicly accessible transparency database.
• Establishing an independent subsidy control body to oversee the UK’s bespoke, modern subsidy control system.
• Providing for judicial oversight and enforcement of the granting of subsidies.

Territorial extent and application

• The Bill’s provisions will extend and apply to the whole of the UK.

Key facts

• In 2018, the UK spent 0.34 per cent of GDP on subsidies. 93 per cent of this was spent in four main policy areas: 42 per cent on ‘Environmental protection including energy savings’, 23 per cent for ‘Research and Development including innovation’, 15 per cent for ‘SMEs including risk capital’ and 13 per cent for ‘Culture’.
• The UK has historically given a low level of subsidies compared to other large European countries. The UK’s 0.34 per cent of GDP spent on subsidies in 2018 was less than the EU average of 0.76 per cent of GDP. France spent 0.79 per cent of GDP and Germany spent 1.45 per cent per cent of GDP on subsidies in 2018.
• 94 per cent of the total value of subsidies granted in the UK was by the UK Government, 5 per cent by devolved administrations and 1 per cent by Local Authorities.

National Insurance Contributions Bill

“Eight new Freeports will create hubs for trade and help regenerate communities. Measures will be introduced to provide National Insurance contribution relief for employers of veterans.”

The purpose of the Bill is to:

• Provide National Insurance contributions relief for employers of veterans, for employers in Freeports, and for the self-employed who receive NHS Test and Trace Payments.
• Strengthen powers to tackle attempts to avoid tax and National Insurance contributions.

The main benefits of the Bill would be:

• Promoting regeneration and job creation through Freeports across the UK, delivering the manifesto commitment.
• Supporting our veterans to secure stable and fulfilling employment as they transition to civilian life and encouraging businesses to use the valuable skillset veterans have to offer.
• Ensuring self-employed people who must, or have had to, self-isolate due to COVID-19 have parity with employed people and do not pay National Insurance contributions on their self-isolation support payments.
• Strengthening HMRC’s ability to clamp down on the tax avoidance market through introducing changes to Disclosure of Tax Avoidance Schemes.

The main elements of the Bill are:

• Providing employers with a relief from National Insurance contributions for eligible new employees in Freeports for three years, up to earnings of £25,000 per annum. Freeport employers will be able to claim this relief on all new hires from April 2022.
• Providing employers with National Insurance contributions relief for veterans for the first 12 months, up to earnings of £50,000 per annum. This relief will be available to employers on earnings from April 2021.
• Ensuring that self-employed people who must, or have had to, self-isolate due to COVID-19 do not pay National Insurance contributions on their self-isolation support payments. This measure is intended to have retrospective effect from 6 April 2020, in respect of the English, Welsh and Scottish schemes which were implemented in autumn 2020. This exemption mirrors legislation already in place for National Insurance contributions for the employed.
• Ensuring that HMRC can act decisively where promoters fail to provide information on their avoidance schemes and make taxpayers aware at an earlier stage where it suspects an avoidance scheme is being sold. These provisions mirror provisions included in Finance Bill 2021 for other taxes and will be effective when the Bill receives Royal Assent.

Territorial extent and application

• The Bill’s provisions will extend and apply to the whole of the UK.

Key facts

• There were around 12,500 veterans who left the regular Armed Forces in 2020 whose employers could qualify for the National Insurance contributions relief on their employment. Employers could benefit from a potential saving of £5,500 per veteran.
• Eight Freeports have been announced in England and the Government has committed to establishing at least one in each of Scotland, Wales and Northern Ireland.
• To date, the Government has provided more than £176 million of funding to local authorities to meet the costs of the Test and Trace Support Payment scheme. This will allow local authorities to continue supporting those on low incomes to stay at home and self-isolate when required to do so.

Charities Bill

“Legislation will support the voluntary sector by reducing unnecessary bureaucracy…”

The purpose of the Bill is to:

• Address a range of issues in charity law which hamper charities’ day to day activities, by implementing the majority of the recommendations in the Law Commission’s 2017 report ‘Technical Issues in Charity Law’.

The main benefits of the Bill would be:

• Removing inappropriate burdens while safeguarding the public interest in ensuring that charities are properly run. Charities currently face unnecessary administrative and financial burdens because of inefficient and unduly complex law.
• Helping charities consolidate and restructure by simplifying a number of relevant processes, reducing costs and saving time for charities.
• Making charity regulation more effective and make the legal framework easier to navigate. This will enable charities to use their money and resources more effectively to promote their charitable causes.
• Providing a rebalancing of regulation – enabling trustees to run charities effectively, whilst ensuring that there is proper oversight and ensuring that the law works better for the entire sector.

The main elements of the Bill are:

• Changing the law to help charities amend their governing documents more easily with Charity Commission oversight where appropriate.
• Giving charities more flexibility to obtain tailored advice when they sell land, and removing unnecessary administrative burdens.
• Increasing flexibility for charities to use their permanent endowment (assets or investments where the capital value must be preserved), with checks in place to ensure its protection in the long term.
• Removing legal barriers to charities merging, when a merger is in their best interests.
• Giving trustees advance assurance that litigation costs in the Charity Tribunal can be paid from the charity’s funds.

Territorial extent and application

• The Bill’s provisions will extend and apply to England and Wales.

Key facts

• Currently charities can find it burdensome to change governing documents, sell land, make better use of permanent endowment funds, and to merge with other charities. This Bill will make the above easier and will save charities time and money.
• There are approximately 169,000 charities in England and Wales registered with the Charity Commission.
• The sector employs almost 3 per cent of the total UK workforce. There are also more than 951,000 trustees of registered charities, supported by over 3.5 million volunteers.
• The Technical Issues in Charity Law report was published on 14 September 2017.
• The Law Commission’s work on charity law developed from its Eleventh Programme of Law Reform.
• The report follows the Law Commission’s 2014 Social Investment by Charities report, the recommendations from which were implemented in the Charities (Protection and Social Investment) Act 2016.

Dormant Assets Bill

“Legislation will support the voluntary sector by… releasing additional funds for good causes.”

The purpose of the Bill is to:

• Expand the Dormant Assets Scheme into the insurance and pensions, investment and wealth management, and securities sectors.
• Enable the social and environmental focus of the English portion of funds to be set through secondary legislation, so that over time the Scheme is able to respond more flexibly to changing social and environmental needs in England. This is in line with the model used in the devolved administrations.

The main benefits of the Bill would be:

• Unlocking around £880 million for social and environmental initiatives across the UK.
• Protecting dormant asset owners and participating businesses while putting assets lying idle from a wider range of financial sectors to good use.
• Delivering on public commitments to expand the Scheme and maintain strong, voluntary engagement with a broad range of industry participants.

The main elements of the Bill are:

• Expanding the Scheme into new asset classes and improving consumer protection in reuniting people with forgotten money.
• Aligning the model for how dormant assets funding is allocated in England with that used in the devolved administrations. This will enable Ministers to set, through secondary legislation, more specific purposes for the allocation of funding within the general “social or environmental purpose”.
• Improving the Scheme’s operation, for example by allowing the Scheme’s administrator, Reclaim Fund Ltd, to only accept transfers from participants who have undertaken appropriate efforts to trace, verify and reunite the asset with its rightful owner.
• Naming Reclaim Fund Ltd as the Scheme’s authorised reclaim fund.

Territorial extent and application

• The Bill will extend and apply to the whole of the UK, with the exception of the provision on the distribution of money in England, which will only apply to England.

Key facts

• Expansion of the scheme has the potential to make £880 million available across the UK as it recovers from COVID-19.
• Over the last decade, the Scheme has unlocked more than £745 million for social and environmental initiatives from dormant bank and building society accounts. This includes releasing £150 million to help charities, social enterprises, and individuals during the COVID-19 outbreak.
• The measure to align the English model for how dormant assets funding is allocated with that used in the devolved administrations includes a statutory duty to consult. Should the measure pass, the Government intends to launch a public consultation on the causes to which future funding can be distributed.