If a need to change the law is identified and it has been agreed
that the policy should be changed, the Oils Team (Policy) will
first explore whether the use of existing legislation will allow us
to do this, for example the RDCO scheme which required all dealers
who handled a ‘controlled oil’ to register. Although
this was a new scheme and it imposed a new set of conditions on
traders and others who had never had to meet these legal
requirements before, it was introduced in 2003 using Section 100G
of the Customs and Excise Management Act 1979.
If it is not possible to use existing law, we would then
consider if we already have the power to make secondary legislation
under powers granted to us under existing primary legislation. If
not we would then have to draft new primary legislation, which can
be a long and complex process normally requiring Finance Bill space
and therefore subject to the budget process timetable.
In order to avoid the need to continuously revise and to update
much of our primary legislation, this is often amended instead in
the annual Finance Act (FA), which is brought in as part of the
normal budget process. The FA may also be used, when subsequent
Regulations modernise or change fundamental issues contained in
legislation, and the primary legislation can be modified more
simply through the FA.
A Finance Act is passed each year because Income Tax and
Corporation Tax are annual taxes that have to be continually
re-imposed. The FA has its origins in the Chancellor of the
Exchequer’s budget speech, in which proposed changes to
taxation are set out. The proposals are debated in the House of
Commons, and budget resolutions passed. The FA is also used to
amend or to vary the existing excise duty rates.
The Finance Bill is published shortly after the budget
speech, and sets out in detail, the new tax proposals. The Bill is
debated in Parliament and may be amended during its passage through
the House. It finally receives Royal Assent and is thereafter known
as the Finance Act for the year in which the assent was given.
