Finance Bill Committee: New Clause 5

What happened: On 10 December 2024, the House of Commons, sitting as a Committee of the whole House, voted on New Clause 5 to the Finance Bill. The clause, tabled by the Conservative opposition, would have required the government to publish an impact assessment of changes to Business Asset Disposal Relief (BADR), comparing the effect of the new rates against the number of claims that would have been expected under the old regime. The amendment was defeated by 340 votes to 105.

Why it matters: Business Asset Disposal Relief is a capital gains tax relief that allows qualifying business owners to pay a reduced rate of tax when they sell or dispose of business assets. The government's Budget raised the BADR rate from 10% to 14%, rising further to 18% in subsequent years. New Clause 5 would not have reversed those changes but would have compelled ministers to publish data allowing Parliament and the public to assess how the reforms affected the number of entrepreneurs making use of the relief. The government argued that existing annual capital gains tax statistics published by HMRC would make this information available in due course, rendering a separate mandated report unnecessary.

The politics: The vote divided almost entirely along party lines. All 299 Labour MPs and 33 Labour and Co-operative MPs who voted opposed the clause, while 91 Conservatives, 5 Democratic Unionist Party members, 4 Plaid Cymru members, 3 Reform UK members, and 1 each from the Ulster Unionist Party and Traditional Unionist Voice supported it. The Liberal Democrats, with 4 MPs voting, sided with the government against the clause, though their spokesperson had expressed reservations about the broader capital gains tax approach. The vote is part of a wider pattern of opposition attempts to force reporting requirements onto the government's tax measures, with related divisions at Report Stage in March 2025 showing similar margins.