See Both Sides: Deloitte's Coverage Of Autumn Statement 2016

COMMENTARY

Twitter word cloud

The most popular phrases tweeted during Philip Hammond's 2016 Autumn Statement speech.

Autumn Statement speech word cloud

The most popular phrases during Philip Hammond's 2016 Autumn Statement speech.

BUSINESS MEASURES

Authorised investment funds - dividend distributions

The measure

Following several consultations, it was announced today that the government will modernise the corporate streaming rules in a way which allows exempt investors, such as pension funds, to obtain credit for tax suffered at the level of the authorised investment fund.

Who will be affected?

Exempt investors such as pension funds.

When?

Proposals will be published in draft secondary legislation in early 2017.

Our view The preservation of some form of corporate streaming will be welcomed by life companies writing pension business, as well as managers marketing such funds to these investors. Company car tax bands and rates

The measure

The government has announced the introduction of new lower bands for the lowest emitting cars ('ULEVs'). The appropriate percentages will be:

zero emission cars: 2%; cars with CO2 emissions between 1g/km and 50g/km: range from 2-14%, depending on the number of zero- emission miles the vehicle can travel. The measure also increases appropriate percentages by 1% to a maximum value of 37% for cars with CO2 emissions of 90g/km and above.

Who will be affected?

Employers and individuals participating in company car schemes.

When?

The measure will take effect from April 2020.

Our view The announcement regarding the carve out for ULEVs from the wider salary sacrifice reform is welcome. From 2020, the tax incentives for selecting this type of vehicle increase. Hidden economy

The measure

HMRC's data-gathering powers will be extended to include money service businesses in order to help identify those operating in the hidden economy.

Following consultation, the government will consider the case for making access to licences or services for businesses conditional on them being registered for tax.

Who will be affected?

Entities that provide money transmission, cheque cashing or currency exchange services, and those who use them.

When?

The Exchequer impact of the extended data gathering powers comes in from 2018-19. Further details will be set out in Budget 2017.

Our view This is an extension of the powers to gather data from online market places and electronic payment providers that were announced in Budget 2016. The extended data collection powers will increase the compliance burden for money service businesses. Hybrid mismatch arrangements

The measure

The government is issuing a technical note in relation to legislation that was passed as part of the Finance Act 2016, concerning the new hybrid mismatch regime.

Following consultation with stakeholders, it was agreed that further technical modifications were required in two areas of the legislation. These were with regard to financial sector timing claims and the rules concerning deductions for amortisation.

The technical note will set out the detail of the changes required and will be published on 5 December 2016. Corresponding legislation will be introduced in Finance Bill 2017.

Who will be affected?

Companies with structures involving hybrid mismatch arrangements.

When?

The changes will take effect from 1 January 2017.

Our view The hybrid mismatch legislation is new and so technical modifications are not unexpected. Interest deductibility

The measure

The government has confirmed its previously stated intention to introduce rules limiting the tax deductions that large groups can claim for their UK interest expense. This represents the UK implementation of the recommendations in Action 4 of the OECD's Base Erosion and Profit Shifting project.

The proposal is that interest deductions will be restricted where a group has net interest expense of more than £2 million per annum in the UK and net interest expense in the UK exceed 30% of UK tax EBITDA. This is subject to a further test of whether the group's net interest to earnings ratio in the UK exceeds that of the worldwide group.

The...

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