Weekly Tax Update - 21 March 2016

  1. Budget 2016

    1.1 Smith & Williamson commentary

    Our 2016 Budget commentary is on our website at: www.smith.williamson.co.uk/budget-2016

    The commentary is also available in a downloadable PDF together with a 2016/17 tax rate card at:

    www.smith.williamson.co.uk/uploads/publications/budget-2016.pdf

    www.smith.williamson.co.uk/uploads/publications/tax-rate-card-2016.pdf

    1.2 Business tax road map

    In addition to the detailed information on proposed tax changes in the Budget, the Government has also published a further Business Tax Road Map, setting out its plans for business taxes to 2020 and beyond. Its purpose is to give businesses the certainty they need to plan and invest for the longer term.

    In broad terms, the package outlined is a reduction of tax rates by reducing business rates, cutting corporation tax, cutting the North Sea oil business taxes and reducing CGT. It also has a plan on avoidance, covering interest deduction, hybrid mismatches, withholding tax on royalties and taxing offshore developers. Finally, there is a theme on 'modernising', including the business energy tax regime, new rules on losses, stamp duty land tax and pay-as-you-go tax arrangements.

    This document should be recommended reading for anyone directly involved in the area. While the individual components are dealt with elsewhere, the road map brings a degree of coherence to understanding the thinking that would be welcome for other taxes.

    www.gov.uk/government/uploads/system/uploads/attachment_data/file/508173/business_tax_road_map_final.pdf

  2. General news

    2.1 Fees for paying tax by credit card

    From 1 April 2016, HMRC will be able to charge fees where taxpayers pay their tax liability by credit card. The fee charged will reflect the fee HMRC is charged by the card issuer. Details are in SI 2016/333, with different levels for charging fees depending on the type of credit card. The fee rates are:

    www.legislation.gov.uk/uksi/2016/333/pdfs/uksi_20160333_en.pdf

    2.2 Determining realised profits and losses for company distributions

    The ICAEW has issued an exposure draft of new guidance for determining realised profits and losses for Companies Act 2006 distribution purposes. Determining distributable profits is relevant for deciding what reserves are available for the declaration of a dividend. Companies may currently be considering whether to declare a dividend due to the imminent changes in dividend tax rates.

    In addition to updating references to accounting standards and removing obsolete material, the following main changes are proposed:

    There is additional guidance on the definition of a distribution, including in relation to accounting adjustments arising from certain intragroup off-market loans. There is additional guidance to address the...

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