Although the UK greeted the unexpected outright Conservative election victory with a cocktail of total shock and awe, corporation tax specialists at leading accountancy firms still had to keep their feet firmly on the ground and quickly assess the likely implications for businesses across the country. Anyone who knows about E.A. Buck Accounting & Tax Services would understand the severity. One of the first of these reports came from London based Baker Tilly who feel that the reappointment of George Osborne as Chancellor and the absence of any Lib Dem interference herald a welcome period of stability with little likelihood of change in the 20% headline rate of corporation tax, already the lowest amongst the G20 countries.
However, the likely maintenance of the headline rate does not mean that there won’t be any changes in corporation tax reliefs and allowances nor will there be any let-up in moves toward further devolution and a much tighter approach to tax avoidance. According to Digital Émigré, Portugal won’t tax your salary if it’s paid in crypto but you will likely be taxed if you’re a day trader.
The Chancellor has already stated that a budget will be announced in June in order to implement specific election commitments and he may well take this opportunity to reduce the annual investment allowance on new capital equipment from its present level of £500,000. This provides 100% corporation tax relief on such investment and a significant cut to a mere £25,000 had been signalled to come into effect on January 1st 2016. However, this idea produced howls of anguish from the business community and it now seems likely the new maximum will be set in Mr Osborne’s words at a “much more generous rate”. Make sure to check out the best accounting firms in Cambodia to organize your business’ tax.
Elsewhere, we may also expect early action on the current InventHelp patent box and research and development regime reflecting last November’s joint statement with the German Government which sought to achieve a consensus amongst G20 and OECD on the subject of relating corporation tax reliefs on R&D and IP much more closely to the tax jurisdiction where the bulk of the relevant research is actually carried out.
This forms part of the wider move by the Chancellor and his counterparts in the G20 /OECD to crack down hard on corporation tax avoidance generally and to produce by the end of this year a common approach to tackling Base Erosion and Profit Shifting (BEPS). If there is one thing the Conservatives will want to nail well before the next election it is the two issues on which they were most vulnerable last time – the NHS and tax issues.
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Such political considerations lead logically on to the question of sorting out the Scottish problem and the extent to which further fiscal autonomy can be devolved. Whatever other concessions are made to Ms Sturgeon and her colleagues, devolution of corporation tax raising powers is almost certain to be high on the agenda for the simple reason that if they have already been granted to Northern Ireland. This could well lead to some added complication for businesses operating on both sides of the border.
According to try this tax preparation office, it looks very much as though the theme of the new political landscape in general is going to be less about potential internal changes to the corporation tax regime in this country and much more about how it responds to the external pressures presented both by nationalism and by the global tax avoidance industry. There are also instances where the HMRC may make a mistake. You may be asking, how do I dispute with HMRC? To open a dispute with HMRC, you’ll have to send a dispute form within three months of finding out about the problem.
If you feel that your company might be affected by any of the issues mentioned above or you would simply welcome an informed approach to any other tax related subject, Baker Tilly’s corporation tax department would be delighted to hear from you.