articles: Business Tax

Diverting profits of individuals and close companies to overseas entities – anti-avoidance

Following an announcement at the Autumn Budget in 2017, HMRC has issued a consultation document ‘Tax avoidance involving profit fragmentation’. This contains proposals to prevent individuals and small companies that carry on a trade or profession in the UK from avoiding tax by diverting profits to overseas entities in low-tax, or no-tax, jurisdictions. The arrangements that are under attack involve fragmenting profit that in substance derives from a single UK activity with the result that for tax purposes it arises partly in the UK and partly overseas.

Dame Treasury and the taxing of tech giants

The UK government is currently reviewing responses to a position paper that explores a potential new revenue based interim tax to be used to target technology companies on the value generated by their users. Ken Almand, Transfer Pricing Partner, breaks down the issue in simple terms through the medium of a Christmas pantomime.

Moore Stephens appoints Ken Almand as new Transfer Pricing Partner

Moore Stephens, is pleased to announce that Ken Almand has been appointed as Transfer Pricing Partner within our Business Tax practice in London. Ken Almand joins from RSM, where he was Head of Transfer Pricing for six years. Ken specialises in helping international corporations manage their global tax obligations, transfer pricing strategies and compliance responsibilities.
 

Tax and the General Election 2017: will businesses emerge as winners?

The outcome of General Elections can be momentous. This election may shape the future direction of the UK over the next half decade and either build on – or dismantle - the policies of the previous government. Arguably the 2017 vote is even more significant than usual, with Brexit overshadowing almost all policy decisions going forward. It’s an uncertain time for businesses. So, what is on the top of businesses’ tax reduction wish-lists? And are their top tax concerns being addressed by the major political parties?

Tax proposals in the 2017 General Election manifestos

The manifestos issued by the three major parties as part of the General Election campaign set out various proposals for changes to the tax system. Our latest blog contains a detailed comparison of the proposals in tabular form, along with links to each of the Conservative, Labour and Liberal Democrat manifestos.

The LLP salaried members rules – Are you compliant?

The salaried members rules treat members of LLPs (but not partnerships other than LLPs) as employees for tax purposes if in substance their relationship with the LLP is akin to that of an employee. Not only does this affect the amount of tax payable, but it is also necessary to operate PAYE which may be a significant administrative burden.
 

Changes to corporate interest relief

Interest on debt has for many years been deductible for corporation tax purposes, subject to certain anti-avoidance rules. From 1 April 2017 the deductibility of interest may be further restricted. Read more to find out more on how this might impact your company.

Is a 'fractional interest' in a property a holiday let?

A recent First-tier Tribunal decision, in the case of Fortyseven Park Street (the company), has concluded that the supply of a ’fractional interest in a property’ (similar to a time share), should be subject to VAT at the standard rate of 20%, on the basis that the supply is one of accommodation provided by a hotel or ’similar establishment’, a supply which is specifically excluded from exemption further to the VAT Act 1994, Schedule 9, Group 1, item 1(d).

This recent VAT case may have significant implications for exhibition organisers

A recent decision in the Upper Tribunal case of Kati Zombory-Moldovan t/a Craft Carnival has found that an exhibition organiser’s services went beyond the passive supply of a pitch or a licence to occupy land, which would have been exempt from VAT, and was actually the provision of ‘a service of participation as a seller at an expertly organised and expertly run antiques and collectors fair’ and, as such was liable to VAT at the standard rate of 20%.

Zero rate tax allowances: Use them or lose them

Did you know that from 6 April 2016 all taxpayers have been able to pay 0% tax on up to £5,000 of dividend income each tax year? In addition, basic rate taxpayers can pay 0% tax on up to £1,000 of interest income each tax year, whilst higher rate taxpayers can pay 0% tax on up to £500 of interest income each tax year.

Paying royalties to non-residents

Currently, UK companies paying royalties to persons overseas have to deduct tax at 20% if the royalties relate to a patent or are ‘pure income profit’ (rather than part of the profits of a trade). Under provisions included in the Finance Bill currently before Parliament, from 28 June 2016 the obligation to deduct tax is extended to any royalty, or other payment for the use of (or for the right to use) intellectual property.

Brexit – one week on

Last Thursday the British people made (in the Prime Minister’s words) a ‘very clear decision’ to leave the European Union. Last Friday they asked themselves (and each other) ‘What happens now?’ And it turned out that nobody knew. So where are we one week on?

The referendum result – its impact on the UK tax system

How will the result of the EU referendum affect the UK’s tax system?

In the short term, the answer is ‘not at all’. For the moment, and probably for most of the next two years, the UK will continue as a member state of the EU, and EU rules will continue to have effect in the same way as at present. In the longer term, however, there may be significant tax changes, in addition to the alterations in customs duties on trade with the EU and third countries that are implicit in leaving the single market, and which have been debated at length during the referendum campaign.

What the Budget 2016 means for the energy, mining & renewables sector

The Budget contained a number of surprise developments that are likely to be of interest to the energy, mining and renewables sector. These include a radical set of measures which are intended to assist the offshore oil and gas sector, and some significant business energy tax reforms.

However, there were also wider changes to the taxation of large corporates that will affect many sectors.

The Budget 2016 – video summary

A sugar-coated Budget for the next generation

In the uncertain global economic environment, the Chancellor’s deficit-reduction goals have become more challenging. But he still managed to strike an up-beat tone when delivering “a Budget that puts the next generation first”.

New rules on country-by-country reporting for tax affect only the largest multinational groups

New rules will require any UK-resident ultimate parent entity of a multinational enterprise (MNE) with turnover of 750 million Euros or more to make an annual report to HMRC within 12 months of the year-end showing, for each tax jurisdiction in which the MNE does business:

• the amount of revenue, profit before tax, and taxes on income that are paid and accrued;

• the total numbers of staff employed, capital, retained earnings and tangible assets.

Some other UK companies will also be affected.

 

Draft legislation for the 2016 Finance Bill

The Government has today published draft legislation to be included in the 2016 Finance Bill, together with explanatory notes, amounting in total to several hundred pages.

Most of the material relates to measures that were announced in principle in the July 2015 post-election Budget, or in the Autumn statement on 25 November 2015. In many cases, it reflects the results of consultation exercises.

It’s the final countdown to FRS102

For those in the investment sector, the adoption of FRS 102 is likely to have a significant impact on the preparation of financial statements. It is worth bearing in mind that the first period of mandatory adoption (any period beginning on or after 1 January 2015) for FRS 102 is rapidly approaching.

Potential tax issues for shipping & offshore maritime sector in UK Autumn Statement

The government is to invest £1.3 billion to transform HMRC into ‘one of the most digitally advanced tax administrations’ in the world. Most businesses and self-employed individuals will be required to keep track of their tax affairs digitally and to update HMRC at least quarterly via their digital tax account. The Government will consult on the details in 2016. 

An Autumn Statement for “rebuilding Britain”

Five years since delivering his first spending review, George Osborne spent over an hour delivering his 2015 Autumn Statement. He repeatedly stated the Government’s intent to build public services, infrastructure, national defences and strong public finances.

State aid approval granted for EIS and VCT rule changes

The European Commission has given state aid approval for the latest Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) rule changes contained in the  Finance (No 2) Bill 2015 (Schedules 5 and 6).The changes are in line with the UK’s proposals which are currently being legislated...

New company car fuel rates

HMRC has published new ‘advisory fuel rates’ (AFR) for company cars, which apply to journeys from 1 September 2015Where an employer reimburses an employee for the cost of fuel used for business travel in a company car, if the payment is too high there is an element of profit to the employee...