Business tax

  • Corporation tax rate: reduced to 17% (not 18% as previously set) from 1 April 2020.
  • Large businesses to publish their tax strategy: for accounting periods commencing on or after Royal Assent to the Bill.
  • Apprenticeship levy: imposed at 0.5% of payroll in excess of £3 million annually from April 2017; paid through PAYE.
  • Withholding tax on royalties: deducted from a wider range of payments to non-UK residents, with effect from Royal Assent to the Bill (provisions to be introduced during the passage of the Bill through Parliament); rules to counter contrived arrangements involving double tax treaties from 17 March 2016.
  • Patent box: changes to the UK’s patent box regime to comply with the OECD’s recommendations under its Base Erosion and Profit Shifting (BEPS) initiative, broadly from 1 July 2016.
  • Averaging of farmers’ profits: averaging period extended from two to five years, from 6 April 2016.
  • Bad debt relief for peer-to-peer loans: allowed against other peer-to-peer income, from 6 April 2015.
  • Wear and tear allowance for landlords: replaced by a deduction for the actual costs of replacing furnishings, from 6 April 2016 for income tax and 1 April 2016 for corporation tax.
  • Renewals allowance for tools: repealed with effect from 6 April 2016 for income tax and 1 April 2016 for corporation tax.
  • Loan relationships and derivative contracts: rules updated to ensure they interact correctly with new accounting standards and other tax rules in certain specific circumstances, from 1 April 2016.
  • Orchestra tax relief: corporation tax relief at a rate of 25% of qualifying expenditure, from 1 April 2016.
  • Television and video games tax relief: consequential amendments to cross-references in the legislation, from Royal Assent to the Bill.
  • Loans to participators: tax rate linked to higher rate on dividends of 32.5% for loans made on or after 6 April 2016.
  • Close company loans to participators: exemption from tax charge for loans made to trustees of charities on or after 25 November 2015.
  • Company distributions: strengthening of the ‘transactions in securities’ rules to prevent conversion of distributions to capital in the hands of shareholders, from 6 April 2016.
  • Asset managers’ performance-based rewards: taxed as income rather than capital gains unless the underlying fund undertakes long-term investment activity, from 6 April 2016.
  • Dealing in and developing UK land: all profits to be taxed in the UK, whether or not the business is UK-resident and whether or not there is a UK permanent establishment (to be introduced at Report Stage of the Bill and to take effect from that date, with anti-avoidance provisions taking effect from 16 March 2016).
  • Life insurance companies: changes to ensure that the regime works as intended in relation to intangible fixed asset debits, deemed income and trading losses in specific circumstances, for accounting periods beginning on or after Royal Assent to the Bill.
  • Insurance-linked securities: enabling legislation from Royal Assent to the Bill, for regulations which will be laid by the end of 2016 to provide for a bespoke corporate tax regime for these securities.
  • Enhanced capital allowances in enterprise zones: available for eight years from the date they are announced, with effect from Royal Assent to the Bill.
  • Leasing and capital allowances: two tax avoidance devices countered, from 25 November 2015.
  • Vaccine research relief: to come to an end on 31 March 2017.
  • R&D state aid cap calculation: amendments to take account of the replacement of the large company R&D relief scheme by the R&D expenditure credit on 1 April 2016.
  • Trading and property income received as money’s worth: to confirm that such income is fully brought into account in calculating taxable profits, from 16 March 2016.
  • Transfer pricing guidelines: definitions updated to refer to the latest OECD transfer pricing guidelines from 2016/17 for income tax and for accounting periods beginning on or after 1 April 2016 for corporation tax.
  • Hybrid mismatch arrangements: agreed OECD rules implemented from 1 January 2017.
  • Intangible assets: provisions to prevent manipulation of the rules by the transfer of assets to partnerships, from 25 November 2015.
  • Finance costs restrictions for landlords paying income tax: minor clarifications from 6 April 2017.
  • Tax provisions affecting banks: definition of excluded entities amended to permit certain additional activities, from a variety of dates for different provisions.
  • Bank losses: proportion of profits that can be relieved by carried-forward losses reduced from 50% to 25% from 1 April 2016.
  • Oil and gas supplementary charge: reduced from 20% to 10% for accounting periods beginning on or after 1 January 2016, with transitional rules for periods straddling that date.
  • Oil and gas: cluster area and investment allowances: HMRC given power to allow tariff receipts to be covered by the allowances by regulations made after Royal Assent to the Bill, which may have retrospective effect.
  • Oil and gas – onshore, cluster area and investment allowances: minor amendments to ensure that the legislation works as intended, from 16 March 2016.
  • Petroleum revenue tax: rate reduced from 35% to nil for chargeable periods ending after 31 December 2015.
  • Securitisation and annual payments: enabling legislation to permit HMRC to clarify, by regulations, that ‘residual payments’ can be made without withholding tax.
  • Simplified expenses for business use of home: regime amended to accommodate partnerships from 6 April 2016.