Anti Avoidance Measures

 

Tackling avoidance

The recent release of the “Panama Papers”, leaking details of offshore arrangements undertaken by wealthy individuals and companies intended to shelter assets from the UK tax net and/or avoid tax on income, led to criticism from the opposition that the Government was soft on tax avoidance. 
 
The Chancellor responded today, firstly by outlining in great detail the avoidance measures he and his predecessor had introduced since 2010, and secondly by announcing new anti avoidance legislation.  These latter measures included, but were not limited to, the following:

 
Withholding tax on royalties

With effect from April 2019 withholding taxes will apply to royalty payments made to low tax jurisdictions in relation to sales to UK customers.  In the past multi national corporates such as Apple, Amazon & Google have sought to reduce their tax exposure on UK profits by making royalty payments to group companies set up in low tax regimes.

 
Extending offshore time limits

Following a consultation period in Spring 2018 the Government intends to extend the time period during which they can recover taxes arising from non deliberate offshore non compliance from four years to twelve years.

  
Requirement to notify HMRC of offshore structures

Following consultation the Government will seek to introduce a requirement for designers of offshore structures which could be used to avoid UK taxes to notify HMRC of the structures and their clients who are using them.
 

NIC and Employment Allowance

To combat some employers abusing the Employment Allowance, in order to avoid paying the correct amount of NICs often by using offshore arrangements, HMRC are to require upfront security from employers with a history of avoiding paying NICs in this way.

 
Disguised remuneration

The Government intends to tackle disguised remuneration avoidance schemes used by close companies (generally those with five or fewer shareholders) by introducing a close companies’ gateway to ensure liabilities from the new loan charge are collected from the appropriate person.

 
Double Taxation Relief

With immediate effect a restriction will be introduced to the relief for foreign tax incurred by an overseas branch of a company, to ensure the company does not get tax relief twice for the same loss.
 
To further bolster their attempts to target tax avoiders the Government is to invest a further £155 million in additional resources and new technology for HMRC, which they forecast will help bring in £2.3 billion of additional tax revenues.  This will assist and enable HMRC to:

  • tackle the hidden economy through new technology
  • further tackle those who are engaging in marketed tax avoidance schemes
  • tackle the enablers of tax fraud and hold intermediaries accountable for the services they provide using the Corporate Criminal Offence
  • tackle non-compliance among mid-size businesses and wealthy individuals
  • recover greater amounts of tax debt through a new taskforce to specifically tackle tax debts more than 9 months old

Our handy Tax Facts Pocket Guide provides you with the rates and figures you need to manage your personal and business finances.

Autumn Budget News

Budget Highlights for UK Manufacturing

Whilst the recent budget didn’t throw up any significant headline announcements for our Manufacturing Sector, there were various items outlined which should have a positive impact on the sector, including: Research & Development

Budget Review for Retail Sector

There are number of areas in the Autumn Budget that will impact on the retail sector.

Impact of the Budget for Family Businesses

It will come with little surprise that the second budget of 2017 failed to offer significant headline announcements, despite the rumour mill going in to overdrive during the past few days.

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