Advisers welcome 2011 Finance Bill draft
Less uncertainty, plus earlier tax consultation, please the profession
ADVISERS HAVE BROADLY WELCOMED the government’s draft finance bill legislation.
Provisions including longer consultation on tax changes and lower corporation tax rates have pleased the tax profession.
“We welcome the new government’s commitment to meaningful consultation on tax issues,” said CIoT president Vincent Oratore.
“This is further evidence of the willingness of the administration to listen to the concerns and suggestions of the tax profession and work with us to produce a more efficient tax system.”
PwC tax partner Alex Henderson said that new rules around capital gains would simplify the “thicket of highly technical tax measures”. Pre-sale dividends will be specifically exempted from rules intended to stop shifting of asset values to avoid CGT. “We hope that the government will keep up the momentum to ensure that these measures work as intended in practice.”
However Henderson was less impressed by the new controlled foreign companies legislation, as the proposal to exempt smaller companies from the tax rules only applied to those that are linked with large companies.
“Yet small and medium-sized companies are likely to have less resources to devote to dealing with the complexity of this legislation in the first place,” said Henderson.
Complex anti-avoidance rules around charities and “substantial donors” will be replaced with what is intended to be a simpler and more targeted provision, according to Baker Tilly head of tax George Bull.
Other proposals include: setting of Budget dates well in advance, plus earlier notice of legislation and other tax announcements; and feedback to show what changes have been made to proposals following consultations. A specific tax impact assessment will replace the current government-wide impact assessment.