DETAILS on corporate tax reporting requirements have been released in the draft of the Finance Bill 2017.
The government intends, with the draft bill, to tackle tax evasion and avoidance as well as supporting business through the tax system, implementing policies following the Budget 2016 and the Autumn Statement.
The Finance Bill plans to prevent the use of disguised remuneration schemes, introduce a new tax avoidance scheme penalty. It will also create a new legal requirement to correct a failure on the payment of UK tax on offshore accounts and investments.
The new legal requirement is that companies must report on their complex financial structures including offshore accounts and notify HMRC, they will receive a notification number to provide to their clients who will be using it in their tax return or personal tax account.
Dawn Register, tax partner at BDO, said: “HMRC are trying to ensure that there are no loopholes for people avoiding common reporting standards. There will be concerns on reporting structure as many people and companies will already be tax compliant, it creates another administrative burden on those already fully tax compliant. HMRC are trying to catch those avoiding tax but it makes you wonder if more layers of rules are really needed.”
The consultation on draft legislation published 5 December 2016 will run until 1 February 2017, with final details being confirmed in Budget 2017 and legislation introduced in the corresponding Finance Bill.
David Prestwich, tax partner at Mazars, commented: “The most important aspect for accountants is actually what has not been covered in the draft bill. Also, the chance to further demonstrate why the UK is the number one place to do business was missed.”
In the recent Autumn Statement the government provided incentives to encourage business, social investment, and infrastructure. This included increasing the amount of Social Investment Tax Relief and providing 100% business rates relief.
Jane Ellison, financial secretary to the Treasury, said: “We are recognised as having one of the world’s most effective tax regimes and this government is acting to ensure it continues to provide certainty for businesses, fairness for workers and a sound tax base. We are making sure we are prepared to meet the challenges and seize the opportunities presented by Brexit.”
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Signed into law by president Barack Obama in 2010, the Dodd-Frank legislation has tightened regulation of the US financial system
Just when SMEs thought they knew the lie of the land in terms of the Brexit timescale, Theresa May has caught them by surprise. Salvador Amico of Menzies asks how SMEs should react to the news of a snap election on 8 June