TaxPersonal TaxDouble tax relief runs out of time

Double tax relief runs out of time

Fears are growing that multi-national companies will be left with little or no time to act on new regulations for double tax relief if their publication is left as late as Gordon Brown's Budget on 7 March.

The regulations come as part of the controversial changes to DTR and were promised for publication in January.

With still no sign of the rules companies fear publication on 7 March will leave them desperately little time to put the regulations into practice before the go-live date of 1 April. If consultation is required companies expect impossible time pressure.

Nicholas Dee, chairman of the Confederation of British Industry’s tax committee, said: ‘There is great concern within industry that this has not been sorted out and the CBI has made this very clear to senior people at the Revenue.’

Industry is still concerned that the DTR changes are going to cost millions and cause a serious disadvantage to some companies.

In last year’s Budget, Gordon Brown proposed to cap the credit for tax paid on dividends earned by UK-owned foreign companies to 30%. After a devastating backlash, the cap was lifted to 45%, but this was for dividends paid through offshore intermediary companies. Dividends paid direct to a UK parent received no cap.

Industry believes this ‘discriminates’ against offshore holding companies and creates an unnecessarily complex system which forces them into massive restructuring if they want to take advantage of the new rules.

Links

Budget 2001

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