Government delays double tax crackdown for nine months

The Treasury said yesterday it would postpone the implementation of the new plans from July 1, 2000 to March 31, 2000.

Accountancy, tax and business groups have complained bitterly that the plans, unveiled in post-Budget press releases in March, would disrupt British business and adversely affect the competitiveness of the UK as a location for major companies. Disagreements over the cost of the move to British business, estimated by some to run to several billion pounds, led to an unusually bitter war of words between PricewaterhouseCoopers and chancellor Gordon Brown.

The proposals abolish the so-called ‘Dutch-mixer’ structure whereby UK multinationals were able to average their overseas profits such that they only paid UK tax on those profits if the average rate of tax was less than the UK rate of 30%. They also include a number of detailed changes in the manner of calculation.

The government is reported to have stopped short of dropping the idea entirely, but has agreed to the delay because some companies faced difficulties because of their convoluted structures.

Stories leading up to this development are listed below:

Double tax changes will cost UK plc £740m every year, says CBI

Tax institute protests over chancellor’s double tax changes

Double tax: It’s not too late to change your mind, Mr Brown

800 page Finance Bill pushes ahead with changes to double tax relief

Tax wars: Storm over double tax relief ‘echoes IR35’ changes

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