Announcing the deferral yesterday, paymaster general Dawn Primarolo said: ‘The government announced a deferral of IAS transitional adjustments for tax at the PBR in order to relieve companies of a considerable degree of uncertainty following their representations.
‘It is very disappointing that some companies have tried to manipulate the situation to their advantage. We have acted to ensure that tax receipts are protected from this sort of arrangement, for the benefit of the vast majority of taxpayers.’
Ernst & Young has expressed disappointment that the government’s attempt to limit turbulence in the gilts market has not been coupled with a ‘fairer set of rules’ on the transition to international financial reporting standards.
Roger Murray, E&Y partner, said: ‘If companies crystallise losses on financial instruments it will not be to avoid tax but to deal with uncertainty, because nobody can be sure what the transitional rules ultimately will be.
‘It is bad enough that fair value gains and losses are even taxable. It would be much better if they were only recognised for tax on realisation, when recycled to profit and loss in the accounts. Having unfair transitional rules compounds the problem.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states