TaxCorporate TaxMore anti-avoidance measures announced

More anti-avoidance measures announced

Ministers announced yesterday that they would bring forward legislation to prevent companies crystallising tax relief for losses before the switch to IFRS.

Link: Timms: progress made on US and IAS standards

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.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

1m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

3m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

4m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter