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Business Tax Roadmap

HM Treasury has recently published a Business Tax Roadmap which sets put the governments plans for business tax to 2020 and beyond. It brings together the results of several major surveys and investigations including the taxation of multinationals, business rates and the taxation of business energy usage. It also outline a number of measures to so support business and specifically small businesses in the future.

Tax Reforms

The government intends to deliver a wide array of tax reforms over the coming parliament (this was of course all said pre Brexit):

  1. Reducing  the business rates by £6.7 billion – making sure that small businesses pay no rates at all and modernising the system so it works in the 21st century.
  2. Reducing the corporation tax rate form 20% to 17%, helping to support business investment and making sure we have th lowest corporation tax rate in the G20 in turn helping to boost growth.
  3. Bringing in a substantial package to support North Sea investment, reducing Petroleum Revenue Tax to 0% and halving the supplementary charge.

4. Reducing Capital Gains Tax and increasing Entrepreneurs’ Relief which should help to increase more investment in companies.

5. Getting rid of Class 2 national insurance contributions which will reduce the amount of NIC paid by self employed people and close a complex and outdated feature of the NI system.

Tax Avoidance

Tackaling tax avoidance  and aggressive tax planning to try and ensure a level playing field for all:

  1. Limiting the level of interest deductions that can be offset from a groups earnings by introducing a ratio rule (this also includes an exception for infrastructure spending of a minimum of £2 million)
  2. Getting rid of the tax advantage for multinationals’ use of hybrid mismatch arrangements involving permanent abodes.
  3. Extending the UK’s ability to withhold tax rights on royalties.
  4. Ensuring that non UK based property developers pay the appropriate taxes on profits made in the UK.

Tax Modernisation

Modernise the UK’s tax regime so its fit for purpose for a modern economy.

  1. Remove the hurdles form the business energy tax scheme: abolish the CRC energy efficiency scheme and offset the costs by an increase in the climate change levy.
  2. Rework the corporate tax rules on losses increasing flexibility for businesses while ensuring companies pay taxes when they make profits in excess of £5 million pounds.
  3. Change the Stamp Duty Land Tax on non-residential property transactions, this is aimed at helping businesses who purchase property.
  4. Enabling self employed people, businesses and landlords to make pay-as-you-go tax payments aiding cash flow and improving flexibility within the system.
  5. Improving HMRC’s customer service (WOW!) including dedicated phone systems for businesses paying their taxes for the first time, providing a 7 day a week service for tax credit phone lines and more investment aimed at reducing call waiting times.

I hope you enjoyed reading this blog post about the business tax roadmap. If you need any more information or advice about running your business payroll give us a call – were always happy to help!