“I meet this…government…, directly, and face to face, once a year- no more- in the person of its tax-gatherer; this is the only mode in which a man situated as I am necessarily meets it; and it then says distinctly, Recognise me.”1
Draft Finance Bill 2014 was released today with a number of changes that will be important for businesses to recognise. A&M Taxand UK will be responding to the UK Tax Authorities with suggested improvements. This consultation process functions effectively and we ask clients to send us any submissions that they would like us to take forward by the deadline of 4 February 2014.
Summary of Key Changes
Given the deluge of anti-avoidance measures in recent years, it is difficult to see where else the Tax Authorities may focus. However, Partnerships have been targeted this year with a detailed campaign that is seeking to raise significant amounts of tax – perhaps a sign that the “Poachers” have pushed too far on the “Game Keepers.” The Tax Authorities also seem to have been inspired by none other than Saint Nick, with a commitment announced to publishing “Naughty lists” for (i) Banks that do not adopt the tax code of conduct requesting them to follow the spirit of tax legislation, and (ii) Promoters of aggressive tax avoidance schemes.
There has been a further increase in the Bank Levy on chargeable equity and chargeable liabilities to sustain the commitment to a 20% rate of corporation tax and the usual verbiage about tax simplification. The Oil and Gas industry is an unlikely beneficiary of Draft Finance Bill 2014, with a handful of measures designed to promote early investment in Shale Gas and to extend certain reliefs and exemptions. Businesses that operate with a controlled foreign company should also take note of the changes to “switch off” partial exemption rules for interest receipts arising where the “main purpose” is to transfer profits out of the UK.
We do have some concerns that the current wording of the Finance Bill anti-avoidance proposals will catch certain commercial transactions that are not tax motivated. We are lobbying to have this amended and will respond in due course.
Some of the Draft Finance Bill proposals were announced on 5 December and the rest were issued today. Our prepared document sets out a more detailed summary of the key changes impacting business.
Head of Alvarez & Marsal Taxand UK