UK and International Tax news

Corporate Tax Roadmap

Tuesday 5th November 2024

HMRC has issued its Corporate Tax Roadmap, which it says is designed to give businesses the certainty they need, and confidence that the UK intends to maintain its competitive position among major economies. The Roadmap includes the following commitments:

Corporation Tax Rate

  • Capping the headline rate of CT at 25% for this Parliament
  • Monitoring international developments with a view to ensuring that the UK’s regime remains competitive
  • Maintaining the Small Profits Rate and marginal relief at their current rates and thresholds

Capital Allowances

  • Maintaining permanent full expensing for this Parliament
  • Maintaining other core features of the UK’s capital allowances regime including the £1m AIA, writing down allowances, and the Structures and Buildings Allowance
  • Further exploring how to provide greater clarity on what qualifies for different capital allowances, the simplification of capital allowances legislation, and the tax treatment of predevelopment costs
  • Exploring an extension of full expensing to assets that are bought for leasing or hiring

R&D Reliefs

  • Maintaining rates for the merged RDEC scheme and the Enhanced Support for R&D Intensive SMEs
  • Enhancing the administration of R&D reliefs by establishing the R&D expert advisory panel, continuing to improve signposting and guidance on R&D reliefs, and launching an R&D disclosure facility by the end of 2024
  • To consult on widening the use of advance clearances in the R&D reliefs

Patent Box and Intangible Assets

  • Maintaining the Patent Box
  • Preserving the UK’s competitive regime for intangible fixed assets

Other Corporation Tax Reliefs

  • Maintaining an Audio-Visual Expenditure Credit and a Video Game Expenditure Credit
  • To consult on the effectiveness of Land Remediation Relief

International Corporation Tax Issues

  • Further consultations on reforms to the rules on transfer pricing, permanent establishments, and Diverted Profits Tax, including the potential removal of UK-to-UK transfer pricing
  • Consulting on further changes to transfer pricing legislation, including potentially lowering the thresholds for exemption and introducing a requirement for multinationals to report cross-border related party transactions to HMRC
  • Reviewing the transfer pricing treatment of cost contribution arrangements
  • Continuing to support international agreement on a multilateral solution under Pillar 1 and maintaining the UK’s commitment to repeal the UK’s digital services tax when that solution is in place
  • Continuing to ensure that the UK’s domestic rules reflect internationally agreed updates to Pillar 2
  • Considering opportunities for simplification/ rationalisation of the rules for taxing cross-border activities in light of Pillar 2

Tax Administration

  • Developing and consulting on a new process that will give investors in major projects increased advance certainty
  • Publishing an update in the spring on how the government will forward its ambitions on modernising the technology the CT system relies on

 

If you would like more information on the above, please contact Keith Rushen on 0207 486 2378.

 

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