We were excited to see our clients INEOS Team UK in the news recently as they officially named their race boat for next year’s America’s Cup.…
Following the first autumn Budget for 20 years, the main hope from businesses was that the Chancellor would keep the number of changes to the tax system to a minimum, after a year featuring two Finance Acts, changes in approach on
making tax digital (MTD) and numerous consultations, a feat which he has largely managed with draft Finance Bill 2018.
The fact that relatively few tax changes were announced for business was well received. Large corporates were dismayed to see even more changes to the corporate interest restriction which is already complex and difficult to apply.
The freezing of the indexation allowance from January 2018 also dealt a blow to companies.
The big news however was that Finance Bill 2019 will see the extension of CGT to all disposals of UK property by all non-resident companies and individuals – previously this had only applied to those disposing of UK residential property.
Whilst rebasing to April 2019 will be available, an anti-forestalling rule came into effect from 22 November counteracting arrangements undertaken to avoid the impact of the new rules by taking advantage of provisions within the UK’s treaty network.
In the Chancellor’s own words, in the run up to Brexit “if we are truly to build an economy that is fit for the future, then we have got to get all parts of the UK firing on all cylinders”. Overall, there is considerable support for the economy over the next three years designed to help support the economy post-Brexit, funded in part by the tax measures in this Finance Bill.
First time buyers have cause to celebrate with stamp duty land tax on purchases up to £300,000 being abolished and with relief on the first £300,000 of the purchase price of properties up to £500,000, although this relief may be less generous in its detail than it appears at first glance.
There is also a huge focus on innovation and skills to boost productivity. There was recognition of the importance of new tech businesses, a big growth area, with the announcement of over £500 million being spent on a range of initiatives from Artificial Intelligence, to 5G and full fibre broadband, as well as boosting investment in science education and skills. The Chancellor also announced the allocation of a further £2.3 billion for investment in research and development (R&D) and increasing the large company R&D tax credit to 12%.
Please read our update on the tax measures included in draft Finance Bill 2018, as well as those announced for Finance Bill 2019. If you have any queries about how these measures may affect you or your business, please speak to your usual PKF Francis Clark contact.