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  • The budget, in fullAutumn BudgetNovember 2017

    GO

  • Commentary 01

    Twitter word cloud 01

    Autumn Budget speech word cloud 02

    Business measures 03

    Antihybrid mismatch rules 03

    Business rates changes 04

    Capital gains: depreciatory transactions within agroup 04

    Capital gains: Foreignbranch incorporation 05

    Corporate interest restriction rules: amendments 05

    Corporate tax and the digital economy: position paper 07

    Corporation Tax: Indexation allowance on chargeable gains 08

    Energy and water saving technologies 08

    Enterprise Investment Scheme 09

    Entrepreneurs relief 10

    Intangible fixed asset regime consultation 10

    Intangibles: Grantof licence between related parties 11

    IR35: Offpayroll working in the private sector 11

    Late tax return submission and late tax payment sanctions 12

    North Sea oil and gas 12

    Property income: nonresident companies 13

    R&D tax relief 14

    Royalties withholding tax 14

    Stamp duty reserve tax 15

    Taxation of gains by nonresidents 15

    Indirect tax measures 17

    Aggregates levy 17

    Air Passenger Duty rates 17

    Alcohol duty rates and bands 18

    Climate Change Levy 18

    Late tax return submission and late tax payment sanctions 19

    Contents

    The budget, in full | Autumn Budget

  • Reducing plastics waste 20

    Tobacco duty and Minimum Excise Tax 20

    VAT: Accessto refunds 21

    VAT fraud in labour provision in the construction sector 21

    VAT: Onlinefraud 22

    VAT registration thresholds maintained 23

    VAT: Vouchers 23

    Vehicle excise duty 24

    Individuals measures 25

    Certificate of Tax Deposit Scheme closure 25

    Electric vehicles: Charging 25

    Enterprise Investment Scheme 26

    Entrepreneurs relief 26

    IR35: Offpayroll working in the private sector 27

    Late tax return submission and late tax payment sanctions 27

    National insurance changes 28

    Rates and allowances 29

    Stamp duty land tax (SDLT) relief for firsttime buyers 29

    The Taylor Review and the gig economy: discussion paper to be implemented 30

    Employers measures 32

    Company car tax diesel supplement increase 32

    Electric vehicles: Charging 32

    Employee expenses 33

    Increased flexibility for SAYE employee share schemes 33

    IR35: Offpayroll working in the private sector 34

    Late tax return submission and late tax payment sanctions 35

    National insurance changes 35

    The Taylor Review and the gig economy: discussion paper to be implemented 36

    Contents (continued)

    The budget, in full | Autumn Budget

  • Commentary

    Twitter word cloudThe most popular phrases tweeted during Philip Hammonds 2017 Autumn Budget speech

    01

    The budget, in full | Autumn Budget

  • Autumn Budget speech word cloudThe most popular phrases during Philip Hammonds 2017 Autumn Budget speech.

    02

    The budget, in full | Autumn Budget

  • Business measures

    Antihybrid mismatch rulesThe measure

    A small number of technical changes are being introduced to the regime on hybrid and other mismatches (the regime having taken effect from 1January 2017). Atthe time of writing, draft legislation for the technical changes has not been published, but the government has set out an overview. Thereare eight changes mentioned, and these include:

    Amendments to generally disregard taxes charged at anil rate for the purposes of the regime;

    Amendments to clarify the scope of the legislation in relation to multinational companies (multinational companies in this context generally means entities that have abranch outside their territory of residence). Thenature of the amendments is not described;

    Amendments to the definition of tax so that withholding taxes are ignored for the purposes of the regime;

    Amendment to the hybrid payee rules, which could be particularly beneficial to some funds. Thecurrent rules could lead to adisproportionate restriction where one investor in afund partnership views the partnership as opaque. Thechange will result in there being more proportionate counteraction; and

    Amendment to the double deduction rules although the changes are notclear.

    The government states that the changes are not intended to alter the overall scope of the regime.

    Our viewAlthough draft legislation has not yet been released, clarifications to areas of uncertainty (particularly those related to the hybrid payee rules) are welcome. Thatsaid, the decision to apply some of these retrospectively indicates that it is important that complex law has adequate consultation prior to enactment so far as possible.

    Who will be affected by this measure?

    The antihybrid and other mismatches regime applies to counter mismatches that would otherwise arise in the tax treatment of transactions. Typicallythis would be in the context of crossborder transactions within amultinational corporategroup.

    The changes will impact asmaller number of corporate groups whose arrangements fall within the specific circumstances targeted and some funds. Determiningthe precise impact will require analysis of the legislation once available.

    When will the measure come into effect?

    The government states that the amendments concerning the treatment of nil rate taxes, and multinational companies, will have effect from 1January 2018. Theother changes took effect from 1January 2017 i.e.the commencement date of the currentrules.

    03

    The budget, in full | Autumn Budget

  • Business rates changesThe measure

    The Chancellor has announced that the annual inflationary uplift in business rates, which is currently linked to RPI, will be linked to CPI from2018.

    Also announced was achange to the frequency with which nondomestic properties are valued for the purposes of business rates, which will result in revaluations every three, rather than fiveyears.

    Our viewThe acceleration of the change of annual inflationary increase from RPI to CPI, which was originally planned for 2020, will be welcomed by businesses.

    The increased frequency of valuations, for which ratepayers will be required to provide regular information to the Valuations Office Agency (VOA) will, however, increase the administrative burden.

    Who will be affected by this measure?

    Business ratepayers.

    When will the measure come into effect?

    The change from RPI to CPI will take effect from 1April2018.

    The increased frequency of valuations will commence following the next planned revaluation, currently due in2022.

    Capital gains: depreciatory transactions within agroupThe measure

    When disposing of shares in asubsidiary at acapital loss, acompany must look back and take account of earlier depreciatory transactions that have materially reduced the value of the shares and decrease the allowable loss by this amount. Thisprevents companies claiming capital losses where there has been no economic loss to the group. Currently,companies only have to look back to depreciatory transactions within the previous six years, but in future the entire history of the shareholding will need to be considered.

    Our viewThis measure will require some increased record keeping, but as capital losses have been less useful since the introduction of the substantial shareholdings exemption in 2002, this should not be ahuge burden.

    Who will be affected by this measure?

    Companies that dispose of shares in asubsidiary company giving rise to acapitalloss.

    When will the measure come into effect?

    The measure will apply to disposals made on or after 22November2017.

    For negligible value claims, the measure will apply to the date of the claim and not any earlier date that might be specified.

    04

    The budget, in full | Autumn Budget

  • Capital gains: Foreignbranch incorporationThe measure

    Current UK tax law provides for adeferral of capital gains arising where aUK resident company transfers the assets of aforeign branch into aforeign company in exchange for an issue of shares (a branch incorporation).

    The government today announced ameasure to correct an anomaly in the current rules, whereby the gains are potentially crystallised if the UK company subsequently makes adisposal of the shares acquired in exchange for the transfer of the assets.

    If the shares are subsequently involved in ashare reorganisation this would typically be deemed to involve no disposal (therefore not crystallising the deferred gains). Howeverthe UK substantial shareholding exemption (SSE) takes priority over the share reorganisation rules and displaces the nodisposal fiction. Incases where the SSE applies to asubsequent share reorganisation, the deferred gains might be crystallised. Thegovernment has announced that the nodisposal fiction will be retained for this purpose, notwithstanding that SSE would apply. Thisshould avoid the unintended crystallisation of thegains.

    Our viewThis change deals with an anomaly in the current law. Whilstthe number of taxpayers impacted is probably small it will be welcomed.

    Who will be affected by this measure?

    UK resident companies that have claimed capital gains deferral relief on transferring the assets of aforeign branch into aforeign company, where the shares issued are subsequently involved in ashare reorganisation.

    When will the measure come into effect?

    The law change will have effect for disposals on or after 22November2017.

    Corporate interest restriction rules: amendmentsThe measure

    BackgroundThe corporate interest

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