Few Changes in UK's 2016 Fall Statement | KPMG | CA

Few Changes in UK's 2016 Fall Statement

Few Changes in UK's 2016 Fall Statement

The United Kingdom opted for continuity in its 2016 Autumn Statement, but it also emphasized a commitment to cracking down on tax avoidance.

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The United Kingdom opted for continuity in its 2016 Autumn Statement, but it also emphasized a commitment to cracking down on tax avoidance. Released November 23, 2016, the Autumn Statement commits to the government's past announcements regarding reforms to the UK's loss regime and the UK's planned implementation of the OECD's BEPS proposals (including in relation to hybrid mismatches from January 1, 2017 and restricting interest deductions from April 1, 2017).

Tax highlights
Select highlights from the Autumn Statement include:

  • An increase in the standard rate of Insurance Premium Tax to 12% (from 10%), starting June 2017
  • Confirmation of the reduction in the corporate tax rate to 19% as of April 2017, and to 17% as of April 2020
  • Introduction of a VAT rate simplification system that will crack down on VAT avoidance; a new rate of 16.5% will apply to businesses with "limited costs", starting April 2017
  • Confirmation that a new penalty regime targeted at enablers of defeated tax avoidance schemes will be introduced.

The UK government is also considering subjecting non-resident companies receiving taxable UK income to corporation tax rather than income tax, as is presently the case. The government will introduce a consultation on this in Budget 2017.

The UK government is also considering subjecting non-resident companies receiving taxable UK income to the corporate tax regime. This will mainly impact non-resident corporate landlords, bringing them within the new interest restrictions and loss rules. The government will introduce a consultation on this in Budget 2017.

For more information, contact your KPMG adviser.

Information is current to November 29, 2016. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500.

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