Corporate Tax
Simon Palmer, Head of International Tax Services, KPMG LLP (UK)
Snapshot
Budget 2009: Corporate Tax Summary
The 2009 Budget was a mixed bag on the corporate tax side. The surprise announcement of a temporary 40 percent First Year Allowance for expenditure on plant or machinery in the main capital allowances pool was welcome although it is far from certain that it will stimulate capital investment to the extent the Chancellor suggested. The extension for a further year of the loss carry back for SMEs is also good news but, as it is still limited to £50,000 of losses, its impact remains relatively small.
The decoupling of the introduction of the worldwide debt cap and the distribution exemption is very welcome and shows that HMRC has been listening to business. The broadening of the circumstances in which a chargeable gain or loss may be reallocated within a group is also a very sensible relaxation of the rules and should help companies obtain effective relief for losses suffered.
A concern for large companies will be the decision to introduce personal liability for senior accounting executives, announced without any prior consultation. This arises from a Budget measure that creates a legal requirement for the Senior Accounting Officers (likely to be the Group CFOs) to certify personally and annually that adequate controls are in place to prepare accurate tax computations. Many companies are likely to have difficulty in confirming that their systems are adequate for all tax computation purposes, particularly in relation non-system areas such as transfer pricing, and there is a real risk of a significant additional administrative burden for most businesses affected.
So overall, although there is a lot for companies to be happy about, for large companies at least, this is likely to be overshadowed by the announcement on personal liability and the concern that this could herald a Sarbanes Oxley equivalent for UK tax.
For more information contact:
Simon Palmer
For all Budget press enquiries please contact KPMG's press office on
020 7694 8773.
- Taxation of Foreign Profits
- Personal tax accountability of senior accounting officers of large companies
- Extension of trading loss carry back for business
- Disguised Interest and Transfers of Income Streams
- Groups: Reallocation of chargeable gains
- Double taxation relief avoidance: repayment of foreign tax
- Group Relief: Preference Shares
- Hedging proceeds from future share issues
- Tax relief for Business Expenditure on cars
- Double taxation relief on dividends
- Reclaiming income tax, capital gains tax and corporation tax overpayments
- Foreign exchange losses: targeted anti-avoidance rule
- Corporate Intangible Asset Regime
- Double taxation relief avoidance: Banks using manufactured overseas dividends
- Double Taxation Relief Avoidance: Credit Abuse
- Financial arrangements avoidance
- Anti-Avoidance: Plant and Machinery Leasing
- Sale of Lessor Companies etc: Reforms
- Stamp Duty Land Tax: Temporary Increase in Thresholds
- Stock Lending and Repurchase Arrangements: Stamp Duty, Stamp Duty Reserve Tax and Tax on Chargeable Gains
- Stamp Duty Land Tax: Alternative Finance Investment Bonds
- Stamp Duty Land Tax: Treatment of Shared Ownership
- Stamp Duty Land Tax: Leasehold Enfranchisement
- Real Estate Investment Trusts ("REIT"): Artificial Restructuring
- Real Estate Investment Trusts ("REIT"): Amendments
- North Sea Fiscal Regime
- Certainty on trading and investment for authorised investment funds and investors in equivalent offshore funds
- Tax Elected Funds
- Chargeable gains and offshore funds
- Offshore funds
- New rules for investment trusts investing in interest-bearing assets
- Manufactured interest
- Transfers of business between mutual societies
- Agreement to forgo tax reliefs for companies which are part of Government Asset Protection Scheme
- Substantial donors regulations
- Publishing the names of deliberate tax defaulters
- Worldwide Debt Cap
- Computations or profits in a non Sterling currency
- Stamp Duty Land Tax: Consultation Document on Disclosure of Tax Avoidance Schemes
- Furnished Holiday Lettings in the European Economic Area
- Structured foreign exchange arrangements
- Temporary First Year Allowances: Plant and Machinery
- Temporary First Year Allowances: Plant and Machinery
- Timing of relief for financing costs
- Waiver of connected party trade debts
- HMRC Charter
