I remember the days when a “road map” was a book that helped you get from A to B and was normally found in the glove box of your car or stuffed between the seat and the transmission tunnel, but then that probably dates me. These days, the words have other connotations and commonly is a method of setting out a plan to meet an objective.
Well, HM Treasury has published a Business tax road map which sets out the government’s plans for business taxes to 2020 and beyond. This new road map goes further than the first Plan published in 2010, by setting out plans for major business taxes to 2020 and beyond. It draws together the results of several major areas that have already been reviewed, including the taxation of multinationals, the future of business rates, and the way we tax business energy use. And it outlines measures to support businesses, particularly small businesses, in the years to come.
The government propose delivering a significant package of tax reforms over this Parliament. The government will:
Continue to reduce tax rates to drive growth, including supporting small business, by: reducing the business rates burden by £6.7 billion, ensuring the smallest businesses pay no rates at all, and modernising business rates so they are fit for the twenty-first century cutting corporation tax to 17% in 2020, supporting investment and ensuring the UK has by far the lowest rate in the G20 introducing a major package to support investment in the North Sea, including taking Petroleum Revenue Tax to 0% and halving the Supplementary Charge reducing Capital Gains Tax for most assets and extending entrepreneurs’ relief, to provide a further incentive for investment into companies, helping them to access the finance they need to expand and create jobs abolishing Class 2 National Insurance contributions (NICs), which will reduce the NICs paid by self-employed individuals by an average of £134 a year and will end an outdated and complex feature of the NICs system Build on progress from the last Parliament to tackle avoidance and aggressive tax planning and ensure a level playing field by: Limiting the level of deductions for interest expense that can be offset against profits to 30% of a group’s earnings; targeting the measure by introducing a group ratio rule, an exemption for public benefit infrastructure and a £2 million de minimis threshold Eliminating the tax advantage arising from multinationals’ use of hybrid mismatch arrangements involving permanent establishments Extending the UK’s withholding tax rights over royalties Ensuring non-resident property developers pay tax in the UK on profits they make in this country Simplify and modernise the tax regime by: Simplifying the business energy tax regime: abolishing the CRC energy efficiency scheme, and offsetting the costs through an increase in the Climate Change Levy Modernising the corporation tax rules on losses, making the system more flexible for business, while ensuring that companies pay tax when they make profits in excess of £5 million Reforming Stamp Duty Land Tax on non-residential property transactions to reduce distortions, cutting the tax for many businesses purchasing property Allowing businesses, the self-employed and landlords to adopt pay-as-you-go tax payments, enabling them to choose payment patterns that suit them and better manage their cash flow Improving HMRC’s customer service including introducing a dedicated phone service for businesses filing and paying their taxes for the first time, offering a 7-day a week service on tax credit phone lines and new investment to cut call waiting timesI particularly like the very last point – now, I wonder why?
