Part of the vast array of documents published today includes the Business Tax Roadmap – this is a document that sets out where we’ve come from in terms of the development of business and corporate tax legislation in the past decade, and where the Government now wants to take us by 2020. If you are a person advising or working in a reasonably complex corporate it’s a must read.

There’s a lot to take in and the document also picks up on entrepreneurial matters including CGT rates but I want to touch on three specific areas as follows:

• First of all the rate of corporate tax will drop to 17% instead of 18% in 2020. The drop from 33% when I began in corporate tax in 1999 at KPMG Bristol is unfathomable. How have we got here? And how much further can we go? Is the ‘race to the bottom’ real?

• The general interest restriction that HM Treasury announced was coming now looks even more certain and elements of the mechanics are being confirmed. The roadmap tells us that interest deductions will be limited to 30% of EBITDA. Those groups with less than £2m of interest expense will be spared the extra compliance burden – but that will still include many companies that I think of as genuine SMEs. So this stuff is going to apply at a relatively low level. The one saving grace is that the ‘worldwide debt cap rules’ will be repealed. Good news for me personally as this is a very technically complex rule. The new interest restriction rules will apply from 1 April 2017.

• Like the interest restriction, many other countries operate a loss restriction and the UK has always been very liberal in its approach to loss utilisation. We are now faced, in certain circumstances, with a loss restriction. In essence where a company has losses brought forwards and a current year profit of more than £5m, only half of the brought forward loss will be available for use. In return for that pain losses incurred from 1 April 2017 onwards and carried forwards will be able to be offset against profits of all group companies. In short losses will be much more easily used.

So are we following Talking Heads or is this business roadmap going to help deliver the UK from the economic doldrums? I have no idea…..but the constant change to the corporate tax landscape since 2002 is beginning to hurt my cerebrum.

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