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Banking tax provisions updated for new IFPR

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The Taxation of Banks (Amendments to the Corporation Tax Act 2009, Corporation Tax Act 2010 and Finance Act 2011) Regulations, SI 2022/286, amend various provisions in primary tax legislation to take account of the new regulatory framework that applies to banks from 1 January 2022 found in the FCA’s new investment firm prudential regime (IFPR). The amendments seek to ensure that FCA-regulated businesses continue to be taxed as they were previously.

The relevant banking tax rules affected include the bank levy, the code of practice on taxation for banks, restrictions on relief for compensation payments by banks, the bank loss relief restriction and the corporation tax surcharge on banking companies.

The tax rules contain definitions that draw from the FCA handbook for the previous regulatory regime, which was replaced by the IFPR with effect from 1 January 2022. Several provisions of these regulations therefore have retrospective effect from 1 January 2022.

Amendments relating to the activity of operating an organised trading facility may bring new entities within the scope of the banking tax rules and will have effect from 5 April 2022.

Issue: 1569
Categories: News