The chancellor of the exchequer, Philip Hammond, has published a letter providing a brief response to the seven main recommendations in the Office of Tax Simplification’s (OTS) report on simplifying corporation tax computations. None of the recommendations have been accepted unequivocally, though some are to be considered further. In particular, the idea of replacing capital allowances with tax deductible accounts depreciation is to be the subject of a specific new review by the OTS.
The chancellor’s responses may be summarised as follows:
Five-year corporation tax roadmap to sit alongside the business tax roadmap: the chancellor remains committed to the business tax roadmap, but makes no mention of adopting a separate one for corporation tax.
Aligning tax and accounts, in particular for small companies: This should be considered further in light of its potential impact on the exchequer, and the OTS should engage with implementing the ‘making tax digital’ reforms.
Aligning definitions between management expenses and trading deductions, and reforming the schedular system: The chancellor has no current plans for reform in these areas, owing to potential uncertainty and transitional burdens.
Exploring the use of accounts depreciation instead of capital allowances: The chancellor has asked the OTS to look into this in more detail, and will agree the terms of reference for this review over the coming weeks.
Embedding the customer relationship manager role for large companies: The OTS should engage with the consultation announced at Spring Budget 2017 on compliance and risk profiles for large companies. (The consultation was delayed as a result of the general election, but is expected to go ahead in due course.)
The letter notes that government officials are working with the OTS on the feasibility of the other 25 proposals in the report. See http://bit.ly/2vrUD56.
The chancellor of the exchequer, Philip Hammond, has published a letter providing a brief response to the seven main recommendations in the Office of Tax Simplification’s (OTS) report on simplifying corporation tax computations. None of the recommendations have been accepted unequivocally, though some are to be considered further. In particular, the idea of replacing capital allowances with tax deductible accounts depreciation is to be the subject of a specific new review by the OTS.
The chancellor’s responses may be summarised as follows:
Five-year corporation tax roadmap to sit alongside the business tax roadmap: the chancellor remains committed to the business tax roadmap, but makes no mention of adopting a separate one for corporation tax.
Aligning tax and accounts, in particular for small companies: This should be considered further in light of its potential impact on the exchequer, and the OTS should engage with implementing the ‘making tax digital’ reforms.
Aligning definitions between management expenses and trading deductions, and reforming the schedular system: The chancellor has no current plans for reform in these areas, owing to potential uncertainty and transitional burdens.
Exploring the use of accounts depreciation instead of capital allowances: The chancellor has asked the OTS to look into this in more detail, and will agree the terms of reference for this review over the coming weeks.
Embedding the customer relationship manager role for large companies: The OTS should engage with the consultation announced at Spring Budget 2017 on compliance and risk profiles for large companies. (The consultation was delayed as a result of the general election, but is expected to go ahead in due course.)
The letter notes that government officials are working with the OTS on the feasibility of the other 25 proposals in the report. See http://bit.ly/2vrUD56.
