HMRC has been working on a project to fix the UK tax code so that – following the introduction of IFRS 16 – the tax rules for leased plant and machinery continue to work broadly as they do currently. On 1 December, HMRC published two consultation documents. Leasing: tax response to accounting changes focuses mostly on amendments to the long funding leasing rules with some comment on other areas. Corporate interest restriction: tax response to accounting changes for leasing explains the impact of IFRS 16 on the corporate interest restriction and outlines three possible replacements for the finance lease/operating lease divide.
