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Miscellaneous

You will find listed here all articles related to Pre-Budget Report 2009 - Miscellaneous.

Indirect tax

The Pre-Budget Report confirmed that the standard rate of VAT will revert to 17.5% with effect from 1 January 2010. However, The Chancellor surprised some observers by making no further changes to the VAT regime, or to announce any further increase in the rate of VAT. The increase to 17.5% will put further pressure on hard pressed retailers, however given the need to raise additional revenue they may feel that the decision not to increase the rate beyond 17.5% was probably the best possible outcome.

Interest expense – post enactment changes to the world wide debt cap

Rather embarrassingly for the government, changes have been announced to the worldwide debt cap rules as enacted by Finance Act 2009. The amendments do not change the legislation significantly, but rather seek to correct what might be considered to be errors or anomalies. These changes will take effect from 1 January 2010 and therefore the amended rules will apply to groups of companies for the first period in which they may be subject to a debt cap restriction. As such it is important that groups use the amended legislation when analysing the extent to which the legislation impacts upon them. Draft legislation has been issued and comments are invited by HMRC, the closing date for which is 29 January 2010.

Research and Development Tax Incentives

In the UK, there are two parallel systems providing enhanced relief for research and development expenditure.

Tackling Tax Evasion

In his Pre-Budget Report the Chancellor made a very clear statement that the Government was going to continue its war on tax evasion with consultation on three measures:

Tax avoidance – HMRC expanding their intelligence gathering

The Government has published a consultation document with various proposals to widen and strengthen the disclosure of tax avoidance schemes (DoTAS) regime.

Furnished Holiday lettings (FHL)

Currently, a furnished holiday letting can be deemed to be a trade and as such enjoys more flexible loss relief, capital allowances, and certain capital gains reliefs. For Income tax and Capital Gains tax purposes these rules cease from 6 April 2010 and for Corporation tax purposes the rules cease from 1 April 2010 (“the relevant date”).

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