Tag Archive for Corporation Tax

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Making Tax Digital for corporation tax scrapped

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By Anna Jordan on Small Business UK – Advice and Ideas for UK Small Businesses and SMEs

The government has confirmed that Making Tax Digital (MTD) will be scrapped for corporation tax (CT).

It was revealed in passing in HMRC’s Transformation Roadmap. Within the document, it states:

‘HMRC do not intend to introduce MTD for CT but are developing an approach to the future administration of CT that is suited to the varying needs of the diverse CT population.’

It remains to be seen what this means for how corporation tax processes will develop. What we do know is that it will begin with ‘the renewal of existing internal systems’ for corporation tax to make way for future innovations.

Andrew Tall, partner at HW Fisher, goes into more detail: “One aspect of the ongoing digitalisation effort involves discussions between HMRC and key stakeholders around the format of CT computations, with HMRC highlighting the need for standardisation and improved disclosure.

“Future areas of the project are expected to significantly expand mandatory disclosure in elements that are currently not consistently disclosed, such as the presence and content of a detailed profit and loss account, the expenses therein that are analysed, and the level of detail of such disclosure,” he said.

It could

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Rishi Sunak eyes hiking corporation tax even higher to 25%

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Originally written by Timothy Adler on Small Business
Rishi Sunak is eyeing increasing corporation tax from 19% to 25% in the Budget next Wednesday, March 3.
Previously, it was thought the Chancellor was only considering going as high as 24 per cent.
The chancellor needs to raise money to help start paying off the staggering £394bn deficit the UK economy is facing because of Covid-19, not least the £71bn the Government has spent supporting businesses.
>See also: Self-employed to be offered fourth and final £7,500 grant in Budget
Each percentage point hiked on corporation tax rates raises another £3.3bn in revenue. This implies that the chancellor could raise nearly £20bn if he increases corporation tax to 25%.
Mr Sunak is also getting political cover to do this because his US counterpart, Janet Yellen, said recently that US corporation tax might rise from 21 per cent to 28 per cent. This would mean that the UK could still claim to have the lowest level of corporation tax in the G7 group of developed nations. According to the Times, the first increase is likely to be in the autumn budget, with subsequent rises.
Also, corporation tax revenue overwhelmingly comes from a number of enterprise-level companies and corporates, as opposed

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Hot Business News Today

Rishi Sunak eyes hiking corporation tax even higher to 25%

by  •  • 0 Comments

Originally written by Timothy Adler on Small Business
Rishi Sunak is eyeing increasing corporation tax from 19% to 25% in the Budget next Wednesday, March 3.
Previously, it was thought the Chancellor was only considering going as high as 24 per cent.
The chancellor needs to raise money to help start paying off the staggering £394bn deficit the UK economy is facing because of Covid-19, not least the £71bn the Government has spent supporting businesses.
>See also: Self-employed to be offered fourth and final £7,500 grant in Budget
Each percentage point hiked on corporation tax rates raises another £3.3bn in revenue. This implies that the chancellor could raise nearly £20bn if he increases corporation tax to 25%.
Mr Sunak is also getting political cover to do this because his US counterpart, Janet Yellen, said recently that US corporation tax might rise from 21 per cent to 28 per cent. This would mean that the UK could still claim to have the lowest level of corporation tax in the G7 group of developed nations. According to the Times, the first increase is likely to be in the autumn budget, with subsequent rises.
Also, corporation tax revenue overwhelmingly comes from a number of enterprise-level companies and corporates, as opposed

Read more...

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Rishi Sunak weighs increasing corporation tax to 24%

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Originally written by Timothy Adler on Small Business
Rishi Sunak is eyeing raising corporation tax from 19 per cent to 24 per cent to help pay down Britain’s COVID-19 debt.
Such a move would raise £12bn next year, rising to £17bn in 2023-24, according to The Sunday Times.
Sunak will argue that 24 per cent is the global average tax rate for business and would still be lower than other European economies such as France, Germany, Italy and Spain.
>See also: Bank of England eyes Working Capital Jobs Retention Scheme
The corporation tax hike would be part of a £30bn tax squeeze on businesses, pensions and foreign aid, to help pay off the estimated £391bn the government will spend trying to stave off the economic consequences of Covid in 2020-21 alone.
Increase dividend tax
Meanwhile, the Treasury is also looking at increasing the tax rate for company directors who pay themselves in dividends – currently 7.5 per cent compared to a basic income tax rate of 20 per cent. Such a move would especially hurt sole traders and others who have already missed out on government COVID-19 financial support.
The Tories catcalled a proposal by Jeremy Corbyn’s Labour at the last election to tax dividends in line with

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Accountants alarmed by schoolboy howler in Labour manifesto for SMEs

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Originally written by Timothy Adler on Small Business
Accountants have raised their eyebrows at an unforced schoolboy howler in Labour’s manifesto, which the party has hurriedly gone in and fixed.
Labour has announced plans to increase corporation tax to 26 per cent for businesses, compared with today’s rate of 19 per cent.
Within this, Labour originally proposed that small businesses would pay corporation tax at a lower rate of 21pc if their turnover is over £300,000.
If kept in, this would have created an anomaly where a small business making a tiny profit on turnover of £300,000 would pay corporation tax, while a competitor making a fat profit on much lower turnover would escape tax.
However, after realising they had muddled up turnover and profit, Labour has since published a revised document outlining its plan to reintroduce a small profits rate for firms with profits greater than £300,000.
>See also: Sajid Javid warns Labour will extend inheritance tax to family businesses
Robert Salter, director at Blick Rothenberg, the accounting and tax advisory company, told The Times: “One must worry whether the initial communication in this regard indicates a potential lack of awareness about businesses and the difference between turnover and profit.”
Tim Walford-Fitzgerald, a tax partner at the

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UK businesses owe £1.8 billion in late corporation tax

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The total value of corporation tax payments in arrears has jumped 15 per cent in the past year, to £1.82 billion up from £1.59 billion, as businesses increasingly struggle to pay their tax bills, says Funding Options, the online business finance supermarket. Funding Options says that the slowdown in the UK economy since Brexit could mean
The post UK businesses owe £1.8 billion in late corporation tax appeared first on Small Business.

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