Last week HM Treasury published extracts from the 3rd Finance Bill of 2010 which will be introduced to Parliament in the autumn.
The Government is taking steps to ensure that changes to the tax system receive adequate scrutiny. Accordingly, draft legislation has been published on various technical tax measures, inherited from the previous government, that are to be legislated in a Finance Bill to be introduced to Parliament in the autumn. The legislation has been published in a consultative format seeking comments to ensure the legislation works as intended.
Each piece of draft legislation is accompanied in the same document by a draft explanatory note. These are intended to assist the reader in understanding the legislation; however they do not constitute a comprehensive description of the legislation.
Comments on any aspect of the draft legislation can be made using the contact details provided at the end of each explanatory note.
Specific items to note are as follows:-
- Company distributions – amendments to prevent certain distributions received by UK companies from being excluded from the distribution exemption regime in CTA 2009 and clarification on the definition of distribution;
- Changes to the consortium claims for group relief legislation to allow claims to be made where a “link company” is established in the EU/EEA and is not “UK related” and adding a further condition to the rules which determine the proportion of losses that may be claimed from or surrendered to;
- Changes to the Enterprise Management Incentives (EMI) rules to ensure that EMI complies with EU State aid guidelines;
- Changes to the worldwide debt cap rules effective 1 January 2010;
- First-year allowances for zero-emission goods vehicles;
- Amendments to VAT rules to implement the basic requirements of the EU VAT Technical Directive which remove the ability to reclaim VAT paid on expenditure on land and property used for private purposes;
- Extension of penalties for failure to make returns etc. and payments to VAT and other miscellaneous taxes and duties not already included in the regime;
- R&D relief for SMEs - removal of intellectual property condition;
- Changes to the rules for Enterprise Investment Schemes and Venture capital schemes (generally to bring EU/EEA investments into these reliefs)
For details of the proposed legislative measures and the relevant explanatory notes see here