It’s been a week since Chancellor George Osborne delivered what he called his ” budget for small business” and it does appear true to his word that small businesses are the real winners this time around with business rate relief and a crackdown on big business tax loopholes.
We predicted on our last blog that the Chancellor would include new steps to be taken to bring more funds into Government coffers through clamping down even further on tax avoidance and tax evasion and it appears he has delivered with the words avoidance and evasion appearing 27 and 16 times respectively in the delivery of the spring budget.
The Chancellor confirmed that he is willing to make concessions to businesses in terms of lower taxes, but in return businesses must pay their taxes. He particularly stresses that multi-nationals must pay their fair share of taxes. No doubt he is alluding to the recent agreements with Google, Starbucks and Amazon.
The Chancellor also sets out provisions to amend business rates in order to try and stimulate SME business (page 45, para 1.158).
Some of the new tax avoidance measures will not impact many, such as the change to tax on royalties because of avoidance of tax on this.
HMRC has stated that these new measures on royalties will help to “prevent the erosion of the UK tax base. The issues that will impact SME businesses is the change to off-shore arrangements for property developers, further restrictions on hybrid mismatch arrangements and, with a particular emphasis on public sector and TV workers, a clamping down on “disguised remuneration”. This will impact public workers, TV stars and bankers more than SMEs, but is an important indicator of the lengths that HM Treasury and HMRC will go to ensure everyone pays their fair share of tax.
The funds HM Treasury expects to receive as a result of these changes are detailed in page 85 of the budget and are extensive.
If you are affected by new tax measures announced in the budget, if you had or have an employee benefit trust, impacted by the Employee Shareholder Status changes, or the remote gaming changes please contact a member of our banking and finance litigation team for more information.
To find out more about the issues raised in this post, or to discuss any queries regarding tax issues raised in the Spring Budget get in touch with Kalvin Chapman or call 0161 829 2599.
The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.