Pre-Budget Report - Business / Corporation Taxes - Impact on Big Business

Putting my very rusty tax technical hat back on, I thought I would quickly review the main changes from Alistair Darling's pre-budget report that will affect businesses:

Capital Allowances - fire safety expenditure / biofuel plants / Plant & Machinery disposal to a non resident

Corporate Tax: disguised interest

Corporate Tax: foreign exchange matching rules

Holiday pay - NIC exemption to be withdrawn

Exemptions for Investment Managers

Landfill Tax

Leasing of Plant & Machinery

Life tax measures

Measuring Tax Losses

Tax simplification for UK/EU VAT rules, anti-avoidance legislation and corporate tax rules for related companies

Spreading of tax relief for pension contributions

Tax treatment of financial derivatives


Whilst I can try to get a grasp of what each of the above measures are trying to do, it is rather beyond me to be able to say whether businesses are better or worse off as a result of the proposed changes. Taking off my tax technical hat and putting on my slightly cynical political hat, I would imagine that the net result is that more business / corporate tax will be paid. Pensioners and second home-owners will benefit as a result of individuals tax changes, which could be nice for votes, but complex corporate tax rules may help to balance the books, whilst at the same time snatching a quite a lot more tax from private equity owners.

For more detailed analysis of the above proposals, you may want to look at:

www.ukbudget.com produced by Deloitte

Views from industry tax professionals on this most welcome