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Thames Valley: Reactive Autumn Budget tax statement from Grant Thornton

By Jo Whittle
1 November 2018
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Tax and IR35 – Dominic Merlin-Cone, tax partner

“Today’s Budget announcement saw a number of changes on tax, particularly, the emergence of tax reliefs enhanced for smaller businesses, especially those on the high street or those incurring expense on plant and machinery. Where tax is being raised, the measures were aimed at larger companies – whether in respect to off payroll workers (the IR35 rules that will apply more vigorously to the private sector from 2020) or even the new digital services tax – 2% in respect of tech business with global revenues of more than £500 million per annum in respect of UK generated sales, again from 2020. Large businesses will require increased support as these changes come into play for them.”

  

Digital tax – Alan Richardson, tax partner

“Phillip Hammond’s announcement of a new 2% digital services tax moves the UK ahead of international bodies like the OECD, although it does follow the actions of some other countries such as Italy and Spain.”

“The UK has to tread a fine line between being seen to be tough on multinationals and showing it is open for business, particularly as we prepare for a post-Brexit economy. One of the reasons that innovative businesses are attracted here is the combination of a stable tax regime and an even-handed approach. The UK has rightly prided itself on being at the forefront of international efforts by the OECD and G20 to tackle Base Erosion and Profit Shifting (BEPS).” 

“We believe now is the very time for the UK to be working alongside other countries in a concerted way, rather than going it alone and we are encouraged to hear that the chancellor will look to adopt a consensus solution from the OECD/G20 when they report again on the digitalisation of the economy in 2019.”

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