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UK Budget 2015 targets MNCs to fund pre-election tax giveaways
Ahead of the UK general election the Chancellor has looked to the financial sector and multinationals for additional tax revenues to help secure for tax breaks for individuals. Taxand UK explores this highly anticipated budget.
Multinationals received confirmation that the Government is to press ahead with the controversial Diverted Profits Tax which will be effective as planned from 1 April 2015. Until the Finance Bill is published on Tuesday next week there is little in the way of extra detail at this stage. What is known is that following the public consultation, there will be significant changes to the clauses included in the draft bill particularly around narrowing notification requirements; the operation of the conditions under which a charge can arise; and, the introduction of specific exclusions.
There was some good news for the North Sea oil & gas industry with a reduction in the rate of petroleum revenue tax and a new investment allowance as well as a reduction in the rate that will apply to the supplementary charge. This should provide a much needed fillip to the industry which is still reeling from falling oil prices.
Other key tax changes include:
- Plans to prevent companies using brought forward losses against profits where the profits arise in a company due to tax avoidance arrangements
- From the beginning of partial exemption tax years falling on or after 1 August 2015, supplies made by foreign branches can no longer be included in the partial exemption calculations
- Legislation will be introduced in Finance Bill 2015 to increase the rate of the bank levy to 0.21% from 1 April 2015
Due to the short period of time before the General Election this Budget has been surrounded by a frenzy of media speculation. The full extent of the measures will only be realised once the Finance Bill is published and the election results are announced.