The UK Government has recently released its Spring 2025 tax update, unveiling a broad package of reforms aimed at simplifying and modernising the tax system.
Tax experts from Travers Smith, Taxand UK have provided a useful overview of these changes, which include:
Reforms to transfer pricing rules, exempting certain UK-to-UK transactions and replacing the diverted profits tax with a new corporation tax charge. A related consultation proposes extending rules to medium-sized businesses and improving cross-border reporting for multinationals.
Alignment of the UK’s “permanent establishment” definition with the OECD model, with proposed reforms to the investment manager exemption to address private capital concerns
Consolidation of stamp duty and stamp duty reserve tax into a single tax on securities, with draft legislation published for consultation.
A revised “Check Employment Status for Tax” (CEST) tool to improve usability, and a one-year deferral of mandatory payrolling of most benefits in kind to April 2027.
You can read the full overview here, as well as the official government summary of the measures here.
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