HMRC Publishes Tax Consultations

by Robin Pilgrim, LawAndTax-News.com, London

06 July 2010

The UK tax authority, HM Revenue and Customs (HMRC), has published details of the tax consultations announced by the Chancellor in the emergency budget.

The consultations, released by HMRC on June 30, are as follows:

Corporate Taxes

• Reform of the Controlled Foreign Company Regime (CFCs). This will entail making interim improvements to the CFC regime by Autumn 2010 with a full reform by Autumn 2011.
• Taxation of foreign branches. To look at adopting a more territorial approach to the taxation of profits of foreign branches, including options for retaining branch loss relief. Legislation to be drafted by Autumn 2010.
• Intellectual Property (IP). Review of the taxation of IP and support for the R&D tax credits for innovation. Launch by Autumn 2010.
• Bank levy. Consultation will look at introducing a new levy based on banks’ balance sheets – to be effective January 1, 2011.

• PAYE. Mechanisms that could improve the PAYE system. Consultation to be launched in July 2010.
• Furnished Holiday Lettings (FHL). Ensure the FHL tax rules meet European Union (EU) legal requirements. Consultation to be launched in July 2010.
• Pensions Tax Relief. Best design of a regime to restrict pension tax relief, considering the use of a reduced annual allowance in place of the reforms legislated at the Finance Act, 2010. Launch summer 2010.
• Purchasing annuity at age 75. End the current legal requirement to purchase an annuity at age 75. Launch summer 2010.

• Implementation of the EU cost sharing exemption. Launch autumn 2010.
• Alcohol taxation. Reviewing alcohol taxation and pricing to tackle binge drinking. Informal consultation to be launched in the summer of 2010.

Other consultative issues include carbon pricing, inheritance tax avoidance and charitable donations.

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