Finance (No 2) Bill was published on Tuesday 25 March, debated in the Chamber of the House during the afternoon of 26 March and received Royal Assent on Thursday 27 March.
Finance Act 2015 is 340 pages long and contains 127 sections and 21 Schedules !!!
For those who are not entertained by this impressive document I am picking out my personal thoughts on the most significant and relevant items, including some not in the Finance Act, in three blogs covering the capital taxes, business and corporate and ‘the rest’. This second blog summarises my pick of the business and corporation tax measures.
For those who are entertained by a good Finance Act here is the link to the legislation – http://goo.gl/yNY27Z. These brave souls should be aware that the average length of Finance Acts during each year of the Coalition was just over 500 pages …. so by the time there is a second Finance Act after the May election the length of Finance Acts in 2015 will be very similar.
The long heralded full corporation tax charge at 20% now has effect for the second year running (2016/17) and perhaps brings more certainty for businesses ( section 6 ).
Intangible fixed assets
Those involved corporate mergers and acquisitions, or indeed the incorporation of their own business, should be aware that post 2002 goodwill acquired by a company from a related party no longer qualifies for intangible assets relief ( section 26 ).
Carry forward losses
When advising on reconstructions, it is important to be aware of the further anti-avoidance measures restricting the use of carry-forward losses, whether trade related or otherwise (section 33 ).
Plant and machinery allowances
The Annual Investment Allowance, whereby a business can obtain 100% capital allowances for capital expenditure of up to £500,000 a year, is due to change yet again on 31 December 2015 to become a mere £25,000 a year. Now is the time to implement plans to qualify for the enhanced relief and those with year ends straddling 31 December need to be aware of the potential restriction. Have a look at HMRC’s website – http://goo.gl/Fqk5kW.
Most employers avoid providing their staff with motor vehicles due to the high benefit in kind charges. The accelerated rate of banding charges introduced in this Bill ( sections 7, 8 and 9 ) may well make even the ‘die hards’ reconsider matters.
Entrepreneurs’ Relief & Joint Ventures
The entrepreneurs’ relief rules around joint ventures have been used to set up structures under which individuals with only a small indirect stake in the trading company can benefit from the relief.
Section 43 amends TCGA 1992 s.165S to ensure that those who benefit have a 5% directly-held shareholding in a genuine trading company. It does not affect shareholdings in companies whose investment in a joint venture is part of their own trade.