Yesterday was Tax Freedom Day, when people stop working for the state and start working for themselves. Calculated by the Adam Smith Institute, it is three days later this year than last, thanks to the increase in VAT, higher national insurance contributions and lower personal allowances. Yesterday was the 149th day of the year.
NATIONAL parliaments in eight European Union countries have come out against the proposal to have a single system for companies based in the European Union to calculate their tax. One parliament, Portugal, is in favour. Those against were the UK, Ireland, the Netherlands, Bulgaria, Sweden, Poland, Malta and Romania. However, the number falls short of the one-third of countries needed to force the European Commission to withdraw or adjust the draft Common Consolidated Corporate Tax Basis (CCCTB) proposal.
The Scottish Government’s call for corporation tax to be devolved to the Scottish Parliament has been boosted by a report by the Northern Ireland Select Committee unanimously recommending that the powers should be devolved to the Northern Ireland Assembly.
On the 1st of April 2011 HM Revenue & Customs Solicitor’s Office (Scotland) merged with the Office of the Solicitor to the Advocate General for Scotland. A positive example of how the number of tax, legal and registration services in Scotland can be consolidated. Hopefully there will be further movement in the relatively near future on the merger of the Edinburgh Stamp Office, Registers of Scotland and Companies House Edinburgh.
HMRC has formed specialist teams to investigate particular industry sectors. The first squad is to target restaurateurs.
The French Government is preparing to introduce a special tax on non-resident property owners.
The UK Government has backed down on plans to tax the oil and gas industry for every worker it sends offshore on helicopters.
The UK Government were considering applying the top rate of air passenger duty (APD) to all flights to rigs and platforms. It had been estimated that the proposal would have cost the industry some £165million a year.
However, after an angry backlash from industry chiefs and politicians at both Holyrood and Westminster, Scottish Secretary Michael Moore confirmed that North Sea helicopter operations would not be “penalised”.
Press and Journal 19 May 2011
Note. APD was one of four minor taxes that the Calman Commission on Scottish Devolution said should be devolved to the Scottish Parliament. As yet only Stamp Duty Land Tax and Landfill Tax are included in the Scotland Bill. It is not yet clear if APD and Aggregates Levy are to be included.
The relief which was announced in the 2011 Budget applies to transactions involving the acquisition of more than one dwelling.
The draft guidance note is available from HMRC’s website here.
Some draft worked examples demonstrating the operation of the relief are available here.
A reminder that furnished holiday lettings may be affected by three major taxation changes. Two changes apply from April 2011. The first of these is that the profit or loss from a FHL in an EEA country other than the UK (European Economic Area is the EU countries plus Iceland, Liechtenstein and Norway) has to be calculated separately from a profit or loss arising from UK holiday lettings. Profits and losses from outwith the EEA also have to be calculated separately. Also from 2011 it will no longer be possible to set a loss made from FHL properties in the UK or overseas against other income to generate a tax repayment. As from April 2012 the periods that a property may be let to qualify for the FHL tax reliefs are to be extended. These changes are likely to mean that some FHL businesses will no longer be profitable.
Tax reliefs for charities and donors were worth £3.34bn in 2010/11,according to HM Revenue & Customs.
Figures published last week show charities received £2.56bn in tax relief, up from £2.48bn 2009/10.
The figures include £1.1bn in Gift Aid, up from £1.03bn in the previous year, and £1.16bn in business rate relief, up from £1.14bn in the previous year. Reliefs for donors rose to £780m from £740m. The largest personal reliefs were inheritance tax relief, up to £340m from £320m in the previous year, and higher-rate relief on Gift Aid, up to £350m from £330m.
VAT reliefs were estimated to be worth £200m, but this figure is rounded to the nearest £50m and has remained unchanged since 2003. Third Sector online 5 May 2011
