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Autumn Budget 2018
Digital Services Tax
From April 2020, the government will introduce a new 2% tax on revenues of certain digital businesses which derive value from their UK users.
The tax will:
y y apply to revenues generated from the provision of search engines, social media platforms and online marketplaces
y y apply to revenues from those activities that are linked to the participation of UK users, subject to a £25m per annum allowance
y y only apply to groups that generate global revenues from in-scope business activities in excess of £500m per annum
y y include a safe harbour provision that exempts loss-makers and reduces the effective rate of tax on businesses with very low profit margins. UK property income of non-UK resident companies As previously announced, from 6 April 2020, non-UK resident companies that carry on a UK property business, or have other UK property income, will be charged to corporation tax, rather than being charged to income tax as at present. Charities Legislation will be introduced to increase the small trading tax exemption limits. These limits apply to trading that does not relate to the charity’s primary purpose. The current exemption threshold of £50,000 will be changed to £80,000 and the lower band changed from £5,000 to £8,000. The changes will have effect on and after 6 April 2019 for unincorporated charities and from 1 April 2019 for incorporated charities. Corporate intangible fixed assets regime The government will publish detailed proposals on how it intends to partially reinstate relief for acquired goodwill in the acquisition of businesses with eligible intellectual property. It will also alter the regime’s de-grouping charge rules so that a charge will not arise where de-grouping is the result of a share disposal that qualifies for the Substantial Shareholding Exemption. The changes to the de-grouping rules will have effect in relation to de-groupings occurring on or after 7 November 2018. Off-payroll working rules Responsibility for operating the existing off-payroll working rules, and deducting any tax and NICs due, will move from individuals to the organisation, agency or other third party paying an individual’s personal service company. Small organisations will be exempt. This change will come into effect from 6 April 2020. Employment Allowance The government will legislate to restrict access to the NICs Employment Allowance to employers with an employer NICs liability below £100,000 in their previous tax year. Where employers are connected under the Employment Allowance rules the threshold will apply to their aggregated liability. This will take effect from 2020.
“Half of my task is running a set of projects that make the NASA moon shot look quite simple” Former Brexit secretary David Davis
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