As Benjamin Franklin would have it, the only things that are certain in this life are death and taxes. Taxes are considered to be the bloodline of a government. It provides the state with the financial resources to operate and implement its projects. In the United Kingdom, the proper collection of taxes is one of the key responsibility of Her Majesty’s Treasury (HM Treasury), and their executive agency, HM Revenue and Customs.
This year, the HM Treasury has announced some tax changes that already took effect earlier this April 2015. Here are some of the most important changes in the tax policies of the United Kingdom:
- The corporation tax paid by businesses will be cut to 20% from 21%. This makes the corporation tax in the United Kingdom the lowest among the G20.
- The Diverted Profit Tax (DPT) takes effect. The DPT imposes a 25% tax on the profits of companies (excluding small-medium enterprises) that satisfy these two conditions; (1) a company that has UK Sales with the help of a non-UK company or a Permanent Establishment; or (2) a UK Company or a Permanent Establishment that has a significant transaction with an associated company.
- Business Rate Changes in England:
- VAT Registration threshold has increased from 81,000 GBP to 82,000 GBP and the deregistration threshold from 79,000 GBP to 80,000 GBP.
- Associated Companies Rules have been replaced with simpler rules based on 51% group membership.
- Capital Gains Tax annual exemption amount has increased to 11,000 GBP
These are just some of the recent tax changes in the United Kingdom for 2015. To know more about other tax changes in the UK, visit www.gov.uk/government/organisations/hm-treasury.
Looking for someone to help you with your taxes in the UK? Feel free to talk to our accountants here.