What will the UK 2017 election mean for business tax?
A summary of the parties’ main proposals outlined in the 2017 election manifestos relating to the taxation of businesses.
Our summary is based on information available and analysed up to 30 May 2017. Please note we have imported terms and words from the manifestos and the economics of the proposals have not been assessed.
Reduce corporation tax to 17% by 2020, the lowest rate of any developed economy
No increase in the level of VAT
Continue to support small businesses through business rate relief and low tax
Continue with the fiscal rules announced by the chancellor in the 2016 autumn statement
Identify the industries that are of strategic value to our economy and support and promote them through policies including tax
Help digital companies – help innovators and start-ups by encouraging early stage investment and considering further incentives under EIS and Seed EIS
Seek to build upon the favourable tax arrangements that have helped creative companies, including the creative industries tax credits scheme
Introduce a one year holiday on employers’ NIC for firms hiring service personnel after they leave service
Introduce a one year holiday on employers’ NIC for businesses employing former wards of the care system, someone with a disability, those with chronic mental health problems, those who have committed a crime but repaid their debt to society and those who have been unemployed for over a year
Update the rules that govern mergers and takeovers, to ensure that overseas investment is not driven by aggressive asset-stripping or tax avoidance
Commission an examination of the use of share buybacks
Promote R&D investment to meet the current OECD average of 2.4% of GDP within ten years, with a longer-term goal of 3% - it is unclear whether this relates to R&D tax credit regime changes
Keep open option of changing the tax status of independent schools if sufficient progress is not made in involving independent schools with academy sponsorship or the founding of free schools in the state system
Be a global nation that is competitive, outward-looking and open for business – the best country in Europe for doing business
Ensure local residents can veto high increases in council tax via a referendum
Continue to support businesses most affected by the recent revaluation of business rates
Make longer term reforms to the business rates system to address concerns about the way it works
Make sure that revaluations are conducted more frequently to avoid large changes in expected bills
Explore the introduction of self-assessments in the valuation process
Conduct a full review of the business rates system to ensure it is sustainable for the future
Ensure a greater percentage of tax revenues from shale gas directly benefit the communities that host the extraction sites
Reverse existing plans to cut corporation tax from 20% to 17%
Create a new ‘start up allowance’ to help those starting up a new business with their living costs in the crucial first weeks of their business
Take tough action against corporate tax evasion and avoidance
Reform corporation tax to develop a system that benefits the smallest companies while ensuring the biggest multinationals cannot avoid paying sums comparable to nationally-based competitors
Consult on moving from a profits-based tax to one that takes account of a wider range of economic activity indicators, such as sales and turnover
Review business rates to reduce burdens on smaller businesses, while prioritising reforms that recognise the development of the digital economy
Encourage employers to promote employee ownership by giving staff in listed companies with over 250 employees a right to request shares, to be held in trust for the benefit of employees
End the anomaly that forces Police Scotland and the Scottish Fire and Rescue Service to pay VAT on their purchases
Lead international action to ensure global companies pay fair taxes in the developing countries in which they operate, including tightening anti-tax haven rules
Require large companies to publish their tax payments and profits for each country in which they operate
Consider the implementation of land value taxation
Reform vehicle taxation to encourage sales of electric and low-emission vehicles and develop electric vehicle infrastructure
Establish a coherent tax and regulatory framework for landfill, incineration and waste collection, including reinstating the landfill tax escalator and extending it to the lower rate and consulting on the introduction of an incineration tax
Tax is likely to represent the biggest financial outlay over your lifetime, yet many of us are simply too busy to ensure our tax affairs are in order and we’re not overpaying.
Assurance and accounting
Ensuring you have effective and accurate financial systems and controls in place to meet your business and compliance requirements is critical to your success.
Weekly Tax update 22 May
In this week's tax update: UK-Swiss co-operation agreement and HMRC refunds, ability to rely on third party software based on HMRC’s specifications, Penalties for late submission of partnership tax return cancelled and VAT updates.
Ever-changing legislation and a global crackdown on tax avoidance mean your business now operates in an increasingly challenging tax environment.