Summer Budget 2015—the lay of the land for commercial lawyers

Summer Budget 2015—the lay of the land for commercial lawyers

This afternoon's 'Summer Budget' saw the first 'full' Conservative budget since 1996: a year when only four per cent of the UK population had access to the Internet (which was, if memory serves me right, petrol-driven) and the average house price was £62,000 (nowadays, not even enough to be the average deposit on a London home).

How life has moved inexorably on...

So what should commercial lawyers take from today's 2015 Budget statement (Mark II)?

Here's a few things that stood out for us:

  • Sunday trading: the government will look to consult on devolving powers on Sunday trading to city mayors and local authorities. Accordingly, mayors or councils might be able to extend Sunday trading hours
  • Enterprise zones: the government will be holding a bidding round for a new programme of Enterprise Zones
  • 'Tax lock': the government states that it will legislate to set a ceiling for the main rates of income tax, the standard and reduced rates of VAT, and employer and employee (Class 1) NICs rates, ensuring that they cannot rise above their current (2015-16) levels. This does not mean, of course, that taxes will not rise elsewhere during the course of this Parliament (or reliefs abolished etc)
  • The hidden economy: the government wants to extend HMRC’s powers to acquire data from online intermediaries and electronic payment providers to find those business which are operating in the hidden economy. It is looking to legislate in the Finance Bill 2016 to achieve this, following a consultation on the detail
  • Corporation tax:  corporation tax will be reduced to 19% from 2017-18, and 18% from 2020-21
  • Annual Investment Allowance: this will be set at new permanent level of £200,000
  • Large businesses (tax avoidance): the government will legislate to 'improve transparency of tax strategies' and give HMRC new powers to tackle businesses which 'persistently engage in aggressive tax planning'
  • Small businesses (tax avoidance): the government will legislate to give HMRC the power to acquire data from online business intermediaries and electronic payment providers to help identify businesses which are trading but not declaring or paying tax. HMRC will consult on these proposals this month
  • Tax avoidance: the government is looking to introduce legislation to improve 'transparency of tax strategies' and give HMRC new powers to 'tackle those businesses who persistently engage in aggressive tax planning'. It also will be consulting on the introduction of tougher measures for those who 'persistently enter into tax avoidance schemes that fail, including a surcharge on those whose latest tax return is inaccurate due to use of a failed scheme and publishing the names of such avoiders'.  In addition, the government will also consult on the detail of a new General Anti-Abuse Rule (GAAR) penalty
  • Competition in SME lending. The government wants to introduce legislation which will implement two reforms to the SME lending market. The first will require the UK’s major banks to share credit information on their SME customers with other finance providers through designated Credit Reference Agencies (CRAs). The second will require those same banks to offer SMEs they reject for finance the opportunity to be referred to a finance platform that can help match them with alternative lenders
  • Limited partnership consultation. The government will publish a consultation on technical changes to limited partnership legislation to enable private equity and venture capital investment funds to 'more effectively use the limited partnership structure'
  • Universities: The government is looking to invite universities, cities, LEPs and businesses to 'map strengths and identify potential areas of strategic focus' for different regions through a series of science and innovation audits
  • Consultants and IR35: The government is looking to 'improve the effectiveness of existing intermediaries legislation' which is designed to protect against disguised employment. A discussion document will be published in due course
  • International trade and sanctions: The government will legislate early in this Parliament to increase the penalties for non-compliance with financial sanctions. An Office of Financial Sanctions Implementation will be created within HM Treasury
  • Claim management companies: there will be a fundamental review of the regulation of claims management companies (CMCs). This will be led by the Chairman of the Chartered Trading Standard Institute Board Carol Brady, who will report to HM Treasury and the Ministry of Justice in early 2016. The government is also looking to bring forward proposals for the introduction of a cap on the charges that CMCs can apply to their customers
  • Insurance:  The Financial Conduct Authority (FCA) will review what more can be done to 'ensure that people are encouraged to shop around when they renew their insurance'. From 1 November 2015, the standard rate of Insurance Premium Tax will be increased from 6% to 9.5%
  • Energy:  The government will review the 'business energy efficiency tax landscape and consider approaches to simplify and improve the effectiveness of the regime'. A consultation will be launched in autumn 2015.

Of course, you probably want to know more.

If so, why not head over to the blog run by our colleagues at PSL Corporate Tax? As you can imagine, they are working hard on analysing this Budget now.

In the meantime, I'm looking forward to watching BBC Newsnight's Lego budget at 10.30pm tonight. Will the power of Lego cut through the detail and help to explain all? Is this the future of budget broadcasting. Only time will tell...

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