The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The UK negotiated a Withdrawal Agreement and left the EU on 31 January 2020 (referred to as ‘exit day’) with an 11-month implementation period up to 31 December 2020.
During this implementation period, the UK was no longer a member of the EU but was subject to EU laws, remaining a member of the single market and customs union. On 24 December 2020, the European Commission and UK Government announced an agreement in principle on the legal terms of the future EU-UK relationship ― the EU-UK Trade and Cooperation Agreement (TCA). The TCA was signed by UK and EU leaders and then approved by the UK Parliament on 30 December 2020. The TCA applied provisionally from 1 January 2021 and entered into full force on 1 May 2021, following ratification by the European Parliament. The UK has enacted the European Union (Future Relationship) Act 2020, which makes provision to implement the TCA in the UK.
The EU and the UK have also made a number of joint declarations, one of which affirms their commitment to countering harmful tax regimes, in accordance with Action 5 of the BEPS Action Plan.
While exit day was important in terms of being the date the UK ceased to be an EU member state, the majority of key domestic tax changes associated with Brexit take effect from the end of the implementation period (specifically, 11pm (GMT) on 31 December 2020, referred to as ‘IP completion day’), including the full repeal of the European Communities Act 1972, incorporation of retained EU law into the UK domestic legal regime, and the commencement of associated Brexit legislation and statutory instruments.
For companies, there are several areas of UK tax law that are significantly impacted by the withdrawal from the EU. Most notably, Brexit affects the treatment of international transactions between groups of companies that operate across multiple EU member states. However, the impact of EU-derived law on domestic legislation also
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Legislative definition of plant and machineryThe general rule allowing capital allowances on plant and machinery is given at CAA 2001, s 11. There is no statutory definition of the term ‘plant and machinery’ but there is confirmation in the legislation on what constitutes a building or a structure
Statutory references to ITTOIA 2005 relate to unincorporated businesses and CTA 2009 relate to companies unless otherwise stated.Legal and other professional fees can represent substantial costs to a business. A detailed analysis is often required for the purpose of preparing tax computations as
Why do we need to calculate these amounts?This guidance note sets out details of the initial calculations a group will need to undertake for the purposes of the corporate interest restriction (CIR) regime. For a general overview of the regime, see the Corporate interest restriction ― overview
Special rate poolExpenditure on some types of plant or machinery must, if neither annual investment allowance (AIA) nor first year allowances (FYAs) are available, be allocated to a ‘special rate pool’. Expenditure to be allocated to the special rate pool consists of expenditure incurred