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AIA

Pre Budget Report 2009 – summary of large company measures

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9th Dec 2009
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  • Bank payroll tax of 50% will apply to bonuses paid by banks after the time of the Chancellor’s announcement unless the amounts and entitlement were contractually fixed before the announcement. See technical summary article. (PBRN02)
  • The debt cap legislation introduced as part of the package of measures on foreign profits in Finance Act 2009 will be amended as a result of consultation between HMRC and businesses since FA 09 was enacted. The changes are intended to allow the debt cap mechanism to work as intended and to ease the practical application of the rules. (PBRN04)
  • Changes to the accounting treatment of financial instruments will impact the tax treatment of those instruments, as the tax treatment follows the accounting treatment. The changes made to IAS 39 and FRS 26 will be recognised through changes proposed in the Finance Bill 2010, which will permit changes to the loan relationship legislation through secondary legislation, allowing corporation tax to respond to the accounting changes as and when necessary. (PBRN05)
  • R & D relief : companies claiming SME R & D relief have previously been required to own the intellectual property deriving from the research and development activity as a condition of claiming the enhanced rate of R & D relief of 75% and the related payable tax credit. Finance Bill 2010 will abolish this requirement, opening up claims to enhanced R & D relief to more companies. (Note that the limits for this relief are unique to the R & D regime – 500 staff and turnover up to €100 million or balance sheet total up to €86 million). (PBRN06)
     
  • Film production tax relief applicable to companies will be amended to correct an anomaly in the way the relief works when expenditure spreads over tow accounting periods or more. (PBRN07)
  • Anti avoidance measures will cover the following areas : Risk transfer schemes (PBRN08), Sale of lessor companies (two changes to the existing anti avoidance regime) (PBRN10 & PBRN11), capital allowances - transfer of entitlement (PBRN12), leasing plant & machinery (PBRN13), index linked gilts (PBRN14), Insurance premium tax - premium splitting (PBRN15), stamp duty and SDRT (PBRN17) and SDLT on residential property which will come within DOTAS (PBRN35)
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