OECD, minimum corporation tax.

Businesses have urged ministers to delay the introduction of an internationally agreed corporate tax or risk burdening them with «impossible» reporting deadlines. However, Chancellor Jeremy Hunt confirmed in the Autumn Statement that a 15 per cent effective minimum tax rate for all subsidiaries of UK multinationals will be included in the spring finance bill and enacted from the end of 2023. The proposed minimum business levy is part of an agreement signed by 136 countries last October, which was coordinated by the OECD club of mostly rich nations and hailed as the most significant tax reform in over a century. The policy is designed to stamp out profit shifting and corporate tax havens, but implementation has been delayed, and no country has yet enshrined the policy in law.

Businesses say they need more time to prepare for the change while finer details still need to be clarified by the OECD. The OECD is due to respond to concerns about the minimum tax rules, with updated guidance to be published in December and again next year. Britain «should not run ahead of everyone else» but wait until the OECD publishes more guidance. A new minimum corporate tax in the US does not comply with OECD rules, and Hungary's directive in the EU is blocked.

www.sba.tax

Comments

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

Transport department officials have begun work on «Project Silverlight» suggesting the highspeed rail scheme might face four additional years of delay. The planned High Speed 2 rail line faces further delays of up to four years and more cuts to the project under plans being drawn up by ministers to rein in its ballooning costs. The extra delays to the country’s biggest infrastructure project would mean that it would not be completed until as late as 2045 — 12 years after originally planned. «This is a function of inflation; we are having to find huge savings because the cost of everything the department is already doing will have become so much more expensive by then,» said one government official. In October, the FT reported that the Treasury had asked HS2’s management team to identify potential cuts or «scope reductions» to the high-speed line. Transport department officials have subsequently begun work on Project Silverlight aimed at fi...

Doubt on CS's collateral.

Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...

Tax cut

Sterling tumbled against the dollar to below $1 . 09 , hitting its lowest point since 1985 , after UK chancellor Kwasi Kwarteng unveiled a £45bn debt-financed tax-cutting package that sparked a historic increase in borrowing costs . Kwarteng’s political and economic gamble includes the biggest set of tax cuts for 50 years , with the end of the 45p additional rate for the highest earners as well as a sharp reduction in levies on dividends . But concern over the amount of debt required to finance the tax cuts triggered a frenetic day of trading that raised doubts on whether Britain’s new economic approach was sustainable . «Britain will be remembered for having pursued the worst macroeconomic policies of any major country in a long time» . Kwarteng has staked the political fortunes of the Conservative party on the bet that the radical tax cuts and deregulation will raise Britain’s sluggish growth rate to 2 . 5 per cent . «This is a new appr...

Search This Blog