TaxSource Total

Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

The report of key tax developments are displayed per year, per month, by Ireland, the UK or International and by report title

UK Chancellor Announced his Budget on 12 March

The Chancellor of the Exchequer presented his first Budget on 12 March, which confirmed many of the measures announced in the 2007 Pre Budget Report.

Among the tax highlights:

Income tax – the basic rate is to reduce from 22% to 20%. The rules for non-domiciled individuals change significantly. After seven years, a charge of £30,000 on un-remitted income will apply where the individual wishes to continue to pay tax under the remittance basis.

Corporation Tax – the headline rate reduces from 30% to 28% from 1 April 2008, but the small company's (taxable profits up to £300,000) rate increases to 21% from April 2008. The rate of R&D Credit for SMEs increases from 150% to 175%, and for larger companies from 125% to 130%, subject to EU approval for the measure.

Capital Gains Tax – Taper relief and the indexation allowance are to go, in favour of a new simplified regime with a standard rate of 18%. A new, so called “entrepreneurs relief”, applying to disposals of certain business assets after 6 April 2008 will result in an effective rate of 10% for gains of up to £1m. Qualifying assets include a trading business, or part of a trading business, shares in a trading company (subject to some restrictions), and assets owned by an individual which were in use for trading purposes.

Capital Allowances – there are to be changes to existing pooling arrangements, and draft legislation was presented to give effect to the phase out of Industrial Buildings Allowances by 2011.

Following its review with large business, HMRC have announced delivery of all the Review recommendations, setting in place the framework for what is hoped will be a better relationship. “The Framework for a better relationship” is available at http://www.hmrc.gov.uk/budget2008/framework-better-relations.pdf.

In addition, following correspondence with the European Commission, the UK Government has decided not to make changes to the Tonnage Tax rules in this year's Finance Bill. Draft legislation had been published on 23 January.

Finance Bill 2008

The Finance Bill 2008 was published on 27 March. It is available from the HM Treasury website.

Impact assessments have been made in relation to

  • Payments, Repayments and Debt: Responses to Consultation and the Next Phase;
  • Capital Allowances changes announced in Budget 2007;
  • A New Approach to Compliance Checks;
  • Penalties Reform: The Next Stage.