CIOT welcomes Chancellor's business tax announcements

The Chartered Institute of Taxation (CIOT) welcomed the Chancellor’s announcements confirming that various business tax measures will come into effect at 1 April. Press release of 26 March 2002.
Contacts:
John Whiting: 020 7804 4422 (O); 07710 027 595 (mobile)
Press Office: Viv Rees: 020 7235 9381 (O); 07900 220887 (mobile)

CIOT President John Whiting said:

“With the delay in the Budget date, we have been asking for confirmation that these important measures will come into effect on 1 April in line with previous announcements. The Chancellor’s confirmation removes uncertainty from business decision making.”

The measures announced as coming into effect are:

• An exemption from tax on capital gains arising on the disposal by companies of “substantial shareholdings” – in essence shareholdings of 10% or more in other trading companies.
  · A new regime for tax relief on intellectual property, goodwill and other intangible assets
  · A new Research & Development tax credit for larger companies

  The first two measures are of course of potential benefit to all companies; the third complements the existing relief already available to SMEs.

  John Whiting continued:

  “We are particularly pleased that there have been further modifications to the reliefs as a result of representations we and other groups have made. The widening of the relief for a substantial shareholding to cover holdings of 10%or more of a company’s share capital is a sensible reflection of reality – a 10% shareholding is a significant stake that deserves exemption under this new regime. And we welcome confirmation that the R&D tax credit will be based on a simple volume-based scheme, as we argued for. We need these new reliefs, but they must be clear and simple in their workings and impact.”

  The CIOT looks forward to continuing discussions on the implementation on these and other tax changes in the coming weeks as the Finance Bill is brought forward and implemented.