Queen’s Speech on Tax and Related Commercial
Now that the new government is bedding down, we highlight some of the key tax-related proposals outlined in the Queen’s Speech just before Christmas.
Business rates
Government plans a fundamental review of business rates to “protect high streets and communities from excessive tax hikes”.
The next business rate revaluation will be brought forward one year to 2021 and future revaluations will be made three-yearly (instead of every five years).
The retail discount is to be increased from one third to 50 per cent. This will also be extended to cinemas and music venues. An additional discount for pubs is to be introduced.
Research and development
The research and development (R&D) tax credit rate will be increased to 13 per cent, along with plans to significantly boost public R&D funding. R&D-related costs that currently qualify for tax credits will be reviewed, with the intention of incentivising investment in cloud computing and data.
The establishment of a National Skills Fund is planned with £3 billion of investment.
Personal tax
There will be no rises in VAT, income tax or National Insurance (NI). The NI threshold will be increased to £9,500 in 2020 (government says this will be a tax cut for 31m people).
Tax evasion
The fight to tackle tax evasion will continue, with government proposing to double the maximum prison term to 14 years for individuals convicted of the most egregious examples of tax fraud.
Trade and employment after Brexit
A proposed Trade Bill is intended to deliver what government says will be “the best international trading framework for the UK after Brexit” through legislating “the fundamental tools” needed to do this. The main elements of the Bill include:
· Creating powers so that the UK can transition trade agreements to which we are party through our membership of the EU.
· Establishing a new independent UK body, to protect UK firms against injury caused by unfair trade practices and unforeseen surges in imports.
· Giving UK businesses continued access to £1.3 trillion a year of procurement opportunities in 47 countries, by creating the powers for the UK to implement the World Trade Organization Agreement on government procurement.
· Ensuring government has legal powers to gather and share trade information as evidence to support UK firms against surges in imports and unfair practices.
A proposed Employment Bill includes broader plans to clamp down on late payment.
It will also strengthen the powers of the Small Business Commissioner to support small businesses that are exploited by big business.
Government plans to achieve “the right regulatory balance” between supporting excellent business practice and protecting workers, consumers and the environment.
There are also proposals in relation to company audit and corporate reporting, including a stronger regulator to improve public trust in business.
If you would like us to cover an issue in the next NGM Tax Law Newsletter, we would be pleased to hear from you