21.12.2022

United Kingdom: HMRC publish ‘Guidelines for compliance’

With the surge in energy prices, the increased cost of living and rising interest rates, there are challenging economic times ahead both for the UK and globally. The International Monetary Fund has predicted that one third of the global economy will fall into recession over the next year or so. The UK Autumn Statement 2022 issued by Chancellor Jeremy Hunt, reverses much of the changes introduced by the Truss government and seeks to put the UK economy back on track.

The main business-related outcomes from the Autumn Statement 2022 are identified in the table below:

	Pre-Autumn 2022 Statement	Post-Autumn 2022 Statement
Corporation Tax	19%	23% from April 2023
Banking Corporation Tax Surcharge	8%	3% (for banks with profits over £100 million) from April 2023
Energy (Oil and Gas) Profits Levy (EPL) & Investment Allowance (IA)	EPL – 25% IA – 80%	EPL – 35% from Jan 2023 IA – 29% from Jan 2023
Electricity Generator Levy		45% from Jan 2023 New levy for extraordinary returns from low-carbon UK electricity generation.
Research and Development Expenditure Credit (RDEC)	13%	20% (The Government will introduce legislation to reform R&D tax reliefs by expanding qualifying expenditure to refocusing support towards UK innovation and to target abuse and improve compliance.)
Diverted Profits Tax	25%	31% from April 2023
Transfer pricing documentation		From April 2023, large multinational businesses will need to keep all transfer pricing documentation in a ‘prescribed and standardised’ format (OECD’s Transfer Pricing Guidelines - Master File and Local File).
Investment zones		The government’s new proposal to set up dedicated geographic areas with specific tax and regulatory rules intended to drive economic growth. The rules are still to be confirmed.

Over the next five years the government will also be investing £79 million in HMRC to resource investigations into serious tax fraud offences, as well as address tax compliance among wealthy taxpayers. The investment is likely to result in returns of circa £725 million of additional tax revenue.

If you wish to discuss this topic, please contact: Hansuke Consulting, London

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