- Digital services tax (DST) – From April 2020, a new 2% tax will apply to the revenues of certain digital businesses to reflect the value they derive from the participation of UK users, pending an appropriate international solution. The government will consult on the detailed design of the DST and legislate in the Finance Act 2020. The tax will apply to annual ‘UK’ revenues above £25m from activities relating to search engines, social media platforms and online marketplaces (of businesses with in-scope annual global revenues of more than £500m). Loss-makers will be exempt and businesses with very low profit margins will be subject to a reduced effective rate.
- Annual Investment Allowance (AIA) – The amount of qualifying investment in plant and machinery made on or after 1 January 2019 until 31 December 2020 will go up from £200,000 to £1m.
- Capital allowances – The capital allowances special rate for qualifying plant and machinery assets will be reduced from 8% to 6% (from 6 April 2019) while a new 2% non-residential Structures and Buildings Allowance (SBA) is available where contracts for physical construction works are entered into on or after 29 October 2018.
- Corporate capital loss restriction – From 1 April 2020, the proportion of annual capital gains over a £5m allowance that can be relieved by brought-forward capital losses will be limited to 50%.
- Intangible fixed assets – There will be relief for the cost of goodwill in acquiring businesses with eligible intellectual property from April 2019. The de-grouping charge rules which apply when a group sells a company that owns intangibles, will be reformed from 7 November 2018 to align them with the equivalent rules applying to capital gains. The tax on income from intangible property held in low-tax jurisdictions to the extent referable to UK sales will apply from April 2019, as previously announced, with some changes.
- Employment Allowance (EA) – Only employers with an employer National Insurance contributions (NICs) bill below £100,000 in their previous tax year will be eligible for EA, which provides businesses and charities with up to £3,000 relief, from April 2020.
- Entrepreneurs’ Relief – For disposals from 6 April 2019 the minimum period throughout which the qualifying conditions for relief must be met will be extended from 12 months to 24 months. In addition to the current requirements on share capital and voting rights, for disposals from 29 October 2018 shareholders must also be entitled to at least 5% of the distributable profits and net assets of a company to claim the relief.
Source: PWC, HMRC