Businesses could soon see changes to Corporation Tax as the Government tries to make the UK more competitive. The Government is apparently not happy that so many businesses are leaving the UK for lower tax destinations overseas.
The changes that are proposed cover:
- The Controlled Foreign Companies regime where the plan is that there will be a partial exemption for overseas financing operations; and a new special rule introduced to prevent the artificial diversion of UK profits derived from intellectual property that has a substantial UK connection.
- A new rate, from April 2013, of 10 per cent Corporation Tax to apply to income derived from patents.
- Exemption from UK Corporation Tax of profits earned by foreign branches of UK companies.
- And no significant changes to the regime relating to the deductability of interest expenses.
But will these changes help?