UK Spring Budget 2024
The UK Spring Budget on 6 March 2024 was relatively measured in its tax policy decisions, despite a background of falling inflation and rising tax receipts. Below are some areas of interest for globally mobile individuals, those with UK staff, and those with business and investment interests.
Main measures affecting individuals
- National insurance contributions (NIC) rates paid by employees and the self-employed with annual taxable income below £50,270 will fall by 2%, saving a maximum of £754. As NIC is dealt with centrally, this reduction will apply across the UK, bypassing regional responsibilities for income tax. The 5p temporary cut in fuel duty rates will be extended to March 2025 and there will be no inflationary increase in fuel duty rates for 2024/25. Though this is helpful for workers they remain adversely impacted by frozen income tax thresholds.
- Employers may need to review their staff remuneration arrangements and employee expense policies in the light of these changes.
- A change to the taxation of foreign individuals who are UK resident but not UK domiciled from 6 April 2025 was announced. The current ‘remittance basis regime taxes foreign income and gains if remitted to the UK, subject to the payment of an annual charge of up to £60k depending on the length of UK residence. The new regime will provide for no charge on foreign income and gains arising in the first four years of UK residence, provided the individual has not been UK resident in the previous 10 years.
- Transitional rules apply for those currently using the remittance basis. These could reduce the incidence of tax on foreign income and gains in 2025/26 and also on foreign income and gains arising before April 2025 that are remitted before April 2027. There will also be refinements to ‘overseas work-day relief’, which excludes earnings for work performed outside the UK from UK income tax for the first three years of UK residence.
- In addition, there will be consultation on moving the inheritance tax (IHT) basis for ‘non-UK domiciled individuals. From April 2025 IHT will apply on an individual’s worldwide assets where they have been UK resident for a ten-year period, with no reference to UK domicile. Transitional rules will, amongst other things, affect how trusts are dealt with, depending on whether they are set up before or after April 2025 and whether settlor interested or not.
- There are a number of considerations for both UK and non-UK domiciled individuals, including UK residence status, assessing options under current rules, when to plan for realisation of income and gains, and the impact on any existing or new trusts.
- These changes will affect employers with a globally mobile workforce, as well as those individuals considering coming to, or leaving, the UK.
Main measures affecting those with property interests
- The furnished holiday lettings regime, which treats certain holiday letting with more favourable trading income tax treatment in contrast to more restrictive investment business taxation, will cease in April 2025. The CGT rate for individuals disposing of UK residential property interests will drop from 28% to 24% from April 2024.
- The multiple dwellings relief’ reducing stamp duty land tax rates will cease to be available in England and Northern Ireland from 1 June 2024, with transitional provisions for contracts entered into before 6 March 2024. Government figures indicated this relief did not significantly improve residential property investment, though we understand those in the property investment sector may have different views.
Main measures affecting other business and investment
- From a business perspective there was a commitment to introduce full expensing (available for companies) for plant or machinery intended for leasing when fiscal conditions permit.
- The temporary energy profits levy applying an additional 35% tax to oil & gas activities, will be extended a further year to March 2029.
- A new independent film tax credit will be available from April 2024 for films with production budgets (excluding marketing and distribution) of up to £15 million. The films will also need one of the following: a UK writer; a UK director; or be certified as an official UK co-production.
- There will be five further investment zones with enhanced tax reliefs for businesses in: Greater Manchester; Liverpool; North East England; South Yorkshire; West Midlands and Tees Valley.
- Subject to further discussion with stakeholders, a new ‘reserved investor fund’ structure will be made available, to facilitate low-cost institutional investment in UK property (for those investing in excess of £1m).
- A range of other government funds available for investment in particular sectors and arrangements designed to improve liquidity for investors in high growth companies were also announced.
Enhancing business sustainability through effective tax control frameworks
Sustainability challenges have become critical business imperatives in recent years. Regulators, stakeholders, investors, employees, customers – all expect a much higher degree of compliance and transparency. Businesses have got used to their performance in these areas being monitored and to being held accountable for any weaknesses. Although much of the focus on ESG (Environmental, Social […]
Tax transparency on allocation of group profits in the light of Public CbCR
Taxation has a key role for medium and large multinational companies in the process of developing a sustainable business model. Disclosure of complex tax information and transparency on profit allocation to group entities is key to this transformation process and will become a reality with new reporting standards and EU disclosure obligations. The Global Reporting […]
Don’t let Australian employment dream become employer’s nightmare
Since COVID-19, there has been a significant increase in demand for employees to work remotely from Australia for foreign employers. Such a relocation is often solely for the convenience of the employee to fulfil a dream of working in Australia or to return home. If you have an employee wishing to work remotely from Australia, you […]
Implementing the right tax control framework
There are two main drivers for organisations looking for advice around tax control frameworks (TCFs). Sometimes it is a proactive strategy to check their tax affairs are in good shape or to better understand any potential liability risks, for example. Alternatively, they may already be aware of tax compliance issues they need to deal with […]
Using CbCR data as a Pillar 2 GloBE starting point
Designed to ensure that multinational enterprises (MNEs) pay a global minimum tax (GMT) of 15% in each jurisdiction where they operate and generate income, the Pillar 2 global anti-base erosion (GloBE) rules are now a reality for in-scope MNEs and very large groups with €750m consolidated global turnover. With some MNEs facing assessments as early […]
How to develop a robust tax control framework for your business
Developing and implementing a tax control framework (TCF) is a strategy being adopted by an increasing number of companies around the world. There is no universal approach to developing a TCF. At Forvis Mazars, based on our wide experience working with a diverse range of companies to implement tax control frameworks, we take a structured, […]
Is a change of tax mindset now needed?
For Singapore and many other countries that have traditionally leant on financial incentives to attract foreign direct investments, the ambition of a 15% minimum global tax presented by Pillar 2 Global Anti-Base Erosion rules (GloBE) heralds a new challenge. While there is little doubt that having a fairer international tax system is a much-needed move, […]
New app from the Mexican Tax Administration Service designed to determine the monthly VAT returns automatically
The Mexican Tax Administration Service (SAT) continues to innovate and invest in technology and artificial intelligence to make it easier and more efficient for taxpayers to file their monthly tax returns. On February 1st, 2024, The Mexican Tax Administration launched a new online platform for filing the monthly Value Added Tax (VAT) returns, which will […]
A basic guide to understanding Pillar 2 GloBE minimum top-up tax rules
As in-scope organisations* embark on a new Pillar 2 Global Anti-Base Erosion (GloBE) journey, having a clearer understanding of how jurisdictions will enact the global minimum 15% tax rule is vital. Notably, while Pillar 2 GloBE sets out model rules on what jurisdictions need to achieve, there is an element of flexibility in how each […]
The benefits of having a tax control framework
Tax control frameworks are becoming increasingly common as companies seek to manage their taxation, compliance, and risk management obligations more effectively and efficiently. So, what is a tax control framework, and what are the benefits? A tax control framework is a set of processes and internal control procedures that ensure a company’s tax risks are […]
The right tax approach: why companies need a tax control framework
Across the globe, an increasing number of companies are developing tax control frameworks to help them stay on top of their taxation, compliance and risk management obligations and objectives. These obligations are continually evolving, driven by a combination of both...
Ecological taxes: new updates in Mexico
Several Mexican states had imposed ecological taxes in order to encourage certain industries to reduce their polluting emissions. In addition, green taxes have recently been imposed as a consequence of the warning issued by the Mexico Climate Initiative (MCI) that Mexico’s carbon dioxide emissions could increase by up to 59.8% by 2050 if the country’s green […]
A basic guide to understanding Pillar 2 GloBE minimum top-up tax rules
As in-scope organisations* embark on a new Pillar 2 Global Anti-Base Erosion (GloBE) journey, having a clearer understanding of how jurisdictions will enact the global minimum 15% tax rule is vital. Notably, while Pillar 2 GloBE sets out model rules on what jurisdictions need to achieve, there is an element of flexibility in how each […]
South Africa: certain foreign employers to be required to account for payroll taxes from 2024
Currently, the provisional tax system ensures that when a non-resident employer of individuals working in South Africa has no representative employer in South Africa, their employees’ tax obligation is settled in the form of a provisional tax payment by the employee, not the employer. The requirement for an employer to deduct and remit employees’ tax […]
IAS accounting requirements for Pillar 2: GloBE for periods ending 31 December 2023
Background to Pillar 2 (GloBE) Part of the ongoing work of the OECD to combat tax avoidance and targeted at low tax jurisdictions, the Pillar 2 – GloBE rules will apply to large organisations (>€750m of global revenue) with each country having its own rules implementing some form of 15% minimum tax, or otherwise risking […]
Green investments in Austria: new tax allowance introduced effective 2023
When the Austrian government – a coalition between the conservative People’s Party and the Green Party – presented their government program for 2020-2024, an “eco-social tax reform” was one of the key elements. The most recent measure has been the introduction of an investment allowance that especially incentivises “green investments”. The two main pillars of […]
Telework in Europe : the new official framework agreement on social security is out
Following our previous newsletter on this topic, we are now pleased to inform you that the expert working group consisting out of 20 different EU Member States has now officially published the “Framework Agreement on the application of Article 16 of Regulation (EC) No. 883/2004 in cases of habitual cross-border telework” (hereafter referred to as […]
How CARF, MiCA, and DAC8 will impact tax transparency in relation to the WEB 3 and other recent web developments
The development of new web communication systems such as WEB3 is making it very difficult for tax authorities to trace taxable transactions. However, measures proposed by the OECD and the European Union aim to provide a framework that will permit traceability of tax transactions. The technical characteristics of a crypto asset make it difficult for […]
ATAD3 update: significant amendments recommended by the European Parliament
The European Parliament proposes significant amendments to the Anti-Tax Avoidance Directive, commonly known as ATAD3. ATAD3 seeks to prevent the misuse of shell companies for tax purposes. Compared to the initial draft Directive, the proposed amendments may provide relief for international organisations. In essence, ATAD3 imposes increased reporting obligations and denial of tax benefits under […]
Mexico approves the Multilateral Instrument (MLI) to implement Tax Treaty Measures
On 12 October 2022, the Mexican Government approved the Multilateral Instrument (MLI) related to the application rules for double taxation agreements (DTAs) to prevent Base Erosion and Profit Shifting (BEPS). The rules were published in the Official Gazette of the Federation on 22 November 2022. Included in the Mexican Government’s reservations and notifications are […]
EU’s new SAFE initiative to bolster existing tax evasion measures
The European Commission (EC) launched an initiative on 6 July 2022 concerning the fight against tax evasion and aggressive tax planning. As a result, a public consultation introducing the Securing the Activity Framework of Enablers (SAFE) directive has now been held. The proposed measures could increase compliance costs for all those involved in providing tax […]
Polish Deal’s tax complexity and worsening economic conditions force revisions
A package of significant tax legislation changes came into force in Poland with effect from 1 January 2022. Dubbed the Polish Deal, these changes were intended to ‘tighten up the tax system’ and deliver a more progressive tax framework. However, they primarily involved a greater burden on a large number of taxpayers, which has subsequently […]
Proposed changes to the offshore regime for passive income in Hong Kong
Background To address harmful tax competition, the European Union (“EU”) requires Member States to refrain from introducing any new harmful tax measures and amend any laws or practices deemed to be harmful. Regarding non-EU jurisdictions, the EU has also evaluated their tax regimes against international tax standards and put in place a list of noncooperative […]
Spanish Supreme Court allows tax benefit to company directors
A Spanish Supreme Court Ruling on 20 June 2022 effectively reverses the decision by the Spanish tax authorities to remove the tax exemption for company directors for works carried out abroad(1). In its ruling, the Supreme Court considers that directors and board members can apply the exemption, provided that requirements set out in Article 7.p) […]
The Google tax: The UK story, 7 years later
The Diverted Profits Tax (DPT), or what the media have dubbed the Google tax, was introduced in 2015 to dissuade and counteract contrived arrangements used by large multinational groups that divert profits from the UK and erode the UK tax base.
The impact of digital assets and cryptocurrencies decentralised finance on taxation in various jurisdictions
Digital assets and cryptocurrencies continue to evolve by offering new services and products such as Decentralized Finance (DeFi) and non-fungible tokens (“NFTs”), but is tax legislation also keeping up to date with the ever-changing world of digital assets and cryptocurrencies?
Estate, gift and trust tax considerations for US domiciliaries and non-residents
Federal income versus transfer tax The US taxes its citizens and residents on their worldwide income but also levies a gift, estate and generation-skipping transfer tax (GSTT) on worldwide assets of both citizens and individuals domiciled in the US. A non-citizen is subject to US income tax when they become a resident. Transfer tax applies […]
Are you ready for the GloBE tax challenges?
On 14 March 2022, the OECD published a comprehensive commentary and illustrative examples of how implementing the Global Anti-Base Erosion Model Rules (GloBE rules) could look. In this blog, we discuss the GloBE rules and examine how the rules apply and filing requirements. On 20 December 2021, the OECD published model rules that member countries […]
New deadlines for reporting ultimate beneficial ownership to the Peruvian tax authorities
Legal entities and certain legal arrangements within the scope of Peru’s disclosure rules are obliged to implement suitable mechanisms allowing the collection and storage of data relating to the identity of their Ultimate Beneficial Owner (UBO). This information supports the data that must be shared with the Peruvian tax authorities by filing a UBO informative […]
Environmental tax pillar in the environmental, social, and governance system
The information regarding environmental taxes paid by an organisation, as well as the actions taken to mitigate the impact on the environment could be included in environmental, social, and governance (ESG) reporting. Environmental reporting in total is an important element for parties to consider when doing business. Along with environmental reporting, environmental taxes play a […]
Tax compliance and incentives during martial law in Ukraine
A crucial number of Ukrainian companies (including subsidiaries of international enterprises) experienced negative business and financial impacts as a result of the Russian invasion of Ukraine which started on 24 February 2022. The urgent relocation of staff to other regions of Ukraine and abroad, interruption of access to internal databases, IT systems, and paper documents […]
A new tax treaty between France and Belgium: Transfer of tax residence and sale of shares
The currently applicable double tax treaty between France and Belgium was concluded in 1964 and then amended many times until 2009. After several years of negotiations, Belgium and France finally signed a new double tax treaty (hereafter, the “new Treaty”). The 1964 Treaty remains applicable until the new Treaty has been ratified by the French […]
New double tax treaty between France and Belgium: nothing is set in stone for French real estate
In this blog post we focus on the situation of individuals residing in Belgium who hold real estate property located in France, looking specifically at the changes introduced by the new Treaty. National provisions have not been changed by this new Treaty, so additional French and Belgian taxes thus remain fully applicable
New tax rules in Luxembourg impacting cross-border workers and PEPPs
Guidelines on the taxation of cross-border workers during the Covid-19 pandemic and an update on PEPP as defined in the latest budget laws in Luxembourg.
Criminalisation of tax litigation in France
Many jurisdictions have refined and improved their legislative defenses against tax avoidance in recent years, making the penalties for tax fraud even tougher.
The Anti-Tax Avoidance Directive II: Will other jurisdictions follow the UK’s lead?
ATAD II is the EU translation of BEPS Action 2, the part which is focused on the ability of taxpayers to design situations of double non-taxation or heavily reduced taxation by exploiting hybrid mismatches. They apply to mismatches between the EU Member States, the UK, Mexico, Australia, New Zealand, and third countries. This legislation has […]
Recent Tribunal ruling on the taxation of ESOPs (Employee Stock Option Plans) in India
In accordance with OECD guidelines, the taxability of ESOP in India depends on where employment is exercised and the period of service for which ESOP has been granted.
Compliance bulletin helps businesses in Mexico
Mazars experts around the world deliver tailored services in audit, accounting, tax, financial advisory, consulting, and legal services. In Mexico, local experts have created a compliance dashboard with news items to help guide businesses as they navigate issues related to finance, tax, legal, and labour updates. With the global economy recovering from Covid-19, new government-required procedures […]
Switzerland is an attractive business hub. What is their secret?
Choosing a business location involves many considerations, with tax being only one of them. Nevertheless, tax is a consideration. Below is a note commenting on the attractions of Switzerland as a business location. There may of course be other locations that should be considered. Switzerland attracts global business, research, and innovation, and maintains the high ground […]
Migrants and refugees have employment rights and obligations in Uruguay
As Covid restrictions begin to lift there will inevitably be increased movement of workers across borders. This brings back into focus a range of global mobility and tax considerations for businesses and individuals. Examples include work permits, visas, payroll and social security amongst other issues. Below is a snapshot of some pints concerning Uruguay to […]
Updated OECD guidance on the impact of Covid-19 for cross border workers
In April 2020 the OECD issued guidance on the impact of Covid-19 on double taxation agreements (DTA) and their application to cross border workers. In January 2021 they updated this guidance. This guidance is necessary as some cross-border workers have been stranded in a country that is not their normal residence, and double taxation could arise without applying a practical approach to the […]
Why Czech Republic’s tax system is attractive for expatriate employees?
Tax reform continues to come in waves across the globe. One common theme of many reforms is tax breaks for low to mid wage earners and surprising tax hikes for high wage earners. This trend seems to be consistent with the latest out of the Czech Republic. New changes to the Czech tax law effective […]
How to attract private capital to fund the new American Jobs Plan?
On March 31, 2021, the Biden administration released The American Jobs Plan, which detailed, among other critical items, the need for infrastructure improvements to enhance America’s competitiveness and to create well-paid American jobs. For this to be successful in attracting needed private capital, the existing regulations concerning Real Estate Investment Trusts (REIT) and Foreign Investment in […]
Brexit impact on in/outbound payments
When the UK finally left the EU ended on 31 December 2020, the application of provisions that have been beneficial to cross-border payments within the EU ceased, or will cease to apply. The elimination of withholding taxes, formerly part of these provisions, means companies with cross-border dividend, interest and royalty payment flows to or from […]
Is your business eligible to claim support under Government Covid and business recovery support schemes?
Government’s around the world have acted to help support individuals and businesses to get through to Covid pandemic. Mazars Covid-19 global tax and law tracker provides an overview of the measures different jurisdictions have put in place and there is a range of information and webinars at the above link. In this article we focus […]
Covid-19 and the impact on taxation of individuals and permanent establishments in Nigeria
world. In addition to adversely affecting the world economy, the restrictions placed on travel could have personal income tax implications for individuals and permanent establishment risks for businesses.
Home office: new tax and social security implications in France
With the Covid-19 crisis, working from home is expected to become the “new normal”. 2020 marks the end of many tax holidays with respect to home working arrangements within and between certain countries. We have already featured some general comments on the implication of remote working in previous blog posts; and we will regularly feature […]
Remote Worker – “necessity” or “choice”?
During the first wave of Covid-19 back in the spring of 2020, many employers found themselves dealing with the issue of “remote workers” in significant volumes, for the first time. When “working from home”, means working from home in another part of the city or the country then the issues are more likely to be […]
State tax telework developments
It seems right now that most countries around the world are busy regulating certain telework arrangements cross border with a keen focus on taxation rights. The U.S. is no different. In fact, the U.S. has the matter pending before its highest Court for review. A decision will not only impact the states named but obviously […]
Brexit implications for international private clients
Now that we are a couple of weeks into the new year, we are seeing lots in the press and media on Brexit’s impact to the business community. But what about the people behind the business – the individuals. At Mazars, we have been educating clients on the future of Brexit from both an entity […]
South Africa and others: broadening the tax base by clamping down on “white collar schemes”
Near-term objective of the South African Revenue Service confirmed: “Remaining focused on international taxes, particularly aggressive tax planning using transfer pricing.” The South African (“SA”) economy, like many others, has been severely impacted by the Covid-19 pandemic. A recent speech by the country’s Finance Minister painted a dire picture of a country that is, in […]
Tax holiday checklists: make your list and check it twice, especially for withholding tax changes
Generally speaking, year-end is that time of year when we clean up all open items in the current year and head into the new year with a fresh outlook and perspective. This also applies to tax. You cannot be blind to the overwhelming number of tax checklists published to help individuals, in particular, get their tax affairs […]
Welcome (bienvenidos, willkommen, karibu, bienvenue) to a world of tax incentives
The pandemic has led to many people choosing to relocate. Many are leaving densely populated cities to work remotely to where they feel are more desirable locations for themselves and family. Others are holding steadfast to their crowded city dwellings. Either way, geographies are challenged to retain (or welcome) existing residents and newcomers. Many are […]
The new year brings new social security challenges post- Brexit
What is the issue? With Brexit talks still ongoing, employers should be planning for the impact of a hard Brexit on social security coverage and benefit provision for their employees who travel between the UK and EU (including EEA & EFTA countries and Switzerland) for work. HMRC’s October employer bulletin provided a welcome update on […]