The Chancellor has published a letter which asks the Office of Tax Simplification (OTS) to conduct a further review of the proposal to use depreciation instead of capital allowances for tax.
The OTS published its report Simplifying the Corporation Tax Computation in July 2017, this makes major recommendations for reform of the schedular system, tax to following accounting profits and replacing the present capital allowances system with an accounts depreciation approach.
In the Chancellor’s response to the OTS:
- He agreed that a commitment to earlier and more open consultation is a key short-term goal
- The number of corporation tax adjustments made to get from accounting profit to taxable profit should be minimised and the capital/revenue definitions should be aligned for accounts and tax. These recommendations should be considered further alongside a review of how the changes would affect the Exchequer.
- There is no intention to review the current scheduling system of tax.
- He requested that the OTS explore the use of depreciation instead of Capital allowances further. Terms of reference for a further review will be agreed in the coming weeks.
Links
OTS: Simplifying the Corporation Tax Computation
External links
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