United Kingdom - Tax proposals in “Autumn Statement” 

• Corporate tax: The FY 2013 corporate tax rate will be reduced by 1% to 21%; the annual investment allowance will be increased from £25,000 to £250,000 per annum for a two-year period beginning 1 January 2013; the main rate of the bank levy will increase from 0.105% to 0.130% from 1 January 2013.
• Derivative contracts: Measures to counter "schemes" using property-based derivatives; parties to the derivative contract are not to include two or more connected companies (effective 5 December 2012).
• Tax mismatch "schemes”: Measures to counter asymmetrical treatment of loan relationships and derivative contracts within a company.
• Manufactured payments: Measures to counter “schemes” using stock-lending arrangements by providing that the deemed manufactured payments rules continue to apply when the plan is entered into, effective in relation to dividends or interest paid, or treated as paid, on or after 5 December 2012.
• Individual taxpayer measures—
  • Reductions in the lifetime allowance and annual allowance for pension tax relief (effective April 2014)
  • An increase to income tax personal allowance and annual ISA investment limit and a reduction of the threshold at which higher rate tax becomes payable (effective April 2013)
  • An annual increase by 1% to the capital gains tax annual exempt amount, reaching £11,000 in 2014/15 and £11,100 in 2015/16
  • An increase of the nil (0%) rate band to £329,000 (effective April 2015)
• Employment issues and measures affecting employers—
  • Reduction in the annual allowance for pension tax relief (effective April 2014)
  • The government decided not to proceed with a proposal to tax those meeting the definition of “controlling person” at source
  • The government decided to “wait for further progress on planned operational changes to the tax system” before launching a formal consultation on integrating the operation of tax and National Insurance contributions (NICs)
  • New "employee shareholder" status introduce, to allow employees to have shares in the company they work for in return for reduced employment rights
  • A government-requested review of ways to simplify the taxation of employee benefits and expenses and employee termination payments (details from the Office of Tax Simplification are expected soon)
  • A review of offshore employment intermediaries being used to avoid tax and NICs (update to be provided at Budget 2013)

Read a December 2012 report [PDF 197 KB] prepared by the KPMG member firm: Weekly Tax Matters (5 December 2012)

Also covered in the KPMG report are the following items:

• Government and EC announcements on tax avoidance and evasion
• Call for evidence concerning the balance of competence between UK and EU on taxation
• Scottish land and buildings transaction tax bill published
• VAT: Court of Appeal – Secret Hotels2 Ltd (formerly Medhotels)
• Changes to company car advisory fuel rates beginning 1 December 2012
• Pension relief at source claims – scheme administrators
• Life insurance corporate taxation update
• Change of address for employees