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Tax simplification?

Our tax simplification aims appear to be some way off target.  I was looking at the definitions of large company or group, I was surprised and I work in tax full time.  Here is where I am and I strongly suspect I missed a few! The purpose of the definition in point is noted in brackets.

Large company -

  • taxable profits £1.5 million pro rata reduced by number of 51% group companies (QIPs)
  • taxable profits £20 million pro rata reduced by number of 51% group companies (shorter QIPS)
  • taxable profits £5 million on a company or group basis (loss restriction)

Large group

  • net interest cost in the UK of £2 million  (interest relief restriction)
  • more than 250 employees and either turnover of €50 million or balance sheet total €43 million or more (transfer pricing)
  • more than 500 employees and either turnover of €100 million or more or balance sheet total €86 million or more (reduced R&D credit)
  • company or group that on the last day of its previous financial year had world-wide turnover more than £200 million or balance sheet total more than £2 billion (tax strategy publication)

Add in the large company tests for an audit – two out of three of 50 or more employees, turnover £10.2 million and gross assets £5.1 million and it starts to get out of hand – or is it just me?

 

 

Date: 11th April, 2016
Author: Cathy Corns

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