Tempestuous weather conditions did little to deter delegates from visiting The Claremont Hotel’s Sanderson Suite on Friday 22 March to attend KPMG’s ever-popular UK and Manx tax update. Held in the wake of the UK Budget, the update featured a series of presentations by members of KPMG’s tax team covering the UK Budget itself, February’s Manx Budget, as well as recent developments in VAT, the Isle of Man’s personal service company legislation, FATCA and the Isle of Man’s associated disclosure facility.
Kevin Loundes spoke first and focused on the implications of the UK Budget from an offshore tax perspective, noting that it contained very few surprises, although this fact alone could be considered as a positive development for the Island compared to last year’s Budget in which certain measures were introduced with potentially negative repercussions for local business. Mr Loundes went on to describe some changes to key UK anti-avoidance rules before providing an overview of the UK’s General Anti-Abuse Rule (or “GAAR”).
Sandra Skuszka then provided a VAT update which included consideration of the proposed changes to the place of supply rules. These proposals will potentially result in significant changes to the way in which intra-EU business-to-consumer supplies of telecoms, broadcasting and electronic services are taxed. Ms Skuszka continued by summarising a number of recently issued HMRC “business briefs”, including one detailing changes to the banding of air passenger duty rates which will render air travel more expensive, particularly for private business jet owners.
An outline of the main tax and national insurance measures announced as part of the recent Manx Budget followed, during which Robert Rotherham discussed matters such as the extension of the employers’ national insurance ‘holiday’ and the introduction of a 10% corporate income tax on Isle of Man retail profits. Mr Rotherham concluded by providing a recap of the tax position regarding distributions made by Isle of Man companies to their local shareholders, further guidance in respect of which has recently been issued by the Treasury.
Next up was Harley Richards with an Isle of Man employment tax update focussing primarily on recent developments concerning personal service companies, or “PSCs”, new legislation in respect of which is due to take effect in April 2014. Mr Richards identified potential complications with the proposals including the qualification and identification of workers under third-party employment and the application of VAT. A UK employment tax roundup followed, during which Mr Richards discussed the merger of the PAYE and NIC systems, proposed legislation governing Offshore Employment Intermediaries and the Real Time Information project.
David Parsons was the morning’s final speaker and covered the ongoing issue of FATCA, (the US Foreign Account Tax Compliance Act), the UK FATCA-equivalent, and the Isle of Man’s associated disclosure facility, the Manx Disclosure Facility (or “MDF”). Following a brief refresher session on the implications of the US’s regime, Mr Parsons outlined the current status of the UK equivalent, which is based on the US model and due to come into effect on the same day. Next, Mr Parsons compared the approach to FATCA taken by the Isle of Man authorities to that adopted in certain other offshore and mainstream jurisdictions before moving on to summarise the main features of the MDF. This facility is essentially designed as a “tax amnesty” similar to the existing Liechtenstein Disclosure Facility (“LDF”) and, as such, provides the opportunity for persons with Manx financial interests, and who have undeclared UK tax liabilities, to regularise their UK tax affairs in a controlled and comparatively efficient manner.
A brief comparison of the MDF with the Liechtenstein equivalent was followed by a short question and answer session, after which Mr Parsons closed the morning’s proceedings by thanking the audience for having braved the miserable weather conditions before wishing them the best of luck in their onward journeys.
Category: Finance & Business