News and events from TaxCalc
Corporation Tax Loss Reform – An update to TaxCalc
Last Friday, HMRC emailed the accountancy practice community to inform that new rules concerning the relief and utilisation of corporate losses had taken effect.
The new rules were part of the legislation put before ministers earlier this year but, due to the General Election in May, were taken out as part of the ‘washing up’ of the original Finance Act – essentially, the passing of enough of the Budget to keep the country going.
After the election, the rules were reintroduced into draft legislation as part of Finance (No 2) Act 2017, which received Royal Assent on 16 November 2017. Last Tuesday, HMRC’s filing servers were updated to be able to receive the revised return and XBRL computations.
However, the important thing to note is that the Finance (No 2) Act was passed as if it was still early this year i.e. the rules apply to periods ending after 1 April 2017. Accordingly, where a tax position has been calculated under the old rules already, if there are losses, the return should be revisited and any liability recalculated.
Due to the changes in calculation and disclosure required in the computation, we have just released a new version of TaxCalc. Older versions of TaxCalc will no longer be able to file returns with losses, so it’s important that the update is applied.
The update marks the end of a challenging year in which we have seen the above retrospective changes to the corporation tax rules (somewhat rushed through), the first-ever in-year change to Self Assessment due to the application of the Personal Savings and Dividend Tax Reform and the mass introduction of new APIs to download data from HMRC directly into the tax return.
Of course, no matter how much pressure this may place upon us to update our software as quickly as we can, we appreciate our customers have to field these changes many times over with their clients.
With luck, for both us, our customers and their clients, 2018 will be a far more straightforward year!