Today the Chancellor announced a consultation on businesses paying their tax as profits arise. This will likely generate a cash injection for the government through tax being collected earlier but it is also likely to mean that businesses will need to invest in more sophisticated real time financial reporting to comply with this burden.
It will be interesting to see how this consultation dovetails with the announcement on digital tax accounts and the need for businesses to update these on a quarterly basis.
The Chancellor also confirmed the devolution of corporation tax in Northern Ireland, with the corporation tax rate expected to reduce to 12.5 per cent, compared to the rate currently applicable of 20 per cent.
This reduction puts businesses operating in Northern Ireland on a level playing field with those in Southern Ireland and is likely to be seen as a welcome measure.
The sting in the tail will be the added compliance burden of businesses operating throughout the UK, with the need to now separately identify profits in Ireland.
If you would like advice on the topics raised in this article please contact Melanie Reed