29 September 2017

How will the new Finance Bill affect you or your business?

The Finance Bill, due to get its second reading this September will finally include the new rules for the set off of company losses that were originally announced in March 2016.

 A helpful article in FT Adviser provides top line information containing the Bill’s key points including:

  • Changes to business loss relief
  • Cut to money purchase annual allowance from £10,000 to £4,000
  • Cut in the tax-free dividend allowance from £5,000 to £2,000 from April 2018
  • Introduction of £500 financial advice allowance from pension fund 

Dates confirmed for new rules

As a result of the first Finance Act being rushed through due to the snap General Election the legislation to introduce the new company loss relief rules were dropped. This led to considerable uncertainty as to the start date of the new rules but it has now been confirmed that the new rules will apply from 1 April 2017 after all.

Business losses relief

So if your company diversifies into a new business activity the losses of one activity incurred after 1 April 2017 can be carried forward and set off against future profits of the new business. Previously such losses would have been ring fenced against future profits of the activity that incurred the losses.

There are new restrictions for companies and groups with profits in excess of £5 million and also changes to the set off of losses within a group.

Want more information?

Your RWB taxation team can assist you in ensuring that relief for losses is obtained in the most beneficial way and can provide information on the latest developments from the Finance Bill. Contact us on 0115 964 8860 or email enquiries@rwbca.co.uk

The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.