The stability of tax rules is of vital importance to the UK shipping sector, and international accountant and shipping adviser Moore Stephens says it is therefore encouraging that the UK government continued to provide a stable regime in its Autumn Budget 2017.
The Budget includes some specific further assistance for the offshore sector, with the introduction of a transferrable tax history mechanism for UK oil producers for deals on or after 1 November 2018. This is designed to facilitate the transfer of late-life oil and gas assets. In addition, the government is to launch a technical consultation on allowing a petroleum revenue tax deduction for decommissioning costs incurred by a previous licence holder.
While there are no new developments relating specifically to the shipping industry in the Budget, there are some items worthy of note. Under current rules, where a company realises a capital gain, the original cost will be adjusted for an inflation allowance. This allowance will now be frozen from 1 January 2018. Meanwhile, the Research & Development (R&D) tax credit will be increased from 11% to 12%. R&D is interpreted widely, and this may be of interest, for example, to suppliers to the offshore sector carrying out research and development activities, or companies developing software.
Capital gains made by non-residents on all UK property after April 2019 will be taxable, rather than capital gains on just UK residential property. There will be certain exemptions for investors such as pension funds.
Finally, the government will invest a further £155 million in additional resources and modern technology for HMRC to increase tax revenues by targeting the hidden economy, further tackling those engaged in marketing tax avoidance schemes, and addressing non-compliance among mid-sized businesses and wealthy individuals.
Moore Stephens tax partner Sue Bill says: “Once again it is a case of a UK Budget where little or no specific maritime-related news is good news for the UK shipping sector, while the offshore industry has been given some further, welcome help.”
l Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping, offshore maritime and transport & logistics adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 626 offices of independent member firms in 108 countries, employing 27,997 people and generating revenues in 2016 of $2.7 billion.