HMRC and the Treasury are consulting on potential changes to the corporate intangibles regime and reforms to the administration and tax compliance in the light of changing attitudes to intellectual property (IP) and the government's aim to reduce aggressive tax avoidance
Plans for a consultation were first mooted by the government in the autumn Budget 2017, last November. The regime is more than 15 years old and the government says it would like to examine whether there is scope for reforms that would simplify it and make it more effective in supporting economic growth.
While there have been a number of changes to the regime since 2002, most of these changes have focussed on closing down avoidance schemes and removing unfairness within the existing tax rules.
The consultation document draws attention to of the growing importance of IP to the productivity of modern businesses, and the restructuring of IP ownership within multinational groups in response to recent international tax changes, and suggests it is now the right time for a more comprehensive review of the regime.
Specific aspects of the regime under consideration include the exclusion of pre-2002 assets; the exclusion of goodwill and customer-related intangibles; the impact of the de-grouping rules on mergers and acquisitions.; and the use and competitiveness of the election for fixed rate relief at 4% per year.
The consultation closes on 11 May 2018.
Review of the corporate intangible fixed assets regime is here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/682159/Review_of_the_corporate_Intangible_Fixed_Assets_regime_consultation.pdf
Report by Pat Sweet