Moore Stephens tax partner Sue Bill (pictured) said: “While there is nothing in the Autumn Statement 2014 which is of fundamental importance to the maritime sector, there are some changes which may be of interest to the shipping and offshore industries.
“For example, the remittance basis charge will increase for some non-UK domiciled individuals. For individuals who have been UK-resident for 12 out of the last 14 years, the charge will increase from £50,000 to £60,000. A new charge, of £90,000, will be introduced for individuals who have been UK-resident for 17 out of the last 20 years. In addition, the government will consult on making the election apply for a minimum of three years.
“As expected, the UK government will introduce legislation giving it the power to implement the OECD model for country-by-country reporting. These rules will require multinational enterprises to provide high-level information to Her Majesty’s Revenue & Customs on their global allocation of profits and taxes paid, as well as indicators of economic activity in each country.”
Meanwhile, a number of measures have been introduced of relevance to the oil and gas sector. Sue Bill explains, “The government will introduce an immediate 2% reduction in the rate of the Supplementary Charge from 32% to 30%, with effect from 1 January 2015, and will aim to reduce the rate further in the future. The ring-fence expenditure supplement will also be extended from six to 10 accounting periods for all ring-fence oil and gas losses and qualifying pre-commencement expenditure incurred on or before 5 December 2013. The government is also introducing an allowance to support the development of high-pressure, high-temperature projects. From 3 December 2014, an amount of profits equal to 62.5% of the qualifying capital expenditure a company incurs will be exempt from the Supplementary Charge. “
A new exemption from withholding tax on interest on qualifying private placements (a type of unlisted debt) has also been announced to help the provision of new finance for businesses and infrastructure projects.
Finally, as part of further measures to minimise aggressive tax planning by multinational enterprises, a new tax will apply where such enterprises divert profits from the UK. The Diverted Profits Tax will be 25% and will apply from 1 April 2015.
Sue Bill said: “Overall, setting aside the changes for non-UK-domiciled individuals, this is generally a helpful budget for the shipping and offshore sectors. The new exemption from withholding tax on interest on qualifying private placements, while subject to further details, could make it easier for companies to raise finance without incurring withholding tax liabilities of up to 20% on interest payments. The continuing government clampdown on aggressive tax avoidance by multinational enterprises is not unexpected. Meanwhile, the new high-pressure, high-temperature cluster area allowance taking effect from 3 December 2014 is among a number of encouraging measures for the oil and gas sector.”