Autumn Budget 2017: Proposed changes to UK taxation on royalties


Blick Rothenberg comments on the proposed changes to taxation on royalties.

“The extension to UK taxation on royalties paid overseas is not unexpected and is in line with the UK’s continued commitment to tackle aggressive tax avoidance and the diversion of profits from the UK. It is unclear how this will be administered and how it will interact with current double tax treaty agreements, which the UK has concluded globally," says Genevieve Moore, partner and Head of Corporate Tax.

“The introduction of withholding tax on royalty payments relating to digital supplies will cause interesting issues with regards to implementation as it would only apply where the end customer is in the UK. Further clarification will be needed”, says partner Paul Smith.

“The Chancellor will need to ensure proposed changes to payment of royalties are compatible with other future changes to avoid a hotch potch of rules that are difficult to apply,” says Helena Kanczula, Corporate Tax Director.

Indexation allowance

“The proposed freezing of indexation allowance for companies is not unexpected and will have the most impact on companies which own properties which they have owned for many years. Although this is a proposal for freezing indexation allowance, businesses should be prepared for an eventual abolition of the relief in the future and plan accordingly,” says Genevieve Moore.

“No surprise that indexation allowance will be frozen for companies, particularly with inflation on the rise. The allowance was never a major factor when making a decision to invest in capital assets,” says Helena Kanczula.

For more information, please visit our Autumn Budget 2017 news page here.