Further to our Budget Newsbrief we have noted that the SCT rate increase has been included in a resolution passed under the terms of the Provisional Collection of Taxes Act.
As a result of this we believe that the SCT rate change is “substantially enacted” for UK GAAP and IFRS purposes. This may therefore impact companies’ quarterly reporting obligations.
We noted in our Budget note that there may be opportunities to minimise the impact of these provisions for 2011. Readers may recall that when SCT was introduced there was no specific methodology included within the transition provisions for allocated profits such that companies were able to effectively choose whether to use on time apportionment basis (which is generally the default within the corporation taxes act) or based on actual. However the wording included in the resolution provides that the apportionment of profits for 2011 is to be done on a simple daily basis. The opportunities for planning will therefore be limited, but there may be some scope once the profit position for 2011 is known.
CW Energy LLP