Miscellaneous

 

Bank levy

 

A permanent Bank Levy is introduced with effect from 1 January 2011.  It can apply to any group of companies that includes a bank.  It is expected to raise £2.9bn in a full year by charging a small percentage of consolidated equity and liabilities in excess of £20bn.  Because of the extensive range of exclusions from “chargeable equity and liabilities”, it is expected that institutions paying this levy will be encouraged to increase Tier 1 capital and other long-term funding and discouraged from excess reliance on short-term borrowing.

 

 

Aviation Tax

 

The Government announced that it would tax private business jets and will be consulting about implementation.  A consultation was also announced on wider reforms to Air Passenger Duty to apply from April 2012.

Oil & Gas

 

Companies involved in oil and gas in the UK or on the UK Continental Shelf are subject to a special tax regime.

 

As part of the Fair Fuel stabiliser, an increase from 20% to 32% in the supplementary charge on profits is being levied on these companies whilst oil remains above a trigger price of around US $75 per barrel – the precise value for which would be subject to consultation.  This will provide the Government with funds to restrict the Fuel Duty increases.  It is intended that this supplementary charge will reduce should oil prices start decreasing on a sustained basis.

 

However, the rate of relief for decommissioning expenses will be restricted to 20%.

 

Further, rules covering the acquisition of oil licences will be tightened so that they specifically prevent tax relief for their depreciation.

 

Other measures, some of which have been previously announced, cover tax relief on gains that are reinvested into new oil trade assets.

 

 

9.4       Renovation allowance

 

The Business Premises Renovation Allowance provides 100% tax relief for the capital costs of converting, renovating or repairing qualifying unused commercial buildings in certain disadvantaged areas.

 

It was introduced on 11 April 2007 with a five year time limit.

 

The Government has announced that it will extend this five year time limit by a further five years to 2017.

 

 

9.5       Business Rates

 

As part of the agenda for growth, 21 Enterprise Zones are being created in areas where there is strong focus on manufacturing.  These zones will be established nationwide – including the South East and will confer tax and non-tax advantages.

 

One of the non-tax advantages will be a discount for business rates of up to 100% for five years.

 

 

9.6       Business Rates Holiday

 

Small businesses with rateable values below £6,000 a year are currently entitled to a business rates holiday ending October 2011.

 

This holiday will now be extended to October 2012.