Capital allowances specialists Lovell Consulting are finding relatively few property companies and private equity businesses are alert to these fundamental changes which will apply from 1 April 2017, not least because the 90 pages of complex legislation was only published on 26 January 2017. John Lovell, MD of Lovell Consulting, advises clients need to be ready for these radical changes which could shift loss making entities into tax paying entities. It will be important to see what historical, unclaimed allowances can be claimed to help mitigate this measure.
The British Property Federation (BPF) has expressed concerns regarding these bank interest deductibility and corporation tax losses reforms, ‘The combined effect of the proposed interest deductibility rules and the loss reforms on interest expenses is not yet fully understood. The complexity of both rules makes it incredibly hard to model’. The full BPF response can be found HERE.
2017 is going to be a tough year for businesses. The combination of business rates increases, these tax reforms, living wage, pension auto enrolment, all in 2017 will have a substantial impact to some businesses particularly those that are labour intensive and multi-site such as retail, restaurants and hotels.