Today's Budget announcement referenced a number of noteworthy items. Here's a couple of my initial thoughts...


The Chancellor was emphasising the UK leaving the EU. Following the Spring Consultations he is looking at enhancing the two UK R&D schemes. R&D will be extended to cloud computing and data costs. Both UK creative credit and R&D reliefs were limited by EU State Aid rules. You can see in his comments and actions, a desire to move the UK forward towards a more dynamic economy. In terms of R&D some of the historical relief was associated with costs for investment overseas, the Chancellor hinted at limiting that relief and focusing it more on the UK.

Thought will also be given on how overseas companies can re-domicile to the UK to access the various incentives, and bring new business to the UK.

Tax Administration, Fraud and Avoidance

As expected, further investment will be spent on HMRC to tackle illicit financial flows, and to tackle tax avoidance. HMRC will continue to investigate fraud linked to the furlough scheme, and look at the behaviours of promoters of tax avoidance.

The Government is proposing:

  • to allow HMRC to freeze tax promoter's assets;
  • deter offshore promoters by introducing a new penalty on the UK entities supporting them;
  • provide for the closing down of companies that promote schemes.

With the introduction of the new property developers tax, I would expect HMRC to further broaden their efforts in investigating those involved in the UK property market.

International Tax Compliance

With the UK leaving the EU, the UK withdrew from the EU exchange of information agreement, but the Spring Budget confirmed they will be consulting on how to introduce the OECD Mandatory Disclosure regime. This will focus on the reporting of Common Reporting Standard (CRS) avoidance schemes and opaque structures created to hide the identity of beneficial owners. This demonstrates the Government’s commitment to make the UK transparent.

HMRC will also be introducing new rules which will require digital platforms to collect and pass details to tax authorities of those selling on their platforms. They opened a consultation on 30 July 2021 which closed on 22 October 2021.