Newsletters

UK TAX COMPLIANCE TO GET MORE COMPLICATED FOR SOME NON-RESIDENT COMPANIES

First published 25th September 2018; Updated 15th November 2018

At present all non-resident companies whose income is solely income from property complete a simple income tax return showing only the income and expenditure relevant to the UK property business. We do not need a Balance Sheet nor do we require a full Profit and Loss Account. The requirements of the UK companies Acts as regards presentation of accounts simply do not apply.

With effect from April 2020 all non-resident companies will be subject to the full UK Corporation Tax regime instead of the simplified income tax regime. The note from HMRC reads as follows:

The accounts and balance sheet as prepared under the company’s jurisdictional statute or constitution will be required. If the taxonomy is non-UK or non-US GAAP e.g. Swiss/French/Lux/BVI then accounts are to be sent in as an untagged PDF but the computations will require iXBRL tagging. Where no formal accounts are required under the home jurisdiction, a set of management accounts with P&L and balance sheet should be filed.

iXBRL tagging is a hidden tag applied to key entries in a submitted document that indicates to the HMRC software for entry validation.

We don’t yet have all the details but it will mean a substantial increase in the cost of compliance. As soon as we get more information we will publish it here.