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Tax changes on 1 April: Cheaper long-haul flights | Tax changes on 1 April: Cheaper long-haul flights |
(about 1 month later) | |
Among the tax changes coming in on 1 April is one that will mean cheaper flights for thousands of people who travel over 4,000 miles. | Among the tax changes coming in on 1 April is one that will mean cheaper flights for thousands of people who travel over 4,000 miles. |
However, those flying between 2,000 and 4,000 miles will pay more in duty. | However, those flying between 2,000 and 4,000 miles will pay more in duty. |
As part of other changes, UK companies will pay a reduced rate of Corporation Tax on their profits. | As part of other changes, UK companies will pay a reduced rate of Corporation Tax on their profits. |
And companies which artificially export profits to other countries will become liable for the Diverted Profits Tax - otherwise known as the Google Tax. | And companies which artificially export profits to other countries will become liable for the Diverted Profits Tax - otherwise known as the Google Tax. |
Other changes, involving tax rates, personal allowances, National Insurance (NI) contributions and pensions will come into effect at the start of the next tax year, on Easter Monday. | Other changes, involving tax rates, personal allowances, National Insurance (NI) contributions and pensions will come into effect at the start of the next tax year, on Easter Monday. |
Air Passenger Duty | |
From 1 April, the two more expensive bands of the Air Passenger Duty (APD) are being abolished. Band 'C' affects people travelling over 4,000 miles, and band 'D' affects journeys over 6,000 miles. | From 1 April, the two more expensive bands of the Air Passenger Duty (APD) are being abolished. Band 'C' affects people travelling over 4,000 miles, and band 'D' affects journeys over 6,000 miles. |
Band C passengers flying economy class paid £85 each in APD last year, and will now pay £71, a £14 reduction. | Band C passengers flying economy class paid £85 each in APD last year, and will now pay £71, a £14 reduction. |
Band D passengers paid £97 last year, and will now pay £26 less. | Band D passengers paid £97 last year, and will now pay £26 less. |
The Treasury said the measure was designed to help boost trade with emerging economic countries like China and Brazil. | The Treasury said the measure was designed to help boost trade with emerging economic countries like China and Brazil. |
It said a family of four flying to India or the Caribbean in economy would save £56 in duty. | It said a family of four flying to India or the Caribbean in economy would save £56 in duty. |
However, passengers in band B (2,000 to 4,000 miles) will see APD rise from £69 to £71. | However, passengers in band B (2,000 to 4,000 miles) will see APD rise from £69 to £71. |
Further reform will happen on 1 May, when children under 12 will no longer have to pay APD. Those under 16 will be exempt from March 2016. | Further reform will happen on 1 May, when children under 12 will no longer have to pay APD. Those under 16 will be exempt from March 2016. |
Passengers on direct long-haul flights whose journey begins in Northern Ireland are exempt from APD. | Passengers on direct long-haul flights whose journey begins in Northern Ireland are exempt from APD. |
Corporation Tax | |
The main rate of Corporation Tax - on company profits - is being reduced from 21% to 20%. This continues the downward trend in the rate, which was at 28% five years ago. | The main rate of Corporation Tax - on company profits - is being reduced from 21% to 20%. This continues the downward trend in the rate, which was at 28% five years ago. |
As a result it is thought that the UK's corporation tax rate is now the joint-lowest in the G20 group of countries. | As a result it is thought that the UK's corporation tax rate is now the joint-lowest in the G20 group of countries. |
The equivalent tax is 30% in Germany, and 33% in France. | The equivalent tax is 30% in Germany, and 33% in France. |
Large and small companies will now pay the same rate on profits above £300,000. | Large and small companies will now pay the same rate on profits above £300,000. |
Diverted Profits Tax | |
Any company with operations in the UK which artificially diverts profits to another country will be liable to pay the Diverted Profits Tax (DPT). | Any company with operations in the UK which artificially diverts profits to another country will be liable to pay the Diverted Profits Tax (DPT). |
It follows criticism of multi-national companies like Google, Starbucks, Amazon and Apple. | It follows criticism of multi-national companies like Google, Starbucks, Amazon and Apple. |
Some of those companies are being investigated by the European Commission for their failure to pay tax in the countries in which they operate. | Some of those companies are being investigated by the European Commission for their failure to pay tax in the countries in which they operate. |
The tax will be charged at 25% of profits, and is expected to make £25m for the Treasury this financial year, rising to £355m by 2020. | The tax will be charged at 25% of profits, and is expected to make £25m for the Treasury this financial year, rising to £355m by 2020. |
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