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News - 12 June 2013

Treasury closes £900m utility firm tax loophole


The Treasury has changed the law in an effort to stop gas and electricity companies claiming capital allowances for money spent by business customers.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“The legislation, which comes into immediate effect, will prevent gas and electricity distribution companies from making new claims for historic costs dating back decades that have already been paid by their business customers. These claims could result in up to £900m in tax lost to the Exchequer.”

Some gas and electricity companies have attempted to make new claims for past expenditure, which if they succeed would generate large windfall tax repayments and reductions for the companies concerned, the Treasury said.

Chancellor George Osborne said: "It is completely unacceptable that utility companies think they can claim for huge amounts of money, that business customers have already covered the cost for. By legislating today, we will prevent utility companies from making these claims, ensuring fairness for British taxpayers."
The draft legislation, introduced on 29 May, will be introduced in the current Finance Bill.

If you need any help and advice for your business on capital allowances or you need to keep abreast of changes in legislation and how it could impinge upon your business, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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