27 Oct 2021 5:07 PM

Changes announced

If you watched the Budget announced today by the Chancellor, you would have heard his claims that the UK are taking advantage of tax reforms as a result of leaving the EU. One budget change that wasn’t announced in his speech is a change to cross-border group relief for those groups with entities in the European Economic Area (“EEA”) and the UK.

The announcement brings the group relief rules relating to EEA-resident companies into line with those for non-UK companies elsewhere in the world. The more favourable rates were brought into UK law as a obligation as a member state of the EU, but now that we have left the UK is no longer required to keep these favourable rules.

When does the change have effect?

This change takes effect immediately for company accounting periods ending on or after 27 October 2021 with transitional rules in place for those companies with accounting periods that straddle this date.

If you have an EEA subsidiary or you have a company established in the EEA with a UK permanent establishment then this change may affect you, so please get in touch for more information on the changes.