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Wednesday, 23 November 2016

Moore Stephens says Autumn Statement bodes well for UK business stability

International accountant and shipping adviser Moore Stephens says the Autumn Statement from the UK Chancellor of the Exchequer should provide stability for UK businesses.

Moore Stephens tax partner Sue Bill says, “While there are no new developments relating specifically to the shipping industry, there are a number of items worthy of note. It was confirmed that the corporation tax rate will be 17% from April 2020, and will not be further reduced. Rules will be introduced to limit the tax deduction that large groups can claim for interest expenses from April 2017. These will apply where a group has net interest expenses of more than £2 million, where these expenses exceed 30% of UK taxable earnings, and where the group’s net interest earnings ratio in the UK exceeds that of the worldwide group.”

Corporation tax loss relief rules will also be changed with effect from April 2017, with the result that the amount of profit that can be offset by carried-forward losses will be restricted to 50% after a £5 million allowance. There will be greater flexibility, however, with regard to the types of profit that can be relieved by tax losses brought forward.

For the oil and gas sector, the process to opt a field out of Petroleum Revenue Tax, which is now at a rate of 0%, has been simplified in order to reduce administrative costs.

It has been confirmed, meanwhile, that reforms to the taxation of non-UK domiciled individuals will be brought in from April 2017. Moore Stephens tax partner Gill Smith says, “These rules will end the permanency of the non-domiciled tax status and introduce inheritance tax for UK residential property where it is held indirectly by a non-domiciled individual through an offshore structure. In addition, Business Investment Relief rules will be changed to make it easier for non-domiciled individuals taxed on the remittance basis to bring offshore money into the UK for the purpose of investing in UK businesses.”

Others measures announced in the Autumn Statement include confirmation of reforms to the Substantial Shareholdings Exemption (SSE) rules, the introduction of further incentives to encourage research and development, and a review of the rules relating to the taxation of benefits in kind. The government has also reiterated its commitment to reduce offshore tax evasion and aggressive tax avoidance schemes.

Sue Bill says, “The Autumn Statement appears to place the emphasis on stability for UK business which, given recent events, would seem to be good news, not least for the shipping sector. “

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping, offshore maritime and transport & logistics adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 657 offices of independent member firms in 106 countries, employing 27,613 people and generating revenues in 2015 of $2.7 billion. www.moorestephens.co.uk

For more information:
Sue Bill
Moore Stephens LLP
Tel: +44 (0)20 7334 9191

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Monday, 21 November 2016

ITIC warning on the price to be paid for misreading tariffs

International Transport Intermediaries Club (ITIC) says the misreading of tariffs in shipping documentation is a common cause of costly claims.

ITIC cites the case of a South American port agent asked by the owners of a vessel to provide a quote for the costs of discharging a shipment of project cargo. The agent reviewed the port authority’s official tariffs, and advised the owners that the stevedoring costs would be $28.90 per metric tonne of cargo. The cargo weighed 296 metric tonnes, so the owners calculated the stevedoring costs at approximately $8,500 and quoted that in turn to the charterers of the vessel. The voyage was duly fixed on that basis.

After the cargo had been discharged, the stevedores invoiced the agent for the sum of $130,000. When these costs were questioned by the owners, the agent realised that the $28.90 rate it had quoted to the owners was the rate per cubic metre, not per metric tonne. It was apparent that the agent had simply misread the port tariff document. After discussion with the agent, the stevedores agreed to offer a discount on the costs, and the claim, which was covered by ITIC, was ultimately settled for $75,000.

ITIC points out that claims often arise from misread tariffs. In another recent case, ship agents in Australia quoted the incorrect port charges for a local port to their customer. The customer then fixed on that basis and suffered a loss of AU$86,000. The claim against the agent was reimbursed by ITIC.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com

For more information:
Charlotte Kirk
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151

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