Tax ripples, reliefs, and reflections

KEY POINTS

• Accounts examination and new business reliefs.
• The halving of income tax rates.
• Corporate tax changes and reductions.
• Capital taxes and VAT changes.

During the period from January 1978 to June 1984 very substantial changes were made to the system of both direct and indirect taxation. The need for some of these changes was doubtless created by a government direction requiring a considerable reduction in Inland Revenue staff numbers. Other changes were introduced to reflect the changing nature of business life. It did however seem that as the volume of change gathered pace the amount of underlying legislation grew at a most alarming rate.

Examination of accounts

One change in practice which created a great deal of uncertainty and considerable ill-will concerned the determination and agreement of taxable business profits. Previously financial accounts of...