Taxation of leased assets: HMRC’s discussion document

On 9 August 2016, HMRC published a discussion document Lease accounting changes: tax response (www.bit.ly/2baAS8x), which outlines its current thinking on options to change the UK tax treatment of leased plant and machinery. The catalyst is a need to ensure the tax rules in this area remain fit for purpose after the adoption of IFRS 16. At this stage, HMRC is suggesting two alternative approaches: the main features of the current regime will be retained, with only necessary changes; or a new regime will move to an accounts based system, with variants which could maintain the ability to incentivise lessees. HMRC has not concluded on a preferred route. Taxpayers and advisers have an opportunity to submit their views and comments to HMRC over a 12 week period of consultation, ending on 30 October 2016.