The Postal Services Act 2011 (Taxation) (Amendment) Regulations 2016
Published 22 September 2016
© Crown copyright 2016
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Who is likely to be affected
This will only affect The Department for Business, Innovation and Skills (BIS) (Postal Services Act 2011) Company Limited (BCL).
General description of the measure
The amended regulations extend BCL’s Corporation Tax exemption.
Policy objective
This measure supports the government’s commitment to secure a sustainable future for the universal postal service by ensuring that no Corporation Tax arises as a result of the transfer of Royal Mail’s pension deficit to government.
Background to the measure
The Postal Services Act 2011 (Taxation) Regulations 2012 introduced provisions intended to remove unintended tax consequences which could arise as a result of the transfer of assets and liabilities to enable the government to take over the pension deficit in the Royal Mail Pension Plan (RMPP).
These included a time limited Corporation Tax exemption for BCL (now expired). It was exempted from Corporation Tax for its accounting periods beginning and ending before 1 April 2015.
Detailed proposal
Operative date
The amended regulations will take effect from 30 September 2016.
Current law
Regulation 6 of the Postal Services Act 2011 (Taxation) Regulations 2012 (SI 2012/764) gave BCL an exemption from Corporation Tax for periods beginning and ending before 1 April 2015. Since that date BCL is subject to the normal rules for Corporation Tax.
Proposed revisions
The new legislation will indefinitely extend BCL’s exemption from Corporation Tax from 1 April 2015 to allow for the longer term sale of the assets, but only whilst BCL remains wholly in Crown ownership.
Summary of impacts
Exchequer impact (£m)
| 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 |
|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
There is no impact on individuals because this is a change that affects BCL only. The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
There are no equality impacts on any protected equality group.
Impact on business including civil society organisations
This measure is expected to have no impact on businesses or civil society organisations as the provisions only relate to BCL.
Operational impact (£m) (HM Revenue and Customs (HMRC) or other)
It is not anticipated that implementing this change will incur any additional costs or savings for HMRC.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be kept under review through communication with affected taxpayer groups.
Further advice
If you have any questions about this measure please contact:
- email: lorraine.coster@hmrc.gsi.gov.uk
- telephone: 03000 585676
Declaration
Jane Ellison MP, Financial Secretary to the Treasury, has read this Tax Information and Impact Note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.