Offshore receipts in respect of intangible property: initial equality impact assessment
Published 4 November 2019
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This publication is available at https://www.gov.uk/government/publications/offshore-receipts-in-respect-of-intangible-property/offshore-receipts-in-respect-of-intangible-property-initial-equality-impact-assessment
Project objectives
This measure will apply a UK Income Tax charge to amounts received in a low tax jurisdiction in respect of intangible property, to the extent that those amounts are referable to the sale of goods or services in the UK.
The measure will apply to income receivable from both related and unrelated parties and has been effective since 6 April 2019.
The policy targets multinational groups that generate significant income from intangible property through UK sales, and have made arrangements such that the income is received in offshore jurisdictions where it is taxed at no, or low, effective rates.
By taxing the proportion of that income which is referable to the sale of goods or services in the UK, this measure will reduce the opportunities for large multinationals to gain an unfair competitive advantage by holding their intangible property in low tax offshore jurisdictions, levelling the playing field for businesses operating in UK markets.
Intangible property is property that does not have any physical attributes, which includes intellectual property such as patents, trademarks, software or licences.
Customer groups affected
The measure is expected to have an impact on large multinational groups by bringing into scope of UK Income Tax the proportion of their income that is realised in low tax jurisdictions where intangible property is held, which enables, facilitates or promotes UK sales.
What customers will need to do
Customers who fall under the jurisdiction of this measure will be required to keep records of income referable to UK sales, and calculate the tax due.
They will then complete the SA700 ‘Tax return for a non-resident company liable to Income Tax’, which is a manual paper return to HMRC. Customers will need to submit paper returns from April 2020 onwards.
The SA700 will be amended so that income included in the scope of this measure will be included in ‘other UK Income’, with a tick box located at the top to identify this type of income.
Assessing the impact
We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act.
Racial groups
Impact on customers
There is no evidence to suggest any specific impact on those customers in this protected characteristic group.
Disabled and not disabled
Impact on customers
No evidence, as above.
Gender
Impact on customers
No evidence, as above.
Gender reassignment
Impact on customers
No evidence, as above.
Sexual orientation
Impact on customers
No evidence, as above.
Age
Impact on customers
No evidence, as above.
Religion or belief
Impact on customers
No evidence, as above.
Pregnancy and maternity
Impact on customers
No evidence, as above.
Marriage and civil partnership
Impact on customers
No evidence, as above.
People with dependents and those without
Impact on customers
No evidence, as above.
Political opinion (for Northern Ireland only)
Impact on customers
No evidence, as above.
People who use different languages (including Welsh Language and British Sign Language)
Impact on customers
No evidence, as above.
Opportunities to promote equalities
We have considered opportunities to promote equalities and good relations between people in each of the equality groups, but none have been identified within the scope of this project.