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Financial Services: Taxation

Question for Treasury

UIN HL2520, tabled on 7 September 2021

To ask Her Majesty's Government what steps they are taking to amend the tax regime for the financial services sector; and how they intend to provide more clarity on investment screening laws to attract more inward investment.

Answered on

21 September 2021

The Government’s aim is for a tax regime that supports the competitiveness of the UK as a financial services centre while ensuring it makes a fair contribution to the funding of public services.

The Government has recently taken a number of steps in support of that aim. This includes: a consultation on the UK tax treatment of funds; the development of a new tax regime for asset holding companies in alternative fund structures; a review on the VAT treatment of fund management fees and working group to consider the case for a wider financial services supplies; and, a review of the bank surcharge to ensure that the combined rate of tax on bank profit remains competitive in light of the increase in the corporation tax rate.

On attracting inward investment, the National Security and Investment Act will provide businesses with more certainty that they will not be targeted by hostile actors, ensuring the UK remains the premier investment destination in the world.

The Government is committed to ensuring investors understand the National Security and Investment Act, including what it requires from them, what it offers them, and how they can engage with the government for more information. In July 2021, the Government published an outline of the provisions of the National Security and Investment Act and guidance on a range of issues, and ahead of the January 2022 full commencement of the Act, will publish further guidance on how to submit a notification form, how sensitive data will be handled, interim orders and final orders, and notifiable acquisitions. Within six months of the Act’s full commencement, Government will provide market guidance notes to further aid interaction and compliance.

The Government is also actively engaging interested stakeholders, including businesses and investors, to develop their understanding of the Act.

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