With post-Brexit change and uncertainty dominating financial news cycles the ongoing review and amendments to IFRS 16 could have been at risk of being swamped by other financial news.
However, the finance and leasing sectors continue to watch closely as the HMRC analyses the tax options for IFRS 16 and makes announcements prior to formal consultations.
IFRS16 is the first set of changes to the regulations since 2012. With parliament in recess, the changes are due to enter consultation in November with an implementation date of 1st January 2019.
HMRC Announcements on IFRS16
The HMRC have already stated that the changes to IFRS 16 will be revenue neutral and there are a number of different options being analysed before the regulations are finalised.
At the KPMG Leasing and Asset finance forum Paul Hindley, leasing policy specialist, corporation tax, international and stamps at HMRC advised asset finance professionals on the HMRC’s stance on the forthcoming accounting changes and the resulting tax burden on the leasing industry.
He summarised the position of the HMRC by stating
“We’re not seeking to raise revenue… [we want] the smoothest transition possible to accommodate changes.”
Key Change With IFRS16 Leases
The key change to the regulations is that IFRS 16 removes the division in classification between finance and operating leases. This will also include anti-avoidance rules relating to the sale and finance of leasebacks.
Leasing Life identifies that the changes are part of a drive towards simplification in a post-2008 landscape.
With cloud-based technology opening new opportunities within the leasing industry, VIP continues to monitor and adapt our advice to clients based on developments within the technology and processes affecting the industry.
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