Mini-Budget U-Turn: Corporation Tax Rise Reinstated
In a dramatic turn of events, starting with the departure of Chancellor Kwasi Kwarteng, Prime Minister, Liz Truss, confirmed the rumour circulating for the last two days that the UK Government would reinstate the corporation tax rise to 25% with effect from 1 April 2023.
Whilst the short term changing of policy is singularly unhelpful to businesses, this U-turn makes it important for businesses to consider matters including timing of bonus and pension payments, whether to incorporate or not, assessing whether a group can be rationalised to reduce associated companies as well as cash flow planning for higher corporation tax charges.
Partner and Head of EQ Taxation, David Morrison, commented, “U-turns are the enemy of businesses who crave certainty of future policy to allow them to make long term decisions. The reinstated rise in corporation tax to 25% will have cash flow implications for clients in future meaning that it has never been more important to plan for these changes. We sincerely hope that common sense now breaks out and we encourage our clients and any other concerned businesses to contact us for some advice”
As always, our EQ Taxperts are on hand to support you and your business. if you’d like to discuss your circumstances, please get in touch with our EQ Taxperts via [email protected] or call one of our offices.