It was good to see a number of announcements in the Budget that provide some clarity to businesses, even if some were just pointers more detail in the spring and Phase 2 of the Spending Review.
Alongside the Budget, the government published a Corporate Tax Roadmap setting out its plans in corporation tax and a small number of other taxes over the course of this Parliament.
This 'confirms the major features of the corporation tax regime for the duration of this Parliament, including:
- predictability by confirming the major features of the corporation tax regime for the duration of this Parliament, highlighting areas where we will actively investigate change, and committing to consultations that will allow businesses to influence future changes
- stability by maintaining many of the system’s current features, especially those that make the UK’s corporate tax regime competitive
- certainty by committing to improved guidance to make it simpler and more straightforward for businesses to understand their obligations and how to meet them; and to develop a new nine process for increasing the tax certainty available in advance for major investments.'
It highlights:
- capping the headline rate of corporation tax at 25% for this Parliament
- publishing an update in the spring on how the government will take forward its ambitions on modernising the technology the corporation tax system relies on
- maintaining the small profits rate and marginal relief at their current rates and thresholds
- maintaining the generous system of permanent full expensing for this parliament
- maintaining other core features of the UK’s capital allowances regime including the £1m Annual Investment Allowance, writing down allowances, and the Structures and Buildings Allowance
- exploring an extension of full expensing to assets that are bought for leasing or hiring
- maintaining the generosity of the rates for the merged R&D Expenditure Credit scheme and the Enhanced Support for R&D Intensive SMEs
- launching an R&D disclosure facility by the end of 2024
- confirming a consultation in spring 2025 on widening the use of advance clearances in the R&D reliefs Patent Box and intangible assets
- maintaining the Patent Box.
These features resonate with ACCA’s own foundations for a sound tax system of stability, certainty and stability.
The roadmap also announces a series of upcoming consultations. If you would like to feed into any of these consultations, please email us, to register your interest, at UKPolicy@accaglobal.com.
2024
- consultation on tax treatment of predevelopment costs.
Spring 2025
- consultation to review the effectiveness of Land Remediation Relief
- second-round consultation on reforms to the UK’s rules on transfer pricing, permanent establishments, and Diverted Profits Tax – including the potential removal of UK-to-UK transfer pricing
- consultations on potentially lowering the thresholds for exemption from transfer pricing and introducing a requirement for multinationals to report cross-border related party transactions to HMRC
- consultation on a new process that will give investors in major projects increased advance certainty
- consultation on widening the use of advanced clearances in the R&D reliefs.
