With the new tax year underway, there’s no time like the present for a friendly reminder of the changes that may affect your business.
Now that Chancellor Jeremy Hunt has delivered his Spring Budget, we have an idea of what the coming months will look like.
Our article will outline and explain any changes to business taxes for the 2023/24 fiscal year.
After being in the pipeline for a while, the main rate of corporation tax has risen from 19% to 25% for businesses with annual profits of £250,000 and over.
The main rate will also apply to businesses with an income between £50,000 and £250,000 but with a tapered rate or “marginal relief”.
According to the Chancellor, only 10% of companies will pay the full 25% rate.
Any businesses with annual profits under £50,000 will still pay the 19% rate, now known as the small profits rate.
With the Government’s super-deduction coming to an end, Hunt announced a new measure to promote investment for UK-based companies.
A new full expensing scheme will now act as a capital deduction for businesses investing in plant, machinery and technology. Companies that invest in these fields can reclaim every pound spent immediately by deducting it from their taxable profits.
The scheme is due to run until March 2026, but the Chancellor said there are plans to make it permanent “as soon as we [the Government] can responsibly do so”.
Research and development
During last year’s Autumn Statement, Hunt said he would return with a more robust plan for the research and development (R&D) tax scheme changes.
After planning on cutting the SME credit rate from 14.5% to 10%, the Chancellor announced that loss-making SMEs, who spend 40% of their time on R&D, will still be able to claim 14.5% in tax credits.
The policy tweak means that R&D-intensive companies can claim back £27 for every £100 they spend on innovation.
After the hospitality industry was hit hard by the pandemic, the Chancellor announced a freeze on alcohol duty in December 2022.
In his Spring Budget, he decided to go one step further. From 1 August, the Government will introduce “draught duty”, which will make the average pint of beer up to 11p cheaper in a pub than if bought at a standard supermarket.
What’s in store for your business?
As the scope of tax is ever-changing, it can be challenging to stay compliant and keep an eye on the impact these announcements have on your business.
If you have any questions, we’re here to help advise you and prepare for any liabilities you’ll face over the 2023/24 tax year.
Get in touch to talk about your business taxes.