The old adage of, “nothing in life is certain except for death and taxes” has never been so far from the truth!
In the last two weeks, we have had the mini-budget which announced major tax cuts and caused major instability in the financial markets as well as the general UK economy; the reversal of the announcement to abolish the additional tax rate; a new Chancelor – the fourth in as many months; and the reversal of the cancellation of the intended rise in corporation tax. Are you keeping up?
So, what does the latest announcement mean? Well, it puts us back to the position on corporation tax where we were before this whole debacle started – the main rate of corporation tax will move from 19% to 25% with effect from 1 April 2023, although the lower rate of 19% will apply for profits up to £50,000.
This rate change brings with it wider implications and complications announced back in March 2021, such as the reintroduction of the associated companies provisions, marginal relief calculations and the close investment holding companies rules.
That said, we should all watch this space. We have another fiscal event due on 31 October 2022, and although this was expected to be used to simply set out the background to how the mini-budget was to be funded, at the fear of ‘spooking’ the market further, there is growing speculation of further tax rises to help balance the books.
Clearly, we will have to wait to see what happens. That said, as we have seen, a lot can happen in two weeks and current rumblings are concerned more with changes at the top of Government than the tax system itself!
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