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Corporate Tax Roadmap
The Government has announced a corporate tax plan, affirming that the corporation tax rate will remain at 25% for the rest of this Parliament. The small profits rate and marginal relief will also stay unchanged. This decision provides businesses with a crucial sense of stability in these uncertain times.
The Government’s commitment to keeping the UK competitive is evident in their plan to closely monitor global tax developments. This, along with the continuation of full expensing for investments and other key parts of the capital allowances regime, provides businesses with a sense of reassurance and foresight.
For a comprehensive understanding of the corporate tax roadmap, we encourage you to visit the Gov.uk website and read the full details at Corporate Tax Roadmap 2024.
Comments on the Roadmap
While businesses welcome the certainty around future corporation tax rates, it’s important to note that many are disappointed. The profit thresholds for marginal relief have not increased, a move that could have significantly benefited smaller companies. This disappointment is a sentiment that many in the business community can empathize with.
Close Companies and Anti-Avoidance
New measures are being introduced to prevent close companies from avoiding Section 455 tax. Some businesses have been exploiting rules by creating loan chains where funds are repeatedly lent and repaid across groups or associated companies to sidestep tax obligations.
The Targeted Anti-Avoidance Rule (TAAR) within the loans-to-participators regime will be aligned with other TAARs to close these loopholes. Further details and the draft legislation can be found on the Gov.uk website at Corporation Tax: Close Company Shareholders Anti-Avoidance Measure.