As part of the Autumn Budget 2024, the Government introduced a ‘Corporate Tax Roadmap,’ aimed at providing businesses—both corporate and, in some cases, non-corporate—with clarity on the tax landscape ahead. This is intended to help businesses make confident decisions with a clear understanding of the tax framework in the coming years. The Roadmap outlines the areas where the Government plans to maintain current policies throughout this parliament, as well as those where changes are anticipated.
Regarding corporation tax rates, the Government has confirmed that there will be no increase in the tax rates for either small or large companies. These rates will continue to be reviewed to ensure they remain competitive. Small companies (with profits under £50,000 annually) will continue to pay at 19%, while larger companies (with profits exceeding £250,000 annually) will remain at the 25% rate. Companies with profits between these two thresholds will benefit from marginal relief. The ‘associated company’ regime remains unchanged, so it is still essential to accurately identify group companies and those under common control to apply the correct corporate tax rate.
On the subject of capital allowances, which also affects unincorporated businesses, the Government has pledged to maintain current rates for writing down allowances in both the main and special rate plant and machinery pools. Additionally, the highly valuable 100% annual investment allowance for up to £1 million in qualifying expenditure each year will continue. For companies, the unlimited ‘full-expensing’ regime will remain in place for qualifying expenditure on new plant and machinery, with hopes of expanding the qualification criteria.
For companies involved in research and development (R&D), the two mechanisms introduced on 1 April 2024 to claim tax relief for revenue R&D expenditure will also be upheld. As this area remains quite complex, please don’t hesitate to contact us if you need assistance or are considering making a claim.