Chancellor promises Budget Tax Cuts
In a recent speech to the CBI, Rishi Sunak promised tax cuts for businesses in the Autumn Budget. The aim is to boost UK investment before Corporation Tax increases to 25% in April 2023. This increase applies to companies making profits of more than £250,000, while small companies will continue to pay 19%.
He highlighted investment, training and innovation as UK weaknesses, and stated that to get the tax cuts, businesses needed to do more of all three.
Stating that this was ‘at the centre’ of his economic outlook, he went on to say ‘‘In the Autumn Budget we will cut your taxes to encourage you to do all those things. That is the path to higher productivity, higher living standards, and a more prosperous and secure future.’
He assured his audience that the government is ‘pro-business’ and that they should ‘never, ever doubt we are on your side’. The government’s ‘firm plan is to reduce and reform’ business taxes.
He also referred to the 50% cut in business rates during the pandemic, adding ‘of course, there’s more to do’.
The Super Deduction, designed to encourage investment, and providing a 130% relief on the purchase of equipment equivalent, will expire at the same time that Corporation Tax rises. The CBI has previously said that the impact of the two changes will ‘put business investment as a share of GDP to the lowest level in the G7’.
In response to the Chancellor’s speech, the CBI President urged the government to act urgently on the cost of living crisis. Lord Karan Bilimora stated that he’s worried the current course will bring businesses the highest level of tax in 70 years and ‘will stifle our recovery and growth’.
He went on to call for a permanent replacement for the Super Deduction as well as an extension to the Recovery Loan Scheme.
Whatever the Chancellor comes up with for the Autumn Budget, businesses feel he needs to be creative and positive. Many will struggle to reach the Budget in October, let alone wait for implementation dates in 2023.
Our hope is that any announcements are brought forward so businesses have a chance to plan accordingly after such a long period of adversity.
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