Mitchell Charlesworth comments on the Budget

Fri, March 5th, 2021

Phil Hartley, tax manager at Mitchell Charlesworth comments on the Budget...

From a corporate tax perspective my initial reaction would be shock at how quickly the increase in Corporation Tax rate is being implemented. A lot of the pre-Budget press talk suggested that this increase would be over the term of the parliament but instead the Chancellor is bringing this in with no incremental increase from 1 April 2023. This could very risky given the post Brexit world and the reliance on the big companies that this targets to be based in the UK to protect jobs.

The ‘Super Deduction’ for business asset purchases is a new temporary tax relief on qualifying capital asset investment from 1 April 2021. This is a bold tax incentive that could attract up to 25p in the £1 in tax relief. This is anticipated to cost £12bn per year for the next two years and all companies could benefit from this relief. It could be a significant shot in the arm for investment over the next two years without imposing a wealth tax on companies.

On a general point, the Freeport status being bestowed on Liverpool City Region will ultimately help drive investment to the region which can only be a positive for the city.

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