Press release
15 March 2023
Amanda Tickel, head of tax and trade policy at Deloitte comments:
“The Chancellor’s aim today was to ensure the UK has a more competitive tax environment, with tax reliefs to soften the blow of the corporation tax rise as well as levelling up and pensions tax reforms.
“Today’s announcement giving 100% first year allowances for plant and machinery ensures that the UK has the joint most generous capital allowances regime in the OECD. The measure is a strong response to recent calls for support and businesses will no doubt feel glad of a cashflow boost that allows them to make future investments. However, with this initially implemented for just three years, it may not provide sufficient certainty for longer term investment decisions.
R&D relief
“Enhanced R&D tax relief for loss-making small and medium sized businesses will partially restore some of the benefit lost due to the reduction announced in the 2022 Autumn Statement. However, only some will benefit from this as it only applies to businesses spending at least 40% of their total expenditure on R&D. Some may question why the Chancellor didn’t make more of his generous R&D credits for larger businesses which go up to 20% from 1 April and can completely wipe out the effect of the corporation profits tax rise.
Lifetime Allowance
“The removal of the pensions Lifetime Allowance and increase to the pensions Annual Allowance, aims to reduce economic inactivity of higher earners and will simplify the position significantly for those impacted.
Longer-term road map needed
“As the corporation tax rate rises, businesses will be relieved to see some of the support measures announced today. However, with the capital allowances measure only temporary, and little news on the net zero strategy, a longer-term tax road map to support ongoing investment and growth decisions is still needed.”
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