Corporate Tax Roadmap

The Government published a ‘Corporate Tax Roadmap’ as part of Autumn Budget 2024. The Roadmap is designed to give corporate businesses (and, in some areas, non-corporate businesses) certainty about the tax framework ahead to give confidence in business decisions being made now. The Roadmap sets out the areas in which the Government intends to maintain the status quo for the duration of this parliament, as well as areas in which change is expected.

Starting with corporation tax rates, the Government have committed not to increase the rates of corporation tax paid by small or larger companies and to keep the rates under review to ensure they remain competitive. This means that small companies (those with profits below £50,000 a year) will continue to pay at 19% and larger companies (with profits above £250,000 a year) will continue to pay at 25%, with marginal relief given from the 25% rate for companies with profits between the two thresholds. No changes have been made to the ‘associated company’ regime so, to ensure the correct rate of corporate tax is applied, it remains crucial to fully identify group companies and those under the control of the same individual(s).

Turning to capital allowances and of interest to unincorporated businesses as well as companies, the Government have committed to maintaining the rates of writing down allowances in the main and special rate plant and machinery pools, as well as the availability of the very valuable 100% annual investment allowance for up to £1 million of qualifying expenditure each year. For companies, the unlimited ‘full-expensing’ regime will also be maintained for expenditure on brand-new and otherwise qualifying plant and machinery, with a continued hope of seeing the qualification criteria expanded.

For companies, the two mechanisms for obtaining tax relief for revenue research and development (R&D) expenditure that have been in place since 1 April 2024 will also be maintained. This remains a very complex area so please do reach out to us if you need support in this area or are considering whether you may be able to make a claim.