2 min read
The main rate of corporation tax will (no surprise) remain at 25%. Certain key measures are either already in place (such as full expensing having been made permanent) or remain subject to further consultation. “New” developments in this Budget tend to focus on specific industries, niche issues, were broadly anticipated, will be fleshed out properly later, and/or can be described as “tinkering” rather than involving wholesale change.
To give more of a flavour, we see that energy companies may be disappointed by the extension of the Energy Profits Levy to 31 March 2029, albeit subject to the possibility of early termination through the Energy Security Investment Mechanism (as previously announced). Owners of close companies may be interested in the tweaks to the Transfer of Assets Abroad Rules (which seemingly unwind the Supreme Court’s decision against HMRC in Fisher). For players in the film industry, the government has announced additional tax relief for visual effects costs. R&D intensive businesses won’t see any further changes in terms of how R&D tax relief will work (this was dealt with at the Autumn Statement 2023), although HMRC will establish an expert advisory panel to support the administration of those reliefs. And in the funds space, we are told that the Spring Finance Bill 2024 should include legislation in respect of Reserved Investor Funds (a new type of unauthorised contractual scheme) – but the detailed tax regime for it will come later in the form of secondary legislation.
With that, we are left wondering whether paragraph 5.51 of the Red Book (“The government will bring forward a further set of tax administration and maintenance announcements on 18 April 2024”) is in fact doing quite a lot of work.
The Spring Budget has unashamedly focussed on personal tax measures – perhaps inevitably so, given that we’re in the run up to a general election where the voters are actual human beings (not mere bodies corporate). As employers of such actual human beings, some of the flagship personal tax measures will be of interest to corporates too. Whilst the cut in national insurance may fall on the easier side of the fence, the proposed removal of the non-dom regime and its replacement with a new residence-based regime may necessitate careful thinking regarding the management of an internationally mobile workforce. And UK corporates – perhaps especially those operating share option plans – will want to eye up the potential positive implications of the proposed new UK ISA.
So all in all, there is not nothing in this Budget for corporates – although there certainly is less than we’ve seen in previous months and years. But a quiet Budget is not necessarily a bad thing for corporates, who already have plenty on their plate to be thinking about