SPRING BUDGET 2021 - CORPORATION TAX
The 3rd March 2021 Budget had very few surprises (much of which had already been leaked to the press) in advance. It was also obvious that with the huge amount of borrowing to help support employees, someone would have to pay for it and the biggest change was the increase to Corporation Tax.
Changes to corporation tax will see bigger businesses paying 25% from April 2023, although those with profits of less than £50,000 will continue to pay the current rate of 19%, and there will be a tapered increase for those with profits between £50,000 and £250,000, so only those with profits in excess of £250,000 will pay the highest rate. In good news for business, the tax treatment of losses will allow companies a three year carry-back to write off losses of up to £2m. Depending on the detail It will be interesting to see if this increases the number of buyers looking to acquire loss making businesses in order to utilise tax losses and set off against profits (if this is possible under the rules).
Also, upfront capital allowances will see qualifying new plant and machinery assets benefiting from a 130% first-year capital allowance in a drive to boost economic activity.
The Corporate team at Chattertons can help if you are looking to buy or sell a business or looking to invest in capital equipment. We'd always recommend that any contract you enter into is checked legally to ensure that any purchase you make is clearly set out between the parties.
Feel free to contact me at adam.gilbert@chattertons,com to see how we can help you.