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Autumn Statement 2022: the impact on corporates

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Yogi Berra’s famous quotation neatly sums up some of the key Autumn Statement measures for corporates. The biggest revenue raiser, putting the corporation tax rate up to 25% from April 2023, is predicted to raise over £18bn per annum by 2027. It was also predicted to be the biggest corporate revenue raiser when it was first announced in the March, 2021 Budget, before being reversed in this September’s ‘mini-Budget’. And once again the bank surcharge rate is set to drop from 8% to 3% at the same time. Whether that is a one percentage point rise in the tax banks pay or a five percentage point cut seems to depend on the message the speaker is trying to make.

Still, at least banks avoided a windfall tax which there had been much speculation about unlike electricity generators for whom there is a new 45% levy on extraordinary returns from low-carbon electricity generation. That came alongside pushing the energy profits levy rate up from 25% to 35%.

Perhaps unsurprisingly, given the economic backdrop, there was precious little good news in this statement. Maybe if you were planning a major car park upgrade in the next couple of years the extension of 100% first year allowances for electric car charging points through to 2025 might merit a small cheer?

Even the ‘Pillar Two optimists’ – those who thought (vainly hoped?) that the UK’s implementation of Pillar Two might be further postponed – have had their hopes dashed with the confirmation that the UK will bring in its income inclusion rule (or IRR) and qualified domestic minimum top-up tax (or QDMTT) for accounting periods beginning on or after 31 December, 2023. Also likely to be increasing the compliance burden for large businesses from April 2023 will be the requirement to maintain transfer pricing records in accordance with OECD best practice.

So for corporates a short, but fair, summary of the Autumn Statement might well be: tax rates up, compliance burden up!

Issue: 1598
Categories: Analysis , In brief
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