Corporation tax to increase to 25% in 2023

Grant Prior 3 years ago
Share

Chancellor Rishi Sunak has confirmed plans to raise corporation tax rates to 25% by April 2023.

Sunak put “profitable” businesses in the cross hairs of his initial revenue raising plans to pay for the £407bn cost of Covid support measures.

Corporation tax rates will also be tiered for the first time with firms making an annual profit of £50,000 or less continuing to pay the current 19% rate.

Rates will then be tapered up to £250,000 profits when companies will pay the new 25% rate from 2023.

Sunak said only 10% of firms would pay the new higher rate.

Treasury documents show that the corporation tax increase is expected to raise between £12bn and £17bn annually from 2023.

The move reverses a decade of corporation tax cuts by previous chancellors and will make the main UK rate on a par with China’s at 25%.

The government will also invest over £100m in a Taxpayer Protection Taskforce of 1,265 HMRC staff to combat fraudulent Covid support package claims.

In better news for business a new “super-deduction” scheme will come into force from 1 April 2021 until 31 March 2023.

Construction companies investing in qualifying new plant and machinery will benefit from a 130% first-year capital allowance.

Sunak said: “Under the existing rules, a construction firm buying £10m of new equipment could reduce their taxable income, in the year they invest, by just £2.6m.

“With the Super Deduction, they can now reduce it by £13m.”

Rob Oliver CEO of the Construction Equipment Association said: “We look forward to reviewing the details, but on the face of it, it looks like it will be a great time to renew the machine fleets of plant hirers and contractors.

“These tax concessions are clearly a quid pro quo for swallowing a corporation tax hike in the future”.

Paul Hamer, CEO of Sir Robert McAlpine, said: “The planned ‘super deductions’ for businesses investing is good news, and could see innovation accelerate right across the sector as firms commit money to new technologies and sustainable construction solutions.

“The positive ripple effect could be significant and we will be looking closely at how this may benefit our business and future projects.”

Latest news

Berkeley subbies face six weeks without payments

Introduction of new finance software means payment hiatus for suppliers
14 hours ago

Pagabo reveals 56 winners of latest £1.6bn retrofit deal

Decarbonisation Solutions Framework launched: Full list of winners
14 hours ago

Go-ahead for £100m Liverpool Love Lane flats

500-flat scheme will be built across four blocks in Vauxhall area of city
14 hours ago

Unions win HS2 site access battle at Old Oak Common job

Skanska, Costain, Strabag JV now the last denying unions access to HS2 sites
13 hours ago

Contractors jack 1,100t viaduct into place in 13-hour operation

158m-long composite deck structure jacked into place 10-hours ahead of schedule
14 hours ago

Wates wins former Daily Mail printworks transformation

British Land advances major cultural venue at London’s Canada Water
1 day ago

Mace poaches Ramboll chief to be Head of Engineering

Martin Feakes will develop civil and structural engineering offer at Mace
1 day ago

Subcontractors form alliance for major civils jobs

Trio of specialists join forces to collaborate and offer Tier 1 contractors a turnkey solution
2 days ago

Fear of supply chain failures boosting collaboration

Procurement survey also reveals project bank account use is rising
2 days ago

Wates sets up business to target 160,000 mouldy social homes

Healthy Homes service will be offered to social landlords across England
2 days ago

Higgins wins £75m Peabody Passive House job

Latest phase of Deptford Landings to start construction
2 days ago

Contractors and unions agree Sizewell C working deal

New deal offers improved sick pay and parental leave over Hinkley Point deal
2 days ago

Competition chiefs win legal fight for more construction raids

High Court rules CMA officials can raid a domestic property as part of investigation
2 days ago

More Osborne companies file administration notices

Three more divisions lodge notices with court
3 days ago

McLaren wins multi-storey urban logistics contract

South London win with British Land is pioneering urban logistics hub
3 days ago

Big social housing schemes at risk over funding uncertainty

Housing associations warn uncertainty over public funding beyond 2026 is curbing new schemes
3 days ago

Kier wins Worcestershire town centre renewal

Firm secures Bromsgrove commercial and cultural hub project
3 days ago

BAM signs Kent school contract at £42m

Sevenoaks school rebuild signed off at £8m more than first estimates
3 days ago

RG Group signs £121m Newcastle rental homes job

Developer Olympian Homes advances 519 flats plan at Pottery Lane site
5 days ago

Geoffrey Osborne files administration notice

Contractor in talks to save parts of the business
6 days ago

Winners named for £260m Manchester Uni framework

B&K, Henry Bros, Graham, Robertson and Vinci among new line-up
6 days ago

Shed specialist Benniman rides out market lull

Worcestershire warehouse builder says industrial and logistics work is picking up again
6 days ago

Another contractor cleared after high profile immigration raid

Adana Construction employees were working legally on site swooped on by Home Office
6 days ago

McAleer & Rushe wants to meet new London suppliers

Contractor holding Meet the Buyer event in London: Register now
6 days ago

McAlpine signs £500m Broadgate dual towers deal

Work to start on iconic 36-storey and 21-storey towers
6 days ago

Worker rescued from collapsed four metre deep trench

Fire crews take six hours to save trapped builder near Blackwall Tunnel
7 days ago

Gove puts another major building scheme on hold

Secretary of State starts another planning fight after M&S defeat
1 week ago

Greenwich University tenders £300m framework

Up to five firms will carry out upgrade and newbuild work at three campuses
7 days ago

Work starts on Manchester 26-storey Obsidian tower

Contractor Domis starts Salboy's 10th Manchester scheme in seven years
7 days ago

Race for £1.3bn West Midlands social homes framework

The Community Housing Group reboots tender race for new build housing
7 days ago

Contractor services