What had not already been released to the media in breach of ministerial code, was delivered with pomp and wide-ranging pledges.
The main headlines from a corporation tax angle had been announced earlier this year. Those earlier announcements will see a rise in corporation tax in April 2023 to 25%, a super deduction for capital allowances of 130% and the introduction of the social care levy in April 2022 increasing NIC and dividend rates by 1.25%
However, there were three further announcements of significance to note:
- Creative arts tax reliefs
The rate of relief for Museums and Galleries Exhibition tax relief, Theatre tax relief and Orchestra tax relief is to be doubled from 27 October to April 2023. This will increase the relief to between 40-50% in a further aid to help the struggling arts industry. A 1 year taper will then apply to April 2024.
- Research and development
The relief is to be expanded to include cloud computing and data costs which with technological advances is a sensible extension. Additionally, a more restrictive measure will be introduced from April 2023, that will result in non-UK based R&D being excluded from the relief. This is an interesting restriction in what may be seen as another Brexit style flag waving measure. Thankfully, the Chancellor did stress the government’s commitment to increased R&D spending.
- Capital allowances
The annual investment allowance of £1m will be extended from December 2021 to March 2023, avoiding the fall to £200k. This will be a welcome measure for companies looking to invest in assets, especially the farming community.
Additional detail on the R&D restriction is eagerly anticipated so the Dafferns team can advise on the likely impact accordingly.