{"id":26881,"date":"2024-09-26T15:02:33","date_gmt":"2024-09-26T15:02:33","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/?p=26881"},"modified":"2024-09-26T15:02:33","modified_gmt":"2024-09-26T15:02:33","slug":"moore-thompsons-views-on-the-budget-will-it-bring-change-or-continuity-in-corporate-tax","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/blogs\/moore-thompsons-views-on-the-budget-will-it-bring-change-or-continuity-in-corporate-tax\/","title":{"rendered":"Moore Thompson\u2019s views on the Budget – Will it bring change or continuity in corporate tax?"},"content":{"rendered":"

\"\"<\/span><\/p>\n

 <\/p>\n

Recently, the Moo<\/span>re Thompson team has been deliberating on the impact that the upcoming Budget will have on corporate tax.<\/span>\u00a0<\/span><\/p>\n

The core question remains: will busi<\/span>nesses face an increase (or less likely, a decrease) in their tax rates in the near future?<\/span>\u00a0<\/span><\/p>\n

 <\/p>\n

Corporation Tax<\/span><\/b>\u00a0<\/span><\/p>\n

As you\u2019re likely aware, n<\/span><\/p>\n

o changes were made to Corporation Tax in the Spring Budget by the Chancellor, Jeremy Hunt.\u00a0<\/span>\u00a0<\/span><\/p>\n

Since April 2023, the main Corporation Tax rate has remained at 25 per cent for businesses with profits exceeding \u00a3250,000, with a marginal rate applying to those earning between \u00a350,000 and \u00a3250,000.<\/span>\u00a0<\/span><\/p>\n

Our Partner, Heather Bright remarks: \u201cWhile we have seen stability in Corporation Tax over the past year, the upcoming Autumn Budget may introduce changes that could impact businesses, especially if other tax areas are also reconsidered.”<\/span>\u00a0<\/span><\/p>\n

Business Asset Disposal Relief<\/span><\/b>\u00a0<\/span><\/p>\n

Another ‘what if’ scenario revolves around the potential abolition of Business Asset Disposal Relief, previously known as Entrepreneurs\u2019 Relief.\u00a0<\/span>\u00a0<\/span><\/p>\n

This relief currently allows a reduced rate of 10 per cent on qualifying business asset disposals, up to a lifetime limit of \u00a31 million.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cIf the Chancellor were to remove this relief, the tax liabilities on business disposals could potentially double, making it less attractive for business owners to sell their enterprises,\u201d notes Heather.<\/span>\u00a0<\/span><\/p>\n

\u201cThis increased tax burden could diminish the net proceeds from a business sale, which is a concern for those who have spent years building their businesses.\u201d<\/span>\u00a0<\/span><\/p>\n

For many, selling a business represents the culmination of years of hard work and a primary source of retirement funds.\u00a0<\/span>\u00a0<\/span><\/p>\n

A higher tax rate could reduce the financial security anticipated from the sale, forcing business owners to reconsider their timing or even the feasibility of selling at all.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cThe absence of Business Asset Disposal Relief might reduce reinvestment into new ventures or other sectors of the economy, as business owners become more cautious under poorer tax conditions,\u201d Heather points out.\u00a0<\/span>\u00a0<\/span><\/p>\n

Inheritance Tax<\/span><\/b><\/p>\n

Inheritance Tax (IHT) looks likely to be impacted by the upcoming Budget. For more information on what might change and how this will impact you, please read our guide to the Budget and personal tax.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

Inflation\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

If the Chancellor opts to raise taxes and cut spending to address the so-called \u2018black hole\u2019 in public finances, we could see inflationary pressures ease slightly as these measures reduce overall demand.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cThe challenge is bala<\/span><\/p>\n

ncing these actions without stalling economic growth, which could inadvertently lead to inflation persisting even as growth slows,\u201d mentions Heather.<\/span>\u00a0<\/span><\/p>\n

The Bank of England has forecast that inflation might rise to 2.75 per cent in the coming months before potentially dropping below two per cent next year.\u00a0<\/span>\u00a0<\/span><\/p>\n

But with the latest figures showing a reversal of the downward trend, the Budget’s approach will be crucial in determining whether this prediction holds.<\/span>\u00a0<\/span><\/p>\n

\u201cHigher taxes could dampen spending and investment, which might help control inflation but could also slow the economy,\u201d says Heather.\u00a0<\/span>\u00a0<\/span><\/p>\n

Dividend taxation<\/span><\/b>\u00a0<\/span><\/p>\n

Dividends have become an increasingly important part of income for many investors, business owners, and retirees alike.\u00a0<\/span>\u00a0<\/span><\/p>\n

With the Treasury’s finances under significant pressure, there\u2019s speculation that dividends could be targeted in the upcoming Budget.<\/span>\u00a0<\/span><\/p>\n

Increasing dividend rates could make dividends less attractive as a source of income, particularly for those who rely on them heavily, such as business owners and investors.\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cThe Government will likely tread carefully here, as taking more of investors\u2019 returns as tax could discourage investment in the UK stock market, which Labour is keen to bolster,\u201d says Heather.<\/span>\u00a0<\/span><\/p>\n

Another potential change could involve the dividend allowance, which has already been cut down drastically by the previous Government, going\u00a0<\/span><\/p>\n

from \u00a35,000 to the current \u00a3500. <\/span>\u00a0<\/span><\/p>\n

\u201cThe big question is whether Labour is prepared to go any deeper,\u201d mentions Heather.\u00a0<\/span>\u00a0<\/span><\/p>\n

While these are all speculative scenarios, they illustrate the changes that the Autumn Budget could bring.\u00a0<\/span>\u00a0<\/span><\/p>\n

Businesses and individuals alike need to stay informed and consider how these potential cha<\/span><\/p>\n

nges could impact their financial planning strategies.<\/span>\u00a0<\/span><\/p>\n

As more news comes to light regarding October\u2019s Budget, we will be here to provide you with the necessary information and advice.<\/span>\u00a0<\/span><\/p>\n

For assistance and guidance on managing your tax obligations in light of the upcoming Budget, contact us today.\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

  Recently, the Moore Thompson team has been deliberating on the impact that the upcoming Budget will have on corporate tax.\u00a0 The core question remains: will businesses face an increase… Read more…<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,4],"tags":[],"class_list":["post-26881","post","type-post","status-publish","format-standard","hentry","category-blog","category-business"],"yoast_head":"\nMoore Thompson\u2019s views on the Budget - Will it bring change or continuity in corporate tax? - Moore Thompson<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.moorethompson.co.uk\/blogs\/moore-thompsons-views-on-the-budget-will-it-bring-change-or-continuity-in-corporate-tax\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Moore Thompson\u2019s views on the Budget - Will it bring change or continuity in corporate tax? 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