The Chancellor has delivered some targeted new tax increases and tax reliefs as he attempts to help struggling sectors whilst stabilising the national debt.
Income tax, CGT, and national insurance rates remain unchanged, but the personal allowance and the higher rate threshold will be frozen from 2021/22 to 2025/26. Businesses will be able to make use of a new ‘super deduction’ on capital investments and a temporary three-year carryback on losses. However, the corporation tax rate will be increased to 25% from April 2023. Smaller businesses will be protected from this corporation tax burden by a new small profits rate.
There will be further tax announcements that will be made on 23 March. On that date, the Chancellor will lay out new tax consultations and calls for evidence. These may provide some more insight into the direction of the Government’s future tax policy for the UK.
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