The double-blow of the hiked rate of corporation tax coinciding with the end of the super-deduction feared by UK businesses did not materialise in today’s budget. 

Moving away from the already promised increase in the rate of corporation tax to 25% from April 2023 proved to be a step too far for a Government already plagued by U-turns, but the blow was softened by the retention of the “super-deduction”. The super-deduction allows businesses to deduct the full cost of investments from their profits as soon as they spend the money, and is considered essential to encourage much-needed investment by businesses. The new £9 billion package will remain in force for three years, with a promise to make it more permanent as soon as it becomes responsible to do so.

There was also some good news for R&D intensive SMEs, that will benefit from an “enhanced credit”, reducing the burden of the lower rates for R&D relief due to come into force in April 2023.

Read our expert commentary on Personal Tax issues here.