#CorporateTaxReforms

[thxnews]

Revolutionizing Business: Permanent Full Expensing Unveiled

  A Game-Changing Legislation for British Business

In a groundbreaking move following last week's Autumn Statement for Growth, the government unveiled the Autumn Finance Bill 2023 on Wednesday, 29 November 2023. This bill aims to enshrine a series of landmark tax changes into law, with the goal of bolstering British businesses and paving the way for unprecedented economic growth.  

A Corporate Boost: Permanent Full Expensing

At the core of the bill lies a commitment to make full expensing permanent, thereby constituting an effective £11 billion per year corporate tax cut. Financial Secretary to the Treasury, Nigel Huddleston, expressed the government's vision, stating, "This Bill marks our next step in making the UK the best place in the world to do business."   Permanent Full Expensing: A Historic Business Tax Cut The permanency of full expensing translates to a remarkable £11 billion annual cut in corporation tax. This move ensures that the UK maintains not only the lowest headline corporation tax rate in the G7 but also boasts the most generous capital allowances in the OECD group of major advanced economies. The anticipated result of the Autumn Statement is an additional £20 billion of investment per year by the end of the decade.   Continuous Investment Incentive Permanent full expensing empowers companies to invest continuously for less by allowing a 100% deduction of the cost of various plant and machinery from profits before tax. This covers essentials like lorries, drills, and office chairs. For every pound invested, companies benefit from up to a 25p reduction in taxes.  

Beyond Full Expensing: Comprehensive Tax Reforms

Chancellor Jeremy Hunt, in addition to the monumental full expensing, announced a host of other measures incorporated into the Autumn Finance Bill 2023. These comprehensive reforms are designed to simplify tax and boost investments across various sectors.   R&D Tax Relief Simplification The Bill includes changes worth £280 million annually to simplify and enhance R&D tax reliefs. This involves merging the current R&D Expenditure Credit and SME schemes. Additionally, more generous support for loss-making R&D intensive SMEs, as announced in spring, is legislated.   Extended Support for Enterprise Investment and Creative Sector Extending the sunset clause to 6 April 2035, both the Enterprise Investment Scheme and Venture Capital Trust scheme undergo significant changes. In addition, the government has reformed film, TV, and video games tax reliefs to refundable expenditure credits, aiming to boost the creative sector.   Simplifying Tax for Growing Traders Expanding the 'cash basis' not only streamlines but also provides a simplified method for over four million smaller, growing traders. This approach enables them to calculate profits and pay income tax more efficiently.  

Navigating the Legislative Waters

The Bill underwent its first reading in Parliament on Monday, 27 November 2023, marking a crucial step. It is now poised to follow the standard parliamentary process, signifying a pivotal moment in shaping the future of British business. This aligns with the government's commitment to foster a thriving economy and elevate living standards for all.   Sources: THX News, HM Treasury & Nigel Huddleston MP. Read the full article