Corporation tax to rise to 25% in Government U-turn

In September the Government said that corporation tax would be frozen at 19%, scrapping a rise to 25% planned by predecessor Rishi Sunak in a ‘mini budget’ but the Government has today (14 October) reversed its decision.

The increase will take effect from April 2023.

Truss made the announcement, which is expected to increase public finances by £18bn following the sacking of Chancellor of the Exchequer Kwasi Kwarteng. His position in Government has since been taken up by Jeremy Hunt.

In a response to Truss’ statement on its economic plan, UKHospitality chief executive Kate Nicholls called on the Government for more support for the hospitality sector.

“The UK’s hospitality sector has enormous potential to turbocharge the everyday economy; delivering value, creating jobs and driving economic growth,” she said.

“Prior to the energy crisis, which is proving to be so devastating, the sector was forecast to grow by 3%. We’re pleased that the government has stepped in to provide key relief to businesses to help weather this storm, but there is real desire from our dynamic hospitality businesses to return to those levels of growth.

 “To achieve this growth, we now need to see government take a longer-term look at what will boost businesses and inspire confidence to invest. Addressing pre-profit taxes by reforming the business rates system, which is currently not fit for purpose and places an unfair burden on hospitality businesses, and introducing a lower rate of VAT would be two galvanising actions from the government that would enable hospitality businesses to grow and also reward the consumer.”