Around this time last year, the then relatively new chancellor’s main aim was to restore a semblance of stability into the UK economy, in the wake of the mini-budget that had been delivered a few weeks earlier.
This year, the task was different; the more significant corporate tax changes could be characterised as gentle progression in place of wholesale change.
Indeed, some of the more noteworthy announcements do not involve the creation of new exemptions, but rather extend the duration of tax reliefs which exist already.
Eye-catching features include putting company ‘full expensing’ on a permanent footing and cutting the rate of national insurance contributions.
However, there is also an important development in relation to freeports.
Freeports already provide significant tax benefits for companies that establish themselves there, such as reliefs from stamp duty land tax, business rates, relief from national insurance contributions up to certain limits and enhanced capital allowances for a period of five years.
However, the government is now extending the duration of the tax reliefs available in freeports from five to ten years, with the declared aim of maximising the programme’s impact and demonstrating the government’s commitment to the concept.
The current sunset date for the stamp duty land tax relief and enhanced capital allowances is 30 September 2026. This will now be extended to 30 September 2031.
The relief for secondary Class 1 NI contributions currently applies to earnings of eligible new employees starting by 5 April 2026. This relief will now apply (for 36 months per employee) throughout the new extended ten-year window.
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For further information, please contact:
David Klass, Partner, Hill Dickinson