Chancellor Rishi Sunak sought to boost investment with new incentives in his Budget on Wednesday, but business leaders warned that his plan could be undermined by the first rise in UK corporate tax rates in more than 40 years.
Stressing that companies would have to do their bit to help repair public finances devastated by the Covid-19 pandemic, Sunak announced an increase in corporation tax from the current 19 per cent to 25 per cent in 2023, when an economic recovery was expected to be well under way.
The chancellor, who has come under fire from parts of his Conservative party for the well-trailed tax rise plans, sought to fend off critics with a two-year “super deduction” for capital investment, offering 130 per cent relief on purchases of equipment up to 2023. The measure amounted to ￡25bn giveaway, he said, marking the “biggest business tax cut in modern British history”.