Tax change to hit UK businesses for £900m
A shake-up of UK corporation tax will cost UK companies £900m in its first year, while at the same time allowing the government to claw in revenue quicker, according to the ACCA.
Company cash flows would be hit because of the government’s plans to provide a slower rate of tax relief on assets such as plant and machinery, the accounting body said.
Tax relief could move from a system based on capital allowances to one based on how assets are depreciated in company accounts. Although the two systems offer about the same value of tax relief, capital allowances do so at a much faster rate.
The Treasury plans could affect a whole range of companies because plant and machinery includes IT equipment.