UK companies to benefit from cut in corporation tax
November 25, 2016: Chancellor Philip Hammond delivered the last Autumn Statement this year and said that the government is focused on preparing and supporting the economy as they begin to write a new chapter in the country’s history.
Hammond spoke about tackling the weaknesses in the economy and even stated that Britain is expected to be the fastest growing economy according to the IMF report.
He announced that, according to forecasts, the economy would grow at 1.4% as opposed to the previously forecast rate of 2.2%, and the reason behind the dip is the Brexit vote.
The government would invest in infrastructure and economic productivity. Central to the plans is a £23bn investment fund for infrastructure and innovation set to deliver a surge in spending on roads, rail, low-emission vehicles, broadband and 5G.
There will be a change in the country’s wage rate, as the government will boost wage rates by 30p an hour. The Chancellor is set to restrict the tax-free benefits offered by ‘salary sacrifice’ schemes and employees who use tax perks as a means to reduce their income tax bill are bound to suffer under the new scheme.
Many British companies are set to benefit from the slash in tax rates, as there corporation tax will be reduced to 17 percent. This announcement makes Britain an efficient and profitable place for business. However, companies will face limits on the tax deductions they can claim for UK interest expenses beginning next April.
Companies ‘cannot save taxes by borrowing in the UK’ to finance their overseas expansion, Mr. Hammond said.