CORPORATION tax WILL be hiked from 19 to 25 per cent from April, in gloomy news for firms.
Chancellor Jeremy Hunt confirmed the controversial move at today’s Spring Budget unveiling – but he tried to sweeten the deal by extending their tax breaks.
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The move risks sparking a major backlash from backbench Tory MPs, who think taxes are high enough as things stand.
And it could make the price of everyday products more expensive, as companies pass on the tax to consumers.
The hike is only set to affect around 10 per cent of businesses.
Firms with profits of less than £50,000 will continue to be taxed at 19 per cent, while companies with profits between £50,000 and £250,000 will be subjected to a tapered rate.
Mr Hunt revealed that while the super-deduction tax relief will end, which allowed firms to get 25p back for every £1 they invest.
However, it will be replaced with a system where they will be able to invest in IT, plant or machinery and have the amount taken off their taxable profits in full – essentially a full refund of 100 per cent.
And there will be a new “enhanced credit” for small and medium sized businesses to spend more on science, research and development.
Film, telly and video game firms will also get extra help.
Theatres, museums and orchestras will have their tax reliefs extended.
And businesses will get tax relief on energy efficiency measures too to make their buildings warmer.
Find out more by reading our Spring Budget live blog here.
Rishi Sunak has insisted Britain will still have the lowest level of corporation tax in the G7.
Vacuum tycoon Sir James Dyson previously blasted ministers over the tax grab.
Before the Budget inventor Mr Dyson wrote to the Treasury citing Mr Hunt’s own words of high-tax economies damaging enterprise and affecting decision-making of bosses.
In a letter seen by The Sun, he said: “The Government has done nothing but pile tax upon tax on to British companies.”
Alongside hiking corporation tax, Mr Hunt launched his major drive to get millions of economically inactive Brits back to the office.
A series of “skills bootcamps” will be formed to tempt retirees back into work.
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There will also be an expansion to the “mid-life MOT” scheme where people are offered financial advice to see whether they can actually afford to retire early.
Disability benefits claimants will soon be free to continue receiving payments after they return to employment.
The hated Work Capability Assessment used to judge eligibility for the sickness benefits will be scrapped.
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Under the current system, disabled people need to have the assessment and be found unable to work to receive additional support.
Meanwhile, around 2 million middle-class Brits will benefit from an increase in the lifetime pension allowance.
