Share with your friends

UK: Initial impressions of business tax measures in 2020 budget

UK: Business tax measures in 2020 budget

The Chancellor today delivered a budget that is intended to help businesses through the economic disruption caused by the coronavirus (COVID-19) by supporting cash-flow and liquidity in the business community. To this end, there are budget measures concerning statutory sick pay, the business-interruption loan program, and business tax rate cuts.


Related content

Under the budget proposals, the corporation tax rate would be maintained at 19% from April 2020. There would be no changes to the income tax, dividend tax or capital gains tax rates. There would be no changes to the value added tax (VAT) rates or thresholds.

For business taxpayers, the budget proposes the following:

  • Beginning from April 2021, large businesses would have to notify HM Revenue & Customs (HMRC) of tax treatments relying on an uncertain legal interpretation which HMRC is likely to challenge.
  • The digital services tax (to be imposed at a rate of 2%) would be introduced from April 2020.
  • The rate of the research and development (R&D) expenditure credit would increase to 13% from April 2020.
  • The annual rate of relief for structures and buildings allowance would increase to 3% from April 2020.
  • Tax relief would be available for acquisitions from July 2020 of pre-April 2002 intellectual property from overseas companies.
  • Plastics packaging tax of £200 per tonne would apply from April 2022
  • Temporary measures would be introduced from April 2020 to extend business rates relief, primarily applying to smaller businesses.

Read a one-page guide on the budget (March 2020) [PDF 292 KB] prepared by the KPMG member firm in the UK

Read an overview (March 2020) of the budget prepared by the KPMG member firm in the UK 

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal