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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.

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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 

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