With so much confusion and uncertainty surrounding the result, at least in the near future, any tax changes are likely to be simple and symbolic. The Tories’ reduced majority puts plans to cut the corporation tax rate to 17% in doubt – Labour and the Greens want to increase it and the SNP has voiced its opposition to any further cuts. The Lib Dems, meanwhile, want to draw the line at 20%.
At least the DUP, potential coalition partners for May’s beleaguered party, have a similar stance on business taxation, with its manifesto calling for a reduction in corporation tax to at least 12.5% in Northern Ireland (something allowed under the Corporation Tax (Northern Ireland) Act of 2015), and cuts in VAT for businesses in the tourism industry.
The VAT rate is another one of those “lockdown” items that would be ripe for review, but given the uncertainty around Brexit and the hugely differing attitudes towards VAT cuts from the different parties, it seems unlikely the rate will move anytime soon.
There is now more uncertainty over taxation than there has ever been. The dropping of so much from FA2017, and with no idea who will be in charge and who will be setting the next budget, it’s impossible to even speculate about sensible tax planning”.
With no party able to command an overall majority in the House of Commons we could have a new Prime Minister within the next few weeks, and could yet face the prospect of another election campaign, potentially as soon as the Autumn. One thing is we can be certain about is that UK businesses shouldn’t be banking on stability any time soon.