Corporate tax reliefs rise £10.3bn in a year, research finds

The value of UK corporate tax reliefs have risen £10.3bn in a year, from £113bn to £123.3bn, to reach the highest level in at least five years, according to new research from Thomson Reuters.  

The research has found that tax reliefs have become “even more” important to UK corporations as the tax burden on business has increased. In April, the rate of corporation tax rose by almost a third from 19% to 25%.  

The Office for Budget Responsibility expects businesses will pay £73.7bn in corporation tax in 2023-2024, an increase of 37% from £53.8bn in 2022-2023. 

This review was published after the government closed the Office of Tax Simplification in March of this year.

The research points to headline rates for business tax remaining high for the foreseeable future as the government looks to keep the public sector debt at a manageable level. 

Ray Grove, head of corporate tax and trade at Thomson Reuters, said: “Tax breaks are enormously valuable to companies, particularly at a time when these customers are having to contend with higher headline rates. If corporate tax leaders don’t take advantage of the tax reliefs that are available to their company, then the business will have less to reinvest in growth.

“It can be incredibly difficult for corporates to keep on track of which tax breaks are available to them and to ensure they are applying rules relating to those tax breaks accurately. Technology solutions for compliance, reporting, research and planning play an important role in helping customers ensure they are paying the right amount of tax.”