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Comment
Businesses incurring expenditure on plant and machinery should carefully consider the timing of their acquisitions to optimise their cashflow. In 2023 the tax relief rules for expenditure on plant and machinery will change and for companies the percentage corporation tax relief saving on the expenditure may change as well.
Structures and Buildings
allowance will be allocated by the group between its companies.
Cultural relief
The government has announced that it will temporarily increase cultural tax reliefs for theatres, orchestras, museums and galleries across the UK from 27 October 2021 to 31 March 2024, increasing the relief organisations can claim as they invest in new productions and exhibitions.
Changes will also be introduced to better target the cultural reliefs and ensure that they continue to
be safeguarded from abuse. These will apply from 1 April 2022.
Research and Development relief reform
Research and Development (R&D) tax reliefs for companies will be reformed to:
• support modern research methods by expanding qualifying expenditure to include data and cloud costs
• more effectively capture the benefits of R&D funded by the reliefs through refocusing support towards innovation in the UK
• target abuse and improve compliance. These changes will take effect from April 2023.
Cross-border group relief
Following the UK’s exit from the European Union (EU), the government is bringing the corporation
tax group relief rules relating to European Economic Area (EEA) resident companies into line with those for non-UK companies resident elsewhere in the world. This applies to accounting periods ending on or after 27 October 2021 and will affect UK groups with subsidiary companies established in the EEA along with EEA-resident companies that are trading in the UK through a permanent establishment.
A Structures and Buildings Allowance (SBA) was introduced with effect from 29 October 2018 to
relieve costs for new structures and buildings used
for qualifying purposes. A business must hold an allowance statement containing certain information to be eligible to claim SBA. Minor changes will be made to the allowance statement requirements to clarify the information required to be kept.
Annual Tax on Enveloped Dwellings
The Annual Tax on Enveloped Dwellings (ATED) charges increase automatically each year in line with inflation. The ATED annual charges will rise by 3.1% from 1 April 2022 in line with the September 2021 Consumer Price Index.
Residential Property Developer Tax
A new tax will be applied from 1 April 2022 on company profits derived from UK residential property development. The tax will be charged at 4% on profits exceeding an annual allowance of £25 million. For companies that are part of a group, the £25 million
Business
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