Corporation tax rate rise to 25% will go ahead

The government’s decision to freeze the rate of corporation tax at 19% has been reversed prime minister Liz Truss confirmed on 14 October. It will now rise to 25% next April as planned by former chancellor Rishi Sunak. Ms Truss admitted the mini-Budget had gone ‘faster and further’ than many expected.

She has replaced Kwasi Kwarteng with Jeremy Hunt as chancellor.

These changes will go part way to regain the confidence of markets according to Thomas Pugh economist at RSM UK. But he added: ‘Ultimately the government will have to come out with a credible medium term fiscal plan to stabilise financial markets and lower the elevated risk premium currently priced into borrowing by UK firms and the government. 

‘The government has now U-turned on almost half of the £45bn of unfunded tax cuts announced in the mini-Budget last month. However that still leaves £25bn...