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UK Moving Corporate Tax Goalposts Creates Accounting Headaches

Sept. 23, 2022, 4:28 PM

The UK government’s reversal of a planned increase in corporate tax and a quickfire cut to national insurance contributions are likely to create balance sheet headaches for some companies.

UK Chancellor Kwasi Kwarteng confirmed Friday that a planned hike in corporate tax from 19% to 25% would be canceled, while this year’s increase to national insurance—a payroll tax borne by both employees and employers—would be reversed from Nov. 6.

While the corporate rate has never changed, the signaling of an increase followed by a U-turn could impact companies having to deal with the reversal, said Matthew Hodkin, tax partner at ...