UK Leadership race = more short-term tax uncertainty for owner managers

The race to replace the Prime Minister, Boris Johnson is causing tax uncertainty for small company owners in the interim.

In the UK, the main rate of corporation tax is currently due to increase from 19% to 25% from April 2023. This, together with the 1.25% increase in the National Insurance rates and dividend tax rates since April 2022 has eliminated the tax benefits of small business incorporation considerably.

Several of the leadership candidates have made tax-related pledges, including scrapping the tax rise, reversing the National insurance rate increase, and even cutting corporation tax rates.

More uncertainty… at least until the UK leadership contest is over in early September.