No. of Recommendations: 6
Not the "JCs"
lessee what the net sifter says:
Over the last 15 years (roughly 2010–2025), the UK government has pursued a mixed policy regarding taxes for "job creators"—a term often used to describe corporation owners, high-earners, and entrepreneurs. While the headline rate of corporation tax was significantly cut for most of this period, it was subsequently raised, and many business-owning individuals have seen tighter tax restrictions on income and capital gains.
1. Corporate Tax Rate Changes
Significant Cuts (2010–2017): Between 2010 and 2017, the UK drastically cut the main rate of corporation tax from 28% to 19%. This was part of a stated goal to create the most competitive corporate tax regime in the G20.
Reversal (2023–2025): The main rate was increased to 25% in April 2023 for companies with profits over £250,000. This was the first increase in the main corporation tax rate since 1974.
"Full Expensing": While the statutory rate has risen, permanent "full expensing" was introduced, allowing companies to deduct the full cost of qualifying plant and machinery investment immediately, aiming to encourage investment.
2. Taxes on Entrepreneurs and Business Owners
Entrepreneurs’ Relief (Business Asset Disposal Relief): The lifetime limit for lower-rate capital gains tax on selling a business was increased from £2 million to £10 million in 2011, but subsequently cut to £1 million in 2020.
Income Tax & National Insurance: The top rate of income tax was reduced from 50% to 45% in 2013. However, the threshold for this rate was reduced from £150,000 to £125,140, meaning more people pay it.
Dividend Taxes: The tax-free allowance for dividends was reduced from £5,000 in 2016 to £500 in 2024, significantly increasing tax on owner-managed businesses that pay themselves via dividends.
Employer NICs: While employee National Insurance has fallen, employer NI rates and thresholds were altered, and the Employment Allowance for businesses was revamped.
3. Investment Incentives
Patent Box: Introduced to tax profits from patented inventions at a lower 10% rate.
R&D Relief: Improvements have been made to research and development tax credit schemes to support innovation
Steve
