An equilibrium budget for innovative companies: there were no changes to corporation tax rates or the rates of incentive for research and development (R&D) spend, but there was a reduction announced to the writing down allowance (WDA) main rate. The Budget announced a reduction to the WDA main rate from 18% to 14% from April 2026, alongside a new 40% first-year allowance from January 2026. This is expected to raise £1.5 billion in 2029-30. This measure changes the capital allowance rates, for both corporation tax paying companies and unincorporated businesses in the self-assessment regime, on expenditure that does not claim full expensing.
R & D news: The Government will pilot a targeted advance assurance service from spring 2026, enabling small and medium-sized enterprises to gain clarity on key aspects of their R&D tax relief claims before submitting to HMRC.
We expect the 2025 Finance Bill to be published with further details of these measures before Christmas.
Contact for more: maria@tax-insight.co.uk