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It’s a drag
Key points
- According to the Bank of England inflation will soon run at more than 7%.
- SMEs are particularly vulnerable to the tax and inflation combination.
- Corporate tax rate increase from 1 April 2023 will be a challenge for SMEs as well as changes to the tax payment dates.
- National Insurance contributions will also increase for SMEs.
With inflation reaching levels not seen since the 1970s the low-tax low-inflation world to which many business owners have become accustomed is being rapidly swept aside. Businesses will need to learn to operate in a world where the cost base could change quickly supply chains are stretched and tax may not be highest priority for otherwise stretched businesses.
Fiscal drag
Plenty has been said already about the impact of inflation on the taxation of individuals. Recently the Centre for Economics and Business Research (CEBR) calculated that nine million people will be...
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