Suffolk businesses will be left disappointed a planned 6% hike in corporation tax will go ahead this year - but may be consoled by a tax break for new plant and machinery, a tax expert says.

Robert Leggett - who heads up the Ensors corporate and business tax team in Ipswich - said the chancellor had failed to produce a rabbit out of the hat, but suggested the effects of his Budget might be a "slow-burn". 

Chancellor Jeremy Hunt - who delivered his Budget speech to the House of Commons today (Wednesday, March 15) - refused to budge on a previous decision to raise corporate tax to 25% and stuck rigidly to his "stability" credentials.

Instead he vaunted his "four Es" - Enterprise, Employment, Education and Enterprise.

The restored tax hike was announced in the wake of Liz Truss's short-lived tenure as prime minister last year following her disastrous giveaway budget.

"Having taken the credit for restoring basic stability to the UK economy through his statements in October and November, Jeremy Hunt’s first full Budget was all about his vision for long term growth," Mr Leggett explained.

Measures to expand the UK's available workforce to relieve acute labour shortages were laid out. 

With 1 million job vacancies, most of the key measures were aimed at getting some of the seven million “economically inactive” working age adults back into employment, he said.

Measures includes more welfare reform for those suffering long term sickness or disability and changes to Universal Credit to encourage claimants back into work or to work longer hours.

Pensions tax reforms - aimed at encouraging the over 50s back to the workplace - included an increase in the pension annual allowance from £40,000 to £60,000 and the abolition of the lifetime allowance.

At the other end of the spectrum, free childcare places are to be made available for children over nine months old.

"If these measures work, then expanding the available workforce can only be good news for businesses who are struggling to recruit - although the impact of these changes is only likely to be felt over time," said Mr Leggett.

"However, business will be disappointed that the scheduled rise in the main rate of corporation tax from 19% to 25% will still go ahead, despite the chancellor recognising the need to maintain a highly competitive corporation tax regime against other G7 members.

"This brings with it additional complexities in terms of associated companies and quarterly instalment payments, which could trip up unwary companies."

But a "full expensing" consolation prize for businesses investing in plant and machinery won't extend to other types of capital spending, such as buildings, he pointed out.

It also doesn’t appear to benefit smaller businesses who don’t use all the existing £1m Annual Investment Allowance, he added.

"A further Energy Bills Discount Scheme for businesses up until March 2024 could be a lifeline for some, but we will have to wait to see the detail of the latest scheme."