The Finance Act 2016 set corporation tax for 2020-21 at 17%, but the Conservative party intends to increase the rate to 19% (and maintain that rate for the rest of the new Parliament).

Business valuers should adjust their models accordingly, which will decrease the concluded values in most valuation reports, all else being equal.

Other tax changes that influence value, or future benefit streams, are less certain prior to the new budget proposal in March. For instance:

• The Chancellor has continued plans to restrict research and development tax credits this year, while the Conservatives want to increase the expenditure credit for big companies from 12% to 13%;
• A tax ‘triple lock’ on income tax, VAT, and NIC appears likely, which at minimum reduces policy risk going forward;
• Five-year incremental increases in national minimum wage to £10.50 appear likely, which should be considered in future cost calculations for businesses with affected employees, beginning in 2020; and
• Changes in digital services tax, if any, should be confirmed by the second quarter. Less likely is a change in off-payroll employee taxation policy.