CGT’s planned rise sent a worrying signal to many investors in UK businesses and real estate. A higher rate of corporation tax is also on its way. Surprisingly, large investors are not looking worried when the UK ranks higher among other investment destinations in 2021.
PwC recently published the global CEO survey results, where more than 5000 global business leaders participated in the inquiry.
Chinese executives were expressly interested in doing business in Britain. 13 per cent of CEOs behind the Great Wall put the UK in their top three investment targets, compared with only 3 per cent in 2019. Almost 25% of India’s higher business officials put the UK in the top three, more than a twofold rise up from 9.5 per cent in 2019.
Interest in growing the business in Britain also increased within the Commonwealth countries, such as New Zealand and Canada.
10 Downing Street is keen to facilitate infrastructural investments in the UK. It also makes R&D one of the top priorities:
“We will make the UK a science superpower and increase investment in research and development to 2.4% of GDP by 2027,” the UK Prime Minister said in his tweet.
Note that even at 25%, the UK’s corporation tax rate will remain the lowest in the G7. A significant part of that cash will be returned to businesses using a new “super-deduction” for capital investment.
For two years from April 2021, companies’ investments in plant and machinery will qualify for a 130% capital allowance deduction, providing 25p off company tax bills for every £1 of qualifying spending on plant and machinery. The policy aims to spur post-pandemic growth and give the government more corporate profits to tax come 2023.
What UK CEOs think?
Business leaders confidence in the future of the UK business and investment grows.
In the survey mentioned above, PwC found that confidence was rebounding quickly. Assessment of businesses’ revenue prospects are much brighter for 40% of the UK top firms, while in autumn 2019 it was only 26%.
Over half (51%) of the UK CEOs surveyed expect to see moderate growth in the global economy this year, while around a quarter (26%) wish strong growth.
UK CEOs are putting money in digital transformation in response to the pandemic. 44% of businesses will invest significantly in digital.
If you plan to create a business in the United Kingdom, ORACLE CAPITAL GROUP will provide you with the advice and support you need to start.