High and increasing inflation will have unexpected consequences. How can businesses mitigate its impact on corporate profits and tax risk?
Tax revenue in the UK is rising to sustained levels not seen since the 1950s (see bit.ly/3MPhqMv). High and increasing inflation will enhance the tax take and have unexpected consequences on both after tax returns and the corporate approach to tax risk. Much has been made of the impact on individuals, but the impact on companies has had little attention. They need to brace themselves for an assault on their post-tax profitability and understand what, if any, actions they can take to make the position better. Alongside this, HMRC is increasingly focused on risk-based reviews of company tax affairs.