Fashion businesses to see corporation tax hike in new spring budget

The UK economy is set to shrink 0.2 percent in 2023, better than earlier predictions of 1.4 percent last November, according to the Office for Budget Responsibility (OBR), the UK government’s fiscal watchdog.

In a new annual spring budget outlined by chancellor Jeremy Hunt, the major measure that will affect the fashion industry is a rise in corporation tax from 19 percent to 25 percent for companies with profits over 250,000 pounds. Some officials said an increase in corporation tax will make the UK less competitive and reduce investment. 6 million people could be affected by stealth taxes, raising 120 billion pounds over the next five years, reported The Times.

Other measures include extending the energy price guarantee and freezes on fuel for the next 12 months. No changes on VAT or National Insurance were announced.

A buoyant Mr Hunt said the “doubters were wrong” in a speech to the Commons and that “our plan is working.” The UK would not enter a recession this year as was widely reported, with inflation forecast to fall from 10.1 percent to 2.9 percent by the end of the year.

Mr Hunt told the BBC he wanted to fill a million vacancies across the UK so companies can "grow faster". A shortage of workers, compounded by Brexit, was holding back growth, with the chancellor stating over-50s, people with disabilities and parents of young children should be able to get back to work. 110,000 people could be added the UK workforce, said the OBR.