Contributed by Lauren Fletcher, Tax Technical Senior Manager at the Chartered Institute of Taxation (CIOT) .
The Corporate Tax Roadmap was published on 30 October 2024 and set out the ‘Government’s plans on corporation tax’ over the course of this Parliament. Eighteen months and another Budget later, this article examines some of the progress made against the roadmap’s commitments.
What is the Corporate Tax Roadmap?
- the headline corporation tax rate will be capped at 25%;
- retention of the small profits rate and marginal relief;
- the maintenance of core structural features of the corporate tax system such as loss reliefs and the UK’s capital allowances framework, including permanent full expensing and the Annual Investment Allowance (AIA);
- maintaining the generosity of Research and Development (R&D) reliefs whilst improving the administration of the scheme and introducing advanced certainty procedures;
- keeping the Patent Box in place and preserving the current approach to intangible fixed assets; and
- a new process to give investors in major projects increased advance certainty on the tax treatment that will apply.
Where are we now?
In the remainder of this article, I will focus on what progress has so far been made against the roadmap’s priorities through the lens of UK companies and groups (my heartland). There were, of course, also a number of commitments focused on international corporation tax issues including transfer pricing, diverted profits tax, Pillar One and Pillar Two which I am not going to cover here.
Predictability
Action against the commitment to predictability ‘by confirming the major features of the corporation tax regime’ can be summed up quite quickly – so far, the headline corporation tax rate has been maintained at 25% and there have been no changes to the small profits rate of 19% either. Along with the Patent Box regime, R&D relief (under the merged scheme that came into effect in April 2024) also remains in place.
When it comes to capital allowances, full expensing (i.e. first-year allowances of 100% on qualifying main rate plant and machinery and 50% on special rate plant and machinery) and the AIA (100% first-year relief on the first £1m of qualifying plant and machinery expenditure per annum) are also untouched.
The intention to consider full expensing for assets acquired for leasing or hire has resulted in the announcement within the 2025 Autumn Budget of a new 40% first-year allowance. This allowance will apply to assets utilised in leasing, as well as qualifying expenditure by unincorporated businesses, effective from 1 January 2026. These changes reflect the roadmap commitment to provide additional incentives for investment but for now fall short of full expensing, one assumes because of fiscal constraints.
Moving forward, any evaluation of predictability will rely on a commitment not to make changes to major features of the regime and whether this is upheld in the long term.
Stability
- a reduction in the writing-down allowance for main-rate assets from 18% to 14% from April 2026;
- first-year allowances for zero-emission cars and electric vehicle charging points extended by a further 12 months until April 2027.
Certainty
Following consultation, the 2025 Autumn Budget confirmed that a new target advanced assurance service for R&D relief will be piloted from spring 2026, giving time for it to be refined before it is fully implemented. The pilot will be open to small- and medium-sized companies on a voluntary basis and will cover some key areas of technical uncertainty like overseas expenditure and contracted out R&D. For now, it will run alongside the existing advanced assurance mechanism that has been in place for many years but has historically experienced low uptake.
This appears to be a direct action to address the roadmap commitments to improve certainty and the user experience of R&D reliefs, whilst at the same time helping to reduce fraud and error. We await more details of the scheme – it is essential this is properly resourced and handled by well-trained staff with sufficient technical and industry expertise (both elements being equally relevant to R&D claims) to ensure it achieves the aim of reducing error in R&D claims.
In terms of other R&D commitments, the disclosure service was launched in late 2024, and late 2025 saw the Government move forward its commitment to the introduction of an R&D expert advisory panel. The panel brings together industry expertise to help HMRC understand how R&D really happens in practice and gives more certainty on the correct for businesses making R&D claims through improved HMRC guidance and communications. More time is needed to assess the benefits of these relatively new developments.
Finally, the Government has moved forward with plans to introduce the Advanced Tax Certainty Service following consultation during 2025. This will be launched in summer 2026; however, it will initially be narrowly focused on the largest projects where at least £1bn is being invested. Because the threshold is so high, it is expected that this scheme will primarily help a small group of the UK’s largest companies, albeit allowing for a targeted and well-resourced service. There remains a question about the extent of the commitment to certainty for all UK businesses in the longer term. The scheme will be reviewed after a year, and Government may consider threshold changes in future.
Is there some unfinished business?
- A planned consultation on the tax treatment of pre-development costs, particularly relevant for infrastructure and energy projects, is yet to be launched. This remains outstanding pending the decision in Orsted West of Duddon Sands (UK) Ltd V R & C Commrs (known widely as Gunfleet Sands), following an HMRC appeal to the Supreme Court in early 2026.
- A consultation to review the effectiveness of land remediation relief took place during 2025, but no policy reform has yet been announced.
- A promise of clarity around what qualifies for different capital allowances. Whilst there has been tinkering with allowances and rates, we await wider clarity on the regime.
What about simplification?
The prominence of the term ‘simplification’, with variations on this theme appearing 13 times in the Corporate Tax Roadmap, highlights its ongoing importance. Progress in this area will need to be continually assessed as the roadmap is fully implemented, but it is useful to highlight a couple of recent developments.
Modernising the system – a key commitment within the roadmap – is vital to ensure the corporation tax framework keeps pace with changing business practices, particularly as technology continues to transform data collection and reporting. HMRC have recently launched a consultation aimed at modernising and standardising corporation tax return formats. The objective is to establish clear, prescribed requirements, giving businesses greater clarity on their reporting responsibilities and helping to reduce errors. This consultation, which closes in June 2026, will inform the design of the new framework, although the timing for implementation remains uncertain.
GFC13, published in September 2025, is HMRC’s non-statutory guidance outlining the steps taxpayers should follow to ensure that tax returns – including corporation tax returns – are accurate and complete to the best of their knowledge, especially in situations involving legal or factual uncertainty.
In principle, GFC13 supports the Corporate Tax Roadmap’s objectives by promoting early resolution of tax uncertainty and encouraging improved compliance processes. However, it could also be seen as adding complexity by imposing higher standards for evidence and governance. The introduction of subjective measures – such as the requirement for what is ‘most likely correct’ – may result in inconsistent interpretations between advisers and HMRC. The true impact of GFC13 will depend on how proportionately and consistently HMRC apply it in practice, and whether it is accompanied by meaningful administrative simplification elsewhere in the corporation tax system.
In summary, while good progress has been achieved, additional time will be required to determine whether the Corporate Tax Roadmap ultimately delivers on its ambitions of providing predictability, stability and certainty.
Useful links
For commentary on tax law simplification, see Direct Tax In-Depth at ¶103-400.
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