Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of corporation tax rises on small and medium-sized hospitality businesses.

Businesses in our retail, hospitality and leisure sectors are foundational to our economy and our high streets, and we are supporting them to succeed.

The Government published its Corporate Tax Roadmap at Autumn Budget 2024, which commits to maintaining a competitive and sustainable main rate by capping corporation tax at 25 per cent for the duration of this Parliament. The Roadmap also confirms that the small profits rate will be maintained, so companies with profits of £50,000 or less will continue to pay 19 per cent.

The marginal relief for companies with profits of between £50,000 and £250,000 means only around 6 per cent of actively trading companies pay the full main rate. This structure means that most small and medium-sized businesses, including those in the hospitality sector, do not pay the full rate.

In addition, the Government is creating a fairer business rates system that protects the high street, supports investment, and is fit for the 21st century.

As set out at Autumn Budget 2024, the Government will introduce permanently lower tax rates for retail, hospitality, and leisure properties with ratable values below £500,000 from 2026-27. This permanent tax cut will ensure they benefit from much-needed certainty and support.

Ahead of these new multipliers being introduced, the Government prevented the current RHL relief from ending in April 2025, extending it for one year at 40 per cent up to a cash cap of £110,000 per business. We have also frozen the small business multiplier.