Key takeaways
- HM Treasury opened a Corporate Tax Simplification for Business Investment consultation on 28 October 2026. The consultation page gives 21 November 2026 as the closing date.
- It covers three areas: financing and international rules, investment and innovation reliefs, and a simpler Corporation Tax experience.
- Named topics include treaty relief on interest, controlled foreign companies, anti-hybrid rules, R&D reliefs, capital allowances, the Patent Box and intangibles.
- Between November and April the government will test ideas with business. Detailed proposals follow between May and September 2027.
- A separate call for evidence on modernising Corporation Tax administration runs alongside.
HM Treasury has opened a consultation on simplifying Corporation Tax to support business investment. It was published with the Budget on 28 October 2026, and the consultation page gives 21 November 2026 as the closing date. The document is a scoping exercise rather than a set of proposals. It names the areas where businesses and advisers say complexity is costly, and asks for evidence and ideas.
What the consultation is for
The Financial Secretary to the Treasury writes that complexity often comes from “the cumulative effect of overlapping regimes, repeated reporting requirements and administrative processes”. The government commits to the 2024 Corporate Tax Roadmap, which caps the headline rate at 25% and keeps the main features of the system that matter for investment.
The aim is to reduce avoidable complexity and administrative burden while safeguarding revenue, preventing avoidance and protecting the tax system. The document says improvements may come through guidance, administration or legislation, with fiscal impact considered at every stage.
The three chapters
- Chapter 3, simpler and more certain rules for financing and international activity. Treaty relief on interest withholding tax, controlled foreign companies, anti-hybrid mismatch rules, the unallowable purpose rule and the corporate interest restriction.
- Chapter 4, making it easier to invest and innovate. R&D reliefs, predevelopment costs, capital allowances, the Patent Box and intangible fixed assets.
- Chapter 5, a simpler, more modern Corporate Tax experience. CT administration, reporting requirements, the Advance Tax Certainty Service, persistent non-compliance and R&D administration.
Points most relevant to SMEs and their advisers
R&D reliefs. The document asks about simplifying the legislation. Issues raised include the eligibility test for the enhanced R&D intensive support scheme, the PAYE and National Insurance cap on payable relief, and the “going concern” requirement. The Corporate Tax Roadmap commits to stability for R&D reliefs.
Capital allowances. The consultation asks where capital allowances could work better for businesses making large, capital-intensive investments. The section also discusses the effect of a Supreme Court judgment on the rules. Our post on capital allowances in Budget 2026 covers the new rates.
Predevelopment costs. The government considers tax treatment of predevelopment costs a priority. It will look at clearer guidance, worked examples and more practical apportionment, and consider targeted legislation if guidance is not enough.
Intangibles. It asks whether the definition of a “relevant asset” should be narrowed, how the regime applies to partnerships, and how related-party rules and IP licensing are treated.
Corporate interest restriction. The document says the government has not identified significant simplification opportunities that avoid fiscal cost, but welcomes input.
Administration changes already under way
Chapter 5 says the government is running a Call for Evidence on Modernising the Administration of Corporation Tax. It looks at how companies meet obligations in practice, including processes, systems and software, and at the role of automation and artificial intelligence.
The government also widens access to the Advance Tax Certainty Service by cutting the qualifying investment threshold to £300 million. The document mentions the Securities Transfer Tax from late 2027 as part of the simplification programme. Read Securities Transfer Tax.
Timetable
| Period | What happens |
|---|---|
| 28 October 2026 | Consultation published |
| 21 November 2026 | Consultation page closing date |
| November to April | Work with business to refine concerns and test approaches |
| May to September 2027 | Detailed proposals for the highest-priority areas and a final technical consultation ahead of a future fiscal event |
The document also invites expressions of interest for stakeholder working groups, which HM Treasury and HMRC will set up.
What advisers should do
- Decide which topics matter to your clients. R&D, capital allowances and CT administration reach the most SMEs.
- Collect examples. The consultation wants concrete cases of uncertainty, duplication and cost.
- Respond by the closing date, or register interest in a working group.
- Keep the wider context in view. Our Budget 2026 corporation tax post lists the rate and relief changes already announced.
Frequently asked questions
When does the Corporate Tax Simplification consultation close?
The consultation page gives 21 November 2026 as the closing date.
Does the consultation change any Corporation Tax rates?
No. It is about simplification. The Corporate Tax Roadmap caps the headline rate at 25%.
Is R&D relief part of the consultation?
Yes. It asks about simplifying the R&D relief legislation, including the intensity test, the PAYE and National Insurance cap and the going concern rule.
What comes after the consultation?
The government will work with business from November to April and develop detailed proposals for priority areas between May and September 2027.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 1 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.