Enacted or substantively enacted rates are used to calculate income tax amounts. A rate is considered substantively enacted when only perfunctory actions are required for a measure to become law. benefit is recognized when it is more likely than not that the position will be upheld based on its technical merits.

What is substantive enactment?

In general, tax rate changes are considered enacted once the relevant bill has received Royal Assent. When tax rate changes are considered enacted or ”substantively enacted”, the effect of the change in tax rate is reflected in the period in which the changes are enacted or “substantively enacted”.

Has the 25 corporation tax rate been enacted?

Finance Bill 2021 and deferred tax

Finance Bill 2021 had its third reading on 24 May 2021 and is now considered substantively enacted. This means that the 25% main rate of corporation tax and marginal relief will be relevant for any asset sales or timing differences expected to reverse on or after 1 April 2023.