The Chancellor Rishi Sunak today announced a massive hike of corporation tax to 25% for the biggest companies in his Budget.

While he stressed it was still the lowest rate in the G7, the increase from the current 19% level was likely to anger big businesses.

Sunak stressed the new rate would only be introduced in 2023 “well after the point when the OBR (Office for Budget Responsibility) expect the economy to have recovered .

“And even then, because corporation tax is only charged on profits, any struggling businesses will, by definition, be unaffected.”

The Chancellor said firms with profits of £50,000 or less would still only have to pay 19% under what he called a Small Profits Rate.

This will mean around 70% of companies - 1.4 million businesses, will be unaffected, he said.

There had been speculation of a 25% corporation tax but most had thought it would settle at more like 22-23%.

Sunak said: “So, yes, it’s a tax rise on company profits, but only for the larger, most profitable companies, and only in two years’ time.

“I wanted to announce this now because I think that, for business, certainty matters.”