A reduction in the main rate of corporation tax for companies was the highlight of Chancellor George Osborne’s Budget last week.
The main rate of corporation tax for companies with profits above the upper limit of £1.5m is reduced to 24% from 1st April 2012 and then 23% from 1st April 2013. The main rate will be further reduced to 22% from 1st April 2014 and it is believed that the Chancellor’s long term aim is a main corporation tax rate of 20%.
The small companies rate of corporation tax (which applies to companies and groups whose annual profits do not exceed £300,000) remains at 20% for the financial year commencing 1 April 2012.
– The Finance Partnership and Enterprise Finance Guarantee Schemes are to be extended;
– a ‘Patent Box’ will allow companies to offset some profits against corporation tax for qualifying intellectual property from 2013;
– the computer game, animation and TV production industries will qualify for tax credits.
– consultation will begin on simplifying the way non-incorporated small firms (with a turnover of up to £77,000) are taxed;
– a new General Anti-Avoidance Rule to tackle tax avoidance will enter consultation and be introduced in 2013;
– a new stamp duty rate of 7% will apply to purchases of properties worth over £2m;
– significant increased taxes will be applied to the purchase and sale of properties through offshore companies;
– the VAT registration threshold will rise to £77,000 from April 2012.
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