Corporation Tax
Rates
As announced in the Autumn Statement, the main rate of Corporation Tax will fall from 23% to 21% for Financial Year 2014 (commencing 1 April 2014), and to 20% in April 2015. This is the same as the rate for companies with small profits. This will simplify the calculations for those falling in the marginal band between the small profits and full rates. Such companies will suffer an effective rate of 21.25% on profits falling between £300,000 and £1.5m in the year to 31 March 2015 (limits are reduced for short accounting periods and for associated companies).
Research and development credits
Loss-making small and medium-sized companies conducting research and development can claim a repayment by ‘surrendering’ qualifying R&D expenditure (which is uplifted by 125%) for a payable tax credit. The rate of credit will be increased from 11% to 14.5% for expenditure incurred on or after 1 April 2014.
Enterprise Zones
Companies investing in plant or machinery in designated enhanced capital allowance sites in Enterprise Zones receive 100% capital allowances on such expenditure. This relief, which was due to expire in 2017, will now be extended for a further 3 years from 31 March 2017 to 31 March 2020.