Corporation Tax

Rates

The corporation tax rates for small and large companies will be aligned at 20% from April 2015. This will remove the need for the associated companies rule and the marginal rate of corporation tax will disappear. The rates for the three financial years to 31 March 2017 have been announced as:

Year beginning 1 April: 2015 2016 2017
  20% 20% 19%
Year beginning 1 April: 2018 2019 2020
  19% 19% 18%

Research and Development (R&D)

Small and medium (SME) companies can claim enhanced deductions for expenditure on R&D projects at 230% of qualifying expenditure. Where the deduction is claimed and the company makes a loss, it can claim a cash credit from HMRC of 14.5% of that loss.

Research and Development Expenditure Credit (RDEC) scheme

Large companies can claim an 11% uplift on the following qualifying expenditure:

  • Staffing costs
  • Expenditure on externally provided workers
  • Software and materials
  • Contributions to independent research
  • Subcontractors of qualifying bodies and individuals/partnerships

RDEC differs from the previous R&D scheme for large companies as it is an 'above the line' tax credit and can be accounted for in the profit/loss statement.

Enterprise Zones

Around 46 enterprise zones have been formed around the country to encourage investment and job formation. Businesses in some of those zones can claim 100% capital allowances on the equipment they use within the zone. The period for which those 100% allowance are available has been extended by three years to 31 March 2020.

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Corporation Tax

Under Corporation Tax Self Assessment (CTSA), the legal responsibility for correctly calculating the corporation tax liability falls on business owners. Our objective is to work closely with you as we understand the issues facing small business owners and can prepare tax returns for you. We will calculate your company's tax liability. With the increased reporting obligations, investigations policies on the part of the tax authorities and harsher penalities for non-compliance, why not let us minimise the administrative burden of compliance with current tax legislation.

Corporation Tax