The Chancellor means business…
As part of his stated aim of giving the UK the most attractive tax regime for businesses, the Chancellor has announced changes intended to benefit organisations at both ends of the spectrum:
- Larger – or at least more profitable – companies will see the top rate of corporation tax fall to 20%, from April 2015. This is likely to be the last step in a phased reduction in corporation tax rates, as all companies will pay corporation tax at the same rate, from that date. It also means that the UK’s corporation tax rate will be up to 20% lower than that payable by competitor companies in other major economies.
- What George Osborne did not say was whether this might be a precursor to companies all having to pay tax by instalments (which brings forward their corporation tax bills by up to a year) in a similar regime for income tax self assessment. It may be a way of achieving one of his other aims, of offering a fully funded Budget…
- Smaller employers (not necessarily companies, as the new regime will cover all employers, including charities) are likely to see the most significant benefit from the introduction of an employer’s national insurance allowance, of up to £2,000 per year, from April 2014. This allowance will be set against the employer’s liability and claimed under the new Real Time Information (“RTI”), though the detail has yet to be finalised.
Date: 21st March, 2013
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