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Budget 2014

Budget 2014: Corporation Tax changes

The general trend towards reducing the higher rate is continuing and by 1st April 2015 will be the same as the small companies rate of 20%.


Rates currently are as follows:

2013/14 2014/15 2015/16
Large Companies
(profits > £1.5m)
23% 21% 20%
Small Companies
(profits <£300k)
20% 20% 20%


Larger companies or companies whose profits stretch just into the gap between £300k and £1.5m will of course be delighted as the amount of corporation tax that they pay on the bit above £300k will be significantly reduced in the short term and to nothing at all in the medium term.

Small companies will of course be disappointed that Google, Starbucks and ICI will be paying tax at the same rate as John Smith Ltd with significantly smaller profits and whose profits almost represent direct income for the business owners.

In terms of tax planning there is little to be done in the short term except that group structures designed to protect the assets of the group will be cheaper to operate in terms of tax from 2014/15 and beyond.


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