Business taxes

Announcements affecting business taxes included:

Corporation tax – main rate

The Chancellor announced that from 1 April 2014 the main rate of corporation tax would be reduced to 21%. This was a greater reduction than previously announced in the 2012 Budget, which intended a rate of 23% from 1 April 2013 and 22% from 1 April 2014.

Annual Investment Allowance

The Annual Investment Allowance limit will be increased from £25,000 to £250,000 per annum for two years for all qualifying investments in plant and machinery made on or after 1 January 2013.

Corporation tax reliefs for the ‘creative’ sector

In the 2012 Budget it was announced that, following consultation, corporation tax reliefs would be introduced for the video games, animation and high-end television industries from April 2013, subject to state aid approval. Under these reliefs, qualifying companies will be able to choose between an additional deduction at a rate of 100% of enhanceable expenditure or a payable tax credit at a rate of 25% of qualifying losses surrendered.

Tax simplification for small unincorporated businesses

A new income tax scheme for small unincorporated businesses will be introduced for the 2013/14 tax year to allow eligible self-employed individuals and partnerships to calculate their profits on the basis of the cash that passes through their business. They will generally not have to distinguish between revenue and capital expenditure. In addition, and with wider implications for our self-employed clients, all unincorporated businesses will be able to choose to deduct certain expenses on a flat rate basis.

Small Business Rate Relief

The temporary doubling of the Small Business Rate Relief will be extended for a further 12 months from 1 April 2013.

Empty property rates

Subject to consultation, all newly built commercial property completed between 1 October 2013 and 30 September 2016 will be exempted from empty property rates for the first 18 months, up to the state aid limits.

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