No immediate change to Corporation Tax Rates but reductions coming up
The current rate of Corporation Tax is 20% and this rate will continue in 2016-17. It has now been announced that this will be reduced to 19% for the three years from 1st April 2017, with a further reduction to 18% from 1st April 2020.
There will be no more messing about with the Annual Investment Allowance
Currently, there is a 100% deduction from profits for the majority of capital expenditure up to a limit of £500,000. Cars are, as usual, excluded. The maximum expenditure for which this deduction is available has fluctuated wildly in the past, and it was due to drop to £25,000 from January 2016. It has now been announced that the limit from January 2016 will be permanently set at £200,000.
Corporation Tax Relief on the acquisition of Goodwill is abolished
Tax relief on the cost of acquired goodwill is abolished with immediate effect.