Corporation Tax
From April 2015 the Small Companies Rate and the Main Rate of Corporation Tax will merge. For both 2015-16 and 2016-17 the rate of Corporation Tax will be 20%.
Annual Investment Allowance
The Annual Investment Allowance has been at £500,000 per annum from April 2014. This gives tax relief of 100% on most expenditure on plant and machinery up to that level. Relief of 8% or 18% per annum, depending on the type of asset, is available on expenditure above that limit.
The Annual Investment Allowance is due to fall to £25,000 per annum from 1st January 2016. The Chancellor has said that this will be reviewed in the Autumn Statement but no further details are available at present.
Research and Development Tax Credits
These will be increased from 10% to 11% from April 2015, with the rate of the SME scheme increasing from 225% to 250%.
There are changes to the items eligible for the relief, and also a voluntary advance assurance scheme will be introduced from the Autumn.
Construction Industry Scheme
From April 2015 the need to make a monthly return even if no payments have been made is removed.
Class 2 NIC
From April 2015 the liability to pay Class 2 NIC will arise at the end of the tax year and will be paid with the Tax and Class 4 liability through the self assessment tax return. People with profits below the threshold will be able to make a voluntary payment to protect their pension rights.
Corporation Tax for Goodwill on Incorporation
From December 2014 restrictions on claiming a tax deduction were introduced when the transfer was between related parties. This applies in particular when a sole trader or a partnership transfers the business to a limited company when the company is under the control of the sole trader or partners in the partnership. Additionally, a restriction on the claiming Entrepreneurs Relief was introduced at the same time.
Farmers Averaging
The period over which farmers can average their profits will be extended from 2 years to 5 years with effect from April 2016.
Diverted Profits Tax
Effective from April 2015, a new diverted profits tax of 25% will be introduced where multinational companies use aggressive tax planning techniques.
Venture Capital
Changes to the Seed Enterprise Investment Scheme, the Enterprise Investment Scheme, and Venture Capital Trusts will be made, subject to EU approval.