Budget 2014 – Corporation Tax

Corporation tax rates

The scheduled reduction in the main rate of corporation tax is to go ahead.   Hence, the main rate will be reduced from 23% to 21% (on 1 April 2014) and eventually to 20% (on 1 April 2015), whereby it will then be aligned with the current small companies rate of tax.  When the coalition government came to power in 2010, the main rate was 28%, so this reduction to 20% within 5 years represents a significant saving to businesses (and explains the continuing popularity of the use of corporate structures in tax planning).

 

Research & Development

SMEs that incur R&D expenditure are currently allowed to surrender their tax losses in exchange for cash payments from HMRC at a rate of 11% (e.g. £100,000 of tax losses can be converted to an immediate cash payment of £11,000).  From 1 April 2014 the surrender rate will be increased to 14.5%, which is very welcome news to those businesses that are otherwise unable to use their tax losses, as the immediate payment of cash from HMRC can often be a critical lifeline whilst businesses invest in R&D for the long term.

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Feb 20

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I know Dodd & Co have clients all over the country and beyond but the firm’s home is Cumbria. Cumbria is very special, not just because of the beautiful countryside but because of the people who live and work here. Dodd & Co are at the heart of our communities, raising funds and as volunteers and working as trustees in many local organisations. I often attend the County Young Farmers AGM and enjoy the young farmers’ banter with their county treasurer Rob Wharton. Thank you Dodd & Co - your support makes a real difference to the Cumbria Community Foundation and the people we serve.
-- Andy Beeforth OBE