Budget 2015 – Corporation Tax

Rate of 20% confirmed

The change to the main rate of corporation tax to 20% was confirmed from 1 April 2015.

 

Making sure banks pay their fair share

The rate of the Bank Levy is increased to 0.21% from 1 April 2015.  The Government forecasts this will raise an additional £900 million a year.

It was confirmed that the Autumn Statement proposal to restrict to 50% the proportion of banks’ annual taxable profit that can be offset by carried forward losses will be introduced in Finance Bill 2015.

The Government will also make banks’ customer compensation payments non deductible for corporation tax purposes so that they are not obtaining tax relief on miss-selling.  A consultation will take place on the detailed design of this change.

 

Loss refresh prevention

Companies will not be able to obtain a tax advantage by entering contrived arrangements to convert brought forward reliefs into more versatile in-year deductions. It covers carried forward corporation tax trading losses, non-trading loan relationship deficits, and management expenses. This will take effect for accounting periods beginning on or after 18 March 2015.

 

Diverted Profits Tax

As announced at Autumn Statement 2014, legislation will be introduced in Finance Bill 2015 for a new tax on diverted profits from 1 April 2015.  This means that multinational companies which are undertaking economic activity in the UK but diverting their profits abroad through complicated business structures and the manipulation of international tax rules will be caught by this new tax.

 

Supporting Creative Industries

From 1 April 2015 the rate of Film Tax Relief will be increased to 25% for all qualifying core expenditure, for all eligible film productions, as opposed to being capped at 25% only for the first £20m and 20% thereafter. The distinction between limited budget films and all others will be removed to make the relief more flexible.

From 1 April 2015 companies involved in high end television production will benefit from further changes to tax reliefs.  The minimum UK expenditure requirement for Television Tax Relief will be reduced from 25% to 10%.  This change will also apply to the Animation Tax Relief.   Legislation will also be introduced to provide tax relief for producers of childrens’ television programmes which will now also include children’s game shows and competitions.

A new corporation tax relief for orchestras will be introduced from 1 April 2016.

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Apr 21

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