Corporation Tax

Rates

The corporation tax rates for small and large companies will be aligned at 20% from April 2015. This will remove the need for the associated companies rule and the marginal rate of corporation tax will disappear. The rates for the three financial to 31 March 2016 have been announced as:

Research and Development (R&D)

Companies can claim enhanced deductions for expenditure on R&D projects at rates broadly dependent on the size of the company as follows:

Revenue expenditure includes the following costs which can be included in your R&D claim:

• Staffing costs
• Subcontracted R&D
• Externally Provided Workers (EPWs)
• Consumables
• Software
• Payments to the subjects of clinical trials.

SME relief allows companies to:

deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction.

claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss

Enterprise Zones

Around 18 new Enterprise Zones and extended 8 zones have been formed around the country to encourage investment and job formation. Businesses in some of those zones can claim 100% capital allowances on the equipment they use within the zone.