Welcome to this month's Tax Tips & News, our newsletter designed to bring you useful advice to keep you one step ahead of the taxman.... View the latest tax tips and news here Sign up to newsletter

Subscribe to our monthly tax tips & news Sign up to newsletter

  • Request a callback
  • Request a callback
  • Request a callback
  • Request a callback
  • Request a callback

Business Tax Changes 2011/12

Newsletter issue - December 2010.

Corporation Tax

The small profits rate of corporation tax will fall by 1% to 20% from 1 April 2011.This rate applies to profits of up to £300,000 if there are no associated companies. The corporation tax rate for large companies with profits over £1.5million will also fall by 1% to 27%, making the marginal rate for profits between those limits 28.75%. The main rate for larger companies will also fall by 1% in each of the following 3 years down to 24% in the year beginning 1 April 2014.

Capital Allowances

Capital allowances will be reduced with effect from 1 April 2012 (6 April 2012 for income tax purposes), as follows:

  • Main pool writing down allowance - reduced from 20% to 18%
  • Special rate pool writing down allowance - reduced from 10% to 8%
  • Annual Investment Allowance (AIA) maximum investment - reduced from £100,000 to £25,000

Where expenditure on integral features, plant and equipment (excluding cars) is within the annual investment allowance, the business can claim a 100% deduction for those costs in the year bought.

NI

From 6 April 2011 the rates for NI contributions will be increasing by 1% and the new rates become...

  • Employer's class 1 above secondary threshold: 13.8%
  • Employee's class 1 above primary threshold and below upper earnings limit: 12%
  • Employee's class 1 above upper earnings limit: 2%
  • Self-employed class 4: 9%
  • Self-employed class 4 additional rate: 2%

The reduced rates of NI for contracted out contributions for employers and employees have not been confirmed as yet.

From 6 April 2011 if you are self-employed you will be able to pay your class 2 NICs in two instalments on 31 January and 31 July, the same dates as your income tax payments on account are due. You can continue to pay your class 2 NIC by monthly direct debit if you wish, but there will be a break in DD requests by HMRC from April 2011 to August 2011.