Business tax is adjusted

20 March 1998




Business tax is adjusted

THE small company rate of corporation tax, for businesses with profits under £300,000 a year, will come down by 1% to 20% from Apr 1999. That is now 3% below the basic income tax rate, and 20% below the higher rate.

The larger gaps offer a bigger incentive to incorporate, especially for young businesses.

Advanced corporation tax is to be abolished from Apr 1999. Those companies paying dividends will benefit.

First-year capital allowances on plant and machinery, currently at 50% until Jul 1, 1998, will continue for another year at 40%, a welcome extension given the current economic climate. Unfortunately, agricultural buildings allowances remain at 4%.

Business tax is adjusted

THE small company rate of corporation tax, for businesses with profits under £300,000 a year, will come down by 1% to 20% from Apr 1999. That is now 3% below the basic income tax rate, and 20% below the higher rate.

The larger gaps offer a bigger incentive to incorporate, especially for young businesses.

Advanced corporation tax is to be abolished from Apr 1999. Those companies paying dividends will benefit.

First-year capital allowances on plant and machinery, currently at 50% until Jul 1, 1998, will continue for another year at 40%, a welcome extension given the current economic climate. Unfortunately, agricultural buildings allowances remain at 4%.


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