Business and Corporation Tax
Today’s Budget speech provided a number of announcements that are likely to have a significant impact on all businesses. Some of the announcements made are of no surprise and were already touched upon as part of the 2016 Autumn Statement.
The main rate of Corporation Tax
Corporation Tax for companies is currently 20% and from 1 April 2017 will reduce to 19%. This tax rate is set to fall even further and will eventually be 17% from 1 April 2020.
As previously announced, from April 2017 small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates.
There will also be a tapered rate of relief on properties whose rateable value is between £12,000 and £15,000.
Recognising the valuable role that local pubs play in our communities, it was announced in the Budget that a £1,000 discount on business rates will be available to all pubs whose rateable values are less than £100,000 – which accounts for 90% of all pubs across the country. Unfortunately this is only available for one year from 1 April 2017.
With reference to the business rates revaluation which takes effect in England from April 2017, and which would see some businesses face a 400% increase in their rates bill, the Government announced further support as follows:
- Any business that no longer qualifies for small business rate relief will see a restriction on the increase in their rates bill next year of £600.
- Council authorities will be provided with funding to allow them to grant discretionary relief to businesses in their area.
Rural rate relief will increase to 100%
Rural rate relief will increase from 50% to 100% in April 2017, saving a business up to £2,900 a year. This business rate relief is available to businesses in rural areas with a population under 3,000, where that business is:
- the only village shop or post office with a rateable value of up to £8,500, or
- the only public house or petrol station with a rateable value of up to £12,500
For tax advice of any kind please give our team a call.