Higher Corporation Tax

[Ivor1]

This doc has more info:

http://www.hm-treasury.gov.uk/media/...rvices_231.pdf

Thanks it doesnt clarify the back dating though

[AZZIK]

Corporation tax will be cut from 30p to 28p from April next year.


Tax rate on small companies to be raised in three stages from 20p this year to 22p in 2009.
summary of the budget http://news.bbc.co.uk/1/hi/uk_politics/6474997.stm

[Ruprect]

Putting on my rose tinted specs I remember 1997 and something gordo said about "encouraging entrepreneurs and small businesses"... did I just dream that?

[PAG]

Removing the 10p starting rate of tax is not good news !!!

[pickle]

That's for large companies only!

For small companies (i.e. our ltds) it goes from 19% to 22% over the next 3 years

But wont we also save some by having the full "up to 40% threshold" allowance available to us? Currently you can only pay divis to 34kish (i forget exact figure) without going into the upper tax rate , because of the dividend credits gordo sticks on to account for the difference between corp rate and 22% tax rate?

So surely that wont apply now and we will be able to pay more dividends than before without the need for any extra tax (other than the corp tax allready paid of course)

It wont offset the ful 2% rise, but must be worth something. Just thinking out loud..

[Langkawi]

Apart from the raising of the upper tax bracket (if you're luck enough to earn that much [I'm not!]) I'm reading this as he's screwed the Ltd's twice;

Assuming you pay NMW of say £10,000 for simplicity (controversial, I know - not trying to open that debate again) on a £35,000 contract.

The 10p tax rate goes so that £2000 now attracts 20% tax not 10%, meaning you fork out another £200 tax on that 2K.

Ok you save 2% on the basic rate portion of the next 3K so thats £60 saved.

But then the corporation tax on your profits goes up incrementally and by the time it reaches 22% then (say you expenses are 5K) your paying an extra 3% CT on the £20,000 profits - meaning an extra £600 notes to the treasury.

Net result is that I reckon I'll be down £740 a year by 2009.

All back of an envelope stuff, but what happened to rewarding entrepreneurism.

Meanwhile big corps like the big banks get a tax break to help them continue fleecing the customers. Not very fair Gordo!

[Maxamus]

Im sick of this country!
20% corp tax from April! Wat a fookin joke!

Looks like im going to have to figure out ways of increasing my company expenses by 1% a month.......any ideas?

[Denny]

Not very fair Gordo!

Yes, but it's not your average IT contractor that invites Gordo to expensive idealic holiday destinations in exotic private paradises, offers NL huge donations to keep him in the custom to which he has become very much accustomed and has no intention of giving up, and probably posts lavish cases of expensive champagne and huge semi-detached house size Teddy Bears for his kids at Christmas on him, is it.

What chance have little ol' you, in your 'I'm a £40 an hour IT geek' T shirt got to offer our thrifty thefty Scot compared to some swashbuckling offhore tax haven jet setting multi-millionaire in his Saville Row suits heading up a huge multi-national? A tin of All Butter Shortbread and a bottle of blended Whiskey?

Be realistic - please !

[Maxamus]

Corporation Tax will be raised to 20% from April, with 21% from 2007 and 22% from 2008

Alan

so two hikes in corp tax this year?
"20% from april, with 21% from 2007" ????

[Denny]

so two hikes in corp tax this year?
"20% from april, with 21% from 2007" ????

It is 2007 already so how come there are two hikes to cover this year?