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Do you want to pay less tax?


The Chancellor presented his eleventh Budget on 21st March 2007 which included some headline grabbing reductions to tax rates. However, as is always the case, the real truth is in the small print and the good news is outweighed by the bad news for many.

So we have gone behind the headlines and summarised below the main points in the Budget and how these will really affect you.

Good news for some companies and bad news for others!


The good news is that the main rate of corporation tax will fall to 28% from 1st April 2008. Unfortunately this reduction will only apply to certain large companies and some investment companies.

The bad news is that from 1st April 2007 the Corporation Tax rate for smaller companies will increase to 20%, rather than the current 19%. Further staged increases will then follow; from 1st April 2008 this will increase to 21% and 22% from 1st April 2009. This means that from 2009 a company making £100,000 in profits could be paying an extra £3,000 in Corporation Tax each year. The budget reduces the tax incentive for many small businesses to become companies.