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Accountants in Medway - Sinden Thackeray Partnership

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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.

 


Christopher Kember FMAAT is licensed and regulated by AAT under licence number 7213. AAT is recognised by HM Treasury to supervise compliance with the Money Laundering Regulations and Sinden Thackeray Partnership is supervised by AAT in this respect.