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| Business Announcements
BUSINESS
ANNOUNCEMENTS
CORPORATION TAX
The rate of corporation tax will reduce to
17% for the inancial year commencing
1 April 2020. The planned reduction in
corporation tax to 19% from 1 April 2017
remains unchanged.
LOANS TO PARTICIPATORS
In order to keep the tax rate in line with the
higher rate of tax on dividend income, the
loans to participators tax rate payable will
increase from 25% to 32.5% on loans or
beneits conferred by close companies on
or after 6 April 2016.
CORPORATION TAX REFORM
OF LOSS RELIEF
From 1 April 2017, companies will only be
able to use losses carried forward against
up to 50% of their proits above £5 million.
If a group, the £5 million allowance will
apply per group. With respect to the current
streaming rules, the use of losses arising
on or after 1 April 2017 will be more
lexible so that the losses will be useable,
when carried forward, against proits from
other income streams or other companies
within a group.
TAX DEDUCTIBILITY OF
CORPORATE INTEREST
EXPENSES
New rules will be introduced from
1 April 2017 to limit the tax relief that large
multinational enterprises can claim for their
interest expenses.
Relief on interest payments will be
restricted to 30% of UK earnings, with
exceptions for groups with legitimately high
interest payments.
BUSINESS RATES
The government will permanently double
the small business rate relief in England
from 1 April 2017. At the same time, the
government will raise the small business
rate relief threshold in England to rateable
values of up to £12,000 tapering
to £15,000.
The threshold at which business rate bills in
England are calculated using the standard
multiplier to properties with rateable values
of £51,000 and above from 1 April 2017.
The annual uprating of business rates will
change from the RPI to the CPI, from
1 April 2020.
REPEAL OF THE RENEWALS
ALLOWANCE
The renewals allowance for the cost of
replacing tools which provides traders
and property businesses with tax relief will
be withdrawn.
The impact of the change is intended to
ensure that tax relief for expenditure on
replacement tools will be obtained under
the same rules as those which apply to
other capital equipment.
This change will see businesses claim tax
relief under the capital allowance regime or,
in the case of residential landlords, for the
cost of replacing domestic items such as
appliances or furnishings.
The new measure will repeal the renewals
allowance on or after 6 April 2016 for
income tax purposes and from 1 April 2016
for corporation tax purposes.
SMALL BUSINESS RATE RELIEF
THRESHOLD
2016
£6,000
2017
£15,000