Key changes announced are:
- Corporation tax – A surprise reduction in the main corporation tax rate was announced. From 1 April 2012 this rate drops 2% to 24%. The small companies’ rate remains unchanged at 20%.
- Bank levy – This is adjusted so that banks do not pay less tax as a result of the corporation tax reduction.
- Enterprise Management Incentives (EMI) – The maximum value of qualifying options is to increase from £120,000 to £250,000. This change is subject to State Aid approval.
- Seed Enterprise Investment Scheme (SEIS) – Further changes to this new investment tax incentive were announced in the Budget. Please contact us for more information.
- Enhanced capital allowances – A number of changes have been announced regarding the availability of enhanced capital allowances for energy-saving and water efficient technologies. The changes will take effect by way of a Treasury Order which is expected to be made prior to the summer 2012 Parliamentary recess. The special scheme allows for 100% first year allowances for qualifying expenditure.
- Patent box – Legislation will be introduced in Finance Bill 2012 to allow companies to apply a 10% corporation tax rate to a proportion of profits attributable to patent and certain other qualifying intellectual property. This will apply from 1 April 2013. In the first year this proportion will be 60% and increase annually to 100% from April 2017.
Please give us a call if you have any queries.
John Elliott, Tax Partner
