Businesses paid £44.4 billion in corporation tax in 2015/16, according to figures from HMRC.
This is an increase of 3% from the £43 billion collected in 2014/15, and is the highest since 2007/08.
The figure reflects increases in tax from the manufacturing, distribution, financial services and commercial sectors.
North Sea oil and gas sector receipts fell from £2.1 billion in 2014/15 to £0.5 billion in 2015/16 while bank surcharge receipts (introduced from January 2016) were £22 million.
Conrad Ford, CEO of Funding Options, said:
“Small businesses in the UK benefitted from a lower rate of corporation tax for over 40 years until 2015. This was an effective way of helping small businesses to compete with larger rivals and would be so again.
“Another option for helping SMEs would be to increase the annual investment allowance (AIA) encouraging small businesses to invest in new equipment or upgrades on their existing capacity.”
Annual investment allowance
Businesses can claim capital allowances on assets (equipment, machinery and vehicles) they buy and keep to use in the business.
Businesses can deduct the full value of assets that qualify for the AIA from profits before tax. The AIA has been £200,000 since 1 January 2016.
It’s not possible to claim the AIA for items bought in the final accounting period if the business closes.
Talk to us today about utilising capital allowances. Contact John Elliott for more information.