Companies and unincorporated associations which pay Corporation Tax are most likely to benefit from the reduced rates.
In the 2015 summer budget the government announced the main rate of Corporation Tax will be 19% for the years starting 1 April 2017, 2018 and 2019; with the rate decreasing to 17% for the year commencing 1 April 2020. The 17% Corporation Tax rate is an added 1% decrease as it was previously announced the Corporation Tax rate for the year beginning 1st April 2020 would be 18%. This means the UK will have the lowest Corporation Tax rate in the G20 when the change comes into place.
Though it is not anticipated that the decreased rate will directly impact on individuals or households, it will be hugely beneficial to over a million companies. The change will lower the tax bills of many companies, small and large, that pay Corporation Tax.
A lower Corporation Tax rate could make the UK a more desirable destination for businesses to relocate.
As with all pending changes in tax rates and allowances; good tax planning will enable you to benefit from them in the most efficient way.
It is often beneficial to speak to your accountant or adviser before making any changes or decisions.
These tax rate changes are subject to change from new governments or budgets. At the time of publishing the article the tax rates quoted are correct, however we cannot accept any reliance for actions taken without confirming your tax position.