Corporation Tax cut. Mr Osborne created a stir by cutting the main rate for Corporation Tax (CT) by an extra 1%. It was due to drop 1% to 27% from April 1, but it will now fall to 26%. It sounds good but in practice it only benefits companies whose profits exceed £300,000 per year. Those with lower profits are left with the pre-announced cut of 1% in the small profits rate to 20%.
Car mileage allowances increased. From 6th April 2011 the Approved Mileage Allowance Payments (AMAPs) will increase for the first time since 2002/3. Businesses will now be allowed to pay up to 45p per mile tax and NI-free to employees, and directors, who use their own cars for business.
This will increase the tax advantages of employee car ownership schemes and similar arrangements so if you haven’t considered these before, now might be the right time.
Merger of taxes. It’s been announced that income tax and NI will be merged. It will mean major changes for all employers; however it will be a couple of years or longer before the new all-in-one system will come into force. In any case it may well be a good thing as it will cut red tape for employers. We’ll update you on any future developments
Written by undefined at 06/04/2011 10:45:52