Business tax

News: March 2012

Business tax

Simplification

The Government wants to simplify the accounts small businesses (partnerships and sole-traders) have to prepare for tax purposes. It is consulting on whether preparing accounts on a cash basis would be easier, and standard allowances could be used for the business use of vehicles and the proprietor’s home. Any changes are likely to apply from April 2013 or later.

Corporation Tax

The small profits corporation tax rate remains the same at 20% for the year from 1 April 2012.

However the main rate for large companies is reducing from 26% to 24% and will be 22% by the year from 1 April 2014.

Capital Allowances

The rates and thresholds of the main capital allowances will apply as follows for 2012/13…

  • Main pool: writing down allowance: 18% (2011/12 – 20%)
  • Special rate pool: writing down allowance: 8% (2011/12 – 10%)
  • Annual Investment Allowance (AIA) cap: £25,000 (2011/12 – £100,000)