Minimising the Corporation Tax bill
The main rate of corporation tax, which generally applies to companies with profits over £1.5 million, is reducing from 23% to 21% from April 2014.
However, not only the largest companies are affected, as where profits exceed £300,000 the marginal rate of corporation tax gradually increases the total tax take from 20% until an effective 23% applies.
It is possible that by moving the date of revenue or qualifying capital expenditure forward by a short time, from April to March for example, your business could benefit from additional tax relief of up to 9.52%.
Significant amounts of capital expenditure are the simplest items to identify, but any costs or deductions you can bring forward will attract the higher rate of tax relief.
There will be a further opportunity to achieve a similar (albeit smaller) tax advantage from 2015, when the main rate is due to fall from 21% to 20% and a single unified rate of corporation tax will apply for non-ring fence profits.
Care needs to be taken, so talk to us in good time so we can make sure you get the maximum benefit from the changes.