Going down
For companies with profits of £1.5m or more the intention for the main rate has been confirmed for corporation tax to be 28% from April 2009, the same rate as that applying for companies from 1 April 2008.
Going up
Small companies (companies with profits below £300,000), on the other hand, are seeing an increase in rates from 19% to 21% with effect from 1 April 2008.
Companies with profits between £300,000 and £1,500,000 will see an increase as well, with effective marginal rates sliding upwards from 21% to 30%.
Associated companies
There has been a relaxation of some of the associated company rules, which means that where individual A controls a company and is in a partnership with individual B, who also controls a company, the two companies will no longer be treated as associated. The exception is where the arrangements have been entered into for tax avoidance purposes. The rules, as they currently exist, can result in extra tax being paid by both companies.
This is a welcome relaxation of a wholly unworkable law.
