UK Budget 2011 – summary of business tax measures

Business taxation measures announced in Budget 2011:

Corporation tax

  • Reduced by 2% from April 2011
  • To be reduced by a further 1% per annum for the following 3 years
  • Small profits rate to be reduced to 20% from April 2011
  • Corresponding increase in bank levy from 2011

Capital allowances

  • Short life asset election to be extended from 4 to 8 years

Research & development

  • Rate of research and development additional deduction to be increased from 75% to 100% from 1 April 2011 (subject to State aid approval)

Business rates

  • 100% business rates discount for businesses located in newly created Enterprise Zones
  • Small business rate relief holiday to be extended by 1 year

VAT

  • Registration threshold to be increased from £70,000 to £73,000

Business payment support service (BPSS)

  • HMRC will continue its BPSS to provide advice and & time to pay to viable businesses experiencing financial difficulty

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