Autumn Statement 2016: Corporation Tax
Philip Hammond delivered his first Autumn Statement today – and his last! Next Autumn will see an Autumn Budget, followed in March 2018 by a Spring Statement. The laudable intention is to give businesses time to prepare for the changes, and to reduce the number of changes in tax legislation. Sticking to his theme, Mr Hammond does not appear to be proposing many significant tax changes this year, with all income tax and corporation tax rates remaining as previously announced.
The rate of corporation tax will fall to 19% on 1 April 2017, and then to 17% from 1 April 2020. Capital Allowances will remain unchanged, with the Annual Investment Allowance fixed at £200,000, and writing down allowances at 18% for most items of plant and machinery, and 8% for certain cars and fixtures in buildings.
Large, multinational corporate groups will face a potential restriction to tax relief on interest costs. The rules are designed to affect highly geared groups having subsidiaries in low tax jurisdictions. Only groups with more than 250 employees and turnover exceeding euro 50 million or a balance sheet total exceeding euro 43 million will be affected.