Corporation tax rates
| Financial Year to | 31 March 2009 | 31 March 2008 |
| Taxable profits | ||
| First £300,000 | 21% | 20% |
Next £1,200,000 | 29.75% | 32.5% |
Over £1,500,000 | 28% | 30% |
| ||
Small company’s marginal relief fraction | ||
£300,000 - £1,500,000 | 7/400 | 1/40 |
The small companies' rate of corporation tax will increase from 21% to 22% in 2009/10.
Capital allowances
The following changes to the capital allowances regime were introduced from 2008/09:
- An annual investment allowance for the first £50,000 of expenditure on plant and machinery in the general pool will be introduced. The detailed design and scope of this allowance will be the subject of consultation.
- The rate of writing-down allowances (WDAs) for plant and machinery in the general pool will be reduced from 25% to 20%.
- The rate of WDAs on long-life asset expenditure will increase from 6% to 10%.
- WDAs on industrial and agricultural buildings will be gradually phased out, with final withdrawal of both regimes by 2010/11. To prepare the way for final abolition, most balancing adjustments, and the recalculation of WDAs on sale, will effectively be withdrawn from 21 March 2007.
- The rate of WDAs on certain fixtures integral to a building will be set at 10%. The detailed design and scope of the integral fixtures provisions will be the subject of consultation.
- A payable tax credit for losses resulting from capital expenditure on certain designated ‘green technologies’ will be introduced. The detailed design and scope of the tax credit will be the subject of consultation.