Useful Tips

Expected Tax Changes

• The main rate of corporation tax will become 28% from 1 April 2008.
  
  
• The main rate of corporation tax for companies’ ring fence profits will be 30% from 1 April 2008.
  
  
• Small Companies’ Rate
  
  
• The small companies corporation tax rate will become 20% from 1 April 2007 and the fraction used in smoothing the differences between the main rate (marginal small companies’ relief) will be 1/40. The small companies rate for ring fence profits will remain at 19% from 1 April 2007 and the marginal small companies’ relief fraction will be 11/400.
  
  

Additional notes re VCT's post budget

• Changes to Venture Capital Schemes and Enterprise Management Incentives
  
  
• For EIS, VCTs and CVs new qualifying company rules will set limits on the numbers of employees allowed and the amount of capital a company can raise in a 12 month period.
  
  
• A change will also be made to extend the meaning of a 'qualifying 90% subsidiary’.
  
  
• For VCTs: a change will be made to the 70% qualifying holdings condition to deal with cash realisations. Also provisions will be made for Regulations on 'inadvertent’ breaches of the VCT approval conditions.
  
  
• For EIS the investment period in which a manager has to invest 90% of the funds raised by an approved EIS fund is extended from 6 months to 12 months.
  
  
• For EIS, VCTs, CVs and EMI: a change will be made to allow the transfer of a qualifying trade of exploiting relevant intangible assets (RIAs) around a group of companies.
  
  
• These measures will generally operate on or after 6 April 2007