As announced last year, the main rate of Corporation Tax will fall from 21% to 20% for Financial Year 2015 (commencing 1 April 2015). There is no longer a separate rate for companies with small profits. This will not only cut companies' tax charges, but will remove the need for calculations for those falling in the marginal band between the small profits and full rates.
Research and development credits
The uplift in expenditure for small and medium companies claiming R&D tax credits will rise from 125% to 130% with effect from 1 April 2015. The 'above the line' credit for large businesses will rise from 10% to 11% from the same date.
Eligibility for credit will no longer extend to any expenditure on the costs of materials incorporated in products that are sold.
The Budget contains a number of measures intended to support the Government's policy of encouraging creative industries in the UK. Film tax relief, introduced in 2013, is to be increased to a payable 25% credit for all films. The minimum UK expenditure requirement is to be reduced from 25% to 10% for high-end television and animation tax relief. Subject to State aid approval, these measures will apply from 1 April 2015.
It is also proposed to introduce a new children's television relief from 1 April 2015, and a new orchestra tax relief from 1 April 2016.
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