- Increase in the small companies rate- Reduction in the large companies rate
From April 2008 the main (large companies) rate of Corporation Tax (CT) will be reduced from 30% to 28%, making it the lowest rate in the G7 countries.
However, the small companies rate will be increased in stages from the current 19% to 20% from 1 April 2007, 21% in April 2008 and 22% in April 2009. This measure is aimed at reducing the number of small businesses for which incorporation is still tax-advantageous. The fraction used to smooth the transition for companies falling between the small companies and large companies limits will from 1 April 2007 be 1/40 instead of the current 11/400.
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