Autumn Statement 2016 – Corporation Tax
It had been rumoured that the new Chancellor, Philip Hammond would cancel his predecessors planned cuts to Corporation Tax. However, in his Autumn Statement speech, the Chancellor confirmed that the government would stick to the business tax roadmap set out in March and that Corporation tax will fall to 17% by April 2020. This will according to the Chancellor be by far the lowest overall rate of corporate tax in the G20.
The Corporation Tax rate dropped to 20% from 1 April 2015. From 1 April 2017 will be reduced to 19% and continue at this rate for 2018 and 2019. From 1 April 2020, the Corporation Tax rate will be further reduced to 17%. This measure is designed to drive further investment in the UK and continue to help create more employment. The government has also agreed to expand the circumstances in which companies can get Corporation Tax deductions for contributions to grassroots sports from 1 April 2017.
A number of further changes to Petroleum Revenue Tax (PRT) which applied to profits from oil and gas fields approved before 16 March 1993 were also announced. This follows the introduction of the zero-rating of PRT from 1 January 2016. The new changes will simplify the process for opting fields out of the PRT regime and simplify certain reporting requirements for those that remain within the regime.